Study says unscheduled lock outages could cost shippers billions
A new study examining the economic impacts of unscheduled lock outages on U.S. inland waterways has found that the shipping industry stands to lose billions of dollars if key facilities are shut down.
The study released by the National Waterways Foundation and the Maritime Administration (MarAd) examined four locks that support traffic on every segment of the Mississippi River system. Researchers at the University of Tennessee and Vanderbilt University studied Markland Locks and Dam (Ohio River near Cincinnati); Calcasieu Lock (Gulf Intracoastal Waterway in Louisiana); LaGrange Lock and Dam (southernmost of the navigation structures on the Illinois River); and Lock and Dam 25 (Mississippi River north of St. Louis).
The researchers found that if an unscheduled closure occurred at Markland, the shipper supply chain cost burden could exceed $1.3 billion a year. A similar closure at Calcasieu could exceed $1.1 billion annually. The cost burden for a closure at LaGrange or Lock and Dam 25 was estimated to exceed $1.5 billion a year.
“Unscheduled outages at LaGrange and/or Lock and Dam 25 would severely stress the nation’s railroad system to transport the current cargo transiting the locks,” the researchers found. “Trucking to alternative waterway locations would mean an additional 500,000 truck trips per year and an additional 150 truck-miles in affected states.”
As for Markland, an unscheduled outage there would require 40,000 additional carloads and 60,000 additional truckloads to transport the current cargo transiting the lock, the study group said. A similar situation at Calcasieu, they added, would require 10,000 additional rail cars and several hundred locomotives to move the current cargo.
The lock outage duration for the study was based on a one-year closure that triggers long-term changes by shippers and carriers, the researchers said. “This groundbreaking study reveals, for the first time, the broad range of economic and societal impacts of unscheduled lock outages,” said Daniel Mecklenborg, chairman of the National Waterways Foundation.
Ports group sees way to attack HMT ‘inequities’
The American Association of Port Authorities (AAPA) wrote to the House Ways and Means Committee on Nov. 3 that tax reform “is an opportunity to address the long-standing inequities of the Harbor Maintenance Tax (HMT) and make spending mandatory.”
In his letter to committee chairman Rep. Kevin Brady, R-Texas, AAPA President and CEO Kurt Nagle said that the HMT “lacks fairness, equity and hinders rather than promotes American economic growth, jobs and our international competitiveness.”
Nagle said the users of federal navigation channels pay the tax, “ostensibly as a user fee,” to fund 100 percent of “critical water highways.” But over the years, he said “a significant amount” of that tax revenue has not been put back into maintaining channels to their authorized depths and widths.
“HMT should be used to pay for harbor maintenance, rather than used to offset other federal spending,” Nagle said. “Currently there is a balance in the Harbor Maintenance Trust Fund (HMTF) of over $9 billion, and tax reform could help free those funds for desperately needed port maintenance. You can help resolve the HMT inequities that have evolved since the establishment of the tax in 1986, over 30 years ago.”
Nagle added that AAPA is working to develop industry consensus for a spending formula to accompany permanent HMT funding legislation such as H.R. 1908, the Investing in America: Unlocking the Harbor Maintenance Trust Fund Act.
Nagle said one of the key stumbling blocks is funding the necessary offset. “Tax reform can be that vehicle to solve this 30-year-old problem,” Nagle said.
Buzby stresses survival of nation's merchant fleet
Addressing members of the International Propeller Club of the United States at their annual convention last month at Port Canaveral, Fla., Maritime Administrator Mark Buzby stressed his belief that the Maritime Security Program and cargo preference, together with the Jones Act, “are absolutely critical to the survival of the (merchant) fleet.”
As for the security program, Buzby said, “We expect it to be fully funded again in FY 2018. It needs to be fixed for the future, though.” The program is authorized through 2023, but it is only appropriated year to year. The administrator said that MarAd, the U.S. Transportation Command and the maritime industry are working on the next version of the program “to ensure it provides us the right kind of ships we need for sealift.”
“Finally, there is a lot of scuttlebutt around town about cargo preference,” Buzby said in regard to the rule that at least 50 percent of government cargoes shipped under the Food for Peace program be transported by U.S.-flag vessels. Currently the rate stands at 50 percent, he said, “and we’d like to see more. So would others.” Buzby added that there are also those “who would like to see it go away altogether. That discussion continues.”
Buzby reiterated that “all three pillars (security, cargo preference and the Jones Act) are necessary to maintain a strong, resilient U.S.-flag domestic and international fleet, and to employ the mariners needed to crew them.”
Corps of Engineers awards largest dredging contract
The U.S. Army Corps of Engineers has awarded Great Lakes Dredge & Dock a $213 million contract for the Charleston 2 channel maintenance and dredging project.
The scope of work includes the excavation of about 8 million cubic yards of material to deepen a portion of the Charleston, S.C., harbor entrance channel. The project is expected to be completed by the end of 2020.
“The Charleston 2 deepening project is an important win for the company representing the largest dredging contract ever awarded by the Army Corps of Engineers,” said David Simonelli, president of Great Lakes' Dredging Division.
Towing panels to review Subchapter M, ATB operations
The Towing Safety Advisory Committee (TSAC) and its subcommittees will meet next month at the Omni Riverfront Hotel in New Orleans to review and discuss recommendations on a number of topics, including Subchapter M implementation. The subcommittees will meet Dec. 5 and the full committee will convene Dec. 6.
The panelists are scheduled to discuss articulated tug-barge (ATB) operations and manning; inland firefighting; towing liquefied natural gas barges; regulatory reform; and a proposed new subcommittee to examine load-line exemptions for river barges on Lake Erie and Lake Ontario. For more information, contact Coast Guard Cmdr. Jose Perez at (202) 372-1410.