Container shippers underutilizing the Mississippi River

Container shippers underutilizing the Mississippi River

Discussions on intermodal transport have mainly focused on the truck-train operation. However, an often overlooked and increasingly relevant form of intermodal transport is truck to barge or train to barge. The Mississippi River is really a “free railroad” for the U.S. whose potential for intermodal transport has not been fully exploited. Other countries have successfully implemented this concept. The DP World trimodal terminal in Germersheim, Germany is a good example of this. This terminal, which is located on the Rhine River, has its own fleet of dedicated container barges serving the container terminals in Antwerp, Rotterdam and Moerdijk from Germersheim.

This begs the question why a similar solution cannot be applied on the Mississippi River. It is often heard that the Mississippi River is too long and complex a river to have effective barge transport, and there will also be a need for a large number of barge terminals along the route, which many investors might be skeptical of given that demand is variable.

An innovative solution might be to introduce a Container Crane Barge to handle and transport containers along the Mississippi River. The CCB is a geared barge and comes with its own crane. Of course, the crane pedestal cannot be higher than the clearance of the lowest clearance fixed bridge on the Mississippi River. The advantage of the CCB is that it does not require too much infrastructure along the river to pick up and discharge containers. For example the CCB could theoretically pick up and discharge containers from a truck parked alongside the river.

The cost of a CCB is around $ 12 million. The CCB would need to be manufactured in the U.S. to satisfy the Merchant Marine Act of 1920, or Jones Act. I have analyzed the business case for such a project where the CCB will handle and transport containers from St. Paul in Minnesota to the Napoleon Avenue Container Terminal in New Orleans. This project is highly scalable in that capacity can range widely from 150 containers to about 3,000 containers per day. The containers referred to here are 40 feet long. The corresponding capital expenditure would range from $350 million to $4 billion and pay for itself in 4 years. The project is viable at a freight rate of $1,300 per container, which works out to 50 cents per kilometer (.62 miles) for a container.

There are also positive environmental benefits as the program would reduce the number of trucks on the road and by extension, carbon dioxide emissions. It could also help shippers deal with the truck driver shortage by making drivers less essential to the supply chain, and congestion could also be ameliorated to some extent. As the barges need to be built in the U.S., this would create and support manufacturing jobs in the U.S.

Cargo transport along the Mississippi River is one the oldest modes of large scale freight transport in the U.S. There is now the potential to utilize the Mississippi and usher in a new bright future for freight transport in the U.S. with significant benefits to the national economy, while at the same time giving a decent return on investment.

Praveen Raveendran is a consultant based in Dubai and has experience helping clients across Australia, India, Russia and the UAE. Contact him at praveenaca@hotmail.com.