Over the past two weeks, because of Russia’s invasion of Ukraine, ocean vessel traffic (including for agricultural and energy commodities) has been largely halted through the Black Sea.
Although U.S. barged grain volumes have not yet significantly risen, there may be signs global consumers are turning to U.S. grain and other products to substitute for imports from the Black Sea region that have become inaccessible.
U.S. barge freight rates have skyrocketed as both immediate spot demand and April freight demand have surged.
Likewise, an already limited supply of empty barges has grown even tighter. Sharply rising fuel prices will likely pressure barge operators to transfer some costs to customers by raising rates.
Over the past three weeks, the spot rate for St. Louis rose from 470% of the benchmark tariff ($18.8 per ton) to 871% ($34.75 per ton) — 220% higher than last year and 204% higher than three-year average.
Similarly, the Upper Ohio River freight rate jumped from 505% of the benchmark tariff ($23.6 per ton) to 1,060% ($49.7 per ton) — 262% higher than last year and 225% higher than three-year average.
