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Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains (2014)

Chapter: Chapter 5 - Case Study: Columbia River Closure

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Suggested Citation:"Chapter 5 - Case Study: Columbia River Closure." National Academies of Sciences, Engineering, and Medicine. 2014. Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains. Washington, DC: The National Academies Press. doi: 10.17226/23428.
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Suggested Citation:"Chapter 5 - Case Study: Columbia River Closure." National Academies of Sciences, Engineering, and Medicine. 2014. Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains. Washington, DC: The National Academies Press. doi: 10.17226/23428.
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Suggested Citation:"Chapter 5 - Case Study: Columbia River Closure." National Academies of Sciences, Engineering, and Medicine. 2014. Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains. Washington, DC: The National Academies Press. doi: 10.17226/23428.
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Suggested Citation:"Chapter 5 - Case Study: Columbia River Closure." National Academies of Sciences, Engineering, and Medicine. 2014. Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains. Washington, DC: The National Academies Press. doi: 10.17226/23428.
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Suggested Citation:"Chapter 5 - Case Study: Columbia River Closure." National Academies of Sciences, Engineering, and Medicine. 2014. Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains. Washington, DC: The National Academies Press. doi: 10.17226/23428.
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Suggested Citation:"Chapter 5 - Case Study: Columbia River Closure." National Academies of Sciences, Engineering, and Medicine. 2014. Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains. Washington, DC: The National Academies Press. doi: 10.17226/23428.
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Suggested Citation:"Chapter 5 - Case Study: Columbia River Closure." National Academies of Sciences, Engineering, and Medicine. 2014. Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains. Washington, DC: The National Academies Press. doi: 10.17226/23428.
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Suggested Citation:"Chapter 5 - Case Study: Columbia River Closure." National Academies of Sciences, Engineering, and Medicine. 2014. Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains. Washington, DC: The National Academies Press. doi: 10.17226/23428.
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Suggested Citation:"Chapter 5 - Case Study: Columbia River Closure." National Academies of Sciences, Engineering, and Medicine. 2014. Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains. Washington, DC: The National Academies Press. doi: 10.17226/23428.
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Suggested Citation:"Chapter 5 - Case Study: Columbia River Closure." National Academies of Sciences, Engineering, and Medicine. 2014. Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains. Washington, DC: The National Academies Press. doi: 10.17226/23428.
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Suggested Citation:"Chapter 5 - Case Study: Columbia River Closure." National Academies of Sciences, Engineering, and Medicine. 2014. Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains. Washington, DC: The National Academies Press. doi: 10.17226/23428.
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Suggested Citation:"Chapter 5 - Case Study: Columbia River Closure." National Academies of Sciences, Engineering, and Medicine. 2014. Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains. Washington, DC: The National Academies Press. doi: 10.17226/23428.
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Suggested Citation:"Chapter 5 - Case Study: Columbia River Closure." National Academies of Sciences, Engineering, and Medicine. 2014. Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains. Washington, DC: The National Academies Press. doi: 10.17226/23428.
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Suggested Citation:"Chapter 5 - Case Study: Columbia River Closure." National Academies of Sciences, Engineering, and Medicine. 2014. Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains. Washington, DC: The National Academies Press. doi: 10.17226/23428.
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Suggested Citation:"Chapter 5 - Case Study: Columbia River Closure." National Academies of Sciences, Engineering, and Medicine. 2014. Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains. Washington, DC: The National Academies Press. doi: 10.17226/23428.
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Suggested Citation:"Chapter 5 - Case Study: Columbia River Closure." National Academies of Sciences, Engineering, and Medicine. 2014. Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains. Washington, DC: The National Academies Press. doi: 10.17226/23428.
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Suggested Citation:"Chapter 5 - Case Study: Columbia River Closure." National Academies of Sciences, Engineering, and Medicine. 2014. Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains. Washington, DC: The National Academies Press. doi: 10.17226/23428.
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72 5.1 Introduction This chapter describes activities involved in planning for, responding to, and recovering from an anticipated and protracted river closure event that affected a number of marine ports along the Columbia-Snake River system in the Pacific Northwest. As such, it offers a case study of how a series of small and large ports and their supply chain partners dealt with the event, and pro- vides a number of lessons learned from the experience. The study differs from the Superstorm Sandy case study in Chapter 4 of this report by addressing an event that had a good deal of pre- planning associated with it, and one that also dealt with numerous bulk (notably agricultural commodities), versus containerized, cargo movement issues. And as with the Superstorm Sandy case study, the selected disruption event allowed for perspectives on the closure and its recovery to be elicited from experts at a number of different ports along the river system. The Columbia-Snake River System The Columbia and Snake Rivers have been used for trade and subsistence for thousands of years, and for power generation since the 1800s. The Columbia, the largest river in the Pacific Northwest, begins in Canada in the Rocky Mountains and passes through Washington before emptying into the Pacific Ocean near Astoria, Oregon. The 1,243-mile Columbia River is joined by its largest tributary, the 1,078-mile Snake River near the tri-cities region of Wash- ington State, just west of Idaho (Kammerer, 1990). The Columbia-Snake River system today consists of a deep-draft navigation channel and an inland navigation channel. The 105-mile (waterway lengths are provided in statute miles), 43-foot deep channel runs along the lower Columbia River from Portland/Vancouver to the Pacific Ocean (Pacific Northwest Waterways Association, nd). About 44 million tons of cargo moved along this channel in 2011 (USACE, 2011). The 360-mile, 14-foot deep inland channel from Portland/Vancouver to Lewiston, Idaho, includes eight dams with navigation locks on the Columbia and Snake Rivers, as shown in Figure 5.1. In the 1960s and 1970s, USACE built four dams and locks on the lower Snake River to facili- tate shipping and produce hydroelectricity (BST Associates, 2003). The lower Columbia River has likewise been dammed for navigation and hydropower beginning with the Bonneville Dam, which was authorized by Franklin D. Roosevelt in 1933 and completed in 1937. The original lock was subsequently replaced in 1993 to match the size of the locks at the other seven projects on the Columbia-Snake River system. Three additional dams with navigation locks were constructed on the Columbia River, including McNary (1954), The Dalles (1957), and John Day (1971). Thus, a 465-mile shipping channel through locks and reservoirs for heavy barges exists from the Pacific Ocean to Lewiston, Idaho (Bird, 1989). C H A P T E R 5 Case Study: Columbia River Closure

Case Study: Columbia River Closure 73 The USACE (nd) Waterborne Commerce Statistics Center indicates that about 8 million tons of cargo is barged annually (2010–2012) through the Bonneville Dam. Most of the barge traffic originating at small ports on the Snake River is transported to deep-water ports on the lower Columbia River. The Columbia-Snake River system includes five deep-water, marine cargo ports downriver of Bonneville Dam and 19 shallow-water ports with marine cargo facilities upriver of Bonneville Dam as listed in Table 5.1. The inland navigation channel accommodates barges carrying twice the weight as those trav- eling on the shallower Mississippi River. Agricultural products from producers in Washington, Oregon, and Idaho are among the main goods transported by barge on the Snake and Columbia rivers. The river system supports the highest export of wheat and barley in the United States, the highest export of paper, forest, and mineral bulk products on the West Coast, and the high- est import of autos on the West Coast (Center for Economic Development, Education and Research, 2005). The system also provides petroleum to eastern Washington and eastern Oregon via barge since no pipeline exists between refineries near Portland and a pipeline in Lewiston, Idaho. The economic value of this transportation link is apparent from the commerce that flows up and down the system. The river system also hosts many species of fish, which migrate between fresh and salt- water environments, the most common species being salmon. Installation of the dams and locks impacted the migration of fish, prompting close observation by federal and state agencies, tribal authorities, and environmental groups. Over the past few decades, USACE has closely Source: USACE Portland District Lewiston Figure 5.1. Locks and dams along the Columbia-Snake River system.

74 Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains Deep water Ports Waterway State Astoria Columbia River Oregon Longview Columbia River Washington Kalama Columbia River Washington Vancouver Columbia River Washington Portland Columbia River Oregon Shallow water Ports Waterway State Camas Washougal Columbia River Washington Skamania Columbia River Washington Cascade Locks Columbia River Oregon Hood River Columbia River Oregon Klickitat Columbia River Washington The Dalles Columbia River Oregon Arlington Columbia River Oregon Morrow Columbia River Oregon Umatilla Columbia River Oregon Benton Columbia River Washington Kennewick Columbia River Washington Pasco Columbia River Washington Walla Walla Snake River Washington Columbia Snake River Washington Central Ferry Snake River Washington Almota Snake River Washington Wilma Snake River Washington Clarkston Snake River Washington Lewiston Snake River Idaho Source: PB Analysis based on USACE Navigation Data Center U.S. Waterway Data—Port and Waterway Facilities, the Pacific Northwest Waterways Association and individual port websites Table 5.1. Columbia-Snake River system marine cargo ports.

Case Study: Columbia River Closure 75 coordinated with resource agencies to design and construct improvements to mitigate impacts of the dams on fish populations. For example, installation of fish slides and other fish passage improvements have allowed fish to traverse dams more easily, resulting in the trend toward recovery of many of the fish populations. All of these aspects—trade, power generation, and environmental impacts—must be considered in the planning and timing of the 2- to 3-week maintenance closures of the locks each year, as was true for the orchestrated 14-week closure that occurred in 2010–2011. The Columbia-Snake River System Rehabilitation Project The Columbia-Snake River Extended Navigation Lock Closure Project in 2010–2011 arose out of a series of inspection reports in the mid 2000s that documented the need to replace aging lock gates and repair other components, including the following: • The Dalles Navigation Lock downstream gate (completed 1957), • Lower Monumental Navigation Lock downstream gate and other components (completed 1969), • John Day Navigation Lock (completed 1971), • Lower Granite upstream and downstream gates, and • Ice Harbor downstream gate. The decision to expedite the replacement of aging infrastructure occurred following an emergency shutdown of The Dalles Navigation Lock in 2009 that resulted in the discovery of significant deterioration. USACE determined that repairs (Figure 5.2) could only sustain the navigation for the short term, and that full replacement of the customized lock gates needed to happen as soon as possible. Due to the long lead time with designing and constructing these massive lock gates (12 months minimum), USACE initiated in-house design of replacement locks for The Dalles, Lower Monumental, and John Day. In order to repair these aging locks, the entire river system north of the Bonneville Dam was closed to navigation for 14 weeks, thus eliminating barge transportation on much of the inland Columbia River and all of the Snake River. Figure 5.2. The Dalles Lock repair, 2009.

76 Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains The Disruption Event On December 10, 2010, the USACE closed the Columbia and Snake Rivers to barge traffic to repair aging locks and dams along the river system. The system remained closed for major repairs through March 24, 2011. Prior to the event, a shutdown of this length was unprecedented in the United States; however, similar shutdowns in other U.S. regions may become more common as infrastructure ages. The Columbia-Snake River system operates with only one lock at each of its eight dams situated along a 465-mile waterway connecting the Pacific Ocean to Lewiston, Idaho. Many other systems have two locks at each dam, allowing for continuation of operations through one lock while the neighboring lock undergoes repair. Along this system, each lock is unique; therefore, fabrication of large replacement parts requires customization that typically takes a year. Irreparable failure of one of these locks would result in significant economic losses for the region and a high risk of permanent diversion to other gateways. Due to the unprecedented nature of this closure, USACE initiated a planning effort that involved early communication with all affected river users and close coordination with other local, state, and federal agencies. The closure of the system impacted producers, ports, grain elevators, barge operators, petroleum providers and users, solid waste disposal activities, and many others. This case study describes the responses received from more than a dozen in-depth interviews (sample questions and participating organizations appear in Appendix 5A) with industry experts to identify measures that were taken to improve the region’s trade resiliency to the disruption to waterborne commerce. The case study describes preparations taken prior to the river closure, discusses the subsequent impacts to key stakeholders, and summarizes lessons learned from the disruption event within the following three overarching themes identified in previous chapters of this report: • Physical infrastructure that supports the movement of goods, • Logistics and information flow, and • Regulatory/government agency involvement. 5.2 Columbia-Snake River Closure Impacts This case study began with an extensive review of the prior research conducted by Washington State University’s Freight Policy Transportation Institute (FPTI) on this event, which included economic and environmental analysis, as well as industry interviews. FPTI closely observed changes to trade flows and fuel prices before, during, and after the extended lock closure with the intention of documenting the preparations of shippers, river carriers, government entities, ports, and communities prior to the extended lock outage and capturing the economic impacts based on a comparison of trade flows (Simmons and Casavant, 2011b). Their research involved analysis of trade statistics and surveys completed by industry representatives. The USACE Waterborne Com- merce Statistics Center provided commodity data, and it also provided lock operational data from their Lock Performance Monitoring System (LPMS) for the locks owned or operated by USACE. Some of the study findings (Simmons and Casavant, 2011c) are as follows: • Below The Dalles Lock and Dam, a total of 377,000 tons were shipped downriver between December 10, 2010 and March 24, 2011. • Tonnage shipped downriver during the lock outage decreased by 79 percent when compared to an average tonnage of 1.8 million tons for the previous three winters. • Commodities with the largest volume of downriver shipments included wheat; forest prod- ucts, lumber, logs and woodchips; sand, gravel, and stone products; and primary non-ferrous metallic products.

Case Study: Columbia River Closure 77 • Wheat comprised 62 percent, or 233,500 tons, of the total 377,000 tons moving downriver from the lock outage; normally these movements make up at least 75 percent of shipments flowing through the entire lock system. • Approximately 10,500 tons were shipped upriver between December 10, 2010 and March 24, 2011 through Bonneville to The Dalles area—down from 608,500 tons. • Southern Washington firms experienced a 95 percent decrease in wheat shipments. • Eastern Oregon firms experienced a decline in shipments of 20 percent. • Northern and Southern Idaho experienced declines in shipments of 86 percent and 32 per- cent, respectively. • Most wheat firms in the Pacific Northwest moved the majority of their product, an average of 68.5 percent, by rail during the lock outage, as compared to 29 percent during a typical winter. • Eastern Oregon and Southern Washington firms employed trucking services to transport wheat from December 2010 to March 2010, about 40 to 75 percent of shipments, respectively. • On average, truck-barge rates were at least 36 cents per bushel less than rail and truck during the lock outage, as compared to at least 10 cents per bushel less during the typical year. Overall, most of the region fully recovered from the event with only moderate economic losses. Those hardest hit by the event included grain elevators, ports, barge lines, and some of the producers. The following sections describe ways in which these groups mitigated the impacts of the closure, as well as provide strategies to enhance resiliency for future disruptions based on lessons learned from this event. 5.3 Columbia-Snake River Closure Preparations and Response and Recovery Efforts The University of Washington’s FPTI studies discussed many of the preparation activities that led up to the closure, and the economic results of the closure. Incorporating and building on that information, this case study focuses on what preparations and response and recovery efforts were essential in improving resiliency of the industry upon the conclusion of the closure, and how the experience from this event might inform other regions that may experience similar planned navigation channel shutdowns in the future. Specifically, and using the private and public agency discussion guides reproduced in Appendix 5A, a series of in-person and telephone interviews were conducted with experts with first-hand knowledge of the extended lock closure event. These included interviewees at three of the impacted ports, three grain elevators (one upriver and two overseas exports), one grain producer, two barge operators, USACE, USCG, and a trade association representing several water-dependent industries, including ports, pro- ducers, terminal operators, and barge and tug operators. In speaking with many of the impacted industries, the following three components that best mitigated industry and economic impacts repeatedly rose to the top: 1. Physical/logistical preparation given the advanced warning, 2. Constant and consistent communication and coordination, and 3. Regulatory and public agency involvement and government aid. Physical/Logistical Preparation Advanced warning mitigated many of the impacts that the industry would have experienced under an emergency, long-term closure. By communicating with stakeholders 18 months in advance, the industry responded by budgeting for more annual expenses, selling some com- modities early, constructing more storage space, purchasing trucks, and identifying alternative transport options, such as different routes or transportation modes.

78 Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains Producers Producers indicated that the risk associated with storing product, namely insect and heat damage, and the cost of carry (4 percent per bushel, including 2 percent for storage and 2 percent for interest) were lower than the risk of higher costs associated with shipping via truck or rail (Simmons and Casavant, 2011a). Increased demand for truck and rail resulted in higher costs than during normal operations. From the producers’ standpoint, knowing the additional costs at least a year in advance was helpful. The wheat industry performed better than anticipated this year due to extenuating circum- stances, including the drought in Russia and subsequent export ban, severe flooding in Australia that degraded the quality of the wheat, and a below-average year for Canadian wheat. This lack of quality supply caused an increase in the demand for U.S. wheat (Simmons and Casavant, 2011b). The forestry industry increased movements prior to December 2010 to build up inventories. From July to December, forest product shipment volumes moving downriver were consistently about 75 percent above 2007–2009 averages. The forestry industry suggests it took this route of action in order to satisfy customers’ orders and inventories prior to the lock outage instead of foregoing all commerce that would usually ship from December to March (Simmons and Casavant, 2011d). The fertilizer industry focuses on two peak times of year, including one from March through May that coincides with planting schedules. Any possibility of delays to the extended lock closure could have significantly impacted the fertilizer industry. Communication of the schedule and regular status updates eased the concerns of the industry. Preparations, Impacts, and Industry Responses • Coordinated alternative purchasing schedules with customers to line-up the purchase of railed and trucked products during the closure and the purchase of barged products immedi- ately before and after the closure. • The barge lines increased tariff by 7.5 percent just 6 months prior to the closure to off-set anticipated revenue losses that would occur during the shutdown; producers were not pre- pared for this significant cost increase and suggested a 12-month warning would have been very helpful. • Truck shortages impacted some producers that did not own trucks; some producers have begun to explore options for purchasing trucks since another closure is anticipated to occur in 2017–2018. Grain Elevators (Upriver Elevators and Downriver Deep-Water Export Elevators) The Columbia-Snake River system consists of 27 grain elevators. Only two of them have access to rail. The grain elevators communicated regularly with the Pacific Northwest Waterways Association (PNWA), a trade association representing several water-dependent industries in the region, and with their producers, to plan for the closure. They also communicated regularly with the U.S. Wheat Association, which communicated the information to overseas customers throughout Asia. Armed with the schedule well in advance, they employed mitigation measures similar to those used by producers, including constructing more storage, budgeting ahead, and adjusting purchasing schedules. Another measure included increasing the storage tariff from 2.5 cents to 5 cents per bushel stored beyond 20 days. They communicated this planned measure with the producers a year before it went into effect so that the producers could plan accord- ingly. This measure encouraged turnover of the grain in advance of the closure, thus allowing more space to store product during the closure. Also, the grain elevators scheduled two to three barges per day 5 weeks in advance of the reopening, instead of the standard practice of schedul- ing barges as needed. As they correctly anticipated, the barge lines could not keep up with the demand so over-scheduling proved to be quite beneficial.

Case Study: Columbia River Closure 79 Although two grain elevators had access to rail, during the extended closure, the cost of rail along with reliability issues resulted in lower than anticipated rail utilization. As quoted by FPTI (Simmons and Casavant, 2011c), “Rail performance was terrible. Cars were 10 days early in December and over 30 days late by the end of February and continuing through March.” In general, the grain elevators found rail to be unreliable and the risk of delay too high. Main- taining the ability to satisfy customers was worth the higher transportation costs associated with trucking product rather than using trains. Preparations, Impacts, and Industry Responses • Barge lines staged empty barges at key grain elevators for additional “as needed” storage—they were utilized toward the end of the closure. • The closure was scheduled within the “fish window,” which avoided harvest time. • Those with access moved more by rail, doubling the overall cost of moving goods during the closure, but preventing the loss of customers; overall a 30–40 percent cost increase mitigated the risk of losing customers to other countries, such as Canada and Europe. • Cost of rail space during the closure was three times higher than the shippers and ports had projected, at a cost of approximately $800 above tariff according to one of the exporters interviewed. • Russian export restrictions in place during the closure were thought to play a significant role in the willingness of customers to alter purchasing schedules. • Low interest rates significantly reduced projected carrying costs. • Grain companies took advantage of the closures to perform maintenance and rehabilitation activities; this ensured retention of employees and prevented loss of equipment availability during work times. • Many of the grain elevators and producers incorrectly assumed that vessel schedules would adjust in anticipation of the closure—they did not. This prevented much of the product from being shipped out in October, which created congestion at the locks and a shortage of barges in the weeks leading up to the closure. Barge Operators USACE and the PNWA communicated frequently with the barge operators to prepare for the closure, and the barge operators communicated regularly with the grain elevators and the deep export elevators, such as EGT, United Grain, and Columbia Grain. Since barge transportation, for the most part, was halted for the 4 months of the extended lock outage, advanced planning and communication played a significant role in employee retention efforts and, subsequently, in the overall supply chain resiliency of the region. In speaking with the two largest barge operators, the extended closure meant revenue loss and the potential for losing well-trained and certified operators. In speaking with one of the barge operating companies, the average cost to hire and train a skilled operator is $40,000. For this reason, the 18-month warning prompted the follow- ing actions by the two companies interviewed for this case study. • Staff retention efforts that – Informed staff and encouraged them to accumulate vacation time and work overtime 1 year in advance of the closure; – Provided staff with information about how to obtain low-interest loans from their retire- ment accounts; – Initiated early discussions with the state unemployment office to reduce wait time for their employees to receive benefits; – Encouraged and funded required staff certification programs, continuing education, and advanced degrees; and

80 Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains – Allowed staff to seek temporary employment during the closure while maintaining their current medical benefits. • Focused on repairs to vessels and facilities (one firm repaired 25 percent of its fleet). • Utilized staff and equipment in other ways (luckily, an unusual tidal surge that occurred dur- ing the closure required use of tug boats to stabilize ships at dock; this extra work created a “no revenue loss” situation for one of the barge operators). Quoting FPTI (Simmons and Casavant, 2011d), “Two barge lines continued to ship forest prod- ucts, paper, and wheat on the lower Columbia River, below the Bonneville Lock and dam. These lines also performed harbor work in this area. According to a barge line representative, harbor work is “switching grain, petroleum, freight, or container barges into or out of a marine facility to allow loading or discharging. This work also included shifting barges, or moving barges in and out of storage locations or maintenance facilities, which allowed boat crews and barge employees to continue to work and remain busy. Upriver barging tugs that were idle due to the lock outage were called into service to handle the large cargo volumes in the Portland area. These two barge lines were surprised by the volume transported on the lower Columbia River during the lock out- age and the consequential need for their services. These extra services helped dampen the revenue and job loss of the interruption of service on much of the Columbia and all of the Snake Rivers.” Most barge companies temporarily laid-off or reduced the hours of a significant number of their employees during the closure. Some barge companies offered job sharing, others pro- vided education reimbursement, but all of them continued to pay benefit packages during the extended lock outage. As a result of these efforts, all of the firms interviewed successfully retained 100 percent of their employees. Ports All of the ports worked closely together to retain business, but only the deep-water ports of Portland, Vancouver, Kalama, and Longview had the resources to subsidize transportation costs. The Port of Portland coordinated closely with the Ports of Lewiston and Morrow, as well as other upriver ports in advance of the extended closure. In addition to assisting with altering shipment schedules and developing alternative storage options during the outage, the Port of Portland took steps to retain shippers by off-setting their costs of shipping via rail and truck transportation while barging was unavailable. The Port of Portland paid carriers $400 per container (regardless of size) for rail and truck shipments from Lewiston, Idaho, and $250 per container for rail or truck ship- ments from Umatilla and Boardman, Oregon. The Port of Portland set aside $800,000 for this transportation subsidy. Less than half of the allotted subsidy was used by industry because of a shift in the purchasing schedules, and the program resulted in no loss of Port of Portland business. Upriver ports faced the significant challenge of remaining relevant during and after the clo- sure. Unlike the larger downriver export ports, like the Port of Portland, the smaller upriver ports did not have the financial resources to subsidize transportation costs during the extended closure. As a result, the Port of Lewiston, for example, remains down by 20 percent in 2013 from its 2009 volumes. Some shippers apparently found alternative gateways with competitive rates during the closure and have not returned. Preparations, Impacts, and Industry Responses • Upgraded container storage and improved port facilities; • Port of Portland provided subsidies to patrons (industries and shippers) to mitigate truck and rail cost increases: – Provided $250 per unit (any size container) for products shipped from Umatilla, Oregon and Boardman, Oregon; – Provided $400 per unit (any size container) for products shipped from Lewiston, Idaho;

Case Study: Columbia River Closure 81 • Updated patrons and shippers on the status of the lock outage; • Participated in USACE teleconferences; and • Provided storage for some products halted by the extended lock outage. Petroleum For this case study, the following information was extracted from an FPTI report (Simmons and Casavant, 2011d) because none of the petroleum companies responded to requests to dis- cuss the outage—a challenge that the FPTI researchers also encountered. Energy continuity, particularly for heating during the winter months, became a concern for the eastern side of the region, including the cities of Spokane, Yakima, and the tri-cities, which relies primarily on barged petroleum from refineries near Seattle. No pipeline exists between the refineries and this region. In preparation, storage facilities in the eastern Washington/Oregon and northern Idaho regions were maximized prior to the outage. Truck and rail transport sup- plemented demand during the closure, and Tidewater filled and docked six barges of petroleum at Pasco prior to the closure. Initial plans for reversing the flows of two pipelines, one between Pasco, Washington and Utah, and another between Spokane, Washington and Montana, did not occur due to lack of availability. The FPTI researchers (Simmons and Casavant, 2011c) contacted the Washington State Depart- ment of Commerce (WSDOC) and the Oregon Department of Energy (ODE) to identify actions taken by both states and suppliers to ensure energy continuity during the extended closure. Preparations, Impacts, and Industry Responses • Released situation reports warning residents of fuel price increases, shortages, and availability of fuel from alternative sources. • Provided weekly and monthly reports of gasoline and diesel prices around the Pacific North- west and updates on fuel deliveries. Responded to public/media questions, comments, and complaints surrounding fuel impacts related to the extended lock outage. • Petroleum companies shipped more than half of their product by tanker truck during the lock outage, and less than half by rail (60 and 40 percent, respectively). No significant impacts to petroleum supplies occurred because of the amount of lead time and warning provided by USACE to the industry and these state entities. The ODE and WSDOC worked closely with the industry to ensure winter energy demands would be met without result- ing in significant cost increases to consumers. The extended closure did not result in reported fuel shortages, price gouging, or price hikes. Burlington Northern Santa Fe Railway (BNSF), a Class I railroad, transported fuels from Anacortes, Washington (a town north of Seattle) to a transfer point, presumably at Pasco, Washington. The fuels were then interchanged from BNSF to another smaller rail system and hauled to Lewiston for dispersion by tanker truck. Accord- ing to WSDE, Union Pacific Railway (UP) also added additional tanker railcars to handle fuel loads from Portland to Spokane, Washington (Simmons and Casavant, 2011d). Rail Companies In contrast to barge companies, which lost business for the majority of the lock outage, rail lines experienced an increase in cargo loads during the lock outage. Some of the rail operators coordinated with customers and producers to identify anticipated demand for rail transport during the extended closure. The railroads carried more cargo by repositioning rail cars and staff, as well as increasing days of operation. The railroads operated an average of 1.5 additional trains per week during the outage. Each additional train hauled 110 railcars, the equivalent of 440 trucks, which helped alleviate roadway congestion. The majority of these additional trains moved from east to west and carried wheat, forest products, barley, paper, peas, and lentils.

82 Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains Additional trains moving upriver (from west to east) moved empty containers, petroleum, diesel, and fertilizer (Simmons and Casavant, 2011d). In addition to moving extra cargo, rail companies experienced increased costs due to fuel and labor to provide additional days of service to those industries and ports in need. One railroad line in eastern Washington shuttled empty containers for the Port of Lewiston, which involved constant contact with the Port and the ability to be flexible with train schedules. Employees of rail lines faced long shifts, large train loads, and overtime hours (Simmons and Casavant, 2011d). Information Flows and Coordination USACE Communication/Project Management Early on, USACE Northwest Division identified the importance to the overall economic health of the region of reopening the river system on time. With the end in mind, USACE assigned a project manager to each of the dams and a single point of contact (project liaison) to oversee all of the projects and feed information internally and externally. The project liaison was in daily communication with each of the project managers and regularly hosted coordination meetings with the project managers of the concurrent replacement projects. The project liaison reported information to the USACE northwestern division chief of project management and the division’s congressional liaison. The information provided by the project liaison to the division heads ensured that all infor- mation flow to USACE Headquarters and the media funneled through the top levels, thus pro- viding a buffer to the individual project managers. By relieving them of media duty, the project managers were able to focus on construction activities and meeting the committed schedule. The project managers planned for the movement of equipment and oversized replacement pieces via barge to minimize over-the-road impacts, developed plans for inclement weather events, and accelerated preparatory work at the three dams receiving new locks by adding Sunday shifts. The project liaison also compiled information from the project managers and provided sta- tus updates to the industry during monthly teleconferences held on the first Tuesday of every month. Furthermore, USACE posted progress reports on its website, and announced delays and/or revisions in construction and opening dates via email, telephone, and website postings. In addition, the project liaison coordinated and organized several tours for industry, elected officials, and the public to view construction and rehabilitation to demonstrate the importance of the major lock repairs to the Pacific Northwest’s economy. Regulatory and Public Agency Involvement USACE The Army Corps of Engineers’ Northwestern Division’s Portland and Walla Walla Districts maintain the navigation locks along the Columbia and Snake Rivers. The division and the two districts coordinate maintenance, inspections, and repair activities to minimize disruptions to navigation. Together, they initiate a communication process with various river users prior to annual 2–3 week maintenance and inspection closures. In 2009, when the extent of the dam- age at The Dalles was discovered, the two districts immediately began working together to develop the work program, identify funding needs, and develop a coordination/communication structure. During interviews conducted for this case study with USACE, the ports, and several indus- try leaders, it became clear that the structure and role of USACE accounted for much of the

Case Study: Columbia River Closure 83 success of the closure, in particular, their 18-month advanced warning and detailed schedule. USACE coordinated closely with PNWA, which represents river-supported industries, such as ports, producers, terminal operators, and barge and tug operators, to reach out to industries that would be impacted by the closure. USACE coordinated with PNWA along with several of the ports and other entities on lobbying efforts to ensure funding became available and the closure met the announced schedule. In addition, USACE coordinated with environmental agencies to time the closure during a period when impacts to fish habitat would be minimal. USACE shared this information with the trade industry, and the trade industry utilized this information to coordinate alternative purchase schedules with foreign buyers. Pacific Northwest Waterways Association (PNWA) PNWA played an active role in communicating to members of Congress the importance of the river to the national economy, coordinating information prior to the closure, and providing regular communication to its members. PNWA and industry partners regularly visit Washing- ton, D.C. to explain the importance of the Columbia-Snake River system to the Nation’s export of grain and Idaho and Utah’s access to petroleum. In the years prior to 2009, PNWA had been coordinating with the Portland and Walla Walla Districts to understand which navigation lock components were most in need of repair or replacement. As soon as the extent of damage and repair work became known in 2009, PNWA began coordinating funding needs and lobbying efforts with USACE, its members, and other trade organizations, such as the U.S. Wheat Association. PNWA also began participating in USACE weekly status teleconference calls prior to and during the closure. Throughout the clo- sure, PNWA collaborated with USACE and played a significant role in the flow of information to all levels of government and their members. Washington State Department of Employment Security The states of Oregon and Washington worked closely with industries that would be tem- porarily laying-off much of their staff during the extended closure. The State of Washington Department of Employment Security proactively assisted Tidewater in identifying all employees that would temporarily be unemployed and pre-registering them for unemployment assistance. Tidewater employees began receiving benefits the first week they were unemployed. In addition, the State of Washington relieved these temporarily unemployed beneficiaries. 5.4 Lessons Learned and Actions Taken The FPTI reports, including industry surveys, coupled with this study’s interviews of major stakeholders, provide a number of actions that can help to minimize impacts of a long-term closure of a primary freight waterway on port operations and their associated supply chains. These best practices and lessons learned fall into three primary categories, including (1) infor- mation flows and coordination, (2) physical infrastructure, and (3) regulatory and public agency involvement. Information Flows and Coordination USACE acted as the central point of contact and also developed a structure that led to the successful preparation and completion of the lock replacements and repairs. This included identifying a single point of contact within USACE that coordinated with the USACE Port- land and Walla Walla Districts and the Northwestern Division Headquarters, coordinated regular calls with industry representatives, coordinated tours of the construction projects,

84 Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains and coordinated all press releases and public communications. In summary, best practices included the following. USACE • Allowed the on-site lead engineer to focus on constructing the project on time and within budget; minimized administrative and media duties by funneling status updates to a single USACE point of contact; • Initiated design of lock replacements in advance of acquiring funding and communicated “shovel-ready” status of the project to congressional representatives, which resulted in receiv- ing ARRA funds; • Initiated resource agency and high-level industry input about the best time to close the sys- tem 2 years prior to the closure to minimize impacts to fish runs and trade; • Initiated industry communication, including start and end dates of the extended closure, 18 months in advance; • Established weekly status update conference calls with the industry; • Notified stakeholders about project status and progress, as well as any potential schedule changes; • Prepared regular press releases; and • Provided regular status reports to USACE Headquarters in Washington, D.C. Advocacy Groups • Continued to voice support for the rehabilitation of the extended lock outage that would enhance reliability of the navigation and delivery system; • Participated in USACE teleconferences; • Updated wheat elevators, buyers in international markets, exporters, and other stakeholders on lock rehabilitation preparation and progress; • Continued communication with wheat exporters, grain commissions, and elevator managers; fielded comments and complaints regarding alternative modes of transportation and the need for the river system; • Conducted conferences for its members justifying the importance of the lock outage; • Suggested alternative means of transportation to its members; and • Spoke to the public and press about the significance of the outage. Industry • Focused on employee retention plans, including maintaining benefits, coordinating with the state in advance to ensure employees could immediately obtain unemployment benefits, pro- viding education reimbursement, providing more opportunities for overtime in advance of the closure, allowing employees to obtain temporary employment while maintaining benefits, etc.; • Communicated with their employees 12 months in advance of the closure; • Participated in USACE and PNWA coordination calls; • Focused Washington, D.C. lobbying efforts on obtaining funding; • Communicated with their customers 12–18 months prior to the closure and identified prepa- ration and business continuity plans; and • Moved goods in advance to the extent possible by working with buyers to adjust purchase schedules. Physical Infrastructure Infrastructure relevant to a major inland waterway consists primarily of the navigation channel and navigation locks, and the associated ports, railways, and roadways that support waterborne commerce. All pieces work together as a system. When planning for a significant disruption of a primary navigation artery, such as the 14-week extended closure, one must understand the

Case Study: Columbia River Closure 85 entire system in order to identify strategies to support supply chain resiliency. In the case of the Columbia-Snake River system, the infrastructure includes 8 navigation locks, 27 grain elevators, and 24 ports with marine cargo facilities (19 upriver of Bonneville Dam). USACE and PNWA worked closely together to announce the upcoming closure and coordinate preparation activi- ties. The following identifies steps that were taken to assist water-dependent users. USACE • Planned the extended lock outage around salmon runs and heavy cargo months; • Moved accessories, lock gate equipment, and other necessary supplies for the extended lock outage by barge transportation as to not clog major highways or railways; • Developed traffic management plans for staging construction equipment and components; and • Accelerated prep work for the three locks that were receiving new gates (see Figure 5.3) so that repairs and replacements could stay on, or ahead of, schedule (e.g., added Sunday shifts). Ports, Grain Terminal, and Producers • Upgraded storage capacity, • Purchased trucks, • Improved and/or rehabilitated facilities, and • Repaired equipment. Railroads • Repositioned railcars and engines, and • Increased hours of operations. Regulatory and Public Agency Involvement Several concurrent events created the perfect scenario for the expedient repairs to occur. The availability of ARRA funds and the project “readiness” allowed the project to capitalize on a Figure 5.3. Manufacturing gates.

86 Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains unique revenue source that became available after the most recent economic recession. Signifi- cant support at the federal level for projects that strengthen export activities also helped attract funding. USACE • Developed an implementation plan, including early initiation of engineering design, indus- try collaboration to lobby for funding, and an overall communication and implementation strategy; • Coordinated and collaborated with resource agencies such as U.S. Fish and Wildlife, early on to identify the least impactful time to close the locks; • Coordinated and collaborated with several federal, state, and local agencies in advance to identify who would be impacted and how best to minimize impacts—in particular, business retention; and • Developed response plans for bad weather, unexpected delays in construction, and traffic impacts. Possible Considerations for the Future • Low interest rates significantly reduced projected carrying costs; consider subsidies for the industry, in particular, producers who bear most of the additional transportation costs. • Rail tariff rates were much higher than normal due to increased demand and the costs associ- ated with repositioning equipment; potential for government assistance. • Increase the availability of trucks to producers through a program such as the Ports of Long Beach/Los Angeles Clean Truck Program. • Require 12-month advance warning of tariff increases above a minimum threshold to prevent undue hardships to producers. 5.5 References Bird, P. (1989) “Navigation on the Columbia-Snake River System.” Transportation Research Circular 350: 55–59. Transportation Research Board, Washington, D.C. BST Associates (2003) Lower Snake River Transportation Study Final Report: American Rivers. p 13. June 2003. Center for Economic Development and Research (CEDER) (2005) Columbia/Snake River System and Oregon Coastal Cargo Ports Marine Transportation System Study. Prepared by Parsons Brinckerhoff, BST Associates, and Pacific Northwest Waterways Association. June 2005. Kammerer, J. C. (1990) Water Fact Sheet. Open File Report 87-242. United States Geological Survey, Department of the Interior. http://pubs.usgs.gov/of/1987/ofr87-242/pdf/ofr87242.pdf May 1990. Pacific Northwest Waterways Association “Columbia Snake River System Facts,” http://www.pnwa.net/new/ Articles/CSRSFactSheet.pdf. Simmons, S. and Casavant, K. (2010) Historical Waterborne Commerce on the Columbia-Snake River System: Commodity Movements Up and Down River, 1991–2010. FPTI Research Report #1. FPTI, Washington State University. Pullman, WA. Simmons, S. and Casavant, K. (2011a) Industry Preparations for the Columbia-Snake River Extended Lock Outage. FPTI Research Report #2 Freight Policy Transportation Institute, Washington State University. Pullman, WA. Simmons, S. and Casavant, K. (2011b) Industry Reactions to the Columbia-Snake River Extended Lock Outage, December 2010–March 2011. FPTI Research Report #9. FPTI, Washington State University. Pullman, WA. Simmons, S. and Casavant, K. (2011c) Return to the River: Columbia-Snake River Extended Lock Outage, April– June 2011. FPTI Research Report #10. FPTI, Washington State University. Pullman, WA. Simmons, S. and Casavant, K. (2011d) Economic and Environmental Impacts of the Columbia-Snake River Extended Lock Outage. FPTI Research Report #12. FPTI, Washington State University. Pullman, WA. August 2011. USACE Waterborne Commerce Statistics Center, “2011 Waterborne Commerce of the U.S. Waterways and Harbors on the Pacific Coast,” http://www.navigationdatacenter.us/wcsc/wcsc.htm. USACE Waterborne Commerce Statistics Center, “Locks by Waterway, Tons Locked by Commodity Group,” http://www.navigationdatacenter.us/lpms/cy2012comweb.htm.

Case Study: Columbia River Closure 87 Appendix 5A: Interview Guide 3 Represented Participants • Port of Portland; • Port of Morrow; • Port of Lewiston; • United Grain; • Columbia Grain; • Shaver Transportation Company (barge operator); • Tidewater Barge; • Pacific Northwest Waterways Association; • USACE (Portland Division, Portland District, and Walla Walla District); • Lewis-Clark Terminal (grain elevator); • United States Coast Guard; and • D & G Farms (Idaho wheat grower). Sample Questionnaire: Private-Sector Shippers Discussion Guide Note that a similar form was used to guide discussions with public organizations. Introduction Port disruptions, such as those caused by natural disasters, labor disputes, and other man- made events, impact the entire supply chain. We are assessing the impacts, recovery, supply chain and facility changes, and the lessons learned from these events as a key element of a proj- ect for the NCFRP. As part of this study, the scheduled closure of the Columbia River has been identified as one of two in-depth case studies to investigate. NCFRP is part of the Transportation Research Board and the National Academy of Science. A description of our project can be found at http://apps.trb.org/cmsfeed/TRBNetProjectDisplay.asp?ProjectID=3493 The results of our work will be released in a report to inform discussions of the supply chain and port disruptions throughout the United States, including the recent Superstorm Sandy impacts on the Port of New York and New Jersey and the Columbia River locks repair impacts. As we all know, keeping goods moving is important, particularly after a disruption. Your experi- ence in the planned closure of the Columbia River to ocean-going vessels will help us to identify and elaborate on the steps needed to coordinate and continue freight movements through ports in times of severe stress. Our individual discussion is confidential. We will keep the information you give us confiden- tial. No quotes or information will be attributed to an individual person or organization. We are also looking at three aspects of the supply chain—the physical movement of goods, information flows, and regulatory/governmental agency involvement. Background on Your Organization • Please describe your use of the supply chain and your involvement with cargo moving through port facilities. • What public agencies and private-sector organizations do you interface directly with in these activities? • How do disruptions at a port affect your operations? • How do you prepare, respond to, and ensure business continuity/recovery when supply chain disruptions occur, particularly disruptions involving one or more ports?

88 Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains • What is your facility’s geographic coverage? Do you interface with facilities in other geo- graphic areas? Coordination and Communication • How do you coordinate with governmental agencies (e.g., FEMA, DHS, port agencies, and roadway authorities)? • How do you coordinate with transportation providers, your suppliers, and your customers? • What do you consider the strengths of your organization with respect to coordination and communication before, during, and after a port disruption? • How would you improve your communication and coordination process for future situations? Continuity of Operations and Service In considering how to maintain service and cargo flow in times of disruption: • What are the most important considerations (physical, information flows, and regulatory)? • What are the major challenges or obstacles (physical, information flows, and regulatory)? Columbia River Closure Let’s talk about the Columbia River Closure event: • Preparations; • Impacts on your facilities and operations; • Immediate response, business continuity, and recovery; • Lessons learned; • Anticipated changes in facilities and operations. Next Steps • What other organizations and individuals should we talk with regarding the Columbia River closure and supply chain resiliency? • Is there any other information that you would like to share with us at this time? Thank you! We will share the draft case study with you, as well as send you the final report once published by the National Academy.

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TRB’s National Cooperative Freight Research Program (NCFRP) Report 30: Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains focuses on identifying and elaborating on the steps needed to coordinate freight movements through ports in times of severe stress on existing operating infrastructures and services.

This report builds on NCHRP Report 732: Methodologies to Estimate the Economic Impacts of Disruptions to the Goods Movement System to provide a set of high-level guidelines to help seaport authorities with minimizing lost throughput capacity resulting from a major disruption.

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