Stakeholders Gather In Nola For Inland Waterways Conference

Waterway stakeholders converged on the historic French Quarter in New Orleans, La., March 20–21 for the annual Inland Waterways Conference, which focused on topics ranging from winter/spring high water, economic factors affecting the maritime industry, the current regulatory climate and the challenges to waterway operations and maintenance.

The conference opened with comments and discussion from Rear Adm. Paul Thomas, commander of the U.S. Coast Guard’s Eighth Coast Guard District; Maj. Gen. Richard Kaiser, commander of the U.S. Army Corps of Engineers’ Mississippi Valley Division and president of the Mississippi River Commission; Florida Marine Transporters Director Norm Antrainer; and Gus Gaspardo, president of the Passenger Vessel Association and owner of Padelford Packet Company.

Antrainer offered a poignant survey of the economic, environmental and regulatory factors that have come together in recent years to pose serious challenges to the towboat and barge industry. He admitted the maritime industry has been and always will be defined by ups and downs in the market, and yet he remained hopeful for the future, given current trends in oil prices. Antrainer even offered tempered praise of the Trump administration, while also expressing angst with the new infrastructure proposal.

“The new administration has given us certain tax breaks, which is good, but countered with a plan to improve our failing infrastructure by increasing the user tax—go figure,” Antrainer said.
Ultimately, though, Antrainer said he’s confident in the towboat and barge industry’s resilience, no matter what challenges arise.

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“The inland towing industry will be a survivor,” Antrainer said. “We’re the safest, most economical and lowest emitter of greenhouse gases of any [mode of transportation] in the world, bar none.

“Our country needs us to move their gasoline,” he added. “Farmers need us to move their crops. Manufacturers need us to move their chemicals, steel and stock. We’re a vital part of the United States. We are towboaters.”

One member of the audience asked Thomas to address the safety concerns related to recreational boaters—including tubers and paddleboarders—and commercial vessels on the nation’s waterways. Recreational boaters account for a significant percentage of lockages on many waterways, and encounters between recreational boats and towing vessels are always a concern. Thomas acknowledged the issue and suggested it’s mainly a state and local affair best solved by education.

“If you think the answer is another federal regulation—it’s not,” Thomas said.

Another attendee asked Kaiser to address the importance of good communication between industry representatives and the Corps, especially during and after flood events, as it relates to critical infrastructure and channel needs on the waterways.

“We need to hear your concerns and how we can work together,” Kaiser said.

Kaiser said he was recently in Morgan City, La., which like many other smaller port communities, constantly has to advocate for adequate dredging funds.
“We have to have those dialogues,” Kaiser said. “And I will say, when we’ve had these dialogues, it’s made a positive change, so communication is very, very important.”

Potential Tariff Impact
Stephen Barnes, director of the Economics & Policy Research Group at Louisiana State University, surveyed the broader economic climate and how steel and aluminum tariffs could affect the nation’s supply chain. The Trump administration has of late moved forward with a proposal to place a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum.
Barnes took a very negative stance on the tariffs.

“Obviously, this is good news for steel and aluminum producers, so we can all be excited about that,” Barnes said. “And this comes as no surprise. This is the whole purpose of these tariffs. But the unfortunate thing is, it’s a bad thing for everyone else. And there’s a lot of us when we talk about ‘everyone else.’”

Barnes said “everyone else” includes users of steel and aluminum, makers of intermediate goods and consumers. He also highlighted the threat of trade retaliation from countries subject to the tariffs, particularly China. Barnes pointed out that, while imported steel and aluminum represents about $50 billion annually, the United States exports, for instance, around $70 billion worth of agriculture products each year. China is the United States’ No. 1 customer for agricultural exports.

At the time, Barnes said he hoped the threat of tariffs was just posturing on the part of the Trump administration.

“I do think there’s a lot of political bravado here, and it does remain to be seen how seriously this is implemented,” he said.

Kaiser spoke up from the audience to ask the real likelihood of China placing a tariff on food items.

“The first thing that struck me is, ‘People [have] got to eat,’” Kaiser said. “So the question I have is, Would people retaliate against agriculture as a commodity? If not, what other goods do we put out that may be more important for them to target?”

Barnes said, while on the one hand China might be reluctant to attack U.S. agricultural products in a trade war, the fact remains there are other sources of food products in the world besides the United States.

And in fact, in the days since the Inland Waterways Conference, China has itemized many meat and agricultural commodities it plans to target in retaliation for the tariffs the United States has placed on steel and aluminum imports.

Focus On Funding
Patrick Chambers, operations division deputy chief for the Corps’ Mississippi Valley Division, offered an extended discussion on the current state of waterway infrastructure, which in a 2013 infrastructure study received a D-plus rating. That study, now five years old, said waterways needed a $3.6 trillion investment by 2020. And while funding has surged of late, especially since the Water Resources Reform and Development Act of 2014, it’s far below what’s needed to tackle the $3.6 trillion to-do list. And under the Corps’ risk-based funding structure, funds intended for an improvement project are often diverted to address a failure or emergency repair.

“To me, it’s a vicious cycle,” Chambers said.

Kaiser compared it to the task of a homeowner replacing his or her roof.

“You tell me, how long would it take to replace your roof if you only got one shingle per year?” Kaiser said. “Funding is the key.”

And while the Corps can do its best as an organization to address critical needs and maintain waterways and flood control systems around the nation, Kaiser said the most powerful voice belongs to citizens and maritime industry leaders lobbying Congress and the Office of Management and Budget.

“It’s your voice that matters, not mine,” Kaiser said.

Preparing For Subchapter M
With the advent of Subchapter M just months away, the Inland Waterways Conference offered a pair of sessions focused on compliance and the auditing and inspection task to come. One panel featured towing company executives explaining why they opted for the Coast Guard inspection option or the towing safety management system/third-party organization option. Later, a panel of auditors discussed audit focus items and issues like whether two third-party organizations can provide different answers to the same policy question and both be right. (The answer was yes.)

Throughout, despite the regulation and numerous policy statements, the discussions often centered on the persistent unknowns of implementation.

“Like you, we’re bracing for the unknown,” said Capt. Wayne Arguin, commander of Coast Guard Sector New Orleans.