In two years, the first of 10 small container ships are to begin shuttling international containers between major East Coast ports and smaller ports ranging from Maine to Texas.
American Feeder Lines, the company poised to begin operations, is one of eight ventures designated marine highways projects the Department of Transportation believes will establish short-sea shipping as a viable part of the nation’s freight distribution system.
The Aug. 11 announcement by Transportation Secretary Ray LaHood is energizing an industry that’s struggled most of the past decade to find a place in U.S. transportation.
“It’s a very strong indicator that the marine highways are really becoming a part of transportation policy. That’s monumental,” New Bedford, Mass., Port Director Kristin Decas said.
The projects will be eligible for grants from a $7 million pool Congress allotted the Maritime Administration for the marine highways program. Deputy Administrator Orlando Gotay said Marad selected candidates with the most complete business plans that showed a high probability for success. Marad also identified six marine highways “initiatives,” ventures that need fine-tuning.
Gotay said $7 million won’t go far to capitalize any program, but “this is money to refine ideas and look for ways that they can be viable and successful.”
“We are extremely enthusiastic about the enormous potential that America’s marine highways have,” he said. “We want to show people how we can make a shift in the way we transport cargo in this country.”
American Feeder Lines did its homework, according to Tobias Koenig, one of the company’s founding partners. When the partners first considered it, he didn’t think it could succeed because ships would be up against a well-built transportation infrastructure for trucking and railroads. Fuel was cheap, and congestion and air pollution weren’t factors.
“In the last 10 years many things have changed. The traffic got much worse, the volume increased dramatically, there are more people living in the United States. It’s growing by 500,000 a year,” Koenig said. “Things are getting more dense, the economy is growing. Consumption goes up. Trucks are causing gridlock. There’s no maintenance on the system because there is no way to pay for road repair.”
The population density along the coasts -- 90 percent live within 100 miles of coastal waters -- creates conditions for a waterborne feeder system for import cargo in a way Europe has been doing for years.
“There must be a way to move containers and cargo more efficiently than by truck or rail, because that’s how we do it in the rest of the world,” Koenig said.
The potential market is huge. Some 20 million international containers move on the East Coast each year, with another 2 million boxes of military inter-base cargo, mostly household goods, and 78 million domestic 53-foot containers. With 10 ships, AFL could transport 1.2 million containers, a small piece of a very big pie, he said.
AFL’s 1,300-TEU container ships are a German design to be built in the United States. Koenig said the company already has letters of intent with Aker Philadelphia Shipyard, and Bay Shipbuilding in Sturgeon Bay, Wis. Both yards are subsidiaries of European companies.
The cost: $70 million a ship, twice the price of the same vessel in Europe, and triple the cost in China. But Koenig said the cost is offset by infrastructure savings elsewhere.
He said the truck deck of the George Washington Bridge across the Hudson River costs $35 million a year to maintain. “Two years of maintenance of just one bridge in the U.S. pays for one ship,” Koenig said.
New Bedford formed a partnership with the ports of Baltimore and Port Canaveral, Fla., to attract regional freight that otherwise moves by highway. Decas said the key to success is careful marketing.
“It’s not studying short-sea shipping. It’s studying markets and understanding logistics,” Decas said. “We need to understand the origin and destination of all the types of freight that’s in your area, and how you can put together all these logistical pieces to ship them out by boat.
“That’s what’s valuable to me, before you put money into it,” Decas said. “You get all the logistics people together to establish routes. That makes a lot of sense.
Contact R.G. Edmonson at email@example.com.