DEVELOP A SUSTAINABLE CONTAINTER ON BARGE OPERATION ON A SCALE COMPARABLE TO ANY MAJOR RAIL OR HIGHWAY TRADE CORRIDOR.

1. P R E P A R E D F O R :
M I S S I S S I P P I D E P A R T M E N T O F T R A N S P O R T A T I O N
P R E P A R E D B Y :
R N O G R O U P
W W W . R N O G R O U P . C O M
A U G U S T 1 7 , 2 0 1 0
“MHy Delta”
Delta Marine Highway

2. “DEVELOP A SUSTAINABLE CONTAINTER ON
BARGE OPERATION ON A SCALE COMPARABLE TO
ANY MAJOR RAIL OR HIGHWAY TRADE
CORRIDOR.”
VISION

3. Europe, Asia USA
 COB services have existed almost
as long as the container trade, pre-
dominantly in Europe and in
China/Hong Kong.
 COB services are also in existence
in the United States, particularly in
the northwest, the Gulf Coast and
along the eastern sea-board.
COB Services are Tried and Proven

4. Cross Sector Subsidy Economics of Ubiquity
 COB services in the region are
currently subsidized by the bulk
transportation services sector.
 The region’s most sustainable COB
services are integrated into larger
bulk operations, thereby benefiting
from the economies of fleet scale
and vessel ubiquity.
 Container barges used on the
Mississippi are standard open
hopper river barges used for a wide
variety of cargoes and are easily
integrated into a conventional bulk
fleet.
 Ubiquity results in limited need for
repositioning, saving the barge
operator a great deal of money and
time.
Fleet Integration Offers Sustainability

5. Delta
Marine
Highway
Action Plan
This point in the
development of
container capacity in
the Gulf is a
convergence of trends,
and an opportunity to
influence the mode
choice decision process;
With the shipper, the
forwarder/agent, third-
party service provider,
port terminal
developers and
operators, and the
carriers.
Convergence
of Trends

6. D E V E L O P I N G A D D I T I O N A L C O N T A I N E R
C A P A C I T Y N E A R T H E B A S E O F T H E
M I S S I S S I P P I R I V E R I S A N A T I O N A L
I M P E R A T I V E
Regional Gateway Port Strategy

7. America’s Heartland is a Watershed
Region for Internat’l Trade Flows
EastCoast
PortMarkets
WestCoast
PortMarkets
a = % US 2008 port container traffic; b = % 2009 US population
50% 30% 44%26% 7% 43%
a b a b a b

8. America’s Heartland is a Watershed
Region for Internat’l Trade Flows
The addition of a third
alternative mode of
landside transport, in
addition to truck and
rail, reduces the growth
in truck traffic
Every 1 million TEUs in
additional port capacity
at the base of the
Mississippi could cut the
growth in truck trips by
172 thousand trips, and
63 million trucks miles
EastCoast
PortMarkets
WestCoast
PortMarkets
a = % US 2008 port container traffic; b = % 2009 US population
50% 30% 44%26% 7% 43%
a b a b a b
Strategic
Imperative

9. A System of
Container
Gateway Ports
Port of Gulfport – Plans
expand to over 1 million
TEUs
Port of Mobile –
Recently built a
800,000 TEU terminal,
with likely plans to
expand further
Port of New Orleans -
Currently at 330,000
TEUs, plans to expand
to 1 Million TEUs
Seapoint – Planned
ship-to-barge port
handling 900k TEUs

10. Phase I:
Container
Gateway Ports
• Volumes -
Development of
significant container
volumes at and around
the base of the
Mississippi River, New
Orleans to Mobile.
• Mode Share -
Enhanced mode-share
incentives will need to
be implemented so as to
encourage mode
diversion.
• Inter-Gateway
Services - High-speed
container services
between the ports will
allow for the re-
positioning of loads in
co-ordination with liner
schedules.Sea Point
Mobile
Gulfport
New Orleans

11. Phase II:
Vicksburg to
Memphis
As the container
volumes start to build
at the gateway ports,
line-haul services
should begin to evolve
along the Mississippi
and Ten-Tom waterway
on either side of the
State. The gateway
ports are positioned in
such a way that the
growth of COB services
will be possible on
either side of the State.
Sea Point
Mobile
Gulfport
New Orleans
Vicksburg
Yazoo County
Rosedale
Greenville
Claiborne County
Natchez Adams County
Itawamba
Yellow Creek
Amory
Aberdeen
Clay County
Lowndes County

12. Phase III:
Complete the
Loop
Notwithstanding the
need for gateway
densities, the
development of inland
container traffic along
the Mississippi or
Tenn-Tom waterways
will be driven by the
location of inland
consumer/producer
markets.
Sea Point
Mobile
Gulfport
New Orleans
Upper
Mississippi
Ohio River
Region
Cairo/Paducah

13. Mode Shift Tactics at
Gateway Ports
Inland Mode Shares
at the Port of Rotterdam
 Modal Shift (% tons on waterways)
 Revenue (# of ships calling at port)
 Economics (# of jobs created)
Cargo Type
Inland Mode
Barge Rail Pipe Truck Total
Liquid Bulk 39% 1% 51% 9% 43%
Dry Bulk 86% 5% 0% 9% 30%
Container 33% 16% 0% 51% 15%
General Cargo 6% 3% 0% 91% 13%
Total 48% 5% 21% 26% 100%
Mode Shift Tactics at Gateway Ports
The Port of Rotterdam uses the tenant
lease process to secure modal
diversity. They include mode share,
specifically waterway mode share, as a
tenant ranking criteria:

14. T H E S I N G L E L A R G E S T P R O J E C T T H A T H A S A
M A J O R I M P A C T O N T H E D E V E L O P M E N T O F
C O N T A I N E R C A P A C I T Y O N T H E G U L F C O A S T
I S T H E E X P A N S I O N O F T H E P A N A M A C A N A L
MHy Delta in the
Context of the Panama Canal
Expansion Project

15. West Coast Ports Handle Most of
Asian Container Traffic
The west coast handles
approx 75% of Asian
trade with the United
States. The bulk of the
remaining 25% is
handled by the east coast
ports, via the Panama
Canal.

16. Bulk of Asian Container Trade is
Actually Land-Bridged
Three quarters of Asian
container trade volumes
are land-bridged across
the US interior and thru
the Panama Canal.

17. Panama Canal’s Role as a
Land-Bridge is Fast Changing
The Asia-East Coast lane
represents 57% of
Panama Canal trade.
When the canal expands,
the share of Asia trade to
the West coast will drop,
increasing the east coast
port traffic through the
Canal. The result is a
significant increase in
container traffic through
the Gulf of Mexico. The
growth increment in the
Asia-East Coast trade
lane will be highly
contestable by well
positioned Gulf coast
ports.

18. Gulf Coast will Contest the Diverted
West Coast Asian Container Flows
The Panama Canal
expansion presents an
opportunity for
additional container
capacity to be developed
along the Gulf coast to
better serve the
heartland region. Based
on port expansion plans,
the base of the
MsCoBISC will account
for 6% of US container
gateway volumes by
2020.
EastCoast
PortMarkets
Gulf
Coast
Port
Mkts.
WestCoast
PortMarkets
13%
c
6%
d
7%
e
c = % US 2020 port container traffic thru Gulf Coast ports
d = ports at base of Mhy Delta, e = rest of Gulf Coast ports

19. Key Role in Accommodating Canal
Related Container Growth
The MHy Delta comes at
a crucial time. The
Canal project is
estimated to be
completed in 2014. The
Gulf Coast container
port expansion plans are
largely to be completed
by 2020.
In order to successfully
serve its role in
accommodating the
Canal expansion
container growth
impact, the MHy Delta
will need to be
implemented over the
course of the next 4-6
years.
MhyDelta
Network

20. • FOCUS CONTAINER
CAPACITY AT PORTS
WITH ACCESS TO
TRIPLE PLAY MODES:
• RAIL
• BARGE
• HIGHWAY
TRIPLE PLAY
National Container Port Policy
MhyDelta
Network

21. F O C U S E D O N T H E S U S T A I N A B I L I T Y O F S E R V I C E S .
G I V E N T H A T T H E M H Y D E L T A W I L L E S S E N T I A L L Y
B E A P R I V A T E S E C T O R E N D E A V O R , I T I S C R I T I C A L
T H A T T H E P R O P O S E D A P P R O A C H B E B A S E D O N
O P E R A T I O N A L P L A N S T H A T H A V E S H O W N S O M E
L E V E L O F S U C C E S S O N T H E M I S S I S S I P P I R I V E R .
Proposed Operational Plan

22. Line Haul
Segmentation
The Mississippi River is
associated with long
distances and disparate
markets, relative to the
short legs along the
Rhine’s tightly spaced
markers.
The most likely
operations plan is a
tiered service structure
that is dictated by the
distances and market
reach of individual line-
haul segments.
The proposed
operational plan has a
three-tiered structure
that is based on existing
services that have
worked thus far in the
Gulf region.

23. Tier I – Regular
Fixed Schedule
Services
Run between two points
on a fixed regular basis;
For example, once a
week, on Wednesday,
departing at 6pm. They
work best along
segments connecting
with international ports
serving ocean shipping
lines operating on a
fixed schedule basis.
The service is also most
viable along segments
with the highest
container potential.
They operate almost
independent of the bulk
fleet schedules, except
to rely on the supply of
barges and tows from
the bulk fleets.
Sea Point
Mobile
Gulfport
New Orleans
Tier I
RegularFixed
ScheduleService
Cairo/Paducah
Upper
Mississippi
Ohio River
Region

24. Tier II – Regular
Weekly Services
Run at least once a
week, without a
particular time or day
established. This type
of service offers greater
flexibility for balancing
demand with supply,
and is best applied to
segments that do not
connect with a COB
gateway port.
This service is more
dependent on the bulk
fleet schedules, as well
as the supply of barge
equipment.
Sea Point
Mobile
Gulfport
New Orleans
Tier II
Regular
Weekly
Service
Tier I
RegularFixed
ScheduleService
Cairo/Paducah
Upper
Mississippi
Ohio River
Region

25. Tier III –
Inducement
Services
These services are non-
scheduled with the
greatest flexibility for
balancing demand with
supply.
They are almost fully
integrated into the
larger bulk barge
services.
Sea Point
Mobile
Gulfport
New Orleans
Tier III
Inducement
Services
Tier II
Regular
Weekly
Service
Tier I
RegularFixed
ScheduleService
Cairo/Paducah
Upper
Mississippi
Ohio River
Region

26. Start with Bulk Fleet
Integration
Long Term Growth
Strategy is Also Needed
 The Mississippi bulk oriented
barge fleet approach to
transportation service delivery is
not the most ideal for providing a
container barge service.
 Nonetheless, what the
Mississippi bulk barge loses in
speed it makes up in fleet
integration and adaptability.
 A barge operator can provide a
sustainable container barge
service using bulk equipment, if
it integrates the COB service into
a larger bulk barge fleet
 In order to develop a full-scale
COB service, comparable to
major rail and highway corridors,
the service will likely have to
grow out from the shadow of the
bulk operation.
 Incentives should be introduced
to encourage alternative vessel
technologies to the industry.
Vessel Operations Plan

27. MHy Delta is a Multi-
Jurisdictional Project
Identify a Multi-
Jurisdictional Entity
 There are many aspects
that impact the success of
the project that are not
within the jurisdiction of
the State of Mississippi.
 Coordination of Gateway
Port Investment Decisions
 Cooperation of Enhanced
Mode-Share Strategies
 Fleet Integration and
Conversion Strategies
 National Security
 There are several options for
pursing a multijurisdictional
approach.
 1) State of Mississippi to
coordinate among all the
entities, and across all these
issues.
 2) Use an existing entity
that is already recognized
as a multijurisdictional
entity and that receives its
funding from multiple
entities. AASHTO?
Proposed Institutional Plan

28. Issue Recommendation
1. No gateway at base of
Mississippi River
2. Gulf coast ports serve
“truck-able” markets
3. Bulk barge tows not
agile enough for
container trade
4. Involves many states,
ports and pvt. entities
1. Gateway development
strategy & funding
2. COB plus enhanced
mode-share incentives
3. Fleet integration plus
fleet development
incentives
4. Identify multijurisdict’l
entity and fund it
Summary of Findings and Recommendations