Company seeks to develop coastal shipping

Company seeks to develop coastal shipping    A plan by American Feeder Lines (AFL) to build a fleet of 10 containerships to move international and domestic containers along the East and Gulf coasts was selected by the U.S. Department of Transportation and Maritime Administration last week as one of eight 'marine highway' projects eligible for federal assistance.
   Tobias K'nig, a German shipping investor, and U.S. real estate investor Percy Pyne are the principal backers of the AFL project.
   MarAd has said it has $7 million to award by the end of the year. But K'nig said Friday, 'I don't think we will get any of that because it doesn't really get us anywhere,' given the $750 million AFL said it would need to build the 10 1,300-TEU ships it wants to construct. But K'nig called MarAd's inclusion a 'milestone' in advancing its coastal shipping project.
   AFL's application to MarAd was sponsored by the South Carolina Port Authority and the Port of Galveston.
   'A feeder system out of Charleston to other seaports can provide significant benefits such as reduced congestion and enhanced environmental sustainability,' said Jim Newsome, president and chief executive officer of the state port authority.
   AFL said it has letters of intent from two shipyards — Bay Shipbuilding in Wisconsin and Aker Philadelphia Shipyard in Pennsylvania — to build five ships each. The company said the vessels would be lift-on/lift-off vessels and be capable of carrying international containers and 53-foot domestic boxes.

A rendering of the 1,300 vessels American Feeder Lines intends to operate in its coastwise service.

   K'nig said AFL has engaged investment bank Seabury Group to help it raise private equity for the project, but, 'it can't be done all with private money.' His Hamburg-based company, K'nig & Cie, has financed more than 100 vessels and has a fleet of 68 ships on the water and nine vessels under construction. He said he personally owns six ships.
   He feels government support will be necessary to advance short sea shipping, but said AFL has 'not applied for anything yet.' K'nig was doubtful.
   Still he is optimistic AFL's project can be rapidly advanced, saying he hopes to sign contracts to build ships this year and see the first ships delivered, from Bay, by 2012.
   'The problem in the U.S. is that the situation is at a gridlock. The existing infrastructure is broken, cannot be maintained at the cost that that has been budgeted because prices are much higher today and there is no chance you can put more growth on roads and rail capacity is very limited,' he said. 'If things continue to grow in the U.S., you need another mode of transportation.
   'If you look at the green side of the equation, the only way that you can become greener is to use the sea as a mode of transport,' he said. And K'nig sees big opportunities in the domestic market, saying about 78 million vanloads of cargo are shipped between the Gulf and South and North Atlantic regions.
   AFL is speaking to shipping lines, large domestic shippers, and large trucking companies about its plans. K'nig believes trucking companies are increasingly interested in the use of domestic containers because long-haul trucking is becoming less profitable. He said short sea shipping can also play a role in alleviating a shortage of truck drivers that he said may worsen because of the advancing age of the average trucker. ' Chris Dupin