Portside Magazine - Summer 2013 by Ports of Indiana

A Ports of Indiana Publication · Summer 2013

Critical conditions on inland waterways Recent events highlight challenges for vital transportation system

Inside this Issue:

• Commission welcomes new companies, approves $1.7M in rail, sewer work, pg. 5 • Study shows environmental benefits of ships, pg. 6 • Steel Dynamics invests $7.1M into galvanizing line, pg. 14 www.portsofindiana.com · Summer 2013

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Summer 2013 路 PORTSIDE MAGAZINE

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TABLE OF CONTENTS FROM THE CEO . ...................................................................................................... 4 Going ‘green’ to improve bottom line Economic and environmental advantages of marine shipping FROM THE BOARD ROOM . ........................................................................................ 5 Commission welcomes new companies, approves $1.7M in rail, sewer work ENVIRO FOCUS ........................................................................................................ 6 Study shows environmental benefits of ships Great Lakes shipping is 7-times more fuel efficient than truck transportation GUEST COLUMN ...................................................................................................... 7 A fresh perspective: The Ports of Indiana through the eyes of a newcomer FEATURE ............................................................................................................ 8-11 Critical conditions on inland waterways Recent events highlight challenges for vital transportation system

Ports of Indiana Mission “To develop and maintain a world-class port system that operates as an agile, strategically-driven, self-funded enterprise dedicated to growing Indiana’s economy.”

PORT REPORTS Burns Harbor: Floating laboratory hosts educational cruises at port .......................... 12 Mount Vernon: Evansville Western adds interchange with Norfolk Southern . .............. 13 Jeffersonville: Steel Dynamics invests $7.1M into galvanizing line................................14 Ports of Indiana Directory ……................................................................................ 15

For advertising or subscription information, contact Liz Folkerts, (317) 232-9205; lfolkerts@portsofindiana.com

www.portsofindiana.com · Summer 2013

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FROM THE CEO

Going ‘green’ to improve bottom line Economic and environmental advantages of marine shipping

Rich Cooper Chief Executive Officer, Ports of Indiana

Cost Comparison Estimated costs for a sample shipment of steel from Northwest Indiana to the Gulf of Mexico (not including handling charges):

1,500 tons of steel • Barges – 1 - $35 per ton = $52,500 • Trucks – 68 - $140 per ton = $210,000 • Railcars – 18 - $70 per ton = $105,000

We all know that the ‘bottom line’ is what drives most business decisions today. And, more and more businesses are committed to improving their ‘bottom line’ in an environmentally friendly way. They will also go on to confirm that there are few variables that can influence their bottom line as much as transportation costs. Those costs are buried in the selling price of everything we buy, whether it’s paper, pacifiers, or Porsches. The in-bound costs of raw materials used to produce these products and the out-bound costs to get them to the marketplace represent a significant portion of the selling price. When consumers believe the selling price is too high, they buy elsewhere or don’t buy at all. It’s this behavior that causes companies to drive costs from their supply chains to remain competitive, and it’s a sure-bet that companies whose products were transported via water versus other modes were done so at a lower cost and a lower carbon footprint. Our nation has a well-established transportation infrastructure system that consists of 25,000 miles of navigable waterways, 4 million miles of public roads and 160,000 miles of rail. Across these modes, the country moves 1.9 billion tons of cargo each year and 75 percent of that cargo is transported on the waterways. In 2011, these transportation-related goods and services contributed $1.6 trillion to the $15.6 trillion U.S. GDP, roughly 10 percent. Located at the “Crossroads of America,” Indiana is ideally positioned to optimize the transportation network by providing multimodal connections for domestic and international commerce. Accessibility to 80 percent of the U.S. population within a one-day drive provides businesses and shippers a variety of options for moving cargo. Indiana is surrounded by 400 miles of navigable waterways providing access to the Atlantic Ocean and Gulf of Mexico via Lake Michigan and the Ohio River. Nearly 750 million tons of raw materials, agricultural commodities and manufactured products are moved on the Great Lakes-St. Lawrence Seaway System and the Inland Waterways. Indiana accounts for almost 70 million tons of those maritime shipments. Indiana industries such as agriculture, steel, manufacturing, power generation and construction directly benefit from the marine connections of the Ports of Indiana. In fact, the economic impact of our state’s three ports is $6.4 billion annually, which includes $895 million in local purchases and $271 million in state and local taxes. In most instances, our ports are not the final destination for cargoes we handle. Cargo movement at the port is multidirectional – where goods can be unloaded from a ship or barge onto rail or truck; or unloaded from rail or truck onto a ship or barge. It is the essence of being multimodal. There is absolutely no question that “water” becomes the mode of choice for hauling large volumes of bulk material and even steel. It’s these multimodal capabilities that make our ports a vital link in the supply chain. Take for example the cost of moving steel from Northwest Indiana to the Gulf Coast. The approximate cost per ton of freight plus fuel surcharges for each mode would be: truck ($140), rail ($70) and barge ($35), not including handling charges. When you consider the cost for each mode to move 1,500 tons of steel, you can quickly see the maritime advantage. In this shipment, barge shipping would be over $50,000 cheaper than rail and $150,000 cheaper than truck. According to a recent study by Marine Delivers, a bi-national organization promoting Great Lakes shipping, the combined Great Lakes-Seaway fleet can move cargo 38 percent farther than rail and 83 percent farther than truck, per gallon of fuel. A separate study conducted by the Texas Transportation Institute shows that with one gallon of fuel river barges move a ton of freight 576 miles compared to rail at 413 miles and truck at 155 miles. Think of the economies of scale when the largest Great Lakes vessel can carry 62,000 tons of cargo, which equates to 35 barges, 564 railcars or 2,340 trucks. The ability of marine transportation to move cargo more efficiently in greater volumes minimizes transportation costs while also reducing air emissions. The emissions of rail and truck exceed of those of the average Great Lakes Seaway vessel by 19 percent and 533 percent respectively. Given the option, marine transportation can provide some seriously green advantages for the environment, improve a company’s ‘bottom-line’ and lower the costs consumers pay for their everyday purchases.

Summer Summer 2013 2013 ·· PORTSIDE PORTSIDE MAGAZINE MAGAZINE

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Ken Kaczmarek

Greg Gibson

Marvin Ferguson Ramon Arredondo

David Fagan

Phil McCauley

Christine Keck

Jay Potesta

Commission welcomes new companies, approves $1.7M in rail, sewer work INDIANAPOLIS - The Ports of Indiana Commission approved agreements with three new port companies and launched two major infrastructure projects in April and June meetings at the two Ohio River ports. Agreements were finalized for NIPSCO and The Franciscan Alliance to join the Port of Indiana-Burns Harbor, while Walsh Construction will be opening multiple facilities at the Port of Indiana-Jeffersonville in preparation for construction of the massive Ohio River Bridges project. Commissioners launched two construction projects that will have major impacts on the Port of Indiana-Burns Harbor: a main line rail reconstruction and sanitary sewer system replacement. The main line rail reconstruction at Burns Harbor is part of a multi-phase rail improvement project at the port. The project includes the reconstruction of portions of the main line rail at the port, including the rehabilitation of 2,500 feet of rail at three priority areas and the replacement of 1,000 crossties. Upon completion, approximately half of the three-mile rail loop, completed in 1980, will have been reconstructed since 2010. A contract in the amount of $508,000 was awarded to Tranco Industrial Services Inc. Sanitary sewer improvements include the replacement of approximately 1,900 lineal feet of pipe, which will pass under the freight and commuter rail lines. The commission awarded a contract to LGS Plumbing Inc. in the amount of $1.2 million. Additional improvements at the port include a contract awarded to Maris and Sons of Hobart, Ind., for the replacement of roofing on four buildings. Joining the Port of Indiana-Burns Harbor is The Franciscan Alliance. The former healthcare provider at the port, HealtheACCESS, located in the William N. Kenefick

Administration Building, recently sold its business to The Franciscan Alliance. At the Port of Indiana-Jeffersonville, a special-use permit and lease agreement for Walsh Construction Co. were also approved by the commission. Walsh is leading the design and construction of the Downtown Crossing of the Ohio River Bridges Project. The special-use permit and lease are for the purpose of staging and assembling steel girders for the bridge. Earlier in 2013, Walsh and joint venture partner VINCI Construction Grands Projets Inc. received approval to lease Port Building #2, where they will locate their design and construction team for the East End Crossing portion of the Ohio River Bridges Project. The Ports of Indiana will also be collaborating with the Indiana Economic Development Corporation, the Indiana Department of Transportation, the City of Jeffersonville, Clark County and the River Ridge Development Authority, as the commission approved a transportation corridor study to identify the route of a rail connection between the Port of Indiana-Jeffersonville and River Ridge, along with a proposed heavy haul highway. The commission also received an update on a memorandum of understanding that has been established between the Port of Indiana-Mount Vernon and the Indiana Department of Transportation to develop a new roadway for westbound traffic exiting the port. The new roadway will alleviate the City of Mount Vernon’s concerns about truck traffic from the port moving through residential areas. The commission also approved the 2012 audit conducted by Crowe Horwath LLP, which has served as the independent auditor for the Ports of Indiana since 1993. The Ports of Indiana will hold its next commission meeting on August 15 at the Port of Indiana-Burns Harbor.

Join us for the 11th Annual Indiana Logistics Summit Indiana Convention Center October 9-10, 2013 For registration and sponsorship details visit: www.IndianaLogistics.com

www.portsofindiana.com · Summer 2013

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Photo: St. Lawrence Seaway Management Corporation

Study shows environmental benefits of ships Great Lakes shipping is 7-times more fuel efficient than truck transportation 99.9 percent and emissions of particulate matter would be reduced A recent bi-national study outlined the advantages of utilizing by 85 percent. marine shipping in the Great Lakes-St. Lawrence Seaway region, Marine industry experts say the results of this study provide further providing further support for the importance of investments in basis for continued investment in Great Lakes-Seaway shipping. marine technology and infrastructure. “The study findings present a more complete picture of The report, titled “The Environmental and Social Impacts of shipping in the Great Lakes in terms of the benefits of this mode of Marine Transport in the Great Lakes-St. Lawrence Seaway Region,” transportation,” said Steve Fisher, executive director of the American was conducted by Ontario-based transportation consultants Research and Traffic Group and Great Lakes Port Association. peer-reviewed by industry experts “Data from the study will help in both the U.S. and Canada. inform future decisions on subjects According to the study, ranging from investments in new Great Lakes ships are more technologies, budget allocations Environmental issues are very important to the Ports of Indiana. As a port authority, the Ports of Indiana has the dual responsibility environmentally-friendly than for infrastructure projects, and of protecting and enhancing our environment while building land-based transportation modes appropriate levels of regulation, to infrastructure that facilitates economic development. – they use less fuel and emit fewer name a few. The marine industry Article by Evie Schultz greenhouse gases than trains and now has the information it needs trucks. The study also concluded to address questions by federal and that a shift from marine to state governments on the value of truck or rail transport would have numerous disadvantages for shipping to its constituents.” society, including an increase in traffic congestion, infrastructure According to Marine Delivers’ website, the economic impact of maintenance costs and noise levels along highways. Great Lakes shipping in Indiana is greater than any other state, and Key findings in the study included: more than the next two states combined. • The Great Lakes-Seaway fleet is almost seven times more “Marine shipping offers many solutions for our regional fuel-efficient than trucks and 1.14 times more efficient than rail. transportation system,” said Rick Heimann, port director for the • When carrying the same amount of cargo the same distance Port of Indiana-Burns Harbor. “Water transportation, whether it is as the Great Lakes-Seaway fleet, trucks would emit 533 percent by inland barges, ocean-going ships or lake vessels, has historically more greenhouse gases, while rail would emit 19 percent more. shown great cost efficiencies. Marine shipping should be fully • If Great Lakes-Seaway shipments were switched to truck utilized whenever possible or whenever the supply chain allows for transportation, it would lead to a $4.6 billion increase in highway its inclusion. Water transportation systems hold fantastic advantages maintenance costs over 60 years. both economically and environmentally.” • It would require 7.1 million truck trips to carry the cargo Gordon English, a co-author of the study, added that further shipped by the Great Lakes-Seaway fleet in 2010, increasing existing investments in marine shipping will help the industry continue to truck traffic on various highways anywhere from 35 to 100 percent. compete with other forms of shipping. “The rest of the competing • Similarly, it would take 3 million train trips to carry the same modes are changing, and the marine world will also have to invest amount of cargo as the Great Lakes-Seaway fleet in 2010. and improve performance going forward to maintain its advantage,” Long-term environmental effects of the Great Lakes-Seaway he said. fleet were also examined as they pertain to meeting new regulatory According to Marine Delivers, the Great Lakes-Seaway standards and using low sulfur fuels and new technology, including shipping industry supports 227,000 jobs in the U.S. and Canada the repowering of steam-powered vessels, satellite navigation, while generating $35 billion in business revenue and transporting electronic 3-D charting and propulsion upgrades. It found that 164 million metric tons of cargo per year. When compared to the from 2012 to 2025, greenhouse gas emissions by ships would alternative land-based transportation options, this trade route saves be reduced by 32 percent, nitrogen oxide emissions would be companies $3.6 billion per year in transportation costs. reduced by 86 percent, sulfur oxide emissions would be reduced by For more information, visit www.marinedelivers.com.

Enviro•Focus

Summer 2013 · PORTSIDE MAGAZINE

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A fresh perspective

The Ports of Indiana through the eyes of a newcomer

Mount Vernon Transfer Terminal’s 1,000-foot conveyor transfers coal from rail to barge at the Port of Indiana-Mount Vernon.

A Great Lakes Towing tugboat helps the Federal Yukon leave the harbor at the Port of Indiana-Burns Harbor. We watched as Federal Marine Terminals, the port stevedoring Before I began working at the Ports of Indiana, I knew very company, unloaded steel coils from the ship. I had never been on little about how the ports actually function. I was aware of the a bulk carrier before, so I didn’t realize that the ship actually has basics, of course, but I had never been to a port or seen what several holds below deck which are covered goes on at one on a daily basis. But within by hatches. These holds are where the cargo is a month of starting my internship at GUEST COLUMN stored when transported. the Indianapolis office for the Ports of Column by In this case, when the Federal Yukon Indiana, I was lucky enough to be able Evie Schultz arrived at the port, a front-loader was lowered to visit all three of the state’s ports and into each hold to move the cargo. Then, a gain a firsthand view of their operations Summer Intern for the Ports of Indiana huge crane was used to lift the cargo up and and purpose. out of the ship onto the dock. After watching I had heard from staff members Evie will be a sophmore at how the process works, we met several of that each port is unique, with its own Butler University and is majoring in Journalism, Spanish and Economics. the ship’s crewmembers who very graciously “personality.” They were correct – the ports showed us their accommodations and the all boast their own distinct characteristics. ship’s wheelhouse. I was surprised to learn From size and location to the type of cargo that the captain’s family lives on the ship with him, which I was told handled, each Indiana port differs from the next. However, the ports isn’t typical. share one common purpose: they are part of a world-class ports Later in the day, we climbed five stories to the top of the Cargill system that is striving to grow Indiana’s economy. Here’s a bit of grain tower which provides fantastic views of the rest of the port, what I learned on my visits: the steel mills in the area, Lake Michigan and the Chicago skyline. Port of Indiana-Mount Vernon The massive ship, cranes and all the big port equipment looked The first port I visited, Mount Vernon felt expansive and much smaller from this vantage point, and it was amazing to look spacious. It is the largest of Indiana’s ports and has the most land down on the port and see everything happening at once. I was also available for development. On my visit, I learned that this port especially excited to be able to wear a hardhat, neon safety vest and moves more cargo by water and rail than any other Indiana port. protective glasses – I felt so official! Randy Kennedy, Mount Vernon’s operations manager, was Port of Indiana-Jeffersonville kind enough to give me a thorough tour of the port. At the docks, During my visit to Jeffersonville, I attended my very first Randy pointed out CTLC’s overhead crane, which is able to directly Ports of Indiana Commission meeting and took a tour of the transfer cargo between barges, trains and trucks to a huge warehouse port with Operations Manager Brian Sieg. I enjoyed meeting the totaling 58,000 square feet. He also showed me large piles of talc commissioners and being able to listen to a discussion of port outside of Cimbar, a minerals processing company, and even offered operations. Then during my port visit, I was able to meet the to let me keep a small piece. Talc rocks are easily scratched with a president of Voss/Clark, Joe Rhodea, and get a firsthand view of fingernail, and can be processed into a powder that is often used in how his steel is pickled, slit and blanked for use in household items paints and makeup. such as water heaters. Before my visit, I did not realize that the Mount Vernon Steel plays such a huge role at this port that it is often referred location has so much room to expand. Randy drove me past fields to as a “Steel Campus.” The port boasts over a dozen steel processing which are all available for use by potential tenants. I learned this and handling companies that work alongside each other to provide a port has grown significantly over recent years, so adding new land one-stop shop for auto and appliance manufacturers that require all was important to make room for future tenants. shapes and sizes of steel components. Port of Indiana-Burns Harbor I’ve spent most of my life in Indiana, and I’ll admit that at At Burns Harbor, Operations Manager Nick Szymarek also had times I’ve felt, well, landlocked. But after getting the opportunity a full day planned for me so that I could experience and learn as to travel to and explore each port as an intern with the Ports of much as possible about Indiana’s first public port. Indiana, it is much clearer to me how the ports connect our state to The first matter of business was boarding and touring the bulk our waterways and, in turn, the world around us. And by doing so, carrier Federal Yukon, which was docked in the West Harbor Arm. they are helping Indiana’s economy to grow and thrive. www.portsofindiana.com · Summer 2013

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Critical conditions on inland waterways Recent events highlight challenges for vital transportation system Historic flooding. Record drought. Crumbling infrastructure. Insufficient funding. Invasive carp. Closure debates. One of America’s vital transportation systems is facing critical conditions on many fronts. The inland waterways provide 38 states direct access to the most efficient, environmentally-friendly and safest mode of transportation. More than 550 million tons of cargo travel by barge on the 12,000 miles of inland rivers each year. Recent events highlight the fragility of this unsung logistics hero and further emphasize the need for long-term strategies that will allow the U.S. waterways to keep the economy moving in the right direction.

Mother Nature vs. Father Time On April 18, the Dale H. Heller towboat was pushing 14 barges along the Illinois River with some cargoes loaded at the Port of Indiana-Burns Harbor. Torrential rains had caused flood waters to reach historic levels at Marseilles, Ill., roughly 75 miles southwest from Chicago. While approaching the Marseilles lock canal, the towboat lost control in the swift current and seven barges broke free from the tow striking the Marseilles Dam. Four barges partially submerged as all seven were pushed against the 80-year-old structure. The dam held, but river traffic was shut down for approximately 14 days. “Two of the barges involved with this tow were from ArcelorMittal,” said Rick Heimann, port director at the Port of Indiana-Burns Harbor. “Many of our port companies had barges that were delayed en route. Had the closures lasted longer, companies may have started to cancel barges in favor of other transportation modes.” After four days of flooding, the water receded and it was determined that out of the dam’s eight gates, two were broken from the incident and an additional three were inoperable due to the location of the barges against the dam. The lock, located two miles downstream from the dam, only sustained minor damage. Had the damage been more severe, barge shipments through this area could have been shut down for months, which would have caused major problems for businesses on both sides of the lock. In the 2012 closure of a Mississippi River lock near St. Louis, the economic impact was estimated at $2.8 million per day. 8

This incident magnifies the ongoing battle being waged on inland navigational structures by the wrath of Mother Nature and the deteriorating effects of Father Time. More than half of the locks and dams on the inland waterways are more than 50 years old, well past the intended design life. Thirtyfour locks exceed 80 years of age. “The infrastructure is susceptible to more severe damage because of its age,” Heimann said. “The older the infrastructure, the greater the chance for a catastrophe – there’s a better chance for a structure to crumble and fall apart completely. When you take seven barges moving 10,000 tons in the river current, and you hit a structure that doesn’t move, there will always be a problem. But newer, improved designs and well-maintained infrastructure will have fewer problems, reducing the chance of a closure and delays.” According to the Army Corps of Engineers, maintaining the waterway at current operational standards will require more than $13 billion by 2020, billions more than current funding levels being appropriated by Congress. The Corps currently has 22 maintenance and improvement projects in the works that will not be completed until 2090 if funding levels are not increased. Upper St. Anthony Falls Lock

Port of Indiana Burns Harbor Marseilles Lock and Dam

Port of Indiana Jeffersonville Port of Indiana Mount Vernon

New Orleans

The U.S. Inland Waterway System spans 12,000 miles and connects to the Gulf of Mexico in New Orleans. Indiana’s ports and businesses depend on access to these rivers to move commerce, but recent events in Illinois and Minnesota have caused critical conditions on this important transportation system.

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The Inland Waterways Trust Fund finances half the cost of waterway infrastructure maintenance and construction, but the balance has steadily declined from an all-time high in 2002. The fund is supported by a fuel tax of 20 cents per gallon which is paid by barge and towing operators. To keep projects funded, the barge industry supports increasing the tax to 29 cents because of the pressing need for infrastructure improvements. The American Society of Civil Engineers (ASCE) found in its 2013 Failure to Act report that merely keeping waterborne infrastructure funding at current levels would ultimately result in hefty losses by 2020: $700 billion in national GDP, $1.3 trillion in business sales, $270 billion in export value and 738,000 fewer jobs. By 2040, the numbers skyrocket: a $4 trillion hit to the GDP, $7.8 trillion of lost sales, $2 trillion in fewer exports and 1.4 million people out of work. After the Marseilles accident, a unified command comprised of the U.S. Coast Guard, U.S. Army Corps of Engineers and Ingram Barge Co. quickly descended upon a nearby hotel conference room to hash out a game plan, according to Alan Haraf, chief public affairs specialist with the U.S. Coast Guard, 9th District. Ingram focused on how to refloat the barges. The Corps concentrated on the dam, evaluating damage and maintaining river flow. The Coast Guard managed river navigation, establishing safety zones around the recovery operations and keeping vessels moving through the area.

According to Allan Marshall, corporate communications with the U.S. Army Corps of Engineers Rock Island District, temporary repairs to the dam are underway. A dike was built using 42,000 tons of rock to help reduce river flows and facilitate repairs. “The repairs are going to be ongoing for a while,” Marshall said. “The longer plan for permanent repairs will take a couple of years.” An investigation is currently underway and a public announcement will be made with the findings. “We’ll know more about this specific incident when the investigation goes through the whole process – what exactly happened and what factors came into play, whether nature or human,” said Haraf. At the other end of weather extremes, droughts can also impact river commerce. A dry winter season in 2011 and 2012 led to the most severe drought conditions in more than 50 years. Mississippi River navigation was delayed due to low waters south of St. Louis and barges carried less cargo due to shallow drafts. “Mother nature is not to be controlled,” Marshall said. The ASCE graded the Inland Waterways a D- in its 2013 Report Card for America’s Infrastructure, noting the age of most locks and the number of service interruptions throughout the system. The ASCE made several recommendations including establishing a national multimodal freight strategy, increasing overall spending on the inland waterways, prioritizing financing for key projects, and considering risk and economic return in project evaluations.

The U.S. Army Corps of Engineers recently completed a rock dike near the Marseilles Dam to facilitate repairs after barges came to rest against the dam on April 18. Photo courtesy of the U.S. Army Corps of Engineers (above) and U.S. Coast Guard (Page 8). www.portsofindiana.com · Summer 2013

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Closure of Minneapolis’ Upper St. Anthony Falls Lock and Dam is currently being debated by public officials. Photo courtesy of the U.S. Army Corps of Engineers.

Small Lock Raises Big Questions In Minneapolis, a different navigational obstacle has presented itself: public opinion. Government officials have proposed permanently closing a lock because they don’t believe there are significant benefits from continuing river shipments in the area. This issue poses several questions: • What criteria should be considered for closing locks? • What precedent does this set for other locks? • What role should local authorities play in altering multi-state transportation systems? • How will this affect businesses throughout the river system? • What impacts will this have on highway congestion? • What are the long-term effects on the nation’s transportation system and future economic development? The City of Minneapolis sprouted from the river system when Fort Snelling was established in 1819 at the confluence of the Mississippi and Minnesota Rivers, and soldiers began using the falls for waterpower. The section of river that flows through the city’s downtown was once home to the only natural waterfall on the upper Mississippi, the Falls of St. Anthony. Once dubbed “Mill City,” due to the flour mills that sprung up along the river for access to water power, the city’s commerce necessitated locks to maneuver around the falls. A series of three locks - Upper St. Anthony Falls Lock, Lower St. Anthony Falls Lock and Dam, and Lock and Dam 1 - were put into operation between 1932 and 1963. One of these, the Upper St. Anthony Falls Lock, is at risk for closure. “Close one lock, you essentially close all three,” explained Russ Snyder, project manager at the St. Paul District of the U.S. Army Corps of Engineers. No terminals exist in the pools between the locks, so any cargo that moves through the locks goes through the entire series of three. Newspapers reported public efforts to close the locks as far back as the early 2000s, when a small number of environmentalists called for reverting the river and falls back to their natural state. According

to Snyder, some proposals to restore the limestone falls are unlikely to be feasible because much of the manmade infrastructure is holding the waterway together and protecting against erosion. Snyder said actions by the Corps of Engineers prevented a total collapse of the limestone-capped falls in the late 1800s. Three terminals use the locks commercially – two private companies and one terminal owned by the city of Minneapolis. City leaders support the lock closure and plan on closing its terminal to redevelop the 48-acre property and nearly mile-long section of riverfront into a business park and recreational space. Minnesota senators have cosponsored the Upper Mississippi Conservation and River Protection Act calling for a feasibility study for closing the lock, and half of the state’s congressmen cosponsored the related bill in the House. Minnesota Gov. Mark Dayton and the state’s Department of Natural Resources are also supportive of closing the lock. However, not everyone shares that position. “If the locks closed, we would have to use trucks,” said Mark Duncan, plant manager at Aggregate Industries, one of the two private companies that ships barges through the locks. “It would put an awful lot of trucks on the road every day.” Aggregate Industries ships a combination of sand and gravel used in construction from its Minnesota mine to the riverside facility. A 2012 economic impact study commissioned by the Metropolitan Council of the Twin Cities found that closing the Upper St. Anthony lock would result in an increase of 21,316 additional trucks on the road and the permanent loss of 72 jobs. The study also estimates moving aggregate by truck would raise transportation costs by $5 to $7 per ton, ultimately increasing the cost of concrete in Minneapolis by 9 percent. According to maritime industry standards, one barge can haul 70 truckloads of cargo, and one towboat with a standard 15-barge tow has the same capacity as 1,050 truckloads.

One inland waterway barge can move the same amount of cargo as 70 trucks. A towboat with 15 barges can move the equivalent of 1,050 truckloads. Photo courtesy of American Commercial Lines.

10 Summer 2013 · PORTSIDE MAGAZINE

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Jeff Boat, which operates the nation’s largest inland shipyard in Jeffersonville, Ind., is adding 110 jobs to meet building demand. Photo courtesy of the American Commercial Lines. The U.S. Army Corps of Engineers controls the navigation of lock operations. Action for a permanent lock closure must stem from Congress. “Because this issue relates to an entire federal transportation system, we are concerned that any lock closure must be evaluated beyond local perspectives to clearly determine its impacts on the national system,” said Rich Cooper, CEO of the Ports of Indiana. “The strength of waterborne shipping is that it can move specialized cargoes with greater efficiency, less fuel and fewer emissions than other transportation modes.” Cooper says a wide range of factors must be analyzed before lock closures should be considered since even low-use waterways play a pivotal role in the national transportation system. “Waterways handle critical cargoes that fit on the water better than anywhere else,” Cooper explained. “Even low-use channels provide vital contingency options for supporting other transportation modes during emergencies or fluctuations in market conditions, and as redundancies to major waterway channels with aging infrastructure.” The Water Resources Development Act of 2013, which passed the Senate in May, includes Sec. 5021, Upper Mississippi River Protection. The act states the Upper St. Anthony Fall Lock and Dam would close if the five-year average of cargo shipments through the locks is less than 1.5 million tons. As of press time, the House had taken no action on the Water Resources Development Act. “The tonnage figure of 1.5 million is more than we currently handle and have averaged over the past five years,” said Snyder, who has worked with the St. Paul district for 32 years. In 2012, 810,000 tons of cargo moved through the locks, which is slightly higher than the five-year average of 773,000 tons. Since a peak of 3 million tons in 1976, the amount of cargo moving through the locks has trended downward, with 2007 as the first year it was less than 1 million tons. Future volume is estimated to be between 500,000 and 1 million tons. Mark Biel, chairman of UnLock Our Jobs, said industry concern is high because the closure is tied to tonnage requirements. “Using tonnage as the barometer for closures does not take other factors into consideration, such as recreational vessels and national significance of waterways,” Biel said. “Because of this precedent, one could make the same argument for the Chicago Lock, despite handling more recreational vessels; it handles less cargo than the O’Brien Lock in the Chicago Area Waterway System.” Much of the debate about closing locks has been driven by the threat of Asian carp migrating into an area and wreaking havoc on native environments. According to Snyder, individual big head, silver and grass carp have been captured in Minnesota waters, but no substantial population

is present, let alone one capable of reproducing. The reproductive population in the Mississippi River exists south of the state, in Iowa. Snyder said the falls were once a natural barrier to fish migration, and now the concern is the locks could potentially allow fish through. “Locks are important transportation connections that were not built to control the movement of fish, organisms or invasive species,” said Heimann, whose port depends on barge shipments through the Chicago locks for 30 percent of its shipments. “Various types of fish barriers have been extremely successful at controlling the movement of Asian carp around working locks, and additional control methods and tactics are currently being developed.”

Bright Future for Waterways Despite all the challenges facing shipping interests on the inland river system, the industry appears to be optimistic about the future. In Jeffersonville, Ind., the largest inland shipyard in the U.S. - Jeff Boat - is currently ramping up barge building operations to fill orders placed through mid-2015. To meet demand the company is adding 110 jobs. Kim Durbin, manager of corporate communications with the company, said demand for liquid transportation on the inland waterways is driving the production boom. “Looking into the future, we believe that expanding our nation’s use of maritime transportation will provide significant economic, social and environmental solutions to many problems facing our region, much the same way it has in Europe and other more congested areas of the world,” the Ports of Indiana’s Cooper said. “As you know, we cannot just keep adding lanes to our highways, but our waterways do have significant capacity for future growth.” As the nation struggles to recover from a major economic recession and freight shipments slowly build toward pre-recession levels, many industry insiders believe talk of underfunding or closing any segments of the nation’s waterways network would be short-sighted when other transportation modes are facing serious constraints, including truck driver shortages, highway and rail congestion, funding shortages for new infrastructure and air emission restrictions. “For hundreds of years, this country’s maritime highways have provided critical shipping connections for goods and materials, employing tens of thousands of Americans who work in businesses that rely on marine transportation,” Cooper said. “These same waterways possess great potential to provide even greater contributions by solving major transportation congestion dilemmas that are facing this nation in the not-so-distant future. Now is the time to make sure our waterways are ready for that challenge so our economy can remain competitive in a global marketplace.” www.portsofindiana.com · Summer 2013

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PORT REPORT - BURNS HARBOR Water quality

The Port of Indiana-Burns Harbor hosted the W.G. Jackson on a foggy June day. The research vessel educated guests on water quality monitoring techniques and uses.

W.G. Jackson deckhand Bob Marx helps visitors deploy water sampling equipment to demonstrate how researchers study levels of oxygen, pH and conductivity in Lake Michigan.

Floating laboratory hosts educational cruises at port PORTAGE, Ind. – It’s not often you The W.G. Jackson’s home port is at PORT REPORT encounter “critter pickers” aboard a marine the university’s Lake Michigan Center vessel, but then again the W.G. Jackson is not in Muskegon, Mich. Since its launch Column by an ordinary boat. in 1996, the W.G. Jackson has hosted Liz Folkerts Instructor Shirley McIntire asked for Communications Specialist more than 2,700 events, reaching over “critter pickers” during the boat’s recent 65,000 visitors. Contact Info: educational cruise at the Port of IndianaAccording to Janet Vail, Ph.D., (317) 232-9205 Burns Harbor. who manages the institute’s outreach lfolkerts@portsofindiana.com Two camp counselors from the and education programs, the university Dunes Learning Center in Chesterton, Ind., frequently has incoming students that were eagerly volunteered, and after a small Ponar inspired by a childhood visit to the ship. dredge dumped a muddy pile onto the deck, the young Onboard the vessel, visitors collected samples of water, women dug in and began to sift through the gray sediment in sediment and plankton from both within the port boundaries and search of any signs of life. out on Lake Michigan. They then moved to the onboard lab to test The Port of Indiana-Burns Harbor welcomed this unique the samples for pH, conductivity (ability to conduct electricity), research vessel for free public cruises and an open house in June. The turbidity (how cloudy the water is) and other water quality data. visit was coordinated by the Indiana Department of Environmental At the end of the trip, guests looked at their findings to determine Management with funding from an Environmental Protection the biological productivity of the lake. Vail explained that parts of Agency Grant for water quality outreach through the Great Lakes Lake Michigan are “oligotrophic,” which means low biomass and Restoration Initiative. The W.G. Jackson vessel is part of Grand Valley State University’s nutrient levels with high oxygen concentration and transparency. Annis Water Resources Institute and houses an onboard lab for This results in a lake with low algae counts, clear waters and high adults and children ages 10 and up to conduct hands-on science drinking-water quality. Oligotrophic lakes are typically deep and experiments. Guests work with the ship’s staff, made up mostly of found in cold areas, which makes them perfect homes for a variety retired educators, during a 90-minute cruise to learn how to monitor of fish species. And those critter pickers? Well, the catch of the day was a lone water quality, gather water samples and collect data on pH, oxygen bloodworm and pieces of shell. According to McIntire, bloodworms levels and microscopic organisms. – excellent fish food – are typically found in “biologically productive” The visit was part of the W.G. Jackson’s annual summer time “Making Lake Michigan Great” tour, which has brought the vessel to lakes, or lakes capable of sustaining life. For more information on the W.G. Jackson and the Annis 33 ports of call on the lake since 1998. This was the vessel’s first visit Water Resources Institute, visit www.gvsu.edu/wri. to the Port of Indiana-Burns Harbor since 2001. 12 Summer 2013 · PORTSIDE MAGAZINE

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PORT REPORT - MOUNT VERNON On a new track

New interchange increases rail capacity for Evansville Western. On average, 26,000 railcars move through the port each year.

Evansville Western adds interchange with Norfolk Southern MOUNT VERNON, Ind. – Evansville evolves, the amount of rail shipments PORT REPORT Western Railway’s new connection moving in unit trains will continue to with Norfolk Southern could lead to increase. Because of EVWR’s continued Column by opportunities for the Port of Indianainvestments, the railway, its customers and Phil Wilzbacher Mount Vernon. The new interchange is the Port of Indiana-Mount Vernon are Port Director a result of $36 million in infrastructure well-positioned looking forward. Contact Info: investments that improve the potential EVWR’s new connection makes (812) 833-2168 for port companies to connect to new the port even more marketable for industrial pwilzbacher@portsofindiana.com markets and industries. development by providing customers Evansville Western (EVWR) invested with more flexibility and rail interchange the $36 million over the course of about options. seven years, from its start-up in 2005 through 2012. These Rail plays a vital part in our port’s logistic operations investments focused on improving the track’s weight capacity, that combine with barge and truck. We have over six miles train speed and, first and foremost, the safety of the railroad. of track within our port complex. Eighty percent of the rail volume In order to improve the railroad’s capacities even more, the at the port is made up of coal, grain and grain products, company will spend approximately $8 million in 2013. These but ethanol, fertilizer and steel are transported through investments focus on accommodating new customers. One of the port by rail as well. On average, 26,000 railcars move through these customer-driven investments included the new connection the port each year. We greatly appreciate the close working with Norfolk Southern just east of Mount Vernon, Ill., about 60 relationship we have with Evansville Western, and we are extremely miles west of the port. confident that this essential partnership can only add to our mutual According to Larry Davis, vice president of sales and marketing at growth and success. Evansville Western, this project provided for the construction of a new For more information on Evansville Western, visit two-mile connection track, which was built in order to move unit trains www.evwr.biz. of coal more quickly and efficiently between the two railroads. EVWR is now able to interchange unit trains with Norfolk Southern, CSX and BNSF Railway, in addition to less-than-unit train interchanges with BNSF, CSX and Union Pacific Railroad. EVWR is also working with Norfolk Southern to establish an interchange for less-than-unit train traffic. Davis explained that the recent enhancements of EVWR provide additional options for the company’s customers and expand its service area to attract new business. As the railroad industry An Evansville Western coal train unloads at Mount Vernon Transfer Terminal. www.portsofindiana.com · Summer 2013

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PORT REPORT - JEFFERSONVILLE New machinery

Steel Dynamics recently invested $7.1 million into equipment that will increase its production capacity by 24 percent.

Steel Dynamics invests $7.1M into galvanizing line JEFFERSONVILLE, Ind. – Steel Dynamics and performance is SDI’s greatest competitive PORT REPORT Inc. (SDI) recently announced a $7.1 million advantage. We could not be more proud that investment in new machinery at its Port of SDI calls the port home. Column by Indiana-Jeffersonville facility. For more information, visit Scott Stewart Port Director The facility galvanizes steel produced www.steeldynamics.com. at the company’s mill in Butler, Ind., Contact Info: Airgas builds new port facility and is known for its specialty steels in (812) 283-9662 unusual widths, from 36 to 61 inches, Steel Dynamics isn’t the only company sstewart@portsofindiana.com and gauges, from 0.012 to 0.45 inches. It making facility improvements. Airgas Specialty also offers painted steel and steel coated in Products recently invested $1.1 million in a GALVALUME, an aluminum-zinc blend new facility on Maritime Road at the port. alloy that offers greater corrosion resistance than zinc-only coatings. The company produces blends of aqueous ammonia and distributes According to SDI Plant Manager Jordan Breiner, the new bulk anhydrous ammonia. The chemicals are used in a variety of machinery replaces obsolete equipment and will produce a higher industries, including refrigeration and pollution reduction. quality product at a faster rate. The new machinery includes highAirgas is a leading supplier of industrial ammonia and diesel pressure, high-temperature cleaning equipment with a four-stage exhaust fluid, with 27 distribution facilities nationwide. rinse, automation systems and more efficient motors, with an The new port facility includes a more efficient production process, expected production increase of 24 percent. a highly integrated process-control system and a larger, improved leak Breiner expects the demand for GALVALUME will grow, since detection system. the construction market is likely to recover shortly. The product is Airgas Regional frequently used in roofing and sheeting for industrial buildings. Manager Russ Zintak said SDI also galvanizes steel from fellow port companies Metals the company’s decision to USA and Ohio River Metal Services. The Port of Indianalocate here was easy because Jeffersonville truly is a steel campus – 11 of our port companies the port is well-operated provide complementary steel services. and the two organizations Headquartered in Fort Wayne, Ind., SDI was founded in 1993 share similar goals in and today is one of the largest steel producers in the U.S., with a total safety, customer service estimated steelmaking capacity of 6.4 million tons. The company and providing a consistent, previously completed a $40 million expansion of its Jeffersonville competitive value to Airgas Specialty Products recently built a new $1.1 million facility at the port. operation in 2007 and added a warehouse in 2010. customers. The port infrastructure allows Airgas numerous distribution The value of SDI’s new investment in its operations at our port options to service a wide range of customers, which has been a key can be measured in more than dollars. SDI is a blue-chip company factor in its success. with a solid reputation for quality and reliability. It recognizes that To learn more about Airgas Specialty Products, visit investing in new equipment of this kind offers major value for its www.airgasspecialtyproducts.com. employees, customers and shareholders. The attention paid to quality 14 Summer 2013 · PORTSIDE MAGAZINE

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Ports of Indiana-Central Office 150 W. Market St., Ste 100, Indianapolis, IN 46204 (317) 232-9200 / fx (317) 232-0137 info@portsofindiana.com www.portsofindiana.com