January 17, 2019

As projections show a steep increase in freight movement over the next few decades, stakeholders representing inland waterway transportation said they are well-positioned to handle the growing demand but that the federal government needs to help them invest in the projects that will keep things running smoothly.

That was the sentiment at a TRB Annual Meeting session on inland waterways this week, featuring representatives from Inland Rivers, Ports and Terminals, Inc., American Commercial Barge Line, and the Waterways Council, as well as the Army Corps of Engineers.

USDOT projects that freight tonnage movement on America’s transportation network will grow 40 percent by 2045, to 25 billion tons. This would put “enormous stress on an already congested highway system,” according to Aimee Andres, executive director of Inland Rivers, Ports and Terminals Inc. “And capacities are already being reached on rail.” Inland waterways, meanwhile, are operating under capacity.

“We can accommodate that projected freight growth,” Andres said.

At the session, stakeholders spelled out several challenges facing inland waterways, many of them related to federal funding.

While funding for Army Corps of Engineers projects, and for inland waterways projects in general, has been increasing in recent years, there was agreement that projects could use more money, released more quickly.

Michael Toohey, President and CEO of the Waterways Council, pointed out that the Water Resources Reform and Development Act (WRrDA) of 2014 increased funding for the Inland Waterways Trust Fund (IWTF) and Harbor Maintenance Trust Fund (HMTF), but stakeholders still have projects that are awaiting funding.

Martin Hettel, vice president for government affairs for American Commercial Barge Line, said 17 projects are authorized but still awaiting funding. Delaying construction of projects increases total costs 300-500 percent, he said.

Take, for example, the Olmsted Locks and Dam, a locks-and-dam system on the Ohio River made of concrete. When the replacement project was first approved in 1988, it was estimated to cost $775 million. By the time it was completed in 2018, the estimated cost was over $3 billion.

To more efficiently disperse funds, some stakeholders have called for changing the cost share for these projects from 50 percent each from general treasury funds and from IWTF, to 75 percent from the general fund and 25 percent from IWTF. (IWTF is funded through inland waterways user fees, meaning Hettel’s proposal would result in these projects being funded more by general taxpayer dollars and less by users.)

Andres cited the inability of smaller inland waterways projects to compete for funding. The INFRA grant program, for example, has a floor of $5 million for eligible projects. Inland Rivers, Ports and Terminals, Inc. is advocating for a new Inland Port and Terminal Grant Program, funded with money set aside from the INFRA, BUILD, and other related grant programs and with a lower floor of $1 million so that smaller inland waterways projects can compete for federal funding.

Finally, Toohey said USACE needs more money, and that money should be distributed upfront so that projects can get started more quickly.

“When the Corps was given $15 billion [post-Katrina], they delivered on-time and on-budget,” he said. But even with that success story, he cited an “institutional problem” getting Congress to provide upfront funding.

Hettel pointed out that the Office of Management and Budget is unwilling to obligate a future president’s budget to any long-term civil works program that would span multiple administrations.

There was agreement across the panel that more federal funding, more quickly, would help inland waterways stakeholders invest in projects that would help reduce transit times and avert the risk of lock or dam failure.

“If a major lock fails, we can’t move all of that tonnage on truck and rail,” Hettel said. The price of freight would go up, then, as demand for movement outpaces the available supply.

Neglecting lock and dam maintenance could have economic consequences, as well.

“If we don’t invest in our lock and dam system to meet demand, we’re going to strangle our economy and we’re going to create opportunity for Brazil, Argentina, and Colombia to grow their export markets,” said Toohey.