High water may force Louisiana chem plants to rely on truck, rail

10 May 2011 19:02  [Source: ICIS news]

Flooding near Memphis, TennesseeBy Brian Balboa

HOUSTON (ICIS)--Chemical producers along the Mississippi river may rely increasingly on trucks and railcars to move material because of high water and flooding, sources said on Tuesday.

The river already has crested at Memphis, Tennessee, and it could crest on the lower Mississippi on  24 May.

If water levels become too high, shipping could be prohibited on the river.

As a result, chemical plants would have to rely on trucks and rail to receive feedstock and ship out product.

“We specifically have seen a couple of requests regarding new business that would otherwise be utilised by barge,” said Steven Tapscott, vice president of sales and marketing for Mississippi-based Miller Transporters.

Tapscott said last week the company anticipated seeing new business as the river was rising.

“We called our shippers, and we’ve tried to allocate our resources for this. Right now we’re ensuring that all of our trucks are being fully utilised,” he said.

In fact, some trucks were freed up in Memphis, Tennessee, because of the flooding, Tapscott said. Miller Transporters expects more truck interest to emerge next week should the river crest.

“It’s very reasonable to assume that will happen,” said John Conley, president of National Tank Truck Carriers (NTTC).

“Clearly when one mode [of transport] is cut off, other modes will pick up traffic.”

Most likely, chemical distributors are already preparing for more traffic, said Matthew Glaser, director of member advancement and strategic communications for the National Association of Chemical Distributors (NACD).

“Because our members practice responsible distribution, they are often prepared for all sorts of catastrophic events,” he said. “It’s likely they have already had plans in place.”

However, there might not be enough railcars to accommodate the increase in traffic, said a styrene trade source.

The lower Mississippi is home to several chemical plants. Plaquemine and Baton Rouge, Louisiana, have plants of such companies as Georgia Gulf, Dow Chemical, Shintech, ExxonMobil, Formosa Plastics and Lion Copolymer.

The extent of shipping disruptions would depend on the individual plant, how high the waters rise and how long the river remains high.

To relieve pressure on the river, the US Army Corps of Engineers has opened the Bonnet Carre Spillway. It may also open the Morganza Spillway.

So far, port authorities along the lower Mississippi are closely watching river levels and relying on the US Coast Guard and US Army Corps of Engineers to maintain the levee system.

The levees in the Baton Rouge area are relatively high - 48-50 feet (15 meters) - so the main concern for the area would be any levee breaches, said Karen St Cyr, a spokeswoman for the Port of Greater Baton Rouge.

St Cyr said barge traffic on Tuesday was moving through Baton Rouge.

The lower Mississippi includes five ports in all: Baton Rouge, southern Louisiana, St Bernard, New Orleans and Plaquemine.

Approximately 420m tons (381m tonnes) of cargo move through the lower Mississippi river system, she said.

“The river is critical for all of us, for certain,” St Cyr said.

Further up the Mississippi river, some markets have already been disrupted by the flooding.

Americas Styrenics was experiencing delays in styrene barge shipments to its three polystyrene (PS) plants in Ohio and Illinois because of high water on nearby rivers, a source with the company said.

The plant in Joliet, Illinois, has a capacity of 125,000 tonnes/year; Marietta, Ohio, has 360,000 tonnes/year; and Ironton, Ohio, has 85,000 tonnes/year.

Additional reporting by Ruth Liao and David Barry

For more on styrenics visit ICIS chemical intelligence

By: Brian Balboa
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