Market Matters Blog

120-Day Lock Closures on Illinois River Start June 1

Mary Kennedy
By  Mary Kennedy , DTN Basis Analyst
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The U.S. Army Corps of Engineers, Rock Island District, developed a consolidated repair schedule, which included a short closure to locks in 2019 followed by two extended closures in 2020 and 2023. The closures were scheduled over the three years to lessen impact to commercial navigation as much as possible. (Photo courtesy USACE, Rock Island)

The USACE consolidated lock repair schedule will be in its final phase beginning June 1, 2023, through Sept. 30, 2023. The full closure schedule is for approximately 120 days.

The 2023 closure won't affect as much grain traffic as happened in the 2020 closure of five locks, but any business moving product by barge above the 2023 closures will definitely be affected. Those businesses have been getting ready by shipping out product as soon as possible. Similar to the 2020 closure, once the locks close, any products needed to move north of the closures will have to be offloaded below the lock closures and then placed on trucks or vice versa; that all comes at added cost.

American Commercial Barge Line (ACBL) has been preparing for the closure by providing information and loading schedules to their shippers, "for your use so you can plan your final barge loadings (prior to the lock closures) accordingly to avoid demurrage and/or storage charges associated with these closures." (https://www.bargeacbl.com/…)

Don't forget -- once those locks open, we will be in harvest and there will be a scramble to get barges moved into place once again, not just for harvest but fertilizer movements and other commerce that was held up due to the closures.

Here is the Corps' lock closure schedule as of May 18 which is subject to change as various circumstances may alter plans:

-- Brandon Road Lock and Dam, Upper Miter Gate Installation & Machinery Replacement: Full closure scheduled approx. 120 days (June 1-Sept. 30, 2023)

-- Dresden Island Lock and Dam, Upper Miter Gate Installation, Valve Replacement, Machinery Replacement, and Electrical System Replacement: Full closure scheduled approx. 120 days (June 1-Sept. 30, 2023)

-- Marseilles Lock and Dam, Electrical Crossover Work: Full closure scheduled approx. 120 days (June 1-Sept. 30, 2023)

Executive Director Soy Transportation Coalition Mike Steenhoek told DTN, "There unfortunately is no way for such a significant construction effort to occur without a degree of inconvenience. No inland waterways user welcomes a closure at any lock site, but the inconvenience can clearly be mitigated by the Army Corps of Engineers providing advance notice, inviting stakeholder feedback, and providing frequent updates on work progress."

Steenhoek added, "If any delays are to occur and the Corps has a choice between under communicating versus overcommunicating with inland waterway users, may the Corps always choose to overcommunicate. Fortunately, the Illinois River lock closures in 2020 were an example of effective two-way communication between the Corps and private industry. The Corps is to be commended on a job well done in 2020, and we're hopeful for a similar outcome in 2023."

The current 9-foot channel lock and dam system on the Illinois River was built in the 1930s with an estimated life span of 50 years. "The structures have long outlived their life expectancy but continue to operate 24/7 due to the hard work and dedication of the men and women charged with maintaining the structures," USACE noted.

CME CORN AND SOYBEAN FUTURES DELIVERY RULES DURING CLOSURE

While the CME has yet to put out an official announcement on the lock closures, it will likely follow the same path as the 2020 lock closures.

"However, because a minority of facilities will be upriver from the lowest obstruction, the Rule that comes into play is different from the river closures back in 2020," CME told DTN. The effects of this year's closure is included in the last question in the FAQ sheet(see below).

"Specifically, since fewer than 50% of delivery facilities in corn and soybean futures lie above the Marseilles Lock, CBOT Rule 703.C.G.(9) does not apply. Instead, CBOT Rule 703.C.G.(8) applies for outstanding certificates delivered from facilities above the Marseilles Lock. Rule 703.C.G.(8) requires issuers of affected certificates, if they are loaded out, to arrange for barges to be loaded at another regular shipping station not affected by (i.e., below) the closure. The shipper is compensated for transportation differences resulting from the change in the location of shipping in accordance with the Rule," said the CME.

If any affected facilities/shippers need more clarification on the rules, reach out to the representatives included on the FAQ sheet attached below.

Here is a link to the CME Delivery and Load-Out Information for Physically-Delivered Corn and Soybean Futures Contacts released during the 2020 Lock Closures on the Illinois River: https://www.cmegroup.com/…

USACE Rock Island website for any updates on the closures: https://www.mvr.usace.army.mil/…

Delivery dates for corn: https://www.cmegroup.com/…

Delivery dates for soybeans: https://www.cmegroup.com/…

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow her on Twitter @MaryCKenn

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