1 00:00:10,560 --> 00:00:14,720 Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast. 2 00:00:14,800 --> 00:00:18,400 Speaker 1: I'm Joe Wisn't Thal and I'm Tracy Allow. Tracy. You know, 3 00:00:18,840 --> 00:00:22,759 Speaker 1: we've covered so many different aspects of supply chains and 4 00:00:22,840 --> 00:00:24,479 Speaker 1: logistics over the last couple of years. You know, I 5 00:00:24,480 --> 00:00:27,240 Speaker 1: think our first like sort of like supply chain episode 6 00:00:27,320 --> 00:00:32,760 Speaker 1: was late when we first started noticing that the cost 7 00:00:32,800 --> 00:00:34,680 Speaker 1: of shipping goods from China to the U S. It 8 00:00:34,760 --> 00:00:37,960 Speaker 1: was like, it seems a little high. Yeah, you're right. So, 9 00:00:38,400 --> 00:00:41,360 Speaker 1: you know, the early days of the pandemic, there was 10 00:00:41,400 --> 00:00:45,879 Speaker 1: all the shipping related chaos, and I guess lucky or unlucky, 11 00:00:46,000 --> 00:00:47,840 Speaker 1: I don't know. Um I had a sort of front 12 00:00:47,880 --> 00:00:50,360 Speaker 1: row seat to observe some of it in Asia because 13 00:00:50,400 --> 00:00:52,640 Speaker 1: it became very very apparent that it was becoming not 14 00:00:52,720 --> 00:00:56,320 Speaker 1: only more difficult but also more expensive to ship goods 15 00:00:56,760 --> 00:00:59,240 Speaker 1: from China to the US. Right, so it's like, huh, 16 00:00:59,280 --> 00:01:01,080 Speaker 1: what is going on with that? And then we looked 17 00:01:01,080 --> 00:01:03,640 Speaker 1: at international shipping and we started pulling on the string 18 00:01:03,800 --> 00:01:05,920 Speaker 1: that got us to ports, and that got us to 19 00:01:06,000 --> 00:01:08,800 Speaker 1: truck that got us to everything else. We pulled the 20 00:01:08,880 --> 00:01:11,440 Speaker 1: thread into what you always think, there's going to be 21 00:01:11,440 --> 00:01:14,280 Speaker 1: nothing left and then like you find something around the corner, right, 22 00:01:14,720 --> 00:01:17,360 Speaker 1: But there's one big area that we've talked about doing 23 00:01:17,360 --> 00:01:20,080 Speaker 1: for a long time that we haven't talked about. Oh yes, yeah, 24 00:01:20,360 --> 00:01:24,040 Speaker 1: well this is my point. There's always something new barges, right. 25 00:01:24,360 --> 00:01:28,479 Speaker 1: So we you know, the inland waterways, rivers, the Mississippi 26 00:01:28,600 --> 00:01:31,440 Speaker 1: River in particular, there's everybody is something we wanted to 27 00:01:31,440 --> 00:01:35,360 Speaker 1: talk about and talk about. It's significance in the U. S. Economy, 28 00:01:35,440 --> 00:01:38,440 Speaker 1: and you know how important is inland infrastructure, but we 29 00:01:38,520 --> 00:01:41,600 Speaker 1: just haven't gotten around to it. However, now we actually 30 00:01:41,640 --> 00:01:43,280 Speaker 1: have a very good reason to talk about it. It's 31 00:01:43,319 --> 00:01:46,800 Speaker 1: the barge episode finally here. But we do have the 32 00:01:46,840 --> 00:01:50,000 Speaker 1: perfect peg, which is that at the moment there is 33 00:01:50,040 --> 00:01:53,080 Speaker 1: a massive drought in the Midwest and it is affecting 34 00:01:53,240 --> 00:01:56,160 Speaker 1: water levels on the Mississippi, which is of course the 35 00:01:56,240 --> 00:02:00,840 Speaker 1: most important inland waterway in the country. And I think 36 00:02:00,880 --> 00:02:03,040 Speaker 1: you know, I was reading a Bloomberg article it said 37 00:02:03,520 --> 00:02:08,360 Speaker 1: waters in Memphis fell to negative ten points seven nine 38 00:02:08,480 --> 00:02:12,720 Speaker 1: ft recently, which is slightly lower than the previous low 39 00:02:13,400 --> 00:02:17,119 Speaker 1: of ten points seven zero from nineteen Did you say 40 00:02:17,200 --> 00:02:21,360 Speaker 1: negative there was negative water? Yeah, I'm not entirely sure 41 00:02:21,440 --> 00:02:24,799 Speaker 1: how that works. It sounds bad, it sounds bad, it's bad. Yeah, Right, 42 00:02:24,880 --> 00:02:27,760 Speaker 1: So there has been a very severe drought in the Midwest, 43 00:02:27,960 --> 00:02:30,240 Speaker 1: and it seems like a double whammy, right because on 44 00:02:30,280 --> 00:02:33,320 Speaker 1: the one hand, like if you depend on the Mississippi 45 00:02:33,440 --> 00:02:36,359 Speaker 1: River or any of the inland waterways and the river's 46 00:02:36,400 --> 00:02:38,960 Speaker 1: tributaries to move your grains or to move your goods, 47 00:02:39,040 --> 00:02:41,440 Speaker 1: that's a problem we're going to get to why. But 48 00:02:41,560 --> 00:02:45,520 Speaker 1: also it's just bad because it's bad for growing, yeah, exactly. 49 00:02:45,560 --> 00:02:48,679 Speaker 1: So if you're a farmer, you probably struggled to actually 50 00:02:48,720 --> 00:02:52,000 Speaker 1: grow your harvest this year, and now you're struggling to 51 00:02:52,440 --> 00:02:55,040 Speaker 1: get it out to the market where you're actually selling 52 00:02:55,040 --> 00:02:57,880 Speaker 1: it into. So, yeah, a double whammy. And also, you know, 53 00:02:58,040 --> 00:03:00,440 Speaker 1: we're going to be speaking a lot about grains on 54 00:03:00,480 --> 00:03:03,880 Speaker 1: this episode, but there are all types of goods and 55 00:03:03,960 --> 00:03:07,519 Speaker 1: resources and commodities that actually move up and down these 56 00:03:07,560 --> 00:03:10,680 Speaker 1: pathways on the water. Right. So we're gonna do this 57 00:03:10,760 --> 00:03:13,960 Speaker 1: episode a little bit differently. We're gonna break it up 58 00:03:14,080 --> 00:03:18,000 Speaker 1: into two different sections. But first let's start with someone 59 00:03:18,040 --> 00:03:20,040 Speaker 1: who works in the grain business and talk about how 60 00:03:20,040 --> 00:03:22,440 Speaker 1: it's affecting them. Let's do it. We have the perfect 61 00:03:22,480 --> 00:03:25,200 Speaker 1: guest to talk about grains and the effects of the 62 00:03:25,680 --> 00:03:28,280 Speaker 1: drought on the grain industry and on shipping grains. We're 63 00:03:28,280 --> 00:03:30,280 Speaker 1: going to be speaking with Ben Shull. He is the 64 00:03:30,320 --> 00:03:34,600 Speaker 1: president of Louis b Oster Burr and Associates, which works 65 00:03:34,639 --> 00:03:39,760 Speaker 1: with specialty grain companies organic grains, non gmo grains, etcetera, 66 00:03:40,040 --> 00:03:43,800 Speaker 1: to move their goods overseas or to sell their goods 67 00:03:44,000 --> 00:03:47,400 Speaker 1: much of its destination overseas, and of course his clients 68 00:03:47,440 --> 00:03:51,320 Speaker 1: are highly dependent on the functioning of the Mississippi River 69 00:03:51,400 --> 00:03:54,240 Speaker 1: and the barges there on. So Ben, thank you so 70 00:03:54,320 --> 00:03:56,640 Speaker 1: much for joining us. Ben, what do you just sort 71 00:03:56,640 --> 00:03:58,440 Speaker 1: of tell us, like, what do you do? What's your 72 00:03:58,560 --> 00:04:02,000 Speaker 1: role within the grain ecosystem. I am the president of 73 00:04:02,000 --> 00:04:06,800 Speaker 1: a specially grain company called Ostburne Associates. We buy especially 74 00:04:06,880 --> 00:04:10,280 Speaker 1: grains non GMOs and the like in export um to 75 00:04:10,360 --> 00:04:14,080 Speaker 1: Japan throughout the river system in the United States. Also 76 00:04:14,120 --> 00:04:16,200 Speaker 1: come from a family farm, so I have a little 77 00:04:16,200 --> 00:04:19,159 Speaker 1: bit of a farm background, and we are involved in 78 00:04:19,200 --> 00:04:24,799 Speaker 1: production agriculture in central Illinois, in the production of specialty grains. 79 00:04:24,839 --> 00:04:26,800 Speaker 1: So as a jumping off point, you know, we talked 80 00:04:26,839 --> 00:04:29,760 Speaker 1: a little bit about this in the intro. How bad 81 00:04:30,000 --> 00:04:32,320 Speaker 1: things actually are on the Mississippi at the moment. But 82 00:04:32,360 --> 00:04:36,039 Speaker 1: give us your sense of how things are at the 83 00:04:36,080 --> 00:04:39,200 Speaker 1: moment and how they stack up against history. Well, this 84 00:04:39,279 --> 00:04:41,599 Speaker 1: is certainly I've been doing this for about sixteen years, 85 00:04:41,640 --> 00:04:43,880 Speaker 1: certainly the worst I've ever seen. As I talked to 86 00:04:43,920 --> 00:04:46,120 Speaker 1: some of the other veterans and people with a little 87 00:04:46,120 --> 00:04:49,800 Speaker 1: more experience shipping on the river, it seems to be 88 00:04:50,120 --> 00:04:53,120 Speaker 1: about as bad as we've had since the nineteen eighties. 89 00:04:53,120 --> 00:04:56,599 Speaker 1: A lot of people are siting, uh, matching some of 90 00:04:56,600 --> 00:04:59,599 Speaker 1: those records. Two thousand twelve was a dry year. We 91 00:04:59,680 --> 00:05:02,320 Speaker 1: had some low, low water we had to contend with. 92 00:05:02,440 --> 00:05:05,400 Speaker 1: But this is a lot really new compared to what 93 00:05:05,440 --> 00:05:08,120 Speaker 1: we've been dealing with in the recent history, which is 94 00:05:08,200 --> 00:05:12,080 Speaker 1: high water. That's interesting. So it's a double whammy. So 95 00:05:12,200 --> 00:05:16,040 Speaker 1: if you're producing grains in the Midwest, you're contending with 96 00:05:16,480 --> 00:05:19,599 Speaker 1: a imagine drought is extremely bad just for the growing 97 00:05:19,640 --> 00:05:23,880 Speaker 1: of grains, and then the actual logistics. Yeah, so we're 98 00:05:23,960 --> 00:05:26,479 Speaker 1: kind of beholden to the weather all year round, especially 99 00:05:26,560 --> 00:05:30,080 Speaker 1: if your main market is the export market, which for 100 00:05:30,240 --> 00:05:33,920 Speaker 1: most would be on the river and river tributary terminals. 101 00:05:34,240 --> 00:05:37,039 Speaker 1: We are usually pretty consistent on the river with river 102 00:05:37,120 --> 00:05:39,160 Speaker 1: levels but you know, we usually have to deal with 103 00:05:39,160 --> 00:05:42,160 Speaker 1: low water in the fall, high water in the spring, 104 00:05:42,800 --> 00:05:44,760 Speaker 1: and it's just something that we usually have to keep 105 00:05:44,760 --> 00:05:47,719 Speaker 1: an eye on. Very rarely does it get parabolic in 106 00:05:47,760 --> 00:05:51,400 Speaker 1: a situation like we're in today. Can you talk to 107 00:05:51,480 --> 00:05:53,839 Speaker 1: us a little bit about the life cycle of a 108 00:05:53,920 --> 00:05:57,240 Speaker 1: harvest or I guess the supply chain of you know, 109 00:05:57,600 --> 00:06:00,839 Speaker 1: particular grain is grown in a few on a farm 110 00:06:01,000 --> 00:06:03,839 Speaker 1: and then it goes down the river and it ends 111 00:06:03,920 --> 00:06:07,520 Speaker 1: up in an export market like Japan or elsewhere. Like, 112 00:06:07,560 --> 00:06:11,600 Speaker 1: how does that process normally work and where are these 113 00:06:11,640 --> 00:06:15,839 Speaker 1: sticking points now? Typically farmers will want to get in 114 00:06:15,839 --> 00:06:18,359 Speaker 1: the field and plant their crops in April May. If 115 00:06:18,480 --> 00:06:21,440 Speaker 1: those are the ideal times to get in you would 116 00:06:21,440 --> 00:06:25,240 Speaker 1: typically begin harvest in that scenario September, which would last 117 00:06:25,440 --> 00:06:29,520 Speaker 1: through October and into the beginning of November. Now, for export, 118 00:06:30,040 --> 00:06:32,800 Speaker 1: soybeans are usually the first thing to leave the United States, 119 00:06:32,800 --> 00:06:35,280 Speaker 1: and a typical harvest, which is where we're at right now, 120 00:06:36,120 --> 00:06:40,839 Speaker 1: soybeans move about of exports will happen between September and February. 121 00:06:41,600 --> 00:06:46,359 Speaker 1: A half to might move by barge. That's where we 122 00:06:46,400 --> 00:06:49,359 Speaker 1: are today. Corn usually follows maybe at the turn of 123 00:06:49,360 --> 00:06:52,719 Speaker 1: the calendar year. That's when our big export program for 124 00:06:52,839 --> 00:06:56,240 Speaker 1: corn will happen. So right now it's pretty much all 125 00:06:56,360 --> 00:06:58,640 Speaker 1: hands on deck in terms of the shipping to get 126 00:06:58,640 --> 00:07:02,160 Speaker 1: the soybeans out. Are big buyers, obviously China. We want 127 00:07:02,200 --> 00:07:05,640 Speaker 1: to get those out and in overseas as fast as 128 00:07:05,720 --> 00:07:08,680 Speaker 1: possible because we will have a South American crop come 129 00:07:08,680 --> 00:07:12,720 Speaker 1: online somewhere January and February where we will no longer 130 00:07:12,760 --> 00:07:15,920 Speaker 1: be as competitive to the market. When you ship something, 131 00:07:16,200 --> 00:07:18,920 Speaker 1: depending on where you ship from. I will use St. 132 00:07:18,960 --> 00:07:22,240 Speaker 1: Louis because it is the biggest origin port out of 133 00:07:22,240 --> 00:07:25,680 Speaker 1: the Center Gulf. That might take in a normal scenario 134 00:07:26,240 --> 00:07:30,160 Speaker 1: ten days to get to New Orleans, maybe another thirty 135 00:07:30,240 --> 00:07:32,400 Speaker 1: to get to a place like Japan after it's loaded 136 00:07:32,400 --> 00:07:35,640 Speaker 1: on a boat. Right now, what we're seeing is at 137 00:07:35,720 --> 00:07:38,200 Speaker 1: least double the amount of time to get from a St. 138 00:07:38,200 --> 00:07:41,720 Speaker 1: Louis to a New Orleans, but that varies day by day. 139 00:07:41,760 --> 00:07:44,640 Speaker 1: There are land mines and pitfalls all over the place 140 00:07:44,640 --> 00:07:47,680 Speaker 1: on the river. Right now, it's legitimately a day to 141 00:07:47,760 --> 00:07:51,360 Speaker 1: day situation. So is the issue for farmers that the 142 00:07:51,480 --> 00:07:54,720 Speaker 1: longer it takes to get the crops out and exported 143 00:07:54,760 --> 00:07:57,280 Speaker 1: to market, the less competitive they are, or is the 144 00:07:57,360 --> 00:08:00,520 Speaker 1: issue that if you wait too long the crops them 145 00:08:00,680 --> 00:08:05,440 Speaker 1: start to spoil. We're both so this is where it's interesting. 146 00:08:05,600 --> 00:08:08,960 Speaker 1: While the dry weather is actually a hindrance to shipping 147 00:08:09,000 --> 00:08:11,920 Speaker 1: and moving the crop on the river, it is hugely 148 00:08:11,960 --> 00:08:14,640 Speaker 1: beneficial for the farmer getting their crops out of the field. 149 00:08:15,040 --> 00:08:18,400 Speaker 1: We are making very good pace on harvest because there's 150 00:08:18,440 --> 00:08:22,080 Speaker 1: been no rain to stop the harvest progress. So they're 151 00:08:22,120 --> 00:08:25,400 Speaker 1: coming off an extremely extremely fast paced in the West, 152 00:08:25,720 --> 00:08:28,200 Speaker 1: even faster because they don't have as much of a 153 00:08:28,240 --> 00:08:30,559 Speaker 1: crop because of the dryness and some of the drought 154 00:08:30,600 --> 00:08:34,920 Speaker 1: issues out there. Where the bottleneck occurs is at the 155 00:08:34,960 --> 00:08:38,240 Speaker 1: shipping point. Most farmers have built ample storage over the 156 00:08:38,320 --> 00:08:41,600 Speaker 1: last few years, as in the last ten plenty of 157 00:08:41,640 --> 00:08:44,600 Speaker 1: storage to store on farm, but the bottleneck becomes at 158 00:08:44,640 --> 00:08:48,959 Speaker 1: the origin port. So now we cannot move as many 159 00:08:49,160 --> 00:08:54,679 Speaker 1: barges because of reduced toes and barge is getting stuck 160 00:08:54,720 --> 00:08:57,360 Speaker 1: all along the river segment, and that creates a backup 161 00:08:57,440 --> 00:09:01,439 Speaker 1: at origin where it hurts the producer. Is a basis level, 162 00:09:01,559 --> 00:09:05,080 Speaker 1: or the difference in cash prices versus the Chicago Board 163 00:09:05,080 --> 00:09:08,000 Speaker 1: of Trade continue to drop off. So whereas a farmer 164 00:09:08,080 --> 00:09:11,840 Speaker 1: might see something relatively equal to what you see quoted 165 00:09:11,880 --> 00:09:14,360 Speaker 1: on the board. They might be getting a dollar less 166 00:09:14,440 --> 00:09:34,800 Speaker 1: because the transportation costs and risks are so high. Can 167 00:09:34,840 --> 00:09:37,720 Speaker 1: you talk a little bit more. You mentioned the logistical 168 00:09:38,000 --> 00:09:41,720 Speaker 1: land mines. Right now, what actually happens in low water 169 00:09:42,000 --> 00:09:45,480 Speaker 1: and how does it slow down the shipment of these 170 00:09:45,480 --> 00:09:50,160 Speaker 1: goods or the ground. So low water causes two problems 171 00:09:50,280 --> 00:09:53,920 Speaker 1: channel depth and channel width of which you can take 172 00:09:54,000 --> 00:09:56,960 Speaker 1: barges down. How this is being slowed down on the 173 00:09:57,040 --> 00:09:59,760 Speaker 1: river currently you have a tugboat that will push a 174 00:09:59,800 --> 00:10:03,000 Speaker 1: pa pack of barges from a St. Louis to New Orleans, 175 00:10:03,040 --> 00:10:06,360 Speaker 1: and they might typically push forty barges. Well, right now 176 00:10:06,480 --> 00:10:09,360 Speaker 1: the max is twenty five on the river. The amount 177 00:10:09,400 --> 00:10:11,760 Speaker 1: of grain that we can actually put in a barge 178 00:10:12,280 --> 00:10:15,880 Speaker 1: is being reduced. So right now everybody is a nine 179 00:10:15,880 --> 00:10:18,400 Speaker 1: ft draft. We can only sink a barge nine ft 180 00:10:18,440 --> 00:10:24,360 Speaker 1: down and ship it. That's that constitutes somewhere between less 181 00:10:24,360 --> 00:10:28,760 Speaker 1: than normal. Uh. Some of the other issues longer turns 182 00:10:29,080 --> 00:10:32,080 Speaker 1: where a lot of people are running daylight only hours 183 00:10:32,200 --> 00:10:35,160 Speaker 1: right now, which means the primarily the reason for that 184 00:10:35,240 --> 00:10:37,920 Speaker 1: is so they can dredge or dig out the bottom 185 00:10:37,920 --> 00:10:41,440 Speaker 1: of the river at night, so it just continues to 186 00:10:41,480 --> 00:10:43,720 Speaker 1: make longer turns down to the gulf and back. We 187 00:10:43,800 --> 00:10:46,640 Speaker 1: have stoppages which are day to day. It could be 188 00:10:46,840 --> 00:10:51,559 Speaker 1: five six blockages on any given river segment and uh, 189 00:10:51,640 --> 00:10:53,680 Speaker 1: all of that really you put all that together and 190 00:10:53,679 --> 00:10:57,120 Speaker 1: what that means for shippers uh, and grain dealers and 191 00:10:57,280 --> 00:11:00,840 Speaker 1: and people that move product on the rivers high shipping costs. 192 00:11:02,120 --> 00:11:05,560 Speaker 1: So what are farmers actually doing to offset some of 193 00:11:05,600 --> 00:11:09,319 Speaker 1: these issues? Like have they potentially built up I mean, 194 00:11:09,360 --> 00:11:11,800 Speaker 1: I guess if you were prepping ahead of time for 195 00:11:11,920 --> 00:11:14,400 Speaker 1: climate change in major drought, maybe you would build up 196 00:11:15,040 --> 00:11:18,600 Speaker 1: your storage capacity for instance, so that you could store 197 00:11:18,679 --> 00:11:20,400 Speaker 1: a lot of your grains if you can't move them. 198 00:11:20,400 --> 00:11:22,960 Speaker 1: Are there things that farmers can do to offset some 199 00:11:23,040 --> 00:11:27,160 Speaker 1: of these challenges? Well, farmers, you can always price ahead. 200 00:11:27,200 --> 00:11:31,360 Speaker 1: You can price before the issue gets here. This issue 201 00:11:31,400 --> 00:11:35,120 Speaker 1: really started well early in the year, but it really 202 00:11:35,120 --> 00:11:38,520 Speaker 1: came to a head in September and October, So you're 203 00:11:39,240 --> 00:11:42,040 Speaker 1: their issue. There are ways to mitigate that risk by 204 00:11:42,040 --> 00:11:45,440 Speaker 1: pricing ahead, taking some of that risk off your off 205 00:11:45,480 --> 00:11:48,840 Speaker 1: your table. You also have a huge build up in 206 00:11:48,920 --> 00:11:52,080 Speaker 1: storage on farm so a lot of these producers can 207 00:11:52,120 --> 00:11:56,280 Speaker 1: tuck away the grain until there's more beneficial river system, 208 00:11:56,760 --> 00:11:59,320 Speaker 1: a better chance and a better opportunity to sell better 209 00:11:59,400 --> 00:12:01,960 Speaker 1: values once we get some of these issues sorted out. 210 00:12:02,120 --> 00:12:06,400 Speaker 1: Do farmers have any alternative ways of shipping goods? Is 211 00:12:06,400 --> 00:12:09,760 Speaker 1: there any rail or trucking nearby or do any of 212 00:12:09,760 --> 00:12:12,560 Speaker 1: them have that option when they can't get a spot 213 00:12:12,600 --> 00:12:16,640 Speaker 1: on a barge. Absolutely, farmers by and large have their 214 00:12:16,640 --> 00:12:19,680 Speaker 1: own trucks. They can move their own product. Uh, there 215 00:12:19,679 --> 00:12:25,280 Speaker 1: are railhouses. Rail even before these river issues was pretty taxed, 216 00:12:25,320 --> 00:12:29,160 Speaker 1: and they've had their own issues and performance and otherwise 217 00:12:29,200 --> 00:12:32,480 Speaker 1: in certain markets in certain parts of the US. So 218 00:12:33,160 --> 00:12:35,080 Speaker 1: I don't know that rail is in a position to 219 00:12:35,160 --> 00:12:38,760 Speaker 1: really help out the river market. And we already have 220 00:12:38,920 --> 00:12:42,800 Speaker 1: a huge demand pull by rail to move corn and 221 00:12:42,840 --> 00:12:45,319 Speaker 1: beans and other products to the West where we had 222 00:12:45,320 --> 00:12:48,920 Speaker 1: a substantial drought, into the Southeast where there's good demand 223 00:12:49,000 --> 00:12:53,120 Speaker 1: for for rail in product, and it really isn't economically 224 00:12:53,160 --> 00:12:57,440 Speaker 1: feasible to truck your grain to the New Orleans, which 225 00:12:57,440 --> 00:12:59,400 Speaker 1: at the end of the day, for export is where 226 00:12:59,440 --> 00:13:02,080 Speaker 1: all this what it needs to be. It's really a 227 00:13:02,120 --> 00:13:05,400 Speaker 1: sit in wait. Look for other markets like a railhouse. 228 00:13:05,559 --> 00:13:09,840 Speaker 1: Look for other markets like ethanol and feeders, and just 229 00:13:10,320 --> 00:13:13,280 Speaker 1: if you need to move grain, find something else other 230 00:13:13,320 --> 00:13:15,719 Speaker 1: than the river at this point to find a home 231 00:13:15,800 --> 00:13:18,200 Speaker 1: because the values will be much better to the producer. 232 00:13:18,800 --> 00:13:20,760 Speaker 1: So this is one thing I was wondering. Actually, you know, 233 00:13:20,800 --> 00:13:24,120 Speaker 1: we're talking about moving things like soybeans down the river 234 00:13:24,240 --> 00:13:27,320 Speaker 1: so that they can get exported to markets like China 235 00:13:27,440 --> 00:13:32,080 Speaker 1: and elsewhere. How much of the grains that are moving 236 00:13:32,400 --> 00:13:35,560 Speaker 1: through the Mississippi, How how much of that goes to 237 00:13:35,640 --> 00:13:39,680 Speaker 1: the US versus the rest of the world. So if 238 00:13:39,720 --> 00:13:43,400 Speaker 1: you're talking about it, let's just take corn for instance, 239 00:13:43,440 --> 00:13:49,000 Speaker 1: because I deal in corn mostly but probably oh my gosh, 240 00:13:49,040 --> 00:13:51,600 Speaker 1: that's all I hear in my house. My I mean, 241 00:13:51,880 --> 00:13:54,600 Speaker 1: my kids have never cared one iota what I do. 242 00:13:54,640 --> 00:13:57,440 Speaker 1: But since that came out, they've done so much for 243 00:13:57,480 --> 00:14:00,439 Speaker 1: the corn industry. Let me tell you, uh, I would say, 244 00:14:02,000 --> 00:14:04,559 Speaker 1: of like the corn in the United States goes for export, 245 00:14:04,880 --> 00:14:08,160 Speaker 1: the majority of that gets used in house for between ethan, 246 00:14:08,200 --> 00:14:14,040 Speaker 1: all uh, feed of animals and just other domestic food products. 247 00:14:14,960 --> 00:14:18,440 Speaker 1: Beans are much more heavy export, probably closer to half 248 00:14:18,520 --> 00:14:20,720 Speaker 1: or something like that. So that's why there's such a 249 00:14:20,720 --> 00:14:22,320 Speaker 1: big on It's not only is it our time to 250 00:14:22,440 --> 00:14:25,080 Speaker 1: ship beans and to get them out. It's our window, 251 00:14:25,240 --> 00:14:27,720 Speaker 1: the place where we're the most competitive, where we are 252 00:14:27,760 --> 00:14:31,600 Speaker 1: typically cheaper than Brazil and our competition in Argentina. That's 253 00:14:31,600 --> 00:14:33,480 Speaker 1: why it's such a high priority to get those out 254 00:14:33,560 --> 00:14:36,600 Speaker 1: now because they will be coming online with bigger crops. 255 00:14:36,720 --> 00:14:40,960 Speaker 1: Is are especially Brazil continues to increase acreage year over year. 256 00:14:41,520 --> 00:14:43,760 Speaker 1: They are becoming more of a force and a bigger 257 00:14:43,760 --> 00:14:47,480 Speaker 1: player in the grain and especially soybean UH competition force 258 00:14:47,520 --> 00:14:50,480 Speaker 1: in the world. Do farmers have to make a decision 259 00:14:51,200 --> 00:14:54,360 Speaker 1: about Wait, this might be like a new normal that 260 00:14:54,520 --> 00:14:57,200 Speaker 1: if you know, because droughts can last a long time. Obviously, 261 00:14:57,240 --> 00:14:59,680 Speaker 1: the drought in the Southwest has happened for several years 262 00:14:59,680 --> 00:15:02,640 Speaker 1: and there like crisis of water levels there. Do farmers 263 00:15:02,680 --> 00:15:04,680 Speaker 1: have to make a bet so to speak, on whether 264 00:15:04,720 --> 00:15:08,520 Speaker 1: the drought is going to persist and constrained waterways is 265 00:15:08,560 --> 00:15:10,240 Speaker 1: a new normal and there has to be a different 266 00:15:10,240 --> 00:15:14,240 Speaker 1: way of exporting their goods. I don't know that they 267 00:15:14,280 --> 00:15:18,720 Speaker 1: need to sit there and worry about drought into the future. 268 00:15:18,760 --> 00:15:21,840 Speaker 1: And as it relates to the river system, they could 269 00:15:21,920 --> 00:15:27,360 Speaker 1: certainly look at diversifying some of their in use. Buyers 270 00:15:27,680 --> 00:15:30,160 Speaker 1: maybe do a little eth and all. Do some river 271 00:15:30,400 --> 00:15:35,840 Speaker 1: feeder maybe diversify it. But my my experience in weather 272 00:15:36,360 --> 00:15:39,880 Speaker 1: and river conditions and rain is much like the economy, 273 00:15:39,920 --> 00:15:42,720 Speaker 1: just like a drought in a recession. The best part 274 00:15:42,760 --> 00:15:45,920 Speaker 1: about them is they will end at some point. What 275 00:15:46,000 --> 00:15:49,240 Speaker 1: would be most helpful for farmers at the moment? Would 276 00:15:49,240 --> 00:15:52,320 Speaker 1: it be like more coordination on the river or better 277 00:15:52,440 --> 00:15:56,760 Speaker 1: dredging capacity? What would people like to see here? There's 278 00:15:56,880 --> 00:15:59,440 Speaker 1: no magic bullet right now for the river. The thing 279 00:15:59,480 --> 00:16:02,520 Speaker 1: that we need is heavy rain, a flash flood type 280 00:16:02,520 --> 00:16:07,440 Speaker 1: event north of St. Louis. The biggest problem with this 281 00:16:07,480 --> 00:16:10,000 Speaker 1: event that we have right now isn't so much the 282 00:16:10,040 --> 00:16:12,640 Speaker 1: low water, it's where the low water is located. The 283 00:16:12,640 --> 00:16:16,680 Speaker 1: biggest problems are Memphis South. So if you had a 284 00:16:16,680 --> 00:16:19,200 Speaker 1: flooding on the Illinois, some of the bigger companies and 285 00:16:19,280 --> 00:16:22,080 Speaker 1: a d M or a Cargill could shift their operations 286 00:16:22,120 --> 00:16:25,880 Speaker 1: to really push product out of the lower Mississippi or 287 00:16:25,880 --> 00:16:30,360 Speaker 1: the Ohio River and kind of ore that opportunity. The 288 00:16:30,440 --> 00:16:33,600 Speaker 1: problem we have right now is where this biggest issue 289 00:16:33,600 --> 00:16:37,800 Speaker 1: is located, and that's Memphis South, which affects every signal 290 00:16:37,960 --> 00:16:41,960 Speaker 1: river segment. So there is no magic bullet what we need, 291 00:16:42,040 --> 00:16:44,600 Speaker 1: or heavy rains, a flash flood type event, like I said, 292 00:16:44,640 --> 00:16:49,800 Speaker 1: that would just run off into the rivers, the tributaries, 293 00:16:49,840 --> 00:16:52,480 Speaker 1: in the in the in the main rivers to provide 294 00:16:52,560 --> 00:16:55,960 Speaker 1: us a little relief. The other would be a kind 295 00:16:55,960 --> 00:16:58,800 Speaker 1: of just soaking rain and start knocking back this drought 296 00:16:58,920 --> 00:17:02,880 Speaker 1: where we have soil moisture and every rain adds to it. 297 00:17:02,960 --> 00:17:05,600 Speaker 1: That is obviously a longer process. It will be slower 298 00:17:05,640 --> 00:17:10,119 Speaker 1: to bring the river levels back up, but absent of 299 00:17:10,200 --> 00:17:12,880 Speaker 1: widespread rain, dredging is just a kind of a band 300 00:17:12,880 --> 00:17:14,919 Speaker 1: aid on a bullet hole at this point. It's just 301 00:17:15,040 --> 00:17:18,439 Speaker 1: keeping us going. Just the one last question for me, 302 00:17:18,840 --> 00:17:22,400 Speaker 1: more out of curiosity. But you mentioned that normally the 303 00:17:22,480 --> 00:17:26,239 Speaker 1: problem that you face is actually too high water. Can 304 00:17:26,280 --> 00:17:30,480 Speaker 1: you talk about some of the challenges that that poses. Yeah, 305 00:17:30,600 --> 00:17:34,240 Speaker 1: so high water. The one experience that I had that 306 00:17:34,320 --> 00:17:35,879 Speaker 1: was probably the worst would have been the spring of 307 00:17:35,960 --> 00:17:41,000 Speaker 1: nineteen where it just continually rained, and more than rain, 308 00:17:41,200 --> 00:17:44,320 Speaker 1: it didn't it didn't ever get warm in the spring, 309 00:17:44,480 --> 00:17:46,200 Speaker 1: and there wasn't a whole lot of sun to dry 310 00:17:46,280 --> 00:17:51,159 Speaker 1: up the soils, and we were pretty much non operational 311 00:17:51,240 --> 00:17:56,760 Speaker 1: on the river, especially the Illinois River, until from spring 312 00:17:56,800 --> 00:18:00,440 Speaker 1: to June where there was a complete backlog at origin, 313 00:18:00,920 --> 00:18:04,000 Speaker 1: a lot like what we have here, but just nothing 314 00:18:04,119 --> 00:18:07,320 Speaker 1: was moving. We're actually trying to move in this situation. 315 00:18:07,359 --> 00:18:09,920 Speaker 1: With high water there, you can get to a point 316 00:18:09,960 --> 00:18:13,639 Speaker 1: where you can't load anything physically because the water is 317 00:18:13,640 --> 00:18:16,800 Speaker 1: so high that barges sit above spouts and product that 318 00:18:16,800 --> 00:18:19,280 Speaker 1: you're trying to load on the barge. Neither or fun, 319 00:18:19,760 --> 00:18:22,000 Speaker 1: but high water comes with its own set of challenges 320 00:18:22,400 --> 00:18:25,480 Speaker 1: just like low water, and high water has definitely been 321 00:18:25,840 --> 00:18:31,600 Speaker 1: the more prominent of the two in recent years. Ben, 322 00:18:31,680 --> 00:18:34,439 Speaker 1: Thank you so much for joining us. This was extremely helpful. 323 00:18:34,560 --> 00:18:37,560 Speaker 1: So appreciate you coming out on ad lots. Oh, it's 324 00:18:37,560 --> 00:18:40,680 Speaker 1: an honor and it's appreciate you guys having me. Yeah, absolutely, yeah, 325 00:18:40,680 --> 00:18:44,240 Speaker 1: thanks man. That was really good. Well, Joe, that was 326 00:18:44,320 --> 00:18:47,360 Speaker 1: fascinating and there is a lot to dissect there. But 327 00:18:47,560 --> 00:18:50,400 Speaker 1: just before we do, we're gonna bring in two other 328 00:18:50,480 --> 00:18:53,560 Speaker 1: guests to people who have actually been on the show before, 329 00:18:54,160 --> 00:18:57,199 Speaker 1: kind of talking about barges, but this time we're really 330 00:18:57,240 --> 00:18:59,520 Speaker 1: going to get into it. We're gonna be speaking with 331 00:18:59,640 --> 00:19:04,399 Speaker 1: Mercy Group CEO Anton Posner and President Margot Brock In 332 00:19:04,480 --> 00:19:24,280 Speaker 1: just a few minutes after the break. So we're back 333 00:19:24,320 --> 00:19:27,560 Speaker 1: and we are continuing our discussion of the Great Mississippi 334 00:19:27,600 --> 00:19:29,919 Speaker 1: Drought and what it actually means for the economy, for 335 00:19:30,040 --> 00:19:32,719 Speaker 1: transport and logistics. We are going to be speaking with 336 00:19:32,840 --> 00:19:37,159 Speaker 1: Mercury Group CEO Anton Posner and President Margot Brock. Anton 337 00:19:37,200 --> 00:19:39,440 Speaker 1: and Margot, thanks so much for coming back on our thoughts. 338 00:19:40,640 --> 00:19:43,120 Speaker 1: Pleasure to be here, Thanks for having us. Yeah, great 339 00:19:43,119 --> 00:19:46,520 Speaker 1: to be back. So I remember the last time we spoke, 340 00:19:47,040 --> 00:19:50,159 Speaker 1: we did touch on barges briefly, and so Joe and I, 341 00:19:50,280 --> 00:19:52,159 Speaker 1: you know, when we were prepping for this episode, we 342 00:19:52,200 --> 00:19:56,200 Speaker 1: thought who do we need to call to talk about barges, 343 00:19:56,359 --> 00:19:59,919 Speaker 1: and it was, of course Mercury Group. Just to begin with, 344 00:20:00,119 --> 00:20:03,800 Speaker 1: give us a sense of your connection to the barge business. 345 00:20:04,520 --> 00:20:08,160 Speaker 1: The river. River business is a huge part of Mercury 346 00:20:08,200 --> 00:20:12,960 Speaker 1: Group business and has been since our inception. Of course, 347 00:20:13,080 --> 00:20:17,240 Speaker 1: millions of tons move of commodities and cargoes move on 348 00:20:17,240 --> 00:20:22,199 Speaker 1: the river system every every year, northbound, southbound, east and 349 00:20:22,320 --> 00:20:26,680 Speaker 1: west throughout the Mississippi River High river system, so it's 350 00:20:26,680 --> 00:20:29,960 Speaker 1: been a big part of our business, primarily moving import 351 00:20:30,040 --> 00:20:35,040 Speaker 1: commodities via coming in via New Orleans and mobile commodities 352 00:20:35,080 --> 00:20:38,600 Speaker 1: like steel and aluminum and lead and zinc and on 353 00:20:39,000 --> 00:20:43,600 Speaker 1: raw materials for the steel and metals metals industry. UM. 354 00:20:43,800 --> 00:20:47,720 Speaker 1: So it's such a significant part of the North American 355 00:20:47,840 --> 00:20:53,280 Speaker 1: and American transportation UH system and a big huge part 356 00:20:53,280 --> 00:20:56,760 Speaker 1: of the Mercury Rickery Groups business that we manage for 357 00:20:56,760 --> 00:20:59,119 Speaker 1: for our clients. Can you talk about like you know, 358 00:20:59,160 --> 00:21:02,760 Speaker 1: we've talked a lot out about logistics and shipping and 359 00:21:02,920 --> 00:21:06,439 Speaker 1: ports and trucks and dredging on the show several times, 360 00:21:06,880 --> 00:21:09,800 Speaker 1: but just like how significant I do feel as though 361 00:21:09,880 --> 00:21:14,240 Speaker 1: inland waterways specifically do not get that much attention. I 362 00:21:14,280 --> 00:21:17,280 Speaker 1: guess maybe outside when they're in crisis, But how significant 363 00:21:17,320 --> 00:21:19,960 Speaker 1: are they? To what degree do people need to appreciate 364 00:21:20,000 --> 00:21:25,560 Speaker 1: the importance of our inland infrastructure. That's a great question 365 00:21:25,640 --> 00:21:29,679 Speaker 1: because I think it is such an unknown in this 366 00:21:29,800 --> 00:21:34,800 Speaker 1: country for people don't understand how extensive the river system 367 00:21:34,920 --> 00:21:37,480 Speaker 1: is and how much of the US gets fed in 368 00:21:37,680 --> 00:21:42,040 Speaker 1: and out of materials on the river system. And you know, 369 00:21:42,080 --> 00:21:45,240 Speaker 1: Anton and I are East Coast based people, so I 370 00:21:45,280 --> 00:21:48,200 Speaker 1: didn't grow up on the Mississippi. I didn't see barges 371 00:21:48,680 --> 00:21:51,640 Speaker 1: moving on the Mississippi, and I didn't know they existed 372 00:21:51,680 --> 00:21:55,800 Speaker 1: growing up, and even Anton and I, who went to 373 00:21:56,240 --> 00:22:00,919 Speaker 1: merchant Marine merchant Marine school, we are came out as 374 00:22:01,000 --> 00:22:04,919 Speaker 1: licensed third mate. Even in college, we didn't talk about it. 375 00:22:04,960 --> 00:22:08,480 Speaker 1: We talked about ocean freight and and bigger, bigger scale. 376 00:22:09,080 --> 00:22:13,520 Speaker 1: The river system is tremendous, and the amount of commerce 377 00:22:13,880 --> 00:22:19,160 Speaker 1: that runs inbound, it really runs the gamut. There's barges 378 00:22:19,200 --> 00:22:24,760 Speaker 1: that move liquids. There's an incredible, incredible fleet of barges 379 00:22:24,800 --> 00:22:29,399 Speaker 1: that move dry materials. Inland. It can be you know, 380 00:22:29,480 --> 00:22:34,680 Speaker 1: some interestingly enough, we at one point removing organic soybeans 381 00:22:35,080 --> 00:22:38,919 Speaker 1: into Middle America because although we make soybeans here in 382 00:22:38,920 --> 00:22:41,639 Speaker 1: the US, we don't have a great organic crop and 383 00:22:41,680 --> 00:22:46,320 Speaker 1: you have to feed your organic meat organic food. So 384 00:22:46,520 --> 00:22:50,440 Speaker 1: to have organic cows, we need organic feedstock for them. 385 00:22:50,520 --> 00:22:55,760 Speaker 1: We send raw materials into production facilities. So you know, 386 00:22:55,800 --> 00:22:59,639 Speaker 1: when we're looking at what has happened in this market 387 00:22:59,680 --> 00:23:04,000 Speaker 1: that we're all living of reduced availability of so many 388 00:23:04,080 --> 00:23:07,640 Speaker 1: items that we think of that come from China in containers, 389 00:23:08,320 --> 00:23:11,200 Speaker 1: you know, and the chips for our cars and Christmas 390 00:23:11,240 --> 00:23:13,560 Speaker 1: gifts on our shelves. That's one part of the market. 391 00:23:13,600 --> 00:23:17,000 Speaker 1: But there's a lot of raw materials that feed up 392 00:23:17,040 --> 00:23:21,879 Speaker 1: into the US that aren't able to reach these production 393 00:23:22,040 --> 00:23:25,359 Speaker 1: facilities if the river is not working, and that's the 394 00:23:25,440 --> 00:23:29,520 Speaker 1: next great shortage that happens when we can't get materials 395 00:23:29,600 --> 00:23:34,920 Speaker 1: up to the production facilities. And then on the export side, 396 00:23:35,320 --> 00:23:39,600 Speaker 1: we'll have discussed grain already for this podcast. Export grain 397 00:23:39,680 --> 00:23:42,840 Speaker 1: is a huge part of the US is grain market. 398 00:23:43,280 --> 00:23:48,080 Speaker 1: So although we feed plenty of our of ourselves domestically 399 00:23:48,119 --> 00:23:51,520 Speaker 1: with what we produce, it's a really big global market 400 00:23:51,560 --> 00:23:54,680 Speaker 1: for US grain. And right now is the green season. 401 00:23:54,800 --> 00:23:58,240 Speaker 1: So when rivers are not running well, which is what 402 00:23:58,280 --> 00:24:00,720 Speaker 1: we're going to talk about today, and cannot get that 403 00:24:00,800 --> 00:24:04,480 Speaker 1: grain out of the river system, that's a huge financial 404 00:24:04,520 --> 00:24:10,200 Speaker 1: impact on our farmers. So it really is very extensive 405 00:24:11,080 --> 00:24:13,880 Speaker 1: the reaches because the river system, you know, it all 406 00:24:13,960 --> 00:24:16,959 Speaker 1: runs up off the Mississippi and feeds east and west. 407 00:24:17,119 --> 00:24:19,879 Speaker 1: It's a very big footprint of the US that the 408 00:24:19,960 --> 00:24:22,679 Speaker 1: river system touches. So talk to us a little bit 409 00:24:22,760 --> 00:24:25,840 Speaker 1: about what you've seen so far. How would you describe 410 00:24:26,359 --> 00:24:32,920 Speaker 1: the current situation on the Mississippi. The current situation the 411 00:24:32,960 --> 00:24:38,760 Speaker 1: Middle America is suffering from a huge drought, and typically 412 00:24:38,800 --> 00:24:43,199 Speaker 1: about this time of year, it's a combination of we 413 00:24:43,280 --> 00:24:47,600 Speaker 1: have self found grain coming out, which dominates the landscape 414 00:24:47,800 --> 00:24:50,600 Speaker 1: because it's so important to the U. S economy to 415 00:24:50,680 --> 00:24:54,240 Speaker 1: be shipping that grain out. And usually they're fighting against 416 00:24:54,920 --> 00:24:58,560 Speaker 1: weather systems that are hurricanes, and we're used to seeing, 417 00:24:59,000 --> 00:25:03,240 Speaker 1: you know, this time last year they were recovering from Ida, 418 00:25:03,560 --> 00:25:06,960 Speaker 1: which took out grain elevators, and then there's too much 419 00:25:06,960 --> 00:25:09,159 Speaker 1: water on the river and it's running too fast and 420 00:25:09,200 --> 00:25:12,520 Speaker 1: it's dangerous and there's so many impacts from too much water. 421 00:25:13,200 --> 00:25:16,160 Speaker 1: And what we're seeing this year is we didn't see 422 00:25:16,160 --> 00:25:19,800 Speaker 1: any big weather systems come into the Gulf. The hurricane 423 00:25:19,840 --> 00:25:22,400 Speaker 1: came in, came into the Gulf, it went to Florida, 424 00:25:22,480 --> 00:25:25,240 Speaker 1: it didn't go to the river system. The river's did 425 00:25:25,240 --> 00:25:28,800 Speaker 1: not see any of that rain water. The river is 426 00:25:28,920 --> 00:25:34,359 Speaker 1: at historic lows and there are moments where you know, 427 00:25:34,400 --> 00:25:38,280 Speaker 1: the gauge at Memphis, Tennessee reading water levels. They've been 428 00:25:38,320 --> 00:25:41,600 Speaker 1: recording that gauge for the last eighty nine years and 429 00:25:42,680 --> 00:25:47,560 Speaker 1: we learned through current events that was the lowest mark 430 00:25:47,960 --> 00:25:50,640 Speaker 1: in that eighty nine year reading on the river. Well 431 00:25:50,680 --> 00:25:54,000 Speaker 1: we've surpassed that. We have set new lows on this river. 432 00:25:54,200 --> 00:25:59,439 Speaker 1: It is significant on the lower Mississippi and what it 433 00:25:59,520 --> 00:26:04,800 Speaker 1: has caused is a series of domino effects. Really, the 434 00:26:04,800 --> 00:26:08,960 Speaker 1: water is low, we are getting channels evaporating where we 435 00:26:09,040 --> 00:26:12,520 Speaker 1: just can't transit it because they're too low. And certain 436 00:26:12,560 --> 00:26:16,880 Speaker 1: areas of the Lower Mississippi have been dredged already, there 437 00:26:16,880 --> 00:26:19,400 Speaker 1: are other areas waiting for the dredge. The dredges are 438 00:26:19,480 --> 00:26:21,920 Speaker 1: very busy right now up and down the river, trying 439 00:26:21,960 --> 00:26:27,480 Speaker 1: to keep keep traffic flowing. We're seeing when those rivers open, 440 00:26:27,920 --> 00:26:30,600 Speaker 1: traffic is in one direction, so you've been waiting for 441 00:26:30,680 --> 00:26:33,280 Speaker 1: days for the river to reopen. Your barges are stuck, 442 00:26:33,320 --> 00:26:36,760 Speaker 1: and now you're sitting a few days more while traffic 443 00:26:36,800 --> 00:26:39,440 Speaker 1: from the opposite direction passes through, and that dredge is 444 00:26:39,480 --> 00:26:44,119 Speaker 1: now on its way somewhere else to salvage another location 445 00:26:44,160 --> 00:26:47,439 Speaker 1: that's having problems. It's almost doing bare minimum just to 446 00:26:47,520 --> 00:26:52,240 Speaker 1: keep the river operating and keep barges flowing. We are 447 00:26:52,320 --> 00:26:55,919 Speaker 1: also because the water is so low, it restricts how 448 00:26:56,000 --> 00:26:58,080 Speaker 1: much you can put in a barge, and so we're 449 00:26:58,119 --> 00:27:02,400 Speaker 1: seeing very low drafts on bar barges, which then has 450 00:27:02,440 --> 00:27:06,320 Speaker 1: that next implication that you need more than the usual 451 00:27:06,359 --> 00:27:10,360 Speaker 1: amount of barges to move that size parcel of cargo. 452 00:27:10,520 --> 00:27:14,600 Speaker 1: So you know, if you're previously you would have moved 453 00:27:15,040 --> 00:27:19,520 Speaker 1: your parcel in ten barges, maybe now you need fourteen 454 00:27:20,480 --> 00:27:23,600 Speaker 1: because of how you have to load them. So it's 455 00:27:23,640 --> 00:27:27,320 Speaker 1: really there's constraints on the system coming from every direction. 456 00:27:28,200 --> 00:27:30,720 Speaker 1: You know, we can't get the barges moving fast enough 457 00:27:31,080 --> 00:27:33,560 Speaker 1: to get them to a point where we need them 458 00:27:33,560 --> 00:27:37,760 Speaker 1: to load. Plus we need that many more to load now, yeah, 459 00:27:37,960 --> 00:27:41,600 Speaker 1: add on you know that need for more barges per 460 00:27:42,160 --> 00:27:47,640 Speaker 1: per per ton effectively on top of a busy grain season. 461 00:27:47,720 --> 00:27:50,840 Speaker 1: And you think people used Percy spoke to on the 462 00:27:50,880 --> 00:27:53,119 Speaker 1: grain market and probably get more insight on this. But 463 00:27:53,640 --> 00:27:57,040 Speaker 1: we've seen a more active export grain market this year, 464 00:27:57,119 --> 00:28:00,280 Speaker 1: with which seems to be of course servers alt to 465 00:28:00,359 --> 00:28:04,680 Speaker 1: what's happening with Russia and Ukraine and European markets buying 466 00:28:04,720 --> 00:28:08,320 Speaker 1: more American grain. And we're not grain people, so we'll 467 00:28:08,560 --> 00:28:11,239 Speaker 1: leave it to the great experts to comment on that. 468 00:28:11,280 --> 00:28:14,359 Speaker 1: But yeah, this situation on the on the river system 469 00:28:14,440 --> 00:28:16,560 Speaker 1: is coming at a time within when there's a ready 470 00:28:16,760 --> 00:28:20,520 Speaker 1: constraint on the barge market and we're seeing as a result, 471 00:28:20,560 --> 00:28:25,840 Speaker 1: we're seeing spot barge rates skyrocket. We've seen on an 472 00:28:25,880 --> 00:28:29,679 Speaker 1: important lane that we're moving on ray materials setting northbound. 473 00:28:30,119 --> 00:28:33,800 Speaker 1: We've seen spot rates for October in the range of 474 00:28:34,240 --> 00:28:40,760 Speaker 1: nine to ten times what the annual contract rate was 475 00:28:41,320 --> 00:28:44,080 Speaker 1: for that particular move, and we were lucky to be 476 00:28:44,160 --> 00:28:47,239 Speaker 1: able to find that. Tracy, I just found we have 477 00:28:47,880 --> 00:28:50,800 Speaker 1: U S D A U S river barge grain spot 478 00:28:50,880 --> 00:28:54,520 Speaker 1: rage on the terminal. So we do we actually st Louismasouri, Yeah, 479 00:28:54,560 --> 00:28:57,320 Speaker 1: we do so. In fact, it's very clear what Anton 480 00:28:57,440 --> 00:28:59,920 Speaker 1: just said. So you know, going back to August, we 481 00:29:00,000 --> 00:29:03,360 Speaker 1: were at fifteen I'm not exactly sure what the fifteen 482 00:29:03,360 --> 00:29:06,280 Speaker 1: dollars per short time, So we're at fifteen and it 483 00:29:06,360 --> 00:29:09,120 Speaker 1: got as high as a hundred and six in the 484 00:29:09,400 --> 00:29:13,480 Speaker 1: in early October, so really an extraordinary rise in a 485 00:29:13,520 --> 00:29:17,360 Speaker 1: spot barge prices. All this chaos on the Mississippi, and 486 00:29:17,400 --> 00:29:19,200 Speaker 1: you know, a lot of this is sort of reminiscent 487 00:29:19,480 --> 00:29:24,520 Speaker 1: of the shipping chaos that we were talking about in one. 488 00:29:25,000 --> 00:29:30,160 Speaker 1: But what exactly can be done to alleviate this? If anything? 489 00:29:30,240 --> 00:29:33,239 Speaker 1: I know there's some dredging activity going on. Can you 490 00:29:33,280 --> 00:29:37,600 Speaker 1: try to you know, expand capacity on the river rush 491 00:29:37,760 --> 00:29:40,719 Speaker 1: to expand capacity at river ports? Is any of that 492 00:29:40,760 --> 00:29:43,760 Speaker 1: possible or does it help the fix right now is 493 00:29:44,120 --> 00:29:47,560 Speaker 1: a good old rainstorm. They just need water. You know, 494 00:29:48,080 --> 00:29:52,880 Speaker 1: there is no significant rainfall in the forecast. Everyone's you know, 495 00:29:53,040 --> 00:29:55,680 Speaker 1: watching carefully in the bards lines of all. And then 496 00:29:55,720 --> 00:29:59,560 Speaker 1: the next concern is when that rainfall comes. The surrounding 497 00:29:59,600 --> 00:30:03,840 Speaker 1: area is so dry as well that it's going to 498 00:30:03,920 --> 00:30:05,600 Speaker 1: take a bit before we get to a point where 499 00:30:05,600 --> 00:30:09,200 Speaker 1: there's actually runoff feeding the rivers. That's the corrective action 500 00:30:09,240 --> 00:30:11,719 Speaker 1: that we need. We just need water in the rivers, 501 00:30:11,920 --> 00:30:15,520 Speaker 1: you know, dredging. Dredging is always a difficult thing to 502 00:30:15,560 --> 00:30:19,280 Speaker 1: stay ahead of to keep channels open, and you're talking about, 503 00:30:19,880 --> 00:30:23,560 Speaker 1: you know, a massive amount of navigable rivers that that 504 00:30:23,760 --> 00:30:26,880 Speaker 1: the Army Corps of Engineers needs to maintain to keep 505 00:30:26,920 --> 00:30:29,880 Speaker 1: us moving freight on the rivers of the US. So 506 00:30:31,000 --> 00:30:36,640 Speaker 1: increasing capacity right now is purely just by keeping channels operating, 507 00:30:36,840 --> 00:30:42,120 Speaker 1: keeping navigable waterways operating, and that's where we're suffering. We 508 00:30:42,200 --> 00:30:44,680 Speaker 1: just don't have the water to be able to navigate 509 00:30:44,760 --> 00:30:47,240 Speaker 1: up and down these rivers right now. At some points 510 00:30:47,360 --> 00:30:50,440 Speaker 1: we look at large capacity being the issue, and it's 511 00:30:50,520 --> 00:30:52,880 Speaker 1: usually this time of year that's a big issue because 512 00:30:52,920 --> 00:30:55,840 Speaker 1: the barges are all tied up in the grain sector, 513 00:30:56,400 --> 00:30:58,840 Speaker 1: and those that are looking to move northbound cargo are 514 00:30:59,000 --> 00:31:03,240 Speaker 1: constrained because the barge lines feed all their equipment up river. 515 00:31:03,800 --> 00:31:05,960 Speaker 1: But that's not even the issue anymore. The issue is 516 00:31:06,040 --> 00:31:09,440 Speaker 1: just it purely can't move. There's no water, it can't move, 517 00:31:09,640 --> 00:31:14,160 Speaker 1: and everyone is just desperate to get the river the 518 00:31:14,200 --> 00:31:18,080 Speaker 1: empty barges back and get them reposition to the next 519 00:31:18,080 --> 00:31:20,440 Speaker 1: point for a load and keep right moving. I have 520 00:31:20,480 --> 00:31:23,600 Speaker 1: a short question and then a slightly longer question. So 521 00:31:23,680 --> 00:31:26,800 Speaker 1: the first short question is what are the non grain 522 00:31:27,280 --> 00:31:31,040 Speaker 1: the dominant non grain goods that gets shipped along the 523 00:31:31,160 --> 00:31:39,520 Speaker 1: river coal, steel, metals, chemicals and tank barges, petroleum products, 524 00:31:39,960 --> 00:31:44,560 Speaker 1: things like that, iron ore, find row material sparrow alloys, 525 00:31:44,640 --> 00:31:47,240 Speaker 1: things like this that go into into steel and making 526 00:31:47,280 --> 00:31:50,160 Speaker 1: a coal. Coal is a huge commodity that moves on 527 00:31:50,240 --> 00:31:52,840 Speaker 1: the on the river system. Our business tends to fold 528 00:31:52,920 --> 00:31:55,400 Speaker 1: mostly towards the metals and steel markets and the row 529 00:31:55,440 --> 00:31:58,920 Speaker 1: materials that go around those, and they're they're keeping us 530 00:31:58,960 --> 00:32:02,000 Speaker 1: pretty busy, Joe. Then this gets to my second question, 531 00:32:02,040 --> 00:32:05,320 Speaker 1: which is, Okay, yes, we see I'm looking at the 532 00:32:05,400 --> 00:32:08,360 Speaker 1: start and the spot rate shot up. But if there's 533 00:32:08,360 --> 00:32:10,280 Speaker 1: an issue of Okay, you just can't move it, which 534 00:32:10,360 --> 00:32:12,040 Speaker 1: is sort of like a lot of our themes. That's like, 535 00:32:12,160 --> 00:32:14,560 Speaker 1: there are certain things that you can't buy it any price. 536 00:32:14,680 --> 00:32:17,920 Speaker 1: When there's a constraint on how many barges there are 537 00:32:18,040 --> 00:32:20,440 Speaker 1: or the depth of the river, what are your clients 538 00:32:20,480 --> 00:32:23,640 Speaker 1: doing as alternatives or how are you helping your clients 539 00:32:23,800 --> 00:32:27,400 Speaker 1: find alternate mean divid shipment that's a yeah, that's a 540 00:32:27,440 --> 00:32:30,800 Speaker 1: difficult one to work around, but it does depend on 541 00:32:30,840 --> 00:32:33,760 Speaker 1: the commodity. When we're looking at a lot of the 542 00:32:33,800 --> 00:32:37,040 Speaker 1: bulk products, which are you know, in terms of being 543 00:32:37,120 --> 00:32:42,920 Speaker 1: raw materials into production, there's often not necessarily the easy 544 00:32:42,920 --> 00:32:46,000 Speaker 1: ability to offload it at a terminal and find another 545 00:32:46,040 --> 00:32:48,400 Speaker 1: conveyance to move it. When you're talking about a ship 546 00:32:48,480 --> 00:32:52,480 Speaker 1: that has fifty thou tons of material on or even 547 00:32:52,560 --> 00:32:57,000 Speaker 1: thirty tons of material on it, that's a huge, huge, 548 00:32:57,080 --> 00:33:00,840 Speaker 1: huge amount of trucks. If you could move it in 549 00:33:00,920 --> 00:33:04,760 Speaker 1: trucks to wait for rail cars would be not feasible, 550 00:33:04,920 --> 00:33:07,600 Speaker 1: you know, And a lot of the instances waiting out 551 00:33:07,640 --> 00:33:10,680 Speaker 1: the delays on the river system is still going to 552 00:33:10,720 --> 00:33:13,680 Speaker 1: be the likely the best use of your time, the 553 00:33:13,760 --> 00:33:19,080 Speaker 1: most time efficient to get to the end destination because 554 00:33:19,600 --> 00:33:21,960 Speaker 1: simply finding a place to offload that much tonnage to 555 00:33:22,000 --> 00:33:25,360 Speaker 1: ground and reload it out and finding enough conveyance to 556 00:33:25,520 --> 00:33:29,480 Speaker 1: get it to that next point is too hard. Now, 557 00:33:29,520 --> 00:33:33,000 Speaker 1: once you move into break bulk materials, where you know 558 00:33:33,120 --> 00:33:36,560 Speaker 1: steels and metals and you know that fall into our sector, 559 00:33:37,480 --> 00:33:40,280 Speaker 1: right now, we're seeing a good portion of that landing 560 00:33:40,360 --> 00:33:44,440 Speaker 1: too dock when it wouldn't have before. And it's simply 561 00:33:44,520 --> 00:33:47,760 Speaker 1: because there is no spot market for barges. If you 562 00:33:47,800 --> 00:33:50,320 Speaker 1: didn't have it booked and you don't have a contract 563 00:33:50,480 --> 00:33:53,800 Speaker 1: for it, nobody's moving it, nobody's touching it. And we're 564 00:33:53,800 --> 00:33:57,959 Speaker 1: talking about like the ships coming into New Orleans discharging 565 00:33:58,040 --> 00:34:00,400 Speaker 1: to the like the city docks in New World, just 566 00:34:00,440 --> 00:34:04,280 Speaker 1: to leave it outside for later reload too barges instead 567 00:34:04,320 --> 00:34:08,319 Speaker 1: of going direct from ship into barge, which is the cheapest, 568 00:34:08,440 --> 00:34:13,080 Speaker 1: most effective, cost effective right And we're finding two that 569 00:34:13,120 --> 00:34:16,840 Speaker 1: we're running a lot of rail rates on lanes that 570 00:34:16,960 --> 00:34:21,440 Speaker 1: were not expected to be rail because there is capacity 571 00:34:21,520 --> 00:34:26,200 Speaker 1: to offload break bulk materials onto the dock steven doors 572 00:34:26,360 --> 00:34:30,320 Speaker 1: when it just needs a basic outside storage. It's easier 573 00:34:30,320 --> 00:34:33,240 Speaker 1: to easier to navigate that and figure that one out. 574 00:34:33,719 --> 00:34:37,960 Speaker 1: So it's landing to outside storage and then we will 575 00:34:38,000 --> 00:34:40,319 Speaker 1: bring in rail cars and move it out that way 576 00:34:40,560 --> 00:34:44,960 Speaker 1: is the best option. Best option for some other cargo 577 00:34:45,480 --> 00:34:48,280 Speaker 1: may end up seeing what happens with the river system. 578 00:34:48,280 --> 00:34:52,319 Speaker 1: If it's not urgently needed upriver or at a at 579 00:34:52,320 --> 00:34:55,040 Speaker 1: a consumption point, it may just stay on the dock. 580 00:34:55,080 --> 00:34:59,680 Speaker 1: In New Orleans, we're also seeing some interest in alternate ports, 581 00:34:59,800 --> 00:35:03,360 Speaker 1: like let's go to mobile where maybe we can barge 582 00:35:03,640 --> 00:35:06,920 Speaker 1: north out of Mobile and avoid the lower Mississippi River 583 00:35:07,239 --> 00:35:10,960 Speaker 1: just to not get caught up in those bottlenecks. Uh, Margot, 584 00:35:11,040 --> 00:35:14,440 Speaker 1: you briefly touched on this at the beginning up. Can 585 00:35:14,480 --> 00:35:18,000 Speaker 1: you maybe describe what would you expect the second order 586 00:35:18,120 --> 00:35:20,359 Speaker 1: effects of all of this to be. Is it going 587 00:35:20,400 --> 00:35:23,960 Speaker 1: to be you know, we mentioned the higher spot rates 588 00:35:24,000 --> 00:35:26,640 Speaker 1: and will that feed into prices. Is it going to 589 00:35:26,680 --> 00:35:30,920 Speaker 1: be you know, shortages because manufacturers can't get the core 590 00:35:31,000 --> 00:35:33,960 Speaker 1: components or resources that they need, things like steel or 591 00:35:34,080 --> 00:35:38,200 Speaker 1: coal to stoke various furnaces. What exactly is going to 592 00:35:38,200 --> 00:35:41,360 Speaker 1: be the result of all of this. Well, right now 593 00:35:42,160 --> 00:35:49,360 Speaker 1: it seems like everything is moving slowly, but things are recovering. 594 00:35:49,840 --> 00:35:52,399 Speaker 1: And the biggest fear that you have in pushing things 595 00:35:52,480 --> 00:35:55,840 Speaker 1: up river predominantly. You know, in talking about a US 596 00:35:55,880 --> 00:36:00,759 Speaker 1: economy and a US workforce, we become concerned with feedstock, 597 00:36:00,840 --> 00:36:04,480 Speaker 1: raw materials, making it into production facilities to keep them 598 00:36:04,520 --> 00:36:06,719 Speaker 1: running right. We don't want to see anyone shut down. 599 00:36:06,760 --> 00:36:09,400 Speaker 1: We don't want to see a labor force for a 600 00:36:09,400 --> 00:36:13,520 Speaker 1: load or cut because a facility has to stop working. 601 00:36:14,280 --> 00:36:17,799 Speaker 1: So that's definitely an ancillary effect and an outcome that 602 00:36:18,200 --> 00:36:22,719 Speaker 1: you have to worry about. But the river, thankfully, you know, 603 00:36:22,840 --> 00:36:26,560 Speaker 1: they're working hard to keep it moving in a modified 604 00:36:26,760 --> 00:36:30,400 Speaker 1: capacity right now. And what we're seeing from the barge 605 00:36:30,440 --> 00:36:34,680 Speaker 1: lines is that they are currently able to cover what 606 00:36:34,800 --> 00:36:38,160 Speaker 1: their commitments are, just they can't go above there already 607 00:36:38,160 --> 00:36:43,280 Speaker 1: booked commitments. So if we can keep it, keep it moving, 608 00:36:43,680 --> 00:36:48,839 Speaker 1: and keep the river alive until rainfall comes, that will 609 00:36:48,880 --> 00:36:51,359 Speaker 1: help a lot and help lessen much of you know, 610 00:36:51,440 --> 00:36:53,120 Speaker 1: some of the impact, I guess, but they're still going 611 00:36:53,200 --> 00:36:57,000 Speaker 1: to be impact. And I think you know what we're 612 00:36:57,120 --> 00:37:03,160 Speaker 1: anticipating is barge contracts run most commonly, if you're on 613 00:37:03,160 --> 00:37:07,080 Speaker 1: a contract, it's a following a calendar. So we're coming 614 00:37:07,120 --> 00:37:11,640 Speaker 1: into that time where we should be negotiating for contracts. 615 00:37:11,680 --> 00:37:15,480 Speaker 1: But nobody's talking about it yet. The spot market being 616 00:37:16,280 --> 00:37:20,480 Speaker 1: eight nine, ten times what the contracts market is is 617 00:37:20,520 --> 00:37:22,560 Speaker 1: not a good time to be talking about, Hey, what 618 00:37:22,600 --> 00:37:24,879 Speaker 1: do you think you want to price me for three? 619 00:37:25,200 --> 00:37:27,839 Speaker 1: It's a really loaded question to be asking right now, 620 00:37:28,120 --> 00:37:31,040 Speaker 1: and nobody's having the conversation we have where everyone is 621 00:37:31,080 --> 00:37:33,920 Speaker 1: agreeing to defer that topic right now. Can I just 622 00:37:33,960 --> 00:37:35,920 Speaker 1: ask a quick question about that? You know, I know 623 00:37:35,960 --> 00:37:39,279 Speaker 1: when we've when we've done episodes on trucking, you know, 624 00:37:39,480 --> 00:37:42,880 Speaker 1: contract is in trucking seems to be like sort of 625 00:37:42,880 --> 00:37:45,960 Speaker 1: a nebulous thing, and uh and are ripping up their 626 00:37:46,000 --> 00:37:48,480 Speaker 1: contracts all the time, and they're not particularly legally binding. 627 00:37:48,640 --> 00:37:53,240 Speaker 1: Particularly spot and contract deviate far when you talk about 628 00:37:53,280 --> 00:37:57,359 Speaker 1: contract with barge operators. Are these more binding or they 629 00:37:57,400 --> 00:38:00,719 Speaker 1: also sort of like loosened subject to reprice? So, Joe, 630 00:38:00,719 --> 00:38:05,120 Speaker 1: the barge lines are are honorable. These are binding contracts 631 00:38:05,160 --> 00:38:09,440 Speaker 1: they are performing. So these these annual contracts that as 632 00:38:09,480 --> 00:38:12,719 Speaker 1: Margo mentioned, right, it's typically a calendar year for for 633 00:38:12,800 --> 00:38:16,200 Speaker 1: these types of contracts that handle the medals and steels 634 00:38:16,239 --> 00:38:18,640 Speaker 1: and some of the row materials that we that we manage. 635 00:38:18,960 --> 00:38:22,160 Speaker 1: So the barge lines are they they stand behind the contracts. 636 00:38:22,200 --> 00:38:26,240 Speaker 1: They stand behind the pricing on the annual basis, annual 637 00:38:26,800 --> 00:38:30,600 Speaker 1: rates that they agree to, and as Margot mentioned right that, 638 00:38:30,680 --> 00:38:33,120 Speaker 1: what they're not doing is going over and above in 639 00:38:33,160 --> 00:38:37,040 Speaker 1: a good year, well a good year for for shivers, 640 00:38:37,200 --> 00:38:40,919 Speaker 1: right for cargo interest, there's some extra capacity and there's 641 00:38:40,920 --> 00:38:45,200 Speaker 1: a possibility to get a barger two extra under the 642 00:38:45,280 --> 00:38:50,000 Speaker 1: contract rates when when needed. Not now. As Margot mentioned 643 00:38:50,080 --> 00:38:52,600 Speaker 1: right there, the barge lines are not giving a single 644 00:38:52,680 --> 00:38:56,680 Speaker 1: barge beyond what they're committed to in their in their contracts. 645 00:38:56,719 --> 00:39:00,759 Speaker 1: But but they are, they are performing and there's no 646 00:39:00,880 --> 00:39:03,399 Speaker 1: back trading, as a phrase that we like to use 647 00:39:03,480 --> 00:39:06,719 Speaker 1: right now, no back trading and Joe as you men 648 00:39:06,719 --> 00:39:08,880 Speaker 1: should right with the trucker is a whole different world 649 00:39:08,960 --> 00:39:11,920 Speaker 1: of what a contract means. But but in the barge world, 650 00:39:11,920 --> 00:39:14,279 Speaker 1: a contract is a contract and the barge lines are 651 00:39:14,600 --> 00:39:17,879 Speaker 1: are sticking sticking to that. Can I just have one 652 00:39:17,920 --> 00:39:20,440 Speaker 1: more question and you know whether it is what it 653 00:39:20,520 --> 00:39:22,240 Speaker 1: is and the rain you know there will be another 654 00:39:22,320 --> 00:39:25,080 Speaker 1: rain or maybe a flood and that might help, but 655 00:39:25,160 --> 00:39:27,800 Speaker 1: how much you know long term do you think about 656 00:39:28,400 --> 00:39:31,879 Speaker 1: your clients, think about climate change and whether the river 657 00:39:31,960 --> 00:39:35,279 Speaker 1: capacity may be impaired on a meaningful basis for some 658 00:39:35,320 --> 00:39:37,960 Speaker 1: time to come, Probably not as much as they should 659 00:39:38,000 --> 00:39:40,800 Speaker 1: be thinking about it, because I know a lot of 660 00:39:40,800 --> 00:39:42,480 Speaker 1: people are going to say there's no such thing as 661 00:39:42,520 --> 00:39:45,880 Speaker 1: climate change, but I don't know. I sort of have 662 00:39:45,960 --> 00:39:48,080 Speaker 1: to beg to differ on that. So you've you've seen 663 00:39:48,160 --> 00:39:51,200 Speaker 1: like sitting aside, what what what you can? Can we 664 00:39:51,239 --> 00:39:55,320 Speaker 1: attribute this drought to climate change or not versus random 665 00:39:55,400 --> 00:39:57,960 Speaker 1: things that happened in the weather. Your perspective from your 666 00:39:57,960 --> 00:40:05,080 Speaker 1: whole career is that things have been worse, Yes, yeah, 667 00:40:05,200 --> 00:40:09,280 Speaker 1: but but I do think that is supported by weather data. 668 00:40:09,360 --> 00:40:12,200 Speaker 1: I think that is supported by looking when you look 669 00:40:12,280 --> 00:40:15,920 Speaker 1: year on year the storms that hit, and you know, 670 00:40:15,960 --> 00:40:17,680 Speaker 1: talk to the people that live in New Orleans and 671 00:40:17,719 --> 00:40:21,279 Speaker 1: tell me what they think about the increase of hurricanes, right, 672 00:40:21,320 --> 00:40:23,759 Speaker 1: I mean except this year, this year, we're not they're 673 00:40:23,800 --> 00:40:28,040 Speaker 1: not getting them. And you know, dare we say we 674 00:40:28,080 --> 00:40:30,400 Speaker 1: need a good hurricane to roll through there, but we don't. 675 00:40:30,520 --> 00:40:32,880 Speaker 1: But the river needs it. But yeah, So that that 676 00:40:33,000 --> 00:40:35,920 Speaker 1: was something I had actually read at one point, talking 677 00:40:35,960 --> 00:40:40,279 Speaker 1: about the climate change and talking about you know, how 678 00:40:40,360 --> 00:40:43,200 Speaker 1: much of the US is under a drought condition right 679 00:40:43,200 --> 00:40:47,840 Speaker 1: now and this time last year they were trying, you know, 680 00:40:48,840 --> 00:40:52,400 Speaker 1: talk speaking specifically to the river system and the barge market. 681 00:40:52,600 --> 00:40:56,440 Speaker 1: Our barging market was desperately trying to recover from a 682 00:40:56,560 --> 00:41:00,160 Speaker 1: huge hurricane that came through that reeks complete havoc with 683 00:41:00,200 --> 00:41:04,080 Speaker 1: the system. And here we are a year later, we're 684 00:41:04,080 --> 00:41:07,600 Speaker 1: talking about we have no rain and we have havoc 685 00:41:07,640 --> 00:41:11,319 Speaker 1: in the river system. So I think, I think it's 686 00:41:11,360 --> 00:41:15,080 Speaker 1: really something they do have to talk about. And there 687 00:41:15,160 --> 00:41:17,880 Speaker 1: was one article I had read and it talked about 688 00:41:18,520 --> 00:41:23,000 Speaker 1: even just global trade and the key choke points that 689 00:41:23,560 --> 00:41:31,399 Speaker 1: are exposed both on political situations and um piracy and 690 00:41:31,680 --> 00:41:35,600 Speaker 1: you know, acts of man that are in control of someone, 691 00:41:36,080 --> 00:41:38,880 Speaker 1: and then the weather events that are in control of 692 00:41:39,440 --> 00:41:43,280 Speaker 1: no one, you know, and talking about straits and Panama 693 00:41:43,320 --> 00:41:46,840 Speaker 1: Canal and Suez Canal and places like that in the 694 00:41:46,880 --> 00:41:50,920 Speaker 1: Black Sea, and everyone being subject to the impacts of weather. 695 00:41:51,360 --> 00:41:56,040 Speaker 1: I mean, any weather extremity causes a problem in shipping. 696 00:41:56,280 --> 00:41:58,560 Speaker 1: And actually this article I read it was so interesting 697 00:41:58,600 --> 00:42:01,080 Speaker 1: that it went as far as to point now excessive 698 00:42:01,160 --> 00:42:05,600 Speaker 1: heat warping about ten years ago getting so hot in 699 00:42:05,640 --> 00:42:08,960 Speaker 1: parts of the US it affected the railroad tracks because 700 00:42:09,160 --> 00:42:12,960 Speaker 1: all the railroad tracks expanded and it caused tremendous derailments. 701 00:42:13,000 --> 00:42:16,520 Speaker 1: So you know, it's not just water, it's not just 702 00:42:16,640 --> 00:42:20,760 Speaker 1: our barges and our ships, it's you know, it definitely 703 00:42:20,800 --> 00:42:25,640 Speaker 1: affects our our network across across all conveyances. Yeah. I 704 00:42:25,680 --> 00:42:28,239 Speaker 1: think that's a really important point and one that we 705 00:42:28,320 --> 00:42:32,280 Speaker 1: all seem to be um learning in real time unfortunately. 706 00:42:32,840 --> 00:42:36,560 Speaker 1: But Anton and Margot, that was fantastic. Thank you so much. 707 00:42:36,600 --> 00:42:39,399 Speaker 1: Really appreciate you coming back on all thoughts to talk 708 00:42:39,400 --> 00:42:44,480 Speaker 1: about barges just like we promised. Finally. Thank you so much. 709 00:42:46,200 --> 00:43:02,759 Speaker 1: Absolutely thanks for having us high so Joe, I'm so 710 00:43:02,840 --> 00:43:05,600 Speaker 1: happy we finally did the barge episode. I should say 711 00:43:05,600 --> 00:43:08,520 Speaker 1: I've been reading a really good book on barges lately 712 00:43:08,680 --> 00:43:13,759 Speaker 1: that a listener actually recommended. Yeah, it's called Brown Water 713 00:43:13,920 --> 00:43:17,960 Speaker 1: Boating by Dean Gabbert. Anyway, if you want to learn 714 00:43:18,040 --> 00:43:20,239 Speaker 1: more about barges, you should definitely check that out. But 715 00:43:20,320 --> 00:43:22,439 Speaker 1: I mean, you know what was interesting in that very 716 00:43:22,760 --> 00:43:25,840 Speaker 1: last bit of the conversation with Margo and Anton the 717 00:43:25,920 --> 00:43:28,600 Speaker 1: talk about climate change. I mean, this is a climate 718 00:43:28,680 --> 00:43:32,640 Speaker 1: change episode, right, and this is sort of what I 719 00:43:32,680 --> 00:43:35,200 Speaker 1: mentioned this already, but this is what we're all learning now, 720 00:43:35,320 --> 00:43:38,080 Speaker 1: is that a lot of our economy depends on the 721 00:43:38,160 --> 00:43:41,080 Speaker 1: weather acting in a certain way. There are being enough 722 00:43:41,120 --> 00:43:45,040 Speaker 1: water for us to transport goods by river, there being 723 00:43:45,239 --> 00:43:48,120 Speaker 1: you know, not too much heat so that the railway 724 00:43:48,160 --> 00:43:51,319 Speaker 1: lines still work. And we're kind of discovering all these 725 00:43:51,400 --> 00:43:57,239 Speaker 1: vulnerabilities in our transport and infrastructure as um as climate change. Yeah, 726 00:43:57,280 --> 00:44:00,359 Speaker 1: you know, I'm thinking also back to that episode we 727 00:44:00,440 --> 00:44:03,080 Speaker 1: did earlier in the year with Elex Turnbull, and we 728 00:44:03,080 --> 00:44:04,880 Speaker 1: were just talking about energy and you know the issue 729 00:44:04,880 --> 00:44:07,480 Speaker 1: of nuclear plans even that need a certain amount of 730 00:44:07,520 --> 00:44:12,200 Speaker 1: cool water to uh, you know, to cool down, and 731 00:44:12,239 --> 00:44:16,000 Speaker 1: if the rivers are too warm then that doesn't work, etcetera. 732 00:44:16,080 --> 00:44:18,640 Speaker 1: And so yeah, we really see that, like certain things 733 00:44:18,640 --> 00:44:22,600 Speaker 1: we take for granted, like the smooth operation of the 734 00:44:22,640 --> 00:44:25,320 Speaker 1: Mississippi River or just the idea that there's gonna be 735 00:44:25,360 --> 00:44:28,560 Speaker 1: cool water for nuclear facilities is not something that we 736 00:44:28,600 --> 00:44:31,480 Speaker 1: can just take for granted. But it's interesting, and you know, 737 00:44:31,760 --> 00:44:34,279 Speaker 1: it really does seem like the inland waterway is the 738 00:44:34,280 --> 00:44:37,680 Speaker 1: Mississippi River. It kind of feels like old timy, you know, right, 739 00:44:37,840 --> 00:44:40,680 Speaker 1: like if you like, what does the Mississippi River contropp 740 00:44:40,719 --> 00:44:45,280 Speaker 1: like some sort of like old verboats riverboats. So who's 741 00:44:45,320 --> 00:44:47,720 Speaker 1: you know, one of those authors who like wrote books 742 00:44:47,719 --> 00:44:49,640 Speaker 1: about that time. You don't think of it as being 743 00:44:49,680 --> 00:44:51,960 Speaker 1: like all that vital like these days, but obviously it 744 00:44:52,000 --> 00:44:56,000 Speaker 1: really is. Yeah, Twain, I was going to say Mark Twain, like, 745 00:44:56,040 --> 00:45:01,040 Speaker 1: come on, Mark Twain, uh, you know and going down 746 00:45:01,040 --> 00:45:04,400 Speaker 1: the Mississippi. Okay, but seriously, if you like that topic, 747 00:45:04,440 --> 00:45:07,440 Speaker 1: you should read that barge book I just mentioned. Um, 748 00:45:07,480 --> 00:45:09,239 Speaker 1: the other thing that struck me is it's not even 749 00:45:09,280 --> 00:45:13,200 Speaker 1: like we need more water, it's that we need water 750 00:45:13,520 --> 00:45:17,200 Speaker 1: in a specific pattern. So, as Ben was mentioning, you know, 751 00:45:17,440 --> 00:45:20,480 Speaker 1: you either need a downpour sort of upriver that then 752 00:45:20,600 --> 00:45:24,480 Speaker 1: flows downstream, or you need a prolonged rain that softens 753 00:45:24,520 --> 00:45:27,960 Speaker 1: the ground like further south and then flows into the river. 754 00:45:28,520 --> 00:45:31,040 Speaker 1: And then the other thing that struck me was that 755 00:45:31,160 --> 00:45:33,839 Speaker 1: even if you get a disruption like this and it's 756 00:45:33,920 --> 00:45:38,600 Speaker 1: relatively short lived, to Anton and Margot's point about the contracts, 757 00:45:39,239 --> 00:45:42,719 Speaker 1: like the way those work, basically means that this disruption 758 00:45:42,800 --> 00:45:46,600 Speaker 1: can have this lagged effect for many many months to come, 759 00:45:46,640 --> 00:45:50,080 Speaker 1: even if it only like is extreme for two or 760 00:45:50,080 --> 00:45:52,919 Speaker 1: three months. Right, the chart is really extreme. It's come 761 00:45:52,960 --> 00:45:55,239 Speaker 1: down a little bit. The spot prices but you know, 762 00:45:55,400 --> 00:45:59,359 Speaker 1: as they as they pointed out, like nobody, nobody wants 763 00:45:59,400 --> 00:46:03,000 Speaker 1: to enter like contract renegotiation season now with the levels here, 764 00:46:03,040 --> 00:46:06,200 Speaker 1: because where the where where do you price things? Also 765 00:46:06,239 --> 00:46:09,040 Speaker 1: like what did the Antons say something about how on 766 00:46:09,080 --> 00:46:12,080 Speaker 1: the barge business they take their contract seriously, unlike unlike 767 00:46:12,120 --> 00:46:14,759 Speaker 1: those truckers where they just rip them up in the 768 00:46:14,920 --> 00:46:17,560 Speaker 1: in the In the barge business, a contract is a 769 00:46:17,560 --> 00:46:21,160 Speaker 1: contract words to live by, live like a barge operator, 770 00:46:21,880 --> 00:46:24,160 Speaker 1: you know, just the just the other thing, you know, 771 00:46:24,320 --> 00:46:27,200 Speaker 1: to Ben's point about how look, you know, price is 772 00:46:27,239 --> 00:46:29,640 Speaker 1: one thing and capacity is another thing. And if you 773 00:46:29,640 --> 00:46:32,120 Speaker 1: don't have the capacity, then you have all these issues. 774 00:46:32,160 --> 00:46:34,600 Speaker 1: You have various terminals that aren't equipped to move things 775 00:46:34,600 --> 00:46:37,320 Speaker 1: at different spots. You have more storage at the ports 776 00:46:37,360 --> 00:46:40,319 Speaker 1: because you're just waiting longer for the barge to come 777 00:46:40,520 --> 00:46:43,600 Speaker 1: and move them. I mean, it's a real mess. And again, 778 00:46:43,760 --> 00:46:47,000 Speaker 1: you know, like it's so interesting in the broad sweep 779 00:46:47,000 --> 00:46:49,439 Speaker 1: of things that we cover, because there are clearly things 780 00:46:49,480 --> 00:46:53,240 Speaker 1: that are sort of macro, right, like inflation generally probably 781 00:46:53,400 --> 00:46:56,080 Speaker 1: is a macro story. But this really does seem like 782 00:46:56,160 --> 00:46:59,239 Speaker 1: one where it's just it's a lot of bad luck. Yeah, 783 00:46:59,600 --> 00:47:02,799 Speaker 1: on top up of the Ukrainian grain situation as well, 784 00:47:02,840 --> 00:47:05,719 Speaker 1: which we've already spoken about, and the booming demand for 785 00:47:05,960 --> 00:47:08,640 Speaker 1: U S domestic grain. So it is connected. And to 786 00:47:09,080 --> 00:47:12,880 Speaker 1: Margot and Anton's point, the booming demand for grains globally 787 00:47:13,040 --> 00:47:16,400 Speaker 1: also means that there's less capacity for non grain goods 788 00:47:16,440 --> 00:47:19,200 Speaker 1: like the various industrial commodities or coal or iron that 789 00:47:19,200 --> 00:47:21,560 Speaker 1: they were talking about. So it really is a it's 790 00:47:21,600 --> 00:47:24,399 Speaker 1: kind of a perfect storm. You're going to say that 791 00:47:24,719 --> 00:47:27,360 Speaker 1: it does seem like it does seem like a perfect storm. 792 00:47:27,400 --> 00:47:30,000 Speaker 1: All right, Well, on that note, before we utter any 793 00:47:30,040 --> 00:47:32,399 Speaker 1: more cliches, I think we should leave it there. Let's 794 00:47:32,480 --> 00:47:34,960 Speaker 1: leave it there. Okay, this has been another episode of 795 00:47:34,960 --> 00:47:37,600 Speaker 1: the All Thoughts Podcast. I'm Tracy Alloway. You can follow 796 00:47:37,600 --> 00:47:40,600 Speaker 1: me on Twitter at Tracy Alloway. And I'm Joe Wisnal. 797 00:47:40,680 --> 00:47:43,880 Speaker 1: You can follow me on Twitter at the Stalwart. Follow 798 00:47:43,880 --> 00:47:47,320 Speaker 1: our guests on Twitter. Ben Schole he's at Auto Shoal 799 00:47:47,800 --> 00:47:51,600 Speaker 1: and Tom Posner He's at Anton Posner and I don't 800 00:47:51,640 --> 00:47:54,799 Speaker 1: think uh. Margot Brock, the president of the Mercury Group, 801 00:47:54,920 --> 00:47:58,759 Speaker 1: is on Twitter. But follow our producer Carmen Rodriguez at 802 00:47:58,840 --> 00:48:02,600 Speaker 1: Carmen armand and if you enjoy it today's episode and 803 00:48:02,760 --> 00:48:06,439 Speaker 1: enjoy odd Lots. Check out Bloomberg dot com slash odd lots. 804 00:48:06,520 --> 00:48:09,560 Speaker 1: Tracy and I write a blog, We post transcripts there, 805 00:48:09,600 --> 00:48:12,600 Speaker 1: and we have a weekly newsletter where we talk about 806 00:48:12,640 --> 00:48:15,160 Speaker 1: some of the themes of the episode. Find it all 807 00:48:15,200 --> 00:48:18,359 Speaker 1: at Bloomberg dot com slash odd lots, and check out 808 00:48:18,400 --> 00:48:22,200 Speaker 1: all of our podcasts on Twitter under the handle at podcasts. 809 00:48:22,239 --> 00:48:23,040 Speaker 1: Thanks for listening.