New canal meets Old Man River

With the Panama Canal expansion scheduled for completion in 2016, a lot of thought is being given to possible shifts in patterns for shipping containers in and out of the country. Once giant containerships begin sailing through the canal, East Coast port volumes are expected to rise, and ports are deepening and expanding their channels and installing large cranes necessary for unloading the bigger vessels. At this point, I don't think anyone really knows how much volume will be diverted from the congested, labor-uncertain West Coast ports, but it should be significant. A recent study by C.H. Robinson and the Boston Consulting Group suggests that up to 10 percent of container traffic to the U.S. from East Asia could shift from West Coast ports to East Coast ports by 2020.

In the Midsouth and Midwest, observers are particularly interested in what will happen at the Port of New Orleans. With a depth of 200 feet, this port is located on the deepest section of the Mississippi River and will have no draft issues. Port officials predict that container traffic will increase by about 7 percent initially. The question is, where do the containers go from there? The channel between New Orleans and Baton Rouge, La., is about 45 feet with a 50-foot depth at Baton Rouge. The U.S. Army Corps of Engineers, which is responsible for maintaining the country's waterways, is considering dredging five feet from the lower Mississippi in order to accommodate large ships as far up as Baton Rouge. The projected cost is $300 million, but port experts believe the project could generate another 24 million tons of cargo for Louisiana ports over an eight-year period.

Even so, Baton Rouge is located a long way from other major cities on the river, and the Corps of Engineers is responsible for maintaining only a nine-foot depth between Baton Rouge and Minneapolis. While cities like Vicksburg, Miss.; Memphis, Tenn.; and St. Louis, Mo.; have deeper harbors, the only way for a container to traverse the length of the river is to be transferred to a barge.

That's just the first of many hurdles the container may face on its journey inland. Once the tows get beyond St. Louis and start to move into the upper Mississippi or other rivers, they face a variety of infrastructure-related challenges. For starters, there's the matter of creaky river locks. The U.S. has 12,000 miles of navigable waterways, almost all of which are part of the Mississippi River system. On these 12,000 miles, there are 242 locks, most of which are 60 to 70 years old and showing their age. Their mechanized gates malfunction, and the locks themselves are in a serious state of disrepair. According to Bloomberg Businessweek, in 2011, a 280-foot section of concrete lock wall crumbled into the Illinois River. The publication also noted that many of these locks are "too small to accommodate the towboat and its typical 15-barge load," forcing the tow to break up the string of barges and make multiple trips. On top of that, there are 170 bridges across the Mississippi, some of which are so low that towboats must be equipped with telescoping pilothouses to pass beneath them.

As is the case with the rest of the country's infrastructure, the U.S. waterways desperately need funding. The Corps of Engineers estimates that it will take an additional $13 billion through 2020 to make the necessary repairs and replacements. Without this added funding, repairs cannot be completed until 2090.

Fortunately, there is a simple and efficient, though more expensive, way to move the containers up the river—by railroad; and in my opinion, containers on barges will not become a major mode of transport. Among other problems, it would be slow and require a significant facility expenditure at each of the destination cities. However, it is unfortunate that shippers along this powerful river do not at least have a reliable lower-cost option.