There are a number of different transportation modes available for shipping goods in the US logistics industry. The US boasts a robust transportation system, from busy airports to sprawling rail networks and endless highways. But does the US logistics network have options that can be more cost-effective and sustainable than the traditional modes accepted by most organizations? In this blog post, we will dive into shipping over inland waterways but first, let us quickly understand the full landscape of transportation modes.
The Current US Shipment Landscape
Like most countries globally, US logistics mainly rely on three shipping methods: air, rail, and truck.
- Air: With the rise of e-commerce and the need for faster deliveries, many shippers have preferred air freight. It is fast, efficient, and ideal for perishable goods or high-value items. However, it's also the most expensive mode of transportation.
- Rail: Railways offer a cost-effective solution for transporting bulk goods over long distances. From coal to grain, railways transport an extensive range of commodities.
- Truck: Flexibility and door-to-door service make trucking a favorable option among shippers. This mode of transport is best for short to medium distances and can cater to a wide range of goods.
Yet, in this vast network lies a largely untapped sector: Inland Marine Shipping. Only about 5% of all freight in the United States moves on river barges, making it a sector ripe for exploration. What is inland marine shipping, what value does it offer over the other modes discussed, and is it relevant in 2023? We'll find answers to all of these questions below.
The Strategic Value of Inland Waterways
The United States inland waterway system has roughly 12,000 miles of rivers and 237 lock chambers at 192 locations. This complex network, which has the Mississippi, Ohio, Tennessee-Tombigbee Waterway, Illinois, Snake, and other connecting rivers and canals, is a commercial logistics asset. Annually, over 500 million tons of freight move through these waterways. This high-efficiency, low-cost system is pivotal for maintaining global marketplace competitiveness. The 2021 Infrastructure Investment and Jobs Act (IIJA) has allocated billions to modernize this network further, highlighting its importance in the national and global shipping landscape.
As global trade dynamics shift towards more cost-effective, sustainable, and efficient transportation, inland waterways are a great option. With its rich history of river-based commerce, the US stands as a frontrunner, showcasing the immense possibilities of leveraging rivers for trade and transportation.
Efficiency of Inland Marine Shipping
A standout value of inland waterways is their unmatched efficiency in transporting bulk volumes over longer distances. Towboats push barges, which are lashed together to form a "tow." On larger rivers with locks, a 15-barge tow is quite common, which is equivalent to about 225 railroad cars or 1050 tractor-trailer trucks. This efficiency translates to significant fuel savings and environmental benefits. For example, a gallon of fuel can ship one ton of cargo 514 mi (827 km) by barge, compared to 450 mi (720 km) by railway and 180–240 mi (290–390 km) by truck. This efficiency reduces greenhouse gas emissions, decreases traffic congestion, and has overall environmental advantages.
Bulk Commodities Transported Over Rivers
Barges are ideal for transporting large quantities of bulk commodities and raw materials cost-effectively. In a year, the inland waterway system handles about 630+ MT of cargo, approximately 16.9% of the total intercity freight volume. Key commodities include:
- Coal: Over 20% of the coal consumed by the US electric utility industry is transported via inland waterways.
- Petroleum: This includes crude oil, gasoline, diesel fuel, jet fuel, heavy fuel oils, and asphalt.
- Agricultural Products: 60% of the country's farm exports, including grains, are shipped through inland waterways, primarily for overseas export.
- Construction Materials: Aggregates like stone, sand, and gravel are commonly transported via barges.
- Chemicals: This category includes fertilizers and other chemical products.
- Metals and Manufactured Goods: This encompasses metal ores, minerals, steel, and other manufactured products.
Relevance to New-Age Businesses
While traditional commodities like coal, petroleum, and agricultural products are shipped via inland waterways, new-age businesses also have a massive interest in leveraging it. Start-ups and modern enterprises, like the e-commerce, sustainable goods, and tech sectors, always seek efficient, cost-effective, and environmentally friendly shipping solutions. Inland marine shipping offers several advantages that resonate with the values of these businesses:
- Sustainability: For environmentally conscious businesses, reducing carbon footprints is a priority. Barge Transport aligns perfectly with this priority with better fuel efficiency and reduced emissions.
- Scalability: The ability to ship large volumes efficiently is crucial for rapidly growing businesses. The vast capacity of barges allows these companies to scale their operations with ease.
- Cost-Effectiveness: New-age businesses, especially start-ups, are often budget-conscious. The significant savings offered by waterway transport can be a game-changer.
- Innovation in Logistics: Modern businesses thrive on innovation. The underutilized potential of inland waterways offers a unique opportunity for companies to innovate their logistics and supply chain strategies, setting them apart from competitors.
Economic Value of Inland Marine Shipping
Inland and Intracoastal waterways are vital economic arteries, directly serving 38 states and handling cargo valued at over $73 billion annually. States like Texas, Louisiana, Illinois, Pennsylvania, and others rely heavily on these waterways, with some shipping goods worth over $10 billion annually. The transportation savings offered by waterways, estimated at $10.67 per ton, translates to over $7 billion in annual savings for the US economy.
With its vast potential, Inland Marine Shipping is waiting to be explored further. As the world moves towards sustainable solutions, river shipping offers a promising avenue for shippers and barge operators alike.
Ready to start shipping on the US Waterways? Explore services, facilities, destinations and upcoming sailings on OpenTug.
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