Sause ends Hawaii Barge Service after 54 years

by Michael Hansen, Hawaii Shippers Council, June 13, 2020

Portland, Oregon-based Sause Bros. Ocean Towing Inc. ended their common carrier Hawaii Barge Service after 54 years with the arrival of their final voyage in mid-April 2020 employing their Tug NATOMA with Barge NAMAKANI (Voyage 20-5) at Pier 5, Kalaeloa Barbers Point Harbor (KPBH), West Oahu Island.

The Sause Hawaii Barge Service was begun in 1966, specialized in the carriage of forest products especially finished lumber and plywood from the Pacific North West (PNW) and was an important logistics link for the building industry in Hawaii. Most recently, The Sause Hawaii Barge Service was based on the Pacific Coast at the Teevin Bros. Terminal on the Columbia River at Rainer, Oregon, and operated on approximately every-three weekly frequency employing two purpose-built oceangoing cargo barges on alternate voyages.

Hawaii maritime and construction industry sources advise that Sause made arrangements earlier this year to withdraw their Hawaii Barge Service and sell the assets of the service to their competitor, but have chosen not made a public announcement regarding the end of their service. This is believed to be the first public report.

The assets sold included Sause’s two cargo barges dedicated to the service – the NAMAKANI and KAMAKANI -- commonly referred to as the “Kani Barges.” The sale was to Sause’s sole interstate common carrier barge competitor, Lynden International, which operates barge services to Alaska and Hawaii under the names Alaska Marine Lines and Aloha Marine Lines (both abbreviated AML). This transaction consolidated the interstate common carrier barge services operating from the Pacific Coast to Hawaii into a single operation reducing competition in the market.

Lynden/AML operates barge services to Alaska and Hawaii from their marine cargo terminal known as “Terminal 115” on Marginal Way in Seattle, Washington State. Their Hawaii service, which operates on a fortnightly frequency, sails from Seattle every-other Friday, specializes in the carriage of construction materials, but has not been as important to the carriage of finished lumber and plywood as was the Sause service. Reportedly, Lynden/AML will continue to operate exclusively from their existing terminal on the Seattle waterfront, and not offer service from Oregon.

The former Sause Hawaii Barge Service and the Lynden/AML Hawaii and Alaska ocean cargo services are operated on a common carrier basis in the noncontiguous trades of the U.S., and are required to file their freight rates with a federal regulatory body, the Surface Transportation Board (STB), which only exercises nominal oversight.

As related to their customers, the Sause decision to divest their Hawaii Barge Service was crucially influenced by the other Jones Act common carriers in the domestic interstate Hawaii trade investing in new vessels over the past several years. This includes Matson Navigation Company Inc., Pasha Hawaii transport Line LLC and Lynden/AML. Accordingly, Sauce made a decision not to compete with the other ocean carrier’s capital intensive new-building programs.

Those merchant cargo owners (known in law and transportation as “shippers”) who traditionally shipped lumber and related products from Oregon with Sause are now facing the alternative of shipping from Seattle either with the barge carrier Lynden/AML or containership carrier Matson. This choice involves tradeoffs, the Lynden/AML service frequency is fortnightly with a transit time of between 12 and 14 days, while Matson’s frequency is weekly with a transit time of about 7 days. However, for those Hawaii merchants who have largely purchased forest products from Oregon, this means arranging inland transportation typically by road trucking to Seattle.

As a result of the consolidation, Lynden/AML relocated from their longtime Hawaii terminal at Pier 29, Honolulu Harbor, to P-5A KBPH, for the arrival of their cargo barge WESTWARD TRADER on April 15, 2020. Lynden/AML is now occupying the area where Sause previously operated and its more convenient to their construction industry customers in the Kapolei, West Oahu, warehousing district. Lynden/AML arranged with the Hawaii State Harbors Division berth P-5 KBPH for the former Sauce barge KAMAKAMI for June 9 – 12, 2020, indicating the transfer of assets and service from Sause is complete.

The independent Hawaii stevedoring company, McCabe, Hamilton & Renny Co., Ltd., provided stevedoring services to the Sause Hawaii Barge Service and continues the same for Lynden/AML assisting shifting their operation to P-5 KBPH.

The Hawaii construction materials merchants have traditionally purchased their inventories of finished lumber and plywood from lumber mills in Southern Oregon and on the Oregon Coast. For many years, the Sause Hawaii Barge Service provided ocean transportation from the Port of Coos Bay on the southern Oregon Coast, which provided a very efficient logistical connection for the Hawaii merchants and even facilitated purchases from Northern California mills. However, when Sause relocated their Pacific Coast port from Coos Bay to Rainer on the Columbia River, the Hawaii merchants incurred additional logistical costs for trucking.

The new requirement for the Hawaii merchants to arrange for trucking from the Oregon mills to Seattle for shipment on Lynden/AML and Matson will lead to additional costs. During the transition from Sause to Lynden/AML, Hawaii merchants reported a shortage of trucking available from Oregon mills to Seattle, which increased their transportation costs. The termination of the Sause Hawaii Barge Service and relocation of Pacific Coast load port to Seattle either by Matson or Lynden/AML will increase the cost of finished lumber and plywood in Hawaii.

Sause will continue its other lines of maritime business including providing harbor tug assist service to ships in Honolulu Harbor, towing Matson’s three interisland cargo barges used as a feeder service to transship their main line container and vehicle cargoes from Honolulu to Neighbor Island ports, and on the Pacific Coast as an important contract carrier tank barge operator primarily for Chevron Corporation.

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PBN: Sause Bros. Ocean Towing Inc. ends its Oregon-to-Hawaii barge service