Grain transportation's green alternative

by World Grain Staff
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In the 2008-09 crop year, U.S. and Canadian farmers combined to export nearly 50 million tonnes of wheat. When you consider that the bulk of this grain had to be moved by truck from the field to a terminal and then by truck or rail to an export position, you begin to get some idea about the number of tonne-miles wheat growers add to already congested highways and rail lines on both sides of the border.

Add to this the number of trucks needed to move North America’s annual harvest of feed grains, oilseeds and specialty crops to export positions, and you get some appreciation about the number of trucks and intermodal containers grain farmers alone contribute to the continental road network.

While transporting grain and agricultural products to market is essential to the economies of all three North American Free Trade Agreement (NAFTA) partners, highway and rail congestion are becoming a serious problem in many areas of the continent where bumper-to-bumper traffic and overburdened rail yards are reaching near-gridlock conditions.

Some think the answer is to lay down more asphalt, steel and concrete. Some think not, and are convinced North America’s "marine highways" are one way of taking a significant number of trucks off the road and containers off trains in favor of its network of rivers, lakes and coastal shipping lanes.

While they recognize that North America’s waterways already play a major role serving transportation needs by providing a liquid highway for grain ships through the Great Lakes, barges down the Snake and Columbia Rivers, or down the Mississippi River and along the Gulf and Inter-coastal Waterway, they also offer compelling reasons for adding more water to the transportation mix.

Mark Yonge, spokesman for the Alexandria, Virginia, U.S.-based Short Sea Shipping Cooperative (SCOOP), told World Grain there is a growing interest on both sides of the border in short sea shipping. SCOOP is comprised of labor groups, ship operators, potential ship operating companies, ship classification societies and ports, and is sponsored by the U.S. Maritime Administration (MARAD).

"There’s a significant amount of activity that’s going on, not only from our cooperative but from the logistics providers and the shippers, recognizing that carbon footprints are going to be very important (in the future) and fuel costs are something that are terribly unpredictable."

Many factors are at play in the transportation industry, such as environmental legislation and a looming shortage of trucking companies and drivers, which could negatively affect a shipper’s ability to get goods delivered to its customers, Yonge said, noting that these factors are making the marine highway system "look like a great option."

Recently, Rep. James L. Oberstar, a Minnesota Democrat who is chairman of the House Transportation and Infrastructure Committee, gave support to groups such as SCOOP by proposing to restructure the Department of Transportation and develop a comprehensive national transportation policy.

In a speech to the Propeller Club in Washington, D.C., U.S., Oberstar said: "We are going to transform the future of transportation in America and put maritime in the front ranks. We also need to embrace short sea shipping. This is one that I think has great promise."

In his drive to give short sea shipping a larger profile, Oberstar recently introduced a bill in the House of Representatives that would exempt ship and barge companies carrying nonbulk cargo from the existing Harbor Maintenance Tax, which has long been a deterrent to short sea shipping in the U.S. Also, he is pushing hard to have a short sea shipping initiative included in any stimulus bill.

MARAD: ENCOURAGING ALTERNATIVES

Jim Pugh, director of MARAD, attributes the increased interest in short sea shipping to planners in the public sector coming to the conclusion that the U.S. cannot "build its way out of its capacity and congestion problems."

"We have to start looking at alternatives that not only relieve congestion, but improve air quality in the major urban corridors in particular," Pugh said.

While MARAD concentrates primarily on the U.S. Marine Highway, it also meets regularly with its NAFTA partners, Canada and Mexico.

"We have what is called the Short Sea Shipping Working Group," he said. "It includes Transport Canada and the Secretary of Transport and Communications in Mexico. We meet regularly and we outline things that we can work on jointly, whether they are procedural things, like customs, or identifying markets."

Pugh said there is growing interest in short sea shipping in the agricultural community. "Some of the major grain companies are environmentally sensitive, and they realize that the use of water transport is a greener alternative," he said.

While inland rivers and waterways offer potential for moving increased volumes of non-bulk freight such as truck trailers and containers, Pugh believes the coastal areas of North America hold the greatest promise.

"The coastal waters offer the greatest opportunity to divert both domestic and international freight going up and down those major corridors," he said.

Pugh said the opportunities for increased short sea shipping in coastal areas include both the Pacific and Atlantic coastlines, the Great Lakes and the Gulf of Mexico.

"But for it to really take hold and divert significant amounts of traffic, I think we’re going to have to have purpose-built vessels built specifically for that trade," Pugh said. "The biggest volume is 53-foot trailers. "And we don’t have a lot of vessels in the U.S. inventory that are set up to handle domestic trailers on a roll-on-roll-off (ro-ro) basis."

INFRASTRUCTURE HURDLES

However, while there is a shortage of vessels to handle truck trailers in the U.S., the largest operator of tugs and barges on the West Coast — Vancouver, British Columbia, Canada–based Seaspan International — does have the equipment together with a C$7 million ($6.3 million) contribution from the Canadian government to expand its short sea shipping facilities.

Having operated tugs and barges from Mexico to Tuktoyaktuk, Seaspan is familiar with the Pacific coastline and its potential for moving freight by water rather than the interstate highway that parallels it.

Steve Roth, vice-president of business development for Seaspan, said: "I think what’s focused attention on short sea shipping is the use of containers. When people now talk short sea shipping, they are really thinking of moving containers."

The major problem, he said, is the lack of infrastructure on North America’s West Coast to accommodate short sea shipping.

"First you need the real estate," he said. "Then you have to build an infrastructure, and that should have rail and truck access. So it’s not a small investment."

It’s also critical that the facility has a concentration of containers or trailers to handle.

As an example, Roth offered the following scenario: "Some exporter brings in some containers and, instead of trucking them locally to his distribution center, he decides to move them by barge.

"You can’t move five containers," he said. "That doesn’t make sense. Whatever the size of your barge is, you have to max it out. Now you have to take it some place that makes sense to him. So now you’re starting to look at maybe some type of intermodal facility that has truck, rail and marine access. It starts to get complicated.

"At Seaspan, we have built four barges specifically to handle the loading of containers (the barges are designed to hold 168 forty-foot containers)," Roth said. "These could go into service tomorrow if we had a customer, a place to load them and a place to discharge them.

"We all would like to see it happen faster. But it’s going to take government; it’s going to take the ports; it’s going to take shipping lines; it’s going to take the unions; it’s going to take everybody to get involved to make this happen quicker."

EUROPE LEADS THE WAY

With its dense population, a history of high petroleum prices and an excellent system of rivers and waterways, Europeans have promoted the advantages to short sea shipping for generations. And rather than taxing waterborne traffic, European governments have encouraged cargo to move off the highways and onto barges and boats.

Today, almost 90% of the E.U.’s external freight trade is moved by water, and short sea shipping represents 40% of trade within the E.U. in terms of tonne-kilometers.

In its "Strategic Goals and Recommendations for the E.U.’s Maritime Transport Policy Until 2018" issued in January, the Directorate–General for Energy and Transport predicted that maritime transport in the E.U.-27 will grow from the 3.8 billion tonnes in 2006 to roughly 5.3 billion tonnes by 2018. This will mean increasing the capacity of ports to handle short sea shipping cargo and boost productivity.

Initiatives in the recommendations that would lead to this increase in productivity include:

  • eliminating the red tape and crossborder barriers that exist between countries and establishing a true "European maritime transport space without barriers";
  • putting in place a European Ports Policy to encourage fair competition, financial transparency, non-discrimination and cost-efficiency;
  • ensuring that the right conditions exist to attract investment in the ports sector that can be used to modernize and expand the infrastructure;
  • issuing guidelines for community environmental legislation aimed at ports; and
  • reinforcing the E.U. strategy for ensuring the full deployment of "Motorways of the Sea" projects, facilitating the start-up of intermodal transport solutions, simplifying administrative requirements and supporting the European Commission’s initiatives for greening transport.

These initiatives are supported by E.U. funding programs such as the Trans-European Transport projects and Marco Polo, a program that funds projects designed to shift freight from road to water or rail, providing less congestion, less pollution and a more reliable delivery of goods. The current budget is €450 million ($640.53 million).

Based in Vancouver, British Columbia, Canada, Leo Quigley writes for a variety of national and international publications specializing in agriculture and transportation. He can be reached at Quigley@dccnet.com.

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