Preparing for Post-Panamax Commodity Flows:Restructuring on Kentucky Waterways

Tim BrockResearch Associate

Kentucky Transportation Center

Smart Rivers 2011New Orleans, LA

September 14, 2011

Kentucky has 1,200 navigable miles of inland waterways.

(Map Source: Kentucky Riverport Improvement Project, 2008)

(Map Source: UK KTC - Jeff Levy and Patrick Bigger, 2011)

Current Waterway Commodity Flow

Containers: Finished Manufactured GoodsMove up Mississippi River (especially St. Louis and below)

Bulk Goods: Grain, Aggregate, Coal, and other specialty mineralsMove down the Ohio River

West Coast Container Movements:Finished goods from Asia are shipped to coastal ports on the West Coast and shipped East by rail.

A small amount of finished goods from Asia are shipped via the Suez Canal directly to Europe and East Coast ports.

(Map from ITTS, 2011)

Panama Canal Expansion Project

This project will increase the carrying capacity of a single ship from 5,000 Twenty-foot Equivalent Units (TEU) to 12,000 TEUs.

(Design sketch from expansion component report by ACP)

US ports on the Gulf and East Coasts are looking to be the first port of call for Post-Panamax ships coming through the canal. Port of Savannah, GA

(Photo from workboat.com, 2011)

Rail lines are adjusting their routes and improving their infrastructure to more efficiently connect eastern coastal ports with Midwestern and Southern markets.

FREIGHT RAIL:Post-Panamax Commodity Flows

Norfolk Southern (NS):Heartland Corridor Crescent Corridor

CSX RailNational Gateway

NS Heartland CorridorTunnel Expansion for Double Stack

Freight(Photo courtesy of Jerry Rose, UK Civil

Engineering, 2011)

NS Heartland CorridorPort of Norfolk, VA to Chicago

by way of Columbus, OH

NS Crescent CorridorConnecting Container Ports in New Orleans and

Memphis toAtlanta – Charlotte – New York/New Jersey Line

CSX National GatewayIncreasing capacity on 3 lines in six states:

(1)the I-70/I-76 corridor between the Port of Baltimore, MD/Washington DC and a new CSX intermodal terminal in Northeast Ohio

(2)I-95 corridor between Baltimore, MD and North Carolina

(3)The Carolina Corridor between Wilmington and Charlotte, North Carolina.

This newly marketed freight rail reorganization bypasses large sections of the Ohio River Basin. The intermodal terminals in Ohio are NOT river adjacent, limiting inland connectivity.

Kentucky’s Connectivity:

Rail Connections: BNSF, Canadian National, CSX, Norfolk Southern, and Union Pacific

COB Potential:Potential for the creation of a COB terminal on Western Kentucky waterways.

Map of NS and CSX marketed corridors and partner states .(Map Source: UK KTC - Jeff Levy and Tim Brock, 2011)

Limiting Factors

(1)Container Recycling Circuit Breaks Down: With no containers coming down the Ohio River, containers shipped up the Ohio would stockpile.

(2)Aging and less reliable lock and dam structure.

Ohio River Container on Barge

Bulk Goods are still shipped down the Ohio River despite the less reliable lock and dam system.

Two Reasons the Post-Panamax Freight Flow Bypasses Kentucky:

(1)Less reliable lock and dam infrastructure.

Recommendation: A basin wide, multi-state coalition of stakeholders to lobby Congress for funding to update inland waterway infrastructure.

(2) Lack of public investment in intermodal infrastructure in the state.

Recommendation: Establish a public-private partnership to fund intermodal freight facilities and market the geographic benefits and opportunities of the state’s inland waterways to land-side transportation interfaces.

By examining the current alignment of freight carriers, public investment, and the existing pattern of commodity flows, the emerging post-Panamax shipping landscape starts to appear more clearly. Waterways stakeholders of the Ohio River Basin need to mobilize in a sustained attempt to improve the aging lock and dam infrastructure in the region. Kentucky stakeholders, in particular, need to consider investing in intermodal terminals that could connect the benefits of its ample inland waterway connectivity to coastal container ports. Given the current restructuring of freight rail companies and the infrastructural limits on inland waterways container shipping, it is imperative that the Ohio River Basin work to improve opportunities for container freight in the region. The potential for new economic development in the region will rely on the Ohio River Basin’s position in the flow of freight in a post-Panamax economy. The region’s natural geographic advantages for waterborne commerce and its location at the intersection of the Gulf Coast, East Coast, and Upper Midwest regions should make preparing the area for post-Panamax freight a priority for stakeholders along the Ohio River. This can only be accomplished by a multi-state coalition that incorporates the use of public-private partnerships between governmental agencies and private freight companies.

Conclusions

KTC Inland Waterways Research InitiativeResearch Goals

Establish the Kentucky Transportation Center as a National Center of Excellence for Waterways

Design and execute a research agenda that will support the research needs of America’s growing waterways industry and provide Kentucky and the nation with a first class waterways research center.

Continue to work to build a strong working relationship with waterway stakeholders, both within the commonwealth and nationally.

Develop a waterways education program to prepare the nation’s future waterways professionals and engage in technology transfer opportunities that benefit the entire national waterways industry.

Waterways Research Agenda

The eight proposed research projects for Kentucky’s inland waterways:

1.Public-Private Riverport Inventory2.Kentucky Inland Waterways Commodity Flow Database3.Economic Impact of Inland Waterways in the Region4.Impact of Panama Canal Expansion on Kentucky’s Commodity Flows5.Kentucky Waterways Capacity and Reliability Model6.Inland Waterways Shipment Management System (IWSMS)7.Outreach Projects for the Inland Waterways Industry8.Inland Waterways Professional Education &Workforce Development Needs Analysis