SHIPPERS REAP HUGE SAVINGS WITH BARGES

SHIPPERS REAP HUGE SAVINGS WITH BARGES

Southern Ionics, a chemical company with a plant in West Point, Miss., ships about 65,000 tons annually of materials up the Tenn-Tom Waterway. The company sees dollar signs with each barge.

Joe Stevens, development manager, estimates that shipping rates are about 45 percent lower by barge than for rail or truck.The company ships in materials from as far away as Corpus Christi and Houston, Texas, that it uses to make chemicals for the pulp and paper industry. Most of the product is sold in the Southeastern United States.

"The Tenn-Tom has lowered our rates so that we are more competitive in our industry," Mr. Stevens said. "It saves us money and allows us to grow and we are able to pass that on to our customers. The benefits go on and on." Scott Paper Co., which ships wood chips from Alabama and Mississippi down the Tenn- Tom for export overseas, also touts the cost-savings of the waterway. Craig Price, the company's public affairs officer, estimated that shipping by barge is two-thirds less expensive than truck or rail. Access to the Alabama and Mississippi wood-chip markets would not be economically feasible without the Tenn-Tom, he said.

Every company that ships on the Tenn-Tom is effectively a testimonial for the lower costs of water transportation, said Don Waldon, administrator of the Tenn-Tom Waterway Development Authority.

Companies are constantly making price comparisons and choosing the most economical form of transportation, he said.

''Every time they have a movement, they look at the rates," Mr. Waldon said.

In general, the longer the haul the more cost effective water transportation becomes, he said.

"If it's a shorter route, it usually moves cheaper by truck or rail," Mr. Waldon said.

The Tenn-Tom is generally believed to provide a benefit to all shippers in the corridor. Shortly after the Tenn-Tom opened in 1985, shippers reported that rail rates dropped 15 percent to 25 percent, Mr. Waldon said.

There are those who believe the waterway is still keeping rates down.

"When you have water and rail (as shipping options) they both stay down," said Sarah Teague, public affairs manager for the Alabama State Docks at Mobile.

But Donald Seale, vice president of merchandise marketing with Norfolk Southern Corp., said the impact of the waterway on rates is limited.