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Stockton short-sea shipping project ends regular barge service

Dec 5, 2014 04:46 PM

Due to a lack of demand and funding, California’s Port of Stockton has been forced to transition its weekly operation of the Marine Highway program — locally known as M-580 — to one operating on an “as needed” basis.
 
Despite obvious environmental benefits and initial seed money from the federal government and a local air quality agency, the port does not see the Marine Highway effort as economically feasible in its current state.

To date, the port has been unable to secure the kind of funding or partnership from a state, federal or private entity. Nor has it sparked intense interest from shipping companies, said Jeff Wingfield, director of environmental, government and public affairs for the Port of Stockton.

“I was disappointed that folks did not jump on board more than they did,” Wingfield said.

The Marine Highway program is overseen by the U.S. Maritime Administration (MARAD). The program seeks to establish a “container on a barge” style of short shipping service. The program was designed as a viable alternative to truck transport on highly traveled freeway corridors and roads around the country.  Reducing truck emissions and congestion are major goals of the program.

At Stockton, the M-580 program seeks to do that by offering the barge transport system from West Sacramento to Oakland, with stops in Stockton. Air emissions have been reduced by as much as 80 percent in some cases, according to the port. The Interstate 580 corridor is one of the most congested in the nation. More than 7,500 trucks travel the corridor daily, between the Port of Oakland and the Port of Stockton.

The M-580 plan included two barges and one tugboat — the 2,460-hp Arthur Brusco — to move containers between the ports. One barge was retrofitted to handle 256 containers and the other can carry 169 containers. Average transport time between Oakland and Stockton is 9.5 hours at 8 knots. Initially the service was making two weekly round-trip rotations.
 
With each barge sailing, the Marine Highway plan would have removed 350 trucks from the port and highway system. It was hoped that use of the program would create a robust revenue stream for the port and income for the city of Stockton.

The port received $750,000 in funding from the San Joaquin Valley Air Pollution Control District in 2011. However, the lack of subsequent funding has proved problematic. The port has absorbed operational costs as a result — it has been losing nearly $1 million a month for its operation of Marine Highway activity. “The losses were too great for us,” said Wingfield.

He said lack of interest in use of the program was partially due to the fact that shipping companies are loath to disturb long-term contracts they have with trucking companies.
 
“It’s not easy for them to just abandon those,” Wingfield said.

Wingfield said the structure of the program has made it a challenge for ports to operate. That structure makes it easy to secure funding for equipment, but operational costs are much harder to secure.

However, the Marine Highway program has seen two successes. One is the M-64 connector that operates between Norfolk, Va., and Richmond, Va. The other is in Texas, between Chambers County and the Port of Houston, said Kim Strong, spokeswoman for MARAD.

Strong said that whatever challenges ports have been facing has not been due to an absence of MARAD’s funding. Since 2009, U.S. ports have received over $100 million in Marine Highway development funds through the TIGER program, she said.

In addition, MARAD has awarded $6.3 million for infrastructure and equipment through a Marine Highway Grant program, and funded $700,000 for corridor studies. 

Strong said that the Chambers County to Houston service has not received any federal support.
  
“It takes good fiscal planning, regional collaboration and support combined with solid marketing and efficient operations,” Strong said.

“And while partnerships and collaboration between public and private agencies are critical, different efforts are required for each region, as markets vary widely from one part of our nation to another,” said Strong.

“At Stockton, the port could not find the financial partners to make the Marine Highway weekly effort possible. The port expressed interest in partnering with either state or federal agencies for financial commitments. This has not happened,” she said.

For now the Port of Stockton has been seeking both partnerships and funding, said Wingfield.

He said the port is confident that opportunity for more funding and partnerships through air resources boards and air districts will materialize by way of California’s evolving Cap and Trade program.

The port is eager to pass responsibility of the operation of Marine Highway activity to someone else. He said that the port has had interest from two private entities about taking over the program.

“Our position is we have all the assets here. We have everything it takes to operate the Marine Highway service,” Wingfield said. “Because operating it was really not our main goal.”

Wingfield said that, initially, the port was not supposed to be the entity operating the Marine Highway effort, but it felt it needed to step in and take it over when an operator was not secured.

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