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Thoughts on Transportation BCA - Linking Water and Roads. Bruce Lambert. Good morning…. Why examine linkages across modes?. More State DOT’s have a navigation role All states have other waterway resource considerations

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why examine linkages across modes
Why examine linkages across modes?
  • More State DOT’s have a navigation role
  • All states have other waterway resource considerations
  • General concerns over future of transportation activities and infrastructure demands
  • Will a national dialogue on all public investment in infrastructure emerge?
how can one look at freight
How Can One Look At Freight?
  • Inventory Functions – physical characteristics, numbers of facilities, labor, equipment
  • Engineering – structural integrity, deterioration
  • Operational Reliability – delay, closures
  • Economical and Financial – Cost/Benefit Analysis, capital and financial resources
  • Traffic volumes and flows
  • Safety and Security
  • Sharing resources with non-freight users and goals
how is navigation a part of freight system
How is Navigation a Part of Freight System?
  • Balance with existing international/ coastal flows
  • Emissions and Environmental accountability
  • Determine ways to encourage private sector investment in equipment, services
  • Recognize regulatory obstacles
  • Federal and State Multiagency planning, data, analysis
u s public port projected capital expenditures by expenditure category for 2007 2011 aapa and marad
U.S. Public Port Projected Capital Expenditures by Expenditure Category for 2007-2011 (AAPA and Marad)
we all recognize
We all recognize…
  • Need better data and analytical tools
  • Need more guidance/support on non-traditional analysis
  • Need to help others see the big picture
federal role in u s waterway transport
Federal Role in U.S. Waterway Transport

National Development


1824 – 1936: Nation Building

Era of primarily Single

Purpose Navigation Projects

1936 – 1986: Era of Economic

Efficiency focusing on

Multi-Purpose Projects

1969 – 1986: Era of Environmental

Enlightenment, focusing on

Multi-Objective Planning

1986 – Present: Beneficiary Pays

Era, evolving towards Integrated

Water Resources Management

1824 – authority to clear snags and make improvements

Canal building era to mid-1800s (states)

Post Civil War – suction dredging, jetties

1885: 1st of 46 locks and dams on Ohio

1930s: Present system of locks constructed on Upper Miss, Illinois, Tennessee, other waterways

1950s: Construction starts on present-day higher lift locks on Ohio

1960s-70s: Navigation improvements to Columbia-Snake, Arkansas River

1985: Tenn-Tom Waterway completed

1994 – Present: Upper Mississippi River & Illinois Waterway Navigation Study

u s army corps of engineers activities water resource missions
U.S. Army Corps of Engineers Activities – Water Resource Missions
  • Primary
    • Navigation
    • Flood Control & Shore Protection
    • Ecosystem Restoration
    • Disaster Response & Recovery
  • Allied Purposes
    • Hydropower
    • Environmental Stewardship
    • Water Supply
    • Recreation
  • Regulatory Programs
maritime infrastructure conditions and concerns
Maritime Infrastructure Conditions and Concerns
  • 25,000 miles of waterway and harbor channels handle 2.4 billion tons of cargo vital to economy
  • Half of locks exceed 50-year design life and lock maintenance downtime has doubled
  • Maintenance backlog continues to increase
  • Single year appropriations
  • Harbor improvements are needed to handle new larger vessels
  • Lock Construction Projects underway continue to be delayed by funding shortfalls
role of dredging in u s
Role of Dredging in U.S.
  • 40,000 km of Waterways
    • 400 Major Ports -130 of 150 Largest Cities
  • Dredged Material Placement
    • Inland waters and Confined Disposal Facilities 110 -180 M m3
    • Ocean waters - 50 M m3
  • Types of Dredging
six step planning process for dredging construction
Six Step Planning Process for Dredging (Construction)
  • Step 1 Problem Perception
    • local community
  • Step 2 Requires for Federal Action
    • local community with Corps
  • Step 3 Study Problem and Report Preparation
    • local community, Corps and Congressional request for Reconnaissance report
  • Step 4 Report Review and Approval
    • Corps District, other Federal Agencies
  • Step 5 Congressional Authorization
    • Corps Headquarters and Congress
  • Step 6 Project Implementation
    • President, Corps HQ and Congress, Local sponsor, WRDA
dredging program in u s navigation channels
Dredging Program in U.S. Navigation Channels
  • When a project completed, federal interest remains into future
  • How financed? Cost sharing is critical
    • Prior to 1986:
      • Federal dredging was funded from general revenues
      • No Cost Sharing
    • After 1986
      • Local sponsors to partially fund some of the project
        • a sign of commitment
        • spread federal dollars across multiple projects.
challenges deep sea navigation and inland waterways
Challenges – Deep Sea Navigation and Inland Waterways
  • All navigable waters in U.S. are responsibility of U.S. Government
    • Once a navigation project is deemed to be a federal responsibility, that responsibility remains with the federal government in perpetuity
    • Excludes private terminals or channels
  • Increased demands for deeper and/or wider channels
  • Dredge management and disposal options
    • 25,000 Miles of Waterways
    • 400 Major Ports
    • $900M Annual Dredging Program
cost justification required for projects
Cost Justification Required For Projects
  • Benefit-Cost Analysis
      • Without Project costs and benefits
      • With Project costs and benefits
    • Life Cycle Analysis
      • 50 years into the future
      • Implies forecasting
    • Risk and Uncertainty
figure 2 7 4 flow chart of deep draft navigation benefit evaluation procedures
Figure 2.7.4 - Flow Chart of Deep Draft - Navigation Benefit Evaluation Procedures

Source: Principles and Guidelines

what is a navigation project














What is a Navigation Project?
  • Channel Cut Schematic
  • Multiuse project evaluation becoming more common
transportation benefits reductions in transportation costs
Transportation Benefits Reductions In Transportation Costs
  • Origin to Destination
    • Waterborne Transport
    • Landside Transport
    • Other ?
  • Cargo Handling, Port or Terminal Throughput, etc.
  • Examples for Reduction in Transportation Costs for Waterborne Transport or Vessel Operations:
    • Increased Waterway Depth
    • Increased Loading for a Given Vessel
    • Increased Vessel Size
    • Reduction Delay for Tidal Windows
    • Combination Thereof
  • Lower unit costs for transportation or delivery…..
basic transportation benefit cost analysis general data requirements
Basic Transportation Benefit - Cost Analysis; General Data Requirements
  • Vessel or Fleet Physical Characteristics
  • Vessel Cargo Traffic & Transit Information
  • Waterway System Physical Specifications & Costs
data requirements vessel or fleet physical characteristics
Data Requirements - Vessel or Fleet Physical Characteristics
  • a.) Vessel Type and Mode of Service (Bulk Carrier; Tanker, etc..)
  • b.) Deadweight (DWT)\GRT\NRT Class
  • c.) Dimensions (LOA, LBP, Breadth, Max. SLLD, Speed, etc.)
  • d.) Relative Capacities (Volumetric vs. Weight, Immersion etc.)
  • e.) Parameters for Management & Operation (Costs, Logistics & scheduling, Underkeel Clearance, etc.)
data requirements vessel cargo transit information
Data Requirements - Vessel Cargo & Transit Information

a.) Type & Mode of Cargo Transport

b.) Port & Facility\Terminal(s) Served

c.) Vessel Cargo Onload\Discharge (Tonnage, TEUs, etc.)

d.) Origin-Destination\Itinerary, Waterborne Transit Distances & Time at Sea or In-Transit; Time In-Port

e.) Parameters for Management & Operation (Costs, Logistics & Scheduling, Underkeel Clearance, etc.)

data file development for u s naval vessels
Data File Development for U.S. Naval Vessels
  • Vessel Draft Clearance Requirements
  • Physical Stationing
  • General Operating Characteristics (?)
  • In cooperation with
    • U.S. NSWC Command
    • U.S. NAVSEA Carderoc
    • U.S. NAFAC
    • U.S. Naval Academy (USNA)
data requirements waterway system specifications costs
Data Requirements - Waterway System Specifications & Costs
  • Estimated Costs of O&M Over Time
    • Periodic vs. Average Annual Equivalent (AAEQ)
  • Incrementally Evaluated According to
    • Navigation Feature, Reach or Channel Segment,
    • Depth (horizontal and vertical dimensions of plan formulation)
deep draft work initiatives under navigation analysis otn nets
Deep-Draft Work Initiatives Under Navigation Analysis (OTN & NETS)
  • Vessel Load Factor Analysis\Variable Immersion
  • Vessel Powering Analysis (Speed and Hydraulic Confinement)
  • Container\Carriage Cost Analysis
  • Automated Worldwide Distance Tables
  • Vessel Fleet & Characteristic Forecasts over corresponding time periods
one framework for waterborne navigation o m assessment
One Framework for Waterborne Navigation O&M Assessment

Vessel Characteristic Data Sources

Lloyd’s Register & Clarkson’s Register U.S. Coast Guard & U.S. MARAD USACE NDC Vessel Owner-Operators

Vessel Fleet Physical Characteristics

Transportation Cost Differentials

Vessel Operational Characteristics by Port; Relative to Cargo Service and Itinerary Served; Subject to (Varying) Waterway Specifications or Limitations (Depths, etc.)

Vessel Transit Cargo Data Sources

USACE NDC U.S. Customs & Bureau of Census Lloyd’s Sea Searcher & Sea Web Trade-Published Shipcards\Schedules Vessel Owner-Operators Port\Terminal Operators

Vessel & Cargo Transit Information

Comparison of Benefits to Costs

(B\C ratios; Incrementalized)

Waterway System Specifications & Costs

Water System Specifications & Costs

USACE – HQUSACE & Districts U.S Coast Guard (ATON) Waterway Users & Non-Federal Sponsors

deep draft navigation analysis ned steps in with statements
Deep Draft Navigation Analysis – NED Steps in With Statements
  • Cost reduction benefits – same commodities, mode, O/D efficiencies.
  • Shift of mode benefits for commodities and O/D
  • Shift in O/D benefits from new O/D or transportation flows
  • New movement benefits - additional movements in a commodity or there are new commodities
  • Induced movement benefits – new flows from lower costs



Year 2000

Year 2020 with

planned projects

constrained calls (thousands)


Year 2020 without

planned projects




Atlantic Coast

Pacific Coast

Gulf Coast

Great Lakes

Constrained Containership Calls by Coastal Region with and without Planned Corps Projects: Year 2000 and 2020

Source: National Dredging Needs Study, USACE

asset management process at usace
Asset Management Process at USACE
  • Districts determine projects based on HQ criteria, mostly Remaining Benefit/Cost Ratios
  • Information supplied to HQ and sorted into various groups based on B/C and other factors
  • Determinations based on actual budgets for upcoming year
asset management initiative
Asset Management Initiative



“Short list”

1000 Coastal Structures

600 Dams

2500 Recreational Areas

250 Locks

75 Hydropower

285000 Tracts of land

12000 Buildings

7 Laboratories


Lifecycle Infrastructure Management:

Campaign Goal 3c- The Right Business Practices

Executive order 13327-

Right-sizing inventory

It's the RIGHT thing to do!

project economic analysis
Project Economic Analysis
  • General Context of Economic Benefits vs. Economic Costs
    • Life-Cycle Evaluation
  • Costs  Relative to Requirements for:
    • Initial Placement or Construction
    • Operations & Maintenance
  • Benefits  Reductions in Transportation Costs
    • (Transportation\Cargo Handling Efficiencies)
life cycle evaluation current corps guidance on navigation projects
Life-Cycle Evaluation – Current Corps Guidance on Navigation Projects
  • Typical Requirements for Study & Analysis of New or Proposed Improvements
  • 50 Years into the Future (Involves Forecasting or Extrapolation of Trends)
  • Constant Price Levels Relative to a Designated Base Year or Period (i.e., Future Valuations Discounted)
the corps is examining performance measures for o m budgeting
The Corps is Examining Performance Measures for O&M Budgeting
  • Previous work on engineering based measures developed and initially deployed
  • Developing new measures use and economic measures to balance issues of scale, geography, and use
  • Seeking comparability with other USACE business lines:
      • Flood Damage Reduction
      • Hydropower
      • Environmental Stewardship (Natural Resources)
      • Recreation
asset management needs to be formulated based on direct questions
Asset Management Needs to be Formulated Based on Direct Questions
  • Can USACE develop a practical & consistent method of answering longstanding question(s) from the Office of Management & Budget (OMB):
    • If USACE were given some specified level of marginal or extra funding could the agency determine which projects would be most appropriate for funding to maximize marginal benefits……….(or alternatively, if the agency were to undergo a reduction in funding could it determine where to impose corresponding reductions in funding to minimize negative impact or “loss” of benefits)……….
    • Could USACE determine what level of maintenance for each project across the navigation program would be applicable to maximize total benefits program-wide………
what are the key accountability elements
What are the Key Accountability Elements?

Assuming request from OMB is feasible:

  • Could supporting methods or systems be developed that are:
    • Analytically Credible
    • Cost Effective & Expeditious (to both develop & maintain)
    • Quantitatively Transparent & Consistent Across Program at the National Level
    • Reasonably Comparable to Efforts Conducted by Skilled Analysts in the Field


  • Could methods of optimization be ultimately applied to
    • Initial Placement or Construction
    • Operations & Maintenance (O&M)
highway asset management
Highway Asset Management
  • Focus – strategic assessment of economic tradeoffs between alternative infrastructure investments
  • Recognizing:
    • Increased demand on system
    • “Mature” network of roads and bridges
    • Increased competition for funding and support
    • Non-traditional players in decision process
    • More focus on maintenance and meeting user expectations
evolution in highway asset management
Evolution in Highway Asset Management
  • Began with engineering criteria
    • Structures were gauged on risk of structural “failure” or condition
    • Decision makers were not financially constrained to make tough “economic” trade-off analysis
  • In 60’s/70s, began linking economic concepts to “optimize” roadway investment
  • Most Asset Management models developed from legacy systems
limitations on applying hers type methodology
Limitations on Applying HERS type methodology
  • Induced Demand in the original design, but no post plan review
  • Background traffic concept different
  • Stronger seasonality changing peak/off peak design considerations
  • Waterway studies are justified on travel savings
  • Network effects stronger
  • No functional class structure in U.S. databases
  • Waterways more prone to discrete changes
  • No national forecasts of water activities
  • Differences of links (highways) vs. Nodes (waterways)
a quick comparison
A Quick Comparison



Study is requested

Network effects are more important

Corps does not routinely study regional issues

Planning has more project elements than in traditional highway studies

Robust Data and Models to capture universe, share among Corps divisions/districts

With a focus on engineering economics, maintain project level information

Limited by Federal Guidance (P&G)

Statewide plan is done to identify needs, not in response to study

Less network effects

Projects are planned and programmed in separate processes

Little data sharing across regions

some cross or corridor modal studies externalities are discussed
Some Cross or Corridor Modal Studies Externalities Are Discussed
  • Black Warrior Tenn-Tom Waterway System
  • Minnesota Bridge Collapse
  • Business Realignment Estimates - FHWA
  • (NCHRP) Report 586: Rail Freight Solutions to Roadway Congestion
  • Lock and Dam Closures
    • Chickamauga Locks
    • Emsworth, Dashields, and Montgomery
  • Marine Highway Program

Potential Marine Highway Services

M-5 (AK)






















MH Corridor

MH Connector

MH Crossing

U.S. Interstate




M-5 (AK)

challenges facing domestic waterway development
Challenges Facing Domestic Waterway Development
  • No clear political voice - ownership
  • “Invisible part” of system
  • Maintenance not properly developed or conducted
  • Geography of decision maker differs
  • Tie to economic growth not understood
challenges facing port development
Challenges Facing Port Development
  • Ports are land development agencies
  • City-Port challenges
  • More considerations for navigation planning
  • Balancing system operations
  • Financing challenges
can we rely upon old approaches to answer new questions
Can we rely upon old approaches to answer new questions?…

How do we move from data into analysis

while providing useful information?

multiport and multimodal analysis must understand and account for
Multiport and Multimodal Analysis Must Understand and Account For:
  • The relationship between Ports
  • The relationship of hinterlands to Port Activities
  • The tradeoff between modes that service Port regions
  • Challenge?
    • Corps Navigation programs becoming increasingly intermodal or have intermodal implications
    • Infrastructure related to freight mobility and economic recognized in current policy discussions (SAEFTEA)
    • Corps has little data on other modes or corridor traffic.
some considerations in developing a multiport model
Some Considerations in Developing a Multiport Model
  • What metrics are consistent with other measures used elsewhere?
  • Can we provide a balanced, accurate picture?
  • Can data be collected consistently over time?
  • Will the selection of performance measures affect the outcome?
  • What combinations of inputs are important to decision making?
  • Can the report be well understood, explainable and defensible?
implementation challenges
Implementation Challenges?
  • Projects have multiple uses
  • No framework to determine and track user expectations
  • Competing and changing commercial interests
  • Determining or guaranteeing a minimum standards
  • Planning and defining current and future needs
  • Data integration – GIS and data warehousing
  • Can process transparency be developed?
  • Education
  • No long term strategic view of transportation needs
  • Public-Private Partnerships?
every agency operates under specific guidance
Every agency operates under specific guidance
  • FHWA – DOT: Map-21
    • Section 1117 and Section 1118
  • Corps: WRDA, P&G
  • States: Federal and State law
corps economic analysis criticized
Corps Economic Analysis Criticized
  • Too Rigid, not flexible to account for other project elements
  • National and no local effects
  • Hard to compare projects on a BC ratio as study objectives, and staff skill, can influence results
some thoughts to broadly improve transportation bc approaches
Some thoughts to broadly improve Transportation BC Approaches
  • A clear federal standard for qualified benefits that focuses exclusively on all efficiency gains, including externalities, and which carefully excludes economic outcomes that simply reflect transfers of economic well-being;
  • A set of analytical methods that are not restricted to transportation activities, but which capture the whole of the supply chain benefits and costs that are attributable to transportation infrastructure improvements;
  • The development of analytical techniques that clearly recognize that capacity deficiencies can actually choke off activity by causing system patrons to abandon planned trips or shipments they would, otherwise undertake;
  • The reconciliation of long-standing differences in the determination of planning horizons, discount rates, and other financial parameters; and
  • A steadfast commitment to the development and ongoing support of the data resources needed to engage in defensible project evaluations.
we want people to make better decisions
We Want People To Make Better Decisions

Everyone is surrounded by reports, studies, consultants, models, but…

problem statement
Problem Statement
  • Can we effectively make statements on broad benefits and externalities related to multimodal projects?
  • Do we have the right tools (data, model, etc.) to develop these tools?
  • Does the right guidance exist to allow for these benefits to be considered?
example investment in corridor a c
Example - Investment In Corridor A-C






Choice - Mode, Route, Operational Patterns, Risk, System Preservation, Pricing, Safety, Environment, Security, National Defense, …

what effects are considered
What Effects Are Considered?
  • First Order Effects - Improved Operations (no change in equipment or routing, but per movement costs decline and\or reliability improves), Noise, Dust
  • Second Order Effects - Change in Routings (realignment of services with existing equipment already in trade),
  • Third Order Effects –
    • Change in the Capacity and Economies or Scale of Services (larger vessels, trucks, etc.)
    • Induced Service or Calls (new equipment enters service),
  • Social Political Effects – non monetary
    • Reduce emissions, environmental restoration, health risks and exposure, risk management/ mitigation, etc.

Degree of Double Counting

some potential effects of inland river closures
Some Potential Effects of Inland River Closures
  • Reliability - Closure Impact Avoidance
  • Plant Closure/Idling
    • Jobs/Earnings
    • Lost Output
  • Water Supply Disruption
    • Industrial/Hydropower
    • Municipal
  • Road Closures
  • Recreational Losses
  • Environmental Losses
    • Greenup 2003 Closure (52 days)- $42 Million
    • Hannibal Locks 2005 Closure (5 days)-$5 Million
    • Lock 27 Closures
      • (August 2007)-$3.9 Million
      • (Oct 2005-Feb 2006)- $2.7 Million
    • McAlpine (August 2004)-$6.3 million
    • 2008 Flooding in Upper Miss?
  • GLOBAL Insight – Upper Miss 90 Day Closure
    • $118.6 million for Waterway freight
    • $482.8 million by rail
    • $1.50 billion by truck
traditional b c ratio formula
Traditional B/C Ratio Formula
  • Shaped by demands to compare projects within a given budget (mode) or geography
  • Differ by agency regarding what can be considered
    • Public Benefits and Costs
    • Externalities – treated and calculated
  • Forecasting and Scenario profiles
    • Project justification/review are coming under criticism
    • Certainty of answers often exceed analytical capacity
    • Network effects not included
    • No pre – post study analysis done on routine basis
  • No analytical framework to do cross modal comparisons with existing traffic models
    • Modal diversion
    • Stepwise facility increases, etc.
  • No clear federal role regarding freight
    • What are first principles?
    • Institutional and Legal Inflexibility
  • State and local role fragmented
    • Staffing, funding constraints, legislative directions
some research ideas
Some Research Ideas?
  • Are some externalities only negative, or can they be viewed in a different context as positive, ie., can rationalize second order benefits in a study?
  • What data, modeling gaps exists?
  • Do we need this approach or some other optimal strategy for network improvements?
  • Do we want some framework for developing a systems perspective for corridor investment?
  • What is the balance between local, regional, national participation in project planning and operations?
  • Spatial markets and realignment in response to transportation projects
  • Externalities related to non-monetary public goals (risks, health, etc.)

Bruce Lambert

Executive Director

Institute for Trade and Transportation Studies