Transcript Presented by: Merritt Lane President & CEO Canal Barge Company

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
2
“Inland Marine Highway”
Minneapolis
St. Paul
Chicago
St.
Louis
Tulsa
Houston
Mobile
New Orleans
Corpus Christi
3
Pittsburgh
• 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
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
4
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!
6
Canal Barge Company
7
Canal Barge Company, Inc.
• Founded in 1933 – 3rd generation familyowned 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 longterm, successful relationships with our
customers, suppliers and employees.
8
Canal Barge Company Profile
September 7, 2011
People
580 non-union
Barges
817
Tank barges
213
Deck barges
144
Hopper barges
460
Inland Towboats
9
32
CBC Today
One of the largest & most diverse privately owned marine
transportation companies in the U.S.
• Third-largest inland liquid
• Only independent towing &
carrier for hire
fleeting service on the Upper
Illinois River
• World-class manager of
third-party marine assets
• Asphalt and chemical
terminal operator in
• Mid-sized dry cargo logistics
Chicagoland
manager
• Dominant liquid carrier into • Second-largest deck barge
fleet for hire
the Midwest markets
• Inland, offshore and
international project carrier
10
CBC’s Area of Operations
River Unit Tows
3 - 5 CBC boats
(working throughout
Inland Waterways)
River SIUT
Lower Mississippi & Illinois Rivers
4 CBC boats
Houston
Chicago
Illinois River &
Chicagoland
9 IMT boats
Ohio River Towing Alliance
3 boats
Baton Rouge
West Canal
Gulf Unit Tows
Canal SIUT
7 CBC boats
4 boats
12
Note: Count includes Owned, Operated, & Contracted boats.
Pittsburgh
Infrastructure Challenges
13
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
14
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
15
Infrastructure Challenges
16
Infrastructure Challenges
17
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
18
Dredging
19
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
20
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
21
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
22
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
23
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.
24
Questions?
Thank You!