Five Rivers Distribution’s President Shell sees Arkansas River recovery but urges infrastructure investments in inland waterways

Marty Shell, president of Five Rivers Distribution, LLC based in Van Buren, Arkansas with cargo-handling operations at Fort Smith and Van Buren, Arkansas, says the McClellan-Kerr Arkansas River Navigation System has now recovered from the catastrophic 2019 floods.

Shell said the 2019 flood was “the worst flood on the Kerr-McClellan Arkansas River system where the flood level rose to 41 feet. The last record was 38 feet in 1938.”

The river system was shut down for two and a half months. Shell outlined the damage and recovery efforts:

“The flow of water rose to 600,000 ft.³ per minute and that compared to previous worst where the flow was 400,000 ft.³ per minute. Normally it’s 70,000 cubic ft per minute.

The Port of Fort Smith was completely destroyed and is being rebuilt.

The Five Rivers facility at Van Buren was under a layer of sand: “It took us 30 days to clean it up and get back up and running.”

Had the levee at Conway, Arkansas not been breached and water not flowed out into farmland, the high flow of water “would have gone down to Little Rock Arkansas and may have flooded the city.”

Need for Major Infrastructure Investments on Inland Waterways and River Ports

Shell says the river system may need up to $850 million in upgrades and cargo-handling terminals may need upgrades of as much as $250 million.

The McClellan-Kerr Arkansas River Navigation System crosses the state of Arkansas into Oklahoma traversing the state until it reaches the Port of Catoosa, near Tulsa, Oklahoma. The 445-mile navigation channel begins at the confluence of the White and Mississippi Rivers.

Shell said: “The U.S. Army Corps of Engineers is backlogged with projects that still have not been completed. It has a number of challenges including on the McClellan Arkansas River that have faced budgetary shortfalls. The shortfalls are partly related to the war in Afghanistan and funds spent on the border wall between Mexico and the United States.”

Shell says investment in infrastructure investments for the Arkansas/Oklahoma river system is vital but is also vital for other rivers:

“I would hope that the Biden Administration infrastructure plan would accommodate the need for upgrading the brown water inland river ports. The blue water coastal rivers have received a great deal of infrastructure support over the years but not the inland rivers.

It is here where we could increase the capacity of moving freight up and down the river with tug and barge service that cost less than trucking.”

Shell is in support of major and long-term investments not just to upgrade the river system including locks and dams, but to also anticipate increased flooding threats:

“We can’t continue to put band-aids on our infrastructure, we need major surgery and not just replace what was already there, but to upgrade the system to anticipate the threat of future flooding. Also, the demand for more tug and barges requires a more modern cargo handling capacity at the inland ports. Finally, we have many ports, especially along the Mississippi, where ports have to beg borrow and steal to obtain dredging services in order to maintain the harbor drafts of 9 feet. A great deal of revenue is being lost because of delays in maintenance dredging at river ports.”

Causes of Market Slowdown

In 2017, Five Rivers was handling around 450,000 tons of freight. This included steel products scrap metal and feed products that were delivered to 12 to 14 states. After a sharp decline after 2019, he said “we are backup to 175,000 tons.”

The decline was due to:
“All I can say is, if you could outlast the tariffs and the flood and the Covid then you were doing pretty well and I’m glad to say that we are mostly back in operation. The Port of Fort Smith is being rebuilt and will have brand new facilities,” Shell said.

• The Trump tariffs on imported steel demand which caused a drastic reduction.
• Damage and losses incurred from the 2019 flood
• The impact of the Covid pandemic in 2020

Containers on Barges

Trucking costs have skyrocketed due to a driver shortage which “has reduced capacity.” The result is that there is going to be increased “demand to move product down the river to and from the ports of New Orleans, Houston and Mobile by rail and by barge.”

Shell believes the future includes transporting more containers by barge.

To do this, he needs to upgrade Five Rivers terminal facilities. This will include new fork lifts, a container crane and the ability to tilt containers so as to fill containers with grain for export through Gulf Coast ports.

Shortages of empty containers and chassis create supply chain challenges that Five Rivers will have to meet.

Nevertheless, the growing gap between high trucks costs and lower waterborne costs by tug/barge create a new market opportunity for the inland river ports: “Many of the blue water ports on the coast have reached capacity, so the future is in the brown water inland ports.”

Cautiously Optimistic

Shell is optimistic about improving river traffic for the remainder of 2021 and into 2022 and said that: “I’m seeing and hearing that the domestic market can’t keep up with the economic growth that we are seeing, but Trump tariffs are still hurting the import market. Something soon will have to give.”