Shipping, Inland Waterways, North America

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Shipping, Inland Waterways, North America

Much, though certainly not all, of North America has been well served by natural and artificial waterways. Canada is deeply penetrated by the St. Lawrence, and theUnited States has a lengthy eastern seaboard much indented by bays and tidal rivers. Another major asset is the massive dendritic drainage of the Mississippi–Missouri–Ohio Rivers and the Great Lakes. This system, including extensions as far as the southern borders of Texas, today reaches seventeen of the fifty U.S. states and at least 60 percent of U.S. consumers. The basic characteristics of inland waterway transport today—cheapness and slow-ness—can be found in competitive situations from the mid-nineteenth century onwards. Between the 1820s and mid-century, canals were responsible for a greater reduction in freight costs than was subsequently achieved by the railways. They could not, however, compete with railways on speed, or indeed at all in the arid regions west of the Mississippi. By 2004, when transport congestion had reminded many shippers of the value of inland waterway transport (IWT), the cost of freight between Memphis and New Orleans was around $6 a metric ton by barge, compared to $40 by truck. But the journey by road took eight hours, and by river seventy-two.


One distinctive feature of U.S. IWT practice was the early and large-scale use of steamboats on rivers and lakes. After the introduction of the first steam-powered boat in 1807, and the first successful ascent of the Mississippi in 1816, commercial expansion was rapid. It was based on the ability of steam power to develop trade routes by overcoming chronic problems with prevailing winds and currents. The main limiting factor was the relatively high cost, which necessitated a focus on passenger traffic and high-value freight. Nevertheless, on the Ohio–Mississippi system primary produce was carried downstream, and passengers in both directions. Eastern operations centered on New York, and also covered the Delaware River and Chesapeake Bay. Eventually it was the major western rivers that made the greatest use of this technology. By 1860 steamboats carried over $300 million in cargo on the Mississippi alone, contributing heavily to the elevation of New Orleans to the fourth-largest port in the world, behind only London, Liverpool, and New York.

New York, like New Orleans, also benefited greatly from the effects of IWT in strengthening communications between seaports and their hinterlands. The natural advantage of the Hudson River was powerfully supplemented by the decision of the state government to construct the Erie Canal (1817–1825) to link the Hudson with the Great Lakes. This was both an immediate and a long-term success, for it virtually recouped its construction costs by the time of completion, and within ten years it was attracting over 3,000 boats and handling 1.3 million tons of cargo annually. The Erie met the classic conditions for the commercial viability of a canal: it was able to carry large volumes of bulky, low-value commodities over substantial distances. Cordwood, flour, and wheat moved to the tidewater. Manufactured goods such as textiles and imported foods such as sugar were conveyed inland. The Erie often has been viewed as a developmental canal, as it radically reduced transport costs and opened up a wide area for early economic development. It not only had an important impact on New York State, but also was for many years either the only or the main outlet for the produce of much of the Old Northwest.

No other U.S. canal enjoyed the spectacular success of the Erie in promoting interregional trade. Even the Erie was used primarily for intraregional purposes until 1850, and reached its peak volumes by the early 1870s. Most attempts to establish links between eastern cities and agricultural areas west of the Appalachians were much less fruitful, despite strong support from "growth coalitions" of eastern business communities and western interests. The obvious contrast to New York is Pennsylvania, which constructed greater mileage of waterway than New York but achieved far less in developmental terms, even though expenditure was so great as to threaten the solvency of the state. The most effective eastern canals outside New York were a group including the Lehigh, Schuylkill, Delaware, and Hudson, which transported anthracite coal to Philadelphia and New York City, from which ports it was passed on by coastal shipping to other East Coast markets. Improved and economical supply of coal contributed to the growing output and the location of several major industries in the 1830s and 1840s, a period associated with the onset of rapid industrialization.

About 4,000 miles of canals were built between 1815 and 1890, mainly in the first half of the period. An estimated $188 million had been invested by 1861; government at various levels provided $115 million of this and $62 million came from bonds bought by overseas bankers. Public expenditure was sometimes contested, but attracted widespread support for projects with long-term promise but heavy initial capital costs. Overbuilding occurred, and with costs averaging almost $30,000 per mile, a number of canals had little chance of providing an adequate return to the investors. The arrival of railroad competition put a premature end to the financial viability of some canals. It has been argued that canal building should have been suspended in 1834, the year of completion of all the eastern canals that were later heavily used. Undoubtedly many investors, both public and private, were disappointed. The social rate of return, however, was greater than the private rate, and railroad-canal competition helped to ensure a continuing and substantial fall in average transport costs through the 1840s and 1850s. However, the development of the United States between the Civil War and the automobile age, especially the integration of the West into the national economy, obviously owed far more to the railroad and little to IWT.


Twentieth-century trends in IWT in North America, as in Europe, showed increasing concentration on the broadest high-capacity waterways and restriction of traffic to large-scale bulk commodities. By the end of the century there were about 12,000 miles of commercially significant waterways, of which canals formed only a small part. The essential value of IWT to the economy was its moderate capital cost and low operating cost, along with the increasingly important factor of good environmental hospitality. A 15 percent share of freight ton-mileage and only a 5 percent share of the annual freight bill was evidence of its price effectiveness. Important new cargoes included petroleum and liquid chemicals. Distinctive new methods have been adopted on the biggest waterways, such as line-haul river tows with powerful towboats and up to twenty-five barges. Computers were used to assist navigation and to coordinate movement of large fleets.

IWT flourished on the Great Lakes at the end of the century, involving both agricultural produce and industrial raw materials. Some of this traffic moved between the lakes and the St. Lawrence Seaway, which had been completed between 1954 and 1959 after a belated agreement between the U.S. and Canadian governments. This provided a 3,700-kilometer route from the head of Lake Superior to Montreal on the St. Lawrence estuary. At the height of its success in the 1960s and 1970s the seaway was used to move more than half of Canada's grain exports, as well as much iron and coal. Decline set in the 1980s because of factors such as tolls, loss of grain trade to West Coast ports, the inability to handle the larger container ships used in the transatlantic trade, lower demand for grain in Europe, and competition from ice- and toll-free Atlantic and Gulf ports.

SEE ALSO Agriculture; Canada; Canals; Cargoes, Freight; Cargoes, Passenger; Containerization;Shipbuilding;Shipping, Aids to;Shipping, Coastal;Shipping, Inland Waterways, Europe;Shipping Lanes;Shipping, Merchant;Shipping, Technological Change;Ships and Shipping;Ship Types;United States.


Crompton, Gerald W. "'The Tortoise and the Economy': Inland Waterway Navigation in International Economic History." Journal of Transport History 25, no 2 (September 2004): 1–22.

Goodrich, C., et al. Canals and American Economic Development. New York: Columbia University Press, 1961. Meinig, Donald W. The Shaping of America, Vol. 2: Continental America, 1800–67. New Haven, CT: Yale University Press, 1993.

Gerald Crompton

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Shipping, Inland Waterways, North America

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