Kentucky Freight Study Designed To Drive Port Growth, Investment

With coal shipments expected to decrease, the Kentucky Transportation Cabinet is studying how the state’s public riverports can capture new markets and  boost the state’s economic development.

Those efforts were detailed in an Inland Marine Expo session titled “Kentucky Riverports: Developments and Its Growing Importance to the Inland Marine Industry.” IMX 2021 was held March 24-26 at the Dome at America’s Center in St. Louis, Mo. It is presented annually by The Waterways Journal.

Ken Eriksen, senior vice president and head of client advisory and development, energy and transportation and policy for IHS Markit, moderated the panel discussion, with virtual panelists Jeremy Edgeworth, Chandler Duncan and Paul Bingham joining in to discuss the ongoing Kentucky Riverports, Highway and Rail Freight Study.

Edgeworth, freight, rail and waterways coordinator at the Kentucky Transportation Cabinet’s Division of Planning, said the state had last studied its riverports in 2008, collecting an in-depth inventory of the public riverport authorities and their infrastructure and providing some general policy recommendations. Much of that information was dated, and it wasn’t sufficient for economic development needs, he said. In a January 2018 speech, the governor at the time not only touted Kentucky’s access to the inland waterway system but also challenged those in attendance to better utilize it to spur economic growth and development. The Kentucky Association of Riverports took up the challenge, drafting the framework for a new study and approaching the leadership of the transportation and economic development cabinets, which agreed the study was needed.

“The study will provide an in-depth analysis of the freight moving out of, into and through Kentucky,” Edgeworth said. “This is looking at freight on all modes—road, rail and river—and then really diving into the commodities that are currently moving through Kentucky and understanding the existing role of freight in Kentucky’s economy, what are the opportunities for growth and expansion, what are the growth opportunities for each public riverport, our seven active riverports and our four developing ports, and then what are the commodities they need to be pursuing, what infrastructure is needed at each port to pursue these new commodities.”

The guidance is individualized because while some of the ports have well-developed master plans, some are part-time, one-man operations, he said.

The end result of the study will include a marketing toolkit for each port along with state economic development leaders having more complete and updated information about the capabilities of each and a plan for investment with a goal toward attracting potential new customers based on major divertible commodities identified in each port’s market area.

“Kentucky’s current state investment in our public riverports is very limited compared to many of our neighboring states, so we wanted to make sure that the investments that are made are on point and as strategic as possible,” Edgeworth said.

Chandler Duncan, project lead with Metro Analytics, the study’s contractor, said the study began with understanding the markets at play and how those might change looking as far out as 2045. As part of that, study organizers conducted site visits at the ports and met with their leaders. They are also holding a series of three online summits, two of which have already taken place.

“How can we relate investments in the river system statewide and regional economic development goals and opportunities?” Duncan asked.

He called the study an example of shining an overhead light on a situation instead of looking at it with only a flashlight.

Changing Markets

It became clear that the markets ports traditionally serve are changing, Eriksen said.

Some of the developing ports were previously more active “but certain changes in commodity flows and certain economic realities changed their footprint,” he said.

Kentucky was investing in its ports with roughly $500,000 in annual grants that required a partial local match. Although that may seem like a lot, riverports’ needs were changing, and that low level of funding greatly limited riverports as far as what types of projects they could ask for help in funding.

Paul Bingham, director of IHS Markit, said the study showed that coal as a leading market is fading away, which will be a heavy hit to waterborne and rail traffic especially, even while substantial growth is expected in trucking. For ports to pick up new customers, it will be necessary for them to divert some products that are currently being trucked, he said. He identified opportunities for growth in agriculture production, plastics and automotive parts and components as well as the potential for container-on-barge or via purpose-built vessels running on natural gas.

“If the supply chains are set up so they can take advantage of lower shipping costs and still meet delivery times, other modes of transportation have potential to carry those,” he said of those products currently being trucked.

Eriksen noted that Kentucky is within a day’s drive of two-thirds of the U.S. population, making it well positioned for growth.

“There’s potential for some long-haul diversion that extends quite significantly if we look at the extent of the inland waterway toward the south,” Bingham said.

Additionally, Bingham said, companies are looking for ways to reduce their carbon footprint, and the barge industry has an opportunity to tout its benefits as in many cases a better option both in terms of cost efficiency and environmental friendliness.