Cost Functions for Inland Waterways Transport in the United States

Rightly or wrongly government plays an important role in the investment and operating decisions of transport firms. The Interstate Commerce Commission oversees a complicated structure of rates and a point-to-point system of operating licenses. For inland waterway transport, additional complications stem from the fact that the construction and maintenance of navigable waterways are controlled by Congress through the Army Corps of Engineers. It is necessary for Congress, the ICC, and the Army Corps of Engineers to cooperate and to pursue the national interest rather than the interest of any particular industry or company. These agencies therefore require knowledge of the underlying cost and demand functions. This paper is designed to provide some information on waterway cost functions.