National Waterways Foundation Commissioned-Study Examines Economic Impact of Increased Investment in Inland Waterways System

January 26, 2015

Contact: Debra Colbert, Senior Vice President
(301) 332-0813
Dcolbert@waterwayscouncil.org

The National Waterways Foundation (NWF) has commissioned and released a two-year, ground-breaking study by the University of Tennessee and the University of Kentucky, “Inland Navigation in the United States: An Evaluation of Economic Impacts and the Potential Effects of Infrastructure Investment” (November 2014).  The study examines the waterways’ national economic return on investment and the need for and benefits of an accelerated program of waterways system improvements that sustain and create American jobs.

The study evaluates the inland navigation system as it is currently funded and configured, and as it might be through renewed infrastructure investment. The study begins with a basic analytical framework examining navigation’s role as a productive input in various industrial processes and reflects actual, real-world economic interactions and consequences if the system were to suddenly shut down and then if proper infrastructure investments were made.

The study found: 

• Investment in badly needed modernization improvements to our inland waterways’ aging lock and dam infrastructure could lead to 350,000 job-years of new, full-time employment with a present value of more than $14 billion over the 10-year period examined in the study. 

• If we invest in our inland waterways, we can sustain 541,000 jobs and more than $1 billion in new job income annually.

• If 21 priority navigation projects could be completed at an estimated cost of $5.8 billion total, the 20-year sum of related economic output activity would exceed $82 billion.

• Although not likely in the current fiscal environment, if the completion of those projects were accelerated to 10 years, between 10,000 and 15,000 new jobs with an annual economic value of $800 million could become available. In the second decade, the completed navigation improvements could result in 10,000 new jobs throughout the economy each year with a total income of $740 million in the first year to more than $1 billion by year-20.        

• New freight capacity could result in robust economic impact in the creation of some 12,000 new full-time, permanent jobs each year with annual incomes in excess of $500 million.

• If commercial shipping on our waterways were to cease entirely, there would be immediate, devastating economic consequences with a total 10-year loss of $1.063 trillion, when discounted to reflect that some of the loss is still several years away.  Shipping costs would increase by $12.5 billion, which would ultimately be passed onto American consumers in the form of higher costs for goods.  The Gulf Coast and Lower Mississippi River regions would be hardest hit by a potential complete waterways system closure.  High-value petrochemical products dominate industrial production in that region and alternative transportation in the region is limited. 

• With the loss of waterways’ shipping, an estimated 75% of freight would be diverted to truck and/or rail, and there would be a 25% loss due to decreased production. Given that the capacity of just one standard river tow (15 barges) equals 1,050 trucks or 216 rail cars and six locomotives, the nation would face certain traffic gridlock. 

• For more than half of Americans, there would be a 7.8% spike in the price of electricity, triple the average annual increase, if the waterways were not available to shippers.

• While Members of Congress debate the many needs of the nation with constrained funding, our inland waterways transportation system must not be overlooked.  This study underscores the need for investment spending that directly results in efficiency and productivity gains across sectors, sustainment and creation of jobs, and curbs on traffic congestion from truck and rail. 

The United States stands at the brink of a watershed era where transportation planning tools will be even more important. For example, as a direct result of large and unforeseen increases in available and affordable domestic energy resources and other areas of opportunity, there is a growing sense that the U.S. economy can capitalize on increased productivity. But realizing these opportunities requires the nation’s transportation sector to adapt accordingly.

“The research in this important study sponsored by the National Waterways Foundation is an effort to help develop a more effective framework for policy-makers to understand and measure the current navigation system and look to future possibilities and job creation if proper infrastructure investments are made,” said Mark Knoy, National Waterways Foundation Chairman.

Port Name: Waterways Council Inc.