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Dredging, Infrastructure, and Other Challenges on the Mississippi River System Presented by: Spencer Murphy Vice President – Risk Management Canal Barge.

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Presentation on theme: "Dredging, Infrastructure, and Other Challenges on the Mississippi River System Presented by: Spencer Murphy Vice President – Risk Management Canal Barge."— Presentation transcript:

1 Dredging, Infrastructure, and Other Challenges on the Mississippi River System Presented by: Spencer Murphy Vice President – Risk Management Canal Barge Company, Inc.

2 Agenda Industry Background Canal Barge Company Overview Infrastructure Challenges Dredging needs Solutions Questions 2

3 “Inland Marine Highway” Pittsburgh Minneapolis St. Paul Chicago Houston Mobile Tulsa New Orleans St. Louis Corpus Christi Portland 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 3

4 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

5 Dry Cargo Capacity One 15-Barge Tow 216 Rail Cars + 6 Locomotives 1,050 Large Semi Tractor-Trailers Source: Texas Transportation Institute Center for Ports and Waterways, November 2007

6 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

7 Canal Barge Company 7

8 Canal Barge Company, Inc. Founded in 1933 – 3 rd generation family- owned 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 long- term, successful relationships with our customers, suppliers and employees. 8

9 Canal Barge Company Profile September 7, 2011 People580 non-union Barges817 Tank barges 213 Deck barges 144 Hopper barges 460 Inland Towboats32 9

10 CBC Today Third-largest inland liquid carrier for hire World-class manager of third-party marine assets Mid-sized dry cargo logistics manager Dominant liquid carrier into the Midwest markets Only independent towing & fleeting service on the Upper Illinois River Asphalt and chemical terminal operator in Chicagoland Second-largest deck barge fleet for hire Inland, offshore and international project carrier One of the largest & most diverse privately owned marine transportation companies in the U.S. 10


12 West Canal Gulf Unit Tows Canal SIUT 7 CBC boats4 boats River Unit Tows 3 - 5 CBC boats (working throughout Inland Waterways) Ohio River Towing Alliance 3 boats River SIUT Lower Mississippi & Illinois Rivers 4 CBC boats CBC’s Area of Operations Chicago Pittsburgh Baton Rouge Houston Illinois River & Chicagoland 9 IMT boats Note: Count includes Owned, Operated, & Contracted boats. 12

13 Infrastructure Challenges 13

14 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

15 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

16 Infrastructure Challenges 16

17 Infrastructure Challenges 17

18 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

19 Dredging 19

20 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

21 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

22 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

23 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

24 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

25 Questions? Thank You!

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