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13 around these problems, causing shippers to lose confi- Frequency is important. To attract a significant number of dence in the service. previously unaffiliated shippers, services must be once per Although the success rate of all ventures was low, services week at a minimum. For certain commodities, multiple sail- that were designed to cater to international services exhibit ings per week are a requirement. NAMH cannot compete a higher failure rate than do domestic services. with same-day services. The service must be scheduled so a shipper can plan ship- Of course, with the current economic recession being experi- ments. Timeliness and reliability are extremely important. enced across the globe, the ability to offer new services at a rate Being "fast" is not as critical as being reliable. The more that will provide a proper return is severely impaired. As the reliable the service, the more likely it will be chosen. crisis fades, rates and demand will improve, and those services Total delivery times are important. This is not the same as that are properly positioned and structured will be in an advan- transit time. Although a barge's transit time may be longer, tageous position for capturing new marine highway markets. its total delivery time may be quicker if the transit can occur on the weekend and during late-hour operations, and avoid congestion as well. Shipper Requirements Marine highway operators need to be able to handle 48-ft The literature review and interviews revealed several ship- and 53-ft containers as well as standard 20-ft and 40-ft per requirements that are important for a marine highway ocean containers. Motor carriers interested in using marine highway services operator to address. To succeed, a NAMH service must pos- sess the following two major characteristics (1) it must pro- typically want to use their own equipment, which implies vide a time/cost tradeoff that is competitive with that of other that Ro/Ro services will have an easier time partnering with modes, and (2) it must be reliable and as seamless as possible. motor carriers. Time-sensitive shippers, as well as shippers of high-value or The most important attributes in a shipper's choice of mode hazardous goods, need a good system to track and manage are (not necessarily in order) general preference for retaining their shipments. Real-time tracking services may partially the existing service structure, travel time, reliability, and cost. compensate for slower delivery times. The first category is probably least discussed yet quite salient due to the transaction costs involved in switching transporta- Although these requirements are frequently cited, it must tion providers. Although shippers are sometimes in a position be noted that generalizations can be dangerous. Many opera- of seeking to switch service providers, they certainly do not tors are quick to point out that there is no substitute for under- want to go through this process often. Therefore, the shipper standing the shipper needs for a certain commodity or service must be convinced not only that the NAMH service is viable in a certain geographic area. in the short term, but also in the long term. These shipper considerations were emphasized in a consultant study com- missioned by a Canadian carrier to examine the economics of Vessel Issues a feeder service on the East Coast that would use a fully amor- According to MARAD, as of December 31, 2008, the U.S.- tized vessel. According to a representative of the carrier, the flag, privately owned ocean and Great Lakes merchant marine study determined that even with the limited capital expendi- fleet consisted of 675 active and inactive vessels. Of those, tures on the front end, the service was not justified due to 238 vessels were available for operation in U.S. foreign and unacceptably high time of transport and high port charges. domestic trades and within those, 145 were Jones Act vessels The economics would be even less favorable with fuel costs with unrestricted coastwise trading privileges. Of the 238 ves- lower than those used in the study. sels, 116 (49%) were built before 1984. Of the 145 Jones Act The shipper requirements documented in the literature are Vessels, 103 (71%) were built before 1984. There are only listed in Appendix C with references. The most important 15 Ro/Ro and 27 container vessels available for the Jones Act consideration to note is that shipper priorities will vary by trades, and most of them are approaching the end of their type of business and the commodity transported. Given that useful life. Table 2 shows the composition and age of the fleet. caveat, there are certain requirements that seem to surface with great regularity, as follow: Vessel Types The service must be cost-competitive with alternatives. Types of vessels that are, or could be, employed on NAMH The service must provide door-to-door arrangements. The can be classified as the following: service that is offered must be an integrated service. It must be as "simple" from the shipper's perspective as arranging Tug and pull-barges (ocean-going), a truck-only shipment. Tug and barges (river type),

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14 Table 2. Age profile of U.S.-flag, privately owned ocean and Great Lakes fleets, 2008. Before 1984 1989 1994 1999 After Fleet 1984 1988 1993 1998 2003 2003 U.S. Flag 116 38 6 34 19 25 Tanker 19 4 0 13 7 13 Double Hull 9 1 0 11 7 13 Dry Bulk 53 4 0 0 2 1 Lakers 47 0 0 0 0 0 Container 19 21 3 16 7 9 Ro/Ro 17 8 2 7 3 4 General 5 1 1 0 0 0 Figure 1. Ocean-going tug and barge. Jones Act 103 9 1 9 8 15 Tanker 22 4 1 9 5 11 DH 9 1 0 9 5 11 Dry Bulk 51 0 0 0 0 0 vessel similar in size to the pulled barge. A self-propelled vessel Lakers 47 0 0 0 0 0 of 700-TEU capacity would require a crew of 20. (TEU stands Container 19 3 1 0 1 3 Ro/Ro 10 2 0 0 2 1 for 20-ft equivalent unit. A 20-ft ocean container is 1 TEU; a General 1 0 0 0 0 0 40-ft container is 2 TEU. This is the standard unit of measure Source: U.S. Water Transportation Statistical Snapshot, MARAD, July 2009. (6) for container capacity.) Figure 1 is a photograph of an ocean- going pull-barge arrangement. Integrated tug/barge and articulated tug/barge (ITB/ATB), Small self-propelled container vessels: lift-on/lift-off (Lo/Lo), Tug and Barges (River Type) Small ships: Ro/Ro, The inland tug and barge services attempted to date or cur- Rail ferry, and rently in use utilize conventional deck or box barges to move High-speed ferry. containers. Container-carrying tug and barge services can be combined with barges carrying "traditional" cargoes such as The literature and the interviewees expressed a wide range agricultural commodities. Alternatively, river barge services in of opinion on the importance of the speed of the vessel. The which there is a cargo imbalance for a traditional cargo in one actual speed of current operators ranges anywhere from 5 to direction can sometimes handle container barges on what 6 knots for inland operators up to 20 knots for coastal opera- would be the empty repositioning leg. Figure 2 is an example tors. One shipbuilder pointed out that high-speed vessels are of a large container shipment on river barges. "light-weight" vessels--their speed and fuel consumption are greatly affected by the load they carry. Some of the litera- Integrated Tug/Barge (ITB)/ ture focused on time-sensitive cargoes where speed might be Articulated Tug/Barge (ATB) a factor, but most analysts seem to agree that highly time- sensitive cargoes are not a good market for marine highway Tug and barge systems offer numerous advantages over operators. Furthermore, increased vessel speed is a key contrib- self-propelled vessels. They require one-third the crew of self- utor to increased fuel consumption and vessel operating costs. The draft requirements of an NAMH vessel are not likely to be the limiting factor in most cases. Of the regularly consid- ered ship types, the deepest draft has been approximately 20 ft. Given average container weights, it is very likely that the cargo for ships will be volume-limited rather than draft-limited. Tug and Pull-Barges (Ocean-Going) The pull-barge is the most commonly used vessel for NAMH coastal operations in the United States. Barges are preferred in NAMH shipping operations due, in part, to federal regulations specifying small crew sizes. Both U.S. and Canadian crew size regulations stipulate minimum crew size based largely on the vessel's registered tonnage, which in the case of a pull-barge is the tug vessel, not the barge itself. The crew of the tug, typi- Figure 2. Containers on river barge. cally about eight, is much smaller than that of a self-propelled Source: Marine Log.

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15 propelled vessels and are able to consume significantly less fuel when slow speeds are acceptable. Tugs typically have crews of 6 to 8 versus a crew of 20 to 23 on self-propelled vessels. Addi- tionally, tug crewmembers generally have a more favorable wage scale relative to crewmembers on self-propelled vessels, in large part because certified mariners for self-propelled ves- sels are a very small population. They also feature lower con- struction costs, maintenance costs, and drydocking fees, and are more conducive to moving larger freight. Ocean-going tugs/barges move at 9 knots, half the speed of self-propelled vessels, but this slower speed results in much less fuel con- sumed per mile. In addition, both new construction and maintenance costs on barges are well below similar size self- propelled vessels. Integrated tug/barge units are used widely in the U.S. Gulf of Mexico and East Coast offshore trade. The stern is notched to accept a special tug that can be rigidly connected to the barge, forming a single vessel. The barge is built in the molded form of a normal ship's hull. Directional stability and control underway is far superior to that of a towed barge, although this configuration does not do well in high seas. No particular changes in the size or shape of the tug are required except for a higher pilothouse, needed for improved visibility. The ITB is usually semi-permanently connected. The tug is not disconnected from the barge when loading or unloading. With an ATB, the tug is generally allowed to "float free" in the notch while loading or unloading. This is an important fea- Figure 3. Integrated tug/barge. ture in that it allows the tugs to be utilized for a higher per- centage of time as opposed to being tied to the barge while of limiting the aftermarket and raising the cost of production loading. Given that terminals handling NAMH traffic will and purchase. This lack of standardization is another obstacle often load containers at a slower rate than terminals serving to vessel procurement for marine highway service. Further- ocean-going vessels, it is often attractive to separate the tug more, ATBs have been used almost exclusively for liquid car- engine since it is the most costly element of the system. goes to date. Figure 3 is a photo of an ITB. Figure 4 is a photo Over time, the cost to build ITB units has risen to values in of an ATB. excess of an equivalent ship. Furthermore, with the issue of Navigation and Inspection Circular 2-81 (NVIC-2-81), the U.S. Coast Guard closed many loopholes in the regulations that the ITB was designed to take advantage. Thus, no ITB has been built since the early 1980s. (7) An articulated tug/barge unit is a newer type of integrated barge. The cost of an ATB is about 20% less than the cost of an analogous self-propelled ship. Unlike the older inte- grated tug/barge style, the ATB has a hinged connection system between the tug and barge. In an ATB configuration, the tug and barge roll as one, but they pitch independently. The ATB system "couples" the tug and barge together. The ATB unit's barge has a notch in the stern where its tug bow fits. An ATB tug can be separated from the barge and used alone. There are a few inherent drawbacks to the ATB system in terms of accomplishing broader utilization. The notches on most ATBs are designed such that a tug from one company can not be used with a barge from another. This has the effect Figure 4. Articulated tug/barge.

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16 Small Self-Propelled Container Vessels: Small Ships: Ro/Ro Lift-on/Lift-off (Lo/Lo) Lower storage density and, in the case of larger vessels, the The literature indicates that a time-chartered roll-on/roll-off need for decking to accommodate multiple levels, makes vessel is probably more suitable to the domestic market and Ro/Ro ships about three times more expensive than a con- a geared container (Lo/Lo) vessel is more appropriate to the ventional container feeder vessel of equivalent container or feeder market, depending upon the port choice. (4, 811) trailer capacity, which explains why Ro/Ro vessels require an Ro/Ro cargoes typically compete on near-sea and short-sea dis- intensive commercial operation to be economically viable. tances with local truck transport, while Lo/Lo typically com- Examples of markets that have seen the successful adoption petes over longer distances with rail and long-haul trucking of Ro/Ro designs are the Baltic and the English Channel. transport. A feeder ship will typically carry less than 1500 TEU. Vessels from 150-trailer to 700-trailer capacity have been The capacity of Ro/Ro vessels can be less than one-half that proposed for a variety of markets. Smaller vessels of approx- of a Lo/Lo vessel of similar size. Furthermore, since cargo can imately 200-trailer capacity may have the broadest market not be stacked (due to wheels) and significant space is needed potential while easing phase-in of a marine highways service. for load and offload ramps, the use of the Ro/Ro model also has (4, 8, 1213) implications for terminal efficiency. For this reason, space- A container vessel can carry much more cargo per dead- constrained terminals may be less willing to accept a Ro/Ro weight ton at a cheaper cost than a comparable Ro/Ro vessel, operation if it interferes with more productive Lo/Lo services. but container vessels take longer to load and offload--Lo/Lo However, even in the case of Lo/Lo operations, the operator is operations are logistically more complicated. not guaranteed priority access for berthing slots. Because ports Generally speaking, Ro/Ro vessels provide the most effec- and terminals tend to give priority to ocean-going container- tive NAMH service platform, because they enable truckers to ships, coastal Lo/Lo ships typically have to allocate 24 h per port use containers or trailers on chassis for the entire movement. call, althoughonly812h are required to load and offload cargo. Several studies indicate that the cost savings from reduced New developments in the design of container feeder vessels, port cargo-handling costs as well as service advantages in which operate in support of mainline vessels and in short sea faster vessel and trailer turn-times more than offset the more trades, focus on speed and size. Whereas a service speed of effective vessel utilization provided by containerships versus 1214 knots was acceptable 15 years ago, in order to maintain Ro/Ro vessels. The literature does not definitively state the con- schedules, speeds of 1517 knots are not uncommon. Feeder ditions under which this advantage holds and at what point the ships now range from 250 TEU to over 2,000 TEU in the Far balance might shift. The majority of previous studies suggest East and Southeast Asia. SPM's new feeder, Shamrock, is con- that a Ro/Ro operation with 53-ft domestic tractor-trailers is sidered a state-of-the art design. It is 376 TEU, with some Ro/Ro the most viable coastal shipping option. The best vessel option capacity on the upper deck. Its top speed is 16 knots, allowing it from a cost perspective would appear to be a relatively new to call at four ports weekly. The vessel was new in January 2001. time-chartered Ro/Ro vessel capable of carrying highway Figure 5 is an illustration of a small container vessel. trailers. Alternatively, an existing offshore service ship design could be modified to a single-deck ferry for 53-ft trailers. The size of the vessels likely to be involved in such services (4, 1213) would have the following general characteristics: Length overall: 190200 meters (623656 ft), Beam: 24 meters (79 ft), Draft: 6.4 meters (21 ft), Deadweight: 12,000 deadweight tons (DWT, a measure of how much weight a ship can safely carry), Road trailers: 140150 (primarily 48-ft and 53-ft), and Stern ramp or quarter ramp. Local street access to the highway system is required that is able to accommodate a flow of up to 140 trailers into the terminal and out of the terminal (each direction) within a 3- to 4-h period MARAD shows 15 Jones Act Ro/Ro vessels as of the end of 2008. This number did not change for the period Figure 5. Small container (Lo/Lo) vessel. 20032008. (14)

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17 According to Infomare, "the niches where the general straight Ro/Ro appears to be high enough to make such a Ro/Ro concept is likely to remain and be developed are defi- service impractical in North America. (16) nitely short sea trade routes with an increasing need for fast tonnage and deep sea trade with rolling cargoes only." (15) Incat. Incat has developed a new variation of its successful New Ro/Ro vessels built by Stena and DFDS point the way in Incat 98 vessel, the Evolution 112, which offers 25% more capac- terms of future development. Stena's 4Runner class vessels are ity than the previous generation. It is designed for passenger and 12,300 DWT, 195m length overall, with 3,000 lane-meters (lm) freight applications, with a total freight capacity of 1,500 tons at or 858 TEU capacity, and a service speed of 22.5 knots. An reduced speed or 1,000 passengers at full speed. Total lane meter additional freight deck can be added above the upper deck, capacity for trucks is 345, while the ship can carry 198 cars (or giving another 1,000 lm capacity to a total of 4,000 lm, similar 321 cars if no trucks are loaded) using the mezzanine decks. The to DFDS' Tor Line and Finnlines, which have ordered similar ideal freight run would be 500 nautical miles. vessels with 4,000 lm capacity. Many of Stena's previous gen- eration of Ro/Ro vessels, the Searunner class, were converted Rail Ferry to roll-on/roll-off/passenger (Ro/Pax) vessels. Another new innovation was introduced by Cobelfret for the StoraEnso There are two marine highway ventures in existence today project, which combines full-width double-level ramps and that operate as rail ferries. The first is CG Railway, a sub- straight driving lanes on-board vessels. It has since been intro- sidiary of International Shipholding Corporation. The ser- duced by TT-Line and DFDS as well. vice operates between Mobile, Alabama, and Coatzacoalcos Analysis of the economics of NAMH suggests that a Ro/Ro in southern Mexico. CG Railway is actually a railway (as vessel of around 150-trailer capacity can be effectively employed opposed to a marine operator) although its service is essen- on voyages of 800 to 1,000 nautical miles such as along the tially a NAMH service. Figure 7 is a photo of a CG Railway Atlantic Seaboard. Larger vessels (up to 300 trailers) may be vessel in operation. deployed on the gulf routes where potential volumes are greater. The second operation is New York New Jersey Rail (4) Figure 6 is an example of a small Ro/Ro vessel. (NYNJR). The ferry is the only freight crossing of the Hud- son River south of the Alfred H. Smith Memorial Bridge, Ro/Pax. Ro/Pax is a ferry concept that is a mixture of 140 mi to the north of New York City. NYNJR leases trailers, trucks, cars, and passengers. These vessels are usually approximately 27 acres of land at Conrail's Greenville Yard of 5,00010,000 DWT, and operate at speeds of 2228 knots. in Greenville, Jersey City, where it connects with two Class Typical vessels of this design are Stena's Seapacer class (400 pas- I railroads--CSX Transportation and Norfolk Southern sengers, 170 trailers, and 22 knots); TT-Line, which operates Railway. On the Bay Ridge, Brooklyn, end, the 6-acre Bush between Germany and Sweden, with a vessel of 1,000 passen- Terminal Yard connects to the New York and Atlantic Rail- gers and 200 trailers at 22 knots; Superfast (the newest vessels way's Bay Ridge Branch and the South Brooklyn Railway. have a passenger capacity of 626, vehicle capacity of 900, and The 2.5-mi barge trip across the harbor takes approximately sail at 30.4 knots.); and Irish Ferries (2,000 passengers and 45 minutes. The equivalent truck trip would be 35 to 50 mi. 270 trailers). In Europe, these vessels are designed for cargo Figure 8 is a photo of the NYNJR ferry in operation. plus utilitarian passenger travel. Unfortunately, the addi- tional cost associated with Ro/Pax service as compared to Figure 6. Ro/Ro vessel. Photographer: Kurt Brandt. Figure 7. CG Railway rail ferry.

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18 The literature suggests that in the case of vessel selection, smaller may be better. (4, 9, 1719) Optimal ship size is obtained by trading off economies of size in the hauling oper- ations with diseconomies of size in the handling operations. The larger the vessels are, the lower the optimal frequency is to handle the same volume. This creates a barrier to entry into shipping routes, as the volume of cargo must be sufficient to enter the market with an economically sized vessel. In port, handling costs per ton increase with ship size, while hauling costs per ton at sea, on the other hand, decline with size. Typ- Figure 8. NYNJR rail ferry. ically, shipping lines will enter a new market with the smallest vessels that meet their economic requirements and then grow the service by increasing ship size. Intra-regional container These applications of marine highway operations have very ships seem to fall within the range of 1,0003,500 TEU. The limited applicability across North America. It seems to work most appropriate Ro/Ro vessels appear to be in the small- to in the case of CG Railway because of border congestion and mid-size range: 600650 ft length overall, 21-ft draft, and the the inefficiencies of rail operations that run from the south- capacity to transport 140150 48-ft or 53-ft trailers. eastern United States to the Yucatan Peninsula and in the case Deploying a relatively higher number of small vessels of NYNJR because of extreme congestion. These conditions mitigates the impact of taking a single vessel out of service for do not exist elsewhere. overhaul, while allowing trucking and rail to serve as a safety net in the event of high demand or reduced vessel capacity (as in the case of a drydocking). Alternatively, the disadvantage High-Speed Ferry of using smaller vessels is that it may not be possible to capital- High-speed ferries, advocated by some analysts, have much ize on the economy of scale offered by a larger ship--a factor higher costs of construction and operation (fuel) than stan- that may be important in high-volume markets. dard ferries. In fact, the time savings achieved with faster ves- Relatively high-speed vessels (e.g., 25 knots) can not oper- sels often does not justify the additional fuel cost. Moreover, ate on most of the length of the inland waterway system. the commercial use for shorter routes, which constitutes most Vessel transit times are slowed by delays in negotiating the of the traffic, is limited. The high-speed vessels are simply not system's series of locks and dams. As a result, creating a truck- cost competitive with trucks. Figure 9 is a photo of a high- competitive NAMH service on the inland waterways (with speed ferry operating overseas. the exception of across the Great Lakes) is not likely. The general view of ocean carriers is that self-propelled vessels rather than traditional tug-barge combinations would Vessels Used in Marine Highway Operations be required to make domestic shipping services operationally The following sections summarize the key features of vessels feasible, primarily due to the considerably faster speed of a used in current and defunct NAMH operations. Tables 3 and 4 vessel (21 to 25 knots for conventional propulsion and much list relevant NAMH ventures and their key characteristics. faster for advanced high-speed designs that may provide speeds in excess of 40 knots). The equipment that ocean carriers use and the labor force they employ are built around the man- agement of self-propelled vessels. Furthermore, there is a greater probability of delays with international shipping due to weather, customs, and equipment availability; therefore, ocean carriers value speed and the ability to "make up time." This would apply mainly to feeder services as opposed to purely domestic shipments, where volumes would not be as great and more flexibility would be possible. Vessel Financing New marine highway services--both Ro/Ro and container vessel-based long-haul services--would be expected to use publicly owned existing terminal facilities or new facilities Figure 9. High-speed ferry. financed by state and federal authorities. The vessels have

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19 Table 3. Defunct NAMH operations. Venture Service Area Period Vessel Albany Express NY/NJAlbany 20032006 River barges America's Marine Express MemphisSanto Tomas, 1994 Container vessel; DWT: 3,700; TEU: GuatemalaPuerto Cortez 256; speed: 16 kn Honduras Crowley Liner Services Lake CharlesProgreso 1999 Three Ro/Ro vessels Gulf Bridge Ro/Ro MobileTuxpan 19981999 Dolores, Ro/Ro ship; DWT: 13,480; Cars: 1,158; TEU: 872; speed: 17.75 kn Gulf Caribbean Transport TampaTampico 20012002 Rita del Mar, vehicle carrier; DWT: 10,890; Cars: 2,780; speed: 18 kn Gulf of Mexico Express MobileVeracruz 19992000 Ro/Ro vessel Hale Container Line NYPhiladelphia 19851987 Ocean barge with 420 TEU capacity BaltimoreNorfolk and NYBoston Lanette, container ship; DWT: 14,033; St. JohnBostonNY TEU: 827; speed: 16.5 kn Matson 19942000 Ewa, container ship; DWT: 39.276; (Company still active in Los AngelesSeattle TEU: 2,128; speed: 21.25 kn other trades) Vancouver McAllister Brothers, Inc. BostonNY/NJ 19761988 Ocean barges (no description available) Mexus Ro/Ro Ltd. HoustonTuxpan 19941995 Chartered Ro/Ro vessel Protexa Burlington GalvestonCoatzacoalcos- 1993-1994 4 rail barges, each with capacity of 54 International AltamiraVeracruz rail cars Sause Brothers Long BeachEnsenada 1998N/A Ocean barges Sea Lion Ocean Freight TampaVeracruz 1997 Mint Dart, general cargo ship; DWT: 3,194; TEU: 256; speed: 12.5 kn SPM Container Line St. Pierre et Miquelon 1994July Carried autos and containers; HalifaxPortlandBoston 2004 DWT: 4,850; TEU: 396; speed: 16 kn Yucatan Express TampaPuerto Morelos 2002 Scotia Prince, Ro/Pax vessel; DWT: TampaCancun 1,321; trucks: 21; cars: 75; speed: 21.5 kn been, and are likely to be, owned by private interests. Although Title XI loan over a traditional loan would be $23 million there is some divergence of opinion, stakeholders consider- per $100 million of shipyard cost. If it is indeed preserved, the ing self-propelled vessel services indicate that vessel costs are application and compliance processes could be simplified and such that new vessels for established operators will generally the debt/equity ratio requirements may need to be relaxed. require federal financing assistance, and new operators will The Title XI program currently has $45 million available. almost certainly require federal financing assistance. Due to recent failures, it may be difficult to get more funding For barge-based short- or intermediate-range services in the short term. However, because of the way the leveraging (mostly for 20-ft and 40-ft international container boxes and works, this could assist in building vessels worth $900 million. some for 53-ft domestic trailers), in the absence of Title XI, (In the event of default, Title XI is only "on the hook" for engine manufacture financing may be the practical financing about 5%.) solution. For container and Ro/Ro-vessel-based long-haul The age of the vessel affects the financing arrangements. services (where vessels could cost $100 million or more, or New vessels can usually be mortgaged for 1215 years, whereas where several $100 million vessels may be needed to establish older tonnage can be financed over 710 years. a viable service), federal assistance such as that provided by Economic analyses have shown that the capital cost of a ship MARAD's Title XI program may be required. does not factor significantly into the price of transportation. There are several points of view on the issue of Title XI That cost is spread over thousands of units per year for a funding. Some are opposed to it and feel that it only props up 25-year projected life of the ship. A NAMH carrier could otherwise unprofitable businesses. They make the case that buy a comparable ship for half the price overseas, and it still such programs encourage enterprises that do not have a sound would not make a strong difference in the economics for a business reason for existence. Their basic premise is that given service. (17, 2021) cargo/demand is the issue, not ship availability. Others (especially shipyards) see it as a valuable tool to Vessel Construction achieve a critical mass of shipbuilding activity. According to a recent study conducted by General Dynamics NASSCO (19), The Jones Act (Section 27 of the Merchant Marine Act the present value benefit to a prospective shipowner of a of 1920 [46 USC 883]) requires that all waterborne shipping

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20 Table 4. Current NAMH operations. Venture Service Area Period Vessel 64 Express Norfolk to Richmond 2008present Conventional river box barges CG Railway MobileCoatzacoalcos 2000present Columbia Coastal Transport East Coast Ports 1990present 5 deep draft barges with capacity of 450 912 TEU; approx. 8 kn speed DetroitWindsor Truck Ferry DetroitWindsor 1990present Flat deck barge; trucks: up to 30 speed: approx. 9 kn Eco Transport OaklandStockton 2009 Tug-barge, up to 350 containers (700 TEU) (proposed) per barge; plans include 3 barges Great Lakes Feeder Lines HalifaxSt. Pierre et 2008present Dutch Runner , general cargo ship with Miquelon1 Ro/Ro capability; DWT: 3,056 trailers: 16; TEU: 219; speed: 13.5 kn Horizon Lines TacomaOakland (extension 1999present 5 container ships, DWT: 20,66839,420; of Hawaii String) TEU: 1,1722,824; speed: 2023 kn. Ingram Barge PaducahNew Orleans 2006present Conventional river box barges Linea Peninsular Panama CityProgreso 1984present 5 general cargo ships, DWT: 3,0363,145; TEU: 154 each; speed: 11.011.6 kn Maybank Industries Port of Charleston to Nucor 2003present Shallow draft barges of 2,0003,000 tons steel plant capacity McKeil Marine Sept-lesTrois-Rivires 2005present Alouette Spirit, capacity: 11,500 MT; operates as ATB with tug Wilf Seymour; retractable roof and bow ramp HamiltonMontreal2 2009present Niagara Spirit, capacity: 250 TEU, 8,500 short tons; operates as ITB New York New Jersey Rail New York Harbor 1983present 2-290' x 40' carfloats and 1-360' x 41' carfloat, capacity: 1015 cars each Oceanex MontrealSt. John's3 1997present Oceanex Avalon, container ship with (current moveable cell guides; DWT: 14,747; TEU: operational 1,229; speed: 20 kn model started in 2005) Osprey Line HoustonNew Orleans 2000present Conventional river box barges (currently operating on inducement basis--no scheduled service) New OrleansMemphis 20042009 Red Hook Container Barge New York Harbor 1991present Container platform barges, capacity: 320 400 TEU each Sause Brothers PNWSouthern California 1950spresent Ocean barges, capacity from 4,30011,900 tons Seabridge Freight Port ManateeBrownsville 2008present Ocean barge with 620 TEU capacity Seaspan British Columbia 1970present 4 rail/vehicle carriers, DWT: 2,0003,429; rail cars: 05 trailers: 28; speed: 1218 kn Various Columbia/Snake River 1932present River barge, typically 120-ft deck barge; TEU: typically 80100, largest is 160 1 Because this is a mainland-island service, it does not meet the definition used for this study. However, the Dutch Runner was specifically retrofitted for service as a Canadian-flag vessel and therefore provides a relevant case study regarding vessel requirements. 2 This service is actually offered by Sea3, Inc., a wholly-owned subsidiary of Hamilton Port Authority. McKeil provides the tug and barge service. 3 Because this is a mainland-island service, it does not meet the definition used for this study. However, the Oceanex Avalon is a new build designed to carry containers (including 53-ft containers) relatively short distances and therefore is included as an example of a useful vessel design. between points within the United States be carried by vessels than large container ships. It is important to keep in mind built in the United States. Existing U.S. shipyards are service- that if things go smoothly, it takes 1820 months to build the able but will require technological upgrades. Additional dry- first ship following the placement of an order. Follow-ups docks may also be needed, especially for larger vessels. The Title take 1418 months. XI program could potentially provide seed money to finance There may be an opportunity to realize economies of scale new ships, and shipyard and terminal upgrades. if multiple vessels of one type can be produced in series by a Any program targeting shipyards should probably focus on shipyard; however the gains from this form of standardiza- the mid-tier operations. The "big six" shipyards do primarily tion suffer diminishing returns to scale at a certain volume naval construction. A mid-tier shipyard with new construc- production. In the short-to-medium term, volume produc- tion and repair capability could build any vessel type other tion is only viable for barges (e.g., ATBs and the like). Self-