Aging Locks and Dams Create Concerns for Companies that Rely on Barges

By: Steve Banker –

Dana Weber, the CEO of Webco Industries, a tubing manufacturer, is speaking out about her concerns about the ongoing lack of sufficient spending on locks and dams on the U.S.’s inland waterways.

Webco, headquartered near Tulsa Oklahoma, was founded in 1969 based on the perceived demand for tubing products across Oklahoma, Louisiana, and Texas. Based on the demand, and the belief that an Oklahoma plant close to their customer base could be cost competitive as long as barges could be used to bring in raw materials, Webco was founded and began shipping in 1970.

Most of Webco’s raw materials originate in the northeastern U.S., although they also receive raw materials from the southeastern U.S. and overseas. Webco has another plant in Pennsylvania, not located near a waterway, that consequently relies on truck – rail for various reasons is not practical – to get most of their raw materials. These goods come from suppliers located for the most part less than 200 miles away. Despite the much greater distances involved, it is cheaper for the Oklahoma plant to receive raw materials from the Northeast via the Port of Catoosa than it is for their Pennsylvania plant to receive materials from local suppliers. Indeed, Ms. Weber says that Webco saves over $4 million per year in freight based upon their usage of barges.

Over time, the advantage of barge transport has only increased. Truck rates have increased much faster than barge rates, and there have been capacity shortages around securing flatbeds. If anything, Ms. Weber believes, those trucking pressures will increase based on the new hours of service rules.
Barge moves do require longer lead times. For Webco the lead times increase from one week to a month with barge, which increases inventory carrying costs. But the freight savings far outweigh inventory carrying costs, especially with the very low interest rates now prevailing.

One downside to the use of barges is that low water levels in late summer and high water levels in the spring can prevent barges from using a waterway. However, Webco has a good advanced understanding of when those events are likely to occur and work with their suppliers to stock up in advance of river disturbances.
However, Ms. Weber’s greatest concern when it comes to barge is the deferred maintenance and aging locks and dams. Ms. Weber’s concerns are not unique. Cargill has been public about their concerns. And the American Association of Port Authorities put out a statement saying that the latest transportation budget proposed in the
President’s fiscal year 2015 budget “falls well short of the waterside maintenance and modernization needs of this country.

Bob Portiss, Port Director at the Tulsa Port of Catoosa, and a Director at the National Waterways Conference, points out that towing service providers are one of the very few industries begging for increased taxes that would then be used to maintain inland waterways. The Inland Waterway Trust Fund is paid for with a 20 cent tax on every gallon
of diesel fuel that the towing services industry uses. But the Trust Fund has not collected enough to meet the backlog of work that needs to be done.

Bob made the point that “Water transportation is one of the least expensive modes of transportation. It allows US businesses to be competitive.” Finally, Ms. Weber points out that the last thing the U.S. transportation infrastructure needs is to shift more products from barges to our highways, which could negatively impact the entire economy due to truck capacity limitations. If anything, the U.S. would get more bang for the buck trying to
get more traffic moving by barge.

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Five years out: 50 percent chance of failure

By: Sarah Mccallion – Tulsa Business Journal

“We have to have about $100 million in repairs made on this navigation system at various locks and dams and features of the system along the way. If we don’t get that done, there’s a 50 percent chance of failure of any of those portions within the next five years,” Port Authority Marketing and Communications Manager Jeff Yowell told TB&LN of the Tulsa Port of Catoosa.

“All of the infrastructure on our navigation system is approaching 60 years old. … They wear out over time. The bearings wear out, the motors wear out, the gates themselves wear out because water is corrosive.”The Tulsa Port of Catoosa was built in 1971 and serves the McClellan-Kerr Arkansas River Navigation System, which President Richard Nixon referred to as “Oklahoma’s Seacoast.” The port is maintained by the U.S. Army Corps of Engineers.“The problem is the Corps of Engineers’ budget is cut year after year, so they’re having to work with fewer and fewer funds, and fewer and fewer dollars,” Yowell said. “They do a great job with the money that they have, but they need more funds to maintain this vital resource for not only Tulsa, not only Oklahoma, but the entire U.S.”Port of Catoosa estimates show if water transportation did not exist in Oklahoma, rail and truck costs would increase by about 15 percent because a lack of competition. Additionally, the port is a large source of employment for the region.“Let’s talk about jobs,” Yowell said. “We’ve got 70 companies here with 4,000 in employment, and that’s just in the port. From here to the Arkansas state border you’re talking about 8,000 jobs. If you combine Oklahoma and Arkansas you’re talking about 13,000 to 14,000 jobs directly related to waterway transportation.”

The entire Oklahoma and Arkansas system runs approximately 445 miles from the Mississippi River to the head of navigation with 11.7 million tons of annual cargo valued at $3.7 billion, as of 2012 estimates. Of that cargo, 5.75 million tons, valued at $2.1 billion, is from the Oklahoma segment alone.

According to Yowell, barges in the port can each hold up to 1,500 tons of cargo, equivalent to 60 semi-trucks or 15 rail cars.

“With just one boat you’re already saving a lot because you’ve replaced so many trucks,” he said. “But consider this: One boat, with three diesel engines and a crew of five to eight, can just as easily push 12 of these barges at one time on this navigation system. Now you’re talking about one boat pushing 720 truckloads worth of cargo.”

Yowell continued that one business with locations in Sand Springs and Pennsylvania told him it is cheaper for them to transport their steel from Pennsylvania to Tulsa via waterway, than it is for them to transport the steel from the mills in Pennsylvania to the Pennsylvania headquarters.

As one of the nation’s largest inland ports, to accommodate incoming and outgoing goods the Tulsa Port of Catoosa spreads across a 2,500-acre complex complete with industrial sites for lease, a foreign trade zone, seven liquid cargo loading and unloading areas with a capacity of approximately 1 million barrels, a 5.5 million-bushel grain handling facility, an overhead traveling crane with a capacity of 200 tons, three locomotives, weigh scales, natural gas and is serviced by three Class I railways and numerous trucking firms. Of the 2,500 acres, there remains only approximately 150 acres left available for lease.

As an important part of Oklahoma and the region’s economy, Yowell said the port authority and other entities are working toward a solution for the issue of replacing and repairing parts. One way the problem is being addressed is through the Tulsa Regional Chamber’s OneVoice Legislative Agenda 2014 Federal Priorities, which calls for reauthorization of the Water Resource Development Act.

“The Tulsa Port of Catoosa adds significant value to our regional economy and to business recruitment efforts in northeast Oklahoma,” said Justin McLaughlin, senior vice president of Economic Development, Tulsa Regional Chamber. “Assets such as the port make the Tulsa area a thriving intermodal transportation hub and greatly enhance our competitiveness among peer regions.”

“Versions of [the WRDA] bill have been passed in both the House and the Senate but the bill has remained mired in joint committee negotiations since October 2013,” said Yowell. “This bill is critical to the nation and needs to move forward.”

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Job, cargo numbers near records at Port of Catoosa

By: Kyle Arnold – Tulsa World

The Tulsa Port of Catoosa may have recorded its best year in 2013 as both employment and shipping surpassed pre-recession levels.

As of Dec. 31, the 70 companies at the port’s industrial park employed 4,000 people. By the end of this quarter, officials expect to see the worker tally exceed all-time highs.
“The port was just one barge-load short of last year’s all-time record,” said David Page, chairman of the City of Tulsa-Rogers County Port Authority, at its annual meeting Wednesday. “It shows that waterway transportation is growing.”

Some 2.7 million tons of cargo were shipped in and out of the port during 2013, with major shipments of crude oil, agriculture products and steel that supplies local manufacturing companies.

Last year’s cargo numbers were just 2,000 pounds short of the record set in 2012, when shipping was buoyed by crude oil being transported from New Orleans to Catoosa and then trucked to Cushing. Companies started shipping oil along the waterway thanks to a widened spread in the price of oil in New Orleans and Cushing.

Now the port is planning to grow, with 45 acres of newly developed property available for companies and a major upgrade to the main dock that could double the loading capacity at the port.

The port developed the land three years ago but first filled other properties inside the complex.

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Port, casino make Catoosa safe bet for growth

By: Lenzy Krehbile-Burton – Tulsa World

CATOOSA —- Barges and blackjack have opened the door for explosive growth in Catoosa.

The Tulsa Port of Catoosa’s impact is directly felt in the Rogers County town, as it helped ignite a population boom that has been going on for four decades. Since the port opened in 1971, Catoosa has grown from a community of fewer than 1,000 residents to a population of 7,151 as of 2012, an increase of 637 percent.”We have 4,000 people working out here, so Catoosa is going to feel the spillover benefits,” Director Bob Portiss said. “What they spend their money on is going to benefit Catoosa and help it grow.”The second farthest inland port in the United States, the Tulsa Port of Catoosa handled 2.7 million tons of barge cargo in 2013. More than 60 commercial and industrial businesses have offices at the facility.

“Energy and agriculture drive our boats,” Portiss said. “What I’m seeing as far as the energy industry is concerned, they have to. We will continue to see strong volumes of cargo by barge due to its low-cost nature.

“It costs more to do business today. If they can find a way to ship their products to market and if they can save a buck, they’re going to do it. We certainly offer a mode of transportation that you clearly can’t overlook.”

Along with the port, continued expansion of the Hard Rock Hotel & Casino Tulsa has helped spur job creation in the community since it opened in 1993 as Cherokee Nation Bingo Outpost. The casino and the two corporate entities over it — Cherokee Nation Entertainment and Cherokee Nation Businesses — account for 1,811 jobs in Catoosa alone, more than 93 percent of Cherokee Nation Businesses’ positions in Rogers County.

“It (the casino) has made it more lucrative to do business here,” Mayor Harold “Red” Staten said. “We have two new hotels, and they’re full almost every night. You have to have a reservation to get a room. You can’t just walk in the door any more.”

Figures from the Bureau of Labor Statistics show that, despite the Great Recession, the total number of businesses based in Catoosa is 12 percent higher than it was 10 years ago when the casino added its first hotel tower and reopened the Cherokee Hills golf course.

“Cherokee Nation Businesses started with the casinos, which generated money and expertise that allowed us to branch into other types of businesses,” Cherokee Nation Principal Chief Bill John Baker said. “A large part of our profit is invested back into those businesses, which helps us grow and create more jobs. Everything we do puts dollars directly back into local economies.”

Catoosa’s growth has even caught the attention of Wal-Mart, which is building a store in Catoosa across 193rd East Avenue from the casino. Scheduled to open later this year, the store will be the anchor of the new Catoosa Hills Shopping Center.
Construction on the shopping center has helped spur work on two more hotels, adding even more jobs to what has become Catoosa’s third-largest industry behind manufacturing and retail sales.
“I think what it is when we look at Tulsa and its suburbs, we have several strong economic engines that we’re all benefitting from,” Portiss said.

“On top of that, there’s a low cost of living compared to other parts of country. Still have the open areas, with all city amenities.”
About Catoosa

Population: 7,151, 56th largest in Oklahoma
Population change since 2000: 31.5 percent increase
Largest employers:
• Tulsa Port of Catoosa (4,000)
• Cherokee Nation (1,811)

Unemployment rate (October 2013): 4.4 percent

Did you know: The Tulsa Port of Catoosa is the second farthest inland U.S. port, trailing only Minnesota’s Port of Duluth-Superior.

History: Initially a Cherokee community, Catoosa benefited as the Atlantic and Pacific Railroad laid tracks into town in 1881, sparking its transformation into a cattle hub. Although agriculture remains significant, the town’s location on Route 66 led to further economic diversification in the 1940s and 1950s, thanks to travelers. Between the port, which opened in 1971, and the development and expansion of the Hard Rock Hotel & Casino Tulsa, Catoosa’s population grew from less than 1,000 in 1970 to more than 7,000 in 2012.

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The Port of Catoosa came very close to a record-setting year in 2013.

By: Matt Trotter – Tulsa Public Radio

The Port of Catoosa came very close to a record-setting year in 2013.

Last year, 1,494 barges moved 2,700,990 tons in and out of the port, 1,474 fewer tons than in 2012. But at today’s State of the Port address, City of Tulsa-Rogers County Port Authority Chair David Page said one barge usually carries 1,500 tons.”Just one more, and we would have had a record year,” Page said. “I think if we’d known that on Dec. 28, we’d have made sure that one more barge got through here.”

Page said shipments of crude oil helped set the 2012 record.
“While less of that commodity shipped through the port in 2013, it was still a remarkably strong year for the port’s historic mainstays, which are agricultural products, steel and project cargo,” Page said.

The port authority is about to begin a project that would double capacity at its main dock.

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