Taking It To The Banks

In an April 7, 2010 Maritime Administration News Release, U.S. Transportation Secretary Ray LaHood unveiled a new initiative to move more cargo on the water rather than on crowded U.S. highways. Under the new “America’s Marine Highway” program, the Department’s Maritime Administration (MARAD) would help identify rivers and coastal routes that could carry cargo efficiently, bypassing congested roads around busy ports and reducing greenhouse gases.

“For too long, we’ve overlooked the economic and environmental benefits that our waterways and domestic seaports offer as a means of moving freight in this country. Moving goods on the water has many advantages: It reduces air pollution and it can help reduce gridlock by getting trucks off our busy surface corridors,” said Secretary LaHood.

Under the new regulation, regional transportation officials would be able to apply to have specific transportation corridors – and even individual projects – designated by the Department as marine highways if they met certain criteria. Once designated and approved, these projects would receive preferential treatment for future federal assistance from the Department or MARAD.

“There are many places in our country where expanded use of marine transportation makes sense,” said David Matsuda, the Acting MARAD Administrator. “It has so much potential to help our nation in many ways: reduced gridlock and greenhouse gases, and more jobs for skilled mariners and shipbuilders.”

According to the News Release, the Marine Highway initiative stems from a 2007 law requiring the Secretary of Transportation to “establish a short sea shipping program and designate short sea transportation projects to mitigate surface congestion.”

“It’s about time,” was the response from those close by “congested roads around busy ports”.

In our Vol. IX, Art. 27 commentary (December 1st, 2006), we noted that Mr. Chuck Raymond, CEO of Horizon Lines at the time, had 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. In the past he had directed our attention to the unacceptable levels of pollution generated by truck traffic as well as to the heavy cost of building new highways.

As opposed to pre-existing, and therefore cost-free coastal waterways, Mr. Raymond reminded us a few years earlier that new highway construction costs $ 32 million per mile. Increasing the number of container-handling ports on the other hand, would not only reduce unacceptable levels of pollution but would also provide more efficient and lower costs to a greater number of end users, as well as reduced costs to taxpayers.

Until we embrace Mr. Raymond’s reasoning, and until more ports are set up to handle containers, problems with air pollution and the cost of goods will continue to increase.

A few weeks later, in our Vol. X, Art. 35 commentary, and 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 – the man who oversees the passage of dozens of daily trainloads of containers along the Corridor – corrected that erroneous thinking by confirming that “trains can’t compete with trucks under 800 miles. It takes $ 200 to truck a container 20 miles,” he stated, “but it’s $ 450 on a train.”

That’s right from the horse’s mouth! … and it should be noted here that as a comparative cost, water transport is one-tenth the cost of truck transport.

We’ve designed and patented a Short Sea Shipping vessel that will do the work of 424 trucks or rail cars, and dozens of these Jones Act vessels could be built every year in U.S. shipyards. Their use would greatly reduce the cost of goods, the level of air pollution, and the wear and tear on our stressed-out highway system. Currently, however, vessels engaged in Short Sea shipping in the U.S. move just 6% of the nation’s freight tonnage. In Europe, Short Sea vessels move more than 40% of freight tonnage. So why can’t we?

In both the U.S. and Europe, end users want their goods delivered on time, at an affordable price, and with careful handling en route. In most cases, on time deliveries and careful handling are services provided by truck, train and ship – but Short Sea vessels just cannot cut the mustard, because the development and advancement of Short Sea Shipping on U.S. waterways has been curtailed by the extra time it takes to load and retrieve containers from small conventionally-structured container carrying vessels. Time is money, and such delays adversely affect the profit margin in U.S. Short Sea Shipping operations, thereby discouraging investment in vessels of this size.

Our patented storage and retrieval vessel, on the other hand, will provide instantaneous storage and retrieval of any and all containers – regardless of positioning on the vessel – and this rapid method of operation will at long last guarantee generous profits for the vessel’s owner and operator, as well as for investors.

In a Texas Transportation Institute study sponsored by the National Waterways Foundation, it was established that water transportation remains the most fuel-efficient way to transport goods. Even inland barges, which are the least profitable vessels for moving containers, have a decided edge over trains and trucks. The study showed that barges move 616-ton-miles of freight, compared to 478 ton-miles by rail and 150 ton-miles by truck.

But barges are restricted, and time is money. Columbia Coastal, for example, can only afford to service Philadelphia, Baltimore and Norfolk – because barges are conventionally-structured.

As a noted U.S. maritime consultant might put it, our patented vessels would be “like grasshoppers, hopping with ease from port to port: from Portland to Boston to New York to Charleston to Miami to Mobile to New Orleans to Galveston/Houston to Corpus Christi – and then back-hauling product all the way back.” – With a final stop at the bank.