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A publication of the Upper Mississippi Waterway Association.
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April 2016

Ice out,  season opens

The Corps of Engineers survey crew that checks ice thickness on Lake Pepin as a way of forecasting the opening of navigation on the Upper Mississippi didn’t have to go out many times this year.  Beginning on Feb. 17, the crew used an airboat and a GPS unit to point them to positions along the lake, with a focus on the area between Red Wing and Wabasha, Minn., where ice is usually thickest.

In past years first measurements showed ice up to 3-feet thick, but this year’s initial check indicated 19 inches in that area.  So it was no surprise when the towboat Ronald E. Wagonblast locked through L&D 2 at Hastings early March 13.  The Corps noted that the earliest ever open was March 4, in 1983,1984 and 2000.  The official season start is said to be when all locks on the Mississippi system are open to traffic.

Duluth harbor wasn’t far behind.  The first two U.S. flagged ‘lakers’ left Duluth-Superior March 22 and the first vessels came through the lift bridge on March 26.

 
Below:  In this Corps of Engineers photo, the Ronald E. Wagonblast pushes the second half of its 12 barge tow into Lock 2 at Hastings, Minn., early March 13th.

Group says 'fund the waterways'

In its recent letter to leaders of the U.S. House and Senate Appropriation Committees, the Ag Transportation Working Group once again made the case for full funding of inland waterways infrastructure improvement and maintenance in FY 2017.  The group says locks and dams are, “in a precarious state of disrepair.” 

In 2014, the Group says, 73% of U.S. agricultural exports and 65% of imports were moved on waterways.  The bulk cargo movements made possible by waterborne transportation also helps discipline rates for other modes, the letter said.   Also, the writers said, exports and navigation activity support more than a half-million American jobs.

UMWA is among 55 organizations that have recently sent letters to House and Senate lawmakers on the Appropriations Committees urging support for $10 Million in appropriations for pre-construction engineering designs for Navigation and Ecosystem Sustainability Projects (NESP).

 

Canal expansion set to open

The Panama Canal Authority says the canal expansion, which is about two years behind schedule, will open by July of this year.  After resolving seepage problems at the new, larger locks, the Authority will send a large tanker through in May to begin testing with a target date for the opening of June 26.

Despite the many problems that have been overcome, there is one remaining that is not so easily solved.  This past winter’s El Nino has caused a drought and reduced water levels in the lake that makes up about half the canal.  That means canal operators are limiting drafts.

For an in depth look at the Canal Expansion and its impact, see the Executive Director's column in this newsletter.

 

Other Items of Interest


* Spring is bringing river traffic back to the Woodswether Terminal at the Port of Kansas City on the Missouri River.  It’s the first time barges have come upriver since 2007.  Kansas City is investing $25 million in the terminal and the Missouri Department of Transportation, barge traffic has been going up over the last five years.

* The Corps of Engineers is asking for extra caution in Mississippi Pool 9 this summer.  The Corps and a contractor is beginning the second of a three-year island restoration project near Lynxville, Wis.  Crews will be working on the river 24 hours a day in the Harpers Slough area.

* It still has flooding problems, but nothing New Orleans has endured recently compares with the flood of 1927.  Recently the Times Picayune newspaper posted a U.S. Army Signal Corps film taken during that disaster when more than 27,000 square miles were flooded.

* Although it will carry required safety and navigation equipment, a pair of Pennsylvania men are building a flatboat to reenact a river journey made by many pioneers in the 1800s.  When completed, the flatboat trip will travel  2,000 miles from Pennsylvania to New Orleans on the Monongahela, Ohio and Mississippi Rivers sometime in July. 

 
From the Executive Director . . .


Panama may facilitate Mississippi River COB
The new Panama Canal is scheduled to open in June of this year, but is the U.S. is ready for the advantages the $5.25 billion addition? 
 
Yes, said Kurt Nagle, president of the American Association of Port Authorities (AAPA).
According to Nagle, U.S. ports are slated to invest $155 billion in freight and passenger infrastructure through 2020. 

In a survey, the association asked its U.S. members how much they and their private-sector partners plan to spend on infrastructure over the next five years.  The biggest project investments will be at ports along the U.S. Gulf Coast, where many new energy processing, production and transfer facilities are being planned, AAPA officials said. Private-sector investment in the area was estimated at more than $122 billion, according to the survey.
 
Capacity added in Panama
The largest infrastructure project since the waterway’s original construction, the Panama Canal Expansion Program, created a third set of locks which will double the capacity of the Canal. The new locks will have three chambers, water-saving basins, lateral filling and emptying systems and rolling gates that will allow the transit of ships carrying up to 14,000 twenty-foot equivalent containers, according to USA TODAY.  However, this does not mean the Canal will start running commercially after the opening ceremony, explained Jorge Quijano, administrator of the Panama Canal Authority.  Rather, the expansion would facilitate commercial operations officially in the second quarter of 2016, if everything goes well, he said.
 
In the meanwhile, U.S. ports are busy deepening harbors and building bigger terminals to draw the bigger ships.  According to Nagle, across the U.S., public ports and their private sector partners will spend more than $46 billion in port-related improvements through 2016.

There is already concern that the new third lock-set scheduled for startup in several months will add unneeded capacity to the demand for containerized freight through Central America.  Nonetheless, spurred by the Nicaraguan threat, Panama reportedly is studying the feasibility of building yet another set of locks that will allow larger ships capable of carrying up to 20,000 containers.
 
Impact on Mississippi River COB
Earlier this month U.S. Transportation Secretary Anthony Foxx designated three new Marine Highway Projects including one operating along the north-south interstate 55 between Chicago and New Orleans.  In its first year of operation, the so-called Illinois Intrastate Shuttle project is structured to shift about 5,500 containers from trucks on the congested interstate to the Mississippi River. 
 
Coincidentally, there was a March internet posting by the Journal of Commerce describing a trimodal terminal in Germany which has its own fleet of dedicated container barges to serve container terminals in Antwerp and Rotterdam.  This, said the posting, begs the question why a similar solution cannot be applied on the Mississippi River which some say is too long and complex a river to have effective [container on] barge transport and lacks a sufficient number of barge terminals along the route.
 
An innovated solution, suggested the posting, might be to introduce a Container Crane Barge service to handle and transport containers along the Mississippi.  The CCB is a barge with its own crane, which of course, cannot be higher than the lowest clearance fixed bridge along the route.  The advantage of the CCB is that it does not require much infrastructure along the river to pick up and discharge containers and could theoretically pick up and discharge from a truck [or rail car] parked alongside the river.  The cost of a CCB is around $12 million and would have to be manufactured in the U.S. to satisfy the Jones Act.
 
Further, the author of the posting wrote that he has analyzed the business case for such a project where the CCB will handle and transport containers from St. Paul to the Napoleon Avenue Container Terminal in NOLA.  The project is highly scalable as capacity can range widely from between 150 to about 3,000 (40-foot) containers per day.  The corresponding capital cost would range from $350 million to $4 billion and pay for itself in 4 years.  The project is viable at a freight rate of $1,300 per container which works out to 50 cents per kilometer (.62 miles). 

The consultant, Praveen Raveendran, is based in Dubai (praveenaca@hotmail.com).
 
Why China’s interested in Nicaragua
While we’re on the subject of water-related investments, what about the erstwhile super canal through Nicaragua that was being discussed a mere nine months ago that would compete with Panama?  Here’s a thumbnail history.  As published on the Wharton School of Business (University of Pennsylvania) website, U.S. Secretary of State Henry Clay in 1826 presented to Congress the idea of building a canal connecting the Caribbean with the Pacific, but Congress turned it down.  In 1899, the U.S. almost started work on such a project, until a rebellion in Panama, aimed at gaining its independence from Colombia, opened up a much shorter route to connecting those two bodies – the Panama Canal. 
 
Now an obscure Chinese company appears poised to revive the dream of building that canal across Nicaragua.  A privately owned British consultancy presented the Nicaraguan government with a 14-volume, 11,000 page report on the environmental impact of the proposed 172-mile, $50 billion Nicaragua Canal Development Project.  Conveniently for the project’s Chinese investors, the report concluded that the project to be financed by billionaire Wang Jing is “feasible”, not only in terms of its impact on the environment, but also on the country’s social resources and local economy.  After all pumping billions into a poverty-stricken area will give China new customers for their domestic production and an envied long sought-after Western presence.
 
A professor of the Wharton School offered two reasons why the Chinese are so interested in Nicaragua: First, Chinese firms often supported by the government, tend to find opportunities in regions needing capital, but are shunned by investors from developed countries; a sort of “going-out” policy that reflects the willingness to take on challenging business environments that gives Chinese firms an edge over their Western competition.  Second, China is eager to find a market for its excess domestic capacity.  Typically, Chinese firms not only invest in the host countries, but also bring workers and supplies with them.
Ninyuan Zhao, the Wharton School professor, offered that while the billionaire Wang is a mystery, China is popular in some host countries because of its reputation of getting things done quickly:  starting or completing big projects even while their environmental implications are being debated.  In Africa, many large infrastructure projects become reality after the Chinese arrive – so why not a canal in Nicaragua?  After all, says Zhao, the Chinese are known for their capabilities in large infrastructure projects and can handle institutional risks.  But that’s just a hypothesis, she said, the reality is we know very, very little about the case in Nicaragua.
 
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.
 

 
Copyright © 2016  Upper Mississippi Waterway Association.  
All rights reserved.


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