Weekly News Summary For May 10–16, 2010:
What local observers are calling a “thousand-year storm” swept the mid-South the first weekend in May, dumping the highest rainfalls ever recorded in the Cumberland River Valley and flooding riverside terminals. The National Weather Service said unusual meteorological conditions combined to produce a torrent of heavy rain over a vast area—one to two inches of rainfall per hour at some spots.
Commercial navigation halted as swollen creeks and soil already saturated from previous rains sent the Cumberland and its tributaries to new heights. The river rose about 20 feet on May 2 alone. It crested at just under 52 feet on May 3, about 11.5 feet over flood stage, according to the Army Corps of Engineers.
On May 4, the Coast Guard closed more than 200 miles of the western Tennessee River, from Mile 0 (Paducah, Ky.) to Mile 206 (Pickwick Landing, Tenn.) to recreational boating traffic because of record high water levels and excessive river drift.
The Coast Guard barred only recreational, not commercial, traffic on the Cumberland. But Ingram Barge Company chief executive officer Craig Philip said “everything was shut down” on the river, except for small fleet boats securing equipment.
Mark Mayfield, general manager of Tennessee Valley Towing in Paducah, told The Paducah Sun that tow operators have suspended use of the Cumberland River, including Lake Barkley. They are also reducing the size of their tows from 15 barges to 12 barges on the Tennessee River, including Kentucky Lake….
American Commercial Lines Inc. announced May 3 that its shipbuilding subsidiary, Jeffboat, had settled a strike with about 600 Teamsters at its Jeffersonville, Ind., site.
Members of the General Drivers, Warehousemen & Helpers (Teamsters) Local No. 89 had walked off the job April 2 in a dispute over premiums for health care benefits. The two sides had begun new talks the previous week.
The new three-year agreement was ratified by 86 percent of union members in a 445 to 71 vote. It calls for a zero percent pay increase in the first year, 1 percent in the second year, and 2 percent in the third year.
The main sticking point was over health care premiums. ACL executives argued that the Teamsters were being offered the same health plan and premiums that executives got, including the chief executive officer. Teamsters retorted that their more physical jobs made injuries more likely than among office workers.
Fred Zuckerman, president of Local 89, told the Louisville Courier-Journal that the union prevailed on the health premium issue. “We negotiated back what we had and we are happy,” he said. He said Teamsters health care contributions would rise about 10 percent from the present level. ACL had wanted to raise the unionized members’ contributions to 20 percent of cost of treatment, according to the Courier-Journal.
Although the average size of the Maritime Administration’s Small Shipyard grants increased from the previous two years, inland shipyards were not as well represented this time around. The $14.7 million in Small Shipyard grants were announced April 15 by MarAd and the Department of Transportation.
“These grants will help modernize small shipyards and strengthen our economy by making sure we maintain the ability to build and repair ships in the United States,” said U.S. Transportation Secretary Ray LaHood.
“Small shipyards are an important part of our nation’s shipbuilding industry,” said David Matsuda, acting Maritime Administrator.
“Shipyards on both coasts, the Great Lakes and our inland waterways will be able to increase productivity and be more competitive as a result of these grants.”
Out of 17 total awardees, only three inland yards serving commercial customers received grants. (A fourth company that received a grant, United States Marine of Gulfport, Miss., has served commercial inland customers in the past, but now serves military customers exclusively.)
One of the larger grants went to C&G Boat Works of Bayou la Batre, Al., which received $1,199,122 for a new 220-ton trawler crane.
After seeing its river barge business decline 30 percent in 2009 during the worst regional drought in 70 years, South American shipping company UABL is betting on a rebound in soy crops, as well as increased iron ore traffic.
UABL’s $30 million expansion of its barge-building and repairing facility at Rosario—which it touts in a recent quarterly report as “the most modern of its kind in South America”—was completed in December 2009. The port of Rosario is Argentina’s third-largest city. Financing of the project came partly from the World Bank.
How will this venture by Felipe Menendez Ross, UABL’s dynamic chief executive officer with shipping and waterways interests all over South America, affect South American demand for U.S. barges and other equipment, which has at times been significant?
Answers vary, but knowledgeable U.S. observers feel that the Rosario yard alone will not, by itself, halt South American demand for American equipment.
Sean Smith, currently deck barge marketing and operations manager for Canal Barge, believes South American demand for U.S. equipment will depend much more on the price of soybeans and the rates for transporting barges in specialized vessels called submersibles, than on the Rosario yard alone….
The Jones Act, which requires cargo moving between U.S. ports to be carried in vessels that are U.S.-owned, U.S.-built and U.S.-crewed, is responsible for enriching the American economy by nearly half a million jobs, the Maritime Cabotage Task Force reports.
In its 2009 annual report, the task force draws from a report commissioned by the Transportation Institute and prepared by Pricewaterhouse Coopers, and says the act creates 499,676 American jobs. Further, the Jones Act generates more than $100 billion on total economic output, $11 billion in taxes and $29 billion in annual wages, and adds $46 billion per year to the value of U.S. economic output, the report states.
Individual sections in the annual report highlight the importance of Jones Act shipping in the non-contiguous trades, on the Great Lakes, and on the inland rivers. Other pages stress the importance of the shipbuilding industry and preparing the next generation of American mariners.
The U.S. shipyard industry supports nearly 100,000 jobs with an annual economic impact of $3.3 billion, the report states.
“American shipbuilders’ skill and expertise are tested every day, as the United States demands the highest safety and environmental standards for vessels flying its flag. Not only do American shipbuilders meet these standards, but they also build super-efficient vessels, as evidenced by the fact that the Jones Act fleet moves nearly one-quarter of all domestic cargo, but represents just 2 percent of the nation’s annual freight bill.”
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