Bulk Transport Leadership: Clark Todd

By Susan Buchanan
Thursday, February 14, 2013
Clark A. Todd, President and COO of Blessey Marine Services, Inc. in New Orleans. Blessey owns and operates one of the youngest, multi-faceted inland tank barge and towing vessel fleets in the United States.

Drought and ensuing low river levels continue to affect the inland industry. Low water between St. Louis and Cairo, Illinois has threatened traffic on the Mississippi River since December.

For months, dredging operations have slowed vessels at points along the river's course. Since December, a stretch at Thebes, Illinois, has been shut for much of each day as the U.S. Army Corps of Engineers removes rock pinnacles. A panel of five executives weighed in on a host of topics regarding inland transportation as part of a round table discussion published in the February print edition of Marine News. Shown here are the comments of Clark Todd, President and COO at Blessey Marine Services, Inc. in New Orleans:

How have reduced Mississippi River drafts have affected your operations, safety, and your bottom line?
Clark Todd: Industry tried for months to get the U.S. Army Corps of Engineers or USACE to address the approaching, low-water situation on several fronts and with several options--all to no avail in anything that could be considered timely. As a vessel owner and operator of inland tank barges, Blessey Marine’s primary consideration is the safety of our crews, our equipment, the environment and local populations in areas where we operate. Reduced flow in the river and the emergence of rock formations and pinnacles created huge hazards to navigation along segments of our inland waterways. We have taken extra precautions in addressing these issues with our captains who operate above Cairo, Ill., and we have actively engaged our customers to ensure that all safety concerns are addressed during this low-water event. Stretches of the Mississippi River that are normally open for two-way traffic are only wide enough for one-tow, eliminating many meeting areas. Tows are losing time waiting for traffic to clear certain areas, thereby increasing transit times, sometimes by days. Tow groundings have occurred in these areas with greater frequency since the current, low-water event began. Each carrier company has different operating margins, different terms and conditions in contracts and different considerations that affect financial statements. Some carriers operate by affreightment rates dependent on the volume of cargo carried in each tow, while other carriers operate on term-charter rates. So it isn't easy or appropriate to comment on how low-river stages affect one operator or another.

Is the Army Corps doing enough to facilitate Mississippi River transport?

Todd:  Many months ago, industry representatives began trying to present this issue to the attention of the USACE. The effects of the drought were a forecastable event that everyone knew would affect transportation throughout the Mississippi River Valley and certainly in and below the St. Louis area. Industry and the USACE knew that this day would come when the last major re-write of the USACE Master Operating Plan for the Missouri River was being debated years ago. Despite recent efforts by industry, the USACE punted the low-water issue around internally for a while. Its reaction was delayed even though industry cried for immediate action. The effects of the drought were heightened by two issues that could have provided a remedy to the problem. First, due to low water, significant numbers of rock formations and pinnacles emerged in the area north of Cairo, Ill., restricting navigable channels on parts of the Upper Mississippi River. And despite knowing the inevitable effects that low water would have in bringing these rock formations into play and their direct effect on navigation, the USACE waited until Dec. 11 of last year to award bids to two contractors to remove these impediments. Second, USACE should have released water from reservoirs on the Missouri River to maintain specific draughts along the Upper Mississippi. They refused, hid behind a public response that they couldn't do anything on the issue without Congressional intervention, and instead released somewhat insignificant amounts of water from other rivers. For months, navigable channels north of St. Louis have been pinched and vessel traffic has been limited to one-way transit--most of which industry believes could have been avoided if the USACE, as the custodian of America’s inland waterway, had taken appropriate and timely action. Lack of action by the USACE forced industry to mount a large, grassroots campaign involving U.S. Senators, Congressmen and other stakeholders, who in turn addressed the USACE at every level of its hierarchy, as well as President Obama.

Are inland freight rates adequate to cover operators' costs now?   
Todd: Each carrier company has different operating margins, different terms and conditions for their contracts and different considerations that affect financial statements. It wouldn't be appropriate to comment further on this issue. But we can say that for carriers who operate on affreightment rates, being paid by the ton or barrel instead of a chartered day rate, those operators would be affected not only by limited draught, but also tow size, thereby limiting the amount of cargo per barge and the number of barges they're able to move. The ultimate impact could be more cargo moved by rail or truck or no movement of cargo at all, depending on the circumstances.

How will reduced barge traffic impact the national economy this winter? To what extent will rail and trucks be used instead of barges?
Todd: Commercial transportation along our waterways, while largely unwitnessed by much of America, is the nation's safest, most economically viable and environmentally friendly mode of transportation for dry and liquid cargoes. U.S. Trade Representative Ron Kirk recently stated that the nation has $9 billion in exports sitting on barges because that can't get down the Mississippi River as a result of the drought. He cited a critical need to look holistically at all infrastructure. According to the American Waterways Operators, a tow on the Upper Mississippi, Illinois and the Ohio Rivers typically moves fifteen barges, thereby resulting in a decrease of 255 tons in capacity for one tow with just one-inch of water loss. The typical dry cargo tow on the Lower Mississippi River pushes 30 to 45 barges, resulting in decreased capacity of up to 765 tons for just a one-inch loss of water. A typical inland barge can carry the same amount of dry cargo--agricultural or steel products--as 16 rail cars or 70 semi trailer trucks. And one tank barge can carry the same amount of liquid cargo-- fuels or chemicals, for example--as 46 rail cars or 144 semi trailer trucks. According to the Texas Transportation Institute and AWO, the estimated effect of low water to consumers and the volume of products potentially impacted in December and January is 7 million tons of agricultural products, worth $2.3 billion; 1.7 million tons of chemical products, worth $1.8 billion; 1.3 million tons of petroleum products, worth over $1.3 billion; 700,000 tons of crude oil, worth $534 million; and 3.8 million tons of coal valued at $192 million. The increased carbon footprint from the use of rail and trucks in lieu of barges is staggering. Whether spare capacity of rail and trucks even exists to fill the void in reduced barge traffic and whether cargo suppliers will seek to use rail and/or trucks remains to be seen. Many factors would have to be addressed--particularly whether terminals and petroleum facilities have sufficient tank capacity to hold petroleum products until an equivalent number of railcars or trucks could move that cargo.

How difficult will it be to comply with the impending Subchapter M rule? Will we see more consolidation within the industry because of it?

Todd: The Notice of Proposed Rulemaking or NPRM for Subchapter M was published in August 2011, and public comments were provided in December of that year. If Subchapter M were made a final rule today, with the USCG incorporating none of the changes or revisions that industry provided, there would be some challenges for small and large companies. But we're confident that industry gave the USCG enough supporting data to revise and rewrite some of the requirements that were included in the NPRM--specifically redundant steering requirements. The USCG suggested that a redundant steering system be located in the engine room of towing vessels. This is impracticable financially and also nearly impossible. The USCG was not clear on whether any vessels would be grandfathered under these rules, leaving industry to rely on assumptions at this juncture. For the most part, Blessey is positioned so that our operations would have little difficulty complying with most of the elements of the NPRM. Its Safety Management System requirements pose few challenges for our operations since we have a Management System in place. Our customer base has been pushing for this for years. So for us, it would be a seamless transition. Other portions of the NPRM, specifically some of the record-keeping requirements, wouldn't cause us great concern since most of them are incorporated in our Management System, or can be added easily. The vagueness of the NPRM left a lot open to interpretation, however. The USCG offered two options for companies to receive Certificates of Inspection for vessels: a Safety Management System route whereby third-party auditors verify compliance for the issuance of a Certificate of Inspection and a Coast Guard option whereby the USCG would inspect every vessel to verify compliance. We're concerned that it would be difficult for any company to comply with these proposed rules when operating outside of a Management System. In addition, USCG resources would be severely strained if it were to inspect every vessel, and given recent budget cuts within the USCG, its strains have gotten worse. We're confident that in the end, however, the USCG will listen to the concerns of industry and work with us as a partner--who wants nothing other than to make the industry as safe as possible. Once the Final Rule is published, there will be phased-in compliance. Therefore, it’s unlikely that we'll see a large number of consolidations early on. However, given the resource burdens of developing, implementing and managing a management system, there's no doubt that some smaller companies will find themselves overwhelmed when trying to comply with Subchapter M.

Is the inland industry prepared for increased traffic from the Panama Canal?

Todd: The question shouldn't be whether the inland industry is prepared for increased traffic. It should be are the ports of the Northern Gulf--including Houston, New Orleans, Mobile, and Tampa--and the ports of the Eastern U.S.--Miami, Savannah and Baltimore--prepared to accept deeper draught and height vessels? The inland industry will look to meet the increased cargo requirements of refiners and petrochemical facilities in transporting their products. However, the immediate bottleneck will most likely be whether ports have met the navigational and capacity issues to handle larger vessels, regardless of whether the vessels are tankers, bulk carriers or container carriers.

Maritime Reporter June 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

VSTEP Wins Mexican Navy Simulator Contract

The Mexican Navy selected VSTEP to supply a Class A NAUTIS Full Mission Bridge (FMB) Simulator and 24 NAUTIS desktop trainer stations for the Naval Academy in Veracruz.

Update: U.S. to Seize Kurdish Oil from Tanker off Texas

U.S. authorities are set to seize a cargo of oil from Iraqi Kurdistan anchored off the Texas coast after a judge approved a request from Baghdad, raising the stakes

S.Korea Ferry Boss's Driver Turns Self In

The driver of a South Korean businessman wanted over the sinking of a ferry that killed 304 people turned himself in on Tuesday, potentially unlocking the mystery

Bulk Carrier Trends

Mercator Lines Profit Hit by Low Bulk Freight Rate

Mercator Lines (Singapore) reported a revenue of US$ 16.5 million for Q1 2015, an increase of 19% as compared to correspoding period in the previous previous year, however a net loss of US$ 7.

China Shipyards Bag the Week's Ocean-going Newbuild Orders

Reported ordering this week has been exclusively focussed on the Chinese yards, says Clarkson Hellas in their latest 'S&P Weekly Bulletin'. Dry bulk carriers COSCO

Lake St. Clair Grounded Bulk Carrier: Update

The U.S. Coast Guard said it continues to monitor the response and salvage operations to the 656-foot HK-flagged bulk carrier Federal Rideau, hard aground in the downbound shipping channel of Lake St.

Workboats

North Sea Atlantic Joins the Technip fleet

On Saturday July 26, 2014, a ceremony was held in Bergen to officially name the latest new subsea construction vessel to join the Technip fleet, the North Sea Atlantic.

HydroComp to Hold Propeller 'Mini-Workshop'

A special version of HydroComp's intensive Propeller Workshops will be brought to Tampa before the start of IBEX 2014.   The Mini-Workshop is a special version

Crowley Christens New DP2 Tugboat

Crowley Maritime Corp. said that the third of four tugboats in the Ocean-class series, Ocean Sky, has been christened in Houston. The ceremony served to formally

Dredging

Dredging at Jurong Port, Singapore

Dredging work will be carried out at Keppel Shipyard Benoi Road, off West Jurong Channel, from 28 July to 30 September. As per the Maritime and Port Authority of Singapore Port Marine Notice No.

Bahrain US$35-M Land Reclamation Contract for GLDD

Provider of dredging services in the United States and a major provider of environmental & remediation services, Great Lakes Dredge & Dock Corporation (GLDD) says

Boscalis to Get IJsseldelta 'Room for the River' Contract

Royal Boskalis Westminster N.V. (Boskalis) say that the Dutch Department of Public Works and the province of Overijssel intends to award the contract for the IJsseldelta polder to them.

Barges

Horizon Delivers 4th 74’ Towboat for Canal Barge Co.

Horizon Shipbuilding, Inc., Bayou La Batre, AL, has delivered the fourth in a series of 74’ towboats to Canal Barge Company, Inc. of New Orleans, LA.    The Jane

Samudra Containership Rationalisation Hits Revenues

Diversified Singapore-based containership owners Samudra Group reports registered revenue of USD 96.9 million for the second quarter ended 30 June 2014, a 7.6% decline from USD 104.

Nation’s Vessel Operators Join EPA as SmartWay Affiliate

The American Waterways Operators, a 350-member trade association representing the U.S. tugboat, towboat and barge industry, announced today that it joined the SmartWay Transport Partnership,

Logistics

Diana Containerships Q2 & 1H 2014 Financial Results

Greece-based Diana Containerships Inc., a global shipping company specializing in the ownership of containerships, has reported net income of $0.6 million for the second quarter of 2014,

Mercator Lines Profit Hit by Low Bulk Freight Rate

Mercator Lines (Singapore) reported a revenue of US$ 16.5 million for Q1 2015, an increase of 19% as compared to correspoding period in the previous previous year, however a net loss of US$ 7.

Marseilles Fos Reports Mixed First Half

First-half container traffic at leading French port Marseilles Fos totalled 583,287 teu – up 7% on the first six months last year - marked by a 10% increase at the deepsea Fos terminals.

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Navigation Offshore Oil Pipelines Pod Propulsion Salvage Ship Repair Ship Simulators Sonar
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.4275 sec (2 req/sec)