The State of the Inland WaterwaysThe State of the Inland Waterways

Transportation ResearchTransportation ResearchBoard Summer MeetingBoard Summer Meeting

Matt Woodruff,Matt Woodruff,Director Government AffairsDirector Government Affairs

Kirby CorporationKirby Corporation

The State of the Inland Waterways The State of the Inland Waterways is Good, but not Greatis Good, but not Great

•• They are a vital asset to the nationThey are a vital asset to the nation•• In many cases, they are performing above In many cases, they are performing above

and beyond their design expectationsand beyond their design expectations•• They have capacity to handle even more They have capacity to handle even more

cargo to meet our nation’s growing cargo to meet our nation’s growing transportation needstransportation needs

•• Yet, they need help ($$$) in order to Yet, they need help ($$$) in order to maintain existing capacity and serve the maintain existing capacity and serve the requirement of future generationsrequirement of future generations

The waterways are an The waterways are an American success story:American success story:

•• They helped make America They helped make America greatgreat

•• They create and maintain good They create and maintain good agricultural and manufacturing agricultural and manufacturing jobsjobs

•• Yet, in recent years, we began Yet, in recent years, we began to see our leaders in to see our leaders in Washington take them for Washington take them for grantedgranted

•• So, industry and agriculture So, industry and agriculture organized to defend and organized to defend and improve the waterwaysimprove the waterways

•• We have been successful so farWe have been successful so far•• The outlook is positiveThe outlook is positive

Canals

DamsLocks

The SystemRivers

-Nearly 12,000 Miles 9 ft & Over-192 Lock Sites / 238 Chambers-About 2/3rds Cost of Rail and1/10 Cost of Truck

We Conserve Fuel & Reduce We Conserve Fuel & Reduce Air EmissionsAir Emissions

How far How far one gallonone gallon of fuelof fuelmoves moves one tonone ton of freight, average by mode…of freight, average by mode…

Truck: 70 milesTruck: 70 miles

Rail: 420 milesRail: 420 miles

Barge: 530 milesBarge: 530 miles

0 100 200 300 400 500 600 Miles

Barge transportation enjoys similar efficiencies in air Barge transportation enjoys similar efficiencies in air emissions per ton mile.emissions per ton mile.

We offer a solution to CongestionWe offer a solution to Congestion:

The waterways will continue to excel as a means of moving bulk commodities…

…and are poised to play an increasing role in moving other cargoes

The waterways serve key future transportationcorridors

The waterways serve many traffic growth corridors.

America’s Waterways AdvantageAmerica’s Waterways Advantage

•• American farmers and industries compete American farmers and industries compete in a tough global marketplacein a tough global marketplace–– If you get the goods to the customer cheaper, If you get the goods to the customer cheaper,

you get the saleyou get the sale–– Efficient, low cost waterways transportation Efficient, low cost waterways transportation

reduces total costs and allows us to competereduces total costs and allows us to compete

•• The Result: American exports win and The Result: American exports win and vital, high paying jobs stay here!vital, high paying jobs stay here!

ValueValue of Inland and Intracoastalof Inland and IntracoastalWaterborneWaterborne CargoCargoby State of Originby State of Origin

Over $10 Billion$2 - 10 Billion$1 - 2 Billion$100 Million to $1 Billion

Lock Constructionor Rehabilitation

Under $100 Million

Based on data developed by TVA and USACE.

•• Over $112 billion Over $112 billion in cargoin cargo

•• Shipped from 31 Shipped from 31 statesstates

•• At average At average savings of savings of $11 / ton over $11 / ton over competing competing modesmodes

Waterways Role in Nation’sWaterways Role in Nation’sEconomic ProsperityEconomic Prosperity

•• Grain ExportsGrain Exports–– 90 million tons annually90 million tons annually–– 70% of soybean and 70% of soybean and

62% of corn exports 62% of corn exports move by bargemove by barge

•• Coal for power plantsCoal for power plants–– 227 million tons annually 227 million tons annually –– inland, Lakes, coastalinland, Lakes, coastal–– 20 % of utility coal supplied by waterway20 % of utility coal supplied by waterway

Waterways Role in Nation’sWaterways Role in Nation’sEconomic ProsperityEconomic Prosperity

•• Petrochemicals & Petrochemicals & Petroleum ProductsPetroleum Products–– 350 million tons 350 million tons

annually between annually between domestic pointsdomestic points

Waterways Role in Nation’sWaterways Role in Nation’sEconomic ProsperityEconomic Prosperity

We are having success…We are having success……because we have a good story to tell…because we have a good story to tell

•• Keeping our industries and farmers Keeping our industries and farmers competitive in a very tough global competitive in a very tough global marketplace preserves U.S. jobsmarketplace preserves U.S. jobs

•• Reduces congestion on our highwaysReduces congestion on our highways

This is an easy story to understand, but This is an easy story to understand, but somebody has to tell it to the Washington somebody has to tell it to the Washington lawmakers.lawmakers.

Where we were in the late ‘90sWhere we were in the late ‘90s

•• Traditionally, the industry did not have to take a Traditionally, the industry did not have to take a proactive role in telling the waterways story. proactive role in telling the waterways story.

•• For many years, the administration and For many years, the administration and Congress understood the value of the inland Congress understood the value of the inland waterways system and provided for its upkeep. waterways system and provided for its upkeep.

•• In the ’90s,In the ’90s, our nation’s leadership lost our nation’s leadership lost sight of the value of this resourcesight of the value of this resource. .

This loss of focus resulted in:This loss of focus resulted in:

•• Declining support from the Administration and Declining support from the Administration and CongressCongress

•• Corps spending on waterways was diverted Corps spending on waterways was diverted elsewhereelsewhere

•• Inland Waterways Trust fund balance starts to Inland Waterways Trust fund balance starts to riserise

•• “Environmentalists” mount attacks on the Corps“Environmentalists” mount attacks on the Corps•• Media & editorial campaigns against the Corps Media & editorial campaigns against the Corps

and water resources developmentand water resources development

The waterway community response:Waterways Work!Waterways Work! was formedwas formedin 2001 to counter negative in 2001 to counter negative publicity about the industrypublicity about the industry

In 2003, Waterways WorkIn 2003, Waterways Workmerged with DINAMO, the merged with DINAMO, the Association for the Ohio Association for the Ohio Valley, and formed the Valley, and formed the Waterways Council, Inc.Waterways Council, Inc.

The Waterways Council, Inc.: •Professional staff based in Washington, DC•Media relations team•Annual budget now over $1 million•Active member involvement•Dedicated lobbying team – Jones Walker/Livingston Group

The Objectives: The Objectives: •• Get the President to propose Get the President to propose

adequate budgetsadequate budgets•• Get Congress to pass laws that Get Congress to pass laws that

authorizeauthorize projects and projects and appropriateappropriate the money needed the money needed each year to build and maintain each year to build and maintain themthem

•• Ensure the Corps of Engineers Ensure the Corps of Engineers actually spends the money as actually spends the money as intended by Congressintended by Congress

New Construction and Modernization:New Construction and Modernization:Major Navigation Projects UnderwayMajor Navigation Projects UnderwayBased on FY 2005 AppropriationsBased on FY 2005 Appropriations

New ConstructionMajor Rehabilitation

Olmsted

InnerHarbor

MarmetMcAlpine

Kentucky

L&D 11 RehabL&D 19 RehabL&D 24 Rehab

Lower Mon 2-4

Myers

Chickamauga

Active new lock construction and major rehabilitation program underway in FY ‘05:

• 8 new or replacementlocks (receiving IWTF funds)

• 3 major rehabs• $332 million in funding

372.0372.06.96.990.890.8117.3117.320042004

325.0325.07.07.092.092.0146.0146.0*2005*2005

391.6391.69.59.589.589.5101.6101.620032003

394.1394.112.412.495.395.3104.5104.520022002

390.9390.920.920.9102.6102.6120.3120.320012001

387.8387.820.020.099.699.6102.4102.420002000

369.2369.216.016.0104.4104.488.288.219991999

337.1337.118.318.391.191.176.976.919981998

304.6304.617.017.096.496.489.589.519971997

280.6280.615.615.6108.4108.485.585.519961996

242.1242.113.313.3103.4103.494.894.819951995

220.2220.29.39.388.488.475.775.719941994

198.3198.37.57.578.678.674.574.519931993

YearYear--EndEndBalancesBalances

InterestInterestEarningsEarnings

Tax RevenuesTax RevenuesEstimated OutlaysEstimated OutlaysYearYear

186.7186.713.713.769.969.9122.7122.719921992

225.9225.921.221.260.560.5148.6148.619911991

292.8292.826.226.262.862.8117.3117.319901990

($Millions)($Millions)

Inland Waterways Trust FundInland Waterways Trust Fund

Trust Fund BalancesTrust Fund Balances

$0

$100

$200

$300

$400

Millions

1990 1992 1994 1996 1998 2000 2002 2004 2006

Trust Fund Spending:Trust Fund Spending:New Construction and Major RehabNew Construction and Major Rehab

Money from 20 cent per gallon fuel tax. This is matched with anequal sum from the Treasury. Actual spending is double this amount.

507090

110130150170190210

96 97 98 99 OO O1 O2 O3 O4 O5 O6

Fiscal Year

Mill

ion

$M

illio

n $

Presiden

t’s Budg

etFina

l Appro

priation

$184 Mil.in BushBudget.Appropriationsbill pending.

Waterways Work /Waterways Council

Formed

Recent Trust Fund SpendingRecent Trust Fund Spending

64

9585

126110

135115

166184

020406080

100120140160180200

2002 2003 2004 2005 2006

AdministrationBudgetCongressionalAppropriation

Millions of dollarsfrom trust fund. Matched with general revenues.

Inland Waterways Trust Fund Inland Waterways Trust Fund Appropriations ComparisonAppropriations Comparison($ in millions)($ in millions)

((--2.9)2.9)0.40.44,5134,5134,6684,6684,5634,5634,6994,6994,6504,650Corps Corps

Civil Works Civil Works TotalTotal

94.794.775.775.7368368332332270270253253189189Inland Inland

Waterways Waterways Trust FundTrust Fund

((--4.4)4.4)4.14.11,6371,6371,7821,7821,7311,7311,7451,7451,7121,712Construction Construction GeneralGeneral

% % DifferenceDifference(06 vs. 02)(06 vs. 02)

% % Difference Difference (05 vs. 02)(05 vs. 02)

FY 2006 FY 2006 RequestRequest

FY 2005 FY 2005 EnactedEnacted

FY 2004 FY 2004 EnactedEnacted

FY 2003 FY 2003 EnactedEnacted

FY 2002 FY 2002 EnactedEnacted

Goals for Fiscal Year 2006 Goals for Fiscal Year 2006 Appropriations:Appropriations:

•• At least $300 million ($150 million from At least $300 million ($150 million from the Inland Waterways Trust Fund) for the Inland Waterways Trust Fund) for Building Priority ProjectsBuilding Priority Projects

•• An additional $100 million above the An additional $100 million above the President’s budget for inland navigation President’s budget for inland navigation Operations and Maintenance priority Operations and Maintenance priority needsneeds

Operations & Maintenance (O&M) Operations & Maintenance (O&M) funding is our next major challengefunding is our next major challenge

0

100

200

300

400

500

600

1977 1980 1983 1986 1989 1992 1995 1998 2001

$ (M

illio

n)

Current $ and 1996 Constant $, Fuel-Taxed Waterways Only

2004

Real O&M funding remains flat even as project portfolio grows and ages…

Current $

Constant $

Markland Locks and DamMarkland Locks and Dam

•• Main Chamber Miter GatesMain Chamber Miter Gates–– Replacement of 4 miter gate Replacement of 4 miter gate

sections in main chamber, sections in main chamber, designed with quick swapdesigned with quick swap--out systemout system

–– Replacement of Miter Gate Replacement of Miter Gate Anchorage points in lock Anchorage points in lock wall.wall.

–– Replacement of lock wall Replacement of lock wall cornerstones.cornerstones.

•• Estimated Cost: $20 MillionEstimated Cost: $20 Million

•• Concrete Concrete RefacingRefacing, Anchoring and , Anchoring and Reinforcement of MonolithsReinforcement of Monoliths–– Significant structural distress Significant structural distress –– Concrete deterioratingConcrete deteriorating

•• Sheet Pile Wall, Concrete RepairSheet Pile Wall, Concrete Repair–– Sheet pile wall and concrete apron on Sheet pile wall and concrete apron on

the upstream portion of dam failingthe upstream portion of dam failing–– Scour protection below dam failingScour protection below dam failing

•• $35 Million needed for O&M now, $35 Million needed for O&M now, but whole lock and dam scheduled but whole lock and dam scheduled for replacement soon.for replacement soon.

Monongahela River Locks and Monongahela River Locks and Dam 3Dam 3

The O&M ChallengeThe O&M Challenge

•• Intensified Focus in 2005Intensified Focus in 2005•• SystemSystem--Wide ExaminationWide Examination•• Joint Industry/Corps InitiativeJoint Industry/Corps Initiative•• Maintain and Improve System ReliabilityMaintain and Improve System Reliability•• Secure Adequate Resources and Invest to Secure Adequate Resources and Invest to

Maximize ResultsMaximize Results–– Reduce Risk and Increase ReliabilityReduce Risk and Increase Reliability

Industry/Corps O&M Workshops in 2005Industry/Corps O&M Workshops in 2005

•• ConductedConducted–– JanuaryJanuary Cincinnati, OHCincinnati, OH Ohio River SystemOhio River System–– JanuaryJanuary St. Louis, MOSt. Louis, MO Upper Miss./IllinoisUpper Miss./Illinois–– FebruaryFebruary Tampa, FLTampa, FL IntegrationIntegration–– AprilApril New Orleans, LANew Orleans, LA Gulf IntracoastalGulf Intracoastal

•• Being PlannedBeing Planned–– TBDTBD TBDTBD Lower Miss. & Lower Miss. & TribsTribs..–– TBDTBD TBDTBD Columbia/Snake Columbia/Snake

Industry/Corps O&M WorkshopsIndustry/Corps O&M Workshops

•• Identify most pressing problems from Identify most pressing problems from perspective of Corps and industryperspective of Corps and industry

•• Allocate resources to address most Allocate resources to address most pressing needspressing needs

•• We are committed to both short term and We are committed to both short term and long term solutions to navigational issueslong term solutions to navigational issues

Other PrioritiesOther Priorities

•• Passage of Water Resources Development Passage of Water Resources Development Act (WRDA)Act (WRDA)–– Authorize Lock Modernization on the Upper Authorize Lock Modernization on the Upper

Mississippi and Illinois RiversMississippi and Illinois Rivers•• Doing nothing is not an optionDoing nothing is not an option

–– Reasonable, NonReasonable, Non--Damaging “Corps Reform” Damaging “Corps Reform” ProvisionsProvisions

Things Things areare getting bettergetting better

……yet we still have much work to do.yet we still have much work to do.

Some of the images in this presentation are courtesy of the U.S. Army Corps of Engineers

Trus

t Fun

d Spe

nding

The sky IS NOT falling,The sky IS NOT falling,

but we must catch up on thenbut we must catch up on thenmaintain our investments maintain our investments in infrastructure.in infrastructure.