Using river barges along the Mississippi and Ohio rivers, all the way to Muskegon, would save agriculture businesses significant transportation costs. Courtesy MABA
The Michigan Agri-Business Association and other business interests in West Michigan have filed a formal petition with the U.S. Coast Guard requesting safety regulation exemptions for Mississippi River barges transporting to and from Muskegon Harbor.
Coast Guard safety requirements for river barges used on the Great Lakes add to the cost of their use, but the Coast Guard has granted cost-saving exemptions for river barge traffic to a couple of other ports on the southern end of Lake Michigan.
“We are not proposing doing anything different than what is already being done,” said Michigan Agri-Business Association president Jim Byrum, noting that river barge traffic is already allowed to enter Lake Michigan at Calumet Harbor (Chicago) and transport cargo to and from Burns Harbor, Ind., on the eastern side of the lake, and to Milwaukee on the western side.
Byrum said the association has members interested in bringing river barges to Muskegon, particularly for shipment of dry fertilizer, as well as other commodities such as feed ingredients and grain.
“This is something that came up in the past, but what Jim is trying to do is very realistic,” said Phil Andrie. He operates a nationwide marine logistics service with tugs and jack barges, with headquarters on Muskegon Lake, although very little of his business actually takes place there.
The exemption idea germinated at the MABA in 2012 when extreme weather conditions in the central Midwest delayed its soybean crop — so much so that Michigan soybeans were bought to fill export orders. They were destined for export from Gulf of Mexico ports and normally would have gotten to the Gulf via the Mississippi, but the Michigan soybeans had to travel by rail.
“If we could have moved it by barges, it would have been a whole lot more cost effective,” said Byrum.
“What Jim is trying to do is make the Coast Guard requirements the same” for river barge traffic from Calumet Harbor to Muskegon as it is for those reaching Milwaukee, said Andrie.
“It comes down to the bottom line of what they are going to spend to get a barge up here,” he added. “It saves Jim’s group a bunch of money if they can use the same regulations.”
The Coast Guard actually allows river barges to enter Muskegon Harbor now, but according to Coast Guard parlance, it is “limited load line” service. The river barge traffic from Chicago to Milwaukee has a “conditional load line exemption,” which is much less expensive.
Andrie said he believes the process for a barge entering the lake at Chicago bound for Muskegon requires an inspection by a marine surveyor when the barge is empty, and he thinks that cost may range as high as $5,000. There are additional requirements to be met to ensure the river barge can safely handle the rougher water on Lake Michigan. A river barge bound for Milwaukee can be “self-certified” at Chicago, before it enters the lake, which does not require the marine surveyor inspection.
Dry fertilizer on barges originating at New Orleans actually may be sold two or three times while en route, noted Andrie, and could end up anywhere, so Michigan companies ordering it are not able to know which particular barge it will arrive on. With tens of thousands of river barges in use, most of those entering Lake Michigan would likely have to go through the more expensive limited load line certification.
Andrie said if Michigan agri-business had the volume, “they could ship it (to Muskegon) on limited load line barges, but there are very few of them around. Right now I know of two or three up here on the (Great) Lakes.” He added that using them is expensive because the material would have to be reloaded on them at Chicago from a river barge.
“They want to take these barges that are loaded in New Orleans and just continue up to Muskegon with them,” said Andrie.
He said it is “very cheap to move stuff along the Mississippi River and the Ohio River systems, compared to on the lakes.” That’s because the Great Lakes are much rougher, so barges designed for Great Lakes use cost more to build.
Also, river barges are moved in long clusters — as many as a dozen at a time — on the upper Mississippi system, pushed by one tug. On Lake Michigan, however, a maximum of two or three barges would be moved together because of the rougher water.
With each river barge standardized at approximately 195 feet long and 35 feet wide, a big river tow can transport a lot of material at less cost per ton, per mile, than a railroad. Andrie said the most expensive mode of bulk transport is by truck, with rail being substantially cheaper and water transport being the least expensive of all.
“I imagine the truckers’ associations will be against this,” said Andrie.
The Coast Guard review process will involve input from any interested or concerned group.
Andrie was in attendance Dec. 6 when the GVSU Michigan Alternative and Renewable Energy Center on Muskegon Lake hosted a discussion on the MABA river barge proposal. Others in attendance, besides Byrum, were Brian Brink of Brink Farms in Hamilton, Rick Chapla of The Right Place in Grand Rapids, Ed Garner of Muskegon Area First, Ed Hogan of Port City Marine, and Juan Lopez-Doriga, a partner at Rockford Berge in Grand Rapids.
Arn Boezaart, the head of MAREC, said his organization is interested in opening up Muskegon Harbor for expanded river barge traffic, noting recent water shipments to Muskegon of very large, commercial wind turbine towers and vanes, shipped all the way from Europe.
Rockford Berge was at the meeting because it is in the logistics business involving commercial wind farm construction.
Boezaart said there were more than 70 people at the meeting, which he described as a “very diverse group.” He said there was a straw vote to see if everyone in attendance thought the MABA proposal has merit — and the result was “a very strong yes vote.”
Byrum told the Business Journal that, due to “the sheer volume” of agricultural products originating in Michigan, use of the major river systems should be an option. He said those products generally have to move south out of the state, and “huge percentages of that moves by rail, currently.”
He said the Coast Guard would consider the proposal from the safety standpoint, and whether or not there really is an economic opportunity.
Safety and protection against environmental contamination are the big issues: The Coast Guard will only allow dry cargo on river barges entering the lakes.
“The last thing we want is to have any problems with (river) barges moving on the lake, so there will likely be restrictions on how far offshore they can operate and what kind of weather they can operate in,” said Byrum. “We want to alleviate any concern that might be out there for potential environmental issues.”
He said the only negative thing his group has heard about the proposal is “a bit of concern about the whole Asian carp issue,” but he noted that barge traffic from the river system is already being allowed onto Lake Michigan at Chicago.
According to a recent report by Reuters, some 60 percent of U.S. grain exports move down the Mississippi River system to export terminals on the Gulf of Mexico, and various other commodities, including oil, coal and fertilizer, also are shipped on the inland waterway system.