When you’re paying to ship a 22-ton coil of steel by barge, the freight bill can be pretty steep. It would suit Don Holder if those delivery charges came down.
Deepening the navigation channel in the McClellan-Kerr Arkansas River Navigation System (MKARNS) would do the trick.
And Holder says lower costs would mean good economic news for his company and for northeast Oklahoma.
“If that channel were deepened from 9 feet to 12 feet, that would allow us to receive more coils per barge,” said Holder, director of materials for Webco Industries, a manufacturer of specialty tubing. “That would lower our freight costs 25 percent. That in turn allows us to be more competitive, to offer more jobs, and give back to the community.
“It would be a win-win for all involved if that channel were deepened.”
MKARNS is 445 miles long, stretching across Arkansas and Northeast Oklahoma. Its 18 locks and dams “enable vessels to overcome a 420-foot difference in elevation from the Mississippi River to Catoosa” on the outskirts of Tulsa, according to the official MKARNS website.
Area political leaders, federal officials, and “stakeholders” — those who have a stake in MKARN’s success — say that digging a deeper channel will make the region more competitive and create more jobs.
Webco’s situation illustrates the problem.
Holder says Oklahoma has no major steel mills, so Webco buys steel from Ohio, Pennsylvania, and Chicago. Steel mills in the Northeast are generally located near waterways because shipping by barge costs less than using trucks or rail.
Other navigable rivers — the Mississippi, the Ohio, the Illinois — all have channels 12 feet deep.
The Arkansas River and other waterways that are part of MKARNS — the White River and Arkansas Post Canal in eastern Arkansas, the Verdigris River here — have a channel 9 feet deep, according to the official website.
A barge loaded at a steel mill on the Ohio River near Pittsburgh can hold more steel coils because of the deeper channel there. But to get to the Port of Muskogee or the Port of Catoosa — which are both used by Webco — some of that cargo would have to be removed and “cross loaded” onto another barge. Or the barge would have to be loaded with a smaller quantity of cargo, wasting some of the barge’s capacity.
The Paragon Industries plant at the Port of Muskogee does additional processing of the steel coils Webco has shipped in, Holder said. The steel is then trucked to Webco’s factories in Sand Springs and elsewhere in the state.
Lt. Col. Gene Snyman is deputy commander of the U.S. Army Corps of Engineers’ Tulsa District, which maintains the Oklahoma portion of MKARNS. He explained why a deeper channel makes a difference.
“Every foot of depth in the MKARNS channel changes the profit margin, because it changes the capacity of the barge,” Snyman said. “It’s the simple ratio of the weight of the load to the depth of the channel. If the channel were 12 feet deep, you wouldn’t have to cross-load at the mouth of the (navigation system).
"There’s a lot of interest in creating a 12-foot channel from the Mississippi to the Port of Catoosa. Except for about 75 miles, the system is already 12 feet deep. But it’s going to cost a lot of money (to complete the deepening of the remaining 75 miles).”
Like about $170 million, Snyman said. With full funding, it could be completed in five years.
Snyman made some comparisons on how much freight a barge could carry on a deeper channel.
“Right now, one barge (on MKARNS) can carry 1,500 tons,” Snyman said. “That’s the equivalent of 15 rail cars or 60 tractor-trailers.
“If we went to 12-foot channels, we could transport 2,000 tons by barge.”
Port of Muskogee Director Scott Robinson favors the 12-foot channel.
“Waterways like the Mississippi are 12 feet deep,” Robinson said. “It becomes an issue here in recruiting a new industry. You could load as much as 40 percent more cargo with a 12-foot channel. An example is Pine Bluff Sand and Gravel Company over in Arkansas. They sell rock for the Gulf of Mexico, and compete against people loading barges in a 12-foot river. The shallower channel puts you at a competitive disadvantage with ports that do have a 12-foot channel.”
Steve Taylor is chief operating officer for Johnston Enterprises. He runs Johnston’s Port 33 on the navigation system near Inola, and the terminal at the Port of Muskogee.
Johnston is well-acquainted with businesses up and down MKARNS.
“The Mid-America Industrial Park at Pryor might lose a plant because the transportation costs by river are not as competitive with other states because of not having a 12-foot channel,” Taylor said. “That river system (MKARNS) is the biggest and best economic tool the state of Oklahoma has. It’s done wonders for Muskogee and Tulsa. People have no idea how many jobs it has created.”
No one disputes that deepening the MKARNS channel add to the region’s prosperity. But coming up with the $170 million to pay for the project has been tough, says Matt Dempsey. He is communications director for the Republican staff of the U.S. Senate’s Environment and Public Works Committee. As such Dempsey works for the committee’s ranking Republican member, Sen. James Inhofe of Oklahoma.
“The 12-foot channel was already authorized in an appropriations bill that passed in 2003, but money has not yet been appropriated for the project,” Dempsey said. “We’ve been a supporter of the project since 2003. It’s hard to see it getting done this year, but we’ll be pushing for it again next year.
“It will be one of Sen. Inhofe’s top priorities again next year.”
Whether the price of deepening the channel should be shared by the federal government and area stakeholders is disputed.
The Corps’ Snyman says yes.
“Civil works projects have to be cost-shared by some local entity and the federal government,” he said.
Steve Taylor disagrees.
“The 12-foot channel won’t happen if stakeholders have to fund it, even a portion of it,” he said. “We can’t afford to throw that kind of money at a project. The federal government should be responsible for building and maintaining infrastructure.”
Scott Robinson also thinks paying for a deeper channel is a federal responsibility.
“There’s no state role in paying for new construction, or for the maintenance or operation of the waterway,” Robinson said. “When the waterway was first authorized in the ’40s, stakeholders in the state guaranteed development on the land side — roads, railroads, ports, shipping facilities. Construction or maintenance on the water side is the federal government’s role. It’s a pretty clearly defined separation of roles.”
John Janoush is vice president of Jantran, Inc., of Rosedale, Miss. Jantran tows 90 percent of the barges that use MKARNS. He says maintenance on the existing navigation system is more pressing than improvements.
“That’s all well and good,” Janoush said of digging a deeper channel. “But we’ve got infrastructure on the system that needs attention. We’ve got 18 locks and dams that are old and need a lot of TLC. To me that’s the priority.”
On the Web
For information on MKARNS, see the official website, maintained by the Little Rock District of the U.S. Army Corps of Engineers: http://www.swl.usace.army.mil/navigation/mckarns.html
Reach Kirk Kramer at 684-2901 or email@example.com.