In it for the short haul!
A former executive at Matson Navigation Co. once stated that the logistics of getting merchandise from one point to another boils down to a simple tradeoff: money versus time. “Generally speaking,” he said, “the faster the service, the higher the cost.” For established modes of transportation, he went on to explain, the tradeoffs are well understood. Air freight is fast but expensive. Truck shipments rank high in convenience and reliability – e.g., direct door-to-door deliveries, flexible scheduling – but such custom deliveries entail a dedicated driver and vehicle and relatively high fuel costs. Operating on a form of hub-and-spoke model, the U.S. railway system specializes in low-cost bulk shipments but demands sacrifices on the time side. Typically, freight cars travel through lengthy chains of “hub” railyards before reaching their final destination. Ocean transport, he said – Short Sea Shipping, which is about one-tenth the cost of truck transport – remains the cheapest transport option for intercontinental shipments.
And Alameda Corridor CEO John Doherty had previously confirmed that trains can’t compete with trucks on trips under 800 miles. “It takes $ 200 to truck a container 20 miles,” he stated, “but it’s $ 450 on a train.”
A current executive of Horizon Lines – CEO Chuck Raymond – has endorsed Short Sea Shipping as an efficient and cost-effective way of transporting containers from one U.S. port to another, and from one U.S. coastal region to another. As opposed to pre-existing, and therefore cost-free, coastal waterways, Mr. Raymond reminded us that new highway construction costs about $ 32 million per mile – and that was about a half-dozen years ago. He also reminded us – as did Norman Mineta, the former Secretary at the U.S. Department of Transportation – that increasing the number of container-handling ports will not only reduce the unacceptable levels of pollution but will also provide more efficient service and lower costs to a greater number of end users.
So what about that money versus time consideration? Could Short Sea Shipping ever be the answer to the problems we’re having with air pollution and highway congestion? A look at what they’re doing in Europe will erase any doubts. Short Sea Shipping profitably moves some 41% of all freight tonnage on that continent. Our continent moves a paltry 6%. What’s holding us back?
In both the U.S. and Europe, the end user wants his goods delivered on time, at an affordable price, and with careful handling while en route. On time deliveries and careful handling are services promised by all carriers – truck, train and ship – but the development and advancement of Short Sea Shipping on U.S. waterways has been curtailed by the extra time it takes to sort and retrieve containers from conventionally-structured container-carrying vessels. Time is money, and because such delays adversely affect the profit margin in U.S. Short Sea Shipping operations, investment in small conventionally-structured vessels is discouraged.
Our patented vessels, on the other hand, provide instantaneous storage and retrieval of any container, regardless of its location on the vessel, and this rapid method of operation (time) will at long last guarantee generous profits (money) for the owner and operator, as well as for investors.