Waterborne Competitiveness Study Analyzes Global River Systems

Research comparing the governance, investment and risk management of six rivers across the globe to the U.S. inland waterway system may offer some strategies for future U.S. policy and investment.

Two of the authors of the recent study “Waterborne Competitiveness: U.S. and Foreign Investments in Inland Waterways” presented key findings in a webinar hosted by the Eno Center for Transportation last month.

The study was written by representatives from Eno along with the Center For International Trade and Transportation at California State University–Long Beach. The research was supported through a contribution from the National Waterways Foundation.

The research included an in-depth case study of the Amazon and  Hidrovia Paraguay-Parana in South America, the Rhine and Danube in Europe and the Yangtze and Mekong in Asia.

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Tom O’Brien, executive director at the Center for International Trade and Transportation, led the presentation, supplemented by Paul Lewis, policy director for Eno. Katie Donahue, policy analyst for Eno, introduced the speakers and took questions from those in attendance online.

South America

O’Brien began by discussing the Amazon River, a naturally navigable river that is 4,250 miles long with 1,100 tributaries. There are no locks on the main stem but there are on tributaries.

“It’s also—and maybe this was one of the surprises to us—largely underutilized as a trade corridor for some of Brazil’s major exports, which include soy and ethanol,” O’Brien said. “Of the 86 million tons of soy that are exported from Brazil, only 12 are currently moved on the Amazon, so there is potential growth there.”

The river is largely contained within Brazil, with little coordination with other countries, he said. That has led to a large number of plans and a complex planning environment with little cooperative planning among various agencies.

Although Brazilian authorities prohibit foreign ownership, O’Brien noted that there have been private concessions land-side that allow developers and movers of key commodities to influence how the waterway is used. That includes both the Chinese and private American developers, according to the study.

The other major river used for trade on the continent is the Hidrovia Paraguay-Parana (HPP), which is 2,200 miles long with 54 dams on the Parana section, which feeds into the Atlantic Ocean.

The river has the potential for increased internal and overseas commerce, with a density of manufacturing operations existing along certain segments. For landlocked countries, including Bolivia, it also is the main access to export markets.

Challenges include a complex, five-nation governance that requires high levels of agreement that rarely exist, however, especially in terms of cabotage, O’Brien said. For example, Bolivia and Brazil have had disputes over access to a canal that runs through Brazil and links Bolivia to Paraguay.

Lewis added that projects on both South American waterways sometimes have “huge implications” for the populations living along the river as well as the environment and natural ecology of the river systems.


The Rhine River in Europe is connected to the Danube via a canal, but as the rivers serve two different purposes within Europe, the study authors separated them as two different case studies.

“The Rhine is vitally important, despite its limited size,” O’Brien said. “There are 500 miles of navigable water, but it does carry two-thirds of all the goods transported by European waterways. It serves a vital connection between coastal ports, for example those in Belgium to interior markets.”

Twelve countries are involved in the Rhine and Danube dam and locks system, where there is a high-level, sophisticated yet complex set of coordinating functions, he said. He noted that there is European level planning for new development, for maintenance and operations and for future needs while allowing for national-based plans and programs to take place.

Additionally, inland waterway transport in Europe has been incentivized because Europe largely excludes waterborne transport from its taxation program. An energy tax directive has looked at differential tax rates for energy products that are in use in different modes of transportation for intra-EU transportation. Diesel use on the Rhine is exempt from taxes, for example.

O’Brien noted that environmental issues on the Rhine include varying water levels that appear to be getting more acute annually as well as demand for diversion of water resources for drinking water and other uses.

The second European river studied, the Danube, has 1,498 navigable miles but excessive variations in water levels, O’Brien said. While it has comparative advantages for bulk transport, “There’s no real container transport of any kind, and so it really depends upon the land-side connectors,” O’Brien said. 

He added that the Danube needs more coordination for planning on the land-side because the road and rail networks are not always as fully developed as compared to the Rhine.

One factor highlighted in risk assessment was that the Danube is geographically close to the war in Ukraine. The fluctuation in water levels on both the Rhine and Danube is also impacting the ability to plan and the number of days available to transport on the system, he said.


The Yangtze River has 1,700 navigable miles with large freight volumes despite varying degrees of coordination across the different levels of the Chinese government, from national to provincial, municipal and port levels. Although fully contained in China, the complex nature of planning across these levels can complicate use and planning for future use of the system, O’Brien said.

However, China is making investments in the system.

“China is investing significantly in land-side connections to improve links between the waterway systems to the road and the rail networks,” O’Brien said.

He added that the system has significant environmental threats, including the impact manufacturing development along the river is having on local communities.

The Mekong River is dominated regionally by China, but, “The finding is that in terms of trade it may be the least significant of all the rivers that we studied,” O’Brien said.

That is, in part, because the upper portions of the river, in China, include multiple, non-navigable hydroelectric dams. Major trade activity is therefore confined to the lower portions of the river system in Thailand and Vietnam, but they are still impacted by the damming upriver. Additionally, while trade in the southern reaches of the river finds its outlet at the ocean, it is also hampered by seasonal flood pulses that impact the predictability of the flow.

Key Findings Across Case Studies

A major finding of the study is that governance is key to developing a river for freight movement, O’Brien said.

“The governance model really matters, whether it’s across a single country or across the five countries of the HPP or the 12 in Europe,” he said. “The planning context matters in terms of how you translate planning into money for development, construction and maintenance. Dominant actors can contribute to underinvestment through underdeveloped governing structures, and that is clearly the case with Brazil in the Amazon and also to a certain extent the five countries in the HPP.”

Additionally, O’Brien said, coordination between the inland waterway and port planning is needed but rarely present.

“You can’t look at the inland waterway governance in isolation,” he said. “You have to do it in connection with what happens on the land-side, particularly port planning. If you don’t have coordinated port planning and regional development, you may get an over-concentration of port facilities that actually can serve to hinder trade. There is some indication that that’s the case along the Yangtze.”

Additionally, he said, private investors sometimes build ports “not necessarily to avoid but to work within the restrictions on foreign direct investment or private sector investment in the waterway itself.”

“Commodity-based investments do support the land-side operation, and that drives, in some cases, what happens on the waterway itself,” he said.

Navigation along the studied rivers also competes against other interests.

“Hydroelectric is the one that’s most pronounced, and that was the case in the Mekong,” O’Brien said. “That was the case also in the HPP, where damming for hydroelectric purpose also impedes trade.”

However, he noted, navigation also competes with recreational use on the rivers, irrigation and the provision of drinking water.

Additionally, as seen particularly in Europe, connections to other river ports, deep-water ports and the global trading environment can influence investments, O’Brien said. This is also seen at the Port of Shanghai in China, which supports investments further upstream to support the global, container-based trade that takes place in Shanghai.

Risk factors at all the sites include environmental concerns and variable water levels. Government instability and the role of government in inland waterway and port management is also a potential risk, especially with the Danube flowing through Ukraine, O’Brien said.

“That was on our radar screen from the very beginning, but it’s certainly been more pronounced in our research and analysis since then,” he said.

Lessons And Opportunities For U.S.

The inland waterway system in the United States has some advantages over the others studied, including its size. There are 12,000 navigable miles in the country’s major river systems with 500 million tons of domestic waterway shipping already taking place and 540,000 jobs for which the waterway system is directly responsible. When indirect jobs, including those in construction, maintenance, repair and transportation are considered, that rises to close to 10 million jobs, O’Brien said.

“When you see it in comparison to the size of these other systems, I think you really take away an appreciation for the U.S. inland waterways system and are hopeful that through some increased awareness and perhaps through some injection of funding through the IIJA [Infrastructure Investment and Jobs Act] that it can be even more robust,” he said.

Additionally, the entire system is contained within the borders of the United States and administrated by the U.S. Army Corps of Engineers and the U.S. Coast Guard, rather than by multiple nations or levels of government. The system’s stability is an advantage to be promoted, he said.

Lessons To Be Learned

However, there are lessons to be learned.

“We also take away from the case studies that multi-modal, multi-agency planning is complex, but it’s necessary,” O’Brien said. “You need to address the institutional barrier to make the funding flow, to make the planning processes and the responsiveness of those processes to disruptions possible.”

Planning should be more proactive and less reactive, he said, adding that discussions should take place among various stakeholders on an ongoing and recurring basis.

The European model of interagency cooperation could serve as a guide, he said. He noted that Europe provides a large funding structure that benefits planning for its inland waterway system as a whole and seems to be “the healthiest model” with local municipalities also engaged in planning and able to tap into European funding for projects on the Rhine, for example.

Additionally, while the U.S. approach to waterways policy has sometimes tended to be more fragmented by geography or topic, the European model is more inclusive. The U.S. also would benefit from mechanisms and metrics for system performance monitoring being built into multi-year planning and for them to be the same from one state or regional district to another, O’Brien said. He believes that would make it easier to determine system strengths and weaknesses moving forward.

When asked about the fairness of the U.S. navigation industry paying diesel tax for the funding for a significant portion of the major infrastructure and construction projects along the U.S. inland waterway system, Lewis was quick to say that the study did not delve into that area. However, he said, most other countries studied do provide access to their inland waterways for free or for very low costs for users.

A U.S. system risk analysis showed that although infrastructure investment has improved in recent years, “There have been 5,000 hours of lost time due to system closures on the U.S. system between 2015 and 2019,” O’Brien said. “There is a backlog of projects.”

Funding of the U.S. inland waterways system has gotten “a lot better over the past decade or two,” Lewis said.

“The U.S. system is trending in the right direction, and so it’s a matter of making sure we continue that trajectory,” he said.

That is especially important because China, the European Union and Colombia are also investing significantly to upgrade their inland waterway networks, and the U.S. must do the same to remain competitive, the study concluded.

Still, Lewis said, the United States has relative funding stability compared to some other countries where financial crises mean plans may have been drawn up but never put in place.

O’Brien agreed, noting that the United States is not alone in needing funding for waterways infrastructure. Other countries studied require investment in infrastructure that can help manage floodwaters, in particular, he said.

Lack Of Dredging

Lack of dredging is also an issue with some of the rivers studied.

“Lack of investment in the HPP in South America and [lack of] basic lock maintenance make it unattractive for use even though it could be moving a lot more goods at a lot lower cost,” O’Brien said.

When asked about what kinds of investments could prompt intermodal cargo to shift to the U.S. waterway system, O’Brien said, “I think making the system work for what it already moves is maybe the best place to start.”

While Lewis noted two container-on-barge programs subsidized by the federal government—on the James River between Norfolk and Richmond, Va., and between Memphis and New Orleans on the Mississippi River—he noted that it would be difficult for the U.S. to match the success of container shipping programs in Europe as the Rhine River connects the Port of Rotterdam to major cities that are close by, and the United States doesn’t have that. 

“If we work to make the system reliable and dependable and something that shippers want to use and private companies want to invest in, then if it makes economic sense, then they will invest in those facilities, but beyond what we have right now, the economics might not pan out,” Lewis said.

O’Brien agreed, adding that factors including fuel prices that may be market-driven and not policy-driven could create an environment where a shift to waterways transport is possible.

As for how much the IIJA can do to bring the U.S. system into a state of good repair, Lewis said the maintenance and operation of the system must be a long-term goal and is not accomplished by a one-time funding injection.

“What we can’t lose sight of is this is a capital investment,” he said. “We have to make sure we do our due diligence in the long run to make sure we have an asset management plan that’s well-executed and an operations plan that emphasizes reliability.”

Finally, O’Brien said the timing of the study was fortuitous. 

“This is a great time to be studying this because inland waterway transport in the U.S. can certainly benefit from the injection of potential resources from the IIJA and the increased awareness of supply chains. People are aware of the importance of trade and making sure everything gets to us, and the U.S. inland waterways system should definitely be part of that conversation.”