View the September 2, 2020 seminar recording
Jennifer Symoun
Good afternoon or good morning to those of you to the West. Welcome to the Talking Freight Seminar Series. My name is Jennifer Symoun and I will moderate today's seminar. Today's topic is Inland Waterways – Issues, Challenges, and Opportunities.
Before I go any further, I do want to remind you to call into the teleconference for the best audio quality. If you are listening to the audio over the computer and experience any issues, I am unable to fix them as audio quality will vary based on your network connection, computer, speakers, and other factors. Please also keep in mind if you are calling into the teleconference for the audio, you will need to mute your computer speakers or else you will be hearing your audio over the computer as well.
Today's seminar will last 90 minutes, with 60 minutes allocated for the speakers, and the final 30 minutes for audience Question and Answer. If during the presentations you think of a question, you can type it into the chat area. Please make sure you send your question to "Everyone" and indicate which presenter your question is for. Presenters will be unable to answer your questions during their presentations, but I will start off the question and answer session with the questions typed into the chat box. We will also take questions over the phone if time allows and I will provide instructions on how to do so once we get to that point.
The PowerPoint presentations used during the seminar are available for download from the file download box in the lower right corner of your screen. The presentations will also be available online within the next few weeks, along with a recording and a transcript. I will send a link to the recording in the next day or so and will also notify all attendees once all materials are posted online.
Talking Freight seminars are eligible for 1.5 certification maintenance credits for AICP members. In order to obtain credit for today's seminar, you must have logged in with your first and last name or if you are attending with a group of people you must type your first and last name into the chat box.
PDH certificates are also available for Talking Freight seminars. To receive 1.5 PDH credits, you will need to fill out a form. Please see the link in the chat box. Certificates will be emailed one week after the seminar. A seminar agenda has been included in the file download box for those who need to submit an agenda to their licensing agency.
Finally, I encourage everyone to please also download the evaluation form from the file share box and submit this form to me after you have filled it out.
Today we'll have two presenters:
Our first presentation will be given by Marty Hettel, Vice President Government Affairs for American Commercial Barge Lines. Marty started in the Inland Waterways Industry as a deckhand in 1980. He has held positions in Logistics, Purchasing, Operations, Insurance/Claims, Personnel, Shipping & Receiving, Freight Sales, and Regulatory. The last 19 years of his career have been with AEP River Operations in the Capacity of Logistics, Sales, and Regulatory. In November, 2015, ACBL purchased AEP River Operations and he was hired by ACBL in the capacity of Vice President of Government Affairs. He has held and continues to hold numerous positions with advocacy groups within the Inland Waterways Industry.
Marty Hettel
Very good. Thank you, Jennifer. I appreciate the opportunity to present today in this webinar. I always look forward to discussing the Inland Waterways as the safest, most fuel-efficient, most environmentally friendly, and most cost-effective means of transporting bulk commodities within the continental United States. In my presentation today we will look at the efficiency of shipping in the Inland Waterways from a study performed by the Texas Transportation Institute entitled "A Model Comparison of Domestic Freight Transportation." We'll then look at the Commercial Barge Lines operations within the Inland Waterways. End up with a look at what is needed to improve our Inland Waterways, how project costs escalate due to inefficient funding, a look at our Inland Waterway trust Fund, and then finish up with a success story on the largest Inland waterway Project constructed by the Corps of Engineers.
As you can see, if we were to take a 15 barge loaded tow and put that in railcars, it would take 260 railcars and 6 locomotives to move the same amount of freight. If that tonnage of that 15 barge loaded tow was put onto semi-trucks it would equate to 1,050 semi-trucks to move the same amount of freight that we can move in a 15 barge tow. So, to put this into perspective, in 2018 Inland Waterways and 578 million tons of commodities. Put that same tonnage on a semi-truck, and put those end to end, and it would circle the earth more than 13 times. That same 578 million tons put in railcars would connect New York to Los Angeles more than 20 times. And we move that 578 million tons in the most fuel efficient manner, as barges can move one ton of freight 647 miles on one gallon of fuel. Rail moves that same ton of freight 477 miles on one gallon of fuel, and trucks move a ton of freight 145 miles on one gallon of fuel. And with barges being the most fuel-efficient they also have the smallest carbon footprint, as moving tonnage by rail generates 30% more carbon dioxide and 10 times more carbon dioxide by truck.
So, now we will take a look at ACBL's operations. We operate 3,504 barges, 180 towboats, moving 61 million tons annually with approximately 2,150 teammates. Our operations are throughout the entire Inland Waterways. We operate on the gulf coast from Brownsville, TX to Pensacola, FL. In the interior of the country we move freight between Mobile, AL and Decatur, AL, New Orleans and Catoosa, OK, between New Orleans and Pittsburgh, PA, Between New Orleans and Chicago, and between New Orleans and St. Paul, MN. We move that freight in 2,424 Covered Hopper barges. These covered hopper barges move freight that is sensitive to weather, such as grains, cement, alloys, lime, gypsum, salt, fertilizer, sugar, along with finished products such as steel coils, wire rods, steel beams and other weather sensitive products. However, these barges are versatile, as when needed we can stack the covers on each end of the barge and load products that are not weather sensitive. We also operate 692 Open Hopper barges. As you can see these barges are utilized for commodities that are not weather sensitive, such as coal, aggregates, scrap iron, and other non-weather sensitive products.
We also move liquid commodities in our 388 Liquid Barge Fleet. These barges can hold between 10,000 barrels and 30,000 barrels of commodities such as crude oil, refined chemicals, ethanol, gasoline, diesel fuel, lube oil, and other liquid commodities. The 30,000 barrel barges are mainly utilized in what we call dedicated service, where we move one commodity from the same origin and destination on a dedicated tow. The 10,000 barrel barges are utilized in what we call Line-Haul service where they may be put into tows of other barges going to multiple destinations.
Our fleet 180 towboats vary in size, dependent upon what service they are in. Towboats in the 2,000-4,000 horsepower range are utilized in fleets on the Gulf Intercostal Waterway and other smaller rivers such as the Tennessee Tombigbee, Cumberland River, and Arkansas River. Our 6,000 horsepower vessels are the most versatile vessels we operate as they can run on the Lower Mississippi with 25 barges and on the Ohio, Illinois, and Upper Mississippi rivers with 15 barges. The large horsepower vessels, which are between 7,200 horsepower and 11,200 horsepower, are utilized between St. Louis and New Orleans with large tows, as there are no locks between St. Louis and New Orleans. So, here are a couple of pictures of tow sizes. The picture on the left is a southbound loaded tow heading to New Orleans with 30 loads. These vessels that run between St. Louis and New Orleans can handle between 30-40 southbound loads at a time, and up to 28-56 barges, which would be a combination of empties and loads, northbound. As previously stated, there are no locks and dams between St. Louis and New Orleans. The tow on the right is a locking river 15 barge tow. Locking rivers are the Upper Mississippi, Illinois, Ohio, Tennessee, Cumberland, and Arkansas rivers. Also, in this picture you can see how we stack covers on the empty barges to haul non-weather sensitive products.
We also operate fleeting areas, where we build and break down tows for specific destinations. These fleeting areas are in strategic locations through the Inland waterways where we have the densest traffic patterns, such as Lemont, Il, Cairo, Il, Baton Rouge, LA, Convent, LA, Harahan, LA, Mobile, AL, and Houston, TX. Here at ACBL we also operate 4 terminals for the loading and unloading of barges, along with several ship anchorages in the Gulf to trans-load product from ship to barge and visa-versa. So, there you have a brief explanation of American Commercials Barge Lines Operations. Now we will now look at how we can improve our Inland Waterway System.
New Lock and Dam construction is funded through our Inland Waterway Trust Fund and the General Revenues from the government. This trust fund was established in the Inland Waterway Revenue Act of 1978. The revenue comes from a per gallon tax that operators pay on a per gallon use of propulsion fuel. This tax started at $.02/gallon and gradually increased to $.20 per gallon. Then the Inland Waterways Industry voluntarily increased our fuel tax by 45%, to $.29 per gallon to more robustly fund the IWTF in order to complete projects sooner.
ACBL's contribution to the IWTF has averaged $17.64 million since we voluntarily increased our fuel tax. It should be noted that the Inland waterway Industry is the only other entity that is taxed for utilizing the Inland Waterway System. Hydroelectric facilities, industrial water usage, municipal water usage, recreational boating, and irrigation pay no additional revenue into the Inland Waterway Trust Fund. By voluntarily increasing our fuel tax, coupled with the WRDA2014 legislation that changed the remaining cost of Olmsted to 85% general revenue and 15% IWTF, enabled funding for 4 other projects to continue construction.
These other projects are the Lower Monongahela Project, the Kentucky Lock project, the Chickamauga Lock project, along with the major rehab at Lagrange Lock. By efficiently funding these other projects we have seen the cost of these projects de-escalate and the completion of these projects coming online sooner by almost four years. When these projects come online sooner, we realize the Economic Benefits of the project sooner. In the case of Olmsted Lock and Dam, the USACE estimated the annual economic benefits at $640 Million annually. By finishing Olmsted 4 years earlier due to efficient funding, we can realize $2.56 billion of economic benefits sooner.
On this slide you can see the results of not funding this project efficiently. These four projects alone range from a 291% to 496% increase in cost from the original cost authorization due to inefficient funding. On this slide you can see that the Inland Waterways Industry has contributed almost $3.1 billion into the trust fund. This slide shows the 27 projects that the Inland Waters Trust Fund has supported with new construction and major rehab, along with the four ongoing projects.
And in this slide are the 17 projects that have been authorized but have not yet started construction. These 17 projects, at authorization, totaled almost $7 billion. As you can see some of these projects were authorized as far back as 2000. So, needless to say, the cost to build them will be more than the cost at the time they were authorized for construction. Earlier I showed you a 15 barge locking river tow. You may ask why only 15 barge tows on these rivers. The reason being is the infrastructure, as locks are 110 feet wide and either 600 feet or 1,200 feet long. One single barge is 200 feet long and 35 feet wide. So, a 15 barge tow is built 5 long and 3 barges wide, which makes the dimension of the tow 1,000 feet long and 105 feet wide, leaving an additional 200 feet for the length of the towboat. You may also be asking what happens when you have a 1,200 foot long tow that has to lock through a lock chamber that is only 600 feet long. This is what we call a double lockage. Let's take an example of a southbound tow of 15 barges. In this scenario, the towboat pushes the first 9 barges into the lock chamber, breaks the coupling between the first nine barges and the remaining 6 barges and the towboat. The Captain then backs up the remaining 6 barges with the towboat in order for the Lockmaster to close the upper Miter Gates. Then the Lockmaster lowers the first 9 barges in the lock chamber and opens the lower Miter Gates. Then these are pulled out through what we call the tow haulage unit on the lock wall. The lower Miter Gates are then closed and then the Lockmaster refills the lock chamber to the elevation of the upper pool. Then the upriver set of miter gate are opened again, and the captain moves the remaining 6 barges and the towboat into the lock chamber. The Lockmaster then again closes the Miter Gates and lowers the remaining six barges and the towboat to the lower elevation of the river. Then the lower Miter Gates between the first 9 barges that were locked, are opened and the remaining 6 barges and the towboat, then the captain pushes the remaining 6 barges up to the original 9 barges that were first locked through. The deck crew then rebuilds the coupling and the 15 barge tow is back together and the Captain departs the lock with the full 15 barge tow. This whole process takes about 2.5 hours. Now, when we have a 1,200 foot lock chamber, like what we have on the Ohio River, the time to move the entire 15 barge tow is about 45-60 minutes, depending upon the lift of the lock. So, you can see how much more efficient a 1,200 foot lock chamber is that a 600 foot lock chamber. That is why in the 2007 WRDA Legislation the Navigation and Ecosystem Sustainability Program, which we call NESP, was authorized. This NESP authorization would build 7 new 1,200 foot lock chambers. Five on the Upper Mississippi at Lock 25, Lock 24, Lock22, Lock 21, and Lock 20, and two new 1,200 foot chambers on the Illinois River at Lagrange Lock and Peoria Lock. Once these new chambers are built, our Inland Waterway System would be that much more fuel efficient, that much more environmentally friendly, and that much more cost effective. Add to those efficiencies the NESP program would also improve the ecosystem of the Upper Mississippi River as the authorization in the WRDA2007 Legislation includes ecosystem restoration within the Upper Mississippi River system.
I will wrap up here with a good news story. On August 30, 2018 the Corps held the Opening Ceremony for the largest and most costly Inland Waterway project the Corps has built. That of course is the Olmsted Lock and Dam Project. The Inland Waterway Industry let out a sigh of relief when the Olmsted Lock Project became operational. Reason being that the Olmsted Project replaces two lock and dams that were built in the late 1920's; those being Locks and Dam 52 & 53. Lock and Dam 52 is just below Paducah, KY. So, all of the river traffic that has to transit into and out of the Cumberland River, the Tennessee River, and the Ohio River had to traverse through Lock 52. Delays could mount up to 3-4 days a tow waiting turn to transit through Lock 52 as more that 90 million tons of commodities would transit this lock annually. So, when I was Chairman of the Inland Waterways Users Board for six years, I was given the honor of presenting and pushing the ceremonial Red Button, along with other dignitaries, to officially open the Olmsted Lock and Dam. Once the red button was pushed, the lower Miter Gates at the chamber opened and they cut the ribbon in order for the barge lines to signify the first lockage of the Olmsted project.
That wraps up my presentation. I appreciate the opportunity and I look forward to any questions you may have. Thank you.
Jennifer Symoun
Thank you, Marty. I see a number of questions typed in and we will get to those after the next presentation. Please continue typing in questions for Marty though. Our next presentation will be given by Tom Heinold, the Chief of Operations Division for the U.S. Army Corps of Engineers, Rock Island District. As chief he is responsible for overseeing approximately 500 employees at multiple locations across the District. These locations include 12 lock and dam sites on the Mississippi River, 8 lock and dam sites on the Illinois Waterway, and five flood control reservoirs in Iowa and Illinois. Tom started his Army career in 1988 and was commissioned as an Engineer Officer with the Corps of Engineers in 1992. His first assignment with the Rock Island District occurred in 1998 and since that time, he has served in both military and civilian roles throughout the District.
Tom Heinold
Thank you, Jennifer. Thank you for inviting me to present today. It's quite an honor to present to so many people and I appreciate the opportunity to get the word out there about the great things we are doing on our Inland Waterways. As Jennifer mentioned, I am the Chief of Operations Division for Rock Island District. Rock Island is one of 6 districts in Mississippi Valley Division. The Mississippi Valley goes all the way from the Gulf Coast up to the Canadian border along the Mississippi Valley. My piece of the system is 12 locks along the Mississippi River from lock 22 in Saverton, Missouri up to lock 11 in Dubuque, Iowa. Until recently, all eight locks on the Illinois Waterway, but this past March, the two locks closest to Lake Michigan were transferred to Chicago district.
A brief explanation about the Corps of Engineers and what we are doing in the transportation realm. There are two sides of the Corps of Engineers. There is a military construction side that is Department of Defense funded. For those that are veterans, if you've seen a Corps of Engineers sign on an Air Force base or an Army post, they use defense funding to build barracks, ranges, maintenance facilities, mess halls -- whatever the Armed Forces need to do their jobs. The other side is Civil Works, and that is where the Mississippi Valley Division comes in. We're primarily a civil works division, and Rock Island is primarily a civil works district. We do not get defense funding and, even though the river looks like a transportation system, we don't get transportation funding. The appropriations come from the energy and water bill. Keep that in mind if you are ever in Washington talking to the senators and representatives on the hill. It's energy and water funding that needs to come to the Corps of Engineers to maintain our navigable waterways. There are several business lines within Civil Works, and Jennifer mentioned at least a few of them. Some people know us best for recreation. We have a lot of camp sites up and down the Mississippi and at our lakes and around the nation. Our recreation parks receive more visitors than the National Park Service, believe it or not. Recreation was one of them. Flood risk management, which Jennifer mentioned, the reservoirs that the Rock Island District has in the states of Iowa and Illinois. And then, of course, navigation, which is what we are here to talk about today; navigation and freight. That is about 75% of what I do here in the district.
So, what is the state of that navigation infrastructure? It's quite extensive. Most of it was built in the 1930s and 1940s with a 50-year design life. So, you do the math and this stuff is old and is getting older, and it probably needs to be replaced. We have three basic things we use to do that as far as maintenance goes. There is routine maintenance which, if I am being honest with myself, I get enough money for routine maintenance. That's paying our lock operators, maintenance crews, heavy lifting crane operators, deck hands, mechanics, electricians, machinists, welders, everyone else that it takes to maintain the system; put grease on the gates so they don't seize, and things like that. If you have a car, that's things like changing the oil in the car and getting it washed every now and then, changing the wiper blades, simple stuff that the crew at the lock can do. The second thing we use is the major rehabilitation and maintenance. That is like when your car needs bodywork, transmission, engine work, something that you probably won't do on a Saturday afternoon in your garage; you will take it to a mechanic. That is necessary and those funds have almost turned the corner. We went through the late 90s and almost the entire decade of the 2000's with our system breaking faster than we could fix it. In very recent years, probably within the last 8-10 years, we have been catching up a lot, and this year is no exception. We are doing a lot of catching up, specifically on the Illinois Waterway, and I will go into more detail about that later in the presentation. So, that is major rehabilitation or major maintenance.
Then, the third thing we need to do as a nation is to make major capital reinvestments in the system. And that is what Marty was talking about with NESP, the Navigation and Ecosystem Sustainability Program. I will talk about that a little bit, too. That is akin to, using the car analogy, at some point you just have to replace the car. It will become prohibitively expensive to maintain and you may as well replace it rather than doing major restoration to keep it running and reliable.
I would refer you, too, to a 2019 USDA report, it is called "Importance of Inland Waterways to US Agriculture". You can google this and find that report online. It's available to the public and I encourage you to do that. It is a long report, hundreds of pages, but there is a 20-page executive summary that is especially interesting to read and will give you a good appreciation about just how important this economic road, if you will, this water road is to this nation. If you are looking for a good read, I would also recommend the book "America: The Accidental Superpower"; you can Google that, too. The premise of the book is that it is no accident that America became strong, because we have the Mississippi River. The Mississippi River flows through the world's most arable farmland, the most production. We've got the nation's breadbasket; we've got the corn belt right in the middle of the country and we have a safe and efficient way to move products up and down the system. Arguably, this is what has made America great. That book is fantastic, so I recommend it as a good read. Let me advance a slide.
You see Marty's slide. I appreciate him being on with us. He is a fantastic advocate for the nation's inland waterway systems. He thinks like an engineer. And Marty, that is a compliment, not an insult. He asks tough questions and he helps us to coordinate efforts so that we can have the least possible adverse impacts to the navigation industry when we do have closure, when we are schedule funding. His company and other groups advocate for us in Washington, because I work for the federal government and I can't advocate for myself. It is others who lobby Congress and actually get us the funding so we can have this economic engine in a reliable state for the country.
So, Marty already explained what the volume comparisons are. I would add that this saves between $7-9 billion annually over the cost of shipping by other modes. It keeps trucks off our nation's highways. I know if you drive on the interstates, for every 15-barge tow that goes downstream you would be grateful to have 1,000 trucks off the road and all the damages they do to the roads. The more traffic, the more wear and tear on our roads. I think Marty quoted a more recent number than I have on this slide. He quoted I think 578 million tons of domestic barge traffic; I've got 532 here [different year referenced]. But all the same things apply; it is environmentally friendly, it's extremely safe. When you take 1,000 trucks off the road, you are increasing the safety and throughput of the system. Especially with the Post-Panamax Canal work, it has been a couple of years, but the throughput of the Panama Canal and our ability to get products over to international markets, particularly China, is especially giving us an advantage on the world markets as an economic power. It almost cannot be understated; if we don't reinvest and make our system more reliable, markets like Argentina who are investing in their navigation system, will eat us alive on the international market and we will be even worse off as a debtor nation, so this is really important to all of our back pockets.
So, how do we sustain a system like this? Remember I told you there are three ways to do it; there's routine maintenance, major rehabilitation and major maintenance, and then major capital reinvestments. This slide describes NESP, which is already authorized, which would be a major capital reinvestment in the system. It was authorized 13 years ago. Unfortunately, we don't have any construction funding appropriated yet for this program. If there are any congressional reps on the call right now, I will insult you a bit, don't take it personally. But Congress loves to wave their hands in the air and say "look how great I am, I got you a project authorized in your district and it is going to provide an exceptional benefit to the nation," but then they forget to appropriate dollars for it. There are two things that the Corps of Engineers need: one is an authorization, but the other and most important, arguably, is the appropriation. Marty mentioned 1,200 foot lock chambers vs. 600 foots. The 600 foot chambers would remain in existence while we built seven brand-new ones [1,200 foot chambers]. And again, the Corps of Engineers is not like a private contractor that can do pretty much whatever they want as long as they aren't breaking the law. We have to do exactly that which is prescribed by the law. The Corps of Engineers as a federal agency studies it to death before we even commence, and if we find that there is not a positive benefit cost ratio that is a return on investment, then we actually don't recommend that the project be built, whether it is a levee or a dam or a lock or whatever the case may be. We don't build projects that don't have benefit cost ratios greater than one. So, for every million dollars we would invest in the system, there is a return on that investment that exceeds a conservative 7.5% interest rate. If you think about it that way, if you want to make an investment that beats inflation and puts money back into American's pockets, really it is a project you can't afford not to do. It actually costs you more not to have this project than it does to have it. Again, you can't afford not to do it and if you don't start the projects, then no benefits will be realized.
We are way behind the power curve here, but we did receive some funding. The good news at the bottom of the slide, we received $4.5 million and this fiscal year which ends at the end of September. Unfortunately, this funding was not construction funding, it was investigations funding. The government has many colors of funding, but we can't use the funding we got this past fiscal year to actually construct anything, but we are using that to prepare designs and have it on the shelf and ready. The bad news to me is that the NESP needs several orders of magnitude more funding so we can construct these locks. Marty had the figures in his slides if you want to download that. Again, it's at the bottom right of your screen. So, we are preparing to launch NESP, but we will need a construction new start authorization from Congress and some construction funding before we can do that.
So, let me get back to that middle thing between routine maintenance and major capital reinvestment. And this is where I get excited because we are undertaking right now a large effort, particularly on the Illinois Waterway (IWW) to catch up, if you will. We are upgrading that infrastructure on the Illinois Waterway at 5 out of 8 locks and dams on the waterway. We worked with industry, in fact it was their idea, to do a consolidated closure rather than a closure at every lock every year. The Corps of Engineers and Congress don't like to see spikes in funding. It is much easier if you have steady work; if you have the same work force, the same number of engineers, the same contracting community. You can be designing one lock while you are constructing the one you designed last year, and then you leapfrog that effort. Year-by-year you would have every lock closed in succession; 90-120 days or so at LaGrange and then you go upriver to Peoria next year and do that one, then go upstream the next year to Starved Rock and you do that one. Well, the navigation industry, Marty and his folks, came to us and said if you do that to us you will kill our industry. Sure enough, the economics proved that out. So, rather than having steady work, our navigation stakeholders and budget folks within the Corps of Engineers put forth a Herculean effort and got a spike in funding authorized for this year to execute some consolidated closures. I've got the number 6 crossed out there and I will explain that in a minute. But at 5 sites concurrently on the Illinois Waterway, with 4 of those requiring dewatering, that is a big effort for us. We don't often dewater 4 adjacent locks in the same season. But, in order to avoid the adverse impacts to industry, that is what it is taking to do it. We timed the work in July through October. That proved to be accurate this year. Through June, very typically, more on the lower river than the upper Illinois, but the lower Illinois Waterway has flooding concerns from the spring snow melt and then May and June thunderstorms. And that actually came true this year. We wanted to be open by the end of October so that we could get the harvest out. I mentioned that we are right in the middle of the nation's breadbasket and we feed the world from right here. So, that freight that moves along the waterway is very heavy on corn and soybeans, and that is what we needed to get out here. Of course, this year there is going to be a bumper crop. The weather this spring was fantastic and the yields from our fields are getting better and better, so it is extremely important that we open as soon as we possibly can.
Here I will go into lock by lock exactly what we are doing over on the Illinois Waterway. LaGrange Lock and Dam is our largest effort. It is both a major rehabilitation and a major maintenance. The difference here is that major maintenance is 100% federally funded with O&M dollars. The major rehabilitation part is cost-shared, as Marty mentioned earlier, with the Inland Waterway Trust Fund, 50/50 with federal construction dollars and IWTF money. There is a mixture of these efforts going on at LaGrange right now, but when we are done, we should end up with a fully restored 600-foot lock at this site. The construction contract was actually awarded in 2018. There were some long lead time items like miter gate machinery and things like that needed to be fabricated and delivered to the site, pre-fabricated concrete panels with steel embeds in them needed to get going. That chamber is dewatered right now and the vertical concrete on this lock and the horizontal surfaces as well, up until a couple of months ago, were the nation's poster child for decaying infrastructure. You've seen a lot of rusty D.O.T. bridges out there and things like that, but you ain't seen nothing until you were at LaGrange Lock earlier this year. There weren't even walls left to bolt a handrail to. I had to have my guys out there wearing personal flotation devices out near the wall because there was nowhere to even put a handrail to protect them from falling in the chamber. It was very bad. We had to delay navigation a couple of summers ago to fish a piece of the wall out of the chamber, because it had fallen in, so it didn't rip a hole in a barge and cause a catastrophic failure. This site floods a lot and spends a lot of time underwater. The freeze/thaw up here in the north of the country, the cycles on the gates, the crumbling concrete, getting sand and things in the hydraulic equipment, it was trashed. So, this site is getting a major overhaul and should be restored. I should mention, it is almost tongue in cheek, we would have been smarter as a nation to fund NESP and install a new 1,200 foot lock adjacent to the 600 foot chamber between 2007 and now. If we had done that, we would be passing traffic through a brand new 1,200 foot lock right now while we were doing this work and there would be no delays to the navigation industry right now. I'm really hoping that NESP gets legs so we at least get some functionality back to the system so that we can pass traffic through one lock and work on another, like they do on the Ohio River. I don't have that luxury of twin locks over here on the Illinois Waterway. So, if you're closing one lock you're choking down the entire system. That is why we are doing this.
The next lock upstream is Peoria Lock and Dam. That's dewatered right now, although, I think there is water going back in later this week. We didn't award a construction contract here. This is all U.S. Army Corps of Engineers' crews doing this work. They built a platform so that they can keep their compressor and back-up generator up out of the water. They installed new bubbler pipe to help us keep ice out of the gate recesses so that we can have full width passes even in the dead of winter up here. I should mention this is another reason why we are closed in the summer and not in the winter. On the upper Mississippi and above, the channel freezes in. So, we do winter closures and we can do those one or two locks at a time on the Mississippi River. Over on the Illinois Waterway, even in the dead of winter, the navigation industry runs tow boats up and down Peoria pool, breaks the ice, and there isn't a day that goes by that there isn't freight moving on the Illinois Waterway. So, we don't have the capability of stopping everything in the middle of winter, so we chose the summer closure to do it faster and we don't have to deal with snow and ice, we don't have to heat concrete and deal with a lot of other cold weather issues. And we can do it faster in the summertime, so that is why we chose the summertime closure here on the Illinois Waterway and not a winter one. But our crews are doing great work there. Also, some valve rehabs going on at Peoria Lock this summer. I should mention, too, that this is an all hands on deck effort. We have bulkheads borrowed from the St. Louis District and St. Paul District, and we actually have a medium lift crane from St. Paul District down at the Peoria Lock helping us out. We have spread our heavy lift crane assets as thin as we possibly can. We've got 3 heavy lift crane assets, 2 that belong to the Mississippi River Project and 1 that belongs to the Ilinois Waterway Project, and these assets are over on the Illinois Waterway right now lifting gates as a part of the effort.
Moving upstream, the next is the Starved Rock Lock and Dam. They are getting brand new upper and lower Miter Gates. Marty mentioned the locking process. Those Miter Gates are the upper and lower doors to the lock chamber that let vessels in and out and hold the water as we either empty or fill the chamber depending on the direction of traffic. Again, a full closure here and full dewatering. A construction contract was awarded for both Starved Rock and Marseilles Lock and Dam. It is the same contractor. They are replacing the miter gate sills and anchorages in the lock chamber to accommodate those new vertically framed Miter Gates. The same at Marseilles, except they are only getting the upper gates. Their lower gates are taller and could not be constructed the same way. They actually have a newer set of Miter Gates, but they are a different style because the lift is different at the lower end of Marseilles. Again, a full closure at Marseilles with a construction contract awarded about a year ago so they could mobilize and get things ready for the summer. Again, those sill and anchorage modifications need to happen in the dry because they are pretty significant. We are going from horizontally frame gates to vertically framed gates here, so for any structural engineers out you probably know what that means. For those that don't, basically they are built to a higher standard; they transfer the loads to the wall to the lower pintle and the upper gudgeon pin in a safer and more reliable manner and they seal better. Unfortunately, they are heavier and built to a higher standard with better materials, so we have to modify the sills and anchorages to accommodate those.
The last thing we are doing this summer on the Illinois Waterway is the Dresden Island Lock and Dam. We did work similar to this at Starved Rock and Marseilles last summer to prepare for this summer. The work that is going on now at Dresden Island is to prepare for a future closure in 2023. The old emergency gates at the upper end were condemned a long time ago. We can't use those for dewatering the chamber anymore. So, in their place we are installing bulkhead slots so that we can reliably seal off the chamber and pump it down and do work in the dry to make those major modifications to accept the new gates. I've got Brandon Rd. Lock and Dam crossed off here. Our original plan was to do the same work happening at Dresden Island Lock and Dam, the bulkhead reinstallation. We wanted to do it this summer as well. We actually put out a contract with no funds available, which actually doesn't matter to the contractors because what we are waiting on was the next fiscal year's funding, but we wanted to get ahead of the game. That funding didn't come in a timely manner such that we could award a contract and actually get it under construction. It turns out that didn't matter anyway, because that bid package came back with no bids. And after we called all the usual suspects, Brennan Marine and other navigation and marine contractors out there, to say this is good work and you've done it before, you've done great work for us in the past, what is the deal? They said well, you've got us spread too thinly already with the other things going on in the waterways. Basically, we ran out of heavy lift assets, we ran out of floating plant, bulkheads, cofferdams, people, and we are spread as thin and doing about as much work as the construction contracting industry and the Corps of Engineers can possibly take on in a year. We have basically maxed it out. So, what that means for Brandon Rd. Lock and Dam, we will have to install those bulkhead slots immediately before a 2023 closure. The reason we will wait until 2023 is that the navigation industry wants a couple of years of reliable service on this system to recover the industry before we shut it down again.
So, very quickly I will take you through a picture show. This is down at LaGrange; there is a vertical concrete pre-cast panel installation on the left. They've got the old crumbling concrete pretty much ground away and are installing brand new panels with those metal rub rails that you can see going in a horizontal direction. Over on the right you will see a steel base for the new Miter Gate machinery. That's the machinery that will open and close those Miter Gates to let traffic pass through. You can see it's up on a good riser to keep it out above flood heights.
Up at Peoria, again this is my crew, so I am proud of these guys. Over on the left is the base, the formwork and the steel structure going in for that compressor and generator platform there to keep that out of the flood. The flood at this height, you can see a 2-story building with a couple of windows on the second floor. It's not unusual to see water about halfway up this building. So, this lock site does go underwater quite a bit. Over on the right you can see at the base of the bulkheads there is new piping going in and some duckbills to allow compressed air to bubble up adjacent to the Miter Gates in the winter and keep them clear of ice and debris, so that we can continue to pass traffic reliably. Also, at Peoria we have some Miter Gate anchorage repairs going on. Again, at Peoria they got some new gates, but the old anchorages have seen a lot of cycles and the interface where the steel came out of the concrete and onto the anchor bars was rusting quite a bit. That section loss was unacceptable, so we are putting in brand new anchorage attached to the old a-frame that is still buried in the concrete. Also, a few new check posts. This is what the tow boats use to throw a rope around and check the tows, so they don't just float into the Miter Gates and crumple those up on us to where we have repairs. It does happen occasionally that a tow boat operator will get into the wind or an out draft situation or misjudge the approach, and every now and then we get a Miter Gate run over. But we have a maintenance crew that is very skilled at responding and uncrumpling those things and getting them back into service very quickly.
Moving up to Starved Rock. Obviously, this is the reason we chose to close on July 1 and not June 1. You can't do work at a site like this when it is underwater, and this is the condition less than a couple of weeks before we closed at Peoria and LaGrange; they were underwater. And then back in May, this was about a month before we closed and Starved Rock was even underwater. So, Starved Rock now looks like this at the upper end. You can see the bulkheads on the upper left-hand of the picture. This chamber is completely pumped down. We have heavy crane assets and all kinds of form work going in here so they can place concrete for the brand new sill which will accommodate those new Miter Gates. Also, at Starved Rock, major maintenance has got vertical concrete repairs going in. You can see the form work across, and there is actually a completed repair area, it is kind of square-ish, right below those forms. All of that work is being done by my crews in and amongst the contractors at Starved Rock.
Up at Marseilles, this is a great aerial view. Upstream is closer to you and downstream is further from you. The Hercules heavy lift crane is in the foreground at the bottom of the picture. It has already lifted the Miter Gates and they are sitting on a barge that is in the canal out of range of the picture here. But you can see the chamber is pumped down, the bulkheads are in and that major maintenance work on the upper end is ongoing at Marseilles. Here is a picture of it. The form work already installed, there is already a lift of concrete in there, already some steel embeds going in at the sides of the chamber to accept those new Miter Gates. This is really exciting. I'm really proud of our crews. Both our lock crews and our contractors are very dedicated. They've got skilled workers from all over Illinois, all hands on deck on this project. These guys got up at 3:00 in the morning and mobilized to the site so they could start a 5:00am concrete pour to beat the heat of the day. It was very hot last week. They were actually putting ice in the concrete trucks to keep the concrete cool enough so it wouldn't bake off all the water and we would end up with crumbling concrete just as it was placed. They are doing what is necessary to get the work done.
Up at Dresden Island you can see the new panels here and then the slot right in the middle, that is the new bulkhead slot. They have a restriction on one side while they do this work, and they are passing traffic at night in this lock. Then they will move to the other side and change the width restriction to the other side. And there is about a 2-week closure coming in early October so they can do the sill across the bottom which will seal the bulkheads.
So, that is the end of the picture show. That is what we are doing. I'm excited to have this happening right now, and hopefully we will have a successful repeat of this in 2023 where the locks I mentioned before (Starved Rock, Marseilles, Brandon Rd., Dresden) will basically get the rest of what is needed to reset the system for another 25 or more years of reliable service after that. I've got our website at the bottom here. And just a couple of slides that will show you what you will be looking at if you go to our website. Again, that's www.mvr, that stands for Mississippi Valley Rock Island, dot USACE, which stands for US Army Corps of Engineers, .army.mil. When you go to the website you will see a button that says Navigation. If you click on that, you will get to a button that says 2020 closures Illinois waterway. This is unique just for this summer's effort. When you go there you will get a picture that looks kind of like this. We keep the site up to date with new developments, the schedule will be continuously updated, especially as we get into October and prepare to reopen the waterway. If there are any updates, if we can open early we will, and as soon as we know that we will advertise it. If we run into any snags or unforeseen weather or if COVID takes its toll on the work force or any other number of risks we may not be able to foresee, we will communicate that to the industry and post it on here.
That is a summary of freight specifically on the Illinois Waterway, but also what it takes to move freight. As a river guy I have to acknowledge that every grain of soybeans and corn that come out of a field come out of that field on a truck and travel on our nation's highways. I get that, but making those systems work together, I would like to talk about the four Rs: roads, rails, runways, and we can't forget about our rivers. The tonnage of our river and the economics that are returned to our back pockets as taxpayers, you can't overstate that. So, I appreciate everyone's support. I hope I have given you a little bit of a background. Jennifer, if there are there any questions for Marty or me, I would be happy to entertain them. Again, thanks for having me.
Jennifer Symoun
Thank you, Tom. We will now move into the Q&A section. I have a number of questions typed in online. Please feel free to continue typing in your questions. A number of questions could probably be answered by both of you. If there is a question I posed to one of you and the other wants to provide a response, just jump in. Tom, we will start with you since you just finished your presentation. The first question is, is the figure comparing a tow to railcars to a semi based on a round-trip average, not just downstream, but upstream against the current?
Tom Heinold
Yes, those are averages. The capacity of a 15-barge tow is the same so that the graphic that shows what fits on a 15-barge tow or trucks or rails, that is consistent. The $7-9 billion in transportation savings is taking roundtrips into account. That accounts for fertilizer and cement and petroleum up, and grain and aggregate and everything else, that's all commodities going both ways, yes.
Marty Hettel
Jennifer, Marty here. Also, those fuel efficiency numbers include the repositioning of an empty barge. For example, we get a barge unloaded in Chicago and we need to move it to Peoria to load grain, the fuel that's used to reposition that empty barge is also included in those figures.
Jennifer Symoun
Alright, thank you. Another question, Tom. What impacts do the major floods we've had in recent years on the Mississippi and Missouri Rivers have on barge movements, locks, ports, etc.? This is one I think either of you could answer, but Tom, we will start with you.
Tom Heinold
Sure. A case in point is the flood of 2019. We had locks closed in my district for the longest they have ever been closed since they were built in the 1930s. That unavailability hurt the farming industry up here, especially. It lasted from the spring through well into the summer and farmers had to find alternative ways to get fertilizer up to their fields. Usually they rely on the transportation system to get that fertilizer up by barge because it is more efficient. So, it cost the farmers more. And then it cost the rest of us more as well. That unavailability hurts. It also hurts financially. I have to spend more money returning those sites to service. I've got guys out there with fire hoses spraying the mud off the walls and out of the machinery pits. It takes not only additional time and additional funding to do that and to make repairs after that. It has been quite a headache over the years. Just this past spring at Starved Rock we missed these major maintenance closures just by one event. We are making some electrical modifications and raising control stands at Starved Rock Lock this summer. And if we had done that already, this year's floods would not have caused the electrical damage. We actually had an outage in late May for a few days when we had to run new conductors and restore that system. So, we lost time and again we lost money that was due to the flooding.
Marty Hettel
Jennifer, Marty here. Also, in reference to the flood of 2019, there were 83 days when our industry could not transport commodities from St. Louis to the north. That cuts off Chicago and all points in between St. Louis and St. Paul. Now, in reference to what the Corps is doing in 2020, our shippers knew that these closures were coming up in 2020, so they could either pre-ship, post-ship or they could do plant maintenance or whatever the case may be while the locks were down. Unfortunately, in 2019 that was what I would call an unscheduled closure due to the flooding. And as Tom mentioned, not only farmers, but every other commodity we move had to find an alternate mode of transportation to get their raw materials to their plants. The other issue that comes about is high water events more and more. So, there is dredging needed to keep the channel open once the high water event recedes. With all the siltation coming down the river, the Corps spends a lot of money getting the channels back to operative conditions so we can continue to move our freight. So, it is not only infrastructure that is halted during a flood, it is also the dredging needs once the flood dissipates and we get back down to normal channel depths.
Jennifer Symoun
Alright, thank you Tom and Marty. Next question, are autonomous barges being considered?
Tom Heinold
I will let Marty talk about this.
Marty Hettel
Thanks, Tom. Remember, a barge does not move itself; it is the tow boat moves the barges. We have a lot of advancements in electronic charting. We have what we call an AIS, which is an Automatic Identification System, where our captains and pilots can look and estimate when they will meet a southbound tow when they're heading northbound so they can plan on where they will meet. But I've got to be honest, if autonomous driving tow boats ever come around, it's got to be way into the future, because you've got to have someone looking out the window and ensure that they have the right to pass another tow and stay in the channel, all of the above. If that does come about, it won't be in my lifetime is my estimate.
Jennifer Symoun
Alright, thank you. Next question. Does the Inland Waterway Trust Fund pay for dredging activities? Many states are interest in moving these by barge, but it is not an option because many of our ports are too shallow. What can states do to get more money for dredging activities?
Mary Hettel
The Inland Waters Trust Fund does not pay for dredging; that is a federal cost. Any of the money in the trust fund is just for major rehab and new construction of locks and dams. Where dredging is funded, not only through the annual appropriation process, is also through the Harbor Maintenance Trust Fund. That is an ad valorem tax put on all the commodities that are imported and exported out of the United States. Again, that trust fund brings in, I will estimate it brings somewhere between $1.8-2 billion a year all based on how much money Congress withdraws from the Harbor Maintenance Trust Fund and give it to the Corps so they can maintain dredging. A part of that funding that's called for subsidiary ports, I believe it's a 10% of whatever Congress authorizes, that is utilized for subsidiary ports and that funding can be accessed for Inland Waterway ports.
Tom Heinold
This is Tom. I couldn't have said it better myself. I can't even add anything to that. Great answer, Marty, thanks.
Jennifer Symoun
This is also for both of you. This person said, I'm in Colorado. Could you explain how the inland waterway system impacts freight movement in our state that has no navigable rivers?
Marty Hettel
Well, that is interesting. We do move. And I don't know about how much grain is grown in Colorado, but I can tell you that our friends on the rail side do what they call unit trains of grain as far west as the Dakotas and bring them to St. Louis and points above to load onto barges. The only other way to get grain I would think from Colorado over to the West Coast being the Columbia Snake River is to truck it or rail it over the mountains, which is not efficient. So, some of the farmers do take advantage of the Inland Waterway system when they rail their grain to the waterways and then put it on a barge down to New Orleans for export.
Tom Heinold
Yes. I would add too that it's not just grain, there are other commodities moved that affect all the states. For instance, a case in point in Brandon Rd pool on the Illinois Waterway is North America's largest facility that refines palm oil. Those raw palms come over to the United States on barges from China, they go through the Panama Canal, they come up the Mississippi River, up to the Illinois River to Brandon Rd. Pool, which is a far southwest suburb of Chicago, and it is all refined right there. So, just about half of what you put in your grocery cart, about half of everything you pull off the shelf at the grocery store, has palm oil in it. That nation's largest producer of palm oil is right there in central Illinois. So, you Denver folks, if you like Oreos and you want them cheap, you better be concerned about keeping the Illinois Waterway and the Impounded River open and reliable, because that commodity and others like it, there are many stories and many second and third order effects of freight costs and how they reach us all no matter where we are in the nation.
Marty Hettel
Great point, Tom. We also move sugar up to Chicago to a place that makes Tootsie Rolls.
Tom Heinold
Well, there you go. I love tootsie rolls, too. Thanks.
Jennifer Symoun
Thank you both. I also love tootsie rolls. Another question. Is another increase in fuel tax contemplated? What increase is needed to help fund these high priority projects?
Marty Hettel
It is interesting. Back in 2014 when we voluntarily increased our fuel tax by 45%, that was to move these projects along quicker by more funding to the trust fund. When you look at what Congress did back in the Water Resource Development Act of 2018, they changed the nonfederal cost share for deep water ports to 75% general revenue and 25% non-federal sponsored. Well, the Inland Waterway Trust Fund is the non-federal sponsor for new construction on locks and dams. So, we have been lobbying Congress to treat the Inland Waterway system the same way they did the deep water ports and change our cost share to 75% general revenue and 25% Inland Waterway Trust Fund for the simple fact that we have already increased our contribution by 45% to $0.29 per gallon. So, if we were to get that cost share change, that list of almost $7 billion worth of projects I showed in my presentation could actually be funded and built in 20 years versus if we stay at the 50% trust fund and 50% general revenue, it would take 40 years to build to those projects. The Water Resources Development Act of 2020 has a 65% general revenue and 35% Inland Waterway Trust Fund in the language. Both the House and Senate are in conference over each of their water resources development language and hopefully when they come out of conference we will end up with a minimum of 65/35% cost share change. That would increase the annual funding for new construction and major rehab from $230 million a year to $330 million a year, at the 65/35. I came up with this number because the Inland Waterway industry contributes about $115 million a year. So, at 50/50 that would be a $230 million program and 65/35 is a $330 million. If you got the full 75/25 it would be $445 million a year program.
Tom Heinold
That's exactly right. Just to add to that, at that rate we could have the ongoing projects done and at that funding rate we could fund almost a new 1,200 foot lock every year within the NESP program. We anticipate if that changes at that cost share rate, and if we get full funding and efficient funding, we could have the NESP 1,200-foot locks built in a 10-year timeframe. Until you start passing traffic through a 1,200 foot lock you don't accrue the benefits. So, the changes are up to Congress and the industry. I don't have a dog in that fight, but I can tell you that a change in it would definitely enable us to accrue those benefits for the nation faster.
Marty Hettel
Tom, that's a good point to Chickamauga and Kentucky. Of course, Olmsted is fully funded to completion and open, Lower Monongahela River project is funded to completion. If we stay at the 50/50 cost share split, Kentucky and Chickamauga won't be fully funded until 2024. If we get a 65/35 and 75/25 cost share change, we see where we could start the construction on these projects by 2021. So, it's important to move these projects forward to gain the benefits. So, if we can get a cost share change we can start these projects earlier, finish them sooner, and at less cost.
Jennifer Symoun
Thank you. Marty, we have questions that came in during your presentation. Again, these could possibly be for either one of you. The first question is, what type of fuel is used on the tugs?
Marty Hettel
The industry uses low sulfur diesel and we burn that in anywhere from tier 2 to tier 3 to tier 4 engines. That's part of or reliability and our less carbon dioxide emissions is that we use the low sulfur diesel fuel.
Jennifer Symoun
Aright, and next question. Are containers moved on the waterways?
Marty Hettel
There are some movements on containers on the waterways. I know specifically, one company has been very successful moving containers between Baton Rouge and New Orleans on a dedicated run. They are looking at expanding that between Memphis and New Orleans. The whole container on barge prospect, the way I look at it, is the products that I think could move on the Illinois Waterways have to be products that are not time sensitive. I always give the example that when Walmart is out of Sony TVs, they want to be able to put it on the shelf tomorrow morning. Well, you can take a container off the East Coast or West Coast and put it on rail and truck and it can be there in 3 or 4 days. If you load that container on a barge in New Orleans it may take 15 to 20 days to get it up to Chicago. So, it's a whole different mindset on scheduling your inventory. As we all know, the longer you have product in inventory, the more costly it is. So, some of the non-time sensitive products, yes, I think they could continue to move container on barge. It is the old scenario of build it and they will come. So, do you put the money into a port to unload containers when you don't have them shipping to the port yet?
Jennifer Symoun
Tom, do you have something to add?
Tom Heinold
No. I confirm everything Marty just said.
Jennifer Symoun
Next question. The Mississippi River and its tributaries generally flow north to south. Does the directional flow affect the barge tow configurations and load capacity of the barges by direction?
Marty Hettel
Yes, it certainly does. This could be a very long and complicated answer, but I will try to keep it brief. Southbound, when we have a tow transiting southbound, we are going with the flow of the water and the tow boat has to move faster than the speed of water to keep steerage. If we were to move slower than the water it will takes us wherever it wants to go, So, we have to keep our tow boat running faster than the current in order to keep the steerage on the southbound end. We are currently at drafts carrying south at 10 1/2 feet. Normally we can operate at 11 1/2 feet of draft in the barges and about every six inches in a barge is another 100 tons we can put on the barge. Part of that reasoning is the dredging needs after the high water event that is holding us up from keeping drafts at a maximum on the lower Mississippi River. When you turn around and look at northbound, of course we are shoving against the current, so we burn much more fuel to go northbound than we do southbound. So, dependent upon where the barge is destined to, for example, a barge going to Chicago can only load in New Orleans to 9 foot because it is a 9 foot river on the Illinois Waterway. Same on the upper Mississippi River. When you turn around and look at the Ohio River, we can load to about 10 1/2 feet over on the Ohio River. While the corridor only maintains and 9 foot draft, that river usually stays in the 10 to the 10 1/2 foot range year-round. So, yes, we burn more fuel northbound than southbound, and we make about 85 miles a day northbound and running southbound we can make upwards of 200 miles a day.
Jennifer Symoun
Thank you. Next question. Are the authorized IWTF projects awaiting construction refits or new construction?
Marty Hettel
The bulk of them are new construction. I don't know, Tom, if there are any major rehabs on the list. I could look at my presentation to tell you. But most are new construction. These projects come about through what the Corps calls a chief report. So, they do a study, they go through the benefit to cost ratio process, and the chief signs off saying yes, this is a valid project. Then the chief's report has to be authorized by Congress and it normally takes place in the Water Resources Development Act. But that is the way the projects are brought in to be built is through an authorization by Congress. Now remember, Congress can authorize all they want, but if they don't appropriate the funds for the authorizations, they don't get built.
Tom Heinold
That's correct. The one major rehab that was authorized is ongoing right now. That is the one I described at LaGrange lock going on now this summer. The only other authorized major rehab that I'm aware of is T.J. O'Brien Lock, the lock closest to Lake Michigan. All the other IWTF efforts I know of are new construction.
Jennifer Symoun
Alright, thank you. Next question. I'm not sure if self-propelled barges are the same as autonomous barges, but the question is why are self-propelled barges not used?
Marty Hettel
Again, I will estimate there are around 12,000 to 14,000 barges on the entire Inland Waterway system. As I stated, one tow coming northbound out of the gulf can push 28-56 barges. So, a self-propelled barge, how much more fuel will you use, how much less efficient will that be if you have to have an engine on every barge? It can't steer itself without a crew there to take it up and down the river. So, we talked a little about container on barges. There is an organization looking at building vessels that could transit the Inland Waterway system with about 2,000 containers on it. Again, that is not a self-propelled barge. It still has a man in the wheelhouse and a crew to take care of the vessel. But, no, I don't know of any self-propelled barges on the Inland Waterway system.
Jennifer Symoun
Is there consideration for converting barges to electric power?
Marty Hettel
Again, barges are not powered, it is the tow boat that are powered. There is some engineering and design of people are looking at to run electric motors instead of diesel motors. You still have to have a generator to convert the electricity to run the motor. There are some rails using engines driven by electricity, but you still have to have a generator to produce the electricity.
Jennifer Symoun
Alright. Next question for you. Can you elaborate on how the truck and barge mileage per gallon fuel was calculated?
Marty Hettel
That is difficult for me, because I am not a professor at Texas Transportation Institute. I did put a link on the comment field for people to access the TTI study and look at it, and this will give you a better definition of how it is calculated.
Tom Heinold
Yes, same for me. I have nothing to add. I am not an economist, I just fix locks and dams. That is beyond my scope.
Jennifer Symoun
Alright. Next question. What about digital innovation? Can the barges be traced or tracked with sensors?
Marty Hettel
There are some companies that put a sensor on their barge so they can track where they are at. Again, we operate over 3,500 barges. Most of the tracking we do is land-based, not shore-based. So, it comes into the fleet, it gets logged in to the fleet and logged out of the fleet through the vessel logs. But I know there are some organizations have that own a sensor barge where they can see where it is at any time of day in any barge.
Tom Heinold
Sure. We also have every tow boat, whether it is pushing a load or not, has an AIS [automated information system] sensor, a beacon on it. And we can go in and figure out where they are. The Coast Guard uses that for tracking and of course individual companies use it for tracking. When it comes to the lock, I've got individual lock operators that log in how many barges of this commodity vs. that commodity come through a lock, and that data is aggregated in the LPMS, the Lock Performance Management System. We are not going to give away the navigation industry's trade secrets. You can't go on and say ok this boat is an ACBL boat, one of Marty's, and it was carrying x amount of grain and x amount of cement and it went from here to here in a certain timeframe. You can't get data because it's against the law to disseminate that. That would violate some trade laws and some monopoly laws, too. But, you can get aggregated information if you go to the Corps of Engineers website or type in LPMS.
Marty Hettel
Yeah, and Jennifer, I want to make sure that everyone understands the differentiation between a barge and tow boat. Again, the barge is not self-propelled with no crewmembers living on them. It is a steel box in the river that holds freight. The tow boat that pushes the barges that does have, as Tom spoke of, an AIS system. We have electronic communication to and from the boat from our logistics people to the boat, to the computers. We do a lot of digital tracking, but you have to remember the differentiation between a barge and tow boat. I hear a lot of people saying I would like to work on a barge. Well, you don't work on a barge, you work on the tow boat.
Tom Heinold
True enough.
Jennifer Symoun
Thank you. Next question. Can you elaborate on how the projects are implemented? Who designs, funds, and builds? It seems that these are true public private partnerships.
Marty Hettel
You know, I will let Tom talk about the design and build side, because that is the Corps of Engineers back yard. As far as which projects go to the head of the line to be built, the Inland Waterway User Board puts together, I think it was the wording of the WRDA 2014 legislature said, is that every 5 years they have to put together what they call a capital investment strategy. And what that capital investment strategy does is rank all the authorized projects on importance to build. And most of those projects are ranked based on risk of failure and benefit to the nation. As a matter of fact, we just finished our 2020 rendition of this strategy and it was given to the user board in July. Of course, it's still got to go through the administration yet, but it does rank which projects should be built first.
Tom Heinold
Sure enough. This is Tom. When the prioritization is set and the funding is in hand, the designs are done by a combination of Corps of Engineers in-house, engineers we have on staff; some very skilled civil, electrical, mechanical, and structural engineers that design projects. When it is a relatively small effort like fixing a gate that got run over by a barge or let's say a log goes into a dam gate or something like that, or we lose a motor and we need a new one or we lose a gear and we need a new one, we have engineers in-house that do small jobs like that up to about a major maintenance [level]. When we are designing new [infrastructure], we usually use a combination of in-house engineering staff and architect engineer firms. Unless a major effort like NESP comes and gets funded, we're not going to maintain an extremely large staff of engineers just so we can sit and wait on funding. When that lump of funding comes in, we can't just staff up immediately, so, we look to the architect engineer firms and civilian firms. And there are several out there that have helped us to do these major civil works projects. So, it is a combination of design bid build style and some design build style. It depends on the urgency with which the work needs to be done, the scale of the work, and the availability of in-house personnel.
Marty Hettel
And Jennifer, let me just take a minute to correct here. One of my friends in the industry just sent me an email. There are actually almost 22,000 barges operating on the Inland Waterway System. I think I referenced 13,000 to 14,000. It is almost 22,000.
Jennifer Symoun
Alright, great, thank you. We only have about two minutes left. We have a few more questions, so let's see if we can quickly get through these questions. What suggestions or strategies would you recommend to increase the transportation of containerized freight through the Inland Waterways?
Tom Heinold
This is Tom. That will take two things. Some infrastructure modifications. You know, container on ship in New Orleans, there is some extensive port infrastructure and they can load containers onto the blue water ships extremely efficiently. There are not a lot of facilities like that on the upper river in my neck of the woods up here. So, if you want containers this far north, you have to have a way to efficiently load them and offload them onto rails and trucks so that they can make their way off the river to where they need to go. That is one thing. Two, the technology and the outlay of funds up front to construct barges that will accept those. Whether it is self-propelled like a container ship, like a miniature version of the bluewater oceangoing vessels that can actually fit through a lock, I think some economic analysis needs to be done on whether that could be done efficiently or not.
Jennifer Symoun
Thank you. I know we have some international participants on, so for their benefit the question is, who decides on the regulations for vessels on the Inland Waterways in the U.S.?
Mary Hettel
All the regulations for the tow boats are through the Coast Guard. So, I always look at the Coast Guard kind of like the Highway Patrol. They are the ones that monitor the regulations on the Inland Waterways. All of our safety management systems, our training, all of that is through the code of federal regulations for the U.S. Coast Guard.
Tom Heinold
That's right. Even though I have a federal fleet and not necessarily subject to all those regulations, we still cooperate with the Coast Guard closely and comply with the safety regulations as well.
Jennifer Symoun
If you have the ability to stay for a few extra minutes we can get through these questions. Would that be ok?
Marty Hettel and Tom Heinold
Yes.
Jennifer Symoun
There are a few more. Could a shore control center and the barge self-propelled without a push barge or is the investment too big for the number of barges?
Marty Hettel
Well, again, a self-propelled barge still needs an engine, a wheel, fuel, all of the above, and most likely a person to steer that barge. So, with almost 22,000 barges, to self-propel each barge we would not be nearly as efficient as we are nowadays where we run with 40 or 50 barges with one push boat.
Tom Heinold
Yeah, that's a good question. It almost sounds like they are talking about a drone except it would be a barge sailing around instead of an aerial drone. I don't think the technology is nearly there yet. It really takes a talented captain to line up on a lock and account for the wind and account for the current. It is a huge responsibility. Taking a person out of that seat right now, I don't think that is feasible.
Jennifer Symoun
During Supply Chain disruptions do you see more collaboration between rail and barge operators to continue getting products to market?
Marty Hettel
Jennifer, we are definitely an intermodal system. There are places that rail and truck can go that barges cannot go. The 578 million tons I referenced, I don't believe the capacity is there for rail and truck to handle that. Just as the barge lines couldn't handle all the tonnage that the rail and truck move because we can't go to the back door. We have to go to a port on a waterway and it has to be taken off of the barge and either moved by rail or by truck, or we go right to the facility itself and they unload the product to the people that utilize it in their plant.
Jennifer Symoun
Alright, one last question. How does barge movement compare with truck traffic regarding traffic at night and also parking and security? With hours of service in the trucking industry only so many hours are allowed in the day and then they must rest. Are there barge rest areas secured for barge operators as well?
Marty Hettel
That's a great question. We operate 365 days a year 24 hours a day. We have a crew of about 10 to 12 people on the towboat. We are licensed by the Coast Guard and we are regulated on how many hours we can work. So, the people on the tow boats work two 6-hour shifts during the day. For example, the captain will work 6 a.m. until noon, the pilot will come from noon to 6p.m., the captain will get back up and work 6 p.m. to midnight, and the pilot gets back up and works midnight to 6 a.m. So, we are limited to 12 hours a day of work for the licensed personnel.
Tom Heinold
That's right. When we respond to an emergency, we have the same set up where the motor vessels are crewed so that they can operate 24 hours a day. So, there is no downtime, we do not pull over and rest.
Marty Hettel
And as far as when we make the crew changes, Jennifer, a lot of companies operate under different schedules. At ACBL we operate 2 or 3 difference schedules based on where the vessels are working. For example, the tow boats that work on the lower Mississippi River are on a 28 days on the boat and 28 days off the boat. Vessels working in the harbor can work 14 days on and 7 off. Some people go home every 12 hours. It depends on where the vessels operate and the size of the crew on them. But basically, most people in the Inland Waterways industry work 185 days a year and they are home 185 days a year; 183 to be exact, 365 total.
Jennifer Symoun
I think we covered everything. I will double check, because I want to make sure I didn't miss this one. Did I ask about collaboration between rail and barge operators during Supply Chain disruption?
Marty Hettel
You did, and that is where I mentioned that we are an intermodal system in this country. Where barge can't move everything rail can move, and truck and rail can't move everything that we can.
Jennifer Symoun
Thank you. I thought I did, I just wanted to make sure. So, I think we have gotten to all the questions today. I appreciate you both and your presentations and taking a few minutes after to answer additional questions.
Thank you all for attending today's seminar. I will send out a link to the recording of today's webinar within the next day.
The regularly scheduled September Talking Freight Seminar will be held on September 16 and will be about Truck Freight Sustainability Initiatives. Registration is not quite open yet but once it is I will send out a notice through the Freight Planning LISTSERV. The Freight Planning LISTSERV is the primary means of sharing information about upcoming seminars. I also encourage you to join the LISTSERV if you have not already done so.
Thank you and enjoy the rest of your day.
