Mississippi River Shippers Shift Freight to Rails

Historically low water levels on the Mississippi River and a potential shutdown of waterway traffic will likely shift even more freight from barges to railroads.

Shippers of recycled metals put more southbound cargo normally bound for barges on the rails in December, and the mode shift is expected to intensify this month as water levels fall further, barge capacity tightens and freight builds, according to a Jefferies research note. Because of their strong networks in the region, Union Pacific Railroad and Kansas City Southern Railway are best poised to gain from the modal shift.

The potential shutdown of Mississippi River barge traffic could affect 7.2 million tons of commodities valued at $2.8 billion, according to the American Waterways Operators and Waterways Council.