Editorial: Transportation Advantage Is A Partnership Advantage
With Hurricane Helene nearing landfall somewhere along Florida’s Big Bend, close to the easternmost point of the Gulf Intracoastal Waterway, ports along the Gulf Coast and GIWW stakeholders are bracing for impacts and already preparing for recovery efforts. That level of partnership and collaboration is an undeniable strength of the nation’s marine transportation system.
The transportation advantage of American export crops has long been a staple talking point of American ag groups. By this they mean, first of all, America’s unparalleled network of rivers and inland waterways, including the locks and dams that modulate the flow of the Upper Mississippi River and the levees and control structures that manage the Lower Mississippi River. Our extensive federal highway network and increasing intermodal coordination between truck, rail and barge play a part as well. But it’s the rivers and inland waterways that supply the real cost advantage.
That transportation advantage helps offset production costs and the price disadvantage that U.S. crops can have in global markets from a strong dollar or other factors that are out of producers’ control.
That’s why farm and ag groups make maintenance and improvement of America’s waterway infrastructure a top priority. They directly translate individual transportation projects, like lock and dam expansions and upgrades, to farmgate prices per bushel for growers in areas affected by those projects.
Our export competitors have long been aware of—and envious of—our transport advantage. They know that it may not matter if they are the cheapest producer if those production savings are eaten up by transport costs. Brazil, in particular, the world’s top soybean exporter, has learned that lesson. Brazil’s production costs are generally much cheaper than those of the U.S., but its congested road network and lack of water transport impose a “transportation penalty” on its exports. Most Brazilian soybeans still move by truck. According to the U.S. Department of Agriculture’s Agricultural Marketing Service, only 13 percent of Brazilian soy exports move by barge.
It’s not just the physical infrastructure in place that matters. Also important is how that infrastructure is used and managed in times of emergency. In recent years, Brazil has improved its road networks around ports, eased crippling road congestion, built more warehouses and generally worked at lowering its transport penalty for ag exports. However, severe drought and low water have affected the Paraná River, a major export corridor for Brazil, Argentina, Bolivia, Paraguay and Uruguay. The Madeira River, a major tributary of the Amazon, has also been affected.
As instances of both high and low water have become more frequent, the barge industry in the United States has stepped up its coordination efforts with port authorities, the U.S. Coast Guard and the Corps of Engineers. The Corps has deployed dredges in a more targeted and efficient manner, aided by private dredge contactors, with constant industry input. What used to be emergency coordination has become a series of institutionalized partnerships that have evolved into a semi-permanent “response infrastructure” of action plans, regular meetings and phone calls and detailed procedures for situations that used to be rare but that are more common now. That kind of response infrastructure is on display each hurricane season with the Gulf Inland Waterways Joint Hurricane Team Response Protocol, a partnership between the maritime industry, Corps districts and Coast Guard sectors, led by the Gulf Intracoastal Canal Association.
Reports from South America suggest those countries are struggling to develop the kinds of “response infrastructure” we already have on our waterways.
Of course, all the partnerships in the world can only go so far when lock chambers are too small, aging locks need replacement or major upgrades and control structures are crumbling. We still need the physical upgrades, and we can’t let Congress forget.
As export competitors improve their own physical infrastructure, the extra advantage provided by our response infrastructure and our ability to maximize cargo flows under adverse conditions will be increasingly important for American exporters.
