A publication of the Upper Mississippi Waterway Association.
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November  2017 
More Lock shutdowns 

     UMWA members and other stakeholders on America’s inland waterway system find no joy in saying, “Told you so.”  But sadly it seems that industry warnings about the economic consequences of a deteriorating system of outdated locks and dams are coming true.
     The latest demonstration of the system’s growing fragility came on the Ohio River with three emergency closures at Lock and Dam 52 this fall.  The latest shutdown happened November 7, forcing the Corps of Engineers to open a “navigation pass” that can be used only in daylight hours.

     A recent media report says Lock and Dam 52 has had 242 unscheduled closures since 2012.  The much-delayed Olmsted Lock and Dam which will replace Locks and Dams 52 and 53 is scheduled to open Oct. 2018, about 30 years after the first funds and authorization was approved
     Even without the stoppages, delay costs at Lock 52 have been estimated at $640 million a year.
      Breakdowns and slowdowns have also been on the increase on the Upper Mississippi for various reasons, including mechanical breakdowns and, as pointed out in the July 2017 issue of Waterways, capacity restrictions on the upper reaches of the system because of limited Corps dredging funds.

     And now, a newly updated study by the National Waterways Foundation focuses on, “The Impacts of Unscheduled Lock Outages.”
     The update looks at four locks and dams on the system and details the economic consequences of an unplanned closure.  The four are: The Markland Locks and Dam (on the Ohio River near Cincinnati), completed in 1959; Calcasieu Lock (Gulf Intracoastal Waterway in Louisiana), 1950; LaGrange Lock and Dam (on the Illinois River), 1939; and Lock and Dam 25 (Mississippi River, north of St. Louis), 1939.
     Study authors say these four locks are representative of the traffic experienced on every branch of the Mississippi River System.  They say a shutdown at the Markland Locks and Dam, for instance, would affect commerce in 18 states, cost shippers $1.3 billion dollars more annually and add thousands of trucks and railcars to already crowded highways and railroads.

     Another shorter study presented last year at the Agricultural & Applied Economics Association measures the system’s importance another way.  It said, “An estimate by the Iowa Department of Transportation (IDOT, 2014) shows that barge cost on the upper Mississippi River, on average, is $11/ton less than the cost of truck and rail. The transport costs that link two trading regions (e.g., north central U.S. and lower Mississippi River ports) have a direct influence on commodity prices in both origin and destination markets. Thus, improvement in navigation efficiency on the inland waterway would enhance the U.S.'s competitiveness in world grain markets.”
     As pointed out in other past issues of Waterways, shippers are demonstrating their concern about the system’s reliability by exploring and, in some cases, using alternative transportation.  For example, at a recent meeting of the Soy Transportation Coalition in Vancouver members began exploring ways to export soybeans off the Canadian west Coast.

(Above)  As this Corps of Eningeers photo shows, work continues on the Olmsted Locks and Dam on the Ohio River which will replace L&D 52 and 53 next year and has been under construction since the mid-90s
From the Executive Director . . .
Jones Act supports national defense
     Recent weather events on our East and Gulf coasts have captured front page attention from print and electronic media reporting the economic devastation and personal tragedies caused by Hurricanes Harvey and Irma.
     Harvey is estimated to have cost $180 billion, making it the costliest natural disaster in U.S. history, with 13 million people affected and 135,000 homes damaged or destroyed.
      In the wake of Hurricane Harvey’s ravaging of the Gulf Coast, Tropical Storm Irma likewise caused severe destruction in the Caribbean before moving on to the Florida Keys.  At one point, Irma, which caused damaged estimated at up to $100 billion, was the strongest hurricane the National Hurricane Center ever recorded in the Atlantic, outside of the Caribbean Sea and Gulf of Mexico.
     Both storms caused heartbreaking loss of life, massive property damage and severely hindered search and recovery efforts.
     In an editorial, The Waterways Journal commented on a Trump administration action involving issuance of a limited waiver of the Jones Act through September 22 to alleviate substantial energy supply shortages caused by extensive storm damage.  The last time such waivers were issued was five years ago by President Obama in response to the Deepwater Horizon disaster.
     The Journal’s editorial went on to state that such waivers are to be used rarely, in exceptional circumstances and only as a means to temporarily correct any demonstrated shortfalls of the U.S. Jones Act fleet.
     Even if and when they are needed, their use should not be an argument that the Jones Act “isn’t working”, but rather that it works and is flexible.  Yet, just as in 2012, the waivers triggered predicable calls to end the act altogether.
The Jones Act
     The Jones Act (Merchant Marine Act of 1920) requires that all goods traded between U.S. ports be transported by U.S.-owned, U.S.-built, U.S.-flagged, and at least 75 percent U.S.-crewed ships.
        Paraphrased, the act states that it is necessary for national defense and for growth of its foreign and domestic commerce that the U.S. has a merchant marine of the best equipped and most suitable types of vessels, sufficient to carry the greater portion of its commerce; and to serve as a military auxiliary in time of war or national emergency.
     Given this legislative language, we find it odd that attackers of the Jones Act seem unaware of information in a November 2015 posting on that postulated a connection between the need for Jones Act vessels and what has been termed “sea-strangulation” that would impact critical movements of U.S. military and civilian goods of commerce.
     In "Sea Strangulation: How the U. S. Has Become Vulnerable to Chinese Maritime Coercion", the authors report that the U.S. Merchant Marine has less than 100 vessels in international trade, whereas China, by contrast, has nearly doubled its commercial fleet since 2010, with more than 3,900 ships now flying the Chinese flag.  With expanding military as well as commercial power, the authors argue "...that an increasingly hostile China can use its growing domination of global shipping to enforce its strategic and military objectives, including the control and potential cut-off of military and civilian goods"...while the U.S has adopted an abandon-ship policy towards its crucial merchant maritime industry.
     Authors Dr. Patrick Bratton, a political scientist and expert on coercive diplomacy and Captain Carl Schuster a retired U.S. Navy veteran, both of Hawai'i Pacific University assert that the United States has never been so dependent on imports and exports delivered by ship as it is today, and never has the U.S. had fewer ships of its own.
More than international trade is threatened
     This imbalance of sea power between China, an emerging world power, and the U.S., which is decreasing the inventory of its own flagged vessels, has put our nation and its allies at great risk.  As such, Bratton and Schuster state:  China does not need to blockade foreign ports to cut off the flow of goods by sea, as it will soon have the ability to control U.S. foreign trade simply by controlling [transportation] and the price of goods entering or leaving U.S. ports.        
U.S. Navy needs Jones Act vessels
     Continuing, the authors question:  If the U.S. Navy, which has shrunk to its lowest fleet-strength since 1917, loses the support of commercial American ships and crews sailing Jones Act/MSP (Marine Security Program) vessels, it would need to depend on foreign carriers for delivery of necessary, and often sensitive, cargoes.  In this scenario, could China - or for that matter, Iran, North Korea or Russia - create "no-go" zones for ships of other nations?  Would foreign ship owners and crews take the risk of standing up to these powers?  Without ships sailing under the American flag, would Guam, Hawaii, Alaska or even Puerto Rico be vulnerable if China applied coercive pressure?  At the very time that we need more merchant shipping vessels to counter this threat, do we run the risk of having none, ask Bratton and Schuster?
     In reaction to charges that the Jones Act is a protectionist vehicle that drives up costs for consumers, Bratton and Schuster argue that in times of international crisis, the U.S. cannot depend on outsourcing its Merchant Marine to the lowest bidder, as foreign vessels might not be willing to go where the U.S. needs and directs them to go.  Thus, in such cases, foreign powers such as China and others could have the ability to apply sea strangulation to overseas U.S. forces and territories. 
     The best and perhaps only way we can counter this threat is to strengthen and expand the United States' merchant Marine, write Bratton and Schuster, as an over-dependence on flags of convenience carriers and ships belonging to China or other nations that may test us could lead to hardships for those who live and serve under the flag of the United States.
     In response to a 2010 study by the University of Puerto Rico that found that the Jones Act costs the island $537 million per year, the American Maritime Partnership, a coalition representing the domestic shipping industry, argues that the act supports national defense needs and ensures a vibrant maritime industry.
Disclaimer:  Thoughts and opinions expressed in this column are those of its author and not necessarily those of the Upper Mississippi Waterway Association or its members.

Other Items of Interest...
   Although Brazilian soybeans and other commodities continue to compete aggressively in world markets, shippers in that country are experiencing their own transportation challenges.  Tax policy there has kept diesel prices high, which pushes up shipping rates.  Investments that were promised for transportation infrastructure have apparently been put into facilities for the recent Olympics and the World Cup.

*    DTN Basis Expert Mary Kennedy DTN says China’s Ministry of Foreign Affairs is again allowing U.S. distillers dried grains with solubles (DDGS) to come into the country.  The announcement follows talks during President Donald Trump’s recent Asian trip.

 *   The Corps of Engineers has recognized Ellie, the Border Collie, for her work keeping birds away from locks and dams on the McClellan-Kerr Arkansas River Navigation system.  Bird droppings have incurred major repair bills for lock machinery that is damaged by the leavings and Ellie was brought in to chase off the birds.  The dog is turned loose at random times and is said to have done a great job of keeping the birds away.

 *    Panama Canal pilots apparently don’t know how to handle the U.S. Navy’s littoral combat ships when transiting.  The trimaran USS Montgomery (LCS8) was damaged last year when pilots moved the ship through the canal, ignoring information and requests from the ship’s captain regarding the lightweight hull.  As a result the Montgomery sustained at least $250,000 damage.  The Navy released the information late last month.

*     Research on low-frequency noises to deter Asian Carp is being conducted by the U.S. Geological Survey, Fish and Wildlife and the University of Minnesota at Locks and Dams 2 and 8 on the upper river. Under water speakers have been installed to broadcast the sounds which are said not to affect native species and can’t be heard by boaters and others using the river.

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