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

People & Company News

Schlumberger Announces Q1 Results

Schlumberger Limited (NYSE:SLB) today reported first-quarter 2014 revenue from continuing operations of $11.24 billion versus $11.91 billion in the fourth quarter of 2013, and $10.

Russia Ships First Oil From Offshore Arctic Platform

President Vladimir Putin hailed Russia's first shipment of Arctic offshore oil on Friday, saying the platform decried by environmentalists will help Moscow expand its global energy markets share.

Shipping Turns From Banks to Equity Markets for Cash

Shipping companies are turning to equity markets to fill a growing funding gap, betting that investors hungry for decent returns will provide capital to a sector

Bulk Carrier Trends

Commodity Giant Steps out of the Shadows

A detailed new case study scrutinizing the risk-management Swiss-based Trafigura is the latest effort to "demystify" the once-secretive commodity trading industry,

Cargill to Buy 100,000mt of Certified Ivorian Cocoa

U.S. agribusiness trader Cargill aims to purchase 100,000 metric tons of certified Ivorian cocoa this season, up slightly from 95,000 metric tons last season, West

Ice Hurts March’s Lakes Ore Shipments

Massive, thick ice formations on the Great Lakes limited iron ore shipments in March to 1.1 million tons, a decrease of 43 percent compared to a year ago, the Lake

Workboats

Offshore: Seacor Raises the Bar Again

Long acknowledged as a firm to watch in U.S. crewboat and fast supply boat innovation, Seacor Marine will be attracting industry attention once again when its latest

Miami Tugboat Oil Spill: Coast Guard Respond

The US Coast Guard says that its crewmembers are responding to a fuel spill in the vicinity of Government Cut in Miami, following a leak discovered aboard the 95-foot tugboat 'Neptune'.

Shipbuilding: Vigor Industrial Grows Stronger

Vigor Industrial has ballooned from a modest shipyard in Portland, Oregon, to the largest shipbuilder in the Pacific Northwest and Alaska. Vigor increasingly thinks big and builds big.

Dredging

Van Oord acquires 100% control of Dravo

Van Oord has acquired all shares of its Spanish subsidiary Dravo S.A.  Dravo S.A. has been owned, since 1987, by Van Oord (50%) and the Spanish company Dragados S.

US FMC Commissioner Visits Panama Canal Expansion Sites

Counsel to the U.S. Federal Maritime Commission informs that  Commissioner William P. Doyle has recently surveyed the construction site on a visit to the Pacific-side of the expanded Panama Canal.

Construction of Changi East Finger Extension

The working period for the construction of Changi East Finger Extension has been extended, GAC said in its daily Hot Port News report. The works will now be conducted from April 25 to October 24,

Barges

When Will Deep Sea Mining Commence? The Robot is Ready

The world's first deep sea mining robot sits idle on a British factory floor, waiting to claw up high grade copper and gold from the seabed off Papua New Guinea

Shipbuilding: Vigor Industrial Grows Stronger

Vigor Industrial has ballooned from a modest shipyard in Portland, Oregon, to the largest shipbuilder in the Pacific Northwest and Alaska. Vigor increasingly thinks big and builds big.

Tug on the Rocks, Lake Pontchartrain, Three Rescued

US Coast Guard 8th District says that it has rescued 3 crewmembers aboard the (uninspected) tugboat 'UTV Todd Michael' after it grounded on the rocks near the Lakefront Airport on Lake Pontchartrain.

Logistics

Among 2014's Most Powerful & Influential Women: Karen Jones

Commercial transportation and supply chain management firm Ryder System Inc. say that their Chief Marketing Officer, Karen Jones, was named one of 2014’s Most Powerful

Inchcape Shipping Services Opens in Venezuela

Inchcape Shipping Services (ISS), the world’s leading maritime services provider, has expanded its network in Central and South America with the opening of ISS Venezuela in Puerto La Cruz,

Blackstone Unlikely to Enter Commodities Trade

Blackstone exec doesn't expect move into commodities in near term Blackstone Group LP is unlikely to make a foray into commodity trading in the short term as

 
 
Maritime Contracts Maritime Security Naval Architecture Navigation Offshore Oil Pipelines Salvage Ship Electronics Sonar Winch
rss | archive | history | articles | privacy | 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: 0.2207 sec (5 req/sec)