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Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Funding and Managing the U.S. Inland Waterways System: What Policy Makers Need to Know. Washington, DC: The National Academies Press. doi: 10.17226/21763.
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Introduction

The inland waterways system provides for the domestic barge shipping component of the nation’s freight transportation system. The system infrastructure is managed by the U.S. Army Corps of Engineers (USACE) and funded through the USACE inland navigation budget. The United States established and funded the federal inland waterways system early in the nation’s history to promote commercial shipping and the U.S. economy. Commercial shipping continues to drive federal economic interest in the system.

Reason for This Report

The Executive Committee of the Transportation Research Board (TRB) initiated this consensus study of the inland waterways system because of reports of deteriorating and aged infrastructure combined with inadequate capital investment, a growing backlog of capital needs, and declining federal funding for inland navigation. This report describes issues relevant to policy makers in considering investments for the inland waterways system.

TRB convened the Committee on Reinvesting in Inland Waterways: What Policy Makers Need to Know. Its task was to examine the role of the inland waterways in the nation’s freight transportation network and, in that context, to assess issues requiring policy attention to determine the level of funding required for the system, who should pay for the system, and how system users and other beneficiaries could be charged.

Box 1-1 presents the complete statement of task that guided the work of this committee and locations in the report (italicized) that respond to each part of the task.

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Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Funding and Managing the U.S. Inland Waterways System: What Policy Makers Need to Know. Washington, DC: The National Academies Press. doi: 10.17226/21763.
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BOX 1-1

Statement of Task

This study will address (a) the transportation role and importance of the federally funded Inland Waterways System (IWS); (b) its costs and benefits; (c) estimated levels of investment required to achieve an efficient inland waterways system and options for funding; and (d) who should pay for the required investment.

1. The committee will assess the role of the IWS in the national freight system by examining specific corridors where commodity shipments by waterways are particularly important. [Chapter 2.] For a subset of these corridors, the committee will consider the implications for shippers, alternate modes, and the general public of lost or significantly degraded water transportation both now and at projected future levels of freight demand. [Chapter 2; Appendix B.] In corridors where the IWS competes with other modes, the committee will consider how public investments could impact the efficiency of freight movements in that corridor, regardless of mode or funding mechanism. [Chapter 5.]

2. At a conceptual level, the committee will describe the full range of benefits and costs of maintaining rivers and coastal channels for inland water transportation, the issues and challenges associated with characterizing as well as quantifying these costs and benefits, and the extent to which they are captured in benefit–cost analyses of the U.S. Army Corps of Engineers. [Chapter 3.]

3. The committee will examine alternate estimates of the level of investment required for an efficient inland waterways navigation system, taking into consideration the difference in peak demand (and therefore capital requirements) that nonstructural alternatives, such as tolls and lock scheduling, could make and the potential for disinvesting in lightly used sections of the IWS. [Chapter 3 describes nonstructural alternatives; Chapter 4 describes an approach to achieving estimates of the level of investment required.]

4. The committee will assess how IWS costs are currently shared among users, the public, and other beneficiaries. [Chapter 3.] It will also assess whether (a) general fund subsidies to inland waterways appear to be commensurate with public benefits; (b) user fees reflect costs imposed; and (c) a full accounting of benefits and costs (including those that can only be

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Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Funding and Managing the U.S. Inland Waterways System: What Policy Makers Need to Know. Washington, DC: The National Academies Press. doi: 10.17226/21763.
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described qualitatively) offers insight into how capital and operating costs of the inland waterways system should be apportioned between users and the public. In examining beneficiaries of navigation investments, the committee will assess whether there are grounds and mechanisms for the nontransportation beneficiaries of the IWS to be charged for the benefits they derive from public investments in the system. [Chapter 3; Chapter 5.]

The study will provide answers to the questions posed above to the extent possible with existing information and identify gaps in information and knowledge required to answer these questions, including uncertainties surrounding external benefits and costs associated with the IWS and freight system more generally.

Committee’s Approach

BOUNDS FOR THE SCOPE

To address its charge, the committee set judicious bounds for its work and identified certain topics as beyond its scope.

Inland Waterways System

The primary concern of this report is funding for lock and dam infrastructure on rivers or river systems. Locks and dams are the main mechanism for enabling cargo movements and the most expensive component in maintaining the inland waterways for barge transportation, although other activities such as dredging are necessary and can be costly. The Great Lakes and the Saint Lawrence River are part of the larger inland marine transportation system but not a focus of this report because of the small number of locks and dams they contain. Furthermore, these segments face issues different from those of the inland waterways system. The Saint Lawrence is a joint Canadian–U.S. system with parallel authorities for maintaining locks and traffic management, but Canada funds, manages, and maintains those segments. Most of the vessels on the Great Lakes are bulk carriers in a largely self-contained system in which vessels too large to fit through

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Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Funding and Managing the U.S. Inland Waterways System: What Policy Makers Need to Know. Washington, DC: The National Academies Press. doi: 10.17226/21763.
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the locks on the Saint Lawrence travel back and forth as they move ore from mines and coal to utilities. Domestic offshore navigation routes, such as transportation to and from Alaska, are also excluded.

Guidance for Policy

The committee offers conceptual frameworks and practical illustrations to aid policy makers in their deliberations related to inland waterways system funding. The report identifies the main policy issues, relevant sources of data, facts to consider, and other concerns that can affect policy judgments about the inland waterways system. The statement of task did not require recommendations; in responding to the charge, the committee drew a number of conclusions on the basis of the information it analyzed, which are summarized in the Summary and in Chapter 6.

Topics Beyond the Scope

Issues related to ports and harbors are beyond the scope. USACE is responsible for deep draft harbor dredging to ensure that harbor channels can accommodate flows of freight carried on large vessels for international commerce. However, ports and harbors are managed and funded differently from the inland waterways and are not a focus of this report. Panama Canal expansion also is not addressed in this report except to the extent that it relates to arguments for the building of larger locks on parts of the inland waterways system.

Broader water resource management and funding challenges and opportunities for the nation are beyond the scope of this report. USACE has three primary mission areas: navigation for freight transportation, flood control and damage reduction, and ecosystem restoration. Other activities performed by USACE include safety and disaster relief, hurricane and storm damage reduction, water supply, hydroelectric power generation, and waterborne recreation. This report focuses on funding for the inland waterways system with regard to the freight transportation mission; it recognizes that decisions concerning shipping affect other users of water resources in the system. The National Research Council (NRC) has prepared a more general overview of issues related to the nation’s water resources (NRC 2012 in Box 1-2).

In discussing its charge, the committee determined that the TRB Executive Committee, which initiated this study and oversaw development of the statement of task, was overly optimistic about what the

Page 10
Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Funding and Managing the U.S. Inland Waterways System: What Policy Makers Need to Know. Washington, DC: The National Academies Press. doi: 10.17226/21763.
×

committee could achieve in an analysis of corridors. Detailed public origin–destination data are scarce, and a full analysis of the corridors that make up the system is a study in itself and would exceed the study timeline and resources. The committee has instead provided an overview of commodity flows in major river corridors that will enable policy makers to become generally familiar with the system and understand the main issues pertaining to decisions about funding. Some readers may be concerned about the possibility for mode shifts if certain waterways are affected by deferred maintenance. However, the committee determined that generalizations or speculation about hypothetical scenarios and possible mode shifts on specific subcorridors based on a general description of the system would be inappropriate; this issue is discussed in Chapter 2, Box 2-1.

In discussing its charge, the committee further determined that accurate forecasting of barge traffic and demand would not be prudent or feasible. As noted in the report, forecasts for traffic growth on the inland waterways system in recent years have been proven wrong by static or declining traffic. Several factors may at some point affect the demand for barge service. Among them are changes in modal access (such as new pipelines), energy prices, policy, and production that may affect the movement of coal, crude oil, and related petroleum and petrochemical products on inland waterways, pipeline, and rail; changing weather patterns that may affect water depth and flows or the production of agricultural products; and changes in the size or technology of vessels. Such factors are important to track over time, but they are beyond accurate prediction by this committee. The report includes a descriptive overview of the current system and discussions about prioritization and funding for system reliability. The discussions pertain to the present challenge of funding the existing system so that it can be responsive to fluctuations in traffic.

INFORMATION GATHERED

The committee held six meetings. Three were public with the purposes of understanding the available data and gathering various perspectives concerning system needs, management, and funding (see the Preface for a list of attendees); three consisted of deliberations and preparation of the committee’s report. Five meetings were held

Page 11
Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Funding and Managing the U.S. Inland Waterways System: What Policy Makers Need to Know. Washington, DC: The National Academies Press. doi: 10.17226/21763.
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at the National Academies buildings in Washington, D.C. The third public meeting was held at Carnegie Mellon University in Pittsburgh, Pennsylvania, with a site visit to the Emsworth Locks and Dams facility in the USACE Pittsburgh district. The site visit was planned to aid the committee in understanding operations at the USACE district level and the procedures used in identifying priorities for spending at facilities in the navigation system. The site visit included travel to Emsworth on a tow of the Ingram Barge Company, which provided the committee with further information from the perspective of tow operators on the system.

This report draws on a number of past NRC reports related to the nation’s water resource and freight transportation system (Box 1-2).

BOX 1-2

Related NRC and TRB Reports

NRC. 2001. Inland Navigation System Planning: The Upper Mississippi River–Illinois Waterway. National Academy Press, Washington, D.C.

NRC. 2004. Analytical Methods and Approaches for Water Resources Project Planning. National Academies Press, Washington, D.C.

NRC. 2004. Review of the U.S. Army Corps of Engineers Restructured Upper Mississippi–Illinois River Waterway Feasibility Study. National Academies Press, Washington, D.C.

NRC. 2005. Water Resources Planning for the Upper Mississippi River and Illinois Waterway. National Academies Press, Washington, D.C.

NRC. 2012. Corps of Engineers Water Resources Infrastructure: Deterioration, Investment, or Divestment? National Academies Press, Washington, D.C.

TRB. 2003. Special Report 271: Freight Capacity for the 21st Century. Transportation Research Board of the National Academies, Washington, D.C.

TRB. 2006. Special Report 285: The Fuel Tax and Alternatives for Transportation Funding. Transportation Research Board of the National Academies, Washington, D.C.

TRB. 2012. NCFRP Report 15: Dedicated Revenue Mechanisms for Freight Transportation Investment. Transportation Research Board of the National Academies, Washington, D.C.

Page 12
Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Funding and Managing the U.S. Inland Waterways System: What Policy Makers Need to Know. Washington, DC: The National Academies Press. doi: 10.17226/21763.
×

The current report differs from and extends previous NRC and TRB reports in that it focuses on strategies for investing in the inland waterways system and does so with consideration of the role of the system in the nation’s freight transportation network. The report also is informed by a number of key reports of the Congressional Research Service, the U.S. Government Accountability Office, and the Congressional Budget Office. Primary sources of data for analyses in the report include USACE Waterborne Commerce Statistics and the U.S. Department of Transportation Freight Analysis Framework.

Organization of the Report

This report is organized into six chapters. Chapter 2 describes the role of the inland waterways system in national freight transportation. It includes discussion of major corridors and commodities shipped. Indicators of the condition and functioning of lock and dam infrastructure are described, some of which could be used to prioritize maintenance spending for commercial navigation.

Chapter 3 describes federal involvement in the management and funding of the inland waterways and the federal role relative to other transportation modes. It presents considerations to take into account in deciding on the federal role in funding the inland waterways, including grounds and mechanisms for charging users of the system.

Chapter 4 describes a strategy for prioritizing navigation expenditures on the basis of the concept of economically efficient asset management. It also describes a framework that USACE is developing for asset management and that could be advanced to prioritize spending.

Chapter 5 presents a user-based approach to funding the system with user charges both to increase revenues for system maintenance and to promote economic efficiency by targeting limited navigation resources to parts of the system most valued for freight transportation. It describes the various user payment options and criteria for evaluating them. Alternative plans are considered for parts of the system that have minimal freight traffic but that may have benefits other than commercial shipping.

Findings and conclusions are summarized at the end of each chapter. Chapter 6 summarizes major conclusions and findings from the

Page 13
Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Funding and Managing the U.S. Inland Waterways System: What Policy Makers Need to Know. Washington, DC: The National Academies Press. doi: 10.17226/21763.
×

report. The chapters are followed by appendixes, which provide more detailed technical data and explanation related to issues raised in the chapters.

A glossary of terms used in the report appears after the Preface.

Intended Audiences

The primary audience for this report is policy makers at the federal level who are responsible for decisions about inland waterways system funding and who may have varying familiarity with the system and the issues and arguments related to its support. Secondary audiences include state and local governments, users and beneficiaries of the waterways, and private organizations and individuals with an interest in the management and funding of freight transportation and the nation’s water resources.

Page 6
Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Funding and Managing the U.S. Inland Waterways System: What Policy Makers Need to Know. Washington, DC: The National Academies Press. doi: 10.17226/21763.
×
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Page 7
Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Funding and Managing the U.S. Inland Waterways System: What Policy Makers Need to Know. Washington, DC: The National Academies Press. doi: 10.17226/21763.
×
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Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Funding and Managing the U.S. Inland Waterways System: What Policy Makers Need to Know. Washington, DC: The National Academies Press. doi: 10.17226/21763.
×
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Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Funding and Managing the U.S. Inland Waterways System: What Policy Makers Need to Know. Washington, DC: The National Academies Press. doi: 10.17226/21763.
×
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Page 10
Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Funding and Managing the U.S. Inland Waterways System: What Policy Makers Need to Know. Washington, DC: The National Academies Press. doi: 10.17226/21763.
×
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Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Funding and Managing the U.S. Inland Waterways System: What Policy Makers Need to Know. Washington, DC: The National Academies Press. doi: 10.17226/21763.
×
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Page 12
Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Funding and Managing the U.S. Inland Waterways System: What Policy Makers Need to Know. Washington, DC: The National Academies Press. doi: 10.17226/21763.
×
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Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2015. Funding and Managing the U.S. Inland Waterways System: What Policy Makers Need to Know. Washington, DC: The National Academies Press. doi: 10.17226/21763.
×
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Funding and Managing the U.S. Inland Waterways System: What Policy Makers Need to Know Get This Book
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TRB Special Report 315: Funding and Managing the U.S. Inland Waterways System: What Policy Makers Need to Know explores the role and importance of the federally funded inland waterways system, priorities for future investment, its beneficiaries, and sources of funding.

In recent years, the inland waterways system has transported six to seven percent of all domestic ton-miles of cargo. The system is a small but important component of the national freight system, particularly for bulk commodities. The study committee finds that, in order to ensure efficient use of limited navigation resources, the most critical need for the inland waterways system is a sustainable and well-executed plan for maintaining system reliability and performance. Reliability and performance will depend on placing higher priority on investments in operations and maintenance (O&M). Without a funding strategy that prioritizes system preservation, maintenance may continue to be deferred, which would result in further deterioration and in a less cost effective and less reliable system.

The committee finds that more reliance on a “user-pays” funding strategy for the commercial navigation system is feasible, would generate new revenues for maintenance, and would promote economic efficiency.

The committee suggests that an asset management program focused on economic efficiency, fully implemented and linked to the budgeting process, would help prioritize maintenance spending and ascertain the funding levels required for reliable freight service.

View the TRB Special Report 315 webcast.

View the press release.

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