DC Velocity - September 2009

newsworthy

is short-sea shipping
the wave of the future?

LISTEN TO SUPPORTERS OF PLANS TO MOVE long-haul freight off the highways and onto coastal, inland, and intracoastal waterways, and you come away thinking that the nation’s marine network is a severely underutilized asset.

According to proponents, the 25,000 miles of navi-

gable U.S. waterways handle just 1. 4 billion tons of freight each year, equal to 2 percent of the nation’s domestic shipments. Because one barge tow can accommodate 456 containers that might otherwise move by truck, shifting even a modest amount of cargo to water would be both cost effective and environmentally friendly, backers say.

But listen to skeptics and they’ll tell you that for all their environmental and infrastructure-related benefits, “marine highways” will always be a slower and less-efficient means of freight transportation than over-the-road trucks or intermodal services, especially on short to intermediate hauls. They maintain that coastal transport’s snail’s-pace transit times are a poor fit for many industries, that the additional cargo handling needed will actually drive up costs, and that the Jones Act, an 89-year-old law requiring that vessels used in domestic trades be U.S.-built, -registered, and -crewed, will make marine highway services uncompetitive.

The debate over the merits of marine highways—commonly known as “short-sea shipping”—may intensify as the clock ticks closer to a Sept. 30 deadline for reauthorizing funding for the nation’s highway system. Rep. James L. Oberstar (D-Minn.), chairman of the House Transportation and Infrastructure Committee, has called for an integrated and holistic national transportation policy to accompany the funding. However, the reauthorization bill sponsored by Oberstar contains no language addressing the nation’s coastal shipping network.

That doesn’t mean the situation is, or has been, static. A December 2007 law directed the secretary of transportation to establish a program aimed at expanding the use of coastal highways to mitigate road congestion. The law also requires the creation of a “Marine Highway Advisory Board,” which is just now taking shape.

The $787 billion economic stimulus plan signed into law in February gives the DOT secretary $1.5 billion in discretionary funding to make capital investments in the nation’s road infrastructure. Marine highways would be eligible for funding; at this writing, the funds had not been disbursed.

The Senate Commerce Committee in early July reported out a $397 million reauthorization of maritime programs that includes language mandating new grants to promote a marine highway system. The bill, sponsored by Sen. Frank R. Lautenberg (D-N.J.), only requires a mechanism for funding. It does not allocate money to the effort.

Meanwhile, Transportation Secretary Ray LaHood has been talking up the concept. Speaking in late July before the Marine p. 14

Intermodal service has always scored points for cost savings and environmental sustainability. But many shippers have shied away from it out of legitimate concerns over the mode’s speed and reliability.

That may be changing. John Lanigan, executive vice president and chief marketing officer for the Burlington Northern Santa Fe Railway, told attendees at the Council of Supply Chain Management Professionals’ annual “State of Logistics” conference in Washington earlier this year that BNSF’s intermodal service is achieving 95 percent on-time performance, a far cry from years ago when a 70-percent on-time record was considered the upper end of the performance scale.

Nashville, Ind.-based consultancy FTR Associates agrees that on-time performance has improved. Through the end of July, intermodal train speeds were averaging 34 miles per hour, significantly higher than the 29- to 30-mile-per-hour average speeds recorded during the corresponding period in 2008, according to FTR’s data.

“We can say that intermodal trains are ‘flying’ across the system in comparison to past years,” says Larry Gross, an FTR consultant. Though the firm doesn’t have similar data on intermodal’s reliability, Gross says, he believes that intermodal service has become more consistent as well.

Railroads are not required to file intermodal performance data with the Surface Transportation Board, and the companies generally keep such internally generated data confidential. Neither the Association of American Railroads nor the Intermodal Association of North America has intermodal reliability data.

While Gross is bullish on intermodal performance, he does issue one caveat: The higher intermodal speeds may also reflect the economic downturn and weaker demand for intermodal service, which would have the effect of reducing congestion across the networks. ;