Running Aground?

Owned by European Metal Recycling, based in Manchester, England, American Iron is in the process of rehabbing its 528-foot seawall; it also has installed state-of-the-art equipment that can shred up to 100 tons of scrap metal per hour, compared with its former capacity of about 35 tons per hour. While that could triple the volume of scrap metal the company sends down river, analysts say that the increase is minimal compared with the volume lost when River Services stopped loading grain.

Aggregate Industries, which ships rock and sand used in building materials, is the main shipper in and out of the harbor. Aggregate Industries has two terminals, one each in Minneapolis and St. Paul. The company, owned by Swiss-based Holcim, expects its Upper Harbor volume to decline by 15 percent or more this year due to the slowdown in residential building, according to Bob Bieraugel, Aggregate Industries’ assistant vice president for properties.

Last year, shipping volume for the Upper Harbor fell below the critical 1-million-ton mark that the U.S. Army Corps of Engineers uses to determine whether a lock is viable. The drop below that level was partly due to the I-35W bridge collapse, which closed the last stretch of navigable river for about five weeks. When volume slips below that mark, the corps can initiate a review process to determine whether it makes economic sense to continue operating the lock.

Bieraugel says that with the economy weak, the Upper Harbor’s 2008 shipping volume could again fall below 1 million tons. “It’ll be around 700,000 tons,” he estimates. Still, Aggregate Industries is committed to keeping its Upper Harbor terminal open. “It’s an important property to us,” Beiraugel says.

A Port in the Storm

“River shipping is in transition,” says Greg Genz, a consultant based in South St. Paul who advises commercial enterprises regarding marine projects, leasing of owned boats and barges, and management of river-related real estate. “We don’t think in the future enough. We on the river always seem to be behind the curve. What is the river going to transition to? I don’t think there are too many people in this area trying to figure that out.”

Ethanol does have a partial silver lining for river transport. Dried distillers’ grains, a byproduct of ethanol production used for livestock feed, could replace some, but certainly not all, of the lost corn shipments, Paurus says. His best guess is that distillers’ grains could replace about 10 percent of the total decline in grain shipments.