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Transportation Strategy Transportation Strategy SCMN 4780SCMN 4780

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and follow instructions and follow instructions Inland WaterInland Water


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”

Guest Speaker Review – ITT CorporationGuest Speaker Review – ITT Corporation

Inland WaterInland Water


US Inland Water Industry US Inland Water Industry


Transportation Strategy Transportation Strategy SCMN 4780SCMN 47804Inland WaterInland Water

Norwegian Water System Norwegian Water System


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

RailTruck

Modal Share of US Transportation MarketModal Share of US Transportation Market

Pipeline

Inter- modal

Inland Water


Water transportation provides tremendous carrying capacity while consuming far less energy compared to other modes of transport such as truck, rail or air.


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).

•River freight •Lake freight •Intracoastal freight •Canal barge •Ship chartering / crew•Towing services

US Inland Water Transportation IndustryUS Inland Water Transportation Industry


Transportation Strategy Transportation Strategy SCMN 4780SCMN 47807Inland WaterInland Water

US Inland Water System US Inland Water System


US Inland Water TransportationUS Inland Water TransportationFreight in Tons (million)



Navigable Rivers & CanalsNavigable 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 ManagementNavigable Waterway System Management

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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.


Intracoastal Waterway SystemIntracoastal Waterway System


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 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 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 SystemMississippi 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 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.


Tennessee River System Tennessee River System

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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.


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.

Tennessee – Tombigbee Waterway Tennessee – Tombigbee Waterway (Canal)(Canal)



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.

Tennessee – Tombigbee Waterway HistoryTennessee – Tombigbee Waterway History



• 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

Tennessee – Tombigbee WaterwayTennessee – Tombigbee Waterway

What value-add does the Tenn-Tom provide to industry?



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

Tennessee – Tombigbee WaterwayTennessee – Tombigbee Waterway


Tenn-Tom disadvantage is the sharp turns

Transportation Strategy Transportation Strategy SCMN 4780SCMN 4780Inland Water Inland Water

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)

US Inland Water Equipment US Inland Water Equipment

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Inland Water Volume Comparison Inland Water Volume Comparison



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

Inland Water Industry Equipment Inland Water Industry Equipment



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

Dry Cargo BargeDry Cargo Barge

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Liquid Cargo BargeLiquid Cargo BargeLiquid 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 PortBarge Terminal - Inland Port

Fundamental characteristics of an inland port: 1.An intermodal terminal 2.Connectivity to rail, barge or truck services3.Provides array of logistical activities supporting the freight moving through the inland terminal

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.



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

US Inland Water TransportationUS Inland Water Transportation

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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)

Major Inland Water “Players” Major Inland Water “Players”

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FROMChattanooga Chicago Houston Little Rock Louisville Memphis Mobile

New Orleans

Pittsburgh St. Louis

Chattanooga 24.3 24.4 22.6 15.0 14.4 26.7 17.0 23.0 13.8

Chicago 23.7 28.4 27.1 20.5 18.9 30.7 21.0 28.5 10.3

Houston 31.3 35.9 24.6 28.1 18.8 21.5 11.8 36.1 25.4

Little Rock 25.7 30.8 21.7 22.5 12.7 24.0 14.3 30.5 20.3

Louisville 15.5 21.6 21.7 19.9 11.7 24.0 14.3 10.5 11.1

Memphis 17.0 22.1 15.6 12.2 13.8 17.9 8.2 21.8 11.6

Mobile 33.8 38.4 21.7 27.1 30.6 21.3 9.7 38.6 27.9

New Orleans 24.1 28.7 12.0 17.4 20.9 11.6 9.7 28.9 18.2

Pittsburgh 22.1 28.2 28.3 26.5 9.2 18.3 30.6 20.9 17.7

St. Louis 13.4 11.5 18.1 16.8 10.2 8.6 20.4 10.7 18.2

ACBL Published Transit Times ACBL Published Transit Times

St. Louis Houston



• 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

Inland Water SafetyInland Water Safety



Inland Water Safety / StewardshipInland Water Safety / Stewardship


Miles Per Gallon Carrying One Ton of Cargo

Truck Freight 155Railroad 413Inland Towing (Barge) 576

Ratio of Fatalities by Mode of TransportTruck Freight 155Railroad 23Inland Towing (Barge) 1

Ratio of Injuries by Mode of TransportTruck Freight 2,172Railroad 125Inland Towing (Barge) 1


Inland Water Hazards 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 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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Documents

SCMN 4780 To view guest speaker presentations, log in: edge.eng@auburn