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Barge Study Offers Ag Transportation Options by Staff The Bend Bulletin, August 25, 2004

For the past 42 years, Seaspan Barge Co. of Vancouver, B.C. has been making a weekly stopover in Portland, delivering 18,000 tons of cement before returning to B.C. with an empty load.

What if the vessel was able to carry back to Vancouver the equivalent 900 containers of Oregon agricultural products for further export to the Pacific Rim? Seaspan officials had no idea such a possibility even existed over the years.

With a clear need for transportation options, Oregon's agriculture industry could make excellent use of a waterborne service that has the capacity to move product to market.

That's one of the many conclusions offered by a newly-completed study that focuses on the barging of containerized agricultural products. The study, conducted by John Kratochvil of the Oregon Department of Agriculture and funded through a federal grant, will be officially released this week at a meeting involving port officials, ag exporters, shipping companies, and barge operators in which a number of options will be discussed.

The study compares cost and availability of truck, rail, and barge service to agricultural shippers. When all factors are considered, a system of barge traffic between inland ports and larger west coast ports with overseas connections could keep the export of Oregon agricultural products viable.

"My research indicates that freight traffic in the western U.S. can be shifted from highway to water, generating significant savings for agricultural shippers," says Kratochvil. "As a result, a robust, profitable water transportation system can help to keep our ag products competitive in world markets."

In general, the study finds that Oregon agricultural shippers are not using waterborne transport as much as their counterparts in other parts of the world. For example, 41% of cargo in the European Union is transported via water compared to just 7.3% in the United States. Europe moves 28% of its cargo by highway trucking compared to 44% in the U.S. Only 8% of European cargo moves by rail compared to 40% in the U.S.

"The greatest challenge to implementing weekly-containerized barging service is a mindset developed beginning in 1956 when the U.S. interstate system was authorized," says Kratochvil, whose study concludes that greater utilization of such waterways as the Columbia River, the Puget Sound, and the coastal Pacific waters in between may hold the key for more efficient movement of Oregon's agricultural goods. With 90% of Oregon's agricultural production leaving the state, transportation costs and accessibility are huge factors to what is roughly a $10 billion industry.

"It's absolutely critical to Oregon agriculture that we maintain and ensure ongoing export market access," says Dalton Hobbs, administrator of ODA's Agricultural Development and Marketing Division. "We cannot consume the huge volume of product we produce in this state. We rely on exports, and having efficient and affordable transportation is very important."

Recent developments have clouded the picture for those who rely on shipping of Oregon agricultural products. Two container carriers- Tokyo-based "K" Line and Hyundai Merchant Marine of Seoul- have announced they will soon stop serving the Port of Portland. That leaves only South Korea's Hanjin as a local provider of container shipping service to the Pacific Rim, effectively limiting the options for many ag producers and processors.

"This week's meeting will look at what kinds of options our shippers might have in overcoming some of these obstacles," says Hobbs. "We feel there may be some very good alternatives, particularly utilizing the Columbia River system through barge service that can act as a feeder to other ports along the U.S. west coast. This could include Seattle-Tacoma and perhaps all the way down to Long Beach, California. Containers of ag products would simply be barged to these load centers and then shipped directly to Pacific Rim ports."

Hobbs says there is definite interest among the parties to establish a barge system, but it is a chicken-and-egg scenario. Operators of the tugboats that would haul the barge want assurance the agricultural freight will be there. Ag shippers want to know that the tugboats and barges will be there. Getting the two together for a thorough discussion this week may help.

Other options open for discussion at this week's meeting may include making better use of return trips by ships and barge lines that call on the Port of Portland. The example of the Vancouver B.C.-based barge company is not so untypical. Many products are imported to the port but vessels often leave empty.

Transport of agricultural products directly to an export market or for further distribution could benefit a number of Oregon commodities despite the fact that waterborne transportation may take longer than by truck. The barge study points to Oregon-grown potatoes, onions, apples, and pears as basic commodities harvested once a year and kept in storage from six to nine months.

Many exported Oregon ag products are already shelf stable- either canned, dried, or frozen. A couple extra days at sea or on the river wouldn't make a difference. The cost savings would.

Finally, the study refers to the concept of sustainability as part of a new vision for freight transportation:

"It is obvious that the coastal waterways are sustainable and that the inland waterways, replenished by rainfall and ice melt, are in a greater sustainability category than the highways. It is common knowledge that western states are in need of bridge repair as are the road surfaces."

With a network of Pacific Northwest waterways already present, agricultural shippers in Oregon are taking another good, hard look at moving their product the way cargo used to be moved before the highways and railways were established.