Floods snarl logistics in the Midwest
Union Pacific declares embargo on shipments
By Dave Hannon -- Purchasing, 6/16/2008 4:01:00 PM
The massive flooding in the Midwest has wreaked havoc on logistics processes in a massive region covering Iowa, Missouri and parts of other states. Rail, barge and truck shipments have all been impacted as a rain-fed flood blitz causes another costly supply chain audible.
On Friday, railroad Union Pacific issued an embargo on shipments, saying “river flooding that has washed out or weakened bridges and large sections of main line track. According to reports, UP’s mainline is out of service near Haley, two mainlines near Cedar Rapids and another two near Tama are flooded out, and a mainline between Des Moines and Kansas City, Mo., is out of service.
“Generally, these embargos impact all manifest and automotive traffic originating at points west of Beverly, Iowa (which is located west of Cedar Rapids) and moving to points east of Beverly, including traffic interchanged over the Chicago gateway,” UP said.
The Associated Press reported over the weekend that rising water from the Cedar River caused a railroad bridge near Cedar Rapids to collapse and put 400 city blocks under water. Since the flooding began last week, state and local officials have closed 54 U.S. highways and hundreds of smaller roads across Iowa. Segments of Interstate Highways 80 and I-380, which connects Iowa City and Cedar Rapids, are expected to remain off-limits until at least Tuesday, Eugene Meyer, Iowa's commissioner of public safety, said Sunday in a Chicago Tribune report.
A 300-mile section of the Mississippi River has been closed to barge traffic. In a Wall Street Journal report Sunday, Larry Daily, president of Alter Barge Line in Bettendorf, Iowa, which uses the Mississippi to ship corn, soybeans, steel, cement and other cargo, said more than 100 of his company's barges and tow boats are stuck at various points along the river, costing his company $25,000 a day.
Sunday, the Army Corps of Engineers listed at least 11 locks closed along the upper Mississippi River system, principally in Iowa and Missouri, which will effectively close commercial traffic between St. Louis and Minnesota for two weeks, said Ron Fournier, a corps spokesman. Barge operator American Commercial Lines said more lock closures are taking place this week in a statement listing the closures on its web site.
The Mississippi is forecast to crest in St. Louis at 39.6 feet on June 20, up from forecasts earlier Friday of 38 feet. "It will rank as about the eighth or ninth on the record books," said Alan Dooley, spokesman for the Army Corps. in a Reuters report Friday. "It's like the flood of 1982 or 1944."
In addition to the logistics snafus there are production impacts in the Midwest. The Des Moines Register reports that ome of Iowa’s largest manufacturers, including Quaker Oats and Penford Products in Cedar Rapids and Deere & Co. in Waterloo, have had to idle plants for multiple days, putting thousands temporarily out of work.
Among the plant shutdowns in hard-hit Iowa are Weyerhaeuser’s containerboard mill in Cedar Rapids, a Cargill corn processing facility in Eddyville, livestock slaughtering plants operated by Tyson Foods in Earlville, and several grain elevators and processors. There are reports of metals service centers throughout the Midwest are having trouble getting metals delivered to the plants and in delivering processed steel and nonferrous materials to customers. Losses in the agriculture industry could have worldwide implications. The U.S. Department of Agriculture recently lowered its forecasts for this season, which if accurate will mean higher prices for food, livestock and ethanol.
Photo courtesy: Union Pacific
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