鈥淎s if agricultural shippers did not have enough supply chain challenges to occupy multiple lifetimes, there is current and growing concern related to the diminished water levels along the inland waterway system that will impact barge transportation,鈥� says Mike Steenhoek, executive director of the聽. 鈥淭his will become more acute as we increasingly enter harvest season.鈥�

Since the Sept. 1, 890 grain barges have unloaded in New Orleans, according to . That鈥檚 nearly 40% fewer than the five-year average. 

Similarly, barge freight rates have increased steadily since early August. As of Sept. 27, the St. Louis barge rate for export grain was a record 1,250% of tariff ($49.88 per ton), 95% higher than the five-year average, and 58% higher than same period last year. 

Unless barge supply improves, the increased demand for barges from grain shippers during harvest will likely put even more upward pressure on barge rates, according to USDA.

More Barge Tows = More Cost

Low water levels hurt navigable waterways in two ways, Steenhoek says: channel depth and channel width.聽

To prevent barges from running aground during their voyages, companies must lighten the load. Steenhoek says a typical barge can be loaded with 1,500 short tons of freight (50,000 bu. of soybeans, for example).聽

A 15-barge tow can easily accommodate 750,000 bushels of soybeans. Each reduced foot of water depth will result in 150 to 200 fewer short tons (5,000 to 6,700 fewer bushels of soybeans) being loaded per barge.聽

鈥淭his is the equivalent of removing the entire production of three soybean farms from a single barge tow (500 acres of soybeans per farm X 50 bu. an acre = 25,000 bu.),鈥� he says.

Channel Width Constraints

During drought conditions, the shipping channel becomes narrower, which necessitates reduced tow sizes, Steenhoek says.聽

鈥淏arge tows south of St. Louis can often include 30 to 40 barges,鈥� he says. 鈥淎 reduced maximum to 25 barges is therefore significant. Having to load barges lighter and restricting the number of barges results in needing more roundtrips to accommodate a given amount of volume. The expected result of this is higher barge shipping rates.鈥�

Precipitation will continue to be a challenge over the next month and will further exacerbate the barge shipping challenges Steenhoek emphasized.

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With AB5, California lawmakers took a swing at gig-heavy, same-day delivery services like Uber, DoorDash and Postmates, and in the process also hit the entire trucking sector.

If carriers lose drivers or are unable to pass the increased cost of maintaining company drivers and vehicles along to customers, 鈥淲e鈥檒l see delivery companies exit the California market,鈥� said Fred Miesch, a senior consultant with Argon & Co. 鈥淭his could then lead to a shift back to private fleet model for intra-California shippers as they scramble to replace lost delivery capacity.鈥�

Joe Wilkinson, VP of transportation consulting for enVista, called the Supreme Court decision to deny a request from the California Trucking Association (CTA) for a hearing on the issue 鈥渁 real disappointment,鈥� given the driver shortage and supply chain bottlenecks in West Coast ports.

鈥淣ow we鈥檙e going to throw gas on the fire with an entirely new driver model for many carriers,鈥� Wilkinson said. 鈥淭hat may not be a good analogy, as even gas takes a second to ignite, whereas with the denial of the CTA鈥檚 appeal AB5 goes into effect right now. This leaves affected carriers and independent drivers scrambling for a solution.鈥�

In order for California companies to continue to classify workers as independent contractors, they have to meet an ABC test established by the state鈥檚 Employment Development Department. The 鈥淏鈥� portion is the real sticking point: proving the person is performing work 鈥渙utside the hiring entity鈥檚 business,鈥� which would not apply to contract drivers.

Bill Aboudi, owner of AB Trucking in Oakland, told CBS News that 90% of the trucks servicing the port there are independent contractors, 鈥渟o, this is a big, big impact.鈥�

Transportation Insight said the acquisition is part of its merger-and-acquisition strategy to buy well-positioned transportation and logistics businesses with growth potential. It noted that FreightPros, founded in 2009, has 鈥渄eep expertise鈥� in the LTL brokerage market.

FreightPros will initially operate within Transportation Insight鈥檚 holding company, Transportation Insight Holdings, and over time will be integrated with its Nolan Transportation Group brokerage business unit.

Source: Heavy Duty Trucking