OF FORECAST

AD-A255 400 Army Co'rps USN ( • of Eninevrs Institute for Water ResourCs A REVIEW OF 16 PLANNING AND FORECAST METHODOLOGIES Used in U.S. Army Corps of Engineers Inland Navigation Studies SEP 0 9 1992 DTIC ELECTE i .11 I-This fofor public release and sole; its distiibution is unlimited. ddiciment has been approved June 1992 IWR Report 92-R-4 REPORT DOCUMENTATION PAGE Form Approved OM8 N 0,04-0188 •1. AGENCY USE ONLY (tee 4. TITLE AND SUBTITLE blank) 2 REPORT DATE .3 REPORT TYPE AND DATES COVERED 5. FUNDING NUMBERS JJune 1992 A Review of 16 Planning and Forecast Methodologies Used U.S. Army Corps of Engineers Inland Navigation Studies 6. AUTHOR(S) in Grier, David V., Skaggs, L. Leigh 7. PERFORMING ORGANIZATION NAME(S) AND ADORESS(ES) 8. PERFORMING ORGANIZATION U.S. Army Corps of Engineers Water Resources Support Center for Water Resources Institute 7701 Telegraph Road, Casey Building Belvoir, Ft. 9 SPONSORING VA 22060-5586 MONITORING AGENCY NAME(S) AND ADDRESS(ES) REPORT NUMBER IWR Report 92-R-4 10. SPONSORING MONITORING AGENCY REPORT NUMBER 11. SUPPLEMENTARY NOTES •2a DISTRIBUTION Unlimited/Unclassified AVAILABILITY STATEMENT 12b. DISTRIBUTION CODE 13 ABSTRACT (Mamurn 200 words) to develop procedures and guidelines R&D effort This manual is part of a larger The projections. for making consistent and systematic inland waterway traffic forecasting methodologies to review and assess traffic manual is purpose of this previously employed by project level and national level Corps of Engineers inland of data sources is the identification effort Inherent in this navigation studies. and commodity supply and demand forecasts. transportation, for economic, 14 SUBJECT TERMS 15. NUMBER OF PAGES Review of forecast and methods, waterway transportation, data sources for economic, forecasts and demand 17 SECURITY CLASSIFICATION OF REPORT 18 SECURITY CLASSIFICATION OF THIS PAGE projections, traffic and commodity supply 19. SECURITY CLASSIFICATION OF ABSTRACT 126 16 PRICE CODE 20 LIMITATION OF ABSTRACT Unclassified %S% 7540-0" 280 5500 Unclassified Unclassified Unlimited Stardad ;,,m t"~ ' 98 ~ Rev 2 89) A REVIEW OF 16 PLANNING AND FORECAST METHODOLOGIES USED IN U.S. ARMY CORPS OF ENGINEERS INLAND NAVIGATION STUDIES By David V. and L. Leigh Skaggs Grier H I .''A& , .. J T G• :, .b , .. ...... .. , S U.S. Army Corps of Engineers Water Resources Support Center for Water Resources Institute Fort Belvoir, Virginia 22060-5586 'U. A 92-24838 June 1992 IWR-92-R-4 92. EXECUTIVE SUMMARY This report is part of a larger R&D effort to develop procedures and guidelines for making consistent and systematic inland waterway traffic projections. The purpose of this report is to review and assess traffic forecasting methodologies previously employed by project level and national level Corps of Engineers inland navigation studies. is the identification of data sources for economic, Inherent in this effort and transportation, commodity supply and demand forecasts. Each of the 16 inland navigation studies reviewed is in some way unique, geographic that have because individual waterway projects have unique physical features, locations, traffic mixes and patterns, However, economic hinterlands, etc., to be addressed. the studies discussed still exhibit enough into four broad similarities to categorize their projection methodologies groups: (1) the application of independently derived commodity-specific (2) shipper surveys of annual growth rates to base year traffic levels; existing and potential waterway users to determine future plans to ship by barge; (3)statistical analysis using regression and correlation to predict and, (4) a future waterborne traffic based on independent economic variables; detailed long-range commodity supply-demand and modal split analysis incorporating the production and consumption patterns of individual economic regions within the waterway hinterland. varies widely, as does the time, effort, The complexity of these methods and expense invested in each. The general projection methodology and data sources incorporated in reviewed inland navigation studies are summarized in Table 33 in section of this report. each of the the summary Most analysts would agree that the projection methodologies employed in Corps navigation studies should not be judged solely on the basis of forecasting accuracy for the simple reason that every forecast contains some degree of error. forecast. A sound methodology does not necessarily ensure an accurate changes or unpredictable political, fiscal, or Often macroeconomic iii meteorological events, "conventional wisdom." for example, How, then, can defy all the presumptions of should these methodologies be judged? The answer depends on what kind of forecast the analyst requires: longterm or near-term; national, regional, or project-specific; definitive tonnage estimates or projection "envelopes"; needs assessment or benefit calculations; or, investment strategies or in supplementing planning efforts. To develop general guidelines with wide applicability, the most practical methodology in appears to be one that uses a consistent set of macroeconomic assumptions generating international, national, and regional level projections. In turn, these can be adapted by the Corps planners as a basic framework for further modifications derived from local knowledge and expertise, project level analysis. and applied in Credibility would thus be enhanced by the uniformity individual of national-level traffic totals and assumptions imbedded in project forecasts with overlapping time horizons. forecasting guidelines is is most practical if it The development of general incorporates a methodology that is easily updatable based on the latest historic and forecast data, and is relatively low cost for the project manager to implement, use on microcomputer adaptable for in a format available to any Corps planner. The next phase of the waterway projection R&D effort will be to develop and document a projection methodology and to -oordinate project level with one or more divisions or districts. a field test at the The methodology will be an attempt to synthesize national level commodity-driven projections developed for IWR's 1988 Inland Waterway Review with regional economic analysis and localized shipper/receiver data to develop specific forecasts. Also, IWR personnel will review software packages that have been r½;eloped for Several existing programs enable forecasting to b,. done with Some of these forecasting. limited data and/or provide techniques for risk analysis. software forecasting packages will be highlighted in the f'llow-up report. iv ACKNOWLEDGMENTS This document has been prepared as part of an Institute Resources for Water A Final Research & Developmco.t work unit on Planning Methodologies. Report will present guidelines and recommendations transportation forecasts by commodity and waterway Grier, for inland navigation in FY1992. The authors for this report were David V. IWR Research Division. in IWR Navigation Division, and L. Leigh Skaggs, The authors gratefully acknowledge valuable assistance Shipla Patel and Jack Lane of the completing this report from Dan Badger, IWR Navigation Division. V TABLE OF CONTENTS Page EXECUTIVE SUMMARY .................. ......................... .......................... .. iii v ix xi ACKNOWLEDGMENTS .......................... LIST OF FIGURES .................. LIST OF TABLES ................... .......................... .......................... INTRODUCTION ......................... REVIEW OF FORECASTS AND METHODS ................................. 1. ........................... 1 7 Lower Mississippi Region Comprehensive Study, Appendix J, Navigation, Lower Mississippi Region Comprehensive Study Coordinating Committee, 1974 . . . 2. Comprehensive Master Plan for the Management of the Upper Mississippi River System, Appendix A: Navigation and Technical Report, Upper Mississippi River Basin Commission, October 1981 .. .......... Projections of Demand for Waterborne Transportation, Ohio River Basin 1980-2040, Study Summary, Ohio River Division, December 1980 ...... ............. Gallipolis Lock and Dam Replacement, Ohio River, Appendix L, Study Area Economic Base and Commodity Flow Analysis, Huntington District, Ohio River Division, April, 1980 .......... ................. Monongahela River Navigation System, Locks and Dams 7 and 8 Feasibility Study, Pittsburgh District, Ohio River Division, January 1984 ...... Lower Ohio River Navigation Feasibility Study IL-KY (Mouth to Cumberland River), Louisville District, Ohio River Division, August 1985, Revised November 19805 .......... ................. Kanawha River Navigation Study, Winfield Lock Replacement Interim Feasibility Report, Huntington District, Ohio River Division, September 1986 ..... 9 3. .. 17 4. .. 26 5. 37 6. .. 44 7. 47 Vii TABLE OF CONTENTS (continued) Page 8. Forecast of Future Ohio River Basin Waterway Traffic 1986 - 2050, Volumes I and II, Navigation Planning Center, Huntington District, Ohio River Division, May 1990 ................. ....................... Supplement to the Environmental Impact Statement: Tennessee-Tombigbee Waterway, Alabama and Mississippi, Navigation, US Army Engineer Districts Mobile, Alabama, and Nashville, Tennessee, April, 1981 ......... ................ Operational Forecast for Initial Traffic on the Tennessee-Tombigbee Waterway, Mobile District, South Atlantic Division, August 1985 ..... ............ Interim Feasibility Report and Environmental Impact Statement for Oliver Lock Replacement, June 1983, and Reevaluation of the Oliver Lock Replacement Project, September 1985, Mobile District, South Atlantic Division ... ........... Bonneville Navigation Lock, Columbia River, Oregon/ Washington, General Design Memorandum, Volume 2 of 2, Appendixes, Portland District, North Pacific Division, September, 1984 ........ ............... Mississippi River Gulf Outlet New Lock and Connecting Channels, Feasibility Study Draft Report, New Orleans District, Lower Mississippi Valley Division, March, 1989 ....... ............. Montgomery Point Lock and Dam Feasibility Study, McClellan-Kerr Arkansas River Navigation System, Little Rock District, 1990 ....... .............. The National Waterways Study - A Framework for Decision Making - Final Report, U.S. Army Engineer Water Resources Support Center, institute for Water Resources, Report No. NWS-83-1, January 1983 ..... 1988 Inland Waterway Review, IWR Report 88-R-7, U.S. Army Engineer Institute for Water Resources, November 1988 ............ .. ................... . 53 9. 64 10. .. 67 11. .. 70 12. .. 72 13. 79 14. 82 15. 83 16. 92 SUMMARY 107 viii LIST OF FIGURES Page I 2 HISTORIC AND PROJECTED TRAFFIC FOR GRAYS LANDING HISTORIC AND PROJECTED TRAFFIC FOR POINT MARION (L&D 8) ................. ....................... MONONGAHELA RIVER TRAFFIC PROJECTIONS (L&D 7) 41 42 . . 3 4 5 6 NATHAN ADJUSTED 43 .. 49 50 .. 63 KANAWHA RIVER SYSTEM LOCK TRAFFIC 1940-2050 ........... KANAWHA RIVER SYSTEM COMMODITY TRAFFIC 1940-2050 OHIO RIVER SYSTEM TOTAL TRAFFIC ........ ............... ...... ix LIST OF TABLES Page 1 ACTUAL AND PROJECTED COMMERCE, LOWER MISSISSIPPI RIVER REGION 1970-2020 ......................... .......................... NATIONAL WATERWAYS STUDY GROWTH RATES ........... ............ 8 10 2 3 UNCONSTRAINED FLOWS BY LOCK AND COMMODITY, YEAR 1980 .................. .......................... UNCONSTRAINED FLOWS BY LOCK AND COMMODITY, YEAR 1990 .................. .......................... UNCONSTRAINED FLOWS BY LOCK AND COMMODITY, YEAR 2000 .................. .......................... UNCONSTRAINED FLOWS BY LOCK AND COMMODITY, YEAR 2010 .................. .......................... UNCONSTRAINED FLOWS BY LOCK AND COMMODITY, YEAR 2040 .................. .......................... FORECAST .. FORECAST .. FORECAST .. FORECAST .. AND .. 11 4 12 5 13 6 14 7 15 8 OHIO RIVER NAVIGATION SYSTEM.TRAFFIC, 1976 AND 1989, PROJECTIONS 1980-2040 ............ .................... OHIO RIVER NAVIGATION SYSTEM, HISTORIC AND PROJECTED WATERWAY TRAFFIC DEMANDS BY COMMODITY GROUP ........... 19 9 .. 21 10 TOTAL WATERBORNE COMMERCE BY LOCK AND DAM, OHIO RIVER BASIN, 1976 AND PROJECTED 1980-2040, SELECTED YEARS ..... TOTAL COAL AND COKE COMMERCE BY LOCK AND DAM, OHIO RIVER BASIN, 1976 AND PROJECTED 1980-2040, SELECTED YEARS ..... COMPARISON OF 1990 TRAFFIC PROJECTIONS ON THE OHIO RIVER SYSTEM: STATISTICAL METHODS (CONSAD), SHIPPER SURVEY (BATTELLE), SUPPLY-DEMAND ANALYSIS (NATHAN), AND IWR . EXISTING AND PROJECTED OHIO RIVER BASIN WATERWAY TRAFFIC BY COMMODITY GROUP ............... ..................... EXISTING AND PROJECTED GALLIPOLIS LOCK TRAFFIC BY COMMODITY GROUP ................ ....................... PROJECTED MONONGAHELA RIVER TRAFFIC ...... ............. 22 11 24 12 . . . 31 13 33 14 .. .. 35 40 15 L6 PROJECTED TRAFFIC DEMAND FOR LOCKS AND DAMS 52 AND 53, LOWER OHIO RIVER BASIN, 1995-2045 ...... .............. xi 45 LIST OF TABLES (continued) Page 17 OHIO RIVER NAVIGATION SYSTEM WATERBORNE COMMERCE BY COMMODITY GROUP, 1980 .............. .................... COMMODITY MIX OF PROJECTED KANAWHA RIVER TRAFFIC DEMANDS 1980-2050 ...................... .......................... SUMMARY OF INDUSTRY FORECASTS AND OBERS-BASED VARIABLES USED IN WATERWAY PROJECTIONS ........... ................ OHIO RIVER NAVIGATION SYSTEM PROJECTED COMMODITY TRAFFIC, 1986-2050 ...................... .......................... TENNESSEE-TOMBIGBEE WATERWAY - 46 18 48 19 59 20 62 . . . 21 22 TTWW COMMODITY FORECAST 66 FORECAST OF INiTIAL (1985) TRAIFIC ON THE TENNESSEETOMBIGBEE WATERWAY ................. ..................... PROJECTED TONNAGES FOR SELECTED LOCKS FOR THE BLACK WARRIOR--TOMBIGBEE RIVER SYSTEM, 1990-2030 (WITH AND WITHOUT PROJECT CONDITIONS) ............. ................. TOTAL TRAFFIC PROJECTIONS AT BONNEVILLE AND ACTUAL TONNAGE 1985-89 ........... LOCK, 1985-2010 ................. FOR 69 23 71 24 79 25 THE NATIONAL WATERWAYS STUDY PRINCIPAL ASSUMPTIONS NWS SCENARIOS .................... ........................ 87 26 WATERBORNE PROJECTED USE FOR ALL COMMODITIES MISSISSIPPI RIVER SYSTEM/GREAT LAKES DOMESTIC TRAFFIC INBOUND, OUTBOUND, LOCAL, AND THROUGH: 1977 AND 1989 ACTUAL TONNAGE AND PROJECTIONS FOR 1980-2003: BASELINE SCENARIO ..................... .......................... WATERBORNE PROJECTED USE FOR ALL COMMODITIES MISSISSIPPI RIVER SYSTEM/GREAT LAKES DOMESTIC TRAFFIC INBOUND, OUTBOUND, LOCAL, AND THROUGH: 1977 AND 1989 ACTUAL TONNAGE AND PROJECTIONS FOR 1980-2003HIGH USE SCENARIO ....................... .......................... WATERBORNE PROJECTED USE FOR ALL COMMODITIES MISSISSIPPI RIVER SYSTEM/GREAT LAKES DOMESTIC TRAFFIC LOAt. AND THROUGH: 1977 AND 1989 [NBOUND, OUTBO)UAD, ACTUXI. TONNA(GE AND PROJECIIONS FOR 1980-2003: LOW USE SCENAR IO . .. . . . . . . . . . . . . . . . . 88 27 89 28 . .. . 90 :xii LIST OF TABLES (continued) Page 29 WATERBORNE PROJECTED USE FOR ALL COMMODITIES MISSISSIPPI RIVER SYSTEM/GREAT L-MKES DOMESTIC TRAFFIC INBOUND, OUTBOUND, LOCAL, AND THROUGH: 1977 AND 1989 ACTUAL TONNAGE AND PROJECTIONS FOR 1980-2003: BAD ENERGY SCENARIO ................ ....................... U S. INLAND WATERWAY TRAFFIC 1986 ACTUAL TONNAGE AND PROJECTIONS OF COMMODITY MOVEMENTS, 1990-2000 .......... GROWTH RATES USED FOR PROJECTIONS OF WATERWAYS TRAFFIC BY COMMODITY GROUP, FOR INLAND WATERWAY SYSTEM ..... T U.S. INLAND WATER !AY TRAFFIC 1986 ACTUAL TONNAGE AND PROJECTIONS OF COMYjUITY MOVEMENTS, 1990-2000 .......... .. 91 30 94 31 96 32 102 33 GENERAL PROJECTION METHODOLOGY AND DATA SOURCES FOR THE 16 INLAND WATER STUDIES ............ ................... 108 xiii INTRODUCTION Inland waterway traffic Army Corps of Engineers' benefits. projections are important elements in the U.S. planning process for determining navigation project cost sharing resulting from the importance of Nationally At present no consistent for use by project With the emphasis on non federal Development Act of 1986, the Water Resources consistent traffic set of waterway demand estimates will increase. traffic demand projections are available managers and water hoc procedures resulted in resource planners. Consequently, analysts must devise ad This has to produce project-specific waterway projections. a wide variety of approaches for traffic generally producing inconsistent results demand projections within from one project study to the Corps, another. The Institute address for Water Resources (IWR) in has been directed to study and the problem of inconsistencies Corps of Engineers projection to develop procedures inland waterway traffic and demand methodologies. guidelines projections The objective of the study is for making consistent and systematic that fit within a national network of regional production and and which account for traffic projections carried by consumption patterns other modes of transportation. methodology The scope of work calls for developing a for inland waterway traffic demand projections by river reach and from Corps divisions by commodity detail, and districts. to be reviewed by representatives Component tasks of IWR's research traffic project include preparing a report reviewing recent inland navigation demand projection methodologies used in level and national level Corps reports and identifying sources of transportation, and commodity production and synthesized analysis, and information for economic, consumption forecasts; from an assessment contract forecast development of a projection methodology regional of previous Corps work, services; input/output field review and testing of the projection traffic forecasts at the project level; final methodology to develop sample refinements and enhancements changes and modifications set of general of the methodology incorporating appropriate generating a final to techniques and data inputs; inland waterway traffic projections at the national level, for districts participating in along with waterway and lock level projections the field test; preparing a report/manual documenting the projection interested field level. methodology and guidelines; and conducting a seminar for all and practical offices to review the approach applications at the field This report reviews and briefly assesses previous Corps forecasting data sources for commodity demand and supply and U.S. Army Corps of Engineers These inland navigation techniques and identifies economic forecasts used in studies completed between 1974 and 1990. and/or contracted by Corps districts studies were conducted by of specific to determine the feasibility inland navigation projects within their jurisdictions. incorporated justification in many of these feasibility The economic analyses the studies were used in of inland navigation projects presently under construction or in and design phases. The 16 navigation studies preconstruction engineering reviewed in this report include: o o Lower Mississippi Region Comprehensive Study of the Upper Comprehensive Master Plan for the Management Mississippi River System o Projections of Demand for Waterborne 1980-2040 Transportation, Ohio River Basin, o o o o o o Gallipolis Lock and Dam Replacement Locks and Dams 7 and 8 Monongahela River Navigation System, Lower Ohio River Navigation Feasibility: (Mouth to Cumberland River) 1986-2050 Forecast of Future Ohio River Basin Waterway Traffic: Kanawha River Navigation, Supplement Winfield Lock Replacement Impact Statement: to the Environmental Tennessee- Tombigbee Waterway o Operational Forecast for Initial Traffic on the Tennessee- Tombigbee Waterway o o Oliver Lock Replacement Bonneville Navigation Lock, Columbia River 2 "o "o o Mississippi River Gulf Outlet New Lock and Connecting Channels Montgomery Point Lock and Dam The National Waterways Final Report Study - A Framework for Decision Making - o 1988 Inland Waterway Review While Corps planning for waterway district and division level, improvements is centered at the level the Corps also has undertaken national navigation studies to provide an integrated system overview and to rank specific project needs for planning, the inland waterways system. incorporated in Waterway Review, design, construction, and operation of Reviews of the projection methodologies and The 1988 Inland included in this report. the National Waterways Study (NWS) both published by IWR, also are national Despite the similarity of both studies' specific) outlooks, system (versus projecteffort addressing at both the NWS represented a massive multi-year projections waterborne traffic for domestic and foreign commerce coastal ports and on the inland waterways, competing modes of transportation (e.g., recommendations regarding and included share analysis for Specific pipelines and rail). investment strategies and schedules based on these The purpose of The 1988 Inland projections were part of the assessment. Waterway Review, on the other hand, traffic was to provide useful information on and projections to help supplement the waterway performance, trends, planning efforts of Corps districts mandated and divisions and the Congressionally- Inland Waterways Users Board. A critical element in the process is of determining benefits for a expected to potential navigation project use the project. effort, In the estimation of future traffic some instances districts have invested considerable time, traffic projections for a and expense into developing comprehensive On the other hand, number of projects. other districts have had to prepare and were compelled Unfortunately, projections under much greater budget and time constraints, to draw on existing projections with only minor modifications. no uniform se'- of national waterway and recurring basis. employ a wide variety forecasts has been available on a timely district planners economic Compounding this lack of consistency, of projection methodologies in their individual 3 analyses. A review of the 16 Corps inland navigation studies indicates that several unique forecasting procedures were used. to be addressed in While each project always projections, the credibility will have unique features developing traffic the use of consistent macroeconomic of all the forecasts. assumptions will enhance The individual methodologies into several general categories. year traffic from each project One procedure report can be grouped involves multiplying a base These increases level by commodity-specific time periods, annual growth rates. traffic in may vary over different but total any given year can traffic levels. commerce at Industrial the simply be computed by aggregating Variations the individual commodity on this method were used for projections of waterborne River), Oliver Lock (Black Warrior River), Waterway), Bonneville Lock Winfield Lock (Kanawha Canal Lock (Gulf Intracoastal (Columbia River), and Dam 26, Study. In Second Upper Mississippi Chamber), River Comprehensive Master Plan (Locks and the Lower Mississippi Region Comprehensive addition, both national level method. reports published by IWR used this type of projection used in the Winfield Study were both commodity specific receiving waterborne commodity traffic. The forecasts and specific to the BEA areas A second group of studies employed a "shipper survey" method in which existing and potential waterway users distributors, military installations, (utilities, exporters, factories, mills, etc.) Responses approach terminal operators, were interviewed to determine their future plans to ship by barge. This "bottom-up" then were aggregated was used in District's Waterway. 53, to yield total projections. the Nathan Associates Ohio River Basin Study and the Mobile restudy, and in operational forecasts for the Tennessee-Tombigbee Ohio Locks 52 and Other reports Locks, (e.g., Monongahela Locks 7 and 8, Gallipolis and Bonneville Lock), did incorporate traffic flows. while not relying on shipper in surveys exclusively, future survey and interview techniques establishing A third methodology was used the Ohio River Basin Study and the These studies correlated historic to such independent variables as Bonneville Navigation Lock Study. waterborne traffic in various commodities 4 time, population, employment by industry, earnings by industry, and personal income. Regression equations were developed that best "explained" the Future values of the independent OBERS national historic pattern for each commodity group. variables were obtained from the Bureau of Economic Analysis' and regional projections series. These government estimates then were plugged into the regression equations to yield future values for waterborne traffic. A final method, developed by the consulting firm Robert R. Nathan Associates for the Ohio River Division, provided the basis for several reports, including Monongahela Locks 7 and 8, Ohio Locks 52 and 53, and Gallipolis Locks. This approach included a long-term evaluation of waterway traffic demands based upon an analysis of market demands for waterborne commodities, the Ohio River basin's resource base of these commodities, and a forecast of the transportation probable long-term production levels, modes involved in moving these commodities from production areas to consumption areas. A brief description of the forecasting methods and commodity projections for each of the reviewed studies is are compared to other studies, if presented in this report. The projections that is, appropriate, and to actual events, how well did the forecasts predict what actually took place. The sources of information for each report's projections also are identified, as well as their usefulness and currency. 5 REVIEW OF FORECASTS AND METHODS 1. Lower Mississippi Region Comprehensive Study, Appendix J, Navigation, 1974. Lower Mississippi Region Comprehensive Study Coordinating Co-mittee, The purpose of the 1974 Lower Mississippi Region Comprehensive to make a broad determination period, 1970-2020, Study was of the region's navigation needs for the 50-year national income and analyzed under two objectives: regional development. projected waterborne Part of the needs assessment was dependent upon traffic levels through 2020. The study used 1970 base The year tonnage data from Waterborne Commerce waterborne share of total of the United States. commerce moving through the Lower Mississippi Region 1970 proportion of total traffic. was assumed to maintain at least its Future waterborne commerce in selected commodity categories was One set of selected projected by applying growth rates to 1970 base year traffic. growth rates was obtained from OBERS industries for particular (Program BEA regions. A) indexes of economic growth in These indices of growth rates by major industry groups Growth rates in in were used to forecast regional development. grain traffic; growth rates in agriculture were used to forecast traffic; mining were used to forecast coal the average traffic; of growth rates mining and refining were used to forecast petroleum quarrying to forecast aggregates forecast iron and steel industrial chemical traffic; traffic; growth rates in primary metals to growth rates in rates in arid growth Another chemicals to forecast (Program B) were traffic. set of indices in employment developed to average reflect a regional growth equal to the national to base of 1.4 percent annually. Application of both sets of indexes year ton miles provided projections of ton miles by river segment 2000, and 2020 (Table 1). for 1980, The utility of this studv's projections has e VbI s, trra ff1ic is somewhat weakened by the dated nature of tht OBERS growth ilmd ic levels amid the obsolescence of 1967 0 NN C0 Q r* 0 . 4 CD- oc 0 r ~~tNl 4-. mU c CHl H 0 : N o(Nc.i 00 I0 ' -HC 00 -4 E 0 ~ 0 ~~ -H 0P. - Nl j l- 1 x- E-44> 43) 0 0 u .- ! 0 0 L GP 0 (U '-0 0 x3 ix 413 u j .r m * L, - 03 V4 0 3'- 03 0 C 4 0 0 0U.' 0U @j 0 0U 4 3 ( o 0 3 mnI- - ( 8 The projection methodology, studies, indexes appear in this case while used effectively in several other navigation to be too generic. to base traffic Applying OBERS productivity levels does not necessarily Potentially for various industries traffic correlate with increased more for a given commodity group. important determinants of demand for commodities moving on the waterway Grain, coal, and petroleum products movements, River, are the were not fully considered. three major commodity a great extent by U.S. productivity gains in groups on the Lower Mississippi influenced to than by and world demand for food and energy products agriculture, mining, and refining. Use of additional data sources would have enhanced credibility of the projections. 2. Comprehensive Master Plan for the Management Appendix A: of the Upper Mississippi Upper Mississippi River System, Navigation and Technical Report, 1981. River Basin Commission, October This report was written with considerable fact, several members Corps of Engineers input; in of the Commission were Corps personnel. (Second Chamber), The Corps' economic analysis of Lock and Dam 26 Louis, located on the traffic projections Mississippi River above St. incorporated commodity directly from the Comprehensive Master Plan. The Comprehensive Mastr .,i the Upper Mississippi Although (above Plan study projected commodity St. Louis) and Illinois Rivers and lock traffic through 2040. the 1980 1980 was used for the base year for commodity movements, (NWS) figures were estimated from National Waterways Study Likewise, finalized forecasts in the projections. (which were were developed using the NWS growth of 1980). traffic Commodity-specific rates fall growth rates from NWS were tonnages for applied to 1980 hase year 1.990, that 2000. present 2010, tli at-'vs einid to yield forecasts of traffic and 20!,0. implicit Tables forecast 2-7 from the Comprehensive Master commodity growth rates Plan from (assimilated the Nat-ional Mississippi Stllud,) arid forecast segments ions tonnages by lock for the Upper 111 liols Riv'r h r". Soime a< Kdeveloped by the Basin Commission) imbedded in the NWS forecasts are art, r-eprodu•d (If-SC r i s.umpt ht~d Vt 1o SCoco - - - ~ ... . 0' -~ -9 cq a - 00 Qn t' IVfl * I ~ -004 00 II 2. 9x 1 jIN 000 u 11 i 7 7 7 i <00o A C A V, 5 - 5 -Ri oN s u I- n n.Z - I- 0 10 ~ I eorj ow Ae -4 N N N -4 NNf -4Nf 04 0 N N7 0%f 0 Cr V V CA IA 140 Fpww~w~. 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MP.0 tP~tVII V4n In on0 mft me30W a6Ift dcd E-~~~~~~~0 ~ M ~ ftft e 0 ft ft @ 0 f § O i f 0 M a 2 %ge- 'r. V. a-' ftt0Ot M P. 06 O a O~1fP 0t g.fN WI af v' g PP. 1a t..vEa @ftfftW I~P.0@fftftft ft 13 JA9~ InI ' %P INS~~~ om -m f LW %Pal OV al %p, :vN n F P . r 11 l P -0 00 P -~'0 V. VN ~ fr AnM N NN NN NN f N N NVINNN0 N 0c000 ~ I19V i N .4m . M votP F"o VZV0F . o 6 u *cc on *4 - - - - - .. .. v~~- . %0NN V N 11N :: ! 4 1t W O b,~-q ftw -~ V vv*u -0 ee --- - --- ~ 00 -- ----- . OQw a V00 0aft~~ ft 00 m" ft ft ft ON wV 000'A00 mfN 00800 o . E -~A b. o u N v~y WY WW WW WO OO*OuOg14n a (p ; f4 pq 'A attt v f f ftNN t t f f 0 4 f4 el o x - 0- - l"vev a A' t ft &4& ftftqYY ~ ~ ~ w vttftt 0.6 f mfl 0% on ontft tf ft % .P tft O0. t I~~ ft .% tv -ft ft F. f.ft %ft ONt . -~~~~~~ ft ' f ' ' ~f f N94 . ft . r' fq"f . U ' fttdCt UttY fffftttttt *S InfttS ft f: I A~tt.9iI f"~ftFf m m m V . m ftSF P . - C Z~ zt wtf Nf--ft j, m v IV to^, " YYY4 10W 2 ZZImpftC 'o.9 u ~ a1 5 Grain traffic, which is in large part a driving force on the Upper is heavily influenced by foreign demand Mississippi Basin Navigation system, for U.S. region is export grains. Approximately 90 percent of grain moving outbound from the The National Waterways Study forecast to exhibit strong growth (3 that destined for export. demand for grain would continue to 4 percent per year through 2003), would increase, acres planted would increase, yields per acre and domestic demand would remain constant. The NWS also predicted that real oil year, prices would continue to increase by 3.8 percent per energy sources and reducing In response, domestic coal demand encouraging the search for alternative share of total energy consumed. petroleum's was expected to triple doubled. during the period 1977-2003, while export demand The NWS also expected steel (thereby imports as a percent of total and raw material consumption to fall suppliers), historical benefiting domestic producers traffic to exhibit slower and for chemical average. growth than its In traffic, comparing the Lock and Dam 26 it appears (L&D 26) projections to actual historic Plan projections fell short of reached that the Upper Mississippi Comprehensive Total traffic (71.1 in 1985 were too optimistic. the "estimated" (57.3 million tons) 1980 base million tons). By 1987 actual traffic only 69.3 million tons, One explanation far short of the 1990 projection of 94.2 million tons. for the discrepancy between forecasted and actual values is change in the U.S. economy after 1980 not captured the extent of macroeconomic by the NWS projections or other forecasts in at the time. A severe world the collapse of oil recession, prices, structural changes the national economy, and fierce competition for grain export markets were not anticipated for L&D 26 were developed. it is more difficult While forecast values can be the methodology employed when the forecasts compared in to history, to evaluate this study. Apparently the National Waterways Study was relied upon These projections were exclusively in for projected growth rates by commodity. turn dependent upon data and economic models (DRI), a well-respected economic consulting the Upper Mississippi Study, developed by Data Resources, firm. DRI's methodology is DRI's role in this Inc. not explained in in Comprehensive is Plan report. the National W;aterways however, examined subsequently document. 16 A second factor in not realizing the projected traffic was the application of growth rates from NWS rather than tonnages projected by NWS. The NWS growth rates were derived using a 1976 base year and premised on achieving a set tonnage level in rates to a different the forecast years. (1980, Applying these growth and much higher base disconnects when grain movements were in the exceptionally high) the rates from the economic assumptions of the forecasts. DRI Model while increasing the magnitude 3. Proiections of Demand for Waterborne Study Summary, Transportation, Ohio River Basin 1980-2040, Ohio River Division, December 1980. Projections navigable tributaries of waterborne commerce on the Ohio River and its Monongahela, Kanawha, eight Green, (the Allegheny, Kentucky, Cumberland, Tennessee, and Clinch Rivers) Robert R. were produced for ORD by three CONSAD Research independent consultants: Corporation, and Battelle Nathan Associates, Columbus Laboratories. The CONSAD report, completed in January 1979, the historic waterborne projected traffic commodity Commerce demands through 1990 by correlating Ohio River various system (obtained flows on the reports) with The from the 1975 Waterborne indicators of regional and national demands for the commodities. traffic demand variables which appeared to best describe for each of the commodity groups was selected historic and projected values the historic pattern The for projection purposes. for the demand variables were based upon the of National and Regional Economic Activity. 1972 OBERS Series E Projections CONSAD used correlation and regression the historical quantitative levels. relationships These techniques to try to determine indicators between national economic and waterway traffic relationships could then be applied to future economic forecasts traffic. The forecast to obtain projections of future demand for waterway indicators, income, provided by 1972 OBERS Series E, per capita income, and population. economic were total earnings, total personal A series of regression equations the eight were developed using traffic variables and time, GNP, levels for national commodity groups as the dependent 17 population, national income and earnings, and basin-level income and earnings individual in various industry groups as the independent variables in regression equations. Only variables that had some identifiable economic a particular commodity group were used in relationship to the commodities in the regressions. The criteria employed for retention of a regression equation (R2) and "appropriateness" of the projected tonnage (a were goodness of fit subjective judgment whether or not the projected value seemed reasonable in light of historic tonnage values). As an example, basinwide traffic in grains was predicted as a function of projected national earnings in manufacture of food and kindred products and projected basinwide earnings in agriculture and wholesale and retail trade. At the individual river level, the analysis was Finally, performed by direction (upstream/downstream) and commodity group. the projection procedures employed for lock and dam projects were similar to those used for individual river projections. CONSAD's and NATHAN ASSOCIATES' are presented in Table 8. projections of Ohio River System traffic 1976 and 1989 actual For comparative purposes, traffic and IWR's projections from The 1988 Inland Waterway Review also are provided. It should be noted that the IWR study was completed almost 10 years the economic and political conditions were after the other studies; thus, different. The Battelle report, through 1990. completed in June 1979, also projected traffic Projections were developed by surveying all waterway users in the Ohio River Basin through a combined mail survey and personal interview approach. The purpose of the survey was to obtain from each individual by specific origins and All shipper an estimate of his future commodity movements, destinations, as well as other associated traffic information. identifiable waterway users were contacted and the responses were then aggregated to yield projected traffic demands. The Nathan report, movements into, from, completed in November 1980, projected commodity and within the Ohio River Basin using three techniques: market demand analysis, transportation 18 and modal split commodity resource analysis. inventory, The demand for waterway was projected for 15 TABLE 8 OHIO RIVER NAVIGATION SYSTEM TRAFFIC, 1976 AND 1989, (Million Tons) AND PROJECTIONS 1980-2040 1976 Total Traffic Historic CONSAD Nathan IWR (High) IWR (Low) Coal Traffic Historic CONSAD Nathan IWR (High) IWR (Low) 1980 1985 1989 1990 2000 2020 2040 178.1 179.3 203.9 238.4 -211.3 264.8 -200.8 222.2 -. 328.1 297.3 254.2 232.3 334.3 390.8 438.7 326.9 266.8 103.0 -- 103.8 117.3 144.6 117.0 146.6 -116.5 130.4 -. 182.3 183.5 204.2 228.1 253.7 159.5 217.9 146.5 176.8 commodity groups, by origin and destination, through 2040. Point-to-point waterway flows were allocated to 72 operational lock and dams. Major forecasts of the Nathan report included the projection of traffic growth on the Ohio River System (ORS) million tons in 2040 1989 (Table 8). (historical from 200.8 million tons in 1976 to 438.7 238.4 This figure compares to an actual Corps data) million tons in tons in and IWR's projected 327.0 million high scenario). in Further, the for 2000 (The 1988 Inland Waterway Review, the largest absolute Nathan report forecast increase commodity traffic coal and coke and the highest rate of growth for ore and mineral commodities (chiefly due to inbound alumina shipments). to decline, Movements of petroleum and petroleum products were forecast consumption of these products. as were regional production and As previously mentioned, market demands in Ohio River Nathan incorporated assessments of future (production base) An analysis of (consumption base) Basin (ORB) and resource inventories BEA regions for 15 commodity groups. projecting future historical patterns. modal splits was also used in transportation A summary of Nathan's methodology follows: 19 (1) BEA regions were identified in the ORB as ultimate origin or destination of waterborne movements. (2) Historical production and consumption data by BEA region for each (e.g., Departments of commodity were obtained from a variety of sources Interior, Analysis, Agriculture, Energy, and Transportation, Bureau of Economic Bureau of the Census, and state and local governments). (3) Historical commodity movements to and from BEA regions by rail and water modes were provided by the Corps of Engineers. to equal total Truck shipments were estimated shipments. net shipments minus net water and rail (4) Factors affecting modal researchers. choice were solicited from shippers, receivers, and professional (5) Future production and consumption of commodities by BEA region were for 1980, 1990, 2000, 2020, and 2040, based on national projections projected developed by Federal agencies and then disaggregated to BEA levels. (6) traffic Projected commodity movements and modal splits patterns and past trends. were based on 1976 Trends were adjusted to take into account the opinions of industry experts and the stated intentions of firms. (7) Projections of waterborne movements were distributed among BEA-to-BEA (1976) distributions, again adjusted links on the basis of historical according to information from interviews. Traffic locks are coke, projections from The Nathan Report for the Ohio River Basin Table 11 for coal and presented in Table 10 for total tonnage and in Ohio River navigation system historic waterway traffic Report. demands 1980-2040, (1976 and 1989) and projected are presented in Table 9 from the Nathan 20 CD u CDC NO M et w 0' - LIn rv UN r. MUn m" N M 0 C 4 C 10 C lC . 07' 0 *0 LA 0 O UTCA 1 *ý Ln Ix,'01 ~ Ir4 00 o 2 l I cl7 C). N LAý 0 .0 Ln r', ct 0t0No' - 40 n r'~~~~~ @ U, Nl r, 4 '4 ' @2 CO Nn a L- S 0;0 ca CU @ ~ N @ Ic.r 0 W: 0u 'C LCo a M n C 0 to.10 ( CU w 4 0,L @C 2 0~ It 0 Wj u N CDn C-,e' 00 0 0, r0 0l 4 C r4 'C m~ &~ -.7 007 tmI 0 N0 -() c 2 'C2 _.7C ro 1- - 0 .@ C ' LA - 0 " 4 0 CD 0' r'- 0, I-& '0 m -7 I00i r4 0 N .- of0 0.0 . CD "' 0, -4, m @2 o n - ' s0 a0cir (a 0L . 00 m F'. -7 N~ LA 0m LAi @2 LA ' 2 LA . ::0: L -F ix -) 0 - LA 0 CUý 0 0- 7S 4.0.4, 0~' 4, UD 00 .C u L. C F'0'0 C1 L 4.02 (n. 2'-21 TABLE 10 TOTAL WATERBORNE COMMERCE BY LOCK AND DAM, OHIO RIVER BASIN, 1976 AND PROJECTED 1980-2040, SELECTED YEARS (Thousands of Tons) Projected Lock and dam TOTAL 1976 1,070,817 188 1,548 2,34 6,991 8,939 18,364 19,351 25,101 22,885 - 1980 1,167,818 208 1,657 2,605 7,622 9,689 19,734 20,836 27,275 25,846 - 1990 1,603,497 256 2,009 3,358 9,300 11,608 22,737 23,732 30,876 30,627 - 2000 1,895,238 290 2,161 3,726 10,332 -12,861 25,297 26,302 33,946 34,188 - 2020 2,383,408 324 2,276 4,104 11,115 13,856 28,369 29,475 37,971 41,314 - 2040 2,820,619 360 2,397 4,376 11,808 14,759 31,299 32,478 41,436 46,767 - a/ Opekiska LID Hildebrand LID Morganovwn LID Point Marion LID L/D 7 - Monongahela Maxwell L/D L/D 4 - Monongahela LID 3 - Monongahela L/D 2 - Monongahela L/D 9 - Allegheny L/D 8 - Allegheny L/0DT - Allegheny L/D 6 - Allegheny L/D 5 - Allegheny LID 4 - Allegheny L/D 3 - Allegheny L/D 2 - Allegheny Emewrth LID Dashields LID Montgomery L/D New Cumberland LID Pike Island LID Hannibal LID Willow Island LID 3elleville L/D Racine LID London L/D Marmet L/D Winfield L/D Gallipolis LID Greenup LID Meldahl L/D Markland LID LID 14 LID 13 ...... - 126 1,625 2,145 3,789 4,241 25,811 25,587 22,936 26,583 27,079 31,603 33,021 34,642 36,234 1,604 6,619 11,344 40,794 32,388 28,708 34,160 - 137 1,773 2,342 4,202 4,677 29,119 28,769 26,424 30,380 31,411 36,054 37,844 40,008 42,156 1,919 8,010 13,553 47,538 36,041 32,162 38,570 - 104 1,377 2,155, 4,786 5,286 36,092 35,428 33,314 38,067 41,249 48,118 51,248 56,175 58,087 3,035 12,330 19,403 64,519 48,668 42,843 53,729 -.. - 91 1,229 2,157 5,417 5,989 41,446 40,609 38,494 43,818 48,121 56,048 60,851 67,185 68,900 3,224 13,215 21,977 75,000 59,833 52,521 65,690 - 101 1,374 2,462 6,430 7,137 50,144 49,062 48,157 54,603 61,610 71,884 80,830 88,612 90,105 3,209 13,382 26,483 93,475 72,473 65,961 85,723 - 107 1,452 2,655 7,140 7,986 56,587 55,324 55,155 62,451 71,247 83,251 95,454 104,338 105,746 3,196 13,814 29,810 107,916 86,123 79,158 103,764 - L/D 12 L/D 11 LIDo10 LID 9 L/ID 8-.... LID 7 LID L/D5 6 - ...... ....... -- L/D 4 L/D 3 L/I 2 L/D 1 McAlpine L/D Cannelton LID Newburgh L/D L/D 3 L/D 2 L/D 1 Uniontown L/D LID 50 - Ohio River L/D 51 - Ohio River Smithland L/D 542 542 542 542 40,094 42,787 39,854 58 12,417 12,958 47,126 51,895 52,743 52,913 546 546 546 546 44,493 46,495 42,247 67 14,062 14,685 48,519 53,459 54,267 54,520 521 521 521 521 63,218 66,056 68,874 85 22,845 23,871 72,&76 79,091 79,950 80,184 471 471 471 471 78,086 81,706 84,565 134 25,652 26,758 87,149 92,955 93,152 93,407 561 561 561 561 104,179 109,698 117,194 74 24,829 26,650 111,715 115,885 116,654 116,963 610 610 610 610 127,807 135,016 146,698 59 25,736 27,918 137,575 140,594 141.783 142,103 (continued) 22 TABLE 10 (Continued) Lock arid dam LID 52 - Ohio liver LID 53 - Ohio liver Kentucky - Barkley LID Cordell Hull LID Old Hickory LID Cheatham L/D Watts Bar L/D Chickamauga L/D Nickajack L/D Guntersville LiD Wheeler LID Wilson L/D Pickwick L/D ft. Loudoun L/D Helton Hill LID 1976 61,530 56,110 24,719 - 1980 62,460 55,009 27,405 276 3,609 472 1,438 4,173 4,824 7,532 7,895 8,850 312 6 1990 94,712 75,447 31,336 - Pro lecctd 2000 116,207 94,522 33,537 - 2020 146,489 117,641 42,648 - 2040 178,250 143,672 47,765 707 7,410 1,338 2,494 8,139 11,063 22,062 24,391 26,657 503 31 262 3,791 378 973 4,029 4,544 6,996 7,301 8,191 228 4 351 4,476 668 1,444 5,4966,478 10.228 10,847 11,950 407 9 465 5,250 830 1,705 6,447 7,798 12,835 13,747 15,048 473 13 650 6,605 1,128 2,213 7,620 9,907 18,221 19,887 21,760 514 23 SOURCE: Robert R. Nathan Associates, Inc. (Table G-1, pages 201-202 of the 1980 Ohio River Basin Study). a/ Total tonnages from running all locks and dams in the system. Note: Tonnages may not sum to totals due to rounding. 23 TABLE 11 TOTAL COAL AND COKE COMMERCE BY LOCK AND DAM, OHIO RIVER BASIN, 1976 AND PROJECTED 1980-2040, SELECTED YEARS (Thousands of Tons) Lock and dam TOTAL 1976 533,241 100 1,460 1,586 5,935 7,882 17,307 17,530 21,213 17,313 - 1980 594,408 108 1,557 1,693 6,437 8,503 18,547 18,781 22,648 19,350 -.... -... -... -... 1990 872,414 130 1,883 2,050 7,672 9,979 21,108 21,353 25,291 22,934 - Projected 2000 1,000,996 143 2,014 2,196 8,454 10,983 23,419 23,687 28,087 25,841 - 2020 1,235,851 151 2,103 2,296 9,012 11,753 26,266 26,564 31,882 32,239 - 2040 1,480,004 160 2,197 2,401 9,616 12,573 29,113 29,440 35,622 37,624 - a/ Opekiaka LID Hildebrand L/D Morgantown L/D Point Marion LID LID 7 - Monongahela Maxwell L/D L/D 4 - Monongahela LID 3 - Monongahela LID 2 - Monongahela L/D 9 - Allegheny L/D S - Allegheny LID 7 - Allegheny LID 6 - Allegheny L/D 5 - Allegheny L/D 4 - Allegheny LID 3 - Allegheny L/D 2 - Allegheny Easworth L/D Dashields LID Montgomery L/D Neo Cumberland LID Pike Island L/D Hannibal LID Willow Island LID Belleville LID Racine L/D London L/D Marmet L/D Winfield L/D Callipolis LID Creenup L/D Meldahl L/D Markland L/D L/D 14 L/D 13 L/D 12 L/D 11 L/D 10 L/D 9 L/D 8 L/D7 I.LID 6 LID 5 LID 4 LID 3 L/D 2 LID I McAlptne LID Cannelton L/D Newburgh L/D L/D 3 L/D 2 L/D 1 Uniontown L/D 208 2,012 2,463 15,947 15,947 11,500 14,110 15,279 17,615 17,616 18,290 18,292 1,265 5,195 4,221 22,149 13,721 9,546 11,670 -....... -....... - 217 2,120 2,593 17,942 17,942 13,318 16,204 17,874 20,527 20,528 21,368 21,370 1,560 6,335 5,114 25,941 14,823 10,327 14,041 - 233 2,289 2,786 21,465 21,465 16,517 19,862 22,891 27,820 27,826 30,618 30,622 2,613 10,173 9,133 36,009 21,779 15,203 22,212 - 265 2,567 3,136 24,437 24,437 19,236 22,857 26,636 32,316 32,323 35,658 35,663 2,811 11,155 10,307 41,426 28,315 20,128 27,335 -- 313 2,994 3,697 31,457 31,457 26,619 30,985 37,357 44,081 44,091 48,317 48,322 2,781 11,219 11,217 55,791 35,120 27,502 38,059 361 3,435 4,277 37,454 37,454 32,929 37,772 45,892 53,452 53,464 58,492 58,497 2,800 11,625 12,310 67,547 45,176 36,536 48,626 -.... -... -..... -.... -.. -.... -..... - -. -. -... - -- - - 18,340 20,011 15,311 58 12,241 12,778 19,956 21,759 23,723 17,733 67 13,904 14,523 21,991 34,071 37,017 36,840 85 22,645 2J,665 39,342 41,849 45,485 44,442 134 25,377 26,472 43,427 57,471 62,448 62,272 74 24,517 26,318 52,466 62,647 78,845 79,829 59 25,387 27,543 64,434 (countiued) 24 TABLE I (Continued) Lock and dam L/D 50 - Ohio River L/D 51 - Ohio liver Saithland L/D LID 52 - Ohio Liver L/D 53 - Ohio Rliver Kentucky - Barkley L/D Cordell Hull L/D Old Hickory L/D Cheatham L/D Watts Bar L/D 1976 24.458 24,548 24,548 19,805 15,167 11,018 - 1980 26,788 26,868 26,868 19,668 12,988 12,653 - 1990 45,359 45,430 45,430 42,842 24,657 12,111 - Projected 2000 48,949 49,040 49,040 50,064 29,152 9,951 -- .-- 2020 56,261 56,380 56,380 57,546 29,802 8,897 - 2040 66,975 67.137 67,137 69,879 36,576 6,143 - - Chickamauga L/D Mickajack L/D Guntersville LID Wheeler L/D Wilson L/D Pickvick L/D Ft. Loudoun L/D Me lto n Hi l L /D 198 1,104 1,109 1,577 1,632 2,009 - 567 968 975 1,388 1,434 1,776 - 271 1,410 1,415 1,855 1,901 2,152 - 208 1,790 1,794 2,235 2,283 2,473 -- 213 1,951 1,955 2,343 2,385 2,529 112 1,900 1,902 2,179 2,211 2,270 ..... SOURCE: Robert R. Nathan Associate, Inc. (Table G-2, pages 203 and 204 of the 1980 Ohio River Basin Study). a/ Total tonnages from running all locks and dams in the system. Note: Tonnages may not sum to totals due to rounding. 25 4. Gallipolis Lock and Dam Replacement, Ohio River, Appendix L, Study Area Economic Base and Commodity Flow Analysis, Division, April, 1980. Huntington District, Ohio River To thoroughly evaluate improvements District all the existing Gallipolis project and potential the Huntington for for increasing tonnage capacity at the lock, estimated future traffic levels and origin-destination patterns Three independent yet complementary Ohio River system traffic. studies of of Demand future demands for waterway service were performed for Projections for Waterborne Transportation Research Corporation, (2) , Ohio River Basin 1980-2040: Institute, (1) by CONSAD (3) by Robert R. by Battelle Memorial procedures, and Nathan Associates. The methods, and resulting forecasts of each of the three studies were reviewed and interpreted by the Huntington District in their economic analysis of the Gallipolis Lock and Dam replacement a summary of the Huntington District's analysis study. The following is and selection of an appropriate projection methodology. Comparison of Projection Methodologies The Huntington District summarized future demands for waterway service on the Ohio River navigation system as a function of four major variables: 1) future local, regional, and national demands for products which use 2) the commodities moving on the basin's waterways as production inputs; portion of these demands which will be met by industries that 3) the raw material suitably located so inputs or final products can be transported by barge; (for raw materials) and markets (for the location of supply regions for finished goods) waterways; industries located contiguous share among all to the basin's navigable modes of transportation in and 4) the waterways' moving the raw materials from point of supply final or intermediate to point of production and the goods from point of production to point of consumption. The first two variables specify the demand for commodities the demand area-supply for each of the as well as area links; The the available supply- the third specifies and the fourth specifies the waterway tonnage links. 26 degree to which these variables are considered, either individually or in aggregate, varies considerably among the three projection studies. The theoretical approach used by CONSAD is founded on the hypothesis that a direct and quantifiable economic growth in relationship exists between the rate of The the Ohio River basin and basin waterway traffic. regression equations developed for each of the commodity resulting projections earlier. Series groups and the discussed implicitly consider each of the four variables Future commodity demand indicators were derived from the 1972 OBERS E projections of national and regional economic activity water resources planning. endorsed by The share of and the The the Water Resources Council for use in these demands that would be met by waterway-oriented subsequent modal split industries were estimated by regression techniques. system traffic regression equations yielded total group. These commodity group (O-D) demands by major commodity totals were then distributed to an originO-D traffic patterns. destination matrix format using the historical This overall approach yielded what might be considered a "baseline" projection projections River (i.e., a continuation of past trends). scenario, historic It utilized the 1972 OBERS the Ohio as the macroeconomic essentially assuming that path, economically, Basin would continue along its and socially, technologically, future. take It and become even more like the nation in the must also be remembered that the 1972 OBERS projections significant structural changes in did not into account the economy or the in later years. patterns regional redistribution of economic activity that took place The procedures also assumed a continuation of historical modal split and the relationships between production and consumption areas which were implicitly reflected in the historic waterway traffic. The Battelle Columbus significantly from CONSAD's Labs shipper survey approach differed statistically-based approach rather methodology. It could be projection by thought of as a "bottom-up" CONSAD. Each of the four than the "top-down" variables discussed above were determined by the as opposed to an independent held highly collective views of projection. Sinr:e the waterway users, it was probable that the survey participants 27 divergent views of the regional/national possible impact on commodity demands, basin waterway users collectively to the OBERS forecasts. it economic future as well as its to quantify how the their outlook was not possible viewed the future and compare The users provided estimates of future waterway traffic individual commodity and origin-destination points. The total volumes by system demands This then were determined simply by aggregating the individual responses. bottom-up approach permitted the identification of new traffic markets shifted or new facilities were built In (e.g links as as weil new power plants) as the elimination of other links. O-D traffic statistically-based assessment barge. essence, the traffic In de±mands and the links were solved simultaneously. projections, of the portion of its the shippefuture traffic contrast to the survey also reflected each firm's that would likely move by The long-zange commodity supply-demand and modal split Inc. analysi. performed by Nathan Associates, of the four major factors demands Listed earlier. It was designed specifically to measure each Basin waterway traffic influencing Ohio River thus represented a much more demands than the statistical comprehensive approacn or the and future assessment' of future traffic shipper survey approach. available were supply Future commodity demands (consumption) (production) for each BEA region within the waterway region and regional models and government, and Nathan analyzed and projected using broad national and, in some cases, trends, the judgment of industry, commodity specialists. The models usu.d representud nerni'v the best estimates of the Department of and on tenerc; products. -, rI ated products, the, Bu ruau of ores, the Department of Agriculture on aggregates, on grains r-elat-ed iron Mines ard all industry expert on alld steelIts p rou proj ct.,dU and minerals . The other smaller commiodity eroups wei us i rig a varit.tV of methods. The p di[~r H H & J -4 E--4 0 4. - Z3 0 H H 1CH~lCN Cl O Nwql q > 0~:1w z >- w~CO ~ E-1-4-40 o mU~-00 CO0ýi U Cnr- H H l 3 4Q Q) ý U) 04N N Cl 4 Hý Ný C N Hl 0) m044 OH E- V)tf0 0 C w ,ý) .U) 4J (0 0 >4~ Ei O-- -I C4 Nr C) H N- 0r H~ ý_ aO < m J~ U U~~- 300 OH ~ 0) - 0~<3 31 ý considered a more sophisticated method from the viewpoint of depth and detail of analysis. This methodology was based upon an exhaustive evaluation and realm of activities from which aggregate transportation In contrast, the other two projection of the full demands are methods derived as well as the modal shares. focused only on the waterway mode and its aggregate traffic. The activities which generate addressed in transportation demands and the modal shares were For these reasons the supply-demand as the a more simplistic manner. analysis performed by Nathan was designated by the Huntington District "most probable" future scenario. The results of the supply-demand analysis presented on a commodity-specific basis in for the Ohio River system are Over the entire Table 13. projection period these estimates were characterized by a growth trend which was increasing at a decreasing 1990, rate (2.8 percent average annual growth 1976As a result, a large A brief 0.8 percent average annual growth 1990-2040). total traffic growth was forecast portion of the explanation to occur by 1990. of each of the commodity groups follows. Coal and coke was the only commodity group or above its historic growth rate. that was expected to grow at This forecast was related to the expected generating facilities in the middle completion of several new steam-electric and lower Ohio River Basin area. percent in traffic 1990) While a large majority traffic (approximately 84 local a of future coal and coke was expected to be moving from production to consumption areas within the basin, increase in inbound coal traffic in was anticipated. significant This increase was accounted for by expected growth the use of low-sulfur western coal by increase in coal receipts was Receipts of coal coal- basin powerplants. The largest relative expected to occur along the lower and middle Ohio Rivers. along the Tennessee fired electric Pittsburgh River were expected facilities in to decline as TVA phased out its favor of nuclear plants. As the generating area becomes increasingly dependent on external sources of coal due reserves, upbound shipments to the depletion of coal of high quality North Appalachian through Gallipolis were anticipated to increase significantly. 32 c, 0, + + + - 'm +1 + +A + 0. X44 LiO T 0,4 0 ~cm rn - CNj 4 L. . ,0 HE0 CL nC 00 '0 tLC' oiL 0 H O>r444 HF,~O i '2( 0fO 0 -l C lO 0 Cý 0 0 ~ OC0n ' ~ n1 ( ~ ~CD0C-ruL R 4 0 0ý 4 , 4, -' ~~4,,4, o 0 Li 4.. ~ , 0c U CL 0 4j' 3(0 4,, LU~ EC4, 4 0~C0 Wa Li C4,a( , .rEUCA ~ 4 ' .. ( (1) 4) L0i ~0) Li- 04,LLrL-'O d)a i 0i 02 u0 33 Growth in petroleum fuel traffic through 1990 is considerably relative increases in to historic traffic trends. expected to slow include slower relative to Reasons consumption, (thus an excess of basin refining capacity consumption reducing the need for fuel imports), and completion of a new petroleum products pipeline to the Louisville area. through 2040 projects a 1990 levels) rather sharp decline of crude petroleum in traffic The long-term outlook (-41.8 percent from energy as the price increases and alternative sources come into widespread use. Traffic grow slowly, in aggregates throughout the projection period is traffic. expected to Intra-basin at about half the rate of growth for total shipments are expected to continue to dominate movements in group, result areas. although reduced supplies in in increased waterborne this commodity the Pittsburgh BEA area are expected to imports from the middle and lower Ohio River through Gallipolis. This will increase upbound aggregate traffic The Nathan forecasts for iron ore, Huntington District the 1960-1976 historical scenario was iron, and steel traffic used by the were exceptionally optimistic, average. with growth rates exceeding The only explanation offered for this iron ore, iron, and that the Ohio basin would continue to consume rate than its ability to produce steel at a faster these commodities. Inbound shipments would increase, area, especially through Gallipolis to the Pittsburgh the basin's major steel production area. Once the traffic system were developed, forecasts for the entire Ohio River Basin navigation remaining task was to Using the Huntington District's allocate the projected tonnages to the system lock and dam projects. projected origin-destination matrices, tonnages were allocated to specific Tonnages were assigned to locks in going from an navigation projects by computer program. along the basin river routes which would have to be traversed origin to a destination. demand forecasts The end result of this process in is a set of traffic for each of the navigation projects the Ohio River Basin. Existing and projected commodity are presented in Table 14. Traffic traffic demands at the Gallipolis locks levels at Gallipolis were expected to grow 34 10 2D PýI. D go0 IrL ++ 0Plr 0 t 1 + 00 >4 0 0. U' +l + ~+ . .0..I 4) 0 >4 U 0C) H ~ - I ~ ~ v) 78 0 EA 4'ucno 17 o 04 E-4 U ~ o 0r ~ 0 r 0. cc,'j4.~~ 0, cm 5 -D r-4 0 4-4 0 0, U coo E-4~ 0 (U E-e 0, co' N ~ :s 0 - 4 'No r'0'rD. Cý o9G Uj m 4) 0 4)0Q w 0 Ma a 0 (DD GD - o H , 'I~~~~~~~ - (-U 0 c ov a.(UcL' GD 35- from 40.8 million tons in million tons by 2040. in 1989, In 1976 to 64.5 million tons by 1990 and to 107.9 reality traffic amounted to only 39.5 million tons declining by an average The projected 1990 traffic For example, 1.8 percent annually during the preceding mix implied no major changes coal and coke would still from the 1976 decade. base year situation. percent of total traffic, represent over 55 the majority destined for upper basin markets. after 1990, Petroleum fuels follow with about a 15 percent share; however, petroleum traffic development traffic was expected to drop off sharply due to conservation and energy sources. Aggregate and non-metallic mineral to the traffic its in of alternative increases would result largely from greater shipments Pittsburgh BEA area from middle and upper basin sources. an upbound direction) traffic Chemical (also moving primarily in relative iron ore, was predicted to double Finally, share of total commodity iron, and steel traffic by 2040. the increases demands would consist primarily of raw for the upper basin area. materials and intermediate inputs destined Prior Studies When Huntington District 1980, prepared the Gallipolis replacement study in available for there were no other prior projections of waterway traffic However, the Ohio River System. projections were available for the Ohio River mainstem from the Ohio River 1968. Basin Comprehensive Study which was completed in traffic on the Ohio River would That study projected that total increase at an average annual 2.6 percent rate of 3.2 percent between 1964 and 1990 and Substantial increases in traffic were for the period 1990-2020. projected for each of the major commodity groups. 1990 traffic traffic, traffic close as it Assuming that the projected system for the mainstem represented about 74 percent of the total did in 1964, the Huntington District (217.8 estimated 1990 system divided by 0,74), very projections of about 294 million tons to the 1990 projection under the Nathan analysis of 297 million tons. Althouýgh a for the 1990-2020 projection slight dampening of the 1964-1990 growth rate was projected period, the rate was significantly higher than the long-term The Nathan study predicted an increase in from the Nathan study. total system traffic of only 0.9 percent annually over the 36 1990-2020 period. As stated earlier, the comparable ORB Comprehensive projection for the mainThus, the more recent Nathan projections stem Ohio was 2.6 percent per year. represented a more conservative long-range outlook. In summary, the Huntington District examined a varietLy of forecasting through the Gallipolis techniques locks. firms traffic to project future movements of traffic The choice of theoretical (CONSAD, Battelle, technique employed by the three consulting was critical to their final estimates of activity, shifting and Nathan) because of varying assumptions regarding economic production and consumption patterns, District's selection of Nathan's and modal shares. The Huntington "most probable" supply-demand analysis as the scenario was based on a detailed and thorough examination of the methodological strengths and weaknesses incorporated in of each of the three studies. the Nathan study were varied and were employed as well. Published data sources extensive, and interview and expert opinion techniques While the Nathan projections the Huntington District's represented the "best estimate" at the time of the forecast of future traffic levels and analysis, turned out to be significantly overestimated due to unanticipated national international economic effort was exhaustive conditions. However, the Huntington District's overall trends. by any and competent and reflected prevailing economic cannot be captured realistically assumptions may be used to All exogeneous macroeconomic variables forecasting determine a technique, although alternative likely range of possible futures. 5. Study, Monongahela River Navigation System, Pittsburgh District, Locks and Dams 7 and 8 Feasibility January 1984. Ohio River Division, At the time this study was conducted waterborne traffic on the Monongahela River exceeded that of any other component of the Ohio River System except carried is coal is for the Ohio River mainstem itself. accounting The predominant commodity Most of the bituminous coal, for 85% of total tonnage. shipped in a downbound direction and used both to generate electricity the steel-making plants (in of the Pittsburgh at downstream power plants and in industrial complex, Other commodities transported descending order of 37 importance) dre aggregates (limestone, phosphate, cement, sand, and gravel), petroleum products, iron and steel products, and chemicals. The study conducted by the Pittsburgh District projections produced by Robert R. Nathan Associates, relied on commodity Projected Demands flow for Waterway Traffic, Ohio River Navigation System, yar for historic eH;r, 1970-2040. Projections The Nathan study were developed for waterborne used 19/6 as the L'u-s based on an evaluation of the probable commodities, probable an analysis of the basin's future market demands resource base of these commodities, of the modes of long-term production levels, involved in and a forecast transportation moving these commodities from production areas to consumption areas. provided above in A more detailed explanation of Nathan's methodology is the review of the Ohio River Navigation System report. The Pittsburgh District updated Nathan's 1976 projections Inc. in These in 1981, figures in collaboration with GAI Consultants, incorporated "local perspectives" local industrial "Nathan-adjusted" the overall methodology; namely, consultation with variations between Basin) methodology, representatives to determine potential (Ohio River local shipping patterns and the basinwide and to ascertain near-term plans for in for specific commodity the Nathan-adjusted movements. projections consumption requirements electric-arc Emerging market trends accounted include increasing export movements, diversification of coal and the coal increased from the steel industry to the energy sector, for generating the additional electricity to support steel production. The Monongahela waterborne traffic Locks and Dams / and 8 study forecasted increasing on the Monongahela River to 1990 with growth rates 1990, when traffic was averaging 2.8 percent annuallY from 1976 through predicted to reach 60 million tons. decreasing rate, traffic Thereafter growth would continue at a through 2040. In reality averaging 0.8 percent annually on the Monongahela declined throughout much of the 1980's after 39.9 millioin tons in 1976 in 1989. (adjusted data). from reaching an all-time high of Traffic did increase to 38.4 million tons powvtr The demand for coal in the 1980s was new electricity- gentraitieg plants coming on-li nt ý8 expected to drive slow growth for all total traffic figures upward. After 1990, however, very energy-related commodities was expected as alternative Table lý and Figures 1, 2, and 3 fuels and energy sources come depict commodity and lock traffic into play. projections on the Monongahela through 2040. In summary, Pittsburgh District employed Nathan's supply-demand analysis commerce in the Ohio River Basin to project movements Nathan's detailed and assumptions about future of of future waterborne traffic through Monongahela Locks 7 and 8. methodologically sound investigation made reasonable production and consumption patterns and modal shares by the Huntington District and Dam project. in its they also were selected Locks economic analysis of the Gallipolis incorporated in Published data sources the Nathan study were varied and extensive, employed as well. and GAI Consultants forecasts. and interview and expert opinion techniques were interviews conducted by the Pittsburgh District in the Additional insured that local perspectives were incorporated This also should have helped to update were based on 1976 base year data. represented the However, the Nathan projections, which while the Nathan projections their "best estimate" at the time of Pittsburgh's analysis, levels in forecast of future traffic overestimated. rates; tons. traffic Traffic the 1980's turned out to be greatly levels have failed to keep pace with predicted growth actually declined from the 1976 base year level of 39.9 million time of This downward trend should have been evident by the in 1984. However, Pittsburgh's analysis the significance and magnitude of the did not adjust their (in this case, forecasts recession, decline was not yet clear accordingly. and the District events Again unpredictable in the national a national structural shifts competition) and regional economies, and foreign have proved elusive to anticipate and to model. (9 0i K~r r-i 0i r,~ ~~~ N 0 -1 C -H U)U) ý4 H o Ll WN U) CDA w D '-D 0 H C) Hv0 LA * H H H H C- H '.H rcr2 H U) -1 -q 0 00 N PL4L0 ) 000 02 0 ~ 4C- '. A CO 'o 0 4-J 2 4--H U~~ (1 U) C) C C) r4 C) LA ( LA C, Y *H. ~ -M j00-, v- C--LAm0 r 0 U) wndEi4 -H4 > F-4 5-02 HA 002I( 0 J.0-) Q 0 l 0 N AL 0~w n w () U) ' 4 . o E-4 co C) 0. o 0 o)w CuC C n ( Oi N ~ 4-H U. 4U mO H3 LiA - 0) 4-'V J 0) U4 CrHO dr -H r3 -9 10 Ft~~o C0~~ W.HU) tU) HH ) H '0 H~~~~~~4 A)4 '.0~ C H4- *a:J ~~~ ~ '-OD 44U 0 rd QU ul iU u'C 0 '0 c~ C- o ~ 0 H3 m W tql 00 ) rd r- ý 2~J f M 5li 0l 0~ 4J - ji- N C1 0r 024 5-n H, U)) U) ý C--I0) 0 ca-i 0 2 H 5-- -HJ Ii020 (1) J-) ) 0rcl:: 4 H4ý Q - . fd W) 40r- r 0 0 0 04 cri C) 04 C 0 QY) cZ C)) CO oz oC0 F-c U) C)) 00 0) C00 - Q? - w cc 0 L 0 D U. Uf) C/3 0 LO 0 z z <~ 41 C)C LLL LL 0l 0 0< LLI Z 06 al) C)) 0 Z 0~0 ~0 cc 0< U D LO 0o~ =0 0 0a L -' C, LL 42~ c',i 0 I 10 b 0 < 04 W 0) 0CiM z0z 00<< wc zr Z 0 LOJ L- o W F- 00 Z 0 Z CL z 0o 0 0 0 z- I 6. Lower Ohio River Navigation Feasibility Study IL-KY (Mouth to Louisville District, Ohio River Division, August 1985, Cumberland River), Revised November 1985. This report documents the results of a feasibility level study conducted for the purpose of determining the feasibility environmental and the economic and along this reach of future effects of making navigation improvements Part of the economic evaluation for Locks & Dams 52 and 53, 16). the Ohio River. traffic in flows involved projecting the existing navigation structures the study area (Table The Corps study relied heavily on Robert R. comprehensive report, Projections Nathan Associates' Transportation. of Demand for Waterborne Ohio River Basin, a long-term 1976-2040 (described earlier). The Nathan study represented demands founded on an (1976-2040) evaluation of waterway traffic for waterborne probable commodities, analysis of market demands base of these commodities, the basin's resource and a long-term production levels, forecast of the modes of transportation involved in from production areas to consumption areas. moving these commodities Ohio River Basin waterborne traffic to 1980, growing from 51.3 million tons The Basin is petroleum fuels, In addition, a major in increased nearly fourfold from 1945 1945 to 193.7 million tons while and in it 1980 (Table 17). "imports" minerals. "exporter" of coal and grain, chemical fertilizers, is chemicals, ores, 72% of Ohio River traffic local to the system. Over the entire projection period (1976 traffic is expected to to 2040) Ohio River System increase by 119% (Table 9). as coal traffic Growth will occur at a 1990. Traffic was 1990, diminishing rate, expected to however, plateaus after increase at an average annual rate of 2.8 perceir through thereafter averaging only 0.8 percent annually. Because the Nathan projections do not reflect Waterway (TTWW) in 1985, traffic the opening of the projections were obtained in this study. Projected Tennessee-Tombigbee for the TTWW from Mobile District and incorporated 44 TABLE 16 PROJECTED TRAFFIC DEMAND FOR LOCKS AND DAMS 52 AND 53, 1995-2045 LOWER OHIO RIVER BASIN, (Thousands of Tons) Projected Commodity Group Locks and Dam 52 Coal and Coke 1995 2015 2045 43,453 57,298 75,254 Petroleum Fuels Crude Petroleum Aggregates Grains Chemicals and Chemical Fertilizers Ores and Minerals Iron Ore, Iron and Steel All Others Totals Locks and Dam 53 Coal and Coke Petroleum Fuels Crude Petroleum Aggregates 8,177 744 3,506 5,454 11,169 9,130 6,602 13,864 102,099 23,904 8,177 744 2,582 9,209 592 4,014 6,736 17,984 16,174 10,564 15,655 139,279 31,314 9,209 592 2,996 8,718 263 4,756 8,556 26,563 27,239 15,980 18,929 186,258 40,562 8,718 263 3,453 Grains Chemicals and Chemical Fertilizers Ores and Minerals Iron Ore, Iron and Steel All Others Totals Source: 5,454 11,169 9,130 6,600 13,863 81,623 6,736 17,984 16,174 10,562 16,654 112,221 8,556 26,563 27,239 15,977 18,917 150,248 Tabulation of Tow Cost Model shipment lists. IL--KY, AUGUST 1985 LOWER OHIO RIVER NAVIGATION FEASIBILITY STUDY, 45 ro UQ CN CN0M*C'ý C 0 ON 0 02 4-3 H ýD:j 00 Cl) m 1~ Y H 0H C co CV 0 C! (41 41 0 0 00 H 0 LI H 4-) 0 rd )a ~0 ~U -4 co z U 0 ~rn m W Hý\ H Ln r-i -H z 0U 2 r.-0pH2C 0) 02 104 U1 H'4f 0 2 4.J r: W0l4 H 0 0C~ U Hr 0 0 r0HHI 0H W (Ni DODCOC rHq 0 W H C 0) - 0 0d 0)0 4- () a 0J 4400 0ý0 rO r-i $ -H t) ) 'dW1: i-i'8 02 t 041 0 () ý Mý [ .$ ý -I 0 0 0 46 traffic traffic was screened to eliminate duplicate million tons in tonnages. In addition, in coal 2040) as was added (7.4 1995 and 13.6 million tons a result of an update District in 1983. to the Nathan projections made by the Pittsburgh reflected new coal markets in the Upper These additions 1976, Ohio River Basin since the base year for the Nathan study. The Tennessee-Tombigbee project area. First, Waterway has a dual impact on traffic in traffic through the there was a small increase through Locks & Dams 52 and 53 because of new movements between the TTWW and the Mississippi River. Second, the opening of the TTWW enabled Ohio River shipments bound for the eastern Gulf Coast to use the TTWW instead of the Mississippi River. Louisville District's TTWW traffic and additional approach in modifying the Nathan projections with coal movements was found acceptable and reliable 1985. In hindsight, despite jower than at the time of its forecast close initial publication in TTWW tonnages, the Lower Ohio study traffic figures appear compared to target based on 1990 PMS tonnage of 99 million at L&D 52, of 102 with a 1995 forecast growth in coal traffic. million tons and in view of anticipated continued 7. Kanawha River Navigation Study, Huntington District, Winfield Lock Replacement Ohio River Division, Interim Feasibility Report, September 1986. Traffic growth on the Kanawha River more than tripled from 1940 to 1980, reaching 14.7 million tons in by 1989 Dam, (Table 18). 1980 and an all-time high of 18.9 million tons traffic transits Winfield Lock and WV. Most of the Virtually all Kanawha situated near in the mouth of the river below Charleston, tonnage is attributable growth Kanawha River industries in to the growth of the coal and Increased and chemical the Kanawha Valley (Figures 4 and 5). inbound shipments of aggregates consumer use were lesser and petroleum fuels for industrial to the overall expansion. contributors 4/ o at 00 Nv 0~F Ln N 0D CD 0 m r0 ý- CD 0; m_0 N Ln C0 j L W) o. al It LA 0 rn 0C0 !2 VNNY 01 m l C AA CD C fl CD 1 0 0C0 C LA '0 C 0 A 0 oX 'A Ln CD 0 0n U0 U) > ~ C) 0 ao H H 4 0 (A Cý It on LA N F' 0 D 0M L rI CO LA in pN zL CD '0 ý2 C, ?- 0 0 00 0 LA rNm -1 lr 0 040 10 ;:' A L A CD 0 -l (d ' 0 o 0l0 10 '4 t- 0. -ý 00 cUU E-44 0 ~ ~r ~) ~ C2 4 Cý m 4)C C) 0 09. 00- 0 d ) I L L 0 -~ 4.' 48 %Ll 0 LO 0 CM 00 z 00 0Z 0 - 0C), 04 Uej LU 0 0 71, c :0 > 0 C0 ~LL 0 0 Y-0)> w j 0 0 CI) D . -J C) zw 0 0 0 -Jo co 10 0 'qt 0 CV) 0 CM 0 r"J- 0 C., -0 c 49 0 0 * * cmJ 0 * . .0 C4 w WD CO) C*4 CMJ o WLO. >4(0 C4 < 0 0... 0 0 z oj 00 LOa oC 0 00 0 0 I- 0 Z I- 50 Most Kanawha River tonnage Ohio River. is shipped inbound from or outbound to the a function of the types of This largely external orientation is the resources industries along the river, of the basin, industry. and the location of product supply and market areas for basin groups that account Of the four commodity coal moves aggregates, of coal is and for 96 percent of Kanawha River traffic, while chemicals, primarily in a downbound/outbound direction, Due petroleum move mostly upbound/inbound. traffic over other commodity traffic, percent) to the predominance slightly however, more traffic (47 percent). shipped out of the area (53 than into the area Coal traffic steam-electric tributaries. (59 percent of total tonnage) is primarily destined for generating plants located along the Ohio River and its for the steel plants of the tonnage) revolves Lesser amounts are destined Chemical traffic (16 in Pittsburgh area. percent of total around the large chemical complex Area (MSA) and is the Charleston Metropolitan Statistical Major origins include the Ohio River, complexes for use in located along the chemical further primarily inbound. River, the lower Mississippi Gulf Coast. manufacturing processing. and the petrochemical These areas provide basic feedstocks as well as intermediate chemical products which require Aggregates (15 percent of total traffic) are used largely in Petroleum fuels (7 the construction activities percent of total Kanawha Basin, traffic), around the Charleston area. consumed by individuals and industry throughout located along the originate primarily from refining centers Ohio River and the lower Mississippi River near Baton Rouge. Traffic projections for the Kanawha River were developed by the by relating the Navigation Planning Support Center of the Huntington District existing traffic base to indexes of growth in the specific regions served by Projections series developed the Kanawha River. The 1980 OBERS BEA Regional by the Bureau of Economic Analysis (BEA) economic framework for developing was selected as the demographic and indexes. regional growth In summary, projections for Kanawha River traffic to the year 2050 were developed by applying OBERS growth indices earnings for population and industry dock-to-dock commodity by BEA Lo 1980 base year Waterborne Commerce 51 movement information. a specific The OBERS index most closely related to the demand for For example, in type of commodity was used for that commodity. and coke traffic for utility 33 percent), usage, determining coal were used: the following indexes wholesale total and retail population (weighted earnings in in trade and services (weighted 19 percent), and earnings manufacturing an index of (weighted 48 percent). earnings in For coal and coke traffic for export, the mining industry was used; for crude petroleum and petroleum for aggregates, earnings in the fuels traffic, a population index ,.as used; for grains, construction industry; (weighted 70 percent) earnings durable in earnings in agricultural production for chemicals, earnings in and population (weighted 30 percent); non-durable manufacturing; and for iron and steel, factor. manufacturing adjusted by a 0.7 dampening Destination-BEA area indices were used for domestic traffic, (which was considered to be demand driven) while origin-BEA area indices were substituted for export These (PE) traffic, which had no destination-BEA area associated with it. movements at the port equivalent level to arrive at projections indices were applied to 1980 traffic to port equivalent origin-destination through 2030. percent Thereafter, some commodity growth rates were dampened to 0.7 in making projections that the planning through 2050 to reflect in the future. the great uncertainty that distant This dampening was to insure process would not be biased by large out-year reasonable judgment call by the analyst. numbers and represented a The study projects Kanawha River to 53.5 million tons tons. (Table 18). to a 1.8 traffic to triple between 1980 and 2050 By 1990 traffic should reach 22.7 million Coal traffic will This translates percent annual growth rate. increase as a share plants. latter traffic of total tonnage due to expanding demands by utility traffic will also increase, traffic. although the Chemical and aggregates will possess a declining share of total Petroleum fuels to should decrease because ener g sources. of continuing conservation and conversion of Kanawha Wheeling, River traffic alternative projected Qol~iihus The major origins are and to remain BEA areas. ,, the Charleston, Likewise, Parkersburg, Huntington, Lhe major destinations Theeling, 52 Cincinnati, of traffic are projected to remain CharlI Hfuntingt on, and Pittsburgh BEA areas. Table 18 and Figures 4 and 5 show projected Kanawha River and locks through 2050. traffic by commodities Although this study's publication date is Corps of Engineers dates back to 1980. to 1980. (COE) quite recent, the historical Waterborne Commerce data used to generate projections the OBERS BEA regional growth indexes also date for 1990 (22.7 1990 Likewise, The study's projections of Kanawha River traffic now appear to be realistic in light million tons) traffic virtually of the fact that As mentioned earlier, at Winfield L&D was 21.2 million tons. all the Kanawha River traffic moves through the Winfield L&D. Regarding the projection methodology itself, population and earnings growth appears appropriate. in indexes the applicability of OBERS commodity groups to most of the One somewhat ambiguous connection was the relationship the mining industry and future coal export traffic. in modal share, between earnings Finally, it while no attempt was made to allow for future shifts is can be argued that there no reason to believe that barges would not share of traffic. all Future growth continue to carry at least their current presumed to affect rates were therefore transportation modes uniformly. 8. Forecast of Future Ohio River Basin Waterway Traffic and II, Navigation Planning Center, 1986 - 2050, Ohio River Volumes I Division, Huntington District, May 1990. The purpose of the study, to project probable as stated in the introduction to Volume I, was future levels of demand for waterway Projections transport on the Ohio River Navigation System (ORS). each navigable 2050. river, and each were developed for the entire ORS, for the period 1986 - lock and dam project The projections were estimated improvement to help guide the Corps of Engineers' lock and dam the future. waterway planning program by indicating which traffic projects would be most likely to experience Through this assessment of future problems, improve the flow of waterway traffic. congestion in plans then could be developed to 53 The ORS includes the Ohio River and the navigable portions of the Allegheny, Monongahela, Kanawha, Big Sandy, Green, Tennessee, Cumberland, and Kentucky Rivers. The ORS serves as a major transportation link for the coal and provides to both the Between mines and industries located within the Ohio River Basin (ORB) direct access, through the Mississippi River and tributaries, Midwest and the deep-draft ports of the Great Lakes and Gulf Coast. 1940 and 1986, million tons, total waterway traffic grew from 51.2 million tons to 223.9 representing an average annual growth rate of 3.3 percent. however. Average annual Cumberland, and This growth was not distributed evenly throughout ORB, tonnage increases on the southern tributaries of the Green, Tennessee Rivers ranged from 10.2 percent to 6.6 percent, while the northern tributaries experienced growth ranging from 3.1 percent on the Kanawha to negative 0.2 percent on the Allegheny River. Traffic increased by an average 4.2 percent annually on the Ohio River mainstem during the 1940-86 period. Major commodities on the ORS include coal and coke, petroleum fuels, chemicals, and grains, aggregates, which together represent about 88 percent of total tonnage. Coal and coke constitute by far the largest single accounting for 60 percent of the total - commodity group moving on the system, 1986 traffic and growing by an average annual 3.1 percent during the 1940 1986 period. With the exception of crude petroleum traffic, which dropped sharply with the opening of a crude petroleum pipeline into the AshlandHuntington area in the early 1970's, all of the major commodity groups grains, 10.6 percent annually; petroleum fuels, 1.9 percent exhibited traffic growth since 1940: chemicals, 7.8 percent per annum; ores, aggregates, 6.1 percent per year; 3.3 percent annually; annually. internal, 2.5 percent per year; and steel, Approximately 63 percent of waterborne commerce in the ORS is meaning that both the waterside origin and the waterside destination About 24 percent of the traffic is outbound and 13 are within the ORS. percent is inbound. While The share of inbound traffic has remained the share of outbound traffic has doubled. relatively constant since 1970, Forecast Methodologies Vhile the methodologies used in developing traffic demand forecasts were specific to each individual commodity, two basic methods were used: 54 one for utility related commodities (utility coal, and lime and limestone Some for steps were desulfurization), and another for the remaining commodities. common to both methods: development examination and completion of industry forecasts, and categorizing each receiving dock of base year traffic flows, by geographic and end use market. to base year traffic levels, The development of growth indices to apply differed between utility related however, commodities and all other commodities. Non-Utility Commodity Forecasts In - 2050, Volume I of Forecast of Future Ohio River Basin Waterway Traffic 1986 forecasts were developed for each of the ORB industries that generate of waterway commodity traffic: agriculture, chemicals, petroleum refining, nonferrous metals, steel, and significant amounts quarrying, construction, paper industries. employed. first Both top-down and bottom-up approaches to forecasting were Top-down techniques begin with national to the industry/regional level forecasts which are disaggregated level and then to the company/ originate at the local level. company/ levels. national Bottom-up techniques, on the other hand, local level and are then aggregated Both approaches are used to insure level to the regional and national general consistency between for individual company forecasts and the unique prospects operations. The horizon. 1986 - 2050 forecast period has a short-term and a long-term time to The short-term extends to the year 2000 and generally corresponds industry forecasts. The long- the planning horizon of most of the available term projection extending from 2000 to 2050 relies primarily on 1985 OBERS top-down projections OBERS forecasts produced by the Bureau of Economic Analysis and earnings by industry. (BEA). BEA's include both employment Employment forecasts are based on demographic participation earnings through turn rates. Earnings estimates and projected labor force level forecasts are derived from national to the various forecasts which have been distributed the use of an input/output model. industry sectors are in State and county projections growth to founded on the projection of ratios of state employment and county ratio of employment to state totals. national growth, 55 Calendar year 1986 was selected as the base year for forecasting purposes. Actual waterway traffic, is while serving as a starting but one visible component point for Before identifying waterway demands, of demand. applying growth indices to the 1986 base level, made to insure that 1) reported year chosen was a representative dampening demands. affected areas and, traffic one; necessary adjustments were the for the base year was accurate; and 3) system constraints were not traffic in flows in System constraints act to reduce if left unaccounted for, the would result understated levels of demand. Two major potential system constraints were identified: the small navigation projects located on the upper Tennessee and the lower Monongahela Rivers. Formal mail surveys were conducted in both areas. Upper Tennessee River study of surveys were completed as part of a 1987 reconnaissance-level Chickamauga, Watts Bar, and Ft. Loudoun locks and dams. traffic These surveys indicated that 5.7 million tons of additional in might move on the river Surveys of potential the absence of constraints on the upper Tennessee. River shippers were conducted in Monongahela the spring of 1988 as part of the subject study. Monongahela tons of traffic Monongahela were Surveys were mailed to over 100 firms identified as potential Respondents indicated that an additional constraints 7.3 million River users. might move on the river system if removed. on the lower Major waterway users were contacted in traffic patterns an effort to identify changes in since 1986 or changes expected to occur in the near future. Extensive telephone surveys of major basin shippers were conducted for each of In addition, each of the Ohio River's four Corps in the nine commodity groups. Districts and the Tennessee Valley Authority provided further assistance traffic flows. identifying new waterway current and potential As a result of these contacts with destination patterns were Comparisons of shippers, traffic a number of origin/ altered and some additional historic was added to the base. averages with the base traffic of base traffic figures also were made to help insure the reasonableness levels. 56 After base traffic the levels were determined, the next impcrrant origin/ step was identification and categorization of each of the unique destination commodity movements This involved identifying on the ORS by geographic and end use markets. determining the market it served. best the shipper, represented, and examining the market(s) the shipper Classification simply through involveO, of end use markets for some commodity movements was difficult the use of dock name descriptions. docks and probable shipper When sizeable movements were in an attempt -hippers were contacted to identify the and classify he particular movoment. The objective in classifying all movements according to appropriate end and/or to use market was to determine which of the previously assembled industry CBERS-based forecasts were appropriate in tiie development of growth indices apply to the base traffic level for each commodity. Final classifications from an industry forecast industry, the finest for corresponded to the finest level of detail available standpoint. For example, involved industry, in the case of the utility level of detail the construtction paper industry, identifying specific utility operating companies; and for the a particular region of the count-y; type of paper involved. the specific By associating, traffic numerous projtctions industries or "keying," each movement to a particular market, for the for any one commodity became the product of forecasts In representing both end use ard geographic markets. for ex-mple, projects, lime plants, utilities, steel mills, ease of limestone, plants, cement water revetment and highway construction projects acted as markets was markets for the different movements. accounted fr in Geographic variation in that the industrial make-up of any given geographic area '-he pattern oE flows and prospects destination BEA industry projections for growth were. in in the necessarily near-term. detrees, influerne_ Additionally, incorporated forecasts for all varying into the traffic commodities. A final growth procedure was the selection and application of appropriate End use classifications factors or "kevs" for each commodi ty movement in in ident i tii indices. represented determining sreci-fic growth indices o ard selecting For v market. keys were for cich movmeint the (R)S. used in developing the traffic projections. The keys most commonly related of the commodity in to industries which acted as the shipper, question. In turn, the or consumer, indices were based on industry market forecasts or by BEA. The BEA forecasts are presented to as OBERS variables. A developed by the industry itself, in the form of industry sector variables referred summary of the industry forecasts traffic projections in and OBERS variables used in developing the Table 19. each commodity group are presented in Short run indices when available. specific. specificity 2050) In (1986-2000) relied most heavily on industry forecasts, some cases the industry forecasts were regionally indices reflecting this geographic long run (2000- Separate keys and companion were created. These same keys were used to select indices as well. Indices used in long run projections were generally These variables relate to regions tied to a limited set of OBERS-based variables. broad industry sectors and the smaller BEA areas, tied economically to a central metropolitan area. (population, manufacturing retail which are geographic While only nine OBERS durable earnings, variables were used, nondurable earnings, transportation employment) earnings, construction earnings, earnings, trade carnings, and mining and public utility mining earnings, they were transformed into as many indices as there were destination BEA's for waterway shipments. Utility Commodity Forecasts Utility coal, and lime and limestone for desulfurization, are the These in 1986. waterborne commodities most directly affected by utility represented roughly 48 percent of total forecasts is the most critical forecasts. ORS traffic component forecasts three commodities The development of coal for utility commodity projections because the lime and limestone factors are generally inputs to coal of arrived at by applying constant consumption consumption forecasts. the tonnage in In addition, utility for these coal accounts for 99.0 percent this group. Projected shipments of coal by utilities consumption, the current share of coal traffic interviews and surveys. 58 were based on projected coal moving by barge, This and the results of industry involved obtaining the TABLE 19 SUMMARY OF INDUSTRY FORECASTS AND OBERS-BASED VARIABLES USED IN WATERWAY PROJECTIONS Commodity Croups Coal Short-term Forecasts Utility Industry Coal Industry Steel Industry Long-term Forecasts Population Retail Trade Earnings Manufacturing Earnings Mining Earnings Mining Employment Durable Earnings Population Population Construction Earnings Nondurable Earnings Durable Earnings Population Retail Trade Earnings Manufacturing Earnings US Dept of Agriculture Population Aluminum Industry US Dept of Agriculture Population Nondurable Earnings Construction Earnings Zinc Industry US Forest Service Population Petroleum Fuels Crude Petroleum Aggregates Population Population Construction Industry Steel Industry Utility Industry Grains US Dept of Agriculture Population Aluminum Industry US Dept of Agriculture Population Nondurable Earnings Construction Industry Zinc Industry US Forest Service Population Steel Industry Steel Industry Manufacturing Earnings US Dept of Agriculture Population US Forest Service Construction Industry Nondurable Earnings Aluminum Industry Zinc Industry Utility Industry Durable Earnings Steel Industry Chemicals Ores and Minerals Iron and Steel Durable Earnings Manufacturing Earnings US Dept of Agriculture Population US Forest Service Construction Earnings Nondurable Earnings Aluminum Industry Zinc Industry Transportation and Public Utility Earnings Durable Earnings All Others SOURCE: Forecast (Huntington. •'V of Future Ohio River Basin Waterway Traffic, 1986 U.S. Army Engineer District, Huntington, 1990). 59 - 2050, short-term electricity these to BEA forecasts demand forecasts developed by each utility of regional population and economic requirements growth. and relating These forecasts were used to develop electricity involved in ORS coal traffic. for each utility The next step involved converting electricity generation by fuel type. requirements into Projected generating mix was based on each utility's efficiencies of each. Net mix of capacity by fuel type and the relative capacity additions plants was from new plant construction and the retirement of old The results of this effort were the ORS. factored into the analysis. projections of electric generation by coal-fired plants in Electricity generation was then converted historic and barge conversion rates for each plant. into coal consumption based on The link between coal consumption receipts was based on the share of 1986 coal consumption barged to indicated by the utilities. each plant unless otherwise The coal conditions. forecasting methodology pertains to the most probable traffic These projections were bracketed with high and low forecasts the most probable condition for the high estimated to be 15 percent above forecasts forecasts. minus and 15 percent below the most probable condition for the low Huntington District bracketed the most probable case by plus or 15 percent based on trend literature. line analysis and review of pertinent a trend line to forecasting historic Regression analysis was used to fit between 1950 and 1986. traffic observations The derived regression equation yielded a good fit Related statistical tests between the trend line and the observations. indicated that 95 percent of the historical this trend line were within plus or minus 15 Further confirmation for the plus or minus Council. 15 The observations deviating about percent of the trend line. percent technique came from the National Electric Reliability of high and low forecasts Counci I establishes below its because represent~ most of the all enrv.elope 15 percent above and probable forecast. of utilities fhlt The Council's convention has significance to ORS waterborne and aggregates traffic. Utilities importance aire of a lI-,r.: ORS coal traffic, 6() Forecast Results The projections for total system traffic Table 20. demand and each of the nine Total traffic is expected to commodity groups are presented in increase from 223.9 million tons in 1986 to 315.9 million tons by the year (96 2000 (an increase of 41 percent); percent growth); percent). Over to 437.9 million tons by the year 2030 of 145 is and to 548.7 million tons by 2050 (an increase the 64-year period from 1986 to 2050, total traffic projected to grow at an average annual rate of 1.4 percent. graphically portrays projections the level of ORS traffic Figure 6 from 1940 to 1986 and from 1986 to 2050. The Huntington District bracketed the projections in Table 20 with high and low forecasts set at 15 percent above and below the most probable condition. Projected values for total ORS traffic ranged between 268.5 and between 466.4 and traffic demands million tons and 363.3 million tons for the year 2000, 631.0 million tons in were projected scenario, scenario. the year 2050. Between 1986 and 2050, to increase at an annual rate of 1.2 percent in and 1.6 percent in the low the high 1.4 percent in the most probable, Summary In summary, the Huntington District future traffic employed a variety of techniques on the Ohio River System. Each industry in attempting to project Commodities were first was in movements aggregated into industry related groups. turn examined and its Base year traffic likely demand for waterborne shipments was flows for each commodity group were adjusted to and potential shifts in waterway flows. forecast. account for system constraints Movements were categorized by the geographic Various location of the destination and based on end use market. short-term and long-term growth indices, and OBERS population, employment, industry market forecasts variables, group. and earnings were applied to adjusted base traffic levels for each commodity Finally, projections were bracketed with high and low forecasts condition based estimated to be 15 percent above and below the most probable or, trend line analysis and review of pertinent forecasting literature. 61 TABLE 20 OHIO RIVER NAVIGATION SYSTEM PROJECTED COMMODITY TRAFFIC, 1986-2050 (Millions of Tons) Annual % Change 1986-2050 1.4 0.2 0.2 1.6 2.1 1.3 1.5 1.5 1.7 1.4 - Commodity Group Coal Petro Fuels Crude Petro Aggregates Grains Chemicals Ores Steel Misc. TOTAL Actual 1986 135.2 12.9 0.6 28.1 10.3 12.4 3.1 5.8 15.5 223.9 2000 189.6 13.3 0.6 38.2 19.0 17.9 4.1 10.4 22.8 315.9 2010 207.0 13.8 0.6 45.0 21.8 19.9 4.7 11.5 26.6 350.9 Projected 2020 216.6 14.2 0.6 54.5 25.2 21.9 5.4 12.5 30.3 381.0 2030 254.4 14.4 0.6 61.6 29.1 23.8 6.0 13.3 34.5 437.9 2050 321.4 15.0 0.7 75.7 39.2 28.0 7.8 15.3 45.6 548.7 1986 SOURCE: Forecast of Future Ohio River Basin Waterwav Traffic, (Huntington, WV: USAED Huntington, 1990). 2050, The Huntington District's The commodity-specific characteristics growth overall effort was exhaustive and competent. indices selected were based on the the underlying forces influencing traffic of the commodity, levels for that commodity, origin/ destination flows. and a detailed examination of the commodity's Published data sources were varied and extensive, opinion techniques as well. to begin to assess While and the District used interview and expert is still too distant the forecast horizon the projections, indicate levels the accuracy of the most recently published data on waterborne commerce continues to grow and projected probable The application traffic that ORS traffic for the year 2000 could well be met. and earnings growth for such a indices of OBERS employment appropriate to most of the commodity groups appears Extending a projection some degree of variables. loneg-term most planninig horizon. envelope above flexibilitv an0d beilow thi torcss oine Iike lv scuinario builds exogenous into L toptre macroeconomic The only cileaIr duwhac1:k lo the Hunýt Liing ton approach might be the cost and time iihile re qu ired to deve 1i) ýýuch I Lo] e c tionts. irk, alwayvs prefterafbl,.. forecasts of this sophistication commininit rkesources of this magnitude nut ,1 I oft ieiCen carn 0e! 0 0 CE 04 WO 04 Cfl0 >4 0 LLO 0 0 0 (D LC) 0 00 0 0 IVCIO 0 0 N 0 0w 0 63 9. Supplement to the Environmental . Impact Statement: Navigation, TennesseeUS Army April, 1981. Tombigbee Waterway Engineer Districts Alabama and Mississippi, Alabama, Mobile, and Nashville, Tennessee, This report relied on economic data from the 1966 Reevaluation of Project Economics and 1976 Restudy of Project Costs and Benefits, District Waterway shippers traffic studies. (TTWW) both Mobile The 1966 report's estimates of future Tennessee-Tombigbee were drawn from interviews and correspondence with traffic and receivers during the period 1957-1960, Tonnage and supplemented by a survey conducted during 1964-65. of 7.5 million tons was increasing roughly metals projected on the TTWW for 1966 to 39.5 million tons by 2026. equal proportions) and ores, (had the waterway been operational), The four predominant commodities (in were predicted to be petroleum and products, coal, and chemicals. In 1975 Mobile District contracted with A.T. Kearney, Inc., to perform a navigation benefit Mobile's receivers potential 1976 in study of the TTWW. Kearney This effort became the foundation for report. identified approximately 1000 shippers and This population yielded over 500 the waterway tributary area. commodity movements. These were screened to eliminate movements duplicates, and those This that wouldn't use the waterway for various reasons, under 6000 tons per year, leaving approximately 250 potential movements. to determine group was then subjected to a detailed rate analysis ton, if any, that would be realized by utilization savings per of the TTWW. Transportation savings were determined by comparing the rate per ton for moving a commodity on an alternative TTWW. route or mode versus the rate to move the commodity on the Movements were not included unless savings were at least greater than mode (rail or truck) or greater than $0.15/ton left 121 $0.50/ton versus an alternative versus alternative movements barge routings on another waterway. per ton criteria This process that met the minimum savings benefits. and became the basis for project navigation annually movements percent through for thei The Corps updated these 121 movements the rates for individual routes. line-haul Finally, a 10 for 1980 by reanalvzing TT"WT and alternative modes and/or cont irgeiien factor was added to the total volumes. 6,4 tonnage to account unidentified and smai 1 traffic The methodology the first percent. yielded a forecast of 28.5 million tons of traffic (expected to be 1987), in 74 year of operation Furthermore, of which coal comprised "unconstrained" TTWW traffic while the expected was expected to reach 111 would reach 41 million tons by 2036, "projected" traffic million tons by the same year. (The difference between unconstrained and limitations of the channels and lock A key 1987) year projected can be explained by capacity and dam dimensions issue is of the TTWW and Black Warrior-Tombigbee Waterways.) levels (beyond in how Kearney arrived at higher future traffic when their shipper survey approach or so of operation. identified only movements the first Projections of future TTWW traffic were made by relating each base year indicator that was Initial tonnage in the commodity movement on the TTWW to a recognized economic most closely associated with the commodity's use or demand. levels were multiplied by OBERS Series applicable industry and region E projections of total earnings movement. involved in each particular Usually the demand industry and region OBERS earnings insufficient informtion was available, in indices were used, unless industry and which case the supply region indices were applied. on the earnings index for For example, pulp and paper movements were based the appropriate demand region. OBERS forecast except of the paper industry in All commodities projections coal movements for export, Interior, relied on the appropriate which were estimated using the Department Bureau of Mines projections industr'. for coal exports and projected growth in (coal, farm products, the foreign steel metallic ores, constitute Five key commodities pulp and paper products, and chemicals) were expected to projected average in over 90 percent of future traffic. Kearney's annual growth rates Table 21. for traffic in various TTWW commodities are presented In summary, the forecast undertaken by Kearney Management Consultants projected initial technique. operational Rate traffic levels using a and Mobile District shipper survey and interview determine commerce. industryif analysis was performed to for potential relied on the TTWIW provided a least-cost of traffic levels OBERS in alternative Projections later years generally indexes. Initiallv, and region-specific growth 65 this approach TABLE 21 TENNESSEE-TOMBIGBEE WATERWAY TTWW COMMODITY FORECAST Average Annual Commodity Growth Rate (Percent) Chemicals 1.0 3.9 Forecast Used Clay, Concrete and Stone Coal (Domestic) Fabricated Metals Food Products Marine Products Metallic Ores Miscellaneous Nonmettalic Minerals (Domestic) Petroleum 2.4 2.5 1.2 2.5 2.2 1.4 1.4 1.9 1.3 - 3.5 2.9 2.7 2.3 3.1 2.2 2.9 2.4 OBERS Series E for total earnings in the applicable industry(s) and region(s) involved in each particular movement. Primary Metals (Domestic) Pump, Paper and Allied Products (Domestic) 1.4 2.0 - 3.2 2.8 Forest Products 2.7 Department of the Interior, Bureau of Mines projections for coal exports and projected growth in the foreign steel industry. OBERS Series E for total earnings in the applicable supply industry and region for each particular movement. Coal (Export) 2.9 Farm Products (Export) Nonmetallic Minerals (Export) Primary Metals (Export) Pulp, Paper and Allied Products (Export) 1.0 - 4.1 0.7 1.6 - 1.8 2.4 2.6 SOURCE: A. T. Kearney, Inc. Study for 1981 Tenn-Tom Study (Page VI-38, Table VI-10 of Report) 66 would seem methodologically immediate traffic future. In appropriate for forecasting traffic in the contrast to the District's 1985; expectations, in however, 1986; 3.6 in 1989. was only 1.4 million tons in in 1987; 2.2 million tons million tons 8.8 million tons in 1988 and 4.3 million tons Although forecasting constructed, dollar, the OBERS projections probably represented the best long-term designed, and tools available when the TTWW was being planned, fundamental changes in the price of energy, the value of the competition in foreign agricultural markets, and the structure of the of the OBERS growth national economy have drastically undermined the validity indices dating from the early 1970s. In addition, the Kearney analysis did time for regional the new waterway. not appear to fully consider the potential transition industries to alter transportation practices to utilize costs, Many industries have fixed assets, particular and contracts associated with a transportation mode and may require some time to evaluate and adopt The unique character of the project was a further analytical that there was no historic traffic base. analysis Economic forecasts for alternatives. challenge in new projects require a regional modal split for forecasting shipments and receipts on the waterway, finally, a broader water route-shift methodology and "waterway-induced" development and traffic. a very complicated input, 10. Operational Forecast Mobile District, for Initial Traffic on the Tennessee-Tombigbee Waterway, South Atlantic Division, August 1985. The Mobile District TN to estimate contracted with BHS Economic Research of Knoxville, and volume of commerce that could be during its in were January, the freight traffic expected to move over the Tennessee-Tombigbee Waterway initial 1985. years of operation. No projections (TTWW) The TTWW opened to commercial in traffic over the project traffic life of growth presented. Traffic forecasts were developed by surveying that had the potential that might have been industries that were using All the waterway and those identifiable industries to ship on the waterway. interested in information, using the waterway including type of were contacted and requested to provide survey 67 commodity, expansion, volume in tons, origins and destinations etc. of cargo, plans for expected traffic, A. T. Kearney's Waterway. lists, Many of these industries had been Economics of the identified in 1976 study on Transportation Tennessee-Tombigbee from chamber directories. Others were identified by the Mobile District trade associations, and state industrial of commerce Industry traffic estimates were then aggregated to yield 18.4 million its routing. tons of "potential" commerce that could use the TTWW in Duplicate tonnages and commodities were eliminated. that were not suitable for barge movements included two distinct categories: Potential commerce freight which was already moving via the TTWW and commerce moving via an alternative mode or route which could potentially realize a if it was diverted to the TTWW. traffic savings in transportation costs Of the 18.4 million tons (freight that would not 2.5 million tons were designated as "future" use the waterway for several more years). A comparative rate analysis was conducted to determine in if the remaining 15.9 million tons could move at a savings alternative development In routing (or alternative of complete modes). transportation costs over an This analysis entailed the transportation charges for each commodity movement. The most cases the alternative routing was the route currently being used. a combination of overland and The rates alternative water route, could be an all-overland route, or a competitive all-water route. receivers, for overland routes or published in either were quoted by shippers, freight tariffs. and carriers, Barge rates were constructed using the daily operating costs published by the Office, Chief of Engineers, of towboats and barges Washington, DC. The -.8 million tons that did not indicate a savings from leaving 13.1 million tons of traffic annual baseresulting in using the TTWAW routing were eliminated, (Table year 22). A 10 percent contingency was applied to the total tonnage tc account for any industries not surveyed, (1985) an estimated 14. 5 million tons of "accepted" commerce thereafter. that should be available Table 22 show the for the TTWW during FY86 or shortly forecast traffic The data in h%- commoditv and bv direction of traffic (upbound/ downbound) 68 TABLE 22 FORECAST OF INITIAL (1985) TRAFFIC ON THE TENNESSEE-TOMBIGBEE WATERWAY Industrial Group 01 Agricultural Production 10 Metal Mining 12 Bituminous Coal Upbound -- Downbound 203,000 20,000 7,125,000 Total 203,000 211,000 7,125,000 191,000 -- 14 Mining and Quarring of Non-metallic Minerals (Except Fuels) 20 Food and Kindred Products 24 Lumber and Wood Products 53,000 37,000 1,250,000 50,000 2,232,000 1,303,000 87,000 2, 32,000 26 Paper and Allied Products 268,000 268,000 28 Chemicals and Allied Products 29 Petroleum Refining and Related Industries 756,000 217,000 171,000 927,000 217,000 32 Stone, Clay, Glass and 55,000 55,000 Concrete Products 33 Primary Metals Industries 50 Wholesale Trade 398,000 10,000 1,930,000 193,000 2,123,000 Knoxville, 103,000 -- 501,000 10,000 13,139,000 1,314,000 14,453,000 Sub-total Plus 10% for Contingencies Grand Total SOURCE: 11,209,000 1,121,000 12,330,000 TN BHS Economic Research, 69 In summary, the operational forecast undertaken by BHS Economic Research levels using a shipper-survey if the TTWW this craff'u in howe' er, and Mobile District projected near-term traffic and interview technique. provided a Rate analysis was performed to determine for potential commerce. Initially, least-cost alternative approach would seem methodologically appropriate the immediate future. traffic in 1987, in In contrast to the District's for forecasting expectations, in 1986, 1985 amounted to only 1.4 million tons; 1988, 8.8 million tons, 2.2 million tons; 4.3 million tons. 3.6 million tons; in traffic and 1989, The increase on the TTWW in 1988 was due to drought conditions on holding down to the Mississippi River. TTWW traffic deviate Other factors were obviously at work in levels for several years. routings, Reluctance of shippers and carriers time from established as well as the extra incurred by tows having to break-up and lock through the TTWW versus channels, TTWW traffic played larger levels. roles than expected in the open-river Mississirpi affecting projected adversely 11. Interim Feasibility Report and Environmental June 1983, Impact Statement for Oliver Lock Replacement, Project, and Reevaluation of the Oliver Lock Replacement South Atlantic Division. September 1985, Mobile District, Although the Mobile District Black Warrior-Tombigbee selected locks Commerce (WC) did not generate forecasts this study, for the entire were made for River System in (Table 23). projections through 2030 dock-to-dock The projections used 1979 Waterborne for base year traffic In levels. addition, commodity movements The data was verified and supplemented by shipper interviews. potential shippers and receivers were contactel listings, Interviews induce state industrial directories, from existing WC dock lists. and Chamber of Commerce indicated that improvements to Oliier Lock & Dam alone would not in the study area th•at currently modal diversion of traffic. Companies used other modes for all or part of their shipments would continue of Oliver Lock. to move that way even with the replacement Future region growth traffic rate, projections were based on "the applicable considering the type of commodity, In cther words 10 its use, 1980 OBERS BEA and the origin traffic was and destination of the movement." base year ti979) -, A w0 '0 Aý 'w ~~~~I N UIN In 40 In AI 40 0 Oa u'% C14 0 w 0C' 0 In A - 41% 0 A P - ' pn A 0 ' N% * 4 ' v CN C4 - '4 4%0% 0% V '0 4O 40 - '0 0 rs 0 -0 ( N) A4 ' as 0 W0 N '0 0 v A In 44 rA. v w;0 cN w .- ' C4 qw '(7 a W*NA N N o -- - -% % - - -' - A - - - - ' co .0 11 co0 4 N Old NN AN 0 0 0n ýr4 z A- - 0% .q 0% co w r ~ ~ A A c1N 4 '0 4 A A 4 .14 04 r ' 4.j P. ( A 3 6" A W0 ' 3 0) 3 4 '3 N ~ ~ 4 '0 co A w0 4 4 'A N-'0 0 cn H> 00 3 0 4 0 3 HO '0 4-4N % * 04j0 % - * ( 0 A ~ % 3 % ,N * p - -C it N A A - 71. % - % N .~O 4 multiplied by a projection factor. This commoditýy- and region-specific factor was derived from 1980 OBERS forecasts of population and income region. Additionally, Tennessee-Tombigbee Inc. Waterway (TTWW) traffic growth by BEA estimates produced by A.T. Kearney, were included in forecast years beyond Tenrinto the Tom's scheduled opening. Traffic projections were then incorporated estimation of project benefits transportation cost savings dam improvements. using the Tow Cost Model traffic for calculating lock and at various levels and for various Considering 1980 the dated nature growth of both the base year data and the use of as well as the over optimism of estimated traffic levels is would (pre-recession) factors, TTWW traffic, compromised. the reliability of this study's forecast The report projected that Oliver Lock and Dam traffic By 1985 traffic reach 25.5 million tons by 1990. only 15.9 million tons and traffic through Oliver amounted to on the entire Black Warrior-Tombigbee in 1989. The general methodology levels is of Waterway reached only 19.6 million tons applying commodity-specific growth rates to base year traffic widely accepted but the results are strengthened by the use of the latest data. The District's data sources for base year traffic and OBERS in available indexes by other BEA region for commodity growth rates have been used extensively Corps navigation studies and were the most current available at the time of analysis. One common drawback to OBERS is that it is updated infrequently. 12. Bonneville Navigation Design Memorandum, Lock, Columbia River, Oregon/ Washington, North General Volume 2 of 2, 1984. Appendixes, Portland District, Pacific Division, September, The Portland District analyzed eight separate the Columbia River. traffic reports. movement-s, Each investigation commodity groups moving on included a review of historical from the Bonirev vill( lockmast.e r's which were obtaitied The District provided a det-ailed and thoroughlv-researched for eac-h of the commodities. interviews, discussions cciisiits These movements lith Agriculture, description of routing patterns were identified by shipper and carrier people, knowledgeable Manuficrtýuru-;), resource consultintg varioiis eri / ) (e.g., and cont.acting gover-mr , associ it.iol, aiiid universitv experts. The next step in between waterway and rail the analysis was a modes. in comparison of transportation rates and Freight rates were obtained for rail the Pacific Northwest from Interstate barge shipments of commodities Commerce Commission rate manuals. rate and tariff data. Finally, in A September 1981 base was selected for all Portland District incorporated a variety of traffic at Bonneville Lock for The commodity-specific methods projecting future medium, levels the period 1985 to 2040. methods and projected traffic below. High, and low projections were made. for each commodity group are explained WHEAT & BARLEY: These two grains represent the largest commodity group Lock, accounting for over 27 percent of total on the Columbia River is First, the moving through Bonneville tonnage. In general, future wheat and barley traffic U.S. expected to grow with total wheat and barley exports. Columbia River's market share of U.S. over the period 1976-81. Second, wheat and barley exports was averaged Bonneville Lock's share of Columbia River Third, a time wheat and barley exports was averaged over the same period. series analysis 1982. of U.S. wheat and barley exports was made for the period 1960- Future U.S. trend wheat and barley exports were projected from the linear High and low projections were defined as one standard line. Bonneville tonnages were regression line. deviation above and below the regression allocated on the basis of historical shares. Columbia River and Bonneville Lock market CORN: The Portland District On the basis did not project corn shipments to use Bonneville Lock. patterns, of current corn production and transportation the Columbia River for area. Currently, at a competitive the ornly producing region expected to use transportation would be the Columbia Basin agricultural Columbia Basin corn cannot be delivered price. origins, partially to East Asian markets The Basin has a transportation cost advantage over corn of midwestern but this to the is more than offset by higher production costs related requirement for irrigation. region's /13 PETROLEUM: Combination barges terminals on the Columbia River move grain downstream to export products and return upstream laden with petroleum the second largest for 16 percent of total for local markets. Petroleum products are commodity group moving through Bonneville, traffic and 81 percent of all accounting upstream movements. Washington, One third of these movements are bound for Pasco, a major distribution hub for and refined petroleum products delivered to the eastern parts of Washington Oregon and northern Idaho Four major modal Portland, (the "local market" for barged petroleum products). i. by tanker to flows bring these products to the region: 2. by pipeline then barged upriver; 3. from Puget Sound to Portland, then barged upriver; and, is 4. by pipeline to Pasco and Spokane from Salt Lake City; Montana. Barge transportation two flows. is For by pipeline to Spokane from Billings, (vs. rail and truck) the least costly mode two flows, for the first the latter transporting petroleum products by pipeline upriver by barge, actually less expensive pipelines is than moving it limited. but the capacity of the in it. the local severely Demand for petroleum products to deliver market exceeds the capacity of existing pipelines In the projections the Portland District first examined the correlations between several movements. independent variables and upbound waterway petroleum products (Pearson's r) were estimated for total total pipeline deliveries, fleet mileage Although correlations covered employment, average manufacturing employment, per capita petroleum consumption, only manufacturing (correlation -. 358) employment were and average automobile (correlation .909) efficiency, deliveries and pipeline used in the final regression equation. FuLure levels of manufacturing Regional Projections forecast variables procedure. into employment were obtained from 1980 OBERS BEA deliveries were estimated using a SAS for these independent and future pipeline By plugging the projected values future the regression model, barge movements of petroleum products were p.-edicted. WOODCHIPS: first the wood This commodity has grown rapidly in 1967. in importance since the of shipments on the Columbia River lumber-making process, fiber Originally a waste product source of for 12 wood chips are now used as a valuable industry. 74 Woodchips Ifor the paper processing ac(ounted percent of all for woodchips traffic is through Bonneville to the general lock in the early 1980s. activity The demand and the related level of paper-making Recent increases to increases in in number of mills located along the river. movements paper; a woodchip demand for rather than through Bonneville are attributable transportation shift to moving chips as a commodity, and a modal shift transporting because the pulp logs downriver; is from rail to water barge shipment more cost-effective. The method used in a time series that changes historical forecasting the flow of woodchips in future years was analysis for the period 1967 to 1982. in Based on the assumption woodchip tonnages are basically a function of time and that a regression trend line was derived relationships will continue, using ordinary least squares regression analysis. was used as the mid-case by computing projections line. The regression trend line scenario while high and low estimates were obtained one standard deviation above and below the regression FERTILIZER: in Washington, Approximately 10 to 15 percent of all fertilizer lock; consumed 93 percent of Oregon, and Idaho moves through Bonneville these shipments move upstream. The first the historical step in record projecting future fertilizer traffic was to compile of wheat (from the USDA Statistical Reporting Service) counties and barley acreage Oregon. Fertilizer planted in the "barge-favorable" of Washington and the The consumption is inherently related to acreage used in crops, wheat and barley in particular. production of fertilizer-consuming continuation of that historical for trend into the future serves as the projection. Regression analysis was tonnage and wheat levels were projected Finally, high independent variable the fertilizer performed to determine the relationship between Future fertilizer fertilizer traffic and barley acreage planted. using the previously developed trend line for future acreage. and low projections were estimated as one standard deviation above and below the regression line. 75 LOGS: Logs are brought from the production areas to the river by truck, the river in log booms. The logs are collected in rafts of then stored in 250,000 board feet before being pulled downriver to the timber processing industries and export Columbia. 3 or 4 at a time by towboats terminals of the lower importance over time, While traffic Log tonnage on the Columbia has decreased in than 5 percent of total traffic in declining to less the 1980s. levels have fluctuated wildly in remarkably constant. any given year, the 20 year totals have been Rafted logs are a low priority commodities tow and have to wait for other barged This delay factor increases the For this to the passing through Bonneville. transportation cost of logs and hence their final delivered price. there has been a shift reason and also because of safety concerns movement of logs in barges rather than open rafts. Several projection methods were attempted in determining future log simple tonnage through Bonneville and found to be not applicable: regression, and multiple regression. trend line, Because no significant relationships log projections were could be determined using typical forecasting techniques, simply estimated by extrapolating through Bonneville the historical average of log tonnages from 1963 to 1981. traffic level. The arithmetic mean was extended into High and low projections were the future as a constant computed as plus and minus one standard deviation above and below the arithmetic mean. There are several constraints and assumptions affecting both supply and the constant flow approach used in and state lands is log projections. demand which corroborate First, the export of logs from federal Second, prohibited except constant are for minor allowances. the Forest Service expects a fairly Third, flow of softwood lumber exports from the U.S. pulp producers shifting from transportation of pulpwood logs to transporting woodchips. Finally, many public forest lands are shifting from logging factors mitigate against increasing volumes to wilderness use. All of these of traffic. 76 CONTAINERS: Movement of containers by barge is a fairly recent phenomenon and only a slightly-used practice on the inland waterways of the U.S. On the Columbia River, however, several upstream ports have invested in container handling facilities and nearly 200,000 tons of containerized commodities move by barge annually. Major containerized cargoes on the peas and lentils (downbound), and Columbia include paperboard (downbound), general cargo (upbound and downbound). A very brief description of projection methods for each of these commodities follows: Paperboard: This product is produced in Lewiston, The U.S. Idaho, and shipped downriver to Portland for export. Forest Service expects exports of to continue to paper and board, which have been rising since the 1960s, increase and double by 2030 because of rising world demand and a favorable supply situation in the U.S. The medium projection of future paperboard based upon the 6 percent average annual Thereafter tonnage tonnage through Bonneville lock is growth rate anticipated by industry sources through 1995. was held constant because of capacity constraints at the production plant. The high and low projections were based on time series analysis of the historical traffic levels. The high projection treated all observations (traffic levels in a given year) equally, while the low projection used exponential smoothing to weight the more recent observations heavier than those in the early part of the time series. Dry Peas and Lentils: lentils is in Nearly all of the U.S. production of dry peas and the Bonneville region of eastern Washington and Oregon and Approximately three-quarters of the crop is produced for northern Idaho. export. The Portland District's low projection was simply an expectation of constant domestic/export shares, the continuation of current traffic levels -modal shares, port shares, etc. The medium projection assumed a one percent annual increase in traffic based on expected expansion of wheat acreage (peas The high projection assumed a and lentils are grown in rotation with wheat). two percent annual increase in traffic levels associated with a geographic of dry peas. expansion of production through the use of new varieties 77 General Cargo: Bonneville high, is Containerized general cargo moving downstream through Portland District projected 7.6 generally bound for export to Asia. and low scenarios of future traffic annual growth rates. GNP in medium, based on 10 percent, percent, and 5 percent These growth rates were Upbound container movements associated with growth in represent very small totals annually, Asian economies. and were projected to grow by 0.7 percent in based on OBERS population growth estimates for the BEA regions the upper Columbia Basin. MISCELLANEOUS grouped elsewhere. projections production, COMMODITIES: This category included all commodities not Because of the heterogeneous nature of this group, of future traffic were not based on analyses of demand, Rather, because miscellaneous or other economic factors. commodities had historically traffic future. made up an average of one percent of total this trend was assumed to continue for total Bonneville in traffic, the passing through Bonneville, A trend line through 2040 was developed total was allocated and one percent of this ccmmodity tonnages. deviation above to projected miscellaneous High and low projections were defined as one standard and below the trend line. The Portland District's projections of total future traffic traffic levels recorded On a expected to use Bonneville Navigation Lock, by the Corps' positive note, envelope, Performance actual traffic it as well as actual Monitoring System are presented in did fall within the District's to the low scenario Table 24. projection although was much closer than the medium projection. Unfortunately for planners trying to predict future m,)vements, traffic on the Columbia River actually peaked in tons; commerce since then has declined, in 1976 and 1980 at about 19 million and was 17.2 million tons in 1989. Unforeseen conditions economists failed traffic in the grain and lumber industries, which many to predict, levels. the late Despite had much to do with the variation between actual Although traffic 1980s, by 1989 it through Bonneville has had still failed to reach and predicted increased 1981's somewhat all-time high. the Portland District's 78 thorough and detailed economic analysis of the industries and modal flows associated with the its projections were over world commodities optimistic. economic etc.) are moving through Bonneville lock, The effects of exogenous events (e.g., value of the dollar, legislation, recession, government trade programs, environmental often difficult to model. In summary, the Portland District future movements used a variety of forecasting of different commodity groups. of the commodity, and a Published Each the techniques to project technique was selected based on the characteristics underlying fcrces influencing traffic levels for that commodity, flows. detailed examination of the commodity's origin-destination data sources were varied and extensive, and survey techniques as well. their projection In and the District employed interview while future traffic include the level of was was terms of accuracy, overestimated, traffic envelope did at least The Portland District's that actually occurred. overall effort thorough and sound. TABLE 24 TOTAL TRAFFIC PROJECTIONS AT BONNEVILLE LOCK, AND ACTUAL TONNAGE 1985-89 (Millions of Tons) 1985 7.6 10.2 12.8 7.7 1986 7.9 10.6 13.2 8.3 1987 8.2 10.9 13.6 8.9 1989 - --- 1985-2010 Low Medium High Actual 1990 9.2 13.3 19.3 2000 13.5 17.6 21.9 2010 17.8 22.1 26.7 11.6 SOURCE: Bonneville Navigation Lock, Columbia River, Oregon/Washington (1984). 13. Mississippi River Gulf Outlet New Lock and Connecting Channels, New Orleans District, Lower Mississippi Feasibility Study Draft Report, Valley Division, March, 1989. A feasibility solutions study examining the problems, needs, and potential relating to shallow-draft navigation channels connecting the Gulf 79 Intracoastal Waterway (GIWW) to the Industrial Canal in the vicinity of New Office. The purpose Orleans was completed at the Corps New Orleans District of the study was through year 2050. Algiers, Port Allen, to estimate The study traffic expected to use a s stem of GIWW locks Harvey, projections locks included Industrial Canal, and Bayou Boeuf Locks. Bayou Sorrel, Traf.Cic form an integral part of the economic analysis in evaluating alternative plans Industrial to improving and/or replacing the existing look structures on the Canal. Due to concerns raised in public hearings over the proposed present location, reconstruction of the Industrial Canal Lock at its reanalysis of this project was initiated in 1990. Traffic projections were made for 18 commodity groups. These aggregations were chosen on the basis of physical properties of the commodity, uses of the commodity, and its tonnage. Single commodities with sufficiently For example, coal, marine shell, chemicals, and large tonnages were treated as one group. and crude petroleum were projected individually while grain, building materials each were combined as groups. The commodity growth rates used by New Orleans IWR for The 19F8 IWR's projections national Inland Waterway Review, of internal waterborne District were developed by with the exception of marine shell. commerce were produced at the level and subsequently distributed among component waterway segments 1984-86 historic share of traffic. Growth indexes based on that waterway's for various commodity groups projections Fertilizer made by DRI, Institute. rates identified by IWR were derived from economic the Department of Energy, and the the WEFA Group, The New Orleans District to a base traffic level. then applied IWR's commodityThis base was defined as the specIfic growth 1986-87 average study locks. tonnage figure for each commodity group moving through the HWR's projections did not extend beyond year 2000, the Although tLhe District extended 2050 life). 1993-2000 annual growth rate projected by iWR to year the project over its 50-year economic (based on the need to evaluate For marine shell, commerce in 1986. which accounted for almost 3 million tons of GIWW future traffic levels the New Orleans District projected 80 based on known reserves of both clam and oyster shell deposits in Ponchartrain and Atchafalaya Bay. developed assuming current, High, medium, Lake and low projections were and immediately declining life of the marine shell gradually declining, rates of production throughout the remaining reserve beds. This translated into average annual growth rates varying from zero (constant traffic levels) to -13.7 percent. Some potential areas of concern emerge from the New Orleans District's analysis. The District relied almost exclusively on projected growth rates produced at another Corps office (IWR), which were made for a national-level, "priorities" assessment study, not for specific project justification. Lockspecific forecasts could be enhanced through interviews with shippers and carriers and investigation of local markets and industries. Disaggregating national level commodity-specific growth rates down to individual locks introduces forecasting risks which have been noted elsewhere in this report. In addition, the growth rates developed by IWR were based on Applying these growth rates to "a weighted 1984-86 average of historical data. "a different base year also introduces another element of uncertainty and weakens the relationship with the information upon which the growth rates were based originally. forecast horizon is Assuming growth rates remain constant over a 50-year also risky in that the commodity growth rates used were macro-economic assumptions. derived based on much nearer term (through 2000) The longer term reliability of these growth rate assumptions would need to be reassessed from the original sources to be applied in a realistic sense much beyond 2000. Lastly, the District study could be improved by clearly traffic forecasts were explaining how IWR's Gulf Intracoastal Waterway (GIWW) allocated among various locks on the GIWW. 81 14. Montgomery Point Lock and Dam Feasibility Study, Little Rock District, 1990 McClellan-Kerr Arkansas River Navigation System, The purpose of this study was to project River tonnages moving on the White for the (part of the McClellan-Kerr Arkansas River Navigation System) Baseline Center period 1995-2045. Commerce Survey. Statistics tonnage estimates were developed using Waterborne (WCSC) data and results from the 1989 Shippers Three and five year averages were developed by combining WCSC and Sand, gravel and rock movements, which are mostly internal, were survey data. not included in the study. Baseline tonnage was calculated by taking the average of tonnage for 1986 and 1987 from WCSC data and for 1988 from the 1989 Shippers Survey. These figures were then used to estimate projected indices, tonnages for project year 1 (1995) OBERS projections. coal by using various including IWR data and One exception to the above five year average three year averages was that to smooth out the annual tonnages were based on a fluctuations. Baseline sand, gravel, tonnage was forecast to be 6.7 million tons and rock), in 1995 (excluding up from the three year averaged 6.0 million tons for are expected to be in grains, 1986-88. fertilizer, The largest tonnage increases steel products. and primary Mode split analysis was used to analyze the mode split for traffic The This originating and terminating on the M-K Arkansas River Navigation System. commercial data base, data base combines barge is a very Transearch, was used to analyze the modal splits. shipment data from 10 sources. The analysis indicated that important mode of transportation for the Arkansas River BEA's, and inbound movements of particularly for outbound movements of farm products chemicals and petroleum products. Baseline in tonnage figures were projected for the period 1995-2045 for use scenarios. Growth calculating benefits for the with and without-project rate projections are based on IWR material, knowledge, Low, OBERS projections, and local based on the survey effort and discussions with local officials. and high scenario projections were developed. 82 Most of the medium, commodity projections Waterway Review. are based on IWR estimates prepared for the 1988 Inland (medium) scenario, total tonnages for 13 For the middle major categories were projected to increase 1995, 2010; in 7.3 million tons in 9.3 million tons and, in 2000; 2015; as follows: 2005; 6.7 million tons in 8.6 million tons in 11.1 million tons 7.9 million tons in 10.2 million tons in 2045. The latter 2025; 2035; 12.1 million tons in represents a doubling of tonnage over the 1986-88 base period tonnage. The 2045 projection for the low scenario was 9.9 million tons; the high scenario, and for the projected tonnage was 15.3 million tons for 2045. 15. The National Waterways Study U.S. - A Framework for Decision Making Support Center, January 1983. Final Report, Institute Army Engineer Water Resources Report No. for Water Resources, NWS-83-1, The National Waterways Study (NWS) Water Resources Development Act of 1976. was authorized by Congress through the The objective of the study was to response to and the on provide a national overview of the inland waterway system in steady increases in traffic, congestion and delays at certain locks, mounting need for replacement or rehabilitation at many aging structures the system. coastal, study in It was the first comprehensive assessment of the nation's inland, since the National Waterways Commission and Great Lakes waterways 1908. The study was extensive in projected waterborne commerce ability of the current scope, covering an examination of current an assessment of the and an evaluation of and (foreign and domestic), system to handle this traffic, alternative strategies the system, waterways. A.T. for adding capacity and maintaining the reliability of particularly with respect to both the inland and Great Lakes The multi-year Louis Berger) in study involved three principal contractors and representatives from OCE Besides reports, BFRH, (DRI, Kearney, and each Corps Civil Works Division, addition to IWR staff. IWR's Final Report, a 24-map set of the papers other products included 10 contractor technical waterway system and major commodity flows, and presentations, a wide variety of historical and documentation of an extensive public involvement 83 program. The contractor technical reports traffic rail, focused on a comprehensive range of waterway topics carrier including: projections; the waterway shipper and other demands and water industries; alternative pipeline and truck modes; recreation, for water resources supply; such as hydropower, flood control, waterway engineering and technology; and an evaluation and recommendations. Traffic projections used in generated by Data Resources, four alternative The projections regions. Inc. the National Waterways (DRI). Study (NWS) were Projections were developed under and under three sensitivity analyses. macroeconomic scenarios were generated for 14 commodity groups and for 22 geographic class details for internal In general, (inland), coastal, They included traffic and foreign trade. Great Lakes, the alternative scenarios reflected both economic and institutional forecast period. An attempt waq made "to changes that may occur over the a wide range of possible incorporate future events to allow planners with future waterborne traffic "Low to assess a number of contingencies associated growth." The four NWS scenarios--"Baseline", and "Bad Energy"--were The three "High Transportation Use", based on three sensitivities in DRI U.S. Transportation Use", macroeconomic forecasts of the economy. examined the impacts of alternative futures not covered directly "High Coal Export", and "Miscellaneous". the scenarios--"Defense", Different model assumptions were embodied in Assumptions about the likely trends the latest U.S. in U.S. each set of forecasts. population growth were based on scenarios. Bureau of the Census data and were the same for all A detailed analysis was performed of each of the major industries which significantly affect water transportation tonnage. These analyses used both Industry field interviews and ongoing DRI industry studies and models. forecasts were then di.;aggregated by region to estimate consumption in specific geographic areas. future production and These projections were based in Each industry'logistics decisions part part upon analysis of historical industry data. decision process was analyzed to identify the likely transportation which would be made. upon correlations waterborne Subsequent waterborne projections were based in and iidustry factors and the between broad economic flows for 1969 to 1977, as well as on full consideration of likely 84 shifts in logiszics systems by industry due to new plant locations or new The industry dnalysis, production and consumption product introductions. regions, reflect and logistics the effects decision process for each industry were adjusted to of the individual scenario assumptions. The "Baseline" waterborne traffic scenario was trends, largely an extrapolation of historical although some adjustments were made to the 1977 price hike and modified forecasu for the U.S. base year data to take agricultural yiells. into account the 1979 oil DRI's "Trendlong" macroeconomic economy was used in this baseline. The "High Transportation Use" macroeconomic roal scenario also used DRI's "Trendlong" incorporated higher estimates for waterborne more assumptions, coal exports, but it traffic, and domestic coal consumptio,.. Further, relaxed environmental restrictions Phosphate allow for the expansion of coal use. compared to a decrease urder expor-.s were held constant after 1985, scenario. the baseline The "Low Transportation Use" scenario incorporated DRI's "LargcGovt" and macroeconomic model, government major include reflecting a combination of economic events the demand in A-sumptions policy that tend to depress transportation. (than industries which are this scenario from ,ars of water imbedded in lower grain yields baseliaie) and reduced grain e"'orts imports, Great Lakes ports, exports, substantially lowjr crude oil lowcr phosphate (to 26% and growing import penetration of the domestic steel market from 15% baselin,). "The national "Bad Energy" scenario used DRI's in "BadEnergy2003" model and effects on the hypothesized an energy crises economy the mid-1980's with resuting The scenario predicted that oil imports wol ld drop synfuel plants precipitously, coal exports would grow, and although additional the traffic would be constructed to receive offset by thL construction coal by water, would be partially of seven coal slurry pipelines. 85 The three sensitivity analyses were performed to look at the impact of certain alternative assumptions in the four primary forecast scenarios. The "Defense" analysis reflected the impact on waterborne traffic of U.S. involvement in a five-year conventional war. "High Coal Exports" focused on on the effects of dramatically higher coal exports (300 million tons by 2003) coastal ports and inland waterways. Finally, the "Miscellaneous" sensitivity analysis incorporated a number of specific adjustments to individual river segment forecasts to account for underreporting of base year traffic and to eliminate disparities with locally-prepared navigation studies. The various Table 25. assumptions employrd by the different scenarios are highlighted in The resulting seven sets of forecasts of potential waterborne commodity flows were developed using base year 1977 data from Waterborne Commerce for 14 commodity groups and 22 geographic "unconstrained" by any snortfall in regions. These forecasts were the waterway capability to handle the traffic and represented the probable cargo levels available for water transportation under each of the sets of assumptions. Projected total traffic levels by waterway segments for the four major scenarios are shown in Tables 26-29. Unfortunately, the National Waterways Study forecast traffic levels are not comparable to either The 1988 Inland Waterway Review projections or historical tonnages in Waterborne Commerce of the U.S. in both waterway segment definitions and in example, the NWS Illinois River, because of differences For the types of traffic counted. and Gulf Coast West Warrior River System, segments included domestic traffic figures from the ports of Chicago, and Houston, respectively, which were not included in Mobile, Black Illinois Waterway, Warrior-Tombigbee Waterway, or Gulf Intracoastal Waterway traffic totals in Furthermore, the NWS also lumped either Waterborne Commerce or the Review. all i land, Great Lakes, local, and coastwise domestic traffic together while the Review deals only with internal barge traffic and Waterborne Commerce lists each of the water modes separately. For these two reasons, most forecasts in the NWS are not easily verified by analogous historic data or more recent traffic projections. 86 TABLE Pricipial ABu 1. Macroeconomic 2. Corn Yielda by 2003 (Bushels per Acre) Went Coast Shaem of Farm Products Exports (Percem) Phospate Exports Steel imports (PercentofTotal Consumption) Crude Oil Prices (Average Amnnal Price Incmus-Pem) Crude Oil Imports by 2003 (Millions of Tons) CoalExpos by 2003 (Millions of Tons)' Gulf Coast Sham of Total Coal Exports in2003 (PeCe.t)' Domesic Coal 25 THE NATIONAL WATERWAYS STUDY PRINCIPAL ASSUMPTIONS FOR NWS SCENARIOS' m Boehmi Treadlong 121 High Use Trendlong 121 Low Use Larger Government 110 Bad Energy Bad Energy 121 Defense Waurume Economy' 121 High Coal Exports Trendlong 121 3. 14 14 14) 14 Overall Decline Dunng Conflict Constant After 1985 Decline Sharply DuringConflict 3.8 14 4. 5. 6. Decrease After 1985 Decrease After 1990from 17to 15 3.8 Constant After 1985 Decrease After 1990 from 17to 15 3.8 Decrease After 1985 Increase to 26 by 2003 3.8 Decrease After 1985 Decrease After 199Ofrom 17to 15 4.8 Constant After 1985 Decrease After 1990from 17to 15 3.8 7. 290 290 240 200 9. 107 156 107 156 Decline of 100 290 Million Tons per Year During Conflict 156 290' 9. 19 23 II 23 23 35 10. 1,794 2,360 1.625 1,728 2.360 2.360 Consumption by II. 2003 (Millions of Tons) Synfuel Plant on Water (Coal Consumption in Millions of Tons by 2003) Coal Slurry Pipelines Eastern Coal Use (Lake Eric Loadings of Coal by 2003 in Millions of 10(50)' 11 (61) 6(30)1 15 (81) 11 (61) 11 (61) 12. 13. None Present Technology and Regulations (20) None Present Technology and Regulations (22) None Increased Use in Great Lakes Area (24) 7' Present Technology and Regulations 120) None Present Technology and Regulations (22) None Present Technology and Regulations 122) Tons) The Miscellaneous scenario incorporates all the assumptions of the High Use scenario. The adustments are made to account for data base errors (Ohio and Gulf Coast-East reaches) or to introduce alternauve regional forecasts (Arkansas and Columbia-Snake Waterway reaches). 2, Based on Federal Emergency Management Agency forecast. 3. Great Lakes shae drope 10 percent. 4. Overseas and Canadian destinations. S. Based on National Coal Association high forecast and modified by Data Resources. Inc. (DRI), 6. An additional demonstrstion plant (not included in these numbers) on the Monongahela River is assumed in operation from 1983 to 1990 and consune 3.000.000 to 6.000.000 tons of coal each year. However. after 1990. it is discontinued. 7. One of dtse seven ptpelines (ETSI) will divert 4 5 million tons of coal from the waterways by 2003 I. SOURCE: THE NATIONAL WATERWAYS STUDY, 1983 (TABLE IV-6, PAGE IV-62) 87 0. C~ 0ý 14 0 0 cic cm-* O CD N00 L N 00 '0 C) pU n -f NO 0 N- Pr% -0 N 0 J 0 pV CD v '0 0 LA nLn 0' 0 ) 0 j 04 0 0 N r' 0 CD (> N) N - N N N N '0 - pn NY 090'1 co 1 L i c ,J -l -r C, 11 0- LA -. Ln LA N Go N N t 0' N 0 N LU r ;C o C N 0 UJL LU N~ (A N- 00 4: L. LU U I -. 1 0~ ~~~r Q NI N* A cZ -t NM - 0 0 C) ' 0i .J ' ' L Ln a. co .- A Ln N: '0 P-~ N E 0 Ln Nr ' N) 0 0' o L &0 Nl N~ A 0CD ~ 10 t '0L 0 . N L E L ~ z '0 10 0 ; 07LU 0c -0 nV N C) 0. ce wA -u :'I- wCC Nl 0' UN Nu , Nc (Jl -t 0' co el 0fý' '0 : co , ' fl N0 C A L 0. 0' No ci Nl LA% rn 0) N 1~ 0 N '0 0D N N 0' l LU -J 4o 4t 4n 4n LA N ( N 4 0 N 0' a w4 4ý -n N ý Nv CC) LA N LA 0, 0: 0 '0 N fJ( N 0 0 N '0 0 0' ) o v ' -. It~~ D) co 0, 3 z C: L7 z 0 E. ( ~ ( C 0' ~ ~ 88I , , .- ) r4J r\L 4 CJ 0 r'4 17 (3. 0 I)V n( (V oo Co O- 0, M) M M( C> 0 U M - 0 0> 10 al 0 m' -7 U2, pn. ;z 1.2 - UCI, (' 4C: Co 0 0D 0' '0 0C C 0 )( 'n 0 0' c r'0 'T al 0-7UWU 2 E-40-u~-- '0 OfCz: U) O- r 1: U,) -7 U N'- Uo rn LIi 04 I? N '0 ' -7 01 0 F0 (~( -4 Nr-: f- 0) U, a- 0' - N- N- C0 0 N r4 0 r 4u .. U )U E-4 rý:' , ' m~0 E- ( o a0, 0' LI)Z Ln i, co -Z U CD 0 C4) 0o C; ~ ('4C (U i 0 n .- '0 N- rn, 4)j -.7 "4 - U( t~ .7 1~r' 0 co U '0 U co -~ N co - U, NN-4 r, 0 030) - n OZ ' C '-04L 0m-0 ~ "'.j 0 0 >4 P7 0 . - 7 I- ~C> U, i P) ('$ " c> " No ;24 N(U t a- '0 r co.?4 t C > U4 1-4 C ) 10 aco '0 ol C) rs '0 r(D N 0 04 M 44 aa A4"4 l C rn2~ o r CD ~ ' NC- 0 oc 0 N-C: , :(U Pei C r- 00(' 04 ý H7 , - (4 '0 ( - 0 ( 00 Z -4 0 M4) 4l > 3 Z 134 jn ''In 444 E-4 -'-L~: zc 89c 'C 0) (V I m 4 0, w 1- r %0 Ll N0 'C t o 0' m 'C 0 N M Nn 0'C 0. D 0 0 co ~ ~ ~ n ' 'I- K 2 Z: .( 0 ~A 0) :3 L.C~ 0 -0I m > > L4' ..0 at (V (3 A AA 0 w uj . 0. L) W)0 0 o K ~o 0 v ( o '-0 0 (V Iu U 0ý z Oz 0 o 0C) t N V Z E-4 N 0 '40 0 0D - .. , 0C. . 1N '0 Is -r 0. m, '0 0. Ln m 1 ( Lm fn ( L '0 0 N . N It Nl " 0 N 0 N 0 %0 -, o. C 0. 0 C 0 0D Vl Lr 0. N a c- o 0 n 0D '0 pn -: N 0 - CD 0 NO-N F'r 0 . 00. 0N rj N 0 U t U r - . 0 O 0 &A G m 0 u A co H')r 0~~~~' 4 r% C W U'. co '0 -% 0 0 r- 0 1 j~ 0. 0D DCDW'0 >4m N N NUSFn 1 N m m O'j C w U N LAi ,4 4 0 U~& 0CJZ)4 -Jj~ 0. S00 Ir "' r'0 0 -0 NZ . CN ~ 0 0 -4 c- "0 Ci 0 C. U' n 0 ' ý 0 0 Ol LA N r4 w 0 . Ln< .4% 0." N' f.- It Nn . w' 0- 0 Z-4E-4 w~ ON 04 Wz f0. . 1-4 '04 N '0 -'0 U)(U N6 0 - 4 i . -n N N0 Ni , N m ND 0. D N us~ G '0 c Ni0 >NN >4 U) V) I ~ 44 ~ 0 0 C) n 0. in ND a. co 0. 00 00 E-0 4 H 1-4 - C 'r P N: ". 0ý ; Pý1 Ný '0 0 i .44 Ný N N2 0 I. 0A 4 c. N Ni co 0 N Ni Z 0 0 N N US 0, IM '0 .n NL v, C . 00 N ' @. 0 0. '0 m 0 N '0 o m z ( E--4 H > 0 Zi E-4 %U a4 L) 0 I rl co r-I rj ý rI 91r r nj 0. With these caveats closely approximate in mind, forecasts from the NWS Baseline scenario the medium scenario forecasts from The 1988 Inland and and Ohio Waterways Review for the Lower Mississippi parallel Rivers. the high scenario forecasts and Missouri River traffic Tennessee, for the Arkansas, 16. Institute 1988 Inland Waterway Review, for Water Resources, IWR Report 88-R-7, U.S. Army Engineer November 1988. This report developed projections of inland waterway traffic national and waterway segment levels using a traffic "top-down" shares. at the approach based on National level individual commodity groups and historic commodity analyses were based on "off-the-shelf" information forecasting services, Federal agencies, such as Data Resources, Inc. (DRI) from major and the WEFA Group, and trade associations. Segment level projections were derived from each segment's historic Traffic for share of a given commodity group. 1975 through 1986 was tabulated and aggregated by commodity group Ten aggregated commodity groups were selected: and waterway. 1. 3. 5 7. 9. Farm Products Coal Nonmetallic Minerals/Products Industrial Chemicals Petroleum Products 2. 4. 6. 8. 10. Metallic Ores, Products and Scrap Crude Petroleum Forest Products Agricultural Chemicals All OU•r Data for these for the following 1. 3. 5. 7. 9. i1. 13. 15. commodity groups were aggregated at the national level and individual waterways: 2. Middle Mississippi 4. Lower Mississippi 6. Illinois o. Monongahela 10. Cumberland 12. Gulf Intracoastal Waterway 14. Atlantic Intracoastal Waterway Upper Mississippi Missouri Arkansas Ohio Kanawha Tennessee Black Warrior-Tombigbee Columbia WW Both levels of projections are discussed 92 in more detail below. National Level Projections Projections of internal waterborne commerce were developed at the national level by IWR from a variety of sources, group. Wherever possible, depending upon the commodity growth indices were derived from government or private entities with generally accepted expertise with respect to a given commodity group. At least three growth rates were obtained for each commodity "medium" and "low" forecasts for the years 1990, 1995 and to generate "high", 2000. Once derived, growth rates were applied to a weighted average base using 1984-86 data from Waterborne Commerce of the United States for each commodity group to arrive at projected traffic. heavily for 1986 (3 times 1986, The data were weighted more 2 times 1985 and 1 times 1984 divided by 6) with two exceptions: farm than for earlier years for most commodity groups, products and coal. For farm products a simple average of the three years' was used due to abnormally depressed traffic levels actual tonnage (1984-86) in 1985 and 1986. It was felt giving additional weight to these low tonnage For coal a 1986 tonnage for this years would skew the projections toward the low side. historic base was used to capture rapid increases in commodity group. It was felt that using the weighted multiple-year base for projections that were unrealistically low The 1986 actual data and the low, medium and 2000 are shown in Table 30. coal generated near term (1990) (i.e., below actual 1986 tonnage). and high projections for 1990,1995, As noted, growth rates were derived from a variety of existing sources. 1995 In December 1987 DRI prepared waterborne commerce projections for 1990, and 2000 for each of the ten major commodity categories analyzed in Inland Waterway Review, (DRI Inc., Waterway Outlook, December 1987). the 1988 IWR chose to apply DRI's growth rates rather than the actual tonnages projected by DRI because their forecasts started with a 1985 base, tcnnage year, recorded in an exceptionally low and did not reflect the recovery in actual traffic tonnage This approach admittedly weakens the relationship between 1986. the projected growth rates and the underlying macroeconomic assumptions developed by DRI. However, the original DRI forecasts for 1990 were already the late 1980s. being exceeded by observed inland waterway coal traffic in The growth rates projected by DRI provided one set of forecasts for all of the 93 ox o co '- 0 r1 lAL CD A r'.j L 'ji ' A .? A J 0~ N- '0 CD LA 0) C r C) Ný C) LAN Ln Cy CDJ A C. r cn, C. 1 CDo5 C\ Z ~ ~ CD rO0- C m 0 N-j 0' J 0C9~~ '4 ~' j co 3 0 0' Urý N -Nj '0 It 0' 10 (14 0' LAN ý O-fA N -I u E-4 04 0 '1'4 ~ 2 r 0 - N- 0 Nn ' rJ 0'T 0 00 : 0 -r- E,4 E 3 E-4 x' L 4 ' & a4 0 : 00 LA '.1 C co N .J 0 0 - N ' m4 N 0' 0 J t~' E-1 -- M El 4 w `40 0 '0 0' 0'0 '4j L 0 n r- N c l P.: .N LA ' 0ý V; . 0 -( ;I N j ~ ~ r-l 1A0 4 N NJ ' ~ N C N) in Na' '0 - N - 0ý ' J o 3 1, C:. 0 I. LA 0' '0 LA i .- N. 't rn NQ N 0 LA . ' P, . r-- 0' 9 o~ u >4 rq N- Nl LA 'r LA N . N 10 -l NC Nl '4 0 -u Co co '0 cNi 0~ fLA .- 0' L 0 en A 0 4 '0 N C) N C) LA N 0' N LA '0 N 0 G 0 0 rn 0> N. 0 0' 0D LA% N N l 0D N. N 0 L '0 N 0N c : W E(,N 00 '0 w 0 0' 0' N.It m '4 It N.LwL U % N. 0 I r 0' . ý D 's 'T Cý 0 0' 0' '0 m L '4 '0 o 39 !2 'r Ný It N NJ N~ C0 LA (ý 00 N 0 '0 LA 06 NA N9 LA -~ U2 ' N 4 LA 04 C-I X- n co - -r '4 N 0: N. Ist Cý N ' 09 N " 0ý :1 "(i 0' LA It 4 (J 0 Co 0 LA 6 o ) N L t C4 N U) ' 0 . o ~ ~ ' ~ I( M) N ~ U) n ~ ~ N '4 ~ L 0 u4- P- r - 10 co (7 (~j ý L 0~ 'n 0 c Z.) 0 0' E W CL 3 (u U) (C( V) XC ) (C ICC 0 EU - C (U 0I. 0 0 0 0 0 C) ( 3 (C (C 4) . jC)' 0 C)mu C In C ) c(~ L E 0 ' :3 .U co 0, . (C Dx - ~ ~ -0 0 Go] u (A Q co 10 Diverted and Induced Waterway Traffic. The projection methodology used by IWR from/to other such as major does not have a mechanism to address the diversion of traffic modes or induced traffic lock rehabilitation resulting from changes in the system, or added locking capacity. Division/District Input to Modify Projections. Several field offices (FOAs) provided support to IWR to refine the segment level projections overcome some of the deficiencies noted above. are in a position to have local knowledge terminals, closures, changes in to help The divisions and districts facilities and of new plants, transfer lock, operating patterns at a particular and relevant characteristics of area shippers and waterway operators. to determine changing Each The localized effects traffic of these factors were evaluated shares by commodity on a given segment and at individual locks. segment was further evaluated through linear regression analysis and data. The result was to modify calculation of standard deviation of historic the forecast envelope the historic deviation. for a number of segments using the linear trend line or traffic about a mean value implied by the standard variation in Concluding Remarks on IWR Projections The projections developed by IWR for the 1988 Inland Waterway Review futures is for traffic on the nation's trends by forecasting provide a broad based look at alternative waterway system. The "top-down" level, approach an effort to capture commodity at the national services. Indeed, as projected by major commercial its a major strength of this method is considerable assessment of production and consumption trends in national economy that use waterborne projections projections the ability various sectors of the The national traffic transportation. thus derived are probably far more realistic generated to predict for individual traffic than a summation of Unfortunately, are lock and dam projects. levels becomes weaker as these forecasts disaggregated down to the segment and lock level using an historic Some of this weakness is weighted average approach. refinements mitigated at the segment level by support. However, the level developed with Division and District is too generalized 103 projection methodology to be applied at the lock without considerable degradation of reliability. the projections national developed in For project-level analysis, the 1988 Inland Waterway Review provide a point. Project analysts framework that can be used as a starting need to refine these projections perhaps applying origin/ patterns further through local and regional analysis, to determine likely future destination studies at individual projects and along localized river reaches. Huntington District, Forecast Methodologies, perspective in its comments on this Review of Planning and from a project level summarized basic concerns on deficiencies of the top-down approach: "With the passage of the Acid Rain Legislation, we are witnessing major and unforeseen changes in coal shipment patterns, some of which are temporary fixes and some of which are permanent. With respect to coal transportation, we are in the midst of a period of adjustment which will continue for the next decade. The usefulness of the top-down forecasting approach described, in this type of an environment, is questionable on the system level and particularly questionable at the project level. Under these circumstances, the major source of useful information will probably prove to be shipper surveys. "The purpose of making these long-term commodity traffic demand forecasts is for the economic analysis of individual projects and yet the forecasting methodology described is most accurate at the national level, less accurate at the system level, less accurate still at the individual waterway level, and least accurate at the project level. The methodology is undermined by a lack of regional variation in commodity traffic growth rates, a lack of company-level input. "The report suggests that the forecasts produced will serve as a "framework" for use in producing project-level traffic demand forecasts, and that districts will make micro-level adjustments to make the forecasts useable in project economic analyses. The danger in this approach is that in their unadjusted form, the overall forecasts will be so generalized that they will be entirely unusable at the project level. "The "leap" from the national-level forecasts to project level forecasts is a highly-complex leap. The forecasts could look good and reasonable at one project in a system, but entirely off-base at another project. Micro-level information is often critical at the project level, and rather than simply adjusting the national-level forecast, what may be required is a complete "re-do" of the forecast. Whatever adjustments are made at the district level, whether minor or major, the likelihood of conflict and confusion is high." (ORH-PD-C, 20 September 1991) 104 The issues raised by Huntington District for appropriate are valid and highlight in the need local and regional input to refine projections level analysis. a top-down framework for project shipper and carrier These refinements can be based on surveys, localized origin/destination analysis, or new traffic, at the project etc. Ideally, the techniques anticipated modal diversions used to refine defensible, the projections level should be well documented, and adaptable by others performing a similar analysis. 105 SUMMARY This report is procedures traffic traffic part of a larger R&D effort to develop suggested inland waterway and guidelines for making consistent and systematic is projections. The purpose of this report to review and assess forecasting methodologies previously employed by project level and Inherent in this and national level Corps of Engineers inland navigation studies. effort is the identification of data sources for economic, transportation, commodity supply and demand forecasts. Each of the 16 inland navigation studies reviewed is because individual waterway projects have unique physical traffic mixes and patterns, However, in some way unique, geographic that have features, etc., locations, economic hinterlands, to be addressed. similarities groups: the studies discussed still exhibit enough into four broad to categorize their projection methodologies (1) the application of independently rates to base year traffic derived commodity-specific (2) shipper surveys of annual growth levels; existing and potential waterway users barge; (3)statistical to determine future plans to ship by and correlation to predict and, (4) a analysis using regression future waterborne traffic based on independent economic variables; supply-demand and modal split detailed long-range commodity incorporating analysis the production and consumption patterns of individual economic The complexity of these methods and expense invested in each. The regions within the waterway hinterland. varie 4idely, as does the time, effort, general projection methodology and data sources reviewed incorporated in in Table 33. each of the inland navigation studies are summarized Most analysts would agree that the projection methodologies employed in Corps navigation studies should not be judged solely on the basis of forecasting accuracy degree of error. forecast. for the simple reason that every forecast contains some A sound methodology does not necessarily ensure an accurate fiscal, or Often macroeconomic changes or unpredictable events, wisdom." for example, How, then, can defy all political, meteorological "Io.,ventional the presumptions of be judged? should these methodologies 107 TABLE 33 GENERAL PROJECTION METHODOLOGY AND DATA SOURCES FOR THE 16 INLAND WATER STUDIES STUDY NAME & YEAR Lower Mississippi Region Comprehensive Study (1974) Master Plan for Upper Mississippi River System (1981) Projections of Demand for Waterborne Transportation, Ohio River Basin, 1980-2040 (1980) PROJECTION METHODOLOGY Base year traffic multiplied by commodity-specific growth rates Base year traffic multiplied by commodity-specific growth rates CONSAD: statistical methods (correlation & regression) Battelle: shipper survey DATA SOURCES -1970 Waterborne Comm. -1967 OBERS industry indices -National Waterways Study, 1983 -1972 OBERS Series E Regional Projection -1976 Waterborne Comm. -surveys and interviews of Ohio River basin waterway users -1976 Waterborne Comm. -U.S. Depts of Interior, Agriculture, Energy, and Transportation -Bureaus of Economic Analysis and Census -see Nathan sources Nathan: market demand, resource inventory, and modal split analysis Gallipolis Locks and Dam (1980) Evaluated CONSAD, Battelle, and Nathan studies; selected Nathan Nathan's market demand, resource inventory, and modal split analysis, then updated in 1981 with interviews, surveys Monongahela River, Locks.& Dams 7 & 8 (1984) -Ohio River Basin Study, 1980 Lower Ohio River Nathan study updated with Navigation Study Tenn-Tom estimates Mouth to Cumberland River (1985) -see Nathan sources 108 TABLE 33 (Continued) STUDY NAME & YEAR Kanawha River, Winfield Lock Replacement (1986) PROJECTION METHODOLOGY Base year traffic multiplied by commodity-specific growth rates DATA SOURCES -1980 Waterborne Comm. -1980 OBERS Series E Regional Projections -1986 Waterborne Comm. -Bureau of Econ. Anal. -U.S. Dept of Ag. -U.S. Forest Service -National Electric Reliability Comm. -Industry Forecasts Forecast of Future Ohio River Basin Waterway Traffic (1986-2050) Industry analyses performed, base year traffic adjusted through shipper surveys, movements categorized by geographic area and end use market, commodityspecific OBERS and industry growth indices applied to base traffic levels Supplement To The Shipper survey and Environmental Inpact interviews (base year) Statement:TennesseeTombigbee Waterway: (1981) -potential shippers identified from commodity movements from Interstate Commerce Commission (rail), Bureau of Census (truck), and Corps (marine) Base year traffic multiplied by commodity-specific growth rates Operational Forecast for the Tennessee Tombigbee Waterway (1985) Interim Feasibility Report and Environmental Impact Statment for Oliver Lock Replacement (1985) Bonneville Navigation Lock (1984) Shipper survey and interviews -1972 OBERS Series E Regional Projections -state industrial directories, trade associations, chamber of commerce lists -1979 Waterborne Comm. -1980 OBERS Regional Projections Base year traffic multiplied by commodity-specific growth rates -Statistical methods -Shipper surveys -Base year multiplied by commodity-specific growth rates -1960-81 Lockmaster reports -US Dept Agriculture, Forest Service -1980 OBERS Regional Projections US 109 TABLE 33 (Continued) STUDY NAME & YEAR Mississippi River Gulf Outlet (Industrial Canal Lock) (1989) PROJECTION METHODOLOGY Base year traffic multiplied by commodity-specific growth rates DATA SOURCES -1986-87 Waterborne Commerce -1988 Inland Waterway Review -1989 -1989 Shippers Survey Waterborne Comm. Montgomery Point Lock and Dam (1990) National Waterways Study (1983) Base year traffic multiplied by IWR and OBERS indices Base year traffic multiplied by commodity-specific growth rates Base year traffic multiplied by commodity-specific growth rates supplemented by statistical methods -1977 Waterborne Comm. -Data Resources, Inc. 1988 Inland Waterway Review (1988) -1986 Waterborne Comm. -Data Resources, WEFA Group, US Dept Energy, Fertilizer Institute -Review by Corps districts, divisions 110 The answer depends on what kind of forecast national, regional, the analyst requires: longtonnage term or near-term; or project-specific; definitive estimates or projection "envelopes"; or, investment strategies or in needs assessment or benefit calculations; To develop supplementing planning efforts. general guidelines with wide applicability, appears the most practical methodology assumptions in to be one that uses a consistent set of macroeconomic international, national, and regional generating level projections, which in turn can be adapted by Corps planners as a basic framework for further modifications derived from local knowledge and expertise in project level analysis. that can be applied Credibility would thus be enhanced by the traffic totals and assumpLions imbedded in The it uniformity of national-level individual project report forecasts with overlapping time horizons. is more practical if development of general forecasting guidelines incorporates a methodology that historic and forecast data, and is is is easily updatable based on the latest to to relatively low cost for the project manager in a format available implement, adaptable for use on microcomputer any Corps planner. The methodology incorporating commodity-specific one or more base years(s) outlined above. Orleans, traffic levels appears growth rates applied to to best meet the criteria Mobile, New in This technique was used by the Huntington, and St. Louis districts for Portland, inland navigation projects in The 1988 their districts, as well as the Institute for Water Resources Inland Waterway Review. commodity forecasts reflect These publically available and independently derived sophisticated macroeconomic models and informed and industry experts with respect to given judgments of academic, commodity groups. government, The shipper survey method tends to build in not sufficiently address long-term forecast an optimistic bias and does while the statisticallycontinuation of issues, based regression and correlation methods past trends. Finally, inherently assume a a long-term evaluation of regional market demands, and transportaion modes -is -while detailed, the type of resource bases, extensive, massive production levels, and methodologically defensible is unfortunately forecasting effort that not easily updated and may be impractical I11 for smaller staffs analysis. facing urgent time and budget constraints in project As explained in projections the text, IWR developed inland waterway traffic approach in an effort to capture trends by forecasting of using a "top-down" commodity at the national services. level as projected by major commercial its considerable A strength of this method is assessment production and consumption trends in that use waterborne methodology is transportation. various sectors of the national economy A weakness is that the projection too general to be disaggregated down to the lock level without This forecast methodology therefore can be used national framework that can be refined in a project a serious loss of reliability. to provide a consistent level analysis by planners project markets, elements. equipped with knowledge that can be refined in of local in level analysis by planners equipped with knowledge industry, these and transportation patterns and any anticipated changes IWR's national framework forecasts can and will be updated as new Commerce of Energy economic and traffic Statistics Centers, data become available DRI, SCI, from the Waterborne the U.S. the WEFA Group, Departments and Agriculture, sources. and other commercially or publicly available the databases forecast Finally, and forecasting calculations produced by IWR are easily installed on microcomputers. As noted earlier, part of an effort this review of past Corps forecasting methodologies forecasting level with one or is to develop and document waterway traffic include a field test at the project guidelines which will more divisions or districts. national The methodology will be an attempt to synthesize for IWR's 1988 Inland level commodity-driven projections developed Waterway Review with data to develop regional economic analysis and localized shipper/receiver forecasts applicable for project level analysis. specific * U S CO'TXNMLN7 PPTLNMGOFMCI 112