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Cash Market Moves             06/14 12:35

   USACE Continues Ongoing Repairs, Maintenance on Aging Locks and Dams

   As the government works on a new infrastructure bill, the U.S. Army Corps of 
Engineers continues to repair and maintain the aging locks and dams on the U.S. 
river system.

Mary Kennedy
DTN Basis Analyst

   The American Society of Civil Engineers' 2021 infrastructure report card 
released in March graded the nation's inland navigation system a "D-plus." That 
grade was a slight improvement from the prior "D" with the 2021 higher grade 
reflecting the "reversal of chronic under-investment in the inland waterways, 
more purposeful and efficient planning by the U.S. Army Corps of Engineers, the 
2014 increase in the diesel fuel tax, and higher operations and maintenance 
funding that has resulted in a reduction of unscheduled lock outages," said 
ASCE.

   The ASCE report said the waterway infrastructure "includes locks and dams as 
well as navigation channels" and added that shipping delays cost up to $739 per 
hour for an average tow within the United States.

   President Joe Biden's infrastructure plan would dedicate $17 billion to 
improve waterways and ports. A Senate Republican counteroffer also proposes 
spending billions to upgrade waterways. Efforts to advance legislation that 
both parties can agree on continues in Washington. In the meantime, the Corps 
continues to repair and maintain the locks and dams on the U.S. river system, 
and in some cases, those repairs are a temporary fix to keep them operating 
safely.

   Patrick Moes, U.S. Army Corps of Engineers, St. Paul District, in his April 
2021 story "A Winter to Remember: Corps of Engineers continues annual winter 
maintenance fight to preserve aging infrastructure" noted that, according to 
the Waterways Council Inc. 2020 annual report, approximately 9,700 tows with 
55,000 barges were delayed by an average of 12.23 hours across the entire 
inland navigation system in 2020. The delays resulted in an estimated cost to 
the economy of nearly $84 million. By comparison, unprecedented high water 
nationwide in 2019 delayed more than 18,000 tows with more than 60,000 barges. 
The delays resulted in an estimated economic impact of nearly $166 million, 
according to the report.

   While delays can be costly, the inland navigation system is still a 
reliable, cost-effective mode of transportation that is also the safest, most 
fuel-efficient and most environmentally friendly. Shipping bulk commodities 
such as cement, coal, fertilizer, soybeans and corn on the Upper Mississippi 
River is a simple decision for many producers -- it saves money, Moes noted.

   In Minnesota, corn production is credited with contributing $160 million in 
economic output, according to a 2019 U.S. Department of Agriculture report 
titled "The Importance of Inland Waterways to U.S. Agriculture." The analysis 
found that increased investment in the inland waterways system would allow for 
the transportation of increased volumes of commodities with farm products 
growing from 14% of commodity volumes on the system in 2016 to 25% by 2029 and 
29% by 2045. 
(https://www.ams.usda.gov/services/transportation-analysis/inland-waterways-repo
rt)

   Bryan Peterson, St. Paul District navigation business line manager, said 
agriculture producers save around $1 per bushel when shipping their corn and 
soybeans via the river compared to other transportation modes such as trains or 
trucks. He added that shippers saved around $400 million in 2020 just within 
the St. Paul District. According to the USDA report, it's estimated that farm 
products moved via barge save farmers anywhere between $7 billion and $9 
billion annually. This includes commodities shipped on the Upper Mississippi 
River.

   "Waterways infrastructure continues to provide economic savings as well as 
security to the Upper Midwest but requires additional maintenance to ensure it 
continues performing as it was designed in the 1930s," said Peterson. 
Recognizing the importance of continued maintenance and eyeing an opportunity 
to fight back against Mother Nature, Peterson said Corps staff and contractors 
up and down the Upper Mississippi River galvanized together this past winter to 
complete more than a dozen major maintenance projects on the locks and dams. He 
said he is proud that the team worked tirelessly to get the projects finished 
in time for the start of the 2021 Upper Mississippi River navigation season.

   "The repairs varied in size and scope," said Peterson. Moes noted that, in 
the St. Paul District, Corps staff focused their efforts on replacing miter 
gate anchorages at Lock and Dam 2 near Hastings, Minnesota; straightening miter 
gates at Lock and Dam 3 near Red Wing, Minnesota; dewatering Lock and Dam 4 
near Alma, Wisconsin, for major maintenance repairs that occur approximately 
every 20 years; and upgrading tow rails at Lock and Dam 5 near Minnesota City, 
Minnesota, and Lock and Dam 5A, near Fountain City, Wisconsin. The tow rail 
upgrades assist upbound tows to safely maneuver through the lock.

   Despite the many hours worked and repairs completed this past winter, 
Peterson said he knows the job is far from complete, with more work to be done 
to sustain the reliable system our partners depend upon. "We will continue to 
address the highest priority projects within the Mississippi Valley Division 
through the prioritization of maintenance process to assure the limited funding 
goes toward the projects that represent the highest risk to the system," he 
said.

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

   Follow her on Twitter @MaryCKenn




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