Arkansas River port authorities receive grant awards, tonnage shipped continues to lag after unusual Spring rains

The port of Fort Smith will receive a $125,644 grant from the Arkansas Waterways Commission to build a bulk storage warehouse. Port operator Marty Shell said the money will help with much needed expansion, especially if river tonnage trends continue to return to normal.

The award was part of more than $450,000 awarded by the commission to help five port operations on the Arkansas River navigation system. Through the Arkansas Ports, Intermodal and Waterways Grant program, the commission on Wednesday (Dec. 2) awarded the following grants:
• Crossett Port, $50,000, hard surface existing gravel road circling the port warehouse;
• Fort Smith Public Port Authority, $125,644.42, to construct a bulk storage building up to 30,000 square feet;
• Helena-West Helena/Phillips County Port Authority, $50,000, to replace crossties from existing Helena Harbor rail track;
• Little Rock Port Authority, $100,000, to install enhanced perimeter fencing and closed-circuit television surveillance; and
• Osceola Port Authority, $125,000, to clean, patch, and overlay entrance road and all paved areas.

“We received over $1.2 million in requests and wish we could fulfill all the requests,” Gene Higginbotham, executive director of the Arkansas Waterways Commission said in a statement. “We hope to have additional funds in the future. Developing our ports is critical to our state’s economic development.”

The grant program, funded through legislation pushed by Sen. Jake Files, R-Fort Smith, provides ports with support for capital projects such as construction, improvement, capital facility rehabilitation, and expansion of a public port facility. Dredging projects are also eligible. Funds awarded may not exceed 90% of construction or 50% of dredging. Grant recipients must provide a 10% match.

“I wanted more, but I’ll be happy with that,” Shell said Wednesday during an interview with Talk Business & Politics. “We have several different customers and we’ve just outgrown our space at the port of Fort Smith. We were challenged to raise the tonnage here in Fort Smith, and we have done that.”

Shell, who owns Van Buren-based Five Rivers Distribution and operates the Port of Fort Smith and port operations in Van Buren, said the project totals about $650,000 and he is looking for other grants to build the warehouse on the port property owned by the city of Fort Smith.

“We’re trying to do it at no cost to the citizens of Fort Smith, and this was a way to do that. … I’m looking for other grants, and if we don’t get them, then we’ll do the dirt work with what we have, and build it as we get the money in,” Shell said, crediting Sen. Files for pushing the grant program into reality.

RIVER TRAFFIC RETURNING TO NORMAL
The funds are welcome news for operators who have struggled through a tough 2015.

An unusually wet end of winter and spring season resulted in river flooding that shut down a majority of lock and dam operations. Just when the cycle of wet weather from the west was ending, Tropical Storm Bill moved out of the Gulf of Mexico and dropped more than 12 inches of rain during mid-June on many areas of Oklahoma, including Arkansas River watershed areas.

According to the Corps, river flows reached 180,000 cubic feet per second, well above the typical 20,000 cubic feet per second. River tonnage was down as much as 30% in August, and hit a record year-to-date dip of 23% after the first seven months of the year.

But in the past three months river levels have returned to normal and port operators are working through backlogs. October tonnage on the river totaled 1.049 million, down slightly from 1.058 million in October 2014. For the first 10 months of the year, tonnage is 8.44 million, down 13% compared to the same period in 2014.

Inbound tonnage totaled 3.835 million for the first 10 months, down 3%. Outbound traffic was hit hardest with the 2.578 million tons shipped from the Arkansas River to ports on other rivers between January and October declining 27%.

Internal traffic totaled 2.026 million tons, down 9% for the first 10 months of the year.

OTHER ECONOMIC IMPACTS
In addition to the heavy rains, Shell said tonnage has also been hit with a reduction in scrap metal demand resulting from a slowing Chinese economy. Coal/coke shipments also are down because of new and looming federal regulations that make the energy cost-prohibitive to use for energy generation. The Spring river conditions also “closed the normal window” on fertilizer shipments for the year. Shipments in that category, which is second behind sand-gravel-rock tonnage, is down 11% year-to-date.

However, Shell said he is pleased with business levels considering the challenges.

“Our warehouses are full. We’re not as busy as I’d like to be … but we’re going to be alright, although we were down for 68 days when we did not move a ton of freight. So for us to break even or just be a hair below where we were in 2014, I’ll take that,” Shell said.

He also said other operators on the river system were able to survive what he says was the toughest year in several decades.

“Some operators had to delay their expansion plans until 2016, but nobody went out of business, nobody had to shut their doors,” Shell said.

Without gains in the remainder of the year, the river system could see two consecutive years of shipping declines. Tonnage totaled 11.719 million tons in 2014, down from the 12.139 million in 2013 but better than the 11.687 million in 2012 and the 10.6 million in 2011.

The Arkansas River system is 445 miles long and stretches from the confluence of the Mississippi River to the Port of Catoosa near Tulsa, Okla. The controlled waterway has 18 locks and dams, with 13 in Arkansas and five in Oklahoma. The river also has five ports: Pine Bluff, Little Rock, Fort Smith, Muskogee, Okla., and the Tulsa Port of Catoosa in Oklahoma.