Next February, Todd Lush will be among the first customers of a new marine highways venture by the Port of Stockton, Calif., when weekly container-on-barge service begins to the Port of Oakland.
“I’m certainly committed to the concept, there’s no question about that. We’ve seen it done at other locations, and we think it can be done here effectively and efficiently,” Lush said. “But until we have the hard costs in front of us, we won’t know for sure.”
Lush is president of Stockton-based Capital Feed, which exports animal feed and biofuel products to Asia and the Middle East. His cautious optimism about trading the highway for the marine highway reflects what other executives in Northern California are thinking.
“There’s a keen amount of interest in this,” said Mark Tollini, the port’s deputy director for trade and operations. “There are a lot of folks out there waiting to see what it is. They’re looking for a pioneer. We’re looking for a pioneer.”
Stockton’s service will join a handful of operations testing the short-sea shipping waters in North America, where there have been successes and failures. Transporting freight by water over relatively short distances is common in Europe and other parts of the world, but U.S. shippers haven’t shown strong support for a transportation service that hasn’t proved its value, and some argue can’t exist without government support.
The Department of Transportation has made America’s Marine Highways a flagship program, and the Maritime Administration is promoting the concept. Marad identified 11 marine highway corridors — routes with the greatest prospects for commercial success. Stockton’s Sacramento River franchise is the M-580 corridor, named for the interstate highway that roughly parallels its route to Oakland.
The idea of a barge service between Stockton and Oakland has been discussed for several years. Aided by $13 million from a $33 million DOT TIGER grant it shared with the ports of Oakland and Sacramento, Stockton is pushing to turn that idea into reality. The port has contracted with Savage Services, a diversified operator of short-line railroad and marine services, to market and manage the barge service. Other than the federal grant and two smaller ones, no subsidies are involved.
It’s why shippers, ports and other marine highway interests will watch the Stockton venture closely. Tollini is confident the port has a winning value proposition that puts the marine highway at the center of an integrated intermodal system.
The region already has an active agriculture export industry. Trucks regularly move containerloads 72 miles to the Port of Oakland, but boxes are limited to the 80,000 pounds gross weight that the highways allow. There are no such weight limits on the water, and Tollini estimates that four overweight boxes on a barge replace five on the road.
Containers are a new business for a port that historically has handled bulk and breakbulk cargo. The TIGER grant — so named for the government’s Transportation Investment Generating Economic Recovery program — paid for two new cranes. A separate regional grant helped pay for two barges with capacity for 216 and 140 40-foot boxes. The port also is establishing a storage yard for empty boxes and a local chassis pool.
The idea is to keep containers circulating locally, and trucking turns short and frequent, Tollini said. “We have a number of tenants that are stuffing containers to go to Oakland,” he said. “Localizing the transportation system right here at the port is very attractive to them.”
“Right now, it’s very simple for us exporters,” Lush said. Shippers either own their own trucks or contract with a carrier. “They leave a container at our doorstep. We fill it, and then they take it back to the port. It’s real simple.”
Capital Feed ships about 500 boxes a month. Using the Stockton service means the company will incur up-front costs for draying containers a mile from the port and return.
“I’m confident that the people at the port are going to come up with a solution for making sure this is competitive with over-the-road trucking,” Lush said. “Most of the people who export commodities do volumes of products — feed, wastepaper or scrap metal. They’re not the high-dollar value goods, so a difference of $10 or $15 for a round-trip container to and from Oakland can definitely make a difference for us exporters.”
Trucking containers to Oakland still will be an option, but Lush said, “If the barge setup is competitive with trucks, it’s to my advantage to use it. Even if I don’t make a penny, I like the idea that my customers overseas will get the benefit of having a heavier container for their drayage costs.”