Dredging needs vary among ports. Selected Ports Varied in Terms of Type and Amount of Freight Moved, and Did Not Show a Consistent Traffic Trend from 2010 through 2015

		Types of Freight

From 2010 through 2015, the 13 selected ports we reviewed moved the  following types of freight: agricultural commodities (primarily soybeans,  corn, and rice); petroleum products; crude materials (sand, gravel, and  similar materials); chemicals; coal; and primary manufactured goods  (such as lime and concrete). However, individual ports varied with respect to the type of freight moved  through the port, with some ports specializing in certain commodities. While tonnage fluctuated  annually, based on the 5-year averages, 6 ports transported less than 1- million tons; 6 ports transported 1-million tons to less than 10-million tons;  and 1 port consistently transported over 10-million tons. In addition, crop  yield per acre determines the amount of crop harvested, and can be  affected by weather, seed quality, and other factors. Stakeholders Identified Challenges That Funding Constraints Pose to Dredging Inland Harbors and Concerns about the Corps’ Fund Allocation Process Funding Constraints Limit the Corps’ Ability to Fully Dredge Harbors, Which Negatively Affects Freight Movement

A majority of the stakeholders we interviewed, as well as officials from  USDA and the Corps, cited funding constraints as a challenge that  prevents the Corps from fully dredging all inland harbors, including the  harbors at the selected ports. According to local Corps officials, the Corps needed approximately $20.6 million, and received approximately $13.1 million to  dredge all of the harbors and channels associated with the 13 selected  ports to their full dimensions in fiscal year 2016. The Corps’ Prioritization Process for Allocating Funds to Dredge Harbors Creates Challenges for Low Tonnage Ports

According to Corps officials, within current funding levels, the Corps must  make decisions about which harbors to dredge, and the amount of  dredging each harbor should receive. However, the Corps has developed some internal tools that might help it  assess data related to some of the factors that Congress has required the  Corps to consider when allocating funds from the Harbor Maintenance  Trust Fund, such as the national and regional significance of harbor  operations and maintenance, and the use and benefit of the harbor for  domestic trade. Further, the official explained that the Corps  has also used the tool to generate metrics on the amount and the dollar  value of cargo at risk when harbors lose 5 feet of depth. A senior Corps official agreed that it may  be beneficial for the Corps to provide Congress with information on the  extent to which the Corps’ existing tools could be adapted to allow it to  consider factors beyond tonnage when allocating dredging funds, the  limitations of using these tools, as well as the amount of additional  resources that may be needed to pursue such an approach. Many Stakeholders Favored Continued Use of the Harbor Maintenance Trust Fund and Identified Potential Challenges of Alternative-Funding Options

		Stakeholders Preferred the Harbor Maintenance Trust Fund for Funding Dredging

Many stakeholders and experts we interviewed said that the federal  government should make more use of the current mechanism for funding  dredging—the Harbor Maintenance Trust Fund—before considering  alternative-funding options. Stakeholders Cited Potential Challenges Related to Alternative Funding Options

We asked selected stakeholders and experts about three options for  funding inland harbors’ dredging: contributions from state and local governments; expanding the use of the Inland Waterways Trust Fund (currently  used for new construction and major rehabilitation of locks and  dams as well as other channel and waterway improvements) to  include maintenance dredging; and a new user fee or tax. Stakeholders such as ports, port tenants, and state departments of  transportation officials also stated that many of the selected ports in our  review do not have the financial resources to provide a funding  contribution, and that it may be difficult to secure state or local funds from  rural, low income counties and states where a number of the inland ports  are located. For example, a  port tenant noted that a lock failure would have more significant effects to  more users than shoaling at one harbor. In addition, some stakeholders noted that using state  and local revenues to fund dredging could be an option if it could be used  to match federal government funds. However, some of these tools were developed for coastal harbors, and  the feasibility, potential limitations, and costs of adapting the Corps’  existing analytical tools and capabilities will need to be assessed before  these tools could be successfully utilized. This report addresses three objectives: (1) what is known  about the freight traffic (including types of freight and trends in traffic) of  selected inland ports on the Mississippi River between St. Louis and  Baton Rouge since 2010; (2) stakeholders’ views on any challenges that  the current federal approach to funding dredging presents for inland ports  and the reported effect on the movement of freight at these ports; and (3)  stakeholders’ views on the potential benefits and challenges of using  alternative options for funding dredging of inland harbors.
Why GAO Did This Study

Inland ports on the Mississippi River between St. Louis and Baton Rouge enable shippers to move millions of tons of agricultural and other bulk commodities. However, these ports' harbors can accumulate sediment that reduces their depth, width, and length, making it difficult for vessels to move. To address this, the Corps routinely dredges the harbors.
Congress included a provision in statute for GAO to review dredging issues for ports in this region. This report addresses: (1) freight traffic of selected ports since 2010; (2) stakeholders' views on any challenges presented by the current federal funding approach to dredging inland harbors; and (3) the benefits and challenges of alternative options to fund dredging.
GAO reviewed Corps' 2010–2015 port traffic data for 13 of 18 inland ports in the region. Data for 2015 were the most recent available. GAO also interviewed Corps officials, industry stakeholders, and officials from 11 of 13 ports selected to include a range in terms of cargo handled, location, and dredging history. GAO conducted a literature search and interviewed 52 industry, port, and other stakeholders and experts about alternative options to fund dredging.

What GAO Found

From 2010 through 2015, 13 Mississippi River ports that GAO selected for review varied individually in terms of the amount, type, and trends in traffic handled. As a group, these ports primarily moved a mix of agricultural commodities (corn, soybeans, and rice); petroleum products; and crude materials (such as sand and gravel, among others). However, the ports varied individually, with some primarily moving agricultural commodities, and others moving a variety of commodities. These ports also varied in the quantity of goods transported through them, ranging from less than 1-million tons to more than 10-million tons per year. The amount of freight moved through each port tended to fluctuate each year due to various factors, such as weather, crop yields, and export markets.
A majority of the stakeholders GAO interviewed, as well as U.S. Army Corps of Engineers (Corps) officials, stated that funding constraints limit the Corps' ability to fully dredge the 13 ports' harbors, which can affect freight movement. According to local Corps officials, they received about $13.1 million of the $20.6 million needed to fully dredge the 13 ports' harbors in fiscal year 2016. Some stakeholders told GAO that smaller ports are negatively affected by the Corps' emphasis on the amount of cargo moved (measured in tons) when making decisions about which harbors to dredge. Congress has directed the Corps to consider harbors' significance and to conduct an assessment of harbors' use and benefits—considering factors beyond tonnage—to inform its allocation of dredging funds. Corps officials said they have not conducted such an assessment due to funding constraints, and raised concerns about the cost-effectiveness of conducting such assessments. However, the Corps has developed some tools that may help it assess inland harbors' significance, use, and benefits. For example, Corps officials explained that they have a tool that allows them to track the amount and type of cargo moving through harbors and to estimate the value of cargo at risk if a harbor loses depth. However, a Corps official noted the cargo-at-risk metric was based on deep coastal harbors and would need to be adapted for inland harbors. A senior Corps official agreed that it could be useful to inform Congress of the Corps' existing tools and capabilities and the resources needed to adapt these tools and capabilities to address the statutory requirements related to allocating dredging funds.
Many of the stakeholders GAO interviewed said that before considering alternative-funding options, the federal government should make more use of the current mechanism for funding dredging: the Harbor Maintenance Trust Fund. With regard to three other potential options for funding dredging—user fees, state and local contributions, and use of the Inland Waterways Trust Fund (which currently funds new construction and major rehabilitation of locks and dams as well as other channel and waterway improvements)—stakeholders identified challenges to their use. In particular, they noted the financial effects of these options on users, state and local governments, and the Inland Waterways Trust Fund. However, some stakeholders identified benefits related to these options, such as benefits from industry paying user fees for its infrastructure use, and state and local governments contributing funds to meet the dredging needs of harbors in their jurisdiction.

What GAO Recommends

The Corps should inform Congress whether it can adapt its existing tools to address factors for allocating funds from the Harbor Maintenance Trust Fund, and the resources needed to do so. The agency concurred with the recommendation, with comment, and provided technical comments that were incorporated, as appropriate.