National Waterways Foundation Commissioned-Study Examines
Economic Impact of Increased Investment in Inland Waterways System
National Waterways Foundation Release
26 January 2015
Washington, DC – The National Waterways Foundation (NWF) has
commissioned and released a two-year, ground-breaking study by the
University of Tennessee and the University of Kentucky, “Inland
Navigation in the United States: An Evaluation of Economic Impacts
and the Potential Effects of Infrastructure Investment” (November
2014). The study examines the waterways’ national economic
return on investment and the need for and benefits of an
accelerated program of waterways system improvements that sustain
and create American jobs.
The study evaluates the inland navigation system as it is
currently funded and configured, and as it might be through
renewed infrastructure investment. The study begins with a basic
analytical framework examining navigation’s role as a productive
input in various industrial processes and reflects actual,
real-world economic interactions and consequences if the system
were to suddenly shut down and then if proper infrastructure
investments were made.
The study found:
The United States stands at the brink of a watershed era where
transportation planning tools will be even more important. For
example, as a direct result of large and unforeseen increases in
available and affordable domestic energy resources and other areas
of opportunity, there is a growing sense that the U.S. economy can
capitalize on increased productivity. But realizing these
opportunities requires the nation’s transportation sector to adapt
- Investment in badly needed modernization improvements to
our inland waterways’ aging lock and dam infrastructure could
lead to 350,000 job-years of new, full-time employment with a
present value of more than $14 billion over the 10-year period
examined in the study.
- If we invest in our inland waterways, we can sustain
541,000 jobs and more than $1 billion in new job income
- If 21 priority navigation projects could be completed at
an estimated cost of $5.8 billion total, the 20-year sum of
related economic output activity would exceed $82 billion.
- Although not likely in the current fiscal environment, if
the completion of those projects were accelerated to 10 years,
between 10,000 and 15,000 new jobs with an annual economic
value of $800 million could become available. In the second
decade, the completed navigation improvements could result in
10,000 new jobs throughout the economy each year with a total
income of $740 million in the first year to more than $1
billion by year-20.
- New freight capacity could result in robust economic
impact in the creation of some 12,000 new full-time, permanent
jobs each year with annual incomes in excess of $500 million.
- If commercial shipping on our waterways were to cease
entirely, there would be immediate, devastating economic
consequences with a total 10-year loss of $1.063 trillion,
when discounted to reflect that some of the loss is still
several years away. Shipping costs would increase by
$12.5 billion, which would ultimately be passed onto American
consumers in the form of higher costs for goods. The
Gulf Coast and Lower Mississippi River regions would be
hardest hit by a potential complete waterways system
closure. High-value petrochemical products dominate
industrial production in that region and alternative
transportation in the region is limited.
- With the loss of waterways’ shipping, an estimated 75% of
freight would be diverted to truck and/or rail, and there
would be a 25% loss due to decreased production. Given that
the capacity of just one standard river tow (15 barges) equals
1,050 trucks or 216 rail cars and six locomotives, the nation
would face certain traffic gridlock.
- For more than half of Americans, there would be a 7.8%
spike in the price of electricity, triple the average annual
increase, if the waterways were not available to shippers.
- While Members of Congress debate the many needs of the
nation with constrained funding, our inland waterways
transportation system must not be overlooked. This study
underscores the need for investment spending that directly
results in efficiency and productivity gains across sectors,
sustainment and creation of jobs, and curbs on traffic
congestion from truck and rail.
“The research in this important study sponsored by the National
Waterways Foundation is an effort to help develop a more effective
framework for policy-makers to understand and measure the current
navigation system and look to future possibilities and job
creation if proper infrastructure investments are made,” said Mark
Knoy, National Waterways Foundation Chairman.