“Disruption clauses” by Mississippi barge operators in contracts with shippers

An article in the Wall Street Journal (August 27, 2013) describes the worries of barge operators on the Mississippi river who have been hurt by floods and the drought. The new disruption clauses shift the cost of delays and the impact of high or low water levels to the shipper. This in turn may cause shippers to compensate with buffers that increase overall costs. Will such contract demands by barge operators shift volume to other modes such as rail ? Will alternate contracts that get shippers to commit volumes across multiple years become the norm for the barge industry ? Given the volume of US grain exports that use the Mississippi river, should the US government cover the barge owner costs associated with the uncertainties caused by climate changes ?

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About aviyer2010

Professor
This entry was posted in Global Contexts, Service Operations, Supply Chain Issues and tagged , , , , , , , , . Bookmark the permalink.

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