Running Aground?

According to the report, “Timber’s demise revealed a problem that had been developing for nearly 50 years. The Mississippi had become a one-commodity river. As that commodity disappeared, the river’s failure as a transportation route became clear. In 1902, railroad baron James J. Hill called for an end to navigation improvement.”

That was in the early days of what continues to be tough competition between the railroad and river shipping industries. Despite Hill’s rallying, in 1907, Congress authorized a widening of a six-foot navigation channel (an artificially deepened part of the river) to replace the existing four- to four-and-a-half-foot channel. The widening was never completed, but in the early 1930s, the U.S. Army Corps of Engineers began work on a nine-foot channel. The navigation improvements, completed in 1940, allowed more barges loaded with coal to navigate the river to its then-northernmost port of St. Paul. In the early ’60s, Minneapolis became the port farthest upstream.

“Early on, we were hauling tremendous amounts of coal—high-energy, high-sulfur, high-BTU coal—from southern Illinois, Kentucky, West Virginia,” says Dick Lambert, director of the Minnesota Department of Transportation’s Ports and Waterways. “About 20 to 25 years ago, we became conscious of high-sulfur coal and what the emissions do to the environment. So the alternative was to use a low-sulfur coal. The big deposits of low-sulfur coal in this country are out in Montana and Wyoming.” That was good for the railroads, but not the barge lines.

At first, end users blended the two forms of coal, which kept river shipping alive for a while. Eventually, however, it became more cost effective to bring low-sulfur coal in from the West by rail, and low-sulfur coal slowly displaced the high-sulfur variety. River shipments of coal peaked in the early 1980s at close to 2.6 million tons. Last year, the amount of coal shipped by river in Minnesota had fallen to just 244,000 tons.

As coal shipments declined, corn, wheat, and soybeans took coal’s place. The nine-foot channel was extended 14.7 miles from the mouth of the Minnesota River to Savage. Four company-owned terminals continue to load barges in Savage today with agricultural goods brought to the river by rail or truck from the surrounding farm fields.

One of those terminals is owned by CHS (formerly Cenex Harvest States), a farmer-owned cooperative and Fortune 500 company headquartered in Inver Grove Heights. Two other terminals are owned by Minnetonka-based agribusiness giant Cargill; the other belongs to Whitebox Commodities, an entity formed by Minneapolis-based investment firm Whitebox Advisors. (Whitebox’s terminal was previously owned by St. Louis–based Bunge Corporation.)

In 1991, CHS moved 101 million bushels through its Savage terminal. Over the past 20 years, the CHS terminal averaged about 65 million bushels of corn, soybeans, and wheat a year, says Clint Gergen, the terminal’s manager. Last year, he adds, “it was closer to 30 million.”