Barge activity on the river. (Credit: St. Louis Regional Freightway)
Industry leaders discussed how impediments impact global trade and why St. Louis remains a key export hub
The outlook for commodities and the barge industry were front and center June 5 during a virtual FreightWeekSTL panel session hosted by the St. Louis Regional Freightway. Ken Eriksen, managing member and strategic advisor at Polaris Analytics & Consulting, highlighted the economic value of the Mississippi River Ship Channel and its significance to the freight industry and the St. Louis region. Eriksen also provided an overview of the evolving landscape of agriculture and barge transport, underscoring the region’s critical role in global trade.
Eriksen provided preliminary insights on the soon to be released Mississippi River Ship Channel market study commissioned by the Big River Coalition and funded by the Louisiana Department of Transportation and Development. He explained the vital importance of the Mississippi River Ship Channel — which stretches from Baton Rouge into the Gulf of America to the Southwest Pass — to global trade. Findings show that vessels loaded with exports or imports passing through this channel contribute approximately $273 million to the economy nearly every day, and billions annually. He also highlighted the significant impact of any impediments, such as draft restrictions or closures, on freight rates and the broader supply chain.
“Impediment reduces the transport capacity,” said Eriksen. “More capacity is then needed to move the same volume, and you cannot bring that capacity to the market fast enough nor at the right time. This results in higher freight rates that, in many instances, are passed on to the consumers further down the supply chain and in the case of grains, the costs are passed upstream to farmers through weakened basis.” He said the continuation of impediments in one area can bolster competitiveness in another, noting that, if not addressed, the transport of grain, for example, could be moved to another port in the United States or go to another marketplace all together, like South America. “However,” he added, “if impediments are removed, and impacts are minimized, it will have a reverse impact. It will create even better trade opportunities and better value for farmers looking to operate out of the local marketplace.”
He also discussed the correlations between what moves out of the St. Louis area and trade through the lower Mississippi River into the Gulf and beyond. When you examine the down bound movement from the upper river areas into export positions on the Gulf through the Mississippi River Channel, Eriksen said 95 percent of all grain and soybean exports arrive by barge. One seventh of export volume, or approximately 10 million tons of grain and soybeans, come from St. Louis, which helps to underscore why those engaged in the movement of goods from the St. Louis region to the Gulf Coast have a vested interest in keeping cargo flowing. These and other study findings are expected to be of great value as partners work to effectively communicate what the Mississippi River Channel has to offer the St. Louis region and the rest of the nation.
Eriksen also discussed the broader trends and outlook for the agriculture and barge industries in 2025, noting that he wouldn’t be talking about St. Louis and the river market if it wasn’t for trading partners. He touched on tariffs, taxes and surcharges on ocean going vessels – as well as the need for fair and engaged trade, and the importance of global partnerships.
“For the St. Louis region and Mississippi River Ship Channel, one of the great things is that, for a lot of the commodities being loaded, whether it’s grains and soybeans, coal or liquids, they’re going to be loaded on vessels of 80,000 dead weight tons and smaller, so there’s not going to be any fee assigned to that vessel by the U.S. government either inbound or outbound. That helps the region’s competitiveness,” Eriksen said.
He also highlighted the resilience and resourcefulness of farmers in promoting U.S. agricultural products globally, despite challenges such as high production costs and fluctuating grain prices.
“From an agricultural perspective, grain and soybean exports are expected to be the fifth largest in U.S. history, with 50-60 percent exiting through the Mississippi River Ship Channel,” said Eriksen. “That’s a great relationship for the St. Louis area because, as the Ag Coast of America, you provide a lot of the volume that goes to the Gulf for exports, and we should see at least a sustained level of volumes that will be moving through there.”
He added that fertilizer may be a little bit challenging because the cost of production is still fairly high for farmers. And while planting numbers won’t be released by the U.S. Department of Agriculture until the end of June, he said more corn could lead to more exports.
Eriksen said coal production has dropped by more than half since 2015, from 1.2 billion tons to below 600 million tons, with a corresponding drop in barge loadings. As a result, there isn’t as much coal in the St. Louis region’s river system. This could change given the new administration’s support of the use of coal, creating both challenges and opportunities as it relates to multimodal options and multi-commodity services.
The overall barge market has seen a slight increase in capacity thanks to the addition of 29 new barges,
Eriksen said, and he expects there will likely be a continual slide of open barges used for coal, rock, sand, and gravel. “The fleet is getting old,” said Eriksen. “The industry will need to start retiring, replacing or resurging barges and adjusting fleets accordingly.”
Eriksen also talked about the wins around the Waterways Resources Development Act that brought stability through a new cost share ratio. Federal funds are now covering 75 percent of projects, with shippers or barge operators covering the other 25 percent through fuel tax. It used to be 50/50. As a result, there has been very sizeable investments in infrastructure improvements, not only for locks and dams, but also for levees.
Renewable energy trends were also touched upon, as Eriksen discussed the growing use of renewable diesel and the potential for expansion of soybean crush facilities near the Mississippi River system in the St. Louis region.
The virtual panel session featuring Eriksen was moderated by Mary Lamie. She leads the St. Louis Regional Freightway and is executive vice president of Multimodal Enterprises for Bi-State Development.
“It’s encouraging to hear that regardless of how different commodities may be trending, the St. Louis region continues to be well positioned to play a role in moving those commodities to their final destination,” said Lamie.
Link to Session
FreightWeekSTL 2025 continued through June 6. To learn more, or view sessions for FreightWeekSTL 2025, visit FreightWeekSTL.com.
About St. Louis Regional Freightway
A Bi-State Development enterprise, the St. Louis Regional Freightway is a regional freight district and comprehensive authority for freight operations and opportunities within eight counties in southwestern Illinois and eastern Missouri, which comprise the St. Louis metropolitan area. Public sector and private industry businesses are partnering with the St. Louis Regional Freightway to establish the bi-state region as one of the premier multimodal freight hubs and distribution centers in the United States through marketing and advocacy for infrastructure development that supports the movement of freight. To learn more, visit thefreightway.com.
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