This article puts forward the concept of service level of inland waterway and indicators based on the traffic engineering theory and inland waterway characteristics. According to standard ship of inland water, it quantifies the service level, and confirms the standard of it. It establishes the calculation model of inland waterway capacity by the ship traffic flow and waterway service level, and calculates the inland waterway capacity by the historical data of Huaihe river, which is compared with the cargo density on the design year. The application results show that the method is suitable for the inland waterway planning and construction, and the assessment of applications as well. It can provide theoretical reference for the channel maintenance or upgrading.