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Thursday, January 4, 2018
Matson replaces interisland container barge; may increase Neighbor Island freight rates
By Michael Hansen @ 4:59 PM :: 7153 Views :: Jones Act

Matson replaces interisland container barge; may increase Neighbor Island freight rates

by Michael Hansen, Hawaii Shippers Council, January 4, 2018

Matson Inc. posted on January 2, 2018, to their corporate website a press release, “Matson Increases Neighbor Island Barge Capacity,” announcing that they are replacing their container-barge MAUNA LOA (built 1984) with the secondhand deck barge COLUMBIA (built 2013) for their interisland feeder service. This portends a significant change in the way Matson handles the delivery of Neighbor Island container cargoes and is likely to increase their operating costs.

The barge COLUMBIA was constructed by Gunderson Marine LLC at its Portland, Oregon, shipyard on the Willamette River, and launched June 1, 2013, for owners Portland-based Sause Bros. Ocean Towing Inc. (“Sause”) to be employed in the Columbia River / Hawaii trade. Sause has operated in the interstate Hawaii trade since 1966 as a common carrier primarily transporting various Pacific Northwest forest products including lumber and plywood commodities for the Islands’ construction industry. Sause also provides contract towage for Matson’s interisland feeder service barges with its Honolulu-based ocean tugs.

Gunderson Marine is a subsidiary of the Lake Oswego, Oregon-based, The Greenbrier Companies, Inc. (“Greenbrier”; NYSE: GBX), a publicly-held barge and railroad car manufacturing corporation with annual revenues of U.S. $2.169 billion and 10,686 employees at August 2017. As the Greenbrier annual report 2017 states in regards to its marine vessel fabrication business, “U.S. coastwise law, commonly referred to as the Jones Act, requires all commercial vessels transporting merchandise between ports in the U.S. to be built, owned, operated and manned by U.S. citizens and to be registered under the U.S. flag.”

Since 1984, Matson has employed two highly specialized purpose-designed and built sister-container-barges – the MAUNA LOA and HALEAKALA – in their interisland feeder service to distribute the container cargo discharged by their mainline containerships at their hub port terminal in Honolulu Harbor to neighbor island ports. In addition, Matson operates the Roll-on / Roll-off (Ro/Ro) Barge WAIALEALE (built 1991) with a capacity of 230 autos in its proprietary interisland feeder service. Matson’s interisland feeder service barges call directly at the neighbor island ports of Nawiliwili (Kauai Island), Kahului (Maui Island), Kawaihae (West Hawaii Island) and Hilo (East Hawaii Island).

As Matson’s feeder service only transports cargo moving on a through Bill of Lading (B/L) in interstate trade, compliance with the Hawaii Water Carriers Act of 1974 (HWCA 1974) as amended with application for and assignment of a Certificate of Public Convenience and Necessity (CPCN) and regulation by the Hawaii State Public Utilities Commission (HPUC) is not required. Matson’s noncontiguous services (including its Hawaii feeder service) are regulated by the federal U.S. Surface Transportation Board (STB), which is an independent agency attached to the U.S. Department of Transportation (USDOT). In contrast, the State’s sole interisland common carrier by water, Young Brothers Limited (YB), which does carry local cargoes, is regulated by the HPUC under the HWCA 1974 and a CPCN.

Matson’s two existing interisland container-barges are geared (i.e., fitted with an onboard traveling gantry crane to load and discharge containers) and cellular (i.e., fitted with cell guides) for the efficient stowage of ISO shipping containers. These container-barges are 345 feet in length overall (LOA), 64 feet in breadth (width), 4,658 deadweight tons (DWT) in long tons (tons of 2240 pounds each), and have a container capacity of 335 twenty-foot equivalent units (TEU)’s.

The configuration of the two Matson container-barges with cell guides and gantry cranes allows for a very efficient operation in terms of cargo handling, expediting port calls especially at the neighbor island ports where there are no shoreside container gantry cranes, and flexibility in scheduling multiple range port calls per voyage. The use of the onboard gantry cranes facilitates Lift-on / Lift-off (Lo/Lo) cargo handling mode. The cellular configuration allows the use of the very efficient shoreside gantry cranes at Matson’s Honolulu terminal also in the Lo/Lo mode.

However, operating the two container-barges MAUNA LOA and HALEAKALA – built in 1984 and now 33 years old – is becoming too expensive and replacement vessels are needed. Meanwhile, the cost of constructing new highly specialized container-barges in the U.S. to comply with the Jones Act has simply become too great and replacement with a standard deck barge has become the default solution. Ergo, Matson turned to Sause for a second hand deck barge.

The cost of constructing self-propelled seagoing ships of 1,000 gross tons and greater in the U.S. to comply with the Jones Act’s domestic ship build requirement is now well understood to be approximately five times that of building a comparable ship in an East Asian (Japan , South Korea or China) yard. It is reasonable to assume that building a highly specialized container barge such as the MAUNA LOA and HALEAKALA in the U.S. today would incur a very similar premium making it infeasible to build in the U.S. for a Hawaii feeder service. Without the federal domestic build requirement, it’s likely that small foreign-built U.S. flag self-propelled geared containerships would be used for inter Hawaiian island feeder service.

As the COLUMBIA is a deck barge without cell guides and cargo gear, Matson will use the Carry-on/Carry-off (Co/Co) container cargo handling mode using large fork lift trucks (FLT)s to move the shipping containers between the container yard and barge via a ramp at both their Honolulu hub and neighbor island ports. The Co/Co cargo handling mode will not be as efficient as the current Lo/Lo operation requiring the new barge to spend longer periods in port working cargo and may restrict the scheduling of multiple range port calls.

Although the COLUMBIA (LOA 362' x Breadth 105' Molded Depth 23') will be somewhat larger than the MAUNA LOA, it’s not clear that the actual container stowage achieved on the COLUMBIA will be that much greater because of the difference in cargo handling modes and stowage.

Matson currently charges U.S. $750 per container 40 foot as their Neighbor Island arbitrary for the transshipment of the container cargo to their Neighbor Island feeder service ports. If Matson’s feeder service costs increase as a result of the operating changes brought about by the barge COLUMBIA, then necessarily the Neighbor Island arbitrary will have to increase.

Key excerpts from Matson:

Matson, Inc. ("Matson") announced that its subsidiary Matson Navigation Company, Inc. has replaced one of its three barges dedicated to serving Hawaii's neighbor island ports with a newer, larger barge that will improve service levels.

The container barge Columbia, to be renamed Mauna Loa in honor of the barge it replaces, is now Matson's largest barge. At 360 feet long, with a beam (width) of 100 feet and cargo carrying capacity of 12,600 tons or 500 TEU,* it is 12 feet longer and 40 feet wider than the barge it replaces, with the capacity to carry 180 more TEU or nearly 8,000 tons more cargo.

Built in 2012 by Gunderson Marine and classified as a Deck Cargo Barge with approximately 33,000 square feet of deck cargo space, the vessel's design enables swifter and more fuel efficient transits. Its deck is unobstructed to allow greater flexibility in loading containers and over-dimensional cargo and is protected by a large breakwater at the bow and bin walls on the sides to aid in cargo securing and protection from the marine environment.


2012: Sause Building New Barge to Service Hawaii


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