Articles

The Marine Highway

As head of the Maritime Administration, Sean Connaughton proposes fighting traffic congestion by moving cargo from Interstates to waterways. The James River could become a pilot project.

by Peter Galuszka

For centuries the James River has served as a vital commercial thoroughfare shaping Virginia’s history. With the rise of railroads and Interstate highways, the brackish, winding waterway lost its status as a primary transportation artery. But now there's a chance that the river, and other Virginia waterways, could see a resurgence: helping relieve traffic congestion by taking container-bearing trucks off the highways.

That idea is part of a countrywide initiative spearheaded by the U.S. Maritime Administration, a federal agency now headed by Sean Connaughton, a Northern Virginia lawyer who chaired the Prince William County Board of Supervisors and ran unsuccessfully for Lieutenant Governor before taking a job with the Bush administration. The goal of the "Marine Highway” program is to make greater use of inland waterways, such as the Mississippi River system and Chesapeake Bay, to haul materials and goods.

The U.S. faces a flood of imports as global economies become more inter-connected and rising economies in China and other countries gear up to export consumer goods from televisions to refrigerators to clothing. Most imports enter the U.S. atop mammoth ships carrying thousands of containers. Yet very few containers actually are transshipped along America’s extensive inland waterways from big ocean ports to their final destinations. Instead, most finish their journeys via trucks or railroad trains.

That’s something Connaughton wants to change. Taking trucks off roads would provide congestion relief for clogged urban transportation systems like that of Hampton Roads. Shippers already suffer from traffic delays at bridge-tunnel bottlenecks caused by increasing container shipments and heavier commuter traffic. Meanwhile, port volume is projected to grow thanks to the new A.P. Moller-Maersk facility in Portsmouth and plans by the Virginia Port Authority to build an even bigger one at Craney Island.

“There will be a great deal of growth international trade and most is in shipping containers loaded on trucks and rail,” says Connaughton, who graduated from the U.S. Merchant Marine Academy and has served in the U.S. Coast Guard and Navy. “Marine Highways would relieve enormous congestion and have environmental benefits because trucks wouldn’t be used as much.”

One of the two pilot projects Connaughton has proposed would introduce regular barge-borne container shipments from Hampton Roads to Richmond. He would also expand use of the Chesapeake Bay as a regular container route. Shipping companies like the idea, but significant problems must be addressed to overcome the seemingly insurmountable advantages of the trucking industry.

If the shipments are time critical such as auto parts used in just-in-time manufacturing processes, truckers will always get the business. If the destination is close by, truckers win again, this time on cost, says Rick Knapp, assistant general manager of Virginia International Terminals, the non-profit port operator of the Virginia Port Authority.

Yet, if destinations are far enough away, the economics of barging begins to make sense. If enough containers from a single shipper going to the same destination can be loaded on the same barge, the shipper can enjoy cost savings and other efficiencies, such as having freight forwarders and customs agents process paperwork as the barges are towed or pushed along.

A big component of the “Marine Highways,” says Connaughton, is creating a tax and regulatory environment that encourages shippers to put containers on barges. Tugboats regularly tow barges on rivers and bays, but the cargoes tend to be low-end goods such as gravel or grain. And that, Connaughton says, points to an obstacle that public policy can overcome.

Federal law taxes shippers to maintain harbors through dredging and other work. But the federal tax is based on the value of the goods being shipped. Thus, a container of electronics will be taxed more than a container containing wooden logs. Another disincentive is that the tax kicks in each time the goods are transshipped. So, a shipper offloading a container in Norfolk and barging it to Baltimore pays the tax twice. Connaughton is lobbying Congress to rationalize the law, noting that the federal government has surplus of funds already to handle harbor upkeep

At least one shipping firm enjoys a good business taking containers up and down Chesapeake Bay. Columbia Coastal Transport, a firm based in Liberty Corner, N.J., has been moving container shipments by barge in most major ports along the U.S. East Coast and some on the Gulf of Mexico. “Our biggest run is twice a week between Norfolk and Baltimore,” says Max Kowalski, port manager for Columbia Coastal’s Norfolk office.

All in all, the firm has 16 barges specially configured to carry up to 950 containers in different sizes. It takes the barges 18 hours to make the twice-weekly trip. Trucks would take only about six hours, but each truck load can handle only one container. If the shipper needs many containers arriving at the same time, barges are the way to go. “We have an advantage when we can move the containers under the same bill of lading at one time,” says Kowalski, who supports the Marine Highway idea.

The Chesapeake Bay is a natural waterway because it is deep and protected, and it stretches for 200 miles. Coastal also runs barge loads to Philadelphia and the New York area and to southern ports as well. One problem with heading south, a factor that could limit the “Marine Highway” to some degree, is that the Intracoastal Waterway, a 12-foot-deep ditch running along the U.S. East and Gulf Coasts is not wide enough to handle the 250- to 350-foot-long barges that Columbia Coastal uses. So, for southbound shipments, tugboats must steer offshore around Cape Hatteras where the winter weather can be nasty. Columbia does make the runs, though, and can go to Latin America as well.

To boost the water highway idea, Connaughton is trying to arrange seed money for two pilot routes. One would go from the ports of New York and New Jersey up Long Island Sound to Bridgeport, Conn. The other is in Virginia, connecting Hampton Roads to Richmond’s small container port on the James River, beside Interstate 95.

Gravel and sand barges, among others, regularly make the James River run, along with small, seagoing container ships from Iceland and Belgium. But problems of geography and economics make shipping containers with high end products problematic. The 90-mile route is just short enough to be over or under the break-even point for shippers, cost-wise.

According to David Host, president of Norfolk shipping agent T. Parker Host, it typically costs about $400 per container for an overnight trip up the James. It costs the same for a four-hour truck trip. Host’s firm has studied the Richmond possibility for about eight years, but cheaper fuel costs made it uneconomical. When energy costs started to rise about two years ago, the idea gained momentum. If energy prices continue to rise, shippers should definitely show interest, says Host.

Richmond-based tobacco giant Philip Morris perked Host’s interest recently when it inquired about barging more containers from Hampton Roads, Host says. Honeywell, which operates large chemical and manufacturing plants in the Richmond, made queries as well.

But before anything happens, a pilot project must prove the idea's worth. “It would be nice to get some money from the Federal Highway Administration,” says Host. (That federal body and the Maritime Administration are both under the U.S. Department of Transportation). “They’ll need seed money to start anything that will have to prove itself. There are big benefits, such as fighting congestion and environmental pollution. I don’t mind waiting until 2008 or 2009. If truck rates continue to rise, then people will sign on without a doubt,” Host says.

The day could come, he adds, when a factory in Lynchburg finds it more convenient to send trucks to Richmond to pick up containers rather than fight road traffic in Hampton Roads, Host says. Another advantage is that containers sometimes can carry more goods on barge than on a truck. Currently, some containers ship timber logs from Richmond. Truck- borne containers can contain only so many logs because they must meet highway weight restrictions. That issue is moot on waterways.

Connaughton says that some obvious locations where the “Marine Highway” concept could prove feasible include the vast Mississippi River system, seaports along the U.S. Gulf, and inland rivers such as one that links the huge container port of Oakland to Sacramento, Calif. Connaughton says he doesn’t have figures yet on how many truck shipments could eventually be displaced and what that would mean for congestion, but that's not stopping him from promoting the idea. On Oct. 3, he was in Little Rock, Ark., evangelizing a national convention of urban planners.

A Republican appointee who became head of the Maritime Administration a year ago, Connaughton may have only one more year in office. He has made the “Marine Highway” concept part of his anticipated legacy. If Congress gets religion about easing the harbor maintenance tax and providing seed money for pilot projects, the water highway project could well start making waves. Should that happen, Virginia’s traffic congestion problems could get some relief from the earliest mode of transit known to mankind.

-- October 3, 2007