US Army Corps of Engineers BUILDING STRONG®

INLAND WATERWAYS AND INFRASTRUCTURE PLANNING

Mark Hammond Co-Tech Director, Planning Center of Expertise for Inland Navigation (PCXIN) Great Lakes and Ohio River Division (LRD) 22 November 2013

BUILDING STRONG® 2

Inland Waterways and Infrastructure Planning*

1) Corps Planning Process 2) Challenges 3) Conclusions

* This presentation is in support of the TRB’s consensus study titled “Reinvesting in Inland Waterways: What Policy Makers Need to Know”.

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Six Step Planning Process

1) Identify Problems & Opportunities - Scoping 2) Inventory & Forecast Critical Resources* 3) Formulate Alternative Plans – Nonstructural, Structural 4) Evaluate Alternative Plans – NED, EQ, RED, OSE 5) Compare Alternative Plans 6) Select Recommended Plan – NED, NER, Combined

Planning Guidance Notebook ER 1105-2-100 22 Apr 2000

* Involves readying the economic model(s) too!

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Problems & Opportunities

• Reliability and aging infrastructure (decay) • Construction and declining revenues • Maintenance backlog with flat budget • Infrastructure Investment means jobs and economic

growth

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Inventory and Forecast

• Study Area • Resources • Industries • Commodity Traffic • Transportation Systems

• Shippers (Demand) • Traffic Demand (uncertainty)

• Transportation Rates • Willingness to Pay

• Project Performance (Supply) • Reliability (risk) • Capacity

P

Q Quantity

Price

S

D

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Ohio River Basin

Forecast Waterway Demand

Forecasts Based on Alternative Futures

Inventory and Forecast

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UNCERTAINTY

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Base Rate Savings

Transportation Rates Waterway & Overland

Water Routing Land Routing Metropolitan Statistical Area

Inventory and Forecast

Current Future Waterway Cost: $ 10 $ 16 Overland Cost: $ 20 $ 20 Savings/Ton: $ 10 $ 4

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Inventory and Forecast

Willingness-to-Pay for Barge Transportation

Price Elasticity of Demand – Shipper Stated Preference Curve

εpq = %∆p/%∆q

$

Rail RQ

Barge BQ

Qe

$

Rail

Barge BQ

Qe

Max.$ WTP

Rail

Barge BQ

Qe8

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Modeling Lock Performance - Capacity

• Tonnage-Transit (Supply) Curve

• WAM uses LPMS data to simulate Supply

Inventory and Forecast

Greenup Main Chamber Closures

0

20

40

60

80

100

120

140

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000

Tonnage (KTons)

Tran

sit T

ime

(Hrs

)

Full Op1-day Main3-days Main5-days Main10-days Main15-days Main30-days Main45-days Main60-days Main90-days Main180-days Main365-days Main

Family of Curves – set of curves for different closure durations

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Component Engineering Reliability - RISK

• Hazard Function

• Event Tree

Inventory and Forecast

0%

20%

40%

60%

80%

100%

0 10 20 30 40 50 60 70 80 90 100

Replace Hz

MINOR #1

MINOR #2

MAJOR

CATASTROPHIC

• Performance over time • Non-Price Determinant of Supply

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• Demand • Forecast (Uncertainty) • Rates (Cost) • Elasticity (Shape, Slope)

• Supply • Capacity (Ton-Transit) • Reliability (Risk)

Greenup Main Chamber Closures

0

20

40

60

80

100

120

140

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000

Tonnage (KTons)

Tran

sit T

ime

(Hrs

)

Full Op1-day Main3-days Main5-days Main10-days Main15-days Main30-days Main45-days Main60-days Main90-days Main180-days Main365-days Main

0%10%

20%30%40%50%

60%70%80%

90%100%

0 10 20 30 40 50 60 70 80 90 100

Year of FollowingAnnual Time Prob. Prob. Year Failure YearDependent Degree of Repair Repair of Closure 1/2 Spd Effect on

Component Probabilities Failure Level Level Repair Cost Days Days Reliability

Satisfactory New Gate 5% 1 $13,150,000 365 0 R=1 all future yearsTable Values 2 $3,150,000 90 0

Main - GateEvent Tree Major Major Repair 35% 1 $1,575,000 45 0 Back 5 years

100% 2 $1,575,000 45 0

Temporary Repair with 60% 1 $3,575,000 45 0 R=1 all future yearsAnnual New Gates 60% 2 $3,575,000 45 0

Unsatisfactory 3 $5,050,000 30 0Table Values

Minor0%

Scheduled Replacement Year 1 = 30 - closure days and cost $5,050,000 Year 2 = 30 - closure days and cost $5,050,000Future Reliability will be equal to 1.0 for all future years after replacement

$-

$20

$40

$60

$80

$100

$120

$140

$160

$180

- 50,000,000 100,000,000 150,000,000 200,000,000 250,000,000

TonnageSa

ving

s ($

) per

Ton

ORS Forecasts

0

100

200

300

400

500

600

1960 2010 2060

Mill

ion

Tons LOW

BASEHIGH

Inventory and Forecast

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• Management Measures • Structural/Non-Structural • Without-Project Condition • With-Project Condition • Formulate to maximize benefits to

national economy and environment Rehabs

+ Comp Replacements and Reactive Maintenance

Structural+ all below options

Reactive MaintenanceFix-as-Fails

Component Replacements+ Reactive Maintenance

Formulate Alternatives

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Evaluate Alternatives

• NED* – changes in economic value of the national output of goods and services • EQ* – non-monetary effects on ecological, cultural, and aesthetic resources and effects of ecosystem restoration • RED – changes in regional economic activity (income and employment) • OSE – community impacts, health and safety, energy conservation, etc.

Four Accounts

* required

P’

Q

D

S S’

P

Q Quantity

Price

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Formulation Criteria Matrix ranked by average annual net benefits

Blue – superior, green-acceptable, yellow-questionable, red-unacceptable performance to meet study objectives

Compare Alternative Plans

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• Preferable to no action

• NED Plan – maximizes net benefits

• NER Plan – (for ecosystem restoration projects)

• Combined NED/NER Plan – optimum

• LPP - complicated

Select Recommended Plan

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National Freight System

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0-9 10-19 20-29 30-39 40-49 50-59 60-69 70-79

80+

0 10 20 30 40 50 60

Age in 2012 (Years)

Number of Operational Lock Chambers

3 9

16 17

53 31

19 55

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Challenge - Aging Lock Inventory

Dewatering and repairs of Inner Harbor Lock, GIWW, which opened in 1923 for steamboats.

60% > 50

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Challenge - Condition

• Half of locks more than 50 years old • Investments in water resources

infrastructure have declined in real terms • Result: more frequent closures for

repairs, decreased performance and costly delays

Crumbling lock wall, Lower Mon 3, opened in 1907

Concrete deterioration at Chickamauga could result in

lock failure

Leaking miter gates, Lock & Dam 52, Ohio R.

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Challenge – IWTF

-150-100-50

050

10015020025030035040045019

87

1990

1993

1996

1999

2002

2005

2008

2011

2014

$ M

illio

n

Annual Surplus / Deficit Trust Fund Balance

IWTF History / Projection FY 1987 - 2014

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Challenge - O&M Funding 1977-2011 Current $ and 1996 Constant $ *

Flat or declining O&M funding in constant dollars, even as project portfolio grows and ages… Lock wall, Lower Mon 3

Lock wall deterioration, Chickamauga

* Fuel-Taxed Waterways Only

0

100

200

300

400

500

600

700

$ M

illio

n

Current$Constant$

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Conclusions • Civil Works Transformation emphasizes planning, budgeting, delivering and sustaining infrastructure – growing recognition that cost growth and insufficient funding disadvantages new construction

• Methods of Delivery initiatives include Production, Design, & Planning Centers

• PCXIN with study ready models and data sets supports Civil Works Transformation

• Waterways are part of national transportation system – both competitive and complementary with other modes

• Maintenance may present as big a challenge as construction

• Public sector under-investment leads to private sector under-investment … resembling the downward spiral of urban decay

• Remediation requires effective public-private partnership that is dedicated to sustaining the inland system (revenues, finance, policy)

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