This Stone Won’t Float

Well, which is it? Last week it was announced that the AFL New England has a 400-TEU capacity. That translates into 400 20-foot containers, or 200 40-foot containers.

Today’s announcement states that the vessel has 700 20-foot-equivalent units, and that would be the equivalent of 350 40-foot containers.

Today’s announcement also stated that the first sailing was scheduled for mid-June but was pushed back until this week. That isn’t exactly true, either. Canadian newspapers reported that the first sailing was scheduled for May 20th, but there wasn’t enough cargo available for transport so the ship remained anchored.

It will be interesting to see if this operation ever gets off the ground.

Officials of the company say that the ship’s cargo will consist primarily of feeder cargo from international ships but will also carry some cargo between Canadian and U.S. ports. But isn’t the concept of U.S. short sea shipping supposed to be based upon hauling materials and manufactured goods between U.S. ports on U.S. inland waterways?

And doesn’t the Jones Act state that vessels must be built in U.S. yards, must be owned by U.S. interests and must be crewed by U.S. personnel? Isn’t that what U.S. short sea shipping is all about?

And this business of feeder cargo from international ships, what does that have to do with short sea shipping? In one of our earliest commentaries – “A Fitting Solution” (in Volume 1, dated November 2nd, 2004) – Paragraph 7 quoted Neil Davidson of Drewry Shipping Consultants when he reminded his audience at Navis World 2004 in San Francisco, that, “The bigger the ship, the more transshipment and feedering (sic) you need, and that costs money.”

So if American Feeder Lines intends to handle “primarily” feeder cargo from international ships, “and that costs money”, how will that beat the low cost of over-the-road trucking?

It won’t, of course, so why the duplicity? It isn’t short sea shipping; it isn’t Jones Act; and it certainly isn’t cheaper – so why the heck would someone want $ 700 million from investors to …

Oh, now it’s becoming clearer. It’s the $ 700 million that’s the key. These guys already know that Massport has seen every effort fail in attempts to move small numbers of containers in small conventionally-structured container ships between U.S. ports. Primitive storage and retrieval methods of loading and offloading are too costly when dealing with small numbers of containers.
Kevin Mack, Columbia Coastal’s VP, made it clear after terminating operations last year that any venture should be built around a business model that does not depend on government support. In other words, using conventional vessels, this stone won’t float without an influx of OPM.