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Brownwater News, November 2017

Nov 16, 2017 10:18 AM

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.

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