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Arkansas River tonnage down 6% in the first quarter of 2014

story by Ryan Saylor
rsaylor@thecitywire.com

Tonnage shipped along the Arkansas River is down for the first three months of 2014 compared to the same period in 2013 and at least one operator along the river said it may still take a while before tonnage rates return to pre-recession levels.

According to the U.S. Army Corps of Engineers, January-March tonnage on the McClellan-Kerr Arkansas River Navigation System totaled 3.062 million tons, down 6% from the 2013 period. April tonnage totaled 1.244 million tons, up 21.84% from the average of 1.021 million tons during the first three months of the year.

Tonnage shipped into the Arkansas River system totaled 1.185 million tons and tonnage shipped out totaled 1.283 million tons during the first three months of 2013, down 6% and 12% respectively. Internal shipping was a bright spot, as the 594,697 tons was a 23% increase over the same period last year.

Marty Shell, president of Van Buren-based Five Rivers Distribution, said the overall 6% decline for the first quarter could be representative of a coming slow down in the economy.

"Your inland port terminals are normally a good economic indicator," he said. "Usually, you'll see a downturn a few months before the stock market. At the same time, you'll usually see an uptick before the stock market, as well."

While overall tonnage is down 6% for the first quarter, a positive included in the numbers is the increase of transported items in the iron and steel category, which is up 11% for the first three months of the year. Other increases include sand, gravel and rock at a 29% increase and minerals and building materials, which is up 14%.

Even though the decline in overall tonnage could be taken as an indicator of a slowing economy, Shell said any increase shown in categories like those above are good indicators that businesses are ramping up production.

It's for that reason that it is so important that the river be open and running at full capacity, he said.

"This provides economic impact for Arkansas and Oklahoma. If it shut down for just a day, it would cost the region about $2 to $3 million a day. This river provides raw material for businesses to keep going," he said. "The river may not employ a lot of people, but the companies we ship to and from employ a lot of people. So it's vital that this system keep moving forward."

With the river economy still struggles like the rest of the economy to fully recover from the economic calamity of 2008 and the recession that followed, Shell said numbers could continue to fluctuate before shipping activity stabilizes along with the rest of the economy.

He saidin 2007 and 2008, he recalls river tonnage numbers averaging around 14 million tons annually before dropping to as low as 10 million tons.

For 2014, Shell said a reasonable estimate would be about 12.5 to 13 million tons. But he said knowing for sure how much his company, which employs about 25 and operates the ports in Fort Smith and Van Buren, would ship in coming months was tough to predict.

"Used to, I could tell you what I'd be doing months from now. But since 2008 to 2009, it's hard to know three to four weeks from now. People just don't want to have a lot of inventory sitting around in a fragile market."

For the time being, he said fertilizer and farming materials will be the big driver of inbound barge traffic, adding that the resulting harvests later in the year will drive much much of the outbound barge traffic in September and October. In the intervening months, he said other items will fill the void.

"We live in a world where the chicken and poultry are very dominant. These guys have to feed these animals. So we'll start to pick up corn and the stuff that goes into the feed. So you'll see some pick up."

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Overall, he said the tonnage report this month is not a dismal one, though everyone involved with movement of goods along the river would like to see improved numbers.

"We went through one of the biggest recessions since the Great Depression. We're almost back to where we were. It's taken five to six years to get there. But things are good on the Arkansas River. Growth is happening. It's just not at the (rate) you or I would like it to happen. Hopefully, as we move forward, the economy will get stronger. It's not what it used to be, but it's getting better."

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