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Plastic resin exports drive growth for container-on-barge service

SCF Marine’s SEACOR AMH unit feeds empty barges to packagers and loaded containers for export to the Port of New Orleans.

SCF Marine's SEACOR AMH has seen its container on barge business surge as plastic resin exports increase.(Photo: SEACOR AMH)

The container-on-barge business of the SCF Marine Inc.’s SEACOR America’s Marine Highway (AMH) unit has seen its business grow rapidly with the boom in exports of plastic resin from U.S. producers. SCF is a subsidiary of SEACOR Holdings Inc. (NYSE:CKH)

The SEACOR AMH service moves containerized imports and exports through New Orleans and Mobile, Alabama, and feeds empty containers to exporters who need equipment to move plastic resin.

SCF has recently published rates for both loaded and empty containers on its website.

“Waterborne container cargo provides shippers with one of the safest and most fuel-efficient forms of transportation today. It reduces roadway damage, highway congestion, bottlenecks at port gate structures and daytime traffic at terminals,” said Tim Power, president and chief executive officer of SCF.

SEACOR AMH began its Mississippi River container-on-barge service in June 2016. In 2018, it moved approximately 50,000 TEUs, an increase of more than 40% over 2017. With rising customer demand and mounting concerns over environmental pollution, the company has seen further growth this year.

Rich Teubner, vice president of SEACOR AMH, said that demand for the service is being driven in large measure by the growth in plastic resin exports from the U.S.

Plastic resin production has boomed in the U.S. with the increase in production of natural gas and natural gas liquids from fracking. According to the American Chemistry Council Plastics Industry Producers Statistics (PIPS) Group, North American resin production grew 5.8% to 119.6 billion pounds in 2018.

Exports of plastic resin through U.S. ports has grown rapidly in recent years. Statistics from IHS Markit show that the volume of plastic resin exports shipped through New Orleans, as measured in TEUs, was up 31.3% in the first six months of 2019 when compared to the first half of 2018.

Brandy Christian, the president and chief executive officer of the Port of New Orleans, highlighted container-on-barge volumes during her State of the Port address in September, noting they had grown 87% from fiscal year 2017 to fiscal 2019 and were expected to reach 30,000 TEUs this year.

Plastic resin volumes are growing at other ports as well: up 56.8% in the first six months through Houston year-over-year; up 47.7% through Charleston; up 9.5% through Los Angeles-Long Beach; and up 9.2% through New York-New Jersey, according to the IHS statistics. 

Just this week A&R Logistics announced it was acquiring Plantgistix Holdings, a provider of packaging, warehousing and export services dedicated to the plastic resin industry with three facilities in the Houston area. That deal came on the heels of its purchase of Michigan-based Blue Water Plastic Transport in June. A&R is planning to spend $100 million to establish facilities in Charleston, South Carolina, and Savannah, Georgia, for the plastic resin industry,

Teubner said SEACOR AMH uses its barges to feed empty containers down the Mississippi into Louisiana from Memphis, Tennessee, primarily for the resin export industry. He explained there is a deficit of empty containers at Gulf ports.

The company is planning to begin operations from St. Louis in the first quarter of 2020 and focus on empty containers that have accumulated in that part of the country and are now being transported to the East or West coasts.

SEACOR AMH has a terminal in Port Allen, Louisiana, which is across the river from downtown Baton Rouge. This is a convenient location for many plants producing plastic resin.

SEACOR AMH uses an SCF terminal in Port Allen, across the Mississippi River from Baton Rouge to position empty containers for plastic exporters, then moves the laden containers to the Port of New Orleans.. (Photo: SEACOR AMH)

The Port Allen terminal receives empty containers from Memphis, Tennessee, and New Orleans. Customers of SEACOR AMH then take the empty containers to packaging warehouses to be filled with plastic pellets and they are returned to Port Allen. SEACOR AMH loads the export containers on barges and they are taken to the Port of New Orleans container terminals where Maersk and CMA CGM dock.

SEACOR AMH has a regular shuttle service that sails from Port Allen to New Orleans on Tuesdays and Thursdays. Teubner said the company has the capability to add another sailing if the need develops.

SEACOR AMH uses standard hopper barges like those that carry bulk grain (though without their covers) that have the capacity to carry 72 loaded, or 96 empty, 20-foot containers or half that number of 40-foot containers, and the regular shuttle service regularly has five or six barges in a tow but can have as many as 10.

Teubner said plastic resin represents more than 90% of the loaded containers that SEACOR AMH moves on the container-on-barge service, but the company has plans to increasingly diversify its cargo mix, having spoken to shippers that move containerized farm products from states such as Illinois, Indiana and Missouri about their possible use of its service. It also hopes to grow imports.

SCF is one of the larger towing companies in the U.S. It operated a U.S. inland waterways fleet of 1,185 barges and boats at the end of 2018, according to SEACOR’s annual report, most of which are dry cargo barges. It also owns and operates river terminals.

When containers are ready to be shipped from Memphis or St. Louis, they are placed into line tows moving bulk products. Those barge tows can have as many as 40 barges. As soon as a barge is filled with empties in Memphis or St. Louis, the company will schedule one of those line tows to pick up the empties and move them downriver to Port Allen.

However, the company is planning to start a regular container-on-barge shuttle from Memphis in January.

SEACOR AMH has also moved containers on barge to Mobile and Houston, but those are not regular services. For example, after Hurricane Harvey, some cargo was diverted to New Orleans and AMH helped move containers into Houston from New Orleans.

Teubner said there are several advantages to moving containers by barge. More cargo can be loaded into the containers because barge movements are not subject to highway weight restrictions, freight rates are favorable and space is readily available on the river.

Teubner noted that shipping by barge improves the environmental footprint of shippers by utilizing a more fuel-efficient logistics solution.

Chris Dupin

Chris Dupin has written about trade and transportation and other business subjects for a variety of publications before joining American Shipper and Freightwaves.