State Of The Industry: Infrastructure, Carbon, Recruitment Define Promise, Challenges Of Year AheadView Source
State Of The Industry: Infrastructure, Carbon, Recruitment Define Promise, Challenges Of Year Ahead
JANUARY 20, 2023 BY DAVID MURRAY
Ongoing infrastructure investment, a push toward decarbonization and the challenge of recruiting the next generation of inland mariners are all defining the coming year’s challenges for the inland waterways.
As last year’s low-water crisis recedes into the rear-view mirror, Jennifer Carpenter, president and CEO of American Waterways Operators, takes a moment to savor the year’s victories. At the top of the list, Carpenter ranks a measure included in this year’s National Defense Authorization Act (NDAA) that severely restricts the government’s power to issue Jones Act waivers. Working with partners like the American Maritime Partnership, AWO helped secured this major bipartisan win.
The new rules mean that the president himself, rather than the secretary of homeland security or any other federal official, must explicitly authorize any waivers. Any waiver must be issued on a case-by-case basis, be tailored to a true national security emergency and cannot be a “blanket” waiver with an indefinite time period.
“Jones Act waivers must be rare and carefully scrutinized,” Carpenter said. “This was the original intent of the Jones Act, which stipulated that American vessels should move cargo between American ports and points of origin. Only a true national defense imperative warrants a waiver.”
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Waves of investment spending on vital infrastructure projects from the Infrastructure Investment and Jobs Act and the Inflation Reduction Act, including locks and dams, are now making their way through the pipelines.
In the Water Resources Development Act (WRDA), which was included in the NDAA, getting the federal cost-share of the Inland Waterways Trust fund changed permanently to a 65-35 split (with the promise of looking in the future at a 75-25 split) has been a huge win for the industry, said Tracy Zea, president of Waterways Council Inc.
“WCI’s top priority for 2023 is to ensure that Congress spends all the Inland Waterways Trust Fund receipts collected,” he said. “In the last two fiscal years, Congress has not spent at least $50 million of the $125 million in revenues from the diesel fuel tax that was collected. This is extremely critical since all current and future projects are seeing cost increases and need adequate funding to complete them promptly and cost-effectively. To receive all the receipts collected, it also requires the Corps of Engineers to provide Congress with accurate construction capability numbers.”
Although inflation has been cooling for the past few months, it remains at a high level, Zea said. “The top challenge will be inflation that can lead to cost overruns, and we will see significant project cost increases. The other problem is on the labor side, finding and retaining the workforce, whether it is deckhands or skilled building trades workers who construct the locks.”
Infrastructure investment is a top concern of the Mississippi River Cities and Towns Initiative, which represents cities and towns along the entirety of the Mississippi River basin. A growing part of MRCTI’s mission is leveraging assets and partnerships to help smaller river towns and communities with expertise in applying for grants to help in climate resilience, flood protection and disaster mitigation.
MRCTI mayors, along with Sen. John Boozman (R-Ark.), were able to make history with inclusion of a Lower Mississippi River natural systems conservation and restoration program in WRDA. This program will join its upper river counterpart in providing environmental rehabilitation for the entire river for the first time; such was a major priority of the mayors’ Safeguarding the Mississippi River Together Act (SMRT).
MRCTI is busy with its legislative priorities for the coming year. Executive Director Colin Wellenkamp told The Waterways Journal, “MRCTI will vigorously carry through proposals for better protecting the Mississippi River from drought. Though we’re climbing out of the drought now, it is never far away, and it will be back. Hopefully, next time a drought won’t have to cost our nation $64 billion in lost economic activity like the one this past fall.”
MRCTI supports the National Climate Adaptation and Resilience Strategy Act, which calls for a national strategy and chief resilience officer to unify and integrate government resilience programs and initiatives to a “beyond federal” approach.
The Resilient America Act would boost pre-disaster mitigation funding from a maximum of 6 percent to 15 to percent of post-disaster spending through the Department of Transportation’s BRIC (Building Resilient Infrastructure and Communities) grants. “The return on investment from pre-disaster investments is as much as 11 to 1,” Wellenkamp said. The Resilient America Act passed overwhelmingly in the House by a bipartisan vote of 383-41 but is held up in committee in the Senate.
MRCTI plans to have a presence in two upcoming international conferences. The United Nations Water Conference to be held in March in New York City (the first such meeting in 50 years) “will provide a new opportunity to secure water resources globally,” Wellenkamp said. “In tandem with that, the first ever Summit of the Americas in Denver this April will provide a chance for Brazil and the Mississippi River valley to build stronger ties and trade opportunities.”
Other MRCTI priorities include the Water Data Act that establishes a federal framework for sharing data and information across agencies; the Flood Resilience and Taxpayer Savings Act to ensure federal investment accounts for future flood risk; the Climate Resilience Act allowing for federal disaster declarations on account of intense heat or cold; and the Andrew Young Safeguarding the Mississippi River Together Act, which “provides the largest regional resilience and adaptation coordination for America’s most climate-vulnerable communities.”
“Finally, we may actually be able to unveil this year a working pilot of a parametric disaster facility for the Mississippi River,” Wellenkamp said.
Recruitment Front And Center
As welcome as the new infrastructure spending is, it does heighten concerns about the ability of industry and contractors to find enough qualified workers, as Zea mentioned. At the height of last year’s low-water crisis, American Commercial Barge Lines’ email newsletter, Currents, began including a bulleted warning: “The inland maritime industry continues seeing major shortages of manpower. This is directly impacting the ability to crew towboats.”
It’s an issue shared by the larger society. As Baby Boomers—the nation’s largest generation—retire at the rate of 10,000 a day, they are being replaced by Generation Z, the smallest population cohort in our country’s history. Many experts have sounded the alarm about a looming shortage of qualified blue-collar workers, especially as many manufacturing industries “re-shore” to the United States.
“Fortunately, we have a terrific story to tell about our industry,” Carpenter said. “A career on the inland waterways may not be for everyone, but it is a great way to make a living and have a meaningful impact.”
Towing companies that used to rely on word of mouth and traditional sources of new recruits now have recruiting budgets. Towing industry officials are increasingly seen at career fairs, high schools and other venues. Programs like Who Works the Rivers? have spread the word about the attractions of a career on the water.
Amy Arrowood, director of the Maritime Credit Program at San Jacinto Community College, said that while enrollments took a hit during the COVID restrictions, they are back to pre-COVID levels. “For the 2022-2023 academic year, our maritime program had 55 students begin in the fall. This year, we doubled the number of female students in the program, bringing them to 14 percent of our total enrollment.”
Students come from all over the country. “We have many students that come from right here in the Houston area, but we’ve also had others come from Florida, Nevada, Kentucky and even Montana,” she said. “It’s really awesome to know that people are excited about the maritime industry and about the program we offer at San Jac.”
Industry partnerships are key to the program’s success, Arrowood said. The San Jac maritime program has received donations from the Houston Pilots, G&H Towing and other industry partners. Funds donated may cover new equipment or scholarships designated specifically for maritime students. “It’s great how the current maritime industry is supporting future generations,” Arrowood said.
“In our program, we try to get the students involved with local companies from their first year in the program. Our two-year program requires students to complete two summer internships on commercial vessels. Between these internships and securing jobs after graduation, our students have worked in 27 different companies! We could not have such a successful program without our industry partners. They offer summer internships, come to speak and present to students, offer field trips, hire graduates and participate as much as possible.”
In 2022, San Jac started a student chapter of the Propeller Club—the only student chapter in a two-year college, Arrowood believes.
New Recruitment Models
Kasey Eckstein is on the forefront of the maritime recruitment conversation. Eckstein founded and directed Women in Maritime Operations (WIMOs), the first membership organization for female maritime professionals, with business partner Jenna Gaudet. Today, WIMOs boasts close to 700 members from 170 companies in 26 states. After being approached by inland marine employers looking for female employees, Eckstein has launched her own consulting firm, Eckstein Trade and Transport, focusing on barge freight logistics and maritime recruitment.
“ET&T Recruiting’s business model is not to poach from one barge line just to land a candidate at another barge line,” Eckstein said. “We are working with outside organizations, such as military organizations and maritime universities, to bring new talent to the maritime industry. Our industry needs fresh talent that has experience and a great work ethic, and a passion for the maritime industry is a plus. U.S. Coast Guard members transitioning out of service typically tick these boxes. ET&T is currently working on building our recruiting presence with the inland barge companies. ET&T works with both male and female candidates, but we specialize in female placement due to our strong network of women working in maritime operations. … We hope that inland barge companies will reach out to ET&T with their hiring goals and any equipment needs that they may have.”
Mike Ellis, CEO of ACBL, reports that recent recruitment efforts have paid off in a “significant” increase in applicant count. “We’ve been proactive in going to communities that have seen other industries leave or slow down. But we are also seeing more applicants across the board—from both traditional and newer sources. We compete with other industries for qualified workers, but as construction has both slowed down, we have benefitted. It allows us to select the best talent.”
To Ellis, training is key—and training means offering new recruits a vision of their future pathway at ACBL.
“Investing in our team members is not only beneficial for them individually, but it also strengthens our organization as a whole. By having a diverse and skilled workforce, we are better equipped to be the trusted leader in marine transportation and deliver exceptional services to our customers. Our pilot steering and engineer training programs align with our commitment to diversity, inclusion and team member development at ACBL. We are proud to support all our team members in their career growth.”
On January 10, the Department of Transportation released its first-ever blueprint to decarbonize America’s transportation sector. It states, “Decarbonizing transportation will affect everyone, and solutions must address the needs of all urban, suburban and rural communities; businesses of all sizes; and individuals and families at every socioeconomic level. The scope, scale, and speed of the shift will continue to require solutions that leverage market forces and private sector investments, which government policies and investments should jumpstart and guide.”
Many industries and businesses are figuring out how decarbonization incentives and opportunities will work for or against them. Not coincidentally, AWO just released its own major document on sustainability and also stood up a CEO task force on sustainability. AWO emphasizes that the inland waterways are already by far the greenest transportation mode—even as the industry continues to reduce emissions and upgrade to cleaner propulsion methods.
“Our industry should not shy away from taking an active part in these conversations about decarbonization,” Carpenter said. “We have a great story to tell and are uniquely well positioned to be a proactive partner in improving sustainability.”
According to the Department of Transportation decarbonization blueprint, “Half of U.S. marine vessel carbon emissions are from international shipping (including from fuel purchased in the U.S. for international voyages), roughly 30 percent is from domestic shipping, and the remaining 20 percent is from recreational boats.” Many of the port-related maritime decarbonization incentives in both the IIJA and the IRA have more to do with truck emissions from ports than with emissions on the water.
Getting the industry’s positive story out to key decision-makers is always part of AWO’s work, and this year there is a new crop of elected officials in Congress to educate, Carpenter said.
What about shipyards and their ability to handle the Subchapter M hull inspections that are part of the next phase of Subchapter M inspections? “The jury is still out on that,” Carpenter said. “We’re watching the shipyard availability situation closely and staying in close contact with members and the Coast Guard.”
Carpenter is proud of the industry’s achievements. “To have achieved 100 percent compliance by 5,000 vessels with a new regulatory standard while dealing with the effects of the COVID-19 crisis, and keeping cargoes moving during the low water, even with glitches and delays—all these things are tremendous industry achievements. The good communication we have had with the Corps and Coast Guard through all these events will continue to guide us through the Phase II hull inspections. This shows our industry’s nimbleness and resilience in the dynamic environment we operate in.”
Ellis adds that making inland waterways service more reliable, with fewer delays, is also green. “The carbon efficiency and green advantage of towboats is reduced during low water on a ton-mile basis, when tows include fewer barges, and there are more delays,” he said. “Becoming greener doesn’t just mean new technology. It also means making sure the Corps of Engineers and the Coast Guard have the funding they need for dredging and channel marking to keep boats running in the various operating conditions we face year-round.”
He added, “The bottom line is, we are the most cost-efficient and greenest mode of transport.”
Caption for photo: As the new year begins, the inland barge and towing industry looks ahead to some interesting challenges. (WJ file photo by John Shoulberg)