The inland waterway system is a vital part of the nation’s multi-modal freight network. Although less visible than other modes, inland waterways allow shippers to transport bulk commodities in a relatively cheap and environmentally-friendly method. To ensure this transportation mode remains a feasible option and accommodates growth, it must continue to be safe, efficient, and functional. This synthesis provides comprehensive perspective on the financial prospects of the inland waterways system. It analyzes current funding levels, along with proposed funding changes and reforms.

Financial support for the inland waterways system comes from the Inland Waterways Trust Fund (IWTF). Historical data gathered provides evidence that the IWTF resources have rapidly declined in recent years, limiting the number of infrastructure projects that can be undertaken. Some of this is can be attributed to the lack of a fuel tax increase since 1995. The fuel tax serves as the primary revenue source for the IWTF. The purchasing power of each dollar is therefore eroded due to the increase of construction costs, coupled with the tax revenue not increasing.In order to reinforce the IWTF and deal with a mounting project backlog, several funding reforms have been proposed in addition to changes in project delivery and prioritization. Many reforms include raising the fuel tax and changing the current cost share structure. Other proposals lay out different options, such as tolling locks and dams or instituting license fees.In order to reverse the decline of the IWTF, it appears that substantive changes may be required.

The past and current state of the system also provides insight as to how previous investment levels have impacted reliability.Measures of lock performance, such as the number of outages (both scheduled and unscheduled) and the duration of lock outages, are used to assess system dependability. These reveal that in recent years there has been an increase in outages and outage durations. Possible factors include a reduction in funding for construction and maintenance projects, which compounds the increasing infrastructure age issue.Unexpected closures impact shippers by causing unplanned delays. These delays increase costs of inland waterway shipments by idling freight and reducing reliability.In turn, reduced system reliability may prompt modal shifts as freight shippers seek more consistent modes of transport.

This synthesis provides valuable information for stakeholders and policymakers regarding current funding levels and investments in the inland waterway system.The initial evidence in this report shows that declining funding levels, coupled with aging locks and dams, are likely contributing to increases in lock outages.If such issues are to be rectified, the reforms detailed here provide a starting point for changing the current funding regime.

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© 2014 University of Kentucky, Kentucky Transportation Center

Information may not be used, reproduced, or republished without our written consent.

Prepared for: Multimodal Transportation & Infrastructure Consortium by the Kentucky Transportation Center

The contents of this report reflect the views of the authors, who are responsible for the facts and the accuracy of the information presented herein. This document is disseminated under the sponsorship of the U.S. Department of Transportation’s University Transportation Centers Program, in the interest of information exchange. The U.S. Government assumes no liability for the contents or use thereof.