Calif. container-on-barge service falters
A short-sea shipping service in northern California supported by a $30 million grant from the U.S. Maritime Administration has not generated sufficient container traffic between the ports of Stockton and Oakland in its first year of operation to maintain a weekly schedule, the Stockton port authority announced Friday.
Effective Sept. 1, the container-on-barge demonstration project will be scaled back to an "as-needed" service, the Port of Stockton said.
Launched with high hopes in June 2013 after several years of planning, the M-580 "marine highway" service was intended as alternative route to trucking on I-580, especially for overweight loads of agricultural products headed from the Central Valley to Oakland for transport on ocean vessels to Asia.
Officials at the port, which invested more than $8 million of its own money in the project, expressed confidence at the time that the river shuttle would make money, and that shippers and ocean carriers were keen to move containers by barge to avoid congestion and highway weight limits.
"Challenges remain as the Port of Stockton is the only operating underwriter of this regional project. During this initial period, we learned that the time it takes to build sustainable volumes was longer than anticipated," Port Director Richard Aschieris said in a statement.
To date, the service has hauled 7,259 containers on 116 voyages, which has removed an estimated 24,629 truck trips from I-580 and helped reduce diesel emissions by 80 percent, according to the port authority.
Stockton officials took pride in the fact that the service didn't enjoy any subsidies and was designed as a for-profit business, but in the past few months, they tried unsuccessfully to secure grants or other funding from numerous state and federal agencies to maintain the current level of service.
"With the congestion we experience on I-580, as well as the air quality and safety benefits of the M-580, we look forward to the day we can bring the weekly service back to benefit our communities," Port Commission Chairman Victor Mow said.
The river shuttle was supposed to be a boon for shippers of dense cargo, such as grain, because containers can be loaded with 20 percent to 25 percent more cargo if they are not transported over the road. Filling containers to their full capacity allows shippers to reduce transportation costs. Other savings were expected from the reduced need for chassis and by avoiding gate fees in Oakland. Officials said the goal was to price the service at about the same rate as a round-trip between Stockton and Oakland by truck. When the service began, truck rates in the Stockton-Sacramento area were about $350-$455 for basic drayage, with a fuel surcharge of about 30 percent.
Two barges were utilized, one calling at the Ports America terminal and the other at Oakland International Container Terminal, operated by SSA Marine. Commodities moved by barge have included tomato paste, wine, hay and supersacks of urea fertilizer.
In November, Stockton Deputy Director Mark Tollini said the so-called California Green Trade Corridor was on track to become a twice-weekly service and that eventually, it could offer three or four calls per week.
Seattle-based SSA Marine manages the container yard and handles loading and unloading at the dedicated barge terminal, under contract with the Port of Stockton. The service is operated by Brusco Tug & Barge.
The news is a setback for the Maritime Administration and the Department of Transportation, which have made truck-to-barge conversion a policy priority. MarAd held up the M-580 as a marine highway success story. It has designated at least 21 Marine Highway routes and invested more than $130 million to support new services.