AFPM ’19: 2020 Illinois river closure poses shipping challenges for chem producers

SAN ANTONIO (ICIS)–The simultaneous closure of six locks and dams on the Illinois river in 2020 poses major logistical shipping concerns for specialty chemical producers in the area, a source said on the sidelines of this year’s International Petrochemical Conference (IPC).

One orthoxylene (OX) buyer said the situation was a major concern for buyers in the region because specialty chemical users in the region use the river to transport raw materials via barges.

The closure is set to take place between July and October 2020 after the highest risk of flooding has subsided and before the fall harvest.

The closure is likely to increase truck and rail demand as buyers look to secure transportation for raw materials.

This is likely to exacerbate ongoing issues in the truck space given ongoing driver shortages in the US.

Some buyers have already leased truck and rail services to cover the four-month period the river is closed, but prices for materials in the area are nonetheless likely to face upward pressure during the maintenance period.

Increased demand for trucks will likely push freight costs higher, and shipping delays are likely to add to the upward pressure.

Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC takes place on 24-26 March in San Antonio, Texas.