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Tuesday, November 21, 2017

The Inland Infrastructure Crisis

Posted to Global Maritime Analysis with Joseph Keefe (by on October 28, 2017

We often talk about what COULD happen. Now, we know.

Joe Keefe

As of Wednesday morning at Lock 52 near Brookport, Illinois, traffic was moving but still encountering massive delays. That morning, the U.S. Army Corps of engineers had locked 15 vessels in the previous 24 hours with an average delay of 65.29 hours. The queue gained 14 vessels during that 24-hour period; hence there were 39 vessels with 444 barges waiting their turn. Originally, Hurricane Nate created rising river levels and its closure, but Lock and Dam 52 was also closed for almost nine days in September due to an unscheduled maintenance issue.      

For most folks, that kind of news gets a quick skim over coffee, not much else. That’s probably why we find ourselves in a predicament which could be the harbinger of the worst infrastructure crisis of this century. We often talk about could happen. Now we know. The latest inland problem came to light on October 2, when the Ohio River was closed to commercial navigation near Brookport after a hydraulic system at lock and dam 53 failed. At that point, a queue of more than 65 towboats was waiting to pass through the area. By the 16th of October, a total of 58 vessels with 658 barges were waiting to transit this Lock and Dam, the backup covering roughly a 20-mile stretch of river.

The unscheduled closure created a massive headache for farmers and shippers alike, as they tried to move newly harvested soybeans from Midwest farms to export terminals along the Gulf Coast. While that played out, U.S. barge freight rates spiked to new highs, in part because of the crisis. It goes without saying that the Mississippi River and its tributaries are the lynchpin for transporting grain to export markets with as much as 60 percent of all U.S. agriculture exports departing the nation’s heartland via Gulf Coast gateways. A robust crop of corn and soybeans has increased export commitments, and as barges and towboats wait to pass, there is nowhere to store the grain and even less choices on the river.
 
The shipping woes come as U.S. farmers are ramping up the harvest of bumper corn and soybean crops and exporters are scrambling to secure more soybeans to meet foreign shipping commitments. With the river now open and supplies moving to market, the back-up caused by the river closure has created logistical problems ashore, as well. Storage space has quickly filled up, and shippers can’t find enough barges to move the crop.

The closures bring to the full spotlight the critical, but aging, lock and dam infrastructure on the inland waterways system. As the U.S. Army Corps of Engineers attempted to fix the problems, the vessel queue at point stretched to 46 miles long. In service since 1928, Locks and Dams 52 and 53 on the Ohio River will eventually be replaced by the Olmsted Lock and Dam which was authorized in 1988, but will not open until next year. Once Olmsted is finished, Locks and Dams 52 and 53 will be removed. It is tempting to characterize this event as an isolated, one-time anomaly, but the truth of the matter is that the entire inland lock and dam system – the vast majority of it in any event – is more than 50 years old, and in desperate need of renewal. 

In June, President Trump visited the Ohio River, where he said, “these critical corridors of commerce depend on a dilapidated system of locks and dams that are more than half a century old. And their condition, as you know better than anybody, is in bad shape. It continues to decay. Capital improvements of the system, which [are] so important, have been massively underfunded. And there's an $8.7 billion maintenance backlog that is only getting bigger and getting worse ... citizens know firsthand that the rivers, like the beautiful Ohio River, carry the life blood of our heartland.”

The Administration has said that it will support a $1 trillion infrastructure initiative to repair America’s infrastructure, but talk is cheap.  In the meantime, much further to the south, the mighty Amazon River provides the same sort of transport artery for South American crops. Stretching from the Atlantic Ocean all the way to Peru, the second longest River in the world also boasts deep draft ports hundreds of miles from its mouth, and more than 20 feet of available draft as far inland as Peru. That river is being developed further in order to compete with U.S. farmers.    

A few years back, I took a vacation in Peru which also included a three day river cruise out of Iquitos, Peru. It was an interesting trip, especially in terms of seeing both the volume of commercial traffic and the size of the vessels easily able to transit the area. The vast river basin consists of South America’s version of the bread basket, and these farmers aim to compete with the United States on the global stage. In fact, they’re already shipping corn to southeastern U.S. destinations, because apparently, it is cheaper to get it there from Argentina and Brazil than it is from the U.S. Midwest.

You can bet that farmers in Brazil and Argentina are watching with interest what plays out on U.S. rivers. But, don’t worry: if we have a catastrophic, long lasting casualty on one or more of our major river arteries, the rest of the world won’t go hungry. Argentina and Brazil will gladly feed them.

Our inland waterways include more than 25,000 miles of navigable waters and in fact may be the most important piece of our national infrastructure. This month, we saw hundreds of vessels backed up and idle at arguably the most inconvenient time of the year, both for shippers and operators alike. And, we often talk about what could happen if we don’t take care of these river assets. Now, we know.MLPro

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Joseph Keefe is a 1980 (Deck) graduate of the Massachusetts Maritime Academy and lead commentator of MaritimeProfessional.com. Additionally, he is Editor of both Maritime Logistics Professional and MarineNews magazines. He can be reached at jkeefe@maritimeprofessional.com or at Keefe@marinelink.com. MaritimeProfessional.com is the largest business networking site devoted to the marine industry. Each day thousands of industry professionals around the world log on to network, connect, and communicate.



 

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