IMX Kickoff: R.D. James On Value Of Waterways

Assistant Secretary of the Army-Civil Works R.D. James kicked off the Inland Marine Expo September 29 with a keynote video talk in which he stressed the value to the country of America’s unrivaled inland waterways network and the importance of clearing away regulations and “moving dirt” to restore it.

The speakers and attendees at this year’s Inland Marine Expo, held as a virtual event because of the coronavirus, were welcomed by Nelson Spencer Jr., publisher of The Waterways Journal. The keynote speakers were introduced by Ken Eriksen, senior vice president at IHS Markit and a frequent partner with The Waterways Journal.

Kyle Liske, a senior adviser at the United States Department of Agriculture, spoke after James, substituting for Secretary of Agriculture Sonny Perdue, who was unable to speak as scheduled.

James began by noting his 37 years of service on the Mississippi River Commission, a body chartered by Congress in 1879 with the purpose of improving the condition of the river to control floods, foster navigation and promote commerce. The commission consists of three officers from the Corps of Engineers (one serving as president); one member from the National Oceanic and Atmospheric Administration (formerly the U.S. Coast and Geodetic Survey); and three civilians, two of whom must be civil engineers. James was originally appointed by President Ronald Reagan as a civil engineer civilian member in 1981. In May, James administered the oath of office to the commission’s newest member, his own son, Riley James.

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That background of service on the MRC gave James a deep appreciation of the value of the Mississippi River system to the nation’s economy, he said, especially to farmers. James cited the 2019 study of the inland waterways network commissioned by the U.S. Department of Agriculture’s Agricultural Marketing Service and developed in partnership with IHS Markit, called “The Importance of Inland Waterways to U.S. Agriculture.” U.S. waterways move 60 percent of all grain imports, 18 percent of freight, 22 percent of coal and 22 percent of petroleum and petroleum products, according to the study.

The U.S. has the world’s highest-yielding crops, said James, and its central plains—the world’s richest cropland and the heartland of U.S. corn and soybean production—is overlaid on the world’s largest inland waterway network. This gives U.S. farmers a global competitive advantage.

That advantage is eroding, however. Our lock and dam system is 100 years old and failing. “Can you imagine getting by with 100-year-old trains or a 1930s road network?” James asked. The Corps does its best to maintain the locks and dam system with what it has, but maintenance isn’t enough, he said, adding that older locks with 600-foot chambers need to be upgraded to 1,200-foot chambers.

Moving Dirt With Partners

James warmed to his signature theme of “moving dirt,” meaning getting crucial lock and dam and other waterway infrastructure projects built with minimal delay. This means reducing regulatory obstacles that add delay and cost to projects. As part of his mission to “move dirt,” and in agreement with President Donald J. Trump’s mandate to reduce government regulation generally, James has overseen efforts to move decision-making back to Corps districts and away from headquarters.

When James served on the MRC, he got into the habit of meeting with local partners and developing close relationships with them, he said. When he was named assistant secretary of the Army for civil works by President Trump, he discovered that the desire to consult partners closely didn’t exist to the same degree at all levels of the Corps. He said local partners know best what the need is for a project and should never be overlooked. He closed by saying navigation and flood control go together.

Ag Advantage

After sending Secretary Perdue’s regrets, Liske reiterated how important the Mississippi River is to farmers. The waterways transportation advantage adds between 12 and 15 cents of “basis” or price advantage per bushel to farmers exporting corn and soybeans, he said.

The 2019 study painted three funding scenarios for the waterways: continuing with present levels of funding, increasing investment to “efficient” levels” or reducing investment by 1 percent. “Not surprisingly, increased investment led to increases in sales, employment and gross domestic product,” Liske said. In the increased investment scenario, an additional investment in locks and dams of $6.3 billion led to economic benefits totaling $72 billion. He quoted Perdue as saying, “I’d make that 11-to-1 investment all day long.”

But recent investments in transportation infrastructure in Brazil, which has emerged as the world’s leading supplier of soybeans to China, have threatened the U.S.’s transportation advantage. Brazil’s water transportation costs are falling, Liske said, while those in the United States are rising.