Future River Economic Competitiveness
Future Economic Competitiveness Overview
According to the National Shippers Strategic Transportation Council (NASSTRAC), most transportation delivery decisions are based on cost. Shippers are always exploring alternative modes of transportation. This is being driven mostly by price and efficiencies.
(Source: The National Shippers Strategic Transportation Council (NASSTRAC) Annual Report. (2013-Update).)
To be an effective choice for shippers, the total cost of handling by barge must be better than truck or rail. Barge movements include the cost of transport and equipment, such as barges, tugs, tug fuel (and surcharges), loading and discharging equipment and labor, and piloting labor.
Future Value and Commodities
The river system in the OKI region is significantly influenced by the movement of basic chemicals and agricultural products. In terms of value, the movement of agricultural products are currently second to shipments of basic chemicals. These commodity value positions are expected to remain unchanged over the next few decades.
Although the region is expecting to see a decrease in overall river tonnage, the overall value and contribution to the regional economy is expected to rise. In 2050, the total value of goods is expected to increase over 60% from 2020 values, according to the Freight Analysis Framework (FAF) cargo forecasts developed by the United States Department of Transportation.
The future values of commodities within the OKI region are expected to be led by the shipment of Basic Chemicals (214%) which includes those used in manufacturing processes such as chlorine; caustic soda (used to make soaps and detergents); and hydrochloric acid (used for household cleaners, food processing, and production of other chemicals).
River shipping in the region is also expected to see steady increases in the value of nearly all commodities led by electronics (160%), machinery (145%), textiles (111%), and base metals (72%). Coal is the only top 10 commodity having a forecasted decrease (59%) in value.
Future Employment
Nationwide, water transportation employment is expected to rise slightly from 75,400 to over 76,000 in the next decade.
In recent years, finding workers in the region has been difficult due to competition for younger workers among other industries, such as the trades, warehousing and distribution. On average, median wages in waterborne freight occupations are higher than those in other occupations. Employment is expected to generally remain unchanged over the next 10 years.
River transport representatives cite working conditions as the primary reason it is difficult to recruit new employees. Because water operations are 24/7, water shipping workers’ schedules may vary to include nights, weekends and holidays. More recently hired employees without seniority are expected to work the least desirable shifts and longer hours. This creates a challenge for barge fleeting and terminal operators in the near future.
Autonomous River Freight Vessels
In the future, autonomous river freight vessels could provide some relief to the industry’s hiring woes. Just as a driverless truck or rail locomotive would do, graduating levels of autonomous technology would reduce the industry’s dependence upon human employees. Early levels of autonomy could help reduce the number of on-board staff needed for operations. Mid-level autonomy would allow for remote operations from a central communications hub. Full autonomy would remove humans from the entire river trip.
Simultaneously, the development of land-side autonomous material handlers and ground equipment would further aide in the creation of more attractive, indoor-operation environments where staff are trained more as engineers.
Autonomous inland freight vessels are still many years, if not decades away. Researchers across Europe are studying the technology’s potential and, most importantly, the barriers that stand in the way. Existing maritime laws and regulations, as well as physical infrastructure limitations are sited as key issues needing to be addressed. Currently, there is no known research being conducted in the US.
Future Market Expansion Opportunity
Today, very few Container-on-Barge (COB) operations are active in the nation’s inland waterway system. COB continues to be a hot topic within the U.S. maritime industry; however, it is dependent upon sufficient customer demand. The trucking industry’s pricing and shorter delivery times is a huge barrier preventing COB from gaining a foothold in the supply chain market.
That said, it is an industry-wide assumption that the future trend will be increases of COB operations. One reason is the nationwide truck driver shortage. The OKI region has an added asset for COB adoption, the proximity of the Ohio River to major Class I railroad and interstate trucking container movement corridors. COB movements are expected to be interregional, or shorter moves, where multiple customer cargos can be combined to fill a barge for efficiencies-of-scale. Evidence of this can be seen on the Mississippi River in Jefferson County, Missouri, or the St. Louis region, where development is in the planning stages for COB service.
Deployment of COB will be driven primarily by the private sector. Operators will need to conduct a market assessment for containerized river shipments in order to make a business case for investing in COB operations and infrastructure.