Chapter 12

Barge 

Transportati on
369

Chapter 12: Barge Transportation 

Before there were locks and dams on the Nation’s rivers, the early commercial vessels were 

designed to travel in shallow waters and had flexible cargo capability to handle passengers, 

freight, or livestock. Some were equipped with second decks for additional carrying capacity. 

These boats, called packets, made regular trips between river cities and were a primary mode 

of transportation in the central United States for the first half of the 1800s. Packets were 

propelled by steam-driven paddle wheels that permitted shallow-draft navigation on the 

constantly changing and unpredictable rivers. Early steamboat traffic was most prevalent 

during the spring, when high water permitted travel along most of the river system. The 

topography of the valley on the lower Mississippi River, combined with water flows from the 

Upper Mississippi, Missouri and Ohio Rivers, produced conditions for year-round navigation. 

The steamboat era ended as railroads began to cross the United States. Railroads offered lower 

rates and provided more city-to-city routes, especially to western destinations. In an effort to 

become more competitive, packets added barges to the sides of the vessels to increase cargo 

capacity. Before the addition of side barges, most packets were side-wheeled paddle boats. To 

accommodate the side barges, the paddle wheel was moved to the stern of the boat. 

Eventually, the packet evolved into today’s diesel-powered tow boat with propellers that 

pushes barges up and down the rivers.243 However, it became evident that improvements to 

the river system were necessary to allow safe and dependable movements on the river. 

Figure 12-1: Ohio packet boats in the early 19th Century 

Source: © 2006 History of Akron & Summit County 
370

As early as the 1830s, the Federal Government began making navigation improvements to the 

rivers. In the early years, improvements were limited to the removal of river hazards, such as 

submerged rocks, shoals, and sandbars. In 1878, Congress authorized a 41⁄2-foot deep channel 

with canals and locks that allowed boats to bypass rapids and other obstructions. In 1907, 

Congress authorized an increase in the channel depth to 6 feet. This increase was 

accomplished by the construction of hundreds of wing dams that extend from the shore to 

force the flow of the river towards the main navigation channel during low water. Finally, in 

1930, Congress authorized the U.S. Army Corps of Engineers (Corps) to construct and maintain 

a navigation channel 9 feet deep with a minimum width of 400 feet. Passage of this 

authorization marked the beginning of a massive dam-building program that built the 29 locks 

on the Upper Mississippi River and 8 locks on the Illinois River. The lock farthest downriver on 

the Mississippi is near St. Louis. There are no locks between St. Louis and New Orleans. There 

are also four locks on the Columbia River and four locks on the Snake River. 

The original purpose of the Federal involvement in inland navigation was to assist in the 

development of the frontier. Today, the Federal government’s role stems from an interest in 

helping to facilitate commercial navigation by providing safe, reliable, highly cost-effective, and 

environmentally sustainable waterborne transportation systems.244 The Federal agencies most 

directly involved in the development and operation of the Nation’s navigation system are the 

U.S. Army Corps of Engineers, the U.S. Department of Transportation (DOT), the Department of 

Homeland Security (DHS), and the Department of Commerce (DOC). The DHS, through the U.S. 

Coast Guard, has responsibility for vessel and navigation safety and provides navigation aids 

and search and rescue services. DOT’s Maritime Administration supports the development of 

U.S. ports, intermodal systems, and domestic shipping, and DOT’s St. Lawrence Seaway 

Development Corporation supports the operation of that waterway in partnership with 

Canadian authorities. DOC’s National Oceanic and Atmospheric Administration provides 

surveys, tidal information, and coastal charts.
371

Barge Traffic 

In 2007, 622 million tons245 of goods moved on the inland waterways, which include all 

movements within the boundaries of the contiguous 48 states and Alaska. The primary 

commodity moved on the waterways is coal, accounting for 29 percent of all tonnages (Figure 

12-2). Petroleum is the next largest commodity group with 27 percent; crude materials (forest 

products, sand, gravel, ores, scrap, and salt) are next largest with 18 percent; and food and 

farm products are fourth, with 12 percent. 

Figure 12-2: Barge tonnage by commodity group, 2007 

Source: Waterborne Commerce Statistics, U.S. Army Corps of Engineers

The Importance of the Inland Waterways to Agriculture 

The Army Corps of Engineers operates and maintains about 12,000 miles of rivers, canals, and 

other inland and intracoastal waterways (inland waterways) in the United States. The 

Mississippi River and the Illinois Waterway are the primary waterways for moving agricultural 

products by barge. They are especially important for transporting bulk grains and oilseeds from 

the Midwest to export ports in the New Orleans region. Other important rivers include the 

Columbia River in the Pacific Northwest, which also moves some bulk grains, oilseeds, and 

fertilizer/chemicals; and coastal waterways that supply poultry and hog operations in the midAtlantic region (Figure 12-2). 
372

Across the inland waterways, there are 191 active lock sites with 237 lock chambers. Some 

locks are equipped with more than one chamber, adding more capacity to that site. In 2006-

2008 the Ohio River carried 18 percent of southbound grain barge movements through the 

locking portion of the river system, the Upper Mississippi River 76 percent and the Arkansas 

River the remaining 6 percent. 

Barges have a 9 percent share of agricultural tonnages and a 12 percent share of agricultural 

ton-miles—most of which is accounted for by movements of grain, animal feed, and fertilizers 

on the Mississippi River and its tributaries. A complete discussion of the importance of the 

inland waterways to agriculture can be found in Chapter 2: The Importance of Freight 

Transportation to Agriculture. 

Figure 12-3: Agriculturally-significant waterways 

Source: AMS 

 
373

Figure 12-4: Barge Tow on the Mississippi River 

Source: USDA 

Today’s Barge Industry 

Today’s barge industry is driven by the fundamental forces of supply and demand, influenced 

by a variety of factors, including local weather patterns, navigation circumstances, domestic 

and international consumption of agricultural and industrial products, crop production, trade 

policies and the price of steel.246 

The demand for dry-cargo freight on the inland waterways is driven by the production volumes 

of dry bulk commodities that require competitive barge transportation. Historically, the major 

commodity groups for dry-cargo barge freight have been: 

• Coal for domestic utility companies, industrial and coke producers, and export markets. 

• Construction commodities, such as cement, limestone, sand, and gravel. 

• Grain and oilseeeds, such as corn and soybeans, for export markets. 

Other commodities include products used in the manufacturing of steel, finished and partially 

finished steel products, ores, salt, gypsum, fertilizer, and forest products. The demand for liquid 

freight is driven by the demand for bulk chemicals used in domestic production, including 

styrene, methanol, ethylene glycol, caustic soda, and other products. It is also affected by the 

demand for refined petroleum products and agricultural-related products such as ethanol, 

vegetable oil, bio-diesel, and molasses. 

 
374

Freight rates in both the dry and liquid freight markets are a function of the relationship 

between the demand for these commodities and the supply of barges available at any given 

point in time. 

U.S. Grain and Tank Barge Fleet 

According to the Corps publication Waterborne Transportation Lines of the United States,247

there were 32,211 non-self propelled vessels (barges of all categories) on the inland waterways 

in 2006. Of this number, 13,062 were covered barges, which haul most of the grain. About 36 

percent of the covered barges were greater than 25 years old. The average economic useful life 

of a dry cargo barge is generally estimated to be between 25 and 30 years. There were 8,673 

open barges, which are mostly used for coal, and 4,250 tank barges, which carry liquids. 

Of all non-self propelled vessels, 86 percent operated on the Mississippi River System and 

connecting waterways, 14 percent in the Atlantic and Pacific regions, and less than 1 percent on 

the Great Lakes. 

Informa Economics—which annually surveys the 

barge industry—reports that from 1998 to 2008, the 

covered barge fleet size for the Mississippi River 

System was reduced from 12,706 to 10,727 barges, 

an 18 percent reduction.248 

When fewer barges are available, carrying capacity is 

lower and competition becomes more intense for 

available barge transportation. Table 12-1 shows the 

five largest barge companies own or operate about 

75 percent of the grain barges. The eight largest own 

or operate 88 percent of the grain barges. Informa 

estimates that 28 companies own or operate barges 

capable of hauling grain. 

 

 

Barge Counts 

The Informa Economics annual 

survey of the barge fleet looks at the 

number of barges that are operated 

by individual companies; the Corps 

barge fleet data tracks vessel 

ownership. Some barge companies 

lease, rather than own, their 

equipment, so the number of barges 

reported differs between the Corps 

and Informa. Leased barges often 

are owned by a financial institution 

and not counted as belonging to a 

barge operator. 
375

Table 12-1: Covered barges on the Mississippi River system, by operator, 2008 

Number Percent of 

Total Fleet

Cumulative 

Total 

Average 

Age 

(years) 

American River Transportation 

Co.249 2,034 19.0% 19.0% 25.0

American Commercial Lines, LLC 1,873 17.5% 36.4% 19.4

Ingram Barge Lines 1,816 16.9% 53.4% 10.4

AEP River Operations 1,477 13.8% 67.1% 13.5

Cargill Marine and Terminal, Inc. 829 7.7% 74.8% 15.0

SCF Marine, Inc 626 5.8% 80.7% 6.8

Bunge North America 457 4.3% 84.9% 22.2

Alter Barge Line, Inc. 332 3.1% 88.0% 8.2

Total Major Operators 9,444 88.0% 16.5

All others 1,283 12.0% 11.6

Total 10,727 100.0% 15.9

Source: Barge Fleet Profile, Informa Economics, March 2009. 

A grain barge is typically 195 or 200 feet long by 35 feet wide, with a draft of 9 feet. An average 

barge holds 1,500 tons of grain. The barge is covered by removable sections that protect the 

cargo from damage during transit, and are removed during loading and unloading. One barge 

holds as much as 15 railcars or 58 semi-trailers of grain. A tow is a group of barges pushed by a 

towboat. On the section of the Mississippi River with locks, tows typically consist of 15 barges, 

grouped 3 abreast by 5 barges long. On the lower Mississippi River, where there are no locks 

and the river is larger, tows can consist of 30 to 40 barges pushed by one towboat. Movements 

on this larger scale increase the efficiency of barge movements. 

 
376

Figure 12-5: Grain barge being loaded. 

Source: USDA 

Barge Rates 

Grain barge rates have changed significantly during the last several years. The size of the barge 

fleet at any given point in time can influence the rates. The number of new barges built each 

year reflects a response to anticipated levels of future supply and demand. After a period of 

sustained rate increases, the industry builds more new barges to take advantage of the strong 

rates. Barge building is also encouraged by investment credits that offer barge owners tax 

advantages. 

When tax advantages brought many new barges into the fleet in the early 1980’s, the surplus of 

barges depressed rates. Because barges are designed to last 25 to 30 years, the surplus period 

lasted a long time. However, as barges reached their life expectancy and were retired, they 

have not been replaced, causing rates to rise in recent years. 

 
377

Barge rates can be volatile as they react to sudden increases in demand. Some shippers react 

to higher rates by postponing shipments until rates go down or choose to ship by an alternate 

mode. When there were surpluses of barges, any increase in demand was handled by the 

oversupply of equipment. Demand can also be boosted by crops being planted and harvested 

late because of bad weather, as occurred in 2008, continuing the volatility of the industry’s rate 

structure. However, most crops are first stored in the Midwest after harvest. Shippers 

generally will move the crops from there in stages over the course of the next year, by rail, 

barge, or truck to intermediate points and end users. 

As shown in Table 12-1, the barge market is highly concentrated. Barge operators are not price 

takers and no one company is considered a price leader. With only a few sellers of barge 

service for grain shippers, the market could be classified as an oligopoly, which implies 

imperfect competition. However, the barge industry is generally considered to be highly 

competitive—perhaps not as competitive as the truck industry, but more competitive than rail. 

Rates are determined by market conditions and no one company dominates the market. 

Theoretically, entry into the barge industry would require leasing or owning one barge and 

finding customers. However, success in the industry would likely require more than one barge 

and the operators would also need extensive industry knowledge and contacts to survive. 

In addition to the charge for freight movements, barge companies add charges for various 

services. For example, demurrage charges result when a barge is not loaded or unloaded within 

the agreed-upon time. Grain elevators typically have three days to load a barge and three days 

to unload it included in the contracted rate. If the grain elevator takes too long to use the 

barge, the barge operator requires some reimbursement because its barge is not being moved 

to the next customer. When this situation occurs, a demurrage charge, which is typically about 

$200 per day per barge, is applied to the final bill. 

Demurrage charges tend to be similar among barge companies across the industry. It is difficult 

to ascertain if this similarity is explicit or implicit among barge companies. However, past 

experience demonstrates that if a company raises demurrage charges too much, market 

dynamics kick in and bring the charges back into line with the rest of the industry. For example, 

in 2007, one of the major barge companies raised its demurrage charges in an effort to make 

more efficient use of their barge fleet. However, the immediate reaction by their customers 

was to avoid the higher demurrage charges by exclusively using other companies that had not 

raised demurrage charges. Eventually, the company dropped the increased demurrage charge 

to the same level as the rest of the industry. 

Barge operators on the Mississippi River System utilize a percent-of-tariff system to establish 

barge freight rates. The tariffs were originally set by the Bulk Grain and Grain Products Freight 

Tariff No. 7, which was issued by the Waterways Freight Bureau (WFB) of the Interstate 

Commerce Commission (ICC). In 1976, the United States Department of Justice entered into an 

agreement with the ICC that made Tariff No. 7 no longer applicable. Today, the WFB no longer 

exists and the ICC has become the Surface Transportation Board, which does not have 

jurisdiction over barge rates on the inland waterways. However, the barge industry continues 

to use the tariffs as benchmarks for rate units. To calculate the rate in dollars per ton, the 
378

industry multiplies the percent of tariff rate by the 1976 benchmark. As an example, a 271 

percent tariff for a St. Louis grain barge would equal 271 percent of the St. Louis benchmark 

rate of $3.99, or $10.81 per ton. Each river segment has its own bench mark, with the 

northernmost segments having the highest benchmarks. 

From 2004 to 2008, first quarter to second quarter rates decreased except for a slight increase 

in 2008 (Table 12-2). Rates for all years increased significantly from the second to the third 

quarter. For the fourth quarter, there were mixed outcomes, with decreases in 2006 and 2007. 

Over the past 5 years, grain barge rates have increased significantly and have trended up on a 

quarterly basis since 2004 (Figure 12-6). 

Table 12-2: Quarterly barge rates from St. Louis to New Orleans, 2004–2008250

 1st Quarter 

Jan–Mar 

2nd Quarter 

Apr–June 

3rd Quarter 

July–Sep 

4th Quarter 

Oct–Dec 

2004 138 119 225 287 

2005 261 186 409 474 

2006 355 279 503 385 

2007 240 218 557 348 

2008 357 361 490 541 

2009 289 198 271 - 

5-year average 270 233 437 407 

Source: AMS

 
379

Figure 12-6: Quarterly barge rates from St. Louis to New Orleans, 2004-08* 

*Rates expressed as a percent of tariff. The St. Louis tariff is $3.99 per ton.

Source: AMS 

During the 1990’s there was an ample supply of barges. Barge rates usually increase slightly in 

late winter and early spring when the Upper Mississippi River reopens after been closed in the 

winter and then dip until early summer (Figure 12-7). During the summer, rates gradually 

increase as old crop grain is sold to make room for the new crop. Rates peak during harvest 

time and then drop again toward the end of the year. 

 
380

Figure 12-7: Weekly barge rates, St. Louis to New Orleans, 10-year average (1990-1999)*

*Rates expressed as a percent of tariff. The St. Louis tariff is $3.99 per ton.

Source: AMS 

The beginning of the upward swing in barge rates started in fall 2004, due to a decrease in the 

barge fleet size and an increase in the demand to transport non-grain commodities on the 

waterways. Barge rates continued their increase the following year when Hurricane Katrina 

disrupted barge logistics in the third quarter of 2005. During the mid-2000s, barges began 

shipping large quantities of non-grain commodities, such as steel and cement. They could ship 

them up-river to manufacturing facilities in the interior of the country, generating additional 

revenue. The up-bound shipments spread the limited number of barges over a greater 

geographical area. With the barges out of position for loading grain, barge availability for grain 

shipments decreased, causing an upward pressure on barge rates. Historically, during the 

fourth quarter in any given year, barge rates can swing in either direction depending on export 

demand combined with the activity of non-grain commodities that compete with grain for 

barge capacity. 

Average quarterly grain barge rates from St. Louis to New Orleans for 2008 were consistently 

above the 4 year average as barge operators contended with a continuous string of navigation 

disruptions and pressing economic concerns (Table 12-6). Navigation was affected by flooding 

for much of the year, a July oil spill in New Orleans limited vessel movements, and two Gulf of 

Mexico hurricanes affected the industry in the third quarter. Barge shippers also had to deal 

with elevated commodity prices that limited economic opportunities. In addition, rates 

changed significantly every week. In 2008, the rate changed 100 points or more in 11 weeks. A 

more typical swing during a non-volatile period is 15 to 20 points per week. 
381

Figure 12-8: Grain barge rates in 2008 above the 4-year average*

*Rates expressed as a percent of tariff. The St. Louis tariff is $3.99 per ton.

Source: AMS 

Figure 12-9 shows a pattern beginning in 1994 of relatively stable rates for 10 years—

fluctuating between 100 and 200 percent of tariff—and then a substantial increase from the 

mid-2000’s on. In the period from 2003 to 2008, at times, the barge rates exceeded 500 

percent of tariff. During this period, the rates are characterized by dramatic swings from peak 

to valley, at times in excess of 300 percent of tariff. Since 2004, barge freight rates have been 

especially volatile as a reaction to high energy costs and competing uses for barge 

transportation. Rates began to decrease in 2009 and, by the end of second quarter, were 

about 200 percent of tariff, back in the upper end of the range that was prevalent in the mid-tolate 1990s. The 2009 decrease may result from the overall economic downturn affecting many 

industries and the smaller barge fleet adjusting to market conditions. 

Figure 12-9: Quarterly barge rates from St. Louis to New Orleans, 1994-2009* 

*Rates expressed as a percent of tariff. The St. Louis tariff is $3.99 per ton.

Source: AMS 
382

Barge Rates and Corn Basis in the Aftermath of Hurricane Katrina 

The Mississippi Gulf port area depends on the Mississippi River for grain barge transportation. The cost of 

shipping corn increases when the river is impassable. With no barge transportation, demand for truck and 

rail services increases. The transportation system is fluid—when one mode is disrupted, the competitive 

pressure to keep the prices of other modes in line is disrupted by the high demand. When river traffic was 

halted by Hurricane Katrina, freight rates responded immediately—barge, rail, and truck rates surged. Barge 

rates spiked to more than 900 percent of tariff for grain shipped from St. Louis to New Orleans and averaged 

more than 500 for the remainder of 2005 (See Figure 12-10). Barge rates decreased subsequent to the 

recovery in the Gulf, but remained higher than the pre Katrina levels throughout most of 2006 because of 

higher fuel and labor costs. 

High transportation costs also translated into lower farm level prices as evidenced by the drop in basis in the 

major production areas of the interior Midwest and a surge in the basis at the Gulf (Figure 12-11). Prior to 

the hurricanes, the weekly corn basis in Illinois was averaging 20 cents per bushel below the futures. It 

dropped to almost 40 cents per bushel after the hurricanes. At the same time, the export basis surged to 

almost 70 cents per bushel above the futures, indicating a strong export demand, and reflecting the higher 

transportation costs. By the end of 2005, transportation disruptions were resolved and both markets 

gradually returned to normal patterns. 

Figure 12-10: Spot barge rates, pre- & post-Katrina 

Source: AMS 

Figure 12-11: Katrina corn basis impact in 2005 

Source: AMS

0

200

400

600

800

1,000

1/7/043/7/045/7/047/7/049/7/04

11/7/04

1/7/053/7/055/7/057/7/059/7/05

11/7/05

1/7/063/7/065/7/067/7/06

Index

St. Louis Spot Barge Rates 

(1/7/04-7/19/2006)

St. Louis Weekly Rate

St. Louis Average Rate

'04 Avg: 

Pre-Katrina 

Last Half 

'06 - Jul 

-0.60

-0.40

-0.20

0.00

0.20

0.40

0.60

0.80

8/5/05

8/12/058/19/058/26/05

9/2/059/9/05

9/16/059/23/059/30/0510/7/05

10/14/0510/21/0510/28/05

11/4/05

11/11/0511/18/0511/25/05

12/2/0512/9/05

12/16/0512/23/05

$/bushel

Illinois (interior) Gulf (export)

Hurricane

Katrina 

8/29

Hurricane 

Rita

9/24
383

Condition of the Nation’s Inland Waterways 

Commercial navigation is one of the three main missions* of the Corps civil works program.251 

The Corps supports commercial navigation on the inland waterways through locks, dams, 

developed channels, and other features. Although much attention has been drawn to the age 

of the locks and dams on the system, they are generally viewed as reliable for transportation. 

As locks age, however, their maintenance becomes more extensive and expensive. The 

investment to continue to maintain the locks and dams and other features that make barge 

transportation possible on these waterways is facing potential financial difficulties. 

Many agricultural interests are concerned over the current condition of the Nation’s 

waterways, especially the Upper Mississippi River and Illinois Waterway (UMR-IW). It is 

commonly thought that these locks have exceeded their design life. For example, the American 

Society of Civil Engineers (ASCE), which produces an annual Report Card for America's 

Infrastructure, said in 2009: “The average age of all federally owned or operated locks is nearly 

60 years, well past their planned design life of 50 years.” Such statements are common, but 

misunderstand the nature and purpose of the Corps project planning process. 

The Corps designs and builds its locks and dams to last much longer than 50 years. However, 

these structures typically require significant rehabilitation about every 25 to 30 years 

depending on local operating conditions, such as degree of barge impact to gates and concrete 

and weather-related deterioration. The Corps, following 10 years of study, produced a report 

on the UMR-IW which said: 

... the life of existing locks and dams and their components can be extended 

with normal periodic rehabilitation for another 50 years and match the 

design life of any new construction being considered as part of the “with 

project”†

 conditions.252

The Corps uses a 50-year period in planning a project, but only for purposes of the economic 

evaluation of a proposed water resources investment. The time frame for this economic 

analysis reflects the fact that the economic benefits and costs beyond 50 years generally are 

negligible when expressed in net present value terms, and therefore do not significantly affect 

the net return to the Nation from the proposed investment. 

In 2007, more than a third of our Nation’s corn exports and almost 17 percent of our soybean 

exports were barged to New Orleans from the UMR-IW. Agricultural interests are concerned 

that the lock capacity on the UMR-IW may not be able to adequately handle grain traffic in the 

 

*

 The other two main missions of the civil works program are flood and storm damage reduction, and aquatic 

ecosystem restoration. †

 Corps studies begin with a description and analysis of the current condition of the water and related land 

resources for a project. The Corps uses this snapshot of the current resources to forecast how the condition of 

the water and land resources would change in the future, both “with” and “without” the proposed federal 

action. 
384

future. They are also concerned that congestion on the river could lead to delays, and thus 

adversely influence barge rates and the competitiveness of U.S. grain in international markets. 

The Corps evaluated these concerns in its September 2004 study of seven proposed new locks 

and other navigation measures for the UMR-IW and in its revaluation of these locks and 

measures in its March 2008 follow-on study. 

Upper Mississippi River and the Illinois Waterway 

The UMR consists of an 854-mile segment of the Mississippi River from the confluence with the 

Ohio River at Cairo, IL, through the Upper St. Anthony Falls Lock in Minneapolis-St. Paul. The 

southernmost set of locks (Locks 27) on the Mississippi is located in Granite City, IL (St. Louis), 

about 185 miles upstream of the junction of the Mississippi and Ohio Rivers (Figure 12-12).

The IW is the 327-mile portion of the Illinois River from its confluence with the Mississippi River 

at Grafton, IL, to the T.J. O’Brien Lock in Chicago. Together, the UMR and the IW represent 

1,181 miles of navigable waterways, about 10 percent of all the inland waterways.

Figure 12-12: Upper Mississippi River and the Illinois Waterway 

Source: U.S. Army Corps of Engineers 
385

The locks on the UMR-IW were built starting in the 1930s and were designed to accommodate 

the size of the most common vessels used in waterways commerce on these rivers at that time. 

The UMR-IW locks built during that period were 600 feet long by 110 feet wide. Since then, 

however, more powerful and efficient towboats have been built. Modern towboats on the 

Upper Mississippi River can push a 1,200-foot-long tow of 15 barges. To transit a 600 foot lock, 

the tow is disassembled or “cut” into two sections, one of nine barges and one of six. The two 

sections transit the lock separately, one at a time. After passing through the lock, the tows are 

reassembled and continue to the next lock. In most cases, the 

process takes 11⁄2 to 2 hours. Transiting a 1,200-foot lock takes 

only about 45 minutes. 

Tows originating at the same lock or at other locks can add 

further to the length of a trip if there are enough of them to 

cause congestion, especially during peak periods. The lockage 

time associated with splitting the tow can then produce 

queuing delays for other barges. Due to the reduction in 

traffic levels over the past 20 years, lengthy delays and long 

queues on the UMR-IW are now much less common.253 When 

they occur, however, they reduce productivity and can 

sometimes cause barge rates to increase. Because farmers do 

not have market power and are price takers, these rate 

increases are felt most by the farmer as higher basis* and 

lower margins. 

In addition to the lockage time associated with getting 1,200-

foot tows through 600-foot locks, and the delays caused by 

congestion, lock maintenance and breakdowns can cause 

delays. To ensure reliability, locks are periodically shut down 

for maintenance. Because maintenance shut-downs are 

usually scheduled during slow traffic periods, barge companies 

can plan for them. Emergency repairs of locks, such as those 

caused by a barge hitting a lock structure, require 

unscheduled shut-downs. Shutdowns due to emergency 

repairs are more detrimental to barge operations than 

planned shutdowns. Delays cause the towboat to use more fuel. If they were to stretch into 

weeks or months, rates would go up and farmers’ net prices could shrink. The longer the delay, 

the greater the impact is on farmers’ incomes. The age and condition of the inland waterways 

infrastructure can thus have an effect on farmers’ livelihoods. 

 

*

 Basis is the difference between the current cash price of a commodity and its futures price (Basis = Cash Price 

less Near-Month Futures Price). The basis accounts for the difference in the supply and demand relationships 

in the local market relative to the futures market. 

Costs of Delays 

A typical towboat is equipped 

with an engine that develops 

from 1,800 to 6,000 horsepower 

(hp).* As a rule of thumb, these 

vessels burn 0.75 gallons of fuel 

per hp per day. For example, a 

towboat with 4,000 hp engines 

may use up to 3,000 gallons of 

fuel per day. Costs other than 

fuel are also increased by delays, 

including barge ownership costs, 

leasing costs, and crew wages 

and benefits. 

*

 Ingram Barge Company, 

Transportation Research Board, 87th 

Annual Meeting, Washington, D.C., 

January 14, 2008. 
386

The Corps gives priority to the maintenance of the locks and dams of the UMR-IW and to their 

periodic rehabilitation. It also has a good track record of responding to equipment breakdowns 

when they occur. Preventable causes (i.e. closures other than due to water conditions from 

drought or flood, and accidents) are infrequent and tend to be relatively short in duration. 

However, when breakdowns do occur, they increase the costs to shippers. 

Wildlife Protection Areas

In addition to federally created and maintained navigation projects, four parts of the UMR-IW 

serve as national wildlife protection areas, creating some potential conflicts among the 

purposes of the river. 

The Upper Mississippi River National Wildlife and Fish Refuge was established in 1924 by 

Congress to preserve the river for fish, migratory birds, other wildlife, and people. Today it 

consists of 200,000 acres of land and water along 260 miles of the UMR from Wabasha, MN, to 

near Rock Island, IL. 

Trempealeau National Wildlife Refuge consists of 5,900 acres on the Wisconsin side of the 

UMR near La Crosse, WI. 

 

Mark Twain National Wildlife and Fish Refuge is on 23,500 acres along the UMR between 

Davenport, IA, and St. Louis. 

Chautauqua National Wildlife Refuge occupies 8,000 acres along and on the Illinois River. 

The Mississippi River is required by law to serve both wildlife and fish protection and 

commercial navigation. The Federal Government is responsible for maintaining and improving 

environmental conditions as well as navigation on the UMR-IW. 

Improvements to the Upper Mississippi River and the Illinois Waterway 

Since 1993, the Army Corps of Engineers has been evaluating options for developing navigation 

improvements on the UMR-IW. In 2001, it added an evaluation of options for environmental 

improvements to this study. In 2004, the Corps proposed a Navigation and Ecosystem 

Sustainability Program (NESP), which is a long-term program of navigation improvements and 

ecological restoration for the UMR-IW that is designed to be implemented in increments over a 

50-year period through integrated, adaptive management. 

The improvements are intended to improve the flow of barge movements, among other things 

such as ecosystem protection, flood plain restoration, water level management, etc. Lockage 

times are longer as a result of barge tows that are longer than the locks, and therefore have to 

be split into two sections for transit. Only 3 of the 37 locks on the UMR-IW—Melvin Price 

Locks, Locks 27, and Lock 19—have 1,200 foot chambers. The splitting process adds time and 

costs to barge movements, and also causes delays for barges waiting for use of a lock that is 

being used by another barge. Delays can result from both traffic backups due to congestion 

and to a lesser extent from closures for operation and maintenance or breakdowns. 
387

The 2004 NESP study recommended the construction of seven new locks and some small-scale 

improvements on the river to facilitate the movement of barge traffic. The proposal was 

contained in the Water Resource Development Act of 2007 (WRDA 2007), which authorizes the 

proposal, but does not provide funding. The proposed small-scale improvements, at Locks 12, 

14, 18, 20, 22, and 24 on the UMR, and La Grange Lock on the IW, include mooring facilities and 

helper towboats to help barges thorough existing locks. Initial costs for the small-scale 

improvements are $274 million. With the proposed new 1,200-foot locks at Locks 20, 21, 22, 

24, and 25 on the UMR and at La Grange and Peoria Locks on the IW, the navigation 

improvements would have an initial total cost of $2.1 billion. 

WRDA 2007 also authorizes an initial 225 ecosystem restoration projects to address the 

cumulative impact of the navigation operations. These programs to improve the ecological 

integrity will total $1.58 billion. Federal funds will pay most of the ecosystem restoration costs 

with cost sharing from other sources. 

Figure 12-13: Building Olmsted locks and dam on the Ohio River. Construction work began in 

1991 and originally was scheduled to be finished by 2006. It will replace Locks and Dams 52 

and 53. 

Source: U.S. Corps of Engineers 
388

Much of the justification for navigation improvements centers on the projected level of river 

traffic that will occur over a period of 50 years. Critics of the improvements believe that future 

traffic will not increase sufficiently to justify the investment needed to construct larger locks. 

Proponents believe that investments in navigation improvements on the UMR-IW will produce 

increases in barge traffic, making the improvements a desirable option.254 

Figure 12-14 shows the commercial tonnage and lockage numbers at Mississippi River Lock 25 

from 1989 to 2009. Overall, this period is characterized with a trend of declining tonnage and 

lockage numbers, especially since the period from 1999 to 2002, when the lockage numbers 

averaged about 3,338. The steep drop in traffic and tonnage in 1993 and 1994 reflects the two 

year effect of major and widespread flooding in the Midwest in 1993. The flooding in 1993 

severely impacted barge traffic and also reduced that year’s grain production, which impacted 

barge movements in the following year. Traffic levels largely recovered by 1995, but have 

declined since 2002 and are now even below the 1993 level. In 1990 the lockage numbers 

were highest at 3,966. By comparison in 2009 the lockage numbers had declined to only 2,350. 

It is interesting to note that most of the variability of the tonnage figures over the period is 

from the farm and food category, which implies the other categories—that add to the total 

tonnage, such as coal, petroleum, chemicals, and manufacturing goods, etc.—have been 

relatively stable over the period. These tonnage figures also show that farm and food products 

are a significant part of the total tonnage on the UMR-IW. 

Figure 12-14: Annual commercial tonnage and lockage numbers at Lock 25, 1989-2009 

Source: U.S. Army Corps of Engineers, LPMS/OMBIL 

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

0

5

10

15

20

25

30

35

40

45

19891991199319951997199920012003200520072009

Million Tons

Lockages

All Commercial Lockages (#)

Food and Farm Products (tons)

All Commodities (tons)
389

Tonnages and Commodities Moved on the UMR-IW 

On average, food and farm products represent about 39 percent of all IW tonnage and 24 

percent of all Mississippi River tonnage (see Table 12-6, in Appendix 12-1). The most important 

agricultural commodities moved on the UMR-IW are corn and soybeans. Almost all grain 

originated in the UMR-IW moves to New Orleans for export. Table 12-3 shows that during the 

period from 2003 to 2007, the UMR-IW supplied 32-52 percent of all U.S. corn exports and 17-

24 percent of all soybean exports. 

Table 12-3: Importance of Upper Mississippi River and Illinois Waterway to agriculture255

 Barged Grain to New Orleans Total Exports 

From Upper 

Miss-IL 

Rivers 

From All River 

Origins 

All Ports and 

Borders 

Percent from Upper 

Miss. & Ill. Rivers 

Crop Year ------- million tons ------ Percent 

Corn 

2003 24.7 32.9 47.3 52.2% 

2004 22.1 34.0 53.6 41.2% 

2005 17.8 28.8 50.1 35.5% 

2006 20.1 32.0 63.2 31.8% 

2007 21.4 34.7 62.7 34.1% 

Soybeans 

2003 8.2 18.7 34.0 24.2% 

2004 4.7 15.5 27.7 17.1% 

2005 5.2 15.1 28.1 18.6% 

2006 5.3 15.3 31.1 17.0% 

2007 5.5 15.3 32.8 16.8% 

Source: U.S. Army Corps of Engineers; Foreign Agricultural Service 

New Orleans is the primary port for exporting corn and soybeans. During 2003 to 2007, about 

65 percent of all export corn and 58 percent of soybeans were shipped to foreign counties 

through New Orleans. New Orleans receives about 90 percent by barge, with the remaining 10 

percent arriving by rail and truck. Other than the UMR-IW, major barge origins for corn and 

soybeans to New Orleans include the Mississippi River below Granite City, MO, the Ohio River 

and its tributaries, and the Arkansas River (officially called the McClellan-Kerr Arkansas River 

Navigation System). 

 
390

The decline in the market share of UMR-IW originations of corn and soybeans for the export 

market was partly due to the increase in barge rates that has occurred since 2004. When barge 

rates are elevated, the UMR-IW is less attractive to exporters. However, ethanol plants in the 

major production areas compete with export buyers of corn, so ethanol production has played 

a role in the decline of grain shipped by barge to New Orleans. Thus, because less grain in this 

area of the country now needs to be moved to distant markets, export related barge 

movements via the UMR-IW may continue to be at lower than historical levels, if this 

phenomenon continues. 

Regional Competition between Barge and Alternate Transportation 

for Export Grain 

A survey conducted by the Navigation Economics Technologies (NETS) program of the Corps 

identified and examined the full range of alternate transportation available to agricultural 

shippers in the Midwest. The study found that most of the agricultural shippers surveyed have 

a range of alternatives, both in terms of the means of transportation and in terms of the end 

markets for their products. For each of these alternatives, the study surveyed the prices that 

shippers said they could receive for their goods, net of the cost of transportation, and 

concluded the economic value created by a single transportation mode is moderated by the 

presence of other alternatives. The Corps used the results of this NETS survey in estimating 

potential national economic development benefits in its March 2008 revaluation of the 

proposed new locks and other navigation measures for the UMR IW.256

 

Figure 12-15: A barge tow on the Mississippi river in St. Louis 

Source: Wikemedia Commons 

 
391

Critics argue that some of these national economic development benefits can be attributed to 

the fact that the operational and maintenance costs of the waterway system are covered 

entirely by the government through appropriations to the U.S. Army Corps of Engineers, which 

is responsible by law for maintaining the Nation’s inland waterways infrastructure. Further, 

they argue barge companies currently pay for only half of new waterway infrastructure through 

a fuel tax. Barge interests contend that the waterways provide benefits to other users, such as 

hydropower, water supply, municipalities, and recreational users, among others. In contrast, 

others contend that most of the benefits ascribed to other “users” of the UMR-IW and the Ohio 

River would have likely accrued anyway in the absence of the existing locks and dams. 

Competing modes, such as rail and trucks, also pay a much greater proportion of the 

operational and maintenance costs of the infrastructure they use, as well as the capital costs of 

expanding that infrastructure. For example, railroads generate from revenues almost all of the 

funds needed for capital improvements and maintenance of their infrastructure. 

Environmental and Economic Uses of the Missouri River 

A divisive debate has developed over the management of water levels on the Missouri River. 

Recreational, environmental, hydroelectric power, navigation, and flood control uses all 

compete for water. The States have different interests, depending on their predominant use of 

the river system. Northern states such as Montana and North Dakota are keenly interested in 

the recreational economy generated from the impounded lakes, and in hydroelectric power. 

Closer to the Mississippi River, States are more concerned with navigation and flood control. 

The Missouri River is important to agriculture, but agricultural traffic on it is small relative to 

that on the Mississippi. During normal flow conditions, it is not the volume of traffic moving on 

the Missouri that makes it so critical to agriculture—although that is certainly important to the 

farmers who depend on the Missouri to move their grain—but its ability to store Missouri River 

water and release it later in the season to augment the supply of the Mississippi River and 

thereby benefit Mississippi River navigation, and by doing so, ensuring that grain can move 

from the Upper Mississippi River to the Gulf of Mexico. 

The Missouri River system is the largest reservoir system in the United States. The river is 2,341 

miles long and drains one sixth of the United States, consisting of 6 dams and reservoirs (lakes) 

located in Montana, North Dakota, South Dakota, and Nebraska (Figure 12-16). The Corps 

operates the reservoir system as a project to serve congressionally authorized purposes—flood 

control, navigation, irrigation, hydropower, water supply, water quality, recreation, and fish 

and wildlife. 

 
392

Figure 12-16: Missouri River 

Source: U.S. Army Corps of Engineers

Navigation is only possible on a 732-mile stretch of the Missouri River from Sioux City, IA, to St. 

Louis. Runoff from above the reservoir system dams is stored in the 6 lakes, where it serves the 

project’s many purposes. The Corps manages the system of dams and reservoirs according to 

the water control plan contained in its Missouri River Mainstream Reservoir System Master 

Water Control Manual,257 first published in 1960 and revised most recently in 2006. 

One of the major concerns with the Missouri River system is that during droughts, limited water 

is available for the upstream and downstream users. Also, three Missouri River species (the 

interior least tern, piping plover, and pallid sturgeon) are listed under the federal Endangered 

Species Act. The Corps considered these issues in its recent changes to the Master Manual. 
393

Missouri River Traffic 

According to a January 2009 report by the Government Accountability Office (GAO), the State 

of Missouri is the predominant user of Missouri River navigation.258 Missouri accounted for 83 

percent of the tonnage shipped on the Missouri River between 1994 and 2006, Kansas 

accounted for 12 percent, Nebraska 3 percent, and Iowa 2 percent. 

Figure 12-17: Big Bend Dam on the Missouri River, South Dakota, one of the six reservoirs 

making up the Missouri River system. 

Source: U.S. Army Corps of Engineers 

The four States of Iowa, Nebraska, Kansas, and Missouri are adjacent to the Missouri River and 

are served by barge and other vessel traffic along the river. Iowa and Missouri are served by 

navigation on both the Missouri and Mississippi Rivers. During the 13-year period from1994 to 

2006, 108 million tons of commodities were shipped on the Missouri River, or about 8.3 million 

tons per year. During the study period, the majority of the shipments on the Missouri River 

were sand and gravel—84 percent of the tonnage. Most of the sand and gravel was 

transported 1 mile or less. The distance traveled is so short because sand and gravel is taken 

from the river and shipped to nearby processing facilities. On average, about 215,385 tons of 

food and farm material per year were shipped to or from Missouri or Iowa on the Missouri 

River. In contrast, on an annual basis, about 14.5 million tons of food and farm material were 

shipped on the Mississippi River to or from the same States. 
394

The Columbia-Snake River System 

The Columbia-Snake River System can be navigated from the Pacific Ocean to Lewiston, ID, 465 

miles from the open sea (Figure 12-18). There are eight primary competing uses of the river 

system: 

• Navigation 

• Flood control 

• Irrigation 

• Electric power generation 

• Fish migration 

• Fish and wildlife habitat 

• Recreation 

• Water supply and quality.259 

Figure 12-18: Columbia–Snake River System 

Source: Pacific Northwest Waterways Association. 

While most uses, such as irrigation, are beneficial to agriculture, some uses conflict. The best 

example is the need to allow anadromous fish, such as salmon, to migrate up and down the 

river system. Salmon live most of their lives in the ocean, and breed in fresh water. Dams 

were built to store water to turn turbines for electric power generation, but stopped fish from 

travelling up or down the river system. In an effort to meet the multiple authorized purposes of 

these dams, which include navigation, the Corps constructed fish ladders and other facilities 

and has taken other measures to help the fish to swim up and down the river. 
395

Certain salmon species on the West Coast experienced dramatic declines during the past 

several decades as a result of human-induced and natural factors.260 Several of the species 

were classified as endangered or threatened, and required corrective action as mandated by 

the Endangered Species Act. To keep the dams operational, procedures were implemented to 

aid in fish migration, including adding screens to prevent the fish from entering the turbines, 

and the use of barges to transport the fish around the dams. The effort to balance conflicting 

demands for uses of the river has generated a lively controversy. For example, some 

environmentalists are so concerned that the construction and operation of the dams on the 

Snake River is damaging salmon breeding they have called for restoring the Snake to its natural 

flow. 

Figure 12-19: Barge tow on the Columbia River 

Source: Wikimedia Commons 

Table 12-4 shows 10 years of tonnage moved on the Columbia and Snake Rivers. About 29 

percent of the tonnage on the Columbia and 60 percent on the Snake is farm and food 

products. The predominant commodity is wheat, making up nearly two-thirds of the farm and 

food traffic on the Columbia and more than 90 percent on the Snake. Other grains and oilseeds 

make up most of the remainder of the farm and food traffic. 

Because the Columbia-Snake system river is deeper than the Mississippi System, barges have a 

greater cargo capacity. Most barges carry 3,500 tons, whereas Mississippi River barges carry 

only 1,500 tons. There are eight locks and dams on the Columbia and Snake Rivers that were 

developed principally for hydroelectric purposes.261 The oldest facility is Bonneville Lock and 

Dam on the Columbia River, which went into service in 1938 and had a new and larger lock 

installed in 1993. The other locks and dams were constructed from the 1950s through the 

1970s. 
396

Table 12-4: Up-bound and down-bound barge tonnage, by river, 1998-2007 

Columbia 

River Million Tons Percent 

 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 10-year 

avg. 

% of 

total 

Total 17.22 17.68 22.02 19.13 15.51 15.95 17.44 17.56 17.89 18.51 17.89 100.0% 

Petroleum 5.37 7.07 10.35 7.88 6.11 5.74 5.92 6.13 6.58 6.56 6.77 37.8% 

Chemicals .54 .54 .45 .45 .34 .18 .20 .22 .12 .09 .31 1.7% 

Crude 

Materials 4.70 4.32 4.69 5.11 5.10 4.69 5.17 5.65 5.48 5.75 5.07 28.3% 

Farm & 

Food (F&F) 5.85 5.07 6.05 5.17 3.48 4.96 5.66 5.06 5.06 5.48 5.15 28.9% 

Other 0.76 .68 .49 .51 .48 .39 .48 .51 .65 .62 .58 3.1% 

% F&F 34.0% 28.7% 27.4% 27.0% 22.4% 31.1% 32.5% 28.8% 28.3% 29.6% 28.9% 

Snake 

River Million Tons Percent 

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 10-year 

avg. 

% of 

total 

Total 5.84 5.84 6.70 5.64 4.28 5.34 5.72 5.29 5.24 5.42 5.53 100.0% 

Petroleum 1.56 1.74 2.12 1.65 1.70 1.82 1.52 1.61 1.92 1.91 1.76 31.7% 

Crude 

Materials .56 .44 .31 .24 .14 .20 .26 .27 .21 .19 .28 5.1% 

Farm & 

Food (F&F) 3.54 3.46 4.16 3.59 2.25 3.19 3.79 3.29 2.92 3.10 3.33 60.2% 

% F&F 60.6% 59.2% 62.1% 63.7% 52.6% 59.7% 66.3% 62.2% 55.7% 57.2% 60.2% 

Source: Waterborne Commerce Statistics, U.S. Army Corps of Engineers. Totals may not add due to rounding. 
397

Inland Waterways Funding 

According to the Inland Waterways Users Board (IWUB), there is a growing gap between 

Congressional appropriations for capital water infrastructure projects and the needed funding 

levels for these projects.262 Although there has been an increase in spending over the past few 

years, there has not been a corresponding growth in the completion of high-priority projects. 

Cost overruns and delayed construction, they say, have disrupted the capability of the Corps to 

improve the nation’s water infrastructure. The projects are almost always multi-year projects, 

but Congressional appropriations are given in 1-year increments. When annual appropriations 

for a given project are less than the Corps estimate of the maximum amount that it can 

efficiently spend in a fiscal year, the completion date is considered extended. 

As an example, the IWUB points to Olmstead Locks and Dam, located on the Ohio near its 

confluence with the Mississippi River. Olmstead was authorized in 1988, funded for $775 

million dollars, and was estimated to be completed in 7 years. By 2008, the project had been 

underway for 15 years and is now estimated to take 22 years. A recent estimate of the cost of 

the completed project is $2.067 billion, almost three times the original estimate. The IWUB 

stated, in its 22nd annual report, released in May 2008, that consistent underfunding has left 

annual shortfalls in the original construction needs.263 

A Corps study of the history of this project reached a different conclusion. In a July 2008 report 

to the IWUB, the Corps found that that Olmsted costs, measured in real terms, had increased 

by 58.6 percent. Typical engineering and construction factors accounted for 69 percent of the 

increase. Specifically, design changes following the initial, rough cost estimate accounted for 30 

percent; omissions and re-estimates from the initial estimate accounted for 35 percent; and 

site conditions that were different than expected accounted for 4 percent. Less than one-third 

of the increase (31 percent, or $226.5 million) involved the appropriated funding levels.264

Funding mechanisms for construction of new structures and major rehabilitation of existing 

navigation structures are specified by Section 102 of the Water Resource Development Act of 

1986 (WRDA 86). WRDA 86 directs the cost of these inland navigation capital improvements to 

be paid from the general fund of the U.S. Treasury and a matching amount from the Inland 

Waterways Trust Fund (IWTF). The sources for the IWTF are taxes imposed on fuel for vessels 

engaged in commercial waterways transportation and any interest accrued by the trust fund. 

The current tax is 20 cents per gallon of fuel. 

During the late 1990’s, IWTF tax revenues were greater than expenditures, creating a surplus in 

the Trust Fund that peaked at $413 million in FY 2002. The balance in the trust fund has been 

declining since FY 2002. This occurred primarily because expenditures increased; however, 

revenues also decreased during this period. By the end of 2009, the balance in the IWTF was 

$14.3 million. At this level, the IWTF can only fund twice the amount of annual receipts 

because under current law the trust fund pays 50 percent of capital investments. In short, the 

decline in the trust fund since 2002 reflects a longer term trend, a structural imbalance 

between receipts and expenditures. The users of these waterways now pay a total of roughly 
398

$85 million per year. By comparison, the amount financed from the trust fund, reflecting their 

share of the capital cost under current law, was $205 million in FY 2007 and $205 million in FY 

2008. 

The primary question is, “how will the funding be provided?” Several sources of additional 

revenues have been suggested, such as a fuel tax increase, a user fee for using the locks 

(possibly including a congestion fee), a ton-mile charge, and expanding the list of waterways 

designated in law265 as “inland and intracoastal Waterways of the United States” to include all 

such waterways. The users have suggested instead that Congress should redefine their cost 

sharing responsibilities by excluding some or many types of projects from cost sharing. If the 

funding mechanisms are not resolved, new construction and the rehabilitation of inland 

navigation structures will slow down. 

In April 2008 and May 2009, the Army submitted legislative proposals to the Congress to 

resolve this issue. The Congress enacted the current cost-sharing in the landmark Water 

Resources Development Act of 1986. While the 2008 and 2009 legislative proposals differed in 

certain respects, both of these proposals aimed to raise sufficient revenue to meet the 1986 

cost-sharing, in a way that would be more efficient and more equitable than the fuel tax. 

The Congress has not acted on these proposals. The lack of a clear path forward is of significant 

concern to the farmers that depend on the inland waterways to move their crops to market. 

However, in the short-term, the current level of annual funding is not likely to cause significant 

delays or closures to the UMR-IW, lead to substantially higher transportation costs, or reduce 

farmers’ margins or their incomes. 

Current Investment Needs 

The Corps develops and maintains navigation on the inland waterways infrastructure through a 

system of locks, dams, channel improvements, and dredging. More than half the locks and 

dams operated by the Corps are over 50 years old. As facilities grow older, the need for repairs 

and preventative maintenance increases, and eventually some facilities need to be replaced. 

Table 12-5 shows current major projects on the Nation’s inland waterways that are included in 

the budget for the U.S. Army Corps of Engineers. Funding is broken into two categories: new 

construction and major rehabilitation. New construction projects are more expensive than 

major rehabilitation. As can be seen from the table, the total cost of new construction projects 

is over $6.5 billion, of which $3.4 billion had been allocated through FY 2008. This leaves $3 

billion to complete these projects. The total cost for projects for major rehabilitation projects is 

over $617 million, of which $261 million has been allocated through FY 2008, leaving some 

$356 million needed to complete these rehabilitations. 

The most expensive project is the construction of the Olmsted Locks and Dam. Olmsted will 

eventually replace the last two locks on the Ohio River, where there are some of the highest 

traffic levels on the waterway system. Of the top twelve new construction projects, Olmsted 

will take about a third of the total costs of the projects for its completion. 
399

Table 12-5: Current funding allocations for inland waterway projects 

Total 

Cost of 

Project 

Allocated 

through 

FY 2008 

Funding 

Needed to 

Complete 

 1,000 Dollars 

New Construction Projects * 

 1 Olmsted Locks and Dam Ohio River 2,067,000 992,946 1,074,054 

 2 John T Myers Locks and Dam Ohio River 232,400 9,017 223,383 

 3 Greenup Locks and Dam Ohio River 245,000 8,236 236,764 

 4 Kentucky Lock and Dam Tennessee River 663,500 256,782 406,718 

 5 McAlpine Locks and Dam Ohio River 429,280 423,010 6,270 

 6 Inner Harbor Navigation Canal Lock New Orleans, LA 733,300 140,653 592,647 

 7 Grays Landing Lock and Dam Monongahela River 178,046 177,446 600 

 8 Locks and Dam 2,3, and 4 Monongahela River 750,000 487,914 262,086 

 9 Point Marion, Lock and Dam 8 Monongahela River 113,574 112,974 600 

 10 Chickamauga Lock Tennessee River 364,600 93,775 270,825 

 11 Marmet Locks and Dam Kanawha River 405,822 396,820 9,002 

 12 Robert C. Byrd Locks and Dam Ohio River 383,500 372,968 10,532 

 Total New Construction 6,566,022 3,472,541 3,093,481 

Major Rehabilitation Projects ** 

 1 Lock and Dam 11 Mississippi River 46,800 40,512 6,288 

 2 Lock and Dam 19 Mississippi River 31,600 31,576 24 

 3 Lock and Dam 24 Mississippi River 85,300 69,772 15,528 

 4 Lock and Dam 27 Mississippi River 33,800 6,837 26,963 

 5 Lockport Lock and Dam Illinois Waterway 132,400 20,618 111,782 

 6 Markland Locks and Dam Ohio River 30,518 6,720 23,798 

 7 Lock and Dam 3 Mississippi River 66,000 7,404 58,596 

 8 Emsworth Locks and Dam Ohio River 163,800 77,667 86,133 

 9 Lower Monumental Lock and Dam Snake River 27,509 0 27,509 

 Total Major Rehabilitation 617,727 261,106 356,621 

* 50 percent of total costs will be derived from the Inland Waterways Trust Fund; the other 50 percent is from the 

general treasury 

** Funding sources for most major rehabilitation projects is generally the same as for new construction. 

Source: U.S. Army Corps of Engineers. 

 
400

The cost for new construction and repairs is expected to exceed the amount of revenue that 

can realistically expect to be generated solely by commercial users of the waterways. Because 

the waterways promote other worthwhile activities that benefit the entire Nation, Congress has 

traditionally shared with the users the costs of funding new construction and major 

rehabilitation, roughly on a 50/50 basis. However, this shared funding arrangement is facing 

increasing criticism from interested parties. Pro-navigation groups want the government to pay 

a higher share of these projects. Some environmental organizations and taxpayer groups 

question the continued development of the Nation’s rivers for navigational purposes, 

particularly with regard to economically marginal investments, and would also prefer for the 

Congress to require the commercial users to pay more. 

The annual receipts from the fuel tax now cover less than 10 percent of the total cost that the 

Corps incurs to support commercial navigation on these waterways, when taking into account 

the operation and maintenance costs, all of which the general taxpayer pays. Some opponents 

of this approach to cost-sharing believe the general public should not pay for benefits that 

primarily will be enjoyed by commercial interests. In addition, some opponents contend that 

the decades of governmental support of navigation have caused significant harm to the 

environment, and that environmental priorities should take precedence over any navigation 

improvements. In fact, some environmental groups have called for the removal of four dams 

on the Snake River to reduce extinction risks to endangered or threatened fish. This action 

would cause the loss of navigation on the Snake River, and would thereby have impacts on 

other transportation systems. 

Overall, there seems be little consensus in determining an optimal level or mechanism for 

funding inland waterways. Authorized projects require years of investigative preparations to 

evaluate the benefits and costs, more years to obtain funding, and are may be underfunded. 

Agricultural waterway shippers believe significant funding should be provided, with assistance 

from public funds. However, others argue that despite the public expenditures on waterways 

over the last 20 years, traffic has declined significantly. The funds to maintain and rehabilitate 

the existing structures are a priority; the question is whether a substantial further public 

investment in new infrastructure is called for at this time. 
401

Conclusions 

Much of U.S. agricultural production occurs in the middle of the country, far from coastal 

export facilities. The river system provides bulk long-haul transportation economically, keeping 

U.S. products competitive in the global economy. From the perspective of the shippers, barges 

offer a low-cost transportation alternative for bulk goods in the areas near these waterways. In 

some areas, they offer competition to other long-haul modes, keeping rates down. Moving 

more bulk commodities on barges could free capacity of other transportation modes, reducing 

congestion. 

More barges are being retired than are being constructed, shrinking the size of the barge fleet. 

The market is currently adjusting to the number of barges in operation. 

Although aging, the locks and dams on the river system are generally reliable. As locks age, 

however, repairs and maintenance becomes more extensive and expensive. Funding for new 

construction projects is nearly depleted, with the trust fund down to $14.3 million at the end of 

2009. Roughly half of the funding for capital investments in the inland waterways comes from 

the commercial users of the system through a fuel tax; the other half comes from Congressional 

appropriations from the General Fund of the Treasury. There is a growing gap between the fuel 

tax receipts and the funding needed to meet the authorized non-Federal cost-share for ongoing 

capital projects. There is currently no clear path forward on the funding shortfall and this is a 

significant concern to farmers that depend on the inland waterways for transportation. 
402

Appendix 12-1 

Table 12-6: Up-bound and down-bound barge tonnage, by river, 1998-2007 

Illinois 

Waterway Million Tons Percent 

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 10-year 

avg. 

% of 

total 

Total 41.80 43.72 44.22 43.49 43.03 44.99 45.23 44.02 43.58 41.11 43.52 100.0% 

Coal 3.03 2.77 2.50 2.11 1.44 3.92 4.21 5.37 6.17 5.44 3.70 8.5% 

Petroleum 6.22 5.69 5.79 6.59 5.18 6.19 6.35 6.31 6.40 6.76 6.15 14.1% 

Chemicals 4.97 4.63 4.78 4.52 4.50 4.51 4.43 4.15 4.17 4.80 4.55 10.4% 

Crude 

Materials 5.76 6.11 6.54 7.44 7.21 7.85 8.24 8.51 8.15 6.53 7.23 16.6% 

Manufactured 

Goods 4.41 4.79 5.64 4.26 4.96 4.51 5.46 5.90 5.59 4.02 4.95 11.4% 

Farm & Food 

(F&F) 17.38 19.71 18.95 18.51 19.72 17.97 16.35 13.69 13.05 13.49 16.88 38.8% 

Other 0.03 0.03 0.02 0.05 0.03 0.05 0.18 0.09 0.05 0.08 0.06 0.1% 

% F&F 41.6% 45.1% 42.9% 42.6% 45.8% 39.9% 36.1% 31.1% 29.9% 32.8% 38.8% 

Mississippi 

River Million Tons Percent 

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 10-year 

avg. 

% of 

total 

Total 324.48 329.64 327.40 316.55 316.21 308.21 312.81 299.14 313.51 311.67 315.96 100.0% 

Coal 52.24 47.28 47.65 46.46 44.09 39.08 41.31 42.20 46.30 47.00 45.36 14.4% 

Petroleum 77.44 76.70 76.83 79.75 77.16 78.83 79.33 78.93 82.92 84.56 79.25 25.1% 

Chemicals 38.05 37.79 37.38 34.79 35.52 37.81 37.88 37.02 35.24 38.06 36.95 11.7% 

Crude 

Materials 54.01 55.47 53.59 50.36 51.38 52.81 55.85 51.12 55.49 48.73 52.88 16.7% 

Manufactured 

Goods 24.36 25.93 27.97 20.45 21.02 20.00 22.76 24.40 25.28 20.97 23.31 7.4% 

Farm & Food 

(F&F) 76.22 85.12 82.59 83.28 86.15 78.76 74.15 64.76 66.92 71.16 76.91 24.3% 

Other 2.15 1.35 1.39 1.46 0.89 0.92 1.53 0.72 1.36 1.20 1.30 0.4% 

% F&F 23.5% 25.8% 25.2% 26.3% 27.2% 25.6% 23.7% 21.6% 21.3% 22.8% 24.3% 

Source: Waterborne Commerce Statistics, U.S. Army Corps of Engineers. Totals may not add due to rounding.