Federal Grants for Container on Barge Services

by Michael Hansen, President Hawaii Shippers Council, November 3, 2016

The U.S. Federal Maritime Administration (MARAD) in a press release posted to their website on October 26, 2016 announced their award of $4.85 million in grants to six marine highway projects on the continuous United States (CONUS).

The purpose of five out of the six projects is to provide what are known as “container-on-barge” shuttle services along coastal and inland waterways to provide efficient and integrated multimodal transportation of freight around the country. Typically these container-on-barge services move container cargo arriving on international ocean shipping services at large ports of entry – or entrepôts – to significantly smaller nearby secondary port destinations. This eliminates the need to transport the containers by truck between regional centers relieving traffic and congestion. The large containerships that characterize shipping today are typically to big for physical and financial reasons to call at the smaller ports.

MARAD has designated a number of what are known as “Marine Highways” with a numbering system that parallels the national highway system. For example, one of the projects awarded a grant operates on the Mississippi River from New Orleans to Chicago, which is designated as the Marine Highway 55 (M-55). That route parallels the Interstate 55 (I-55) which also runs South to North from New Orleans to Chicago.

The application for marine highways grants with MARAD must be made by a regional port authority or state or municipal transportation department in conjunction with private partners that will actually provide the service.

Several transportation and marine publications commented on the recent MARAD marine highway awards noting the inconsistent history of the container on barge services in the U.S. “Container-on-barge services are popular in Europe and Asia but have a spottier record in the United States’ noted the Journal of Commerce (JOC) on October 27th. The JOC said further regarding three of the projects in the Mississippi basin, “Though the Mississippi is the nation’s busiest waterway for bulk cargo, several container-on-barge services on the river since the 1970s have struggled with inconsistent demand, railroad price competition, and uncompetitive transit times.”

The American Shipper Magazine wrote, “MARAD awarded the first round of Marine Highway Grants six years ago as part of its effort to stimulate cargo diversion to coastal and inland waterways, especially barge services that haul containers. But the short-sea shipping mode, as some refer to it, has proven problematic to jumpstart without government subsidies because most shippers have been reluctant to sacrifice speedier transit times and the lack of dedicated port infrastructure for seamless transfer of containers from trucks to barges.”

However, both publications noted that certain of the marine highway container-on–barge projects are achieving success including two of the recent awardees, the James River Express, from Norfolk to Richmond, Virginia, And the SEACOR shuttle service between New Orleans and Baton Rouge, Louisiana.

A similar kind of container-on-barge shuttle service between the State’s Honolulu Harbor and Kalaeloa Barbers Point Harbor (KBPH) could eliminate much of the truck traffic on the H-1 employed hauling container cargo discharged from the ocean carriers calling at Honolulu Harbor to the warehousing and other receivers in the growing Kapolei area.

LINK: Maritime Administration Awards $4.85 Million in Grants for Marine Highway Projects – MARAD