US Inland Waterways’ Role in a Global Marketplace
The United States’ inland waterway system is made up of roughly 12,000 miles of rivers and 237 lock chambers at 192 different locations on the Mississippi, Ohio, Tennessee-Tombigbee Waterway, Illinois, Snake, and connecting rivers and canals. It is a strategic asset for the military and freight shipments, moving over 500 million tons annually. This low-cost, high-efficiency system is vital to competitiveness in a global marketplace. While the 2021 Infrastructure Investment and Jobs Act (IIJA) provides billions to further modernize the network, less is known about the state of development of other global rivers that play a role.
To better understand the international context, this week Eno released a new research report analyzing six international inland waterway freight corridors. The report concluded that policymakers should watch the development of other nations’ freight waterway corridors, particularly China, with an eye toward economic competitiveness and national security.
What do other global rivers look like? And how do they compare to the US system? The following outlines some top-level findings from the Waterborne Competitiveness report to better understand the role, responsibility, and future of our own domestic inland waterway system.
Hidrovía Paraguay-Paraná (HPP) River
One of the busiest freight rivers in South America is the Hidrovía Paraguay-Paraná (HPP). Composed of the Paraná River and its tributaries, the system runs through and borders five countries: Brazil, Argentina, Paraguay, Uruguay, and Bolivia. It moves about 20 million tons of freight annually, which is small compared to the US network and suffers from uncoordinated governance. But the river has significant potential: the HPP is ideally located in the existing agricultural heartlands, and there is a significant market for exporting agricultural products on the river.
The Parana River has 54 dams total, including many that are unnavigable. The Itaipú Dam is the second-largest hydroelectric dam in the world, but is unnavigable as it does not have locks. This obstacle, as well as the need for dredging, creates a barrier between the agricultural areas and deep-water ports for export. Coordination to invest in upgrading the system has been stalled due to the lack of partnership between countries that border and contain portions of the river.
There has been little leadership to fix these issues, even while landlocked Bolivia and Paraguay depend on the river for export and import access to deep water ports. For example, the HPP carries 80 percent of Paraguay’s foreign trade, and Bolivia is also heavily reliant on the waterway for overseas trade. The World Bank estimates the costs to improve the HPP are relatively low, particularly compared to improving rail or road infrastructure, though coordinating these investments is a challenge.
The Amazon is naturally navigable and can accommodate deep draft, oceangoing ships as far upstream as Manaus. This is a great advantage as investments in lock and dam systems are not necessary. However, the river still only carries 25 million tons of freight annually. This has been growing rapidly as farming and mining industries on the Amazon are established. Soy and cereal are the largest exports on the Amazon, with the majority (70 percent) of soybeans shipped to China – however, exporters have called for better infrastructure and development around Amazon ports and tributaries, as most soybean exports currently travel by truck or train.
The Amazon is entirely contained within the Brazilian continent, leading to a simple governance structure. There is a large potential for growth because private firms can invest in port facilities: the government does not have to play an active role while private foreign companies, particularly from the U.S., Europe, and China, currently invest in ports along the Amazon.
The largest factor that could inhibit future growth on the Amazon is environmental. Some stakeholders in the agricultural and industrial sectors have proposed building lock and dam systems on the Amazon to generate hydroelectric power, but these plans face large environmental opposition.
The Mekong River, which begins in China and flows through several Southeast Asian countries, is an important freight corridor for Vietnam and Cambodia, carrying 128 million tons of freight annually on the lower 200 miles. At the Cambodian-Laotian border, the Khone falls create a natural barrier that prohibit the river from providing direct freight access. Freight traffic is very limited upstream from the Khone falls.
China is the dominant force on the Mekong, making investments with vast geopolitical implications for nations in the lower basin, including Cambodia, Vietnam, Laos, and Thailand. Building and investing in dams for hydroelectric use greatly affect water levels and navigability in those other nations. Accordingly, investment priorities on the Mekong are largely geared toward China’s enhancement of hydroelectric power, and not for navigation.
In an attempt to balance China’s influence, the Mekong River Commission (MRC) brings together Cambodia, Laos, Thailand, and Vietnam to create policies for the river. China participates as a “dialogue partner,” not a member, of the MRC, and cooperates with the commission but ultimately continues to prioritize its hydroelectric strategy on the river. Countries in the lower basin continue to express concern with China’s dam strategies, as new dams could restrict or deplete water flows, particularly in the lower basin where trade depends on consistent water levels.
China has established the Yangtze River as the world’s busiest inland freight river, moving more than 2.6 billion tons of freight annually. The river flows through China’s industrial and farming heartland as well as many major cities, with one-third of China’s population living within the river basin.
The majority of cargo in Chinese inland ports is shipped domestically, with only 10 percent of inland cargo shipped internationally. But for that foreign trade, the waterway serves a growing domestic market for high-end consumer goods, as it connects to the coastal ports that are part of the global trading network.
The Chinese Ministry of Transport (MOT) steers policy on the Yangtze. Following a late 20th-century policy change, local governments became responsible for port infrastructure. Inadvertently, this has led to overdevelopment as regions and municipalities competed for economic development along the river’s banks. Currently, there are over 3,900 cargo berths on the main Yangtze waterway, equivalent to more than two berths per mile of river. Many of these facilities are underutilized.
More recently, the national government is strengthening connections between landside and multi-modal infrastructure. For example, the city of Chongqing is connected to the eastern seaboard of China through the Yangtze, and now it is also connected to Europe and Russia via the freight rail network. Cargo throughput at Chongqing ports reached 204 million tons and 1.2 million twenty-foot equivalent units (TEUs) in 2018, and is poised to grow with better intermodal connections.
The Rhine is the busiest freight river in Europe, connecting the ocean ports at Rotterdam with large inland ports, with the Ports of Rotterdam, Duisburg, Strasbourg, and Basel all along its route. More than two-thirds of all goods transported on European waterways use the Rhine, accounting for 160 million tons annually. Much cargo on the Rhine is bulk commodities such as metals, chemicals, mineral oils, and agriculture goods, but the river has also been working to enhance capacity and grow container-based trade. On the upper stretches of the river and connecting canals, there are many locks, necessitating investments in operational reliability for high-value goods movement.
Each country along the Rhine is responsible for maintaining navigability of its own river section. These individual sections are coordinated through the EU and other regional bodies, such as the Central Commission for the Navigation of the Rhine (CCNR) and the International Commission for the Protection of the Rhine (ICPR), which exist mostly to facilitate information exchange and cooperative governance rather than be a technical authority on operations. The EU also created the Water Framework Directive (WFD) to establish compliance and policy mechanisms, including standards and deadlines for creating waterway management plans. The EU also provides funding for waterway management and development within their broader strategic freight plan.
The second busiest river in Europe is the Danube, which connects to the Rhine via the Elbe River in Germany and flows eastward to the Black Sea. The Danube moves 60 million tons of goods annually, mostly bulk industrial and agricultural goods. Container transport on the Danube is almost non-existent – most containers move through the region by trucks or rail. Efforts to change this have not been met with success, yet the river is still attractive for shipping bulk commodities due to low transport costs, good information sharing systems, and few restrictions on nighttime and weekend transport.
Many ports on the lower sections of the river in Eastern Europe, particularly outside Austria and Germany, have outdated, inefficient terminals and lack intermodal facilities to connect to road and rail networks. The Danube River Protection Convention (DRPC) provides a forum for member states to come together, and the International Commission for the Protection of the Danube River (ICPDR) oversees project planning and coordination with the EU’s WFD.
The United States should build on recent efforts to make the system more reliable for shippers and should make inland waterways a key part of a national freight strategy. But investments in other countries need to be monitored to make sure the US system remains competitive. This has a national security element, as Eno’s research found state-owned Chinese companies are investing in facilities along rivers in South America and Southeast Asia. China’s domestic investments in intermodal facilities on the Yangtze could further enhance its use, particularly connecting to other Chinese cities and to railways that lead to Europe.
While the social, political, and economic forces at play in the other regions constitute a unique set of circumstances, there are valuable findings of practices in other regions that will inform U.S. policymakers, managers of the infrastructure, and the users of the system.
To learn more, read Waterborne Competitiveness: U.S. and Foreign Investments in Inland Waterways and sign up for the June 7 webinar.