Bacon's Rebellion

Democracy Thrives in Sunlight

Another Transportation Alternative: River Barges

—

by

James A. Bacon
in

T. Parker Host, a Norfolk maritime company, is seeking federal seed money to run shipping containers from Norfolk to the Port of Richmond, bypassing congested highways — Interstate 64 and U.S. 460 — out of Hampton Roads. According to the Associated Press, the proposed James River Barge Line would move at least 5,000 containers the first year, with a goal of shipping 250,000 annually on two barges making trips twice a week.

Said U.S. Maritime Administration Administrator Sean T. Connaughton (the former chairman of the Prince William County Board of Supervisors): “They have a very good business plan. It’s becoming more and more difficult to build our way out of this congestion. So using our waterways makes an enormous amount of sense.”

Although T. Parker Host anticipates that the business would become profitable, it is not willing to shoulder the anticipated start up costs of the first year, which could amount to $750,000.

Share this article

ADVERTISEMENT

(comments below)

ADVERTISEMENT

(comments below)

Comments

11 responses to “Another Transportation Alternative: River Barges”

  1. Ray Hyde Avatar
    Ray Hyde

    I think we should thank T.Parker Host for their keen powers of observation and wait for someone to come along who is willing to take the risk.

    When the cost for people who are willing to have their money tied up in the cost of shipped goods exceeds the cost for people whowant their stuff tomorrow, then Host, or someone, will have a business.

  2. Larry Gross Avatar
    Larry Gross

    Gee .. did someone say you could also move that stuff with rail rather than I-64?

    Oh… hmmm… why hasn’t THAT happened?

    Oh GEE .. wasn’t that the argument with I-81?

    Wanna speed up the process BIG TIME?

    TOLL those trucks on I-64 to pay for their actual useage instead of Va taxpayers.

    OR… let’s let Va Taxpayers pay for road, rail and barge on an equal basis to “support” those engaged in making a profit from shipping.

    This is one of those deals that seriously grates on me from the perspective of whether or not taxpayers should pay up front or consumers should pay – for shipping as an incorporated fee for delivery.

    When consumers pay – you encourage and incentivize more efficient and more productive shipping.

    When taxpayers pay – you create subsidies with constituencies that virtually ensure that efficiency and productivity will be subordinate – and will remain that way as those constituencies will lobby our elected to preserve their subsidies.

    The next time you see a truck with a sign on the back that says it pays approx 7K a year in road taxes – consider this.

    100,000 (miles a year) / 4 (mpg) =

    25000 gallons X .36 (gas tax) =

    $9000 ….

    That interstate road has to be twice as thick to support trucks.

    That cost is paid for by you and I – up front by our gas taxes.

    In effect, our gas taxes pay for roadways for trucking companies.

    Is this “better” than having those truckers pay the actual costs and incorporate those costs into the price of the goods delivered?

    How about.. is it better than letting all shipping modes compete on an equal footing?

    Barge, rail, road and air – all paid for – by shipping companies – not taxpayers who… will determine the most cost efficient way to deliver the goods competitively .. and than pass that cost on to consumers.

    The bottom line is that right now we not only subsidize shipping with taxpayer monies to our detriment in general but we also do not do it on an mode-equitable basis – so we actually favor one mode over others – road over rail and barge – to our detriment.

    That’s why the barge investors want taxpayer money to start up.

  3. Ray Hyde Avatar
    Ray Hyde

    I agree with all but the tolls.

    At four MPG trucks are already paying 6 times as much as cars, so the fact that the highway has to be twice as thick to support the trucks makes no difference. Even without trucks you would still make the highway just as thick, because of environmental degradation and cost considerations. It is cheaper to pour it once twice as thick than it is to pour it twice.

    So, trucks are paying proportionately more through the fuel tax, it is only that the fuel tax is not nearly high enough. And, by the way, it ought to apply to heating and electrical fuel, too. And since diesel vehicles are generally heavier, you could increase the tax proportionately by having a higher tax on diesel than gas: in other words, charge by the BTU. This would also mean that ethanol would be taxed less.

    Oh, and we don’t have to build any toll stations, or create another bureaucracy.

  4. Ray Hyde Avatar
    Ray Hyde

    “…we actually favor one mode over others – road over rail and barge – to our detriment.”

    We don’t know that this is true. Rail and barge are much slower than trucks. When you have $100,000 dollars worth of inventory on a truck or container, time is money.

  5. NoVA Scout Avatar
    NoVA Scout

    Connaughton has made what is now being called “America’s Marine Highway” one of the focal points of his term as United States Maritime Administrator. The idea is to relieve congestion, particularly in the I-95 and I-5 north/south corridors on the east and west coasts, by encouraging use of sea transit for containerized cargoes. It’s not an easy transition, because there has to be a landside infrastructure in the ports to accommodate and increase in this traffic. But it makes sound economic and transportation policy sense. I imagine that sitting in traffic on the Northern Virginia portion of I-95 gave Connaughton an acute appreciation of the importance of moving some of this traffic out to sea. It’s an excellent initiative that deserves to succeed.

  6. Larry Gross Avatar
    Larry Gross

    Well.. when it comes to say.. issues like the best way to ship something… I think having a person in charge who spent a career in government is a wrong approach.

    That’s the problem that we have with ..what I call “command and control” government dictates.

    The “market” and how it works is all important and those who understand the market.. as well as the existing subsidies are in a better position to help guide policy.

    Do we have any idea at all why barges are not currently used for the most part except for bulk commodities for the most part?

    I’m not opposed to the idea that barging should be an option.

    What I am opposed to is arbirtrarily deciding that it is better than roads or rail… or what percentage of shipping barges should be doing.. without taking a hard look at why.. barging is not currently a favored method.

    We have a guy.. who wants to start using barges…. great… now let’s look at the economics BEFORE we commit tax money to it.

  7. Larry Gross Avatar
    Larry Gross

    re: truck damage

    trucks damage far more than their proportional increase in gas taxes.

    Every mile they travel – no matter what their gas mileage – is more damaging that an equivalent mile of auto travel.

    This is not disputed by the facts.

    The issue is that from a public policy point of view – should taxpayers pay for this through their gas tax revenue – or should consumers pay as a shipping “fee” collected by governments and passed on to consumers.

    You ask -what is the difference?

    The difference is that when you collect the money on the front end of the process – that shippers will COMPETE with each other to reduce their shipping costs and get more business whereas if it is collected from taxes.. it is already “covered” by the money they already pay for fuel – that is considered a “fixed” cost.

    Once you TOLL per useage – including weight – there is a direct incentive to reduce costs.

  8. Jim Bacon Avatar
    Jim Bacon

    Ray and Larry, I agree, if barges are such a great idea, there’s no need to subsidize them. If barges aren’t economical now, they may be in three or four years when traffic congestion worsens. At that point, presumably, business conditions will have improved to the point where the risk is worth taking.

    My main point in posting this item is to show that Virginia’s transportation system does have options that can come into play as traditional modes (highways) become more congested. In the absence of new mega-projects, Hampton Roads is not necessarily headed to gridlock and breakdown.

  9. Larry Gross Avatar
    Larry Gross

    From a public policy point of view – what should the state be doing (or not) .. for the transportation side of the equation once they have decided to get into the business of building ports?

    Ray points out that whoever is supposed to get a container full of goods is not going to like the idea of a barge bringing it upriver at 5 mph verses a tractor trailer unloading it at a dock.. at about the same time a comparable container is on a barge at the mouth of the James.

    Meanwhile.. VDOT is soliciting PPTA proposals on a separate interstate from I-64 .. by calling it 460… then they decide that – the road could not be built only from car tolls.. and that state taxpayers would have to pitch in for the road to “work”.

    Then we have this guy who wants the government to subsidize his barge operations… so that the taxpayers can be “spared” the congestion that would be generated by ever increasing numbers of truckers coming from the ports.

    no mention of rail… here…so far

    So .. us poor smucks that have to use I-64 .. are being told that.. HEY.. we ought to be paying for the upgrades to I-64 caused by increased truck traffic because the ports in HR/TW benefit us and the rest of Virginia.

    So just remember.. the next time you’re “caught” on I-64 with congestion fund and games – that YOU are doing your part to provide someone with a job at a truck depot in Harrisonburg… or some such.

  10. NoVA Scout Avatar
    NoVA Scout

    Larry: I don’t understand the reference to Host having “spent his career in the government.” This is an old-line family business that has been around for a long time. I don’t know Mr. Host personally, so perhaps you’re aware of a career that escapes me, but I doubt that whatever that government service might be is of any significance in this context.

    The government’s role in moving traffic off the roads and out to sea hasn’t been one of subsidization (at least not yet), but encouragement and planning. At some point, public infrastructure (roads, bridges, access to and from ports and terminals) is implicated, but this is, for the moment, much more of an effort to encourage alternatives than it is an advocacy of direct subsidies. T. Parker Host apparently, according to the news reports, is asking for government subsidy in the early stages. I would think that would not find favor in this administration.

  11. Larry Gross Avatar
    Larry Gross

    NoVa Scout – I was referring to Mr.Connaughton government advocacy.

    I could be wrong… but I’m not sure what Virginia EXPORTS via it’s ports…

    If Va ports are a key economic strategy for it’s citizens then I’d have a different view.

    It appears to me that Va Ports are, instead, a way for business to to market imports to Virginians.

    If this is true.. would we view this as such a benefit to Virginians as to justify taxpayer provisioning of the port and transportation infrastructure?

    In other words.. is the net effect of Va Ports to provide us with a Walmart-sold power drill than is 50 cents less in price because Va taxpayers pay a dollar more in taxes for the ports and at the same time experience degradation in the level of service of the interstates to/from the ports?

    I don’t know the answer. I plead ignorance. But I am asking the question. Do the ports provide jobs for Virginians who produce something that is exported?

    Second question. If they do not – what is the benefit to Virginians that justify their tax dollars?

Leave a Reply

Read More