MarketWatch First Take: Low water levels along Mississippi river an opportunity for railroads, says analyst

by | Nov 29, 2022 | Stock Market

Low water levels along the Mississippi River have been causing problems for the barge industry, but could present an opportunity for railroads, some analysts say. Analyst Patrick Tyler Brown at Raymond James explained that over the last two months, water levels on the Mississippi have been at lows not seen in over 30 years. “This has primarily affected parts of the lower Mississippi due to low rainfall in the Ohio River Valley and the Upper Mississippi feeder region, causing a slew of issues for the barge industry,” he wrote in a note to clients.

This has resulted in complete closures of parts of the river or “barge breakups” when a tow boat, which typically carries 30 to 40 barges, hits a sandbar, resulting in queues more than 100 vessels long. To deal with these bottlenecks, initiatives such as a maximum tow size of 25 barges have been implemented, which Brown notes is a 17% to 38% reduction in capacity. Tow drafts, or the amount a vessel can be below the water line, has also been reduced to 9 feet, which Brown said reduces the tonnage per barge by between 24% and 30% compared with normal conditions. Last month, Yale Climate Connections reported that rains from Hurricane Rosly …

Article Attribution | Read More at Article Source

Share This