NETS News
Vol I, Issue 2   February 2005

NETS Team Member Honored
NETS team member Shana Heisey has won the Permanent International Association of Navigation Congresses' (PIANC) 2005 De Puepe-Williams Award for the U.S. section. Heisey, an Institute for Water Resources economist, won for her NETS paper “Determining Economic Efficiency of Harbors, HarborSym, An Application.” The award is given for the most outstanding technical paper on an aspect of waterborne transport. Her paper has been forwarded for consideration in PIANC’s international competition.

The paper discusses HarborSym a simulation model designed to assist in economic analyses of coastal harbors. Developed as a data-driven model, HarborSym has applicability to many different ports. Users customize the tool for a particular study by supplying input parameters, such as information on the harbor network, physical dimensions of channels, transit rules, and vessel calls. Changing data on channel dimensions or the rule structure will show possible changes in vessel delay times resulting from proposed harbor improvements. An application of the model to the Sabine-Neches Waterway showed substantial time savings from several possible channel expansions.

Fact Sheet | Paper

Study Shows Decrease in Carriers' Willingness To Pay for Water Transportation
A recently completed NETS study based on historical U.S. inland water transportation data found that the industry is characterized by:

  • A slowly decreasing willingness by carriers to pay for water transportation.
  • Decreasing rates of growth in total industry output culminating in the current virtual stagnation of long-term industry output levels.
  • Ongoing horizontal integration of inland water transportation providers leading to a greater concentration of industry market power among a handful of national carriers.

Under the federally mandated National Economic Evaluation, which is required for all potential Corps projects, the measurement standard for the value of goods and services created by projects is defined by the willingness of users to pay for each increment of output provided by a plan. In that context, the trends identified by the study have profound implications for Corps management of the existing inland navigation system, concluded the study’s author Donald Sweeney, PhD, University of Missouri, St. Louis.

Fact Sheet | Paper

Survey Finds Increases in Transportation Rates, Transit Time Affect Shipper Demand
A NETS survey of grain elevator shippers on the Upper Mississippi indicates that changes in transportation rates or transit times do affect shippers’ demand (i.e. how often they use the waterways to ship). However, the survey also found that a significant number of shippers are largely insensitive to rate and time increases. Thirty-eight percent of the shippers surveyed indicated that they would not change shipping mode or their origin/destination even if rates doubled and 55 percent said they would not do so if transportation times doubled. In most cases their willingness to endure increases in cost and transit time relate to the fact that they do not have viable alternatives, the survey found.

The survey also found that increases in transit time affect demand irrespective of rate increases. This finding reflects the fact that the full cost of transportation includes time-related factors such as inventory costs, according to the study’s authors Kenneth Train, PhD of the University of California Berkley and Wesley Wilson, PhD of the University of Oregon.

The location of existing shipping facilities is fairly insensitive to changes in transportation rates and times, the survey found. The choice of where to locate new facilities, though, is highly sensitive to transportation rates. The survey of 369 shippers was conducted between December 2003 and February 2004.

Fact Sheet | Paper

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Copyright 2005, Navigation Economic Technologies Program, US Army Corps of Engineers