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Fuel Tax to Help Fix Aging Waterways
Monday, December 22, 2014 12:47PM CST

By Mary Kennedy
DTN Cash Grains Analyst

OMAHA (DTN) -- On Dec. 16, the Senate approved a 9-cent-per-gallon increase in the barge diesel fuel user fee, which will take effect April 1, 2015. This addition to the current barge fuel tax of 20 cents, paid by barge and tow-boat operators, is expected to generate approximately $40 million in additional revenues annually, which will be deposited into the Inland Waterways Trust Fund for the benefit of priority navigation project construction and major rehabilitation.

NGFA President Randy Gordon said in a press release on Dec. 17, "America's inland waterways infrastructure is in desperate need of renovation and modernization, and this much-needed increase in the user fee is absolutely essential to the future global competitiveness and economic growth of U.S. agriculture and other industries, and job creation they represent."

On June 10, President Barack Obama signed into law the Water Resources, Reform and Development Act (H.R. 3080), which provided a process for authorizing certain inland waterway navigation projects. However, legislation did not include an increase in the inland waterways user fee, which is imperative for funding lock-and-dam and all other improvement projects. The NGFA noted in a press release on Dec. 17 that industry estimates are that the 9-cent-per-gallon increase in the barge diesel user fee will generate up to an additional $80 million per year when combined with the federal matching funds.

There are 29 locks and dams total on the Mississippi River from Minneapolis, Minn., to St. Louis, Mo. The lower 27 are numbered, with Lock and Dam Number One located near the Ford Bridge between Minneapolis and Saint Paul. The two locks that are not numbered are the Upper and Lower St. Anthony Falls Locks and Dams, located in downtown Minneapolis. Most of the inland waterway locks and dams were built in the 1930s with a projected 50-year life span. Of the nation's 241 locks, 57% now are 50 years are older, while 26% exceed 70 years of age.

While this extra fee is good news for the aging waterway locks and dams, it may be too late to help out the upper-most locks and dams on the Mississippi River. On Dec. 18, the U.S. Army Corps of Engineers (USACE), St. Paul District, in a press release stated that they were closing the Upper St. Anthony Falls Lock in Minneapolis to all navigation. "The action is mandated as a result of the Water Resources Reform and Development Act of 2014 with the requirement that the lock be closed on or before June 10, 2015," explained the USACE.

"The action will end all use of the lock by commercial, recreation and other navigational uses," said the USACE. "This will end the ability to ship cargo, such as gravel and scrap metal to and from barge terminals above Upper St. Anthony Falls Dam. Cargo that would otherwise be moved by barge during the normal shipping season will likely now be moved by truck or other transportation means. This will have an economic effect for those companies above the dam."

Here is the public notice released on Dec. 18 by the USACE: http://goo.gl/…

EXTRA POWER, GOOD WEATHER HELPS RAIL TRAFFIC IMPROVE

The Burlington Northern Santa Fe (BNSF) in its weekly service update to customers said that they experienced another week of improving car velocity and steady on-time performance. "Aided by the impact of additional resources and capacity, along with generally favorable weather conditions, we maintained good fluidity throughout the network even as we handled one of our largest weekly volumes of the year. As we come to the official beginning of winter and year's end, our typical winding down of maintenance projects also helped to improve fluidity."

The BNSF told customers that additional locomotives have steadily reduced the number of trains holding for power and in the last month, have reduced trains held by more than 50%. "Looking into 2015, we expect to make even more performance gains with the 330 new locomotives that will be added to our fleet next year," said the BNSF.

The Canadian Pacific Railway (CP) told the Surface Transportation Board (STB), that "Our performance as relates to the Rapid City, Pierre & Eastern Railroad (RCP&E) was strong as we fulfilled 314 of 300 requests. And as we indicated last week, the locomotive balance is approaching the target of zero. On Dec. 15, there was only one more RCP&E locomotive on CP than there were CP units on RCP&E. The locomotive balance will fluctuate, but it is trending in line with the zero target."

Tim Luken, Manager of Oahe Grain, Onida, S.D., told DTN that service was better on the RCP&E. "We have been getting service once a week with 50 to 55 cars, so I can't complain," Luken said. "That's much better than getting less than 50 cars as we experienced during the wheat harvest."

The labor problems on the West Coast continue to have some effect on both the CP and BNSF. The BNSF said in their service update to customers on Dec. 19, "We continue to monitor the ongoing labor situation at the West Coast ports. While negotiations between port operators and dockworkers continue, we are actively responding to changing conditions affecting both inbound and outbound shipments. We remain hopeful for a resolution in the near future."

However, as of Dec. 19, there were no resolutions to the contract talks that took place in San Francisco Thursday between negotiators for the Pacific Maritme Association (PMA) and International Longshore and Warehouse Union (ILWU).

On Dec. 17, The PMA released the following statement regarding the status of contract negotiations with the ILWU): "Statements and rumors that our negotiations are 'close' to a final contract are not true. Even after seven months of negotiations, we remain far apart on several issues, and the union slowdowns continue to disrupt the movement of cargo through the ports. Business is being lost, and we are concerned that the damage is permanent and shippers will be fearful to put their trust in the West Coast ports going forward."

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow Mary Kennedy on Twitter @MaryCKenn

(AG)


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