Running Aground?

Tying up valuable inventory for nearly twice as long when shipping by river doesn’t make economic sense for a lot of companies. For CHS, the economics are fairly simple: Grain that is within 100 miles of the river is likely shipped by barge; grain that is farther away probably goes by rail.

(The Minnesota Department of Agriculture, the Minnesota Department of Commerce, and the Minnesota Department of Transportation do not track the volume of grain that leaves the state via rail or truck.)

Closing Minneapolis?

At the end of 2003, River Services, the company that runs the Minneapolis terminal, the city’s public dock, stopped loading grain there. The city and River Services, which isn’t connected with Upper River Services in St. Paul, have a contract that stipulates that they split the profits; River Services is responsible for the losses. Because of the declining number of loads, it was no longer cost effective to load barges up to Minneapolis.

“In 1992, we loaded 350 barge loads of grain during the shipping season,” says Jerry Christensen, general manager of River Services. “In 2003, the last year for loading, we loaded 60 barge loads of grain.” The terminal still loads some scrap steel, and handles one or two truck-loading projects for local companies every year; it also unloads incoming shipments of coal, steel, and aggregate. But all that, too, may come to an end.

The dock, which has been operating since the 1960s, sits on 48 acres of prime riverfront property in North Minneapolis, near Dowling Avenue and Interstate 94. River Services’ contract with the City of Minneapolis expires in 2014. Jim Forsyth with the city’s Department of Community Planning and Economic Development, says, “If and when the time is right, the site will be redeveloped.” The city’s redevelopment plan calls for parkland, residential, and retail development.

But even if the city were to shut down its terminal and transform the site, it doesn’t mean the ports on the Upper Harbor—the navigable part of the river above the St. Anthony Falls—would close.

American Iron and Steel Company, a scrap metal recycling business, has its own terminal in the Upper Harbor. The company estimates that it currently ships about 20 percent of all material that leaves the Upper Harbor. It also ships scrap metal by truck and rail. American Iron and Steel sells the scrap primarily to steel mini-mills, which melt down the scrap to make new steel.

“River shipping clearly, head and shoulders, is the most environmental and efficient economic mode of transport,” says Mark Newbury, director of environmental health and safety for American Iron and Steel. “We can ship a ton of steel to St. Paul by truck or a ton of steel to St. Louis by water for the same cost.”