Lockage Fee Issue Has Its Contradictions

The Waterways Journal - Editorial
13 July 2009

The lockage fee battle in progress had its beginning at least three decades ago, possibly bordering on four. President Obama’s budget proposal for 2010 includes lockage fees but no details. The fees would replace the current fuel tax, which directs funds to the coffers of the Inland Waterways Trust Fund, presently hurting for money.

There is underway an industry initiative to develop a new Capital Projects Business Model for the nation’s waterways infrastructure. The goal is to have the model ready by the end of the year (see WJ, July 6). The funding mechanism would be in lieu of lockage fees. The model, says The American Waterways Operators, “is a comprehensive, consensus-based capital investment program that will ensure that resources and processes are in place to achieve a safe, reliable, cost-effective, and environmentally sustainable inland marine transportation system, along with the necessary funding stream.”

According to Cornel J. Martin, president and chief executive officer of Waterways Council Inc. (WCI), industry and government negotiators would be looking at “…a multitude of options including infrastructure needs, bonding and fuel tax. We will look at all the options and all the proposals that might come up.” None, however, will include lockage fees, he said. Industry is working with the U.S. Army Corps of Engineers on this “white-paper process.” Ultimately it will go to Congress for consideration in the development of the 2010 Water Resources Development Act.

The “contradictions” in our headline involve the government’s role. The government says it wants to reduce carbon footprints. Barge transportation has the smallest and is more environmentally friendly than the railroad and trucking industries. As Martin points out, for government to propose lockage fees “at a time when this administration is calling upon our citizens to be more energy-efficient and environmentally responsible, seems grossly out of step.” Lockage fees, industry believes, will drive shippers away from the waterways, resulting in expansion of modes that produce the most pollution. Such fees would penalize segments of the waterways where there is more infrastructure.

It is the volume of product moved, not engine quality, that gives the towing industry the edge environmentally. One 15-barge tow can carry the equivalent of 2.16 one-hundred-car unit trains or the same product amount as 1,050 large semis. Barge transportation wins hands down by comparison in fuel consumption, required manpower, and pollution. It is safer and helps promote highway safety by reducing truck traffic.

As AWO’s president and chief executive officer Tom Allegretti points out, the fiscal year 2010 budget proposes “to spend wisely” and “reform bad habits.” Calling these “worthy goals,” he said they “should be applied to the broken system that spends Inland Waterways Trust Fund monies ineffectively and results in long project delays.” He said that while it “is the industry’s responsibility to pay its fair share of taxes, it is the government’s responsibility not to waste tax dollars. The lock usage tax proposal doesn’t achieve either goal.”

Fortunately the proposed lock fees have failed to gain support among lawmakers, who apparently understand what the Obama administration does not. Unfortunately, those who keep reintroducing the fee do not understand the towing industry and its challenges, or they have ulterior motives. They seem to ignore how the nation can and does benefit from less costly and more environmentally friendly barge transportation, operating over 12,000 miles of navigable waterways in 38 states just for starters.

The damage to be imposed by an ill-thought-out lockage fee can be widespread as well. The Pacific Northwest Waterways Association (PNWA), which opposes lockage fees, said the administration’s proposal “would likely increase the cost of barging, reducing the competitiveness of many American products and farm goods in international markets.”

On the Columbia-Snake River System, the average four-barge tow currently pays about $1,040 in diesel taxes.

“If the Obama administration proposes the same lockage fee amounts that were unsuccessfully suggested by the Bush administration, a four-barge tow that transits all eight locks [on the system] would incur a fee of $2,560 each way by the year 2011,” PNWA reported.

“New fees should not be assessed until there is consistency in navigation trust funds,” the association believes. It noted that more than $4 billion in Harbor Maintenance Tax revenue has not been spent, while operation and maintenance needs at coastal harbors and deep draft ports are underfunded.

It is crucial that industry and the Corps be allowed to complete their work on the Capital Projects Business Model so it can be presented to Congress at the end of the year. The proposed imposition of a destructive lockage fee simply doesn’t make sense.