Domestic Water Carriers

Significance of the Industry Transport roughly 14% of total national freight 26.5% of total domestic ton-miles Employ close to 200,000 Average compensation = 47,000

Types of Carriers Private Carriers –Cannot be hired –Only transport freight of company that owns/lease the vessel

Types of Carriers For-Hire Carriers –Charge fee for their service –Exempt from economic regulation when transporting dry & liquid bulk commodities –Vast majority of freight transported meets this definition –Hence, most of the for-hire carriers are exempt

Types of Carriers Regulated For-Hire Carriers –Economic regulation administered by the STB –Only about 300 carriers –Classified as either common or contract carriers

Types of Carriers Internal Carriers –Operate on U.S. Rivers & lakes (primarily the Great Lakes) –Principal waterways (rivers) Mississippi Ohio Tennessee Columbia Hudson Tenn-Tom Waterway

Types of Carriers Costal Carriers –Operate along coasts (Atlantic, Pacific, & Gulf of Mexico) –Use oceangoing vessels primarily –Some oceangoing barges used (18,000 ton capacity)

Distribution of Ton-Miles Exempt, For-Hire –Coastal = 34.7% –Internal = 58.3% –Great Lakes = 7.0% Regulated, For-Hire –Coastal = 25.5% –Internal = 56.9% –Great Lakes = 17.6% Private –Coastal = 87.0% –Internal = 10.1% –Great Lakes = 2.7%

Domestic Ton-Miles by Type of Service Exempt, For-Hire = 73.1% Regulated, For-Hire = 4.5% Private = 22.4%

General Service Characteristics Commodities Hauled –Dry bulk (coal & coke) = 28.3% –Petroleum (& related) = 24.4% –Food & farm = 14.4% –Chemicals = 8.4% –Iron ore, iron & steel = 4.7% –All other = 19.8%

General Service Characteristics Length of Haul –Internal carriers average haul 482 miles –Great Lakes carriers average 508 miles –Coastal average 1652 miles Load Size –Barges normally transport 1000 – 1500 tons (max capacity 3000 tons) Equivalent to 16 railcars or 60 trucks –Great Lakes carriers average 20,000 tons

General Service Characteristics Low-Cost Service –Primary advantage –Lowest cost mode for shipment of non-liquid products (1997 averages below) Barge per-ton fees = $0.73 Rail per-ton fees = $2.40 Truck per-ton fees = $26.12 Oil pipelines per-ton fees = $1.37

General Service Characteristics Speed of Service –Transit time longest of the 4 modes that move non- liquids –Speeds average between 5 – 10 miles per hour (upstream vs. downstream) Service Disruption –Ice –Hurricanes

Types of Vehicles Tanker –Largest ship in domestic water industry –18,000 – 50,000 tons Barge –Most commonly used vessel by internal waterway carriers –Powerless (towed by a tugboat) –1500 – 3000 tons

Terminals Most often provided by the public Local government agencies operate ports and storage facilities Some private firms invest in own terminals –Grain, coal, oil Containerization critical

Cost Structure Approximately 15% of costs are fixed Remainder (85%) are variable –Labor represents approximately 20% of operating costs –Ships typically consume more fuel per mile than all the other modes ( miles per gallon) –Note that despite using more fuel on a per mile basis, water transporters use less overall fuel than other carriers –Thus, on a fuel per ton-mile basis, water is the most fuel-efficient