Sunday, 27 September 2020 | 08:08
View by:

US Falls Back On Barging Basics

Thursday, 27 December 2018 | 16:00

New York’s plan for boxes on barges shines a light on a neglected form of transport, finds Martin Rushmere

The US is casting around for a transport solution for its growing heavy vehicle and population density, particularly on the East Coast, with federal and local authorities turning to revitalising short sea routes.

The desultory and scattered efforts so far, mostly on the US Gulf coast and in the southern Atlantic seaboard states, have not had a wide-ranging impact. But the whole movement could be transformed by the biggest market in the country, New York, and its Economic Development Corporation (EDC), which has come up with the most far-reaching venture yet.

Entitled the North Atlantic Marine Highway Alliance, the idea is no more than a general wish-list to get more cargo moving on water around New York/New Jersey and the regions to the north and south.

The plan is an offshoot of the EDC’s $100m Freight NYC initiative to get heavy vehicles off the city and region’s bridges and tunnels as well as pacify the severely vexed 13 million residents of the area.

Authorities, including the EDC, are non-committal about the operational mechanics of the plan, saying that negotiations are still ongoing. The only money forthcoming so far is $300,000 from the Maritime Administration to help with planning.

The blessing of the federal agency is crucial, to clear unexpected regulatory hurdles and ensure advance warning of likely changes to laws.

The federal government’s main incentive is to reduce pollution and make the roads easier to travel on. The Department of Transportation says that in terms of tonne-kilometres per litre of fuel used, a tug and barge operation is 3.7 times more efficient than road transport.

Juggling demands

One difficulty in making the alliance a reality is that the development council is having to juggle the different demands of a local, intra-city barge network and the regional network. The overall view of the council is that “New York City can benefit from a hub-and-spoke marine highway barging operation. Using this approach, shipping containers or palletised cargo would move from large regional container terminals to various points in the city on barges via our waterways—thereby taking trucks off the roads and reducing roadway congestion and pollution.

“Such a system can also serve regional markets, moving freight by water to New England and Mid-Atlantic states, bypassing the city’s congested highways. The City will assist in developing the facilities needed to support increased barging in our harbour,” the council says.

This will involve developing terminals for a local food distribution centre and for South Brooklyn’s Sunset Park – a notoriously awkward logistical puzzle. Both are being discussed along with a regional barge council and a “regional service between New Jersey container terminals, New York City, and New England ports.”

The alliance initiative has drawn strong interest from both businesses and ports. Blue Line Logistics of Belgium has advocated taking the concept a step further in the form of palletised cargo instead of containers, although this is more suited for local use around the city.

The Maritime Administration’s current preference for the regional services is to use an articulated tug and barge system, with the tug pushing the barge.

Long term commitment

One of the most important strategic elements of success for any service is genuine commitment by all parties involved, says Dennis Lombardi, director of strategic development at Romark Logistics. In a presentation to a conference on the marine highway he said cargo owners “don’t want to commit to rerouting cargo without a long-term commitment that the service will be there. They won’t commit long term because they want to make sure it works for them.”

Lack of commitment was a prime reason for the failure of the US West Coast barge service between the ports of Stockton and Oakland, says Stas Margaronis, a short sea analyst and consultant in California.

“Stockton lacked the support of the Port of Oakland, while the ILWU dockworkers’ union was also not totally sold on the idea, so there were problems at both ends. Loading and unloading was slow at a time when viability was in trouble.” One of the ILWU’s complaints was that workers were not given the proper training.

As the service became costlier, loading/unloading took up more of the costs to the point that they accounted for at least 85% of the total transport cost per container.

Mr Margaronis says another weakness was that Stockton took charge of operational management, lacking the expertise and experience, instead of hiring a professional operator.

Listening to experience

This lesson has possibly been learnt by the port of Davisville in Rhode Island, which is setting up a barge service with Red Hook container terminal in New York – separate from the maritime alliance plan – and Seacor, a barge and general marine transport company. The port has added $213,000 to a Maritime Administration grant of $855,000 for equipment, which will include a reachstacker. A twice weekly service of up to 800 teu is envisaged.

“We expect marketing and planning to take another six to nine months,” says port director Bob Blackburn. “We are aiming for a minimum of 250 containers (which will include the US 16.1 metres size) per trip. This service has to be self-sustaining – Marad is not in the business of subsidising commercial operations.”

Loading and discharging will be done by the ILA dockworkers’ union. “We have and have always had an excellent relationship with them,” says Mr Blackburn – a distinct advantage over the US West Coast.

Barge trips will take 14 hours compared with three hours by road, but the congested highways will benefit from a reduction in the number of vehicles.

A financial comparison between vehicle and barge services has been worked out by tug and towing company McAllister. A discounted rate for an oceangoing tug is $750 per hour, plus $5,000 per day for a container barge. For an eight-hour trip, five round trips a week between New York/New Jersey and Bridgeport, Connecticut would be feasible and adding in four to six hours for cargo operations, the round-trip cost would be $25,000.

On a barge with 36 boxes (75% utilisation) the rate would work out at $353 per box, compared with $1,150 for road transport.

McAllister notes that there are hidden costs – stevedoring, chassis costs, port taxes, and terminal fees. These can be significant, with some assessments saying that each container lift could cost between $180 and $220.

Mr Margaronis pulls no punches when he criticises US cargo handling and terminal fees: “The US is not efficient – terminals make money from handling, ocean carriers own the terminals and the terminals charge for double handling – unloading and loading.

“The ocean carrier does not have a service that integrates door-to-door delivery like Europe – Rotterdam is a very good example where there is a single charge,” says Mr Margaronis. “Until now in the US, the industry has wanted to keep trucks on the road. But with the pressure on reducing emissions, change will happen here to provide a more efficient service.”


Ports applying for Maritime Administration (Marad) grants for short sea services such as those under the North Atlantic Marine Highway Alliance must involve both the public and private sectors, says the agency, and must spell out details of the service, market and value proposition, costs and public benefits.

But while Marad appears to be intent on promoting short-sea routes, its own estimates should make ports think hard about getting involved. A route analysis conducted by independent consultants for the agency three years ago said “the weekly revenue was projected to be 48% of the service costs for the relatively short-haul New England-Mid Atlantic service and 49% for the extended East Coast pendulum service. The longer-haul services between New York/New Jersey or Delaware River to Florida had projected revenues that represented between 75% to 88% of costs.

“The potential M-95 services (parallel to the road corridor to New England) face challenges to implementation at present,” continued the study. “Service operating costs exceeded expected revenues by a minimum of $150-$200 per load on average along the highest performing routes.”

National politics in the form of the Jones Act also play a part in the success or otherwise of a short-sea service. Because the routes on all existing and proposed services are in domestic waters, vessels have to be US-built and owned, with crews consisting solely of Americans. Belgium’s Blue Line can only comply by licensing construction and operation to its local partners, Reinauer Group and Hughes Marine.
Source: Port Strategy

    There are no comments available.
    In order to send the form you have to type the displayed code.