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Dredging, Infrastructure, and Other Challenges on the Mississippi River System Presented by: Spencer Murphy Vice President – Risk Management Canal Barge Company, Inc. Agenda. Industry Background Canal Barge Company Overview Infrastructure Challenges Dredging needs Solutions Questions.
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Dredging, Infrastructure,and Other Challengeson the Mississippi River SystemPresented by:Spencer MurphyVice President – Risk ManagementCanal Barge Company, Inc.
Agenda Industry Background Canal Barge Company Overview Infrastructure Challenges Dredging needs Solutions Questions
“Inland Marine Highway” • Over 12,000 miles connecting 38 States • 624 million tons of cargo transit the inland waterways • 14% of all intercity freight, valued at nearly $70 billion, for only 3% of the total freight bill MinneapolisSt. Paul Portland Chicago Pittsburgh St. Louis Tulsa Houston Mobile New Orleans Corpus Christi
Value of Barging • Critical to national economic infrastructure – although largely out of public view • Offers compelling economic value • Boasts excellent safety & environmental record • Affords tremendous fuel efficiency • Provides positive impact on American quality of life
Dry Cargo Capacity One 15-Barge Tow 1,050 Large Semi Tractor-Trailers 216 Rail Cars + 6 Locomotives Source: Texas Transportation Institute Center for Ports and Waterways, November 2007
Industry Characteristics • 24/7/365 operation • Service intensive – the customer is with you every step of the way • Outdoor sport • Competitive • Workforce dependent Fascinating and challenging. Very management intensive!
Canal Barge Company, Inc. Founded in 1933 – 3rd generation family-owned business “Canal” because of original service area We concentrate on areas where specialized knowledge, equipment, focus, and people make a difference. We have built our business by seeking long-term, successful relationships with our customers, suppliers and employees.
Third-largest inland liquid carrier for hire World-class manager of third-party marine assets Mid-sized dry cargo logistics manager Dominant liquid carrier into the Midwest markets Only independent towing & fleeting service on the Upper Illinois River Asphalt and chemical terminal operator in Chicagoland Second-largest deck barge fleet for hire Inland, offshore and international project carrier CBC Today One of the largest & most diverse privately owned marine transportation companies in the U.S.
Ohio River Towing Alliance 3 boats River SIUT Lower Mississippi & Illinois Rivers 4 CBC boats West Canal Gulf Unit Tows Canal SIUT 7 CBC boats 4 boats CBC’s Area of Operations Chicago River Unit Tows 3 - 5 CBC boats (working throughout Inland Waterways) Illinois River & Chicagoland 9 IMT boats Pittsburgh Houston Baton Rouge Note: Count includes Owned, Operated, & Contracted boats.
Infrastructure Challenges • Our lock and dam system is aging • More than half the system’s locks are over 50 years old • Outdated locks cause inefficiency • Modern 1200ft tows must transit 600ft locks • As locks age, maintenance costs and downtime for repairs increase • Cargo moving through an increasingly expensive system decreases competitiveness for U.S. shippers
Infrastructure Challenges • Our project delivery system for new construction and/or major rehab of locks and dams is broken • Operations and Maintenance (O+M) funding for existing projects has remained flat while costs have increased • Major new projects have far exceeded their authorized costs, and failed to meet timelines • Inland Waterways Trust Fund (IMTF) has been depleted without corresponding completion of projects
Infrastructure Challenges • Solution: • Must recapitalize our river infrastructure • Barge industry can’t do it alone • Capital Development Plan • Developed by Corps and Industry • Improve project delivery system; prioritize projects • Increase in fuel tax on barge industry • Adjust cost-share to reflect public benefits of locks and dams • Supported by broad coalition of shippers, carriers, ports, labor and agriculture. • WWW.WATERWAYSCOUNCIL.ORG
Dredging • Why is dredging the Mississippi River important? • MS River connects over 12,000 miles of inland waterway to the Gulf of Mexico • 60% of all U.S. grain exports move on the MS River • Between $80-100 billion worth of foreign trade passes through New Orleans ports annually
Dredging • Mississippi River requires between $75-110 million annually to maintain 45ft authorized depth • Like locks and dams, dredging needs have increased while funding has remained flat. • 2011 funds for dredging: $53 million • 2011 minimum dredging needs: $85 million
Dredging • What happens without adequate dredging? • Draft restrictions below 45 ft • 40ft restriction reduces capacity by 12-15% • Reduces amount of cargo carried by each vessel call • Increases cost of bringing US goods to/from int’l markets • Makes US farmers and manufacturers less competitive • Drives commerce away from the River • U.S. loses its key advantage: low cost transportation of goods to market
Dredging • President Obama’s Goal: Double exports over the next 5 years • To achieve this, the Mississippi River must receive adequate investment • Key roadblock: Harbor Maintenance Trust Fund carries a surplus of over $5 billion. • Money collected specifically for dredging is being put into general treasury of US
Dredging • Solution: • Realizing America’s Promise Act (RAMP Act) • Would directly tie HMTF appropriations to HMTF revenue. • Would address prospective funds only; surplus left in place • Supported by broad coalition of shippers, carriers, ports, labor, and industry groups.
