Coal by Barge: The Operational and Policy Outlook

Coal by Barge:

The Operational and Policy Outlook

By Jennifer Carpenter, President and Chief Executive Officer, American Waterways Operators

During the current COVID-19 pandemic, with many Americans struggling economically and concerns about supply chain continuity in the headlines, there has been much reflection on the goods, services, and capabilities that we typically take for granted. Meat processing plant employees, truck drivers, grocery store clerks, and other frontline supply chain workers have been rightfully recognized for their everyday heroism in keeping our nation supplied despite unprecedented challenges.

Less media attention has been shed on the men and women who make up industries that operate further back in that supply chain—but who are equally critical to keeping our country safe, supplied, and secure. This has been true not only for producers of key fuels such as coal, and the companies generating and distributing electricity from it, but also for transporters of other energy sources and vital cargoes that power our nation and drive its economy, in good times and bad.

The tugboat, towboat, and barge industry is a critical component of U.S. supply chains. In a typical year, the industry transports over 760 million tons of commodities on waterways throughout the United States, contributing nearly $34 billion to GDP annually and supporting over 300,000 American jobs. Coal—a fuel that remains fundamental to powering the nation, maintaining American energy independence, and supporting robust international trade— makes up a significant portion of that cargo, with over 100 million tons of coal transported on domestic waters by barge in 2019, both for domestic consumption and for export to foreign markets.

American Waterways Operators (AWO) is proud to be part of the multimodal transportation system that moves this essential energy source. We are also proud of the important benefits that barge transportation offers our coal industry customers.

As PricewaterhouseCoopers (PwC) noted in its 2017 study on the economic contributions of the tugboat, towboat, and barge industry, barge transportation is a highly efficient mode of freight transportation. A single inland dry cargo barge can move as much coal as sixteen railcars; a standard 15-barge tow moves as much coal as 216 railcars.

The PwC study also highlights the extraordinary safety of barge transportation. This record results both from the nature of waterways navigation and its less frequent interaction with the traveling or commuting public and from the industry’s foundational commitment to safety. That commitment underpins the AWO Responsible Carrier Program—a safety management system for tugboat, towboat, and barge companies that provides a framework for continuously improving company safety performance—and is what propelled AWO to work proactively with the U.S. Coast Guard to craft the “Subchapter M” towing vessel safety regulations that took effect in 2018 to raise safety standards across our industry.

To ensure that the barge industry can keep delivering for our coal customers, we need to manage the challenges of today’s complex and dynamic operating environment and advocate for public policy that keeps the maritime supply chain functioning efficiently.

This spring, the Department of Homeland Security identified commercial maritime workers as part of the

country’s essential critical infrastructure workforce. Consistent with that designation and our core commitment to safety, the industry has focused on adapting operational practices to keep mariners and shoreside staff healthy to ensure continuity of operations throughout the COVID-19 pandemic. These efforts have been effective in holding COVID-19 cases in our industry to a minimum while keeping transportation of coal and other vital maritime commerce moving.

On the economic front, while maritime freight transportation did not experience the abrupt drop in demand that COVID-19 inflicted on a number of other industries early on, our industry continues to experience ripple effects from the resulting economic downturn, along with unbudgeted costs of COVID-19 risk mitigation. These challenges are significant, but ours is a resilient industry, with long experience weathering severe flooding, devastating hurricanes, and other crises. Our experience with contingency planning, crisis management, and safety management systems has positioned us well to serve our customers as we navigate the new challenges before us.

Our industry’s ability to move coal and other commodities on America’s waterways also depends on ensuring that the right public policies are in place. First and foremost, the Jones Act—the foundational law of American maritime requiring that cargo moving between two U.S. ports be transported on vessels that are American-built, -owned, and -crewed—must be sustained. The law is critical to America’s economic and national security; without it, foreign companies would be able to insert themselves into the domestic supply chain for American coal, rendering it less stable and our waterways less secure. Ensuring the unhindered flow of maritime commerce is also critical. Marine transportation requires a reliable network of locks and dams, and dredging on rivers and at coastal ports, so that vessels can move cargo safely and efficiently. It is imperative that federal investment in waterways infrastructure keep pace with demand. Keeping maritime commerce moving also requires consistent national standards for vessels in interstate commerce. Our industry’s ability to serve its customers without interruption would have been jeopardized had the federal government not acted quickly to identify maritime workers as part of the essential critical infrastructure workforce so they could freely travel to work as state and local stay-at-home orders proliferated this spring. The same need for uniformity also applies in other issue areas, such as environmental regulation. Consistent national regulations are essential to

effective and efficient functioning of the maritime supply chain.

As our industry continues to prioritize safety while managing the challenges of the COVID-19 pandemic, Congress can reinforce those efforts by: (1) supporting prioritized access to COVID-19 testing for mariners as essential critical infrastructure employees, and (2) enacting temporary, targeted liability protections for maritime employers who make good-faith efforts to abide by applicable public health guidelines in working to protect their employees from exposure to COVID-19—while preserving the availability of legal remedies against employers who engage in reckless or willful misconduct.

Coal remains a vital component of the American and global energy markets, and the tugboat, towboat, and barge industry is committed to providing our customers with safe, efficient, cost-effective, and reliable transportation in today’s challenging times and beyond.

Jennifer Carpenter is President and Chief Executive Officer of the American Waterways Operators (AWO), the national trade association for the tugboat, towboat, and barge industry. Previously, she served as AWO's Executive Vice President and Chief Operating Officer.