Want Cargo-Moving Efficiency? Invest in U.S. Waterways

Will the U.S. make the needed investments in the most efficient mode for transporting commodities – America’s waterways? That’s an important question now because a surge in spending to improve the nation’s infrastructure is on tap.

Water transportation’s edge

But with crucial needs to relieve rail- and truck-shipping bottlenecks at major seaports, modernize air traffic control communication systems and replace thousands of flagging bridges, why a priority for waterways? Plain and simple – efficiency.

Although much of the country has arisen far from seaports and other waterway shipping, water offers the best bargain when moving cargo. The capacity of a typical dry-cargo barge, for example, is 16 times that of a rail hopper car, and 70 times that of a grain-hauling semi-truck. Plus, those ratios more than double when comparing liquid-hauling barges with tanker rail cars and trucks.

Let’s look, too, at fuel efficiency.

The Texas Transportation Institute estimates that one gallon of diesel fuel will haul oneton of cargo, on average, 150 miles in a semi-truck, 478 miles on a train and 616 miles in a barge on a river. What’s more, switching freight to waterways relieves highway and rail-hub congestion.

Before railroads were built, roads were used mostly for local travel and hauling, and long-distance shipping was nearly all on water. Then came growth, and America flocked to railroads for its huge westward expansion of the 19th century. In the 20th century came the massive highway building and the resulting trucking industry.

So, despite the significant efficiencies of shipping on water, history has left waterways far behind when considering the nation’s total public investment by federal,state and local governments in freight-moving infrastructure.

Congressional Budget Office (CBO) analysts tallied that spending annually, and an average of its most recent totals (2001–2004) showed roads and bridges with 61 percent of the spending; mass transit, 20 percent; aviation, 14.5 percent; water transportation, less than 4 percent. In perspective, about 14 percent of intercity cargo traffic moves on waterways. (CBO’s count omitted most of the modest public spending for freight rail infrastructure.)

The American Society of Civil Engineers (ASCE) calls the inland waterways and rivers “the hidden backbone of our freight network.” The importance of waterway transport doesn’t stop with farm goods and petroleum.Other major products depend on the waterways as well, including coal, steel, fertilizers and chemicals, sand and crushed rock, and intermodal containers.

A State of Disrepair

Broken concrete at the LaGrange Lock and Dam on the Illinois River.

But in its latest assessment, the ASCE hands the transport system a D-, its lowest grade among all transport modes.

The scoring is not about this transport sector’s “trucks,”so to speak, i.e. the 5,500 tugboats and 31,000 barges at work on America’s water highways. Rather, it applies to the 25,000 miles of commercially navigable river channels, the 236 locks on those rivers, plus the other features that keep harbors, the Great Lakes and coastal waterways open for business.

The ASCE declares: “More than half of the locks are over 50 years old. Barges are stopped for hours each day with unscheduled delays,preventing goods from getting to market and driving up costs . . . Projects to repair and replace aging locks and dredge channels take decades to approve and complete . . .”

A prime example of the urgent need for waterway improvements is the LaGrange Lock and Dam. It was built in 1936 and designed to last 50 years – that was 80 years ago.

LaGrange is last lock and dam on the Illinois River before it joins the Mississippi River. Every day, about 70,000 tons of goods worth $27 million travel through the lock. These commodities include grain, petroleum,manufactured goods, chemicals, coal and more, representing billions of dollars to the U.S. economy each year.

Today, the lock chamber and machinery are in bad shape. Big chunks are missing in the lock wall. And the jagged steel edges endanger every barge that moves through it.

Still a competitive way to ship

Fortunately, U.S. cargo-moving infrastructure has remained competitive.

For example, in a recent report supported by the United Soybean Board, Informa Economics chose Brazil, America’s leading hemispheric agricultural competitor, to compare the costs to transport soybeans from the farm to export terminals. In Brazil it costs $96 per metric ton to largely truck the soybeans 1,000 miles to access the country’s primary export region. In the U.S. it costs $62 per metric ton to transport soybeans approximately the same distance due to our greater utilization of efficient river transportation.

But the finding sinclude a caveat: “Since 2005, Brazil’s modal shares have been realigning, with the more efficient modes of rail and barge gaining notable shares.”

What’s more, Brazil is a low-cost producer in other ways,and its farm output and exports are growing exponentially.

The U.S. Department of Agriculture’s trade data shows Brazil’s export volume for soybeans and beef have shot up 280 percent since 2000; for corn, up 350 percent; chicken meat, 370 percent; cotton, more than 800 percent. Brazil exported no cattle in 2000, while last year the country exported 300,000 head.

So Americans interested in ensuring competitive transportation services for the future may want to see stronger investment in waterways. Last year’s opening of the deeper and enlarged Panama Canal channel,for example, emphasized the need for eastern U.S. ports and the Mississippi River system to stay abreast with the world’s oceanic cargo movers to remain competitive.

Funding the future

The nation’s waterway operators have been doing their part. They expanded their barge fleet by about 3 percent in 2014 and again in 2015.Further, they agreed with Congress to hike the tax on their fuel by 45 percent(to 29 cents a gallon) to more generously fund the Inland Waterways Trust Fund,which is used to match the U.S. Army Corps of Engineers’ costs for lock renovation and replacement.

The yearly budget of the Corps for navigation maintenance and improvements, in fact, has been expanded by about $250 million in the past two years, with another $100 million hike proposed for this year by congressional committees.

The funding allows the Corps to deepen harbors and river channels to accommodate the world’s biggest cargo ships – such as those now traversing the Panama Canal – and longer barges. For example, the Corps is hoping to soon gouge out an additional 5 feet of depth, to 50 feet, in the Mississippi River channel for more than 200 miles from its mouth north to Baton Rouge.

Such inland waterways upgrades are a big deal to folks such as Mark Seib, who grows corn, soybeans and wheat on his southwest Indiana spread.

Seib hauls much of his corn and soybeans to elevators at Mount Vernon and Evansville, which are served by barge operators on the Ohio River. The towboats and barges on that river are “a definite must,” Seib says.“For us to keep those inland waterways working to get our commodities up and down the river, it is a huge must.” Although he hauls some of his corn to nearby ethanol plants, “if the river would be shut down for some reason, we don’t have a plan B for that much tonnage to be moved any other way,” he says.

For more information about the impact of infrastructure on U.S. soy, visit UnitedSoybean.org.