Arkansas River tonnage up in 2012, but ‘screwy’

Paul Latture Jr., executive director Port of Little Rock, says December, January and February are the three “screwiest months” of the year, and advises against reading too much into Arkansas River tonnage numbers produced by the U.S. Corps of Engineers.

According to the Corps, river tonnage on the McClellan-Kerr Arkansas River Navigation System during all of 2012 was 11.687 million tons, up 10% compared to 2011.

Tonnage is just part of the picture, according to Latture. For example, Port of Little Rock tonnage was up 2%, but income was up 8% because of the type of cargo being unloaded.

“We don’t look as much as to the tonnage, but the kind of tonnage we are handling,” he explained.

Unloading manufactured products – like steel coils – is more lucrative than unloading bulk commodities like sand, gravel and other raw materials.

In 2012 the Arkansas River handled 1.426 million tons of iron and steel products, down 12% compared to 2011. Sand, gravel and rock accounted for 3.004 million tons, up 11% in 2012 compared to 2011. It was the largest, by tonnage, material segment on the river in 2012.

Chemicals and fertilizers were second at 2.18 million tons, up 11% compared to 2011.

Latture does believe the tonnage figures and the activity at the Port of Little Rock reflect improving economic conditions.

“Overall, you’re just seeing the economy, while it’s not soaring, you’re seeing the economy getting a little better,” Latture explained.

Marty Shell, president of Van Buren-based Five Rivers Distribution, agrees that conditions on the river are improving.

“Ports and terminals are a direct indication of the regional and local economy. We have seen our business pick up after the 2008 recession,” Shell said, but added that he remains unsure if the light at the end of the tunnel is a good thing “or a freight train taking us back into another recession.”

Shell also said economic uncertainty makes it more difficult for his business to plan ahead.

“In past we were able to predict three to four months out what our business was going to look like. In today's times the best we can do is 30 days out,” Shell said.

Part of the uncertainly, according to Shell, is that businesses are more analytical about their shipping decisions.

“Businesses are looking harder at their bottom line and know that (the) transportation cost is one of the top three costs in running a business and customers are looking for the most cost effective mode of transportation to fit their business,” he explained.

To that point, Latture said railroad-related income at the Little Rock port has surpassed income from river traffic. He said about five years ago the river and rail tonnage was about even.

“What we see on the rail is that it just goes up and up and up every year,” Latture said of rail usage.

He said the ratio of shipping between rail and the river is typically a function of the economy. In a booming economy, larger quantities are shipped, and that requires more barge use. As the economy cools, smaller quantities are more cost-effectively shipped using rail.

Shell is optimistic about 2013 despite what he sees as a fickle economy.

“2012 was a good year for our company, but we hope to grow our footprint in 2013 to different market sectors and to market this region as a transportation hub to not only to retain businesses and jobs, but to bring in new businesses and jobs to this region,” Shell said.

As for the beginning of 2013, the 39% January increase in tonnage traveling the river is an example of Latture’s “screwiest months” analysis.

The river was closed to through traffic for almost two weeks in December because of maintenance at the Montgomery Point Lock and Dam near the confluence of the Arkansas and Mississippi Rivers.

“And then we had everyone lined up here (in January) trying to catch up. … That’s what I mean by screwy,” Latture said of the bottleneck created by the river closure in December.

Weather, maintenance and holidays are the primary factors causing December, January and February to be screwy, Latture said.