US Port and inland waterways modernization

Abstract

US Congress directed the USACE Institute for Water Resources to submit to the Senate and House committees on appropriations a “report on how the Congress should address the critical need for additional port and inland waterways modernization to accommodate post-Panamax vessels.” This report fulfills that request. This report identifies capacity maintenance and expansion issues associated with the deployment of post-Panamax vessels to trade routes serving U.S. ports. This identification has been accomplished through an evaluation of the future demand for capacity in terms of freight forecasts and vessel size expectations and an evaluation of the current capacity of the Nation’s inland waterways and coastal ports. Despite the uncertainty in market responses to the deployment of post-Panamax vessels and the expansion of the Panama Canal, individual investment opportunities for port expansion can be identified using established decision making under uncertainty techniques. Adaptive management techniques can also be used to address uncertainty issues. Preliminary estimates indicate the total investment opportunities may be in the $3-$5 billion range. Environmental mitigation costs associated with port expansion can be significant and will play an important role in investment decisions. A notional list of financing options is presented to initiate discussion of possible paths to meet this challenge—it is anticipated that a variety of options may be desirable, and in all cases individual project characteristics, including its economic merits, would need to be considered in selecting the optimal financing mechanisms.