Under these circumstances, an arbiter would be permitted to forgive some of the fees that would normally be imposed on an operator who took longer in a lock than the time reserved.

New operators would buy lockage slots from either existing operators or from the Corps. To encourage entry, however, at the end of the navigation season, the Corps should be directed to rebate back to the new entrant an amount equal to the value of time per sailing given to existing operators.

Allowing operators clear title to specific 5-minute blocks of time throughout each day of the navigation season and then allowing them to trade slots to schedule their own lockage sequences is the simplest, cheapest, and most direct way to speed the flow of traffic on the UMR– IWW system. It has the added advantage of increasing the speed of lockages and thus increasing the system's economic capacity.

Implementing Tradable Permits—Experience from Other Programs

A tradable permit approach holds promise for inducing more efficient use of navigation infrastructure by the barging industry on the Upper Mississippi River–Illinois Waterway system. Tradable time-specific permits to use locks may reduce congestion delays and other user costs and may encourage technological innovation. In considering this approach, it is worthwhile to note that implementing tradable permit policies is often highly politicized because of the complex array of stakeholders with an interest in a tradable permit program. There are those who make a direct livelihood from the navigational use of the waterways—barge captains and tow operators; and those linked to them through capital investments, input supply, and output processing—from grain elevators and port authorities, and from communities concerned with jobs and economic vitality. There are competing advocates for differing priorities in waterway management: recreational boaters, national and local environmental advocates, and farm organizations. There are multiple arms of government—the Corps of Engineers, federal and state wildlife agencies, Congress, and the courts.

These disparate interests are faced with multiple tasks. Prior to establishing tradable lockage permits, policymakers must determine the desirable and feasible number of commercial navigation lockages per unit of time at specific locks or series of locks, and they must consider exceptions to the permitted lockage times for unusual conditions (e.g., severe weather). The nature of the permits must be specified. The permits could be in the form of a right to make an advance reservation that would avoid time in queue at specific locks. Or lockage arrival times and time allotted within the lock could be pre-assigned based on historic dates of use and use levels, with trading to adjust to current needs. To whom would the “permits” be allocated? Should a permit be mandatory to use a lock, or required only to move to the front of the queue upon arrival? What penalties apply for failure to use an assigned lockage time or for use of excess time in the lock? Should the program be revenue-neutral—that is, fees collected would be returned to the permittees in a manner that does not distort their lockage use incentives.

Some organization (which could be a public agency or a voluntary association formed by navigation interests) must assign initial lockage permit allocations, set the rules for trading, and monitor and enforce the activities that ensue. A central coordinating system for reservations



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