Inland Dry Bulk Barge Market & Barge Rates

Similar to the international shipping market with its freight indices and benchmarks, the inland barge market in the U.S. is equally well monitored to assess both transport costs and also get an early sign (leading indicator) of the economy's overall direction


Downbound Grain Barge Rates

Weekly barge rates for downbound freight originating from seven locations along the Mississippi River System, which includes the Mississippi River and its tributaries (e.g., Upper Mississippi River, Illinois River, Ohio River, etc.). The seven locations are: (1) "Twin Cities," a stretch along the Upper Mississippi; (2) "Mid-Mississippi," a stretch between eastern Iowa and western Illinois; (3) "Illinois River," along the lower portion of the Illinois River; (4) "St. Louis"; (5) "Cincinnati," along the middle third of the Ohio River; (6) "Lower Ohio," approximately the final third of the Ohio River; and (7) "Cairo-Memphis," from Cairo, IL, to Memphis, TN.

The U.S. Inland Waterway System utilizes a percent-of-tariff system to establish barge freight rates. The tariffs were originally from the Bulk Grain and Grain Products Freight Tariff No. 7, which were issued by the Waterways Freight Bureau (WFB) of the Interstate Commerce Commission (ICC). In 1976, the United States Department of Justice entered into an agreement with the ICC and made Tariff No. 7 no longer applicable. Today, the WFB no longer exists, and the ICC has become the Surface Transportation Board, which does not have jurisdiction over barge rates on the inland waterways. However, the barge industry continues to use the tariffs as benchmarks for rate units.

Each city on the river system has its own benchmark, with the northernmost cities having the highest benchmarks: Twin Cities = 619; Mid-Mississippi = 532; St. Louis = 399; Illinois = 464; Cincinnati = 469; Lower Ohio = 446; and Cairo-Memphis = 314.

Table 1: Inland Dry Bulk Tariff & Benchmark Rates

To calculate the rate in dollars per ton, multiply the percent of tariff rate by the 1976 benchmark and divide by 100: (Rate * 1976 tariff benchmark rate per ton)/100. As an example, a 271 percent tariff for a St. Louis grain barge would equal 271 percent of the St. Louis benchmark rate of $3.99, or $10.81 per ton.



Chart 1: Recent Southbound Grain Barge Rates by Location (source: USDA)

For those familiar with the international tanker market, the tariff system for establishing actual freight rates in the inland barge market is very similar to WorldScale (WS) calculations for tanker rates, whereby WS=100 is the baseline for any given year, i.e. WS=300 is 3x of the baseline; the baseline 100 is re-calibrated at the beginning of each year for major trading routes to adjust for updated bunker prices, voyage costs, etc



Downbound Barge Grain Movements (Tons)

The Mississippi River (north of St. Louis, MO) and its tributaries (e.g., the Arkansas River, Illinois River, Ohio River, etc.) make use of a series of locks and dams to bring traffic up and down the waterways. Grain generally flows south from the relatively production-rich areas of the Midwest to export ports in Louisiana and feed markets in the southeast. Weekly information on the amount (in tons), location, and commodity of barged grain transiting the following three major points are provided by the USDA for:

(1) the last lock on the Mississippi, Mississippi Locks 27 (called "Miss Locks 27" in the dataset), which captures downbound traffic from the Upper Mississippi and Missouri Rivers;

(2) the last lock on the Ohio River, Olmsted Locks and Dam (called "Ohio Olmstead" in the dataset), which captures any downbound traffic on the Ohio and Tennessee Rivers; and

(3) the last lock on the Arkansas River, Arkansas River Lock and Dam 1 (called "Ark Lock 1" in the dataset).

Ohio Olmsted locks replaced Ohio Locks 52 beginning in November 2018.


Chart 2: Weekly Grain Barge Volumes (source: USDA)

Combined, these three locks give a sense of barge grain traffic (by commodity) on the Mississippi--since grain shipments heading south from the Upper Mississippi River, Illinois River, Ohio River, and Arkansas River are captured. Note, however, that this data does not include all grain barge movements on the Mississippi River System, as some grain originates on the Mississippi below the locking portion (south of St. Louis, MO). Grain traffic originating below Lock 27 on the Mississippi is about 10 to 30 percent of total downbound grain shipments, which varies year to year.


Commodities include "corn," "soybeans," "wheat," and "other" (oats, barley, sorghum, and rye).

Data is collected weekly from the U.S. Army Corps of Engineers' Lock Performance Monitoring System.




Upbound and Downbound Loaded and Empty Barge Movements (Count)


This dataset provides weekly information on the number, location, direction, and type of barges transiting the following three major points:

(1) the last lock on the Mississippi River, Mississippi Locks 27 (called "Miss Locks 27" in the dataset);

(2) the last lock on the Ohio River, Olmsted Locks and Dam ; and

(3) the last lock on the Arkansas River, Arkansas River Lock and Dam 1 (called "Ark Lock 1" in the dataset). (Olmsted locks replaced Ohio Locks 52 beginning in November 2018.) The data offers insight on barge movements over time. One variable is "direction", which consists of upbound ("Up") and downbound ("Down"). It also offers insight on the "type" of traffic (e.g., empty barges, loaded barges, grain barges, and non-grain barges). More specifically, upbound data includes the number of empty barges and the number of loaded (any commodity) barges transiting the locking system. Downbound data includes the number of empty barges, the number of grain barges (loaded), and the number of non-grain (loaded) barges. That is, grain and non-grain sum to total loaded for downbound traffic. will Due to data availability, prior to 10/15/2000, downbound data includes just empty and loaded counts. Data is collected weekly from the U.S. Army Corps of Engineers' Lock Performance Monitoring System.

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