Vol I, Issue 8 August 2005

Final Report Issued on Response to Closure of McAlpine Main Lock
The final NETS report on shipper and carrier response to the August 2004 closure of the McAlpine Main Lock has been released. The 1200’ x 110’ main chamber at McAlpine Lock and Dam on the Ohio River was closed for emergency repairs for nearly 11 days. The purpose of the study was to find out what measures were taken by industry, meaning primarily the commodity recipients, to mitigate the effects of the main chamber closure at McAlpine and to estimate the associated costs.

Although the companies pursued multiple courses of action during the closure, the most common approach seemed to be stockpiling of product to wait out the delays and switching product from waterway to rail/truck delivery. Several companies complained that the overland options were too expensive.

Shippers and carriers also were asked to provide estimates of the additional costs they incurred as a result of the closure. Costs to industry were submitted totaling $2.2 million. Delay costs were computed separately using information from the Lock Performance Monitoring System (LPMS) and towing equipment costs. Delay costs were estimated to be about $695,000. The total costs associated with the McAlpine main chamber closure event, therefore, were estimated to be about $2.9 million. It should be noted that this figure reflects only a partial total of actual industry costs because many companies declined to participate in the survey. The report was developed by the Planning Center of Expertise for Inland Navigation, Corps Huntington District.

Fact Sheet | Paper  (pdf, 557 KB)

Study Presented on Tradable Permits for Inland Locks
On August 15, NETS researchers Dr. Charles Plott of the California Institute of Technology and Dr. Joseph Cook of National Economic Research Associates presented their draft project report on "Tradable Permits for Locks on inland Waterways".

The report outlines how a system of tradable permits might work on the inland waterway. The objective of the analysis is to ultimately design a testable mechanism for the inland waterway system that would allow individuals to reduce their overall transportation cost, reduce uncertainty associated with potential delays and place a dollar value on the benefits of reducing the duration of, or even eliminating, critical delays. Specifically, the researchers explore the use of a system of tradable priority permits issued to existing river barge operators in proportion to existing and historical operations on the river.

The August 15th presentation was hosted by the Corps St. Louis District through the NETS program. The meeting facilitated an initial opportunity to obtain input from others, including the barge industry and members of the Upper Mississippi study team group. Meeting attendees included Corps Upper Mississippi River-Illinois River study team members, other Corps personnel and industry trade group representatives.

Fact Sheet | Paper ( pdf, 315 KB) | Presentation  (ppt, 635 KB)

IWR, USDA Sign Memorandum of Understanding
The Institute for Water Resources (IWR) and the U.S. Department of Agriculture's Economic Research Service have signed a Memorandum of Understanding (MOU) to address joint data and economic analysis of issues affecting the movement of agricultural commodities in the U.S. Bruce Lambert, of the NETS team, led the IWR effort to establish the MOU.

The MOU formalizes a collaborative approach to conducting national economic studies through the creation of an Economic Working Group. The group will improve communication between the two agencies regarding areas of economic data analysis related to estimating the relationship between national economic accounting and geographic specific information on production, consumption and transportation activities.

Memorandum of Understanding  html | pdf, 17KB

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Navigation Economic Technologies Program, US Army Corps of Engineers