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As the United States prepares for a dramatic growth in freight volume, the freight industry continues to explore creative, new approaches for transporting cargo. The sheer volume of containerized cargo and truck freight that will ultimately need to move throughout the country creates unique opportunities. The St. Louis region can benefit if we can demonstrate that shippers can move their products to and through our region more efficiently and cost-effectively than via other routes.
Working with transportation industry leaders, container on barge (COB) and container on vessel (COV) services along the Mississippi River and its tributaries have been identified as transportation alternatives that could deliver those benefits, while maximizing the inland waterway’s existing but underutilized capacity. The completion of the $5.25 billion expansion of the Panama Canal in 2016 has opened the door for a new all-water route into the Midwest. It allows reduced shipping time and lower ocean transportation costs while transporting cargo between the Atlantic and Pacific Oceans along with the ability for larger vessels to pass through the widened canal and continue on up the Mississippi River.
While construction was still underway on the Panama Canal, the St. Louis Regional Freightway teamed with various stakeholders to begin exploring the feasibility of potential COB service—evaluating regional infrastructure and equipment to load and unload containers stacked on a barge versus traditional bulk cargo. It quickly became evident that the St. Louis region possessed key assets for a COB service: three public ports, a handful of privately operated river terminals, and a world-class freight network comprised of six Class I railroads, the third largest inland port, two international cargo airports and four interstate highways. Tires, scrap metal, and agriculture products like soybeans were identified as commodities that could withstand the additional transit times and could be moved to and from the region via COB.
"The sheer volume of containerized cargo and truck freight that will ultimately need to move throughout the country creates unique opportunities"
It also became clear that in order for a COB service to succeed, it was necessary to strengthen relationships with other ports. The St. Louis Regional Freightway and other regional ports subsequently signed a memorandum of understanding (MOU) with the Port of New Orleans (NOLA) in February 2017, followed by a second MOU in March 2018 with the Louisiana-based Plaquemines Port Harbor & Terminal District (PPHTD) in March 2018. PPHTD had already been exploring innovative ways to create a transportation network between Plaquemines Port and upper ports along the Mississippi River. Representatives of the U.S. Department of Transportation Maritime Administration also encouraged collaboration with other regions along the Mississippi River, including Paducah and Louisville in Kentucky, and Kansas City, Missouri, to jointly create the volume that would be needed to develop economies of scale to help address availability of containers and demonstrate a competitive advantage.
PPHTD had already signed an agreement with American Patriot Holdings, LLC, (APH), to develop a hub-and-spoke transportation system for container transport vessel shipments from Plaquemines, at the mouth of the Mississippi River south of New Orleans, to Midwest markets. They viewed this COV approach as a way to move a critical mass of containerized products significantly faster than COB, resulting in lower transportation costs. Ultimately, our world-class multimodal network helped the St. Louis region fit into the developing plans.
The APH vessels have patented features enabling high cargo payload and significant upriver speeds. The liner vessel will carry up to 2,500 containers at speeds of 13 miles per hour with virtually no wake, making round trips from Plaquemines to the St. Louis region possible in 10 days, significantly faster than COB. With so much cargo mass, the all-marine route from Asia to the Midwest will significantly reduce shippers landed transportation costs versus rail and truck from other gateway ports. The vessel recently completed model testing in Germany, and final engineering and design are underway. Given that progress, APH and PPHTD are finalizing an economic competitiveness study that identifies the St. Louis region as a possible distribution center that serves as a consolidation point for commodities within the upper Mississippi River Basin.
The next step to advance the effort is lining up the cargo for the return trips. To that end, APH is conducting a study with 13 states to identify freight flows, commodities and carriers to fill a vessel. The findings are expected to be released later this year. If shippers and carriers along the upper Mississippi River Basin work collaboratively together generating the critical mass that supports COV services and drive transportation costs down, this new transportation option may be part of the solution needed to increase the nation’s global competitiveness.