Cruisin' Down The River" . . . With Export Coal

The romance of the River lives on in the tales of Mark Twain; and many Americans still think of the Mississippi River in terms of the steamboats loaded with passengers, gamblers and cotton. Yet for many years, coal has been a major cargo on the American waterways. Currently, about 100 million tons a year of coal is handled in some part of its journey from mine to destination by barge. The bulk of this traffic has been on the Ohio River System and the Upper Mississippi River System in years past. Now we have a new entry. Over the past 10 years various movements of coal have developed down the Mississippi River to power plants at Memphis and along the Gulf Coast, and a small amount of metallurgical coal has moved down the Mississippi River for export to Japan since 1970. But in 1980 a brand new player came on the scene. 1980 was a momentous year for the American coal business. Historically, we have exported about 50 million tons a year of metallurgical coal to the world's steel mills. Just before and after World War I, we also had a fairly healthy export trade in steam coal; and again in the late forties, we supplied large amounts of coal to Europe until domestic production could recover from the ravages of World War II. But since the early fifties, the name of the export game has been metallurgical coal. Starting in the mid seventies, something began that was almost totally missed by the American coal industry; and that was the growth in the use of coal first in Europe and now in the Far East as a steam product and as an alternative to petroleum products. As these world coal markets began increasing, the U.S. at first was thought to be noncompetitive because ocean rates were still very low. For example, as recently as 1977, Australian coal could be moved all the way from Australia to the Gulf Coast for $12.50 per metric ton. Coal exporting countries were Poland, Australia and South Africa, except for the continuing exports of U.S. high quality metallurgical coal. But then came the second oil shock, and all of the sudden that $12.50 rate from Australia to the U.S. Gulf became $25.00. And then suddenly and almost unrecognized by the American industry, American coal was in fact competitive at overseas destinations because of the drastic change in trade patterns brought on by the doubling and tripling and quadrupling of bunker fuel prices for ships.