Preparing for Post- Panamax Commodity Flows: Restructuring on Kentucky Waterways Tim Brock

1. Preparing for Post-Panamax Commodity Flows: Restructuring on Kentucky Waterways Tim Brock Research Associate Kentucky Transportation Center Smart Rivers 2011 New Orleans, LA September 14, 2011

2. Kentucky has 1,200 navigable miles of inland waterways. (Map Source: Kentucky Riverport Improvement Project, 2008)

3. (Map Source: UK KTC - Jeff Levy and Patrick Bigger, 2011)

4. Current Waterway Commodity Flow Containers: Finished Manufactured Goods Move up Mississippi River (especially St. Louis and below) Bulk Goods: Grain, Aggregate, Coal, and other specialty minerals Move down the Ohio River West Coast Container Movements: Finished goods from Asia are shipped to coastal ports on the West Coast and shipped East by rail. A small amount of finished goods from Asia are shipped via the Suez Canal directly to Europe and East Coast ports. (Map from ITTS, 2011)

5. Panama Canal Expansion Project This project will increase the carrying capacity of a single ship from 5,000 Twenty-foot Equivalent Units (TEU) to 12,000 TEUs. (Design sketch from expansion component report by ACP) US ports on the Gulf and East Coasts are looking to be the first port of call for Post-Panamax ships coming through the canal. Port of Savannah, GA (Photo from workboat.com, 2011)

6. FREIGHT RAIL: Post-Panamax Commodity Flows Rail lines are adjusting their routes and improving their infrastructure to more efficiently connect eastern coastal ports with Midwestern and Southern markets. Norfolk Southern (NS): Heartland Corridor Crescent Corridor CSX Rail National Gateway NS Heartland Corridor Tunnel Expansion for Double Stack Freight (Photo courtesy of Jerry Rose, UK Civil Engineering, 2011)

7. NS Heartland Corridor Port of Norfolk, VA to Chicago by way of Columbus, OH

9. NS Crescent Corridor Connecting Container Ports in New Orleans and Memphis to Atlanta – Charlotte – New York/New Jersey Line

10. CSX National Gateway Increasing capacity on 3 lines in six states: the I-70/I-76 corridor between the Port of Baltimore, MD/Washington DC and a new CSX intermodal terminal in Northeast Ohio I-95 corridor between Baltimore, MD and North Carolina The Carolina Corridor between Wilmington and Charlotte, North Carolina.

11. This newly marketed freight rail reorganization bypasses large sections of the Ohio River Basin. The intermodal terminals in Ohio are NOT river adjacent, limiting inland connectivity. Kentucky’s Connectivity: Rail Connections: BNSF, Canadian National, CSX, Norfolk Southern, and Union Pacific COB Potential: Potential for the creation of a COB terminal on Western Kentucky waterways. Map of NS and CSX marketed corridors and partner states . (Map Source: UK KTC - Jeff Levy and Tim Brock, 2011)

12. Ohio River Container on Barge Limiting Factors Container Recycling Circuit Breaks Down: With no containers coming down the Ohio River, containers shipped up the Ohio would stockpile. Aging and less reliable lock and dam structure. Bulk Goods are still shipped down the Ohio River despite the less reliable lock and dam system.

13. Two Reasons the Post-Panamax Freight Flow Bypasses Kentucky: Less reliable lock and dam infrastructure. Recommendation: A basin wide, multi-state coalition of stakeholders to lobby Congress for funding to update inland waterway infrastructure. (2) Lack of public investment in intermodal infrastructure in the state. Recommendation: Establish a public-private partnership to fund intermodal freight facilities and market the geographic benefits and opportunities of the state’s inland waterways to land-side transportation interfaces.

14. Conclusions By examining the current alignment of freight carriers, public investment, and the existing pattern of commodity flows, the emerging post-Panamax shipping landscape starts to appear more clearly. Waterways stakeholders of the Ohio River Basin need to mobilize in a sustained attempt to improve the aging lock and dam infrastructure in the region. Kentucky stakeholders, in particular, need to consider investing in intermodal terminals that could connect the benefits of its ample inland waterway connectivity to coastal container ports. Given the current restructuring of freight rail companies and the infrastructural limits on inland waterways container shipping, it is imperative that the Ohio River Basin work to improve opportunities for container freight in the region. The potential for new economic development in the region will rely on the Ohio River Basin’s position in the flow of freight in a post-Panamax economy. The region’s natural geographic advantages for waterborne commerce and its location at the intersection of the Gulf Coast, East Coast, and Upper Midwest regions should make preparing the area for post-Panamax freight a priority for stakeholders along the Ohio River. This can only be accomplished by a multi-state coalition that incorporates the use of public-private partnerships between governmental agencies and private freight companies.

15. KTC Inland Waterways Research Initiative Research Goals Establish the Kentucky Transportation Center as a National Center of Excellence for Waterways Design and execute a research agenda that will support the research needs of America’s growing waterways industry and provide Kentucky and the nation with a first class waterways research center. Continue to work to build a strong working relationship with waterway stakeholders, both within the commonwealth and nationally. Develop a waterways education program to prepare the nation’s future waterways professionals and engage in technology transfer opportunities that benefit the entire national waterways industry.

16. Waterways Research Agenda The eight proposed research projects for Kentucky’s inland waterways: • Public-Private Riverport Inventory • Kentucky Inland Waterways Commodity Flow Database • Economic Impact of Inland Waterways in the Region • Impact of Panama Canal Expansion on Kentucky’s Commodity Flows • Kentucky Waterways Capacity and Reliability Model • Inland Waterways Shipment Management System (IWSMS) • Outreach Projects for the Inland Waterways Industry • Inland Waterways Professional Education & • Workforce Development Needs Analysis