| Summary: | This dissertation examines several issues regarding the congestion on the Upper
Mississippi River and Illinois Waterway. Chapter II identifies and measures the impact
of lock congestion on grain barge rates on these waterways. Results indicate grain barge
rates on both rivers are not affected by lagged lock congestion. In present time,
however, lock congestion in the lower reaches of the upper Mississippi and Illinois
Rivers are found to increase barge rates that link the north central United States to the
lower Mississippi Gulf port area. The findings suggest the impact of lock congestion on
grain barge rates is moderate.
Chapter III explores the interaction between grain prices in export and domestic
markets and transportation rates linking these markets over time. Three model
frameworks were evaluated and some consistent results are observed. In general, shocks
in transportation rates (barge, rail, and ocean) explain a great proportion of the variation
in corn and soybean market prices in the long run, suggesting the importance of
transportation in grain price determination. The volatile ocean freight rates are the mostimportant transportation rates contributing to the variation in grain prices, while shocks
in barge rates on the Upper Mississippi River and Illinois Waterway generally explain
less than 15 percent of the variation in grain prices. The dynamic interrelationships
among the six evaluated transportation rates are also found. In addition, the north
central corn markets likely have the most influence over other markets while soybean
export price dominates the soybean market in the long run.
Chapter IV estimates the structural demand for grain barge transportation on both
the upper Mississippi and Illinois Rivers. Results suggest foreign grain demand is the
most influential force affecting grain barge demand on both rivers. Also, results indicate
an inelastic demand for grain barge transportation on the Upper Mississippi in the short
run; demand is price elastic in the long run. The price elasticity for grain barge demand
on the Illinois River is consistently inelastic. Additionally, the winter season and floods
affect demand on the Upper Mississippi negatively, while barge demand increases on the
Illinois River in winter.
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