INLAND
WATERWAYS

Shippers
share space
in barges
BY KEVIN G. HALL
Journal of Commerce Staff

New Orleans – When moving consumer goods or components for manufacturing, shippers often turn to a package-express service or a less-than-truckload motor carrier.

But what about imports of steel, aluminum or other heavy breakbulk cargo? 

MBLX Inc. of New Orleans has developed a growing business by consolidating such heavy items and shipping them on inland waterways in a less-than-bargeload operation.

The service allows three or four shippers to move smaller loads without paying for an entire barge or waiting until the barge operator’s has enough cargo to fill it.

In three years of operation, MBLX volume has expanded to about 45 consolidated barges a month from 12 to 15 a month in the first year.  The service handled 1.3 million tons last year and has handled 906,000 tons through September of this year. 

The company operates the service in a contractual relationship with American Commercial Barge Lines, a division of Jeffersonville, Ind.-based American Commercial Lines.  MBLX is a sister company to New Orleans freight forwarder and customs broker M.G. Maher & Co. 

Although the less-than-bargeload concept has been around since the 1970’s, it never came into widespread use.  That’s partly because consolidated shipments generally are time-sensitive and barge transportation is comparatively slow – as long as three weeks from New Orleans to upriver destinations in the Midwest. 

Less-than-bargeload service got a boost last year when Union Pacific Railroad encountered service problems and a surge in steel imports left importers looking for other transport options. 

MBLX’s operation resembles the services many non-vessel-operating common carriers perform in ocean shipping.  MBLX sells space on the barges, arranges delivery and transfer, and essentially provides everything but the barge, which is supplied by ACBL. 

MBLX fills the barges with consolidated shipments of slabs, coils and other steel products moving to points along the Mississippi River and other inland waterways. 

The big problem MBLX had to overcome was transit time.  Shippers don’t want to keep their cargo sitting around for weeks until carriers can fill a barge.  Likewise, carriers don’t want to keep barges idle for long periods. 

MBLX has developed enough volume to allow it to reduce average waiting time from 10 days to three days – and this year may even be able to cut it to less than 62 hours. 

“We have been very satisfied in service” from MBLX, said Kou-Ren Shao, director of shipping coordination, traffic and insurance for Sumitomo Corp. of America in New York, a major steel importer. 

David P. Schulingkamp, president of MBLX, said the company hopes to expand the service to attract project cargo and a range of products needed for manufacturing supply chains. 

Schulingkamp cites a service in the late 1980’s that moved crates of Brazilian auto parts via New Orleans to upriver points for Rockwell International.  That service stopped when Rockwell shifted its sourcing to Eastern Europe, but the idea remains viable, he said.

 The concept will work for manufacturers that want to use barges on the river system as a “floating warehouse,”  Schulingkamp said.

 “Once you fill a pipeline with material you have a floating warehouse and you have free storage, in essence, while the barge is en route,” he explained. 

Because many steel traders or brokers don’t get paid until the freight actually arrives, they want to minimize waiting time as much as possible. 

“It’s a matter of planning ahead,”  Schulingkamp said.

MBLX uses a computer system to track the time from arrival of freight at the port to loading and departure of the barge.  Waiting time averaged 3.17 days last year and has been cut to 2.52 days this year. 

You’ve got to give competitive prices.  You can talk about computers, anything else, technology, all the buzzwords, but if you don’t have the price you don’t have the business,”  he said.

Schulingkamp said barge transportation costs, excluding transfer from the arriving vessel, are about $8.50 a ton, compared with $70 a ton by truck.

The limitation to the less-than-bargeload service is geography.  But, for those manufacturers and shippers near the inland waterway system there is opportunity for savings, MBLX said.

“If the ultimate destination is within what we say is a strike zone of a barge terminal, it is a good candidate,” Schulingkamp said.