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GREAT LAKES AND
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Transportation Rate Database

This database includes rates for transporting commodities via water as well as the least-costly alternative for the Great Lakes and Ohio River navigation systems. These rates are required by regulation for use in estimating waterway improvement benefits. Benefits are measured as the difference in the existing water rate and the least-cost alternative. The rates for each movement are constructed based on complete origin-to-destination routing, including line-haul, loading, unloading, transfer, and overland hauls to and from the waterway. Shipper surveys, transportation costing models, and detailed research of rate tariffs are used to determine the most appropriate rate for each movement. Rating all Great Lakes and Ohio River navigation system commodity movements is cost-prohibitive due to the large number of movements involved. Therefore, statistical sampling procedures are used to select movements for detailed rate analysis. The sample results are then used to develop rates for all unsampled movements.

The most recent update of the Ohio River rate database was completed in the fourth quarter of FY 03. In FY 04, indices were developed from sample rate data and applied to the database. Demands of navigation studies require updating the rate database to a price level consistent with engineering costs. With a dynamic and rapidly changing transportation market, rates need updated every couple of years. A detailed Ohio River Basin transportation rate analysis is scheduled to begin in FY 05 and conclude in FY 06. This update will coincide with feasibility studies stemming from the Ohio River Mainstem Systems Study (ORMSS) System Investment Plan (SIP).

The plan this year calls for completing a comprehensive Great Lakes and St. Lawrence Seaway (GLSLS) transportation rate database begun in FY 04. This database contains over 200 million tons of U.S., Canadian and overseas traffic. The Center provided the transportation rate specialist a data set of movements that occurred on the GLSLS in 2000. The data set included origin, destination and commodity information but is deficient in vessel information. The transportation rate specialist is providing necessary vessel information, detailed off-river distances, and a qualitative assessment of shipping options for each of the sample movements rated. The qualitative assessment of shipping options will further the Center’s understanding of shipper behavior and willingness to pay. This database will be completed in FY 05 and used in the Great Lakes and St. Lawrence Seaway Review.

Last year, the Center conducted shipper surveys to elicit information on shippers’ willingness-to-pay for barge transportation. The plan this year calls for continued investigation into factors affecting shipper decisions. Ultimately, a method will be developed to incorporate this information into elasticity measures that can be use in the Ohio River navigation Investment Model (ORNIM) to more accurately model the demand for barge transportation.