We ended our October 5th, 2004 commentary, “On Track”, with this observation:

“Bear in mind that a seagoing vessel can steer any course desired and even be redirected to an alternate destination because there are no barriers at sea. A trucker can likewise elect to take a detour because of the millions of miles of roads and highways that crisscross the nation. Trains, however, don’t have the luxury of being able to alter course. Trains are restricted to travel along existing railroad tracks, but communities will eventually put limitations on new track construction, and no amount of capital, even if it could be made available, will remove that natural barrier.”

Then on December 1st, 2006, in Vol. IX, Art. 27, “A Fitting Solution”, we noted that “Mr. Chuck Raymond, CEO of Horizon Lines, 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 coastal region to another. He has in the past directed attention to the unacceptable levels of pollution generated by truck traffic as well as to the cost of building new highways. As opposed to pre-existing, and therefore cost-free, coastal waterways, Mr. Raymond reminded us about four years ago that new highway construction costs $ 32 million per mile. Increasing the number of container-handling ports will not only reduce unacceptable levels of pollution but will also provide more efficient service and lower costs to a greater number of end users. Until we embrace Mr. Raymond’s reasoning, and until more ports are set up to receive containers, problems with air pollution and the cost of goods will continue to increase.

“A few weeks later, in our Vol. X, Art. 35, just after authorities at the Port of Long Beach asserted that ‘Trains are two to four times more fuel-efficient for transporting cargo than trucks, and tend to move loads for fewer dollars than either big-rigs or airplanes,’ Alameda Corridor Chief Executive John Doherty corrected that erroneous thinking by confirming 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.’

“As a comparative cost, water transport is one-tenth the cost of truck transport.” –

So instead of looking at a “fitting” solution, maybe we should be looking at an “only” solution. The math is simple. If it costs $ 450 to transport a container 20 miles by train, and only $ 200 by truck, a merchant will opt for the highway mode every time. But if that merchant knew of a way to ship his container for only $ 20 … obviously that merchant would jump at the chance.

The Short Sea Shipping concept has been on front burners for many years, but there is still just one small problem – even though water passage is dirt cheap, at the end of the day the numbers on the bottom line are all too often in red. At the beginning and at the end of the operation, hefty costs are incurred because of the time and effort required to sort and retrieve containers from conventional container ships. Time is money, and such delays adversely affect the profit margin in U.S. Short Sea Shipping operations, thereby discouraging investments in vessels customarily in use.

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 in Europe, end users want goods delivered on time, at an affordable price, and with careful handling while en route. But on-time deliveries and careful handling are services promised and provided by all carriers – truck, train and ship – so, what’s the hangup? Why aren’t the U.S. Marine Highway Corridors a beehive of activity?

A Journal of Commerce writer hit the nail right on the head in a column he wrote back in April of 2004. Short Sea Shipping would succeed, he pointed out, if smaller vessels could be accommodated and cargo handling could be expedited. Former DOT Secretary Norman Mineta had earlier endorsed the use of smaller ports closer to end users, adding substance to what a truck fleet operator had said when he warned that, “If your product is not on the shelf, you’ve lost that customer forever.”

Time and profit are the fundamental issues that will determine whether or not U.S. Short Sea Shipping will be successful, but time and profit have been adversely affected by conventional means of container storage and retrieval in the smaller and unsuitable vessels typically in use on U.S. Marine Highway Corridors. One carrier, for example, has just been forced to terminate its operations between Elizabeth, NJ and Boston because of low capacity, a very Short Sea route, and red ink.
As we’ve mentioned in past commentaries we own the U.S. and international patents on a new and revolutionary container ship. Theoretically, there would be two practical sizes that would be built in U.S. shipyards, and we’ve completed the initial designs of these ships. The larger of the two would serve the international market and the smaller of the two would be suitable for operations in U.S. Marine Highway Corridors. When we say suitable, we really mean profitable. Our newly-designed Short Sea container ship provides the following advantages:

– At 695 TEUs, its draft will permit “accommodation” at even the nation’s smallest ports.
– Our patented push-button method of instant storage and retrieval is a radical departure from primitive and time-consuming container handling methods. This “expedited” delivery system lowers the line’s operating costs, thereby increasing the line’s profits and lowering the cost of goods to the end user.
– The reduced amount of container handling time allows for a greater number of deliveries per trip and a greater number of annual trips as well.
– Guaranteed profits will attract more investors and more shipping lines.
– The demand for more of our patented vessels will revitalize U.S. shipbuilding and create millions of new jobs.
– More jobs mean more paychecks. More paychecks restore lost buying power. Restored buying power equates to more demand, and more demand, of course, evokes responses from manufacturers both here and abroad.

This desirable progression of events might even come to the attention of our leaders in Washington who might then recognize that, “Whoever builds ships, builds worlds.”