SCMN 4780
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Inland Water
Transportation Strategy
SCMN 4780
Guest Speaker Review – ITT Corporation
Discuss Mr. Hodges remarks concerning …
• the impact of transportation industry deregulation
• the competitive forces impacting today’s marketplace
• the “good, bad and ugly” about JIT supply chain systems
• the current trends in modal segmentation
• a shipper’s understanding of the freight rate schedule and
the accessorial charges in calculating TLC
• high (vs. budget) transportation costs are a sign of _______?
• the fundamental principle of keeping it simple - it’s all about
cost, quality, delivery”
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US Inland Water Industry
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Norwegian Water System
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Modal Share of US Transportation Market
Inland Water
2010 US
Shipments
(TONS)
Truck
12,490 68%
Rail
1,776
10%
Pipeline
1,494
8%
Intermodal
1,380
8%
Inland Water
860
5%
Air / Parcel
12
0%
Other
302
2%
Total
18,313
Intermodal
Pipeline
Rail
Truck
Water transportation provides tremendous carrying capacity while consuming
far less energy compared to other modes of transport such as truck, rail or air.
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US Inland Water Transportation Industry
Industry that comprises establishments that provide inland
water transportation of cargo in the U. S. A. on its navigable
waterways (except the Great Lakes system).
•
•
•
•
•
•
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River freight
Lake freight
Intracoastal freight
Canal barge
Ship chartering / crew
Towing services
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US Inland Water System
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US Inland Water Transportation
Freight in Tons (million)
1,000,000
900,000
800,000
700,000
600,000
Intraport
Lakes
500,000
Rivers
Intracoastal
400,000
300,000
200,000
100,000
0
1970
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1975
1980
1985
1990
1995
2000
8
2005
2006
2007
2008
2009
Transportation Strategy
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Navigable Rivers & Canals
USA’s inland waterways include over 25,000 miles of navigable waters. Most of
the commercially important waterways consist of the Mississippi River system.
In the west, the Columbia, San Joaquin and Sacramento
Rivers are the only major navigable rivers as steep grades
and variable flows of the rivers make them unsuitable for
navigation. Also, most large rivers are damned in multiple
places to supply water for hydroelectricity production and
other uses. A shortage of water and mountainous terrain
in the West make canals unfeasible.
Commercial operators (carriers) who use navigable waterways pay a fuel tax,
deposited in the Inland Waterways Trust Fund, which funds half the cost of new
construction and major rehabilitation of the inland waterways infrastructure.
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Navigable Waterway System Management
The United States Army Corps of Engineers
(CoE) is a federal agency and a major Army
command made up of some 38,000 civilian
and military personnel, making it the world's
largest public engineering, design and
construction management agency. Although
generally associated with dams, canals, and
flood protection, the CoE is also involved in a
wide range of public works support to the
nation and the DoD throughout the world.
With regards to inland waterway system
management, the CoE is responsible for
planning, designing, building and operating the
nations locks and dams. Other responsibilities
include flood control, dredging and beach
nourishment for waterway navigation.
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Intracoastal Waterway System
The Intracoastal Waterway is a 3,000-mile waterway along the Atlantic and Gulf coasts of the USA.
Some lengths consist of natural inlets, salt-water rivers, bays, and sounds; others are artificial canals.
It provides a navigable route along its length without many of the hazards of travel on the open sea.
The waterway provides a channel at a controlling depth of 12 feet, designed for barge transportation.
The Gulf Intracoastal Waterway is located along the
Gulf Coast of the US. It is a navigable inland waterway
running approximately 1000 miles from Carrabelle,
Florida to Brownsville, Texas.
The Atlantic Intracoastal Waterway runs for most of
the length of the eastern seaboard from its northern
location at Virginia Beach, Virginia to Key West, Florida.
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Mississippi River Waterway System
The Mississippi River is the largest
river system in North America. Flowing
entirely in the USA, it rises in northern
Minnesota and meanders slowly
southwards for 2,530 miles to the
Mississippi River Delta at the Gulf of
Mexico. With its many tributaries, the
Mississippi's watershed drains all or
parts of 31 states between the Rocky
Mountains and Appalachian Mountains
reaching into southern Canada. The
Mississippi ranks 4th longest and the
10th largest among the world's rivers.
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Tennessee River System
The Tennessee River’s main
navigable channel is 652 miles
long. It begins a mile above
Knoxville, Tennessee, and
eventually joins the Ohio River at
Paducah, Kentucky. Commercial
navigation also extends into three
major tributaries: 61 miles up the
Clinch River, 29 miles up the Little
Tennessee River and 22 miles up
the Hiwassee River. Another 374
miles of channel that is too shallow
for commercial traffic is marked by
TVA for recreational boaters.
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Until TVA went to work in 1933, navigation
on the Tennessee River was severely
hampered by shoals, rapids and the effects
of droughts and flooding. TVA created an
open river road from Knoxville, Tenn., to
Paducah, Ky., and the region’s economy
continues to benefit today.
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Tennessee River System
From its beginning just above
Knoxville, the Tennessee River
drops a total of 513 feet in
elevation before it joins the Ohio
River. The TVA system of nine
main-river dams allows boats to
“climb” up and down a
“staircase” of quiet, pooled water
and controlled current — a
continuous series of reservoirs
that stretches the entire length of
the Tennessee River.
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Tennessee – Tombigbee Waterway (Canal)
The Tennessee-Tombigbee
Waterway is located in Northeast
Mississippi and West Central
Alabama. It serves as an
alternate route to the Gulf of
Mexico. The waterway stimulates
economic development, provides
outdoor recreational
opportunities, aids navigation,
and enhances wildlife habitat.
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Tennessee – Tombigbee Waterway History
As part of his “Southern Strategy” for reelection, President
Richard Nixon proposed investing $1 million in the Corps
of Engineers’ 1971 budget to start construction of the
Tenn-Tom waterway. In May 971, the President traveled to
Mobile, Alabama to participate with Governor George
Wallace and other elected officials from five states to
symbolically start construction of the long awaited
Tennessee-Tombigbee. The actual start of construction
was delayed until 1972 due to a lawsuit filed against the
project by a group of environmentalists. The federal courts
eventually ruled in favor of the project.
After 12 years of construction at a total cost of nearly $2B,
the Tennessee-Tombigbee Waterway was completed in 1984
when the last plug of earth was removed from the waterway
channel at Amory, Mississippi, allowing the long awaited
mixing of the waters of the Tombigbee with that of the
Tennessee River.
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Tennessee – Tombigbee Waterway
• Links foreign and domestic ports through deep water ports
on the Gulf of Mexico
• Links to 4,500 miles of navigable waterways in mid-west
• Transports 1.2 billion ton-miles of commerce annually
• Provides annual savings of $100 M in transportation costs
• Allows a maximum tow size of 8 barges (in single lockage)
• Connects to a network of highways and railways along the
route for transportation to destination
What value-add does the Tenn-Tom provide to industry?
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Tennessee – Tombigbee Waterway
Economic benefits of using the Tenn-Tom Waterway for the
transportation of raw materials, bulk products, finished
products are:
• lower costs
• expanded markets
• safer transport of goods
• energy efficiency
• environmental compatibility
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Tenn-Tom disadvantage is the sharp turns
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US Inland Water Equipment
BARGE INDUSTRY:
• US inland barge transportation industry includes about 300
companies with combined annual revenue of ~ $5 billion
• Services provided include freight transportation (80% of
industry) and towing / tugboat services (15% of industry)
• Freight transportation consists of
 dry cargo (grain, coal, steel, fertilizers, and aggregates)
 liquid cargo (refined petroleum products, petrochemicals, black
oils, and agricultural chemicals)
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Inland Water Volume Comparison
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Inland Water Industry Equipment
Towboats: self-contained vessels that push the barges; on-board power
of the towboats varies from 500 to 6,000 horsepower.
Covered Dry Cargo Barge: 200 feet long, 1,500 ton capacity; carries
grain, soybeans, coffee, salt, sugar, paper products, and packaged goods
Deck Barge: 200 feet long, 2,000 ton capacity; carries sand and gravel,
construction equipment, prefabricated buildings, military equipment, oil
rigs, and spacecraft
Open Hopper Barge: 200 feet long, 1,500 ton capacity; carries coal, ore,
steel, sand / gravel, and lumber
Liquid Cargo (tank) Barge: 300 feet long, 1 million gallon capacity;
carries petroleum and petroleum products, liquid fertilizers, industrial
chemicals, and orange juice
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Dry Cargo Barge
Made of steel, they have an outer hull, an internal void that is fitted
with heavy struts and cross braces and an internal cargo box. The
outer hull of a barge can come in one of two configurations:
• rake barge has a curved bow to provide less resistance when being pushed
and is usually placed at the head of the tow
• box barge is placed in the center and rear of the tow and can hold more cargo
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Liquid Cargo Barge
Liquid cargo barges transport petrochemicals such as styrene,
benzene, methanol; liquid fertilizer such as anhydrous ammonia;
refined oil products such as gasoline, diesel and jet fuel; black oil
products such as asphalt, No. 6 fuel oil and coker fuel; pressurized
products such as liquefied petroleum gases and butadiene.
Liquid barge construction is
typically a double steel skin having
a liquid cargo compartment which
is semi-supporting with the sides
of the compartment bearing the
weight load.
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Barge Terminal - Inland Port
A barge terminal provides linkage
to an inland port with transportation
services (rail / truck). The port is
integrated with the maritime terminal
and supports a more efficient access
to the inland market for both
inbound / outbound traffic.
Fundamental characteristics of an inland port:
1. An intermodal terminal
2. Connectivity to rail, barge or truck services
3. Provides array of logistical activities supporting the freight moving
through the inland terminal
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US Inland Water Transportation
CARRIER COMPETITIVE LANDSCAPE:
• Demand driven primarily by level of agricultural exports, coal usage,
petroleum refining and chemical shipments
• Large carrier companies have advantage in handling broad range of
cargo types and economies of scale in purchasing and marketing
• Small carrier companies compete by specializing in particular cargo
types or services, subcontracting to larger companies and offering
responsive customer service
• Inland barge companies compete with other modal transportation
carriers (rail, truck, pipeline) in moving bulk materials and liquids
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Major Inland Water “Players”
Barge transportation industry is highly concentrated where largest 50
companies generate > 85% of industry revenue. The five major barge
transportation companies based upon revenue are:
• American Commercial Lines (HQ in Louisville, KY)
• Ingram Barge (HQ in Nashville, TN)
• Kirby Inland Marine (HQ in Houston, TX)
• AEP River Operations (owned by American Electric Power)
• American River Transportation (owned by Archer Daniels Midland)
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ACBL Published Transit Times
FROM
Chattanooga
24.4
22.6
15.0
14.4
26.7
New
Orleans
17.0
28.4
27.1
20.5
18.9
30.7
24.6
28.1
22.5
18.8
12.7
21.5
24.0
11.7
Chattanooga Chicago Houston Little Rock
24.3
Louisville
Memphis
Mobile
23.0
13.8
21.0
28.5
10.3
11.8
14.3
36.1
30.5
25.4
20.3
24.0
14.3
10.5
11.1
17.9
8.2
9.7
21.8
38.6
11.6
27.9
28.9
18.2
17.7
Chicago
23.7
Houston
Little Rock
31.3
25.7
35.9
30.8
21.7
Louisville
15.5
21.6
21.7
19.9
Memphis
Mobile
17.0
33.8
22.1
38.4
15.6
21.7
12.2
27.1
13.8
30.6
21.3
New Orleans
Pittsburgh
24.1
22.1
28.7
28.2
12.0
28.3
17.4
26.5
20.9
9.2
11.6
18.3
9.7
30.6
20.9
St. Louis
13.4
11.5
18.1
16.8
10.2
8.6
20.4
10.7
18.2
Houston
St. Louis
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Pittsburgh St. Louis
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Inland Water Safety
• Water transportation operates in an
environment that has few crossing
junctures and in relatively remote
locations
• Barge spills occur much less often than
tank trucks or tank cars as a result of
fewer loadings and un-loadings
(or exposures)
• Design features such as double hulls,
bolted flanges, automated shutdowns,
spill containment devices, etc. have
reduced incident severity
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Inland Water Safety / Stewardship
Miles Per Gallon Carrying One Ton of Cargo
Truck Freight
155
Railroad
413
Inland Towing (Barge)
576
Ratio of Fatalities by Mode of Transport
Truck Freight
Railroad
Inland Towing (Barge)
155
23
1
Ratio of Injuries by Mode of Transport
Truck Freight
2,172
Railroad
125
Inland Towing (Barge)
1
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Inland Water Hazards
River boat pilots guide 448 million
tons of cargo on barges along the
Mississippi River each year. On the
best of days, the job is tricky. The
4th longest river on earth is full of
shifting currents, submerged
hazards, and constant traffic. In the
Spring, rain and snow flow down
from the north, the river crests and
the job becomes even more
treacherous. "On the river, if you
screw up, someone can get killed
or you can wipe out an entire
population," one pilot says.
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Inland Water Hazards
During flooding, boats must take water
into their hulls as ballast so they can sit
lower in the river to clear bridges,
making them even slower to respond
to rudder controls. Ships going upriver
cruise more slowly against the current
even as they use more power to
compensate, leaving less power for
emergency maneuvers. "With the river
like this, you have to be on top of it,”
the pilot says. "One minor little thing
that you overlook can cause everything
to go wrong."
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