WJ Editorial

Could Resins Help COB Achieve ‘Liftoff’ In Lower Miss?

The boomer generation well remembers the famous career advice given to a young Benjamin Braddock, played by Dustin Hoffman in his breakout role in The Graduate, by an industrialist friend of his parents: “one word: plastics.”

Could that word help lift container on barge (COB) from the realm of limited experiment and oft-touted promise to sustainable reality?

On November 30, U. S. Maritime Administrator Mark Buzby visited the Port of New Orleans and singled out for praise Seacor AMH’s COB service from Memphis to New Orleans, as detailed in last week’s Waterways Journal. The service moves excess empty containers from Memphis to Baton Rouge, where they are loaded mostly with resins and shipped overseas to Asia, Europe and South America. The resins form the basis for many manufactured products.

The Port of New Orleans foresees a demand for an additional 400,000 TEUs of resin exports moving out of the area between now and 2020. Richard Teubner, Seacor AMH’s president, said the company is already expanding to meet expected demand in South America.

One big reason for the optimistic projections emerged in August, when China announced that it will stop accepting 24 categories of imported trash for its recycling centers, including foreign plastic.

China is the world’s biggest recycling market. In 2016, it imported 7.3 million metric tons of waste plastics from developed countries including the U.K., the European Union, the U.S. and Japan. According to the Institute of Scrap Recycling Industries, a trade group, China accounted for 51 percent of the world’s plastic scrap imports last year, with the biggest contribution coming from the U.S. In 2016, the U.S. exported 1.42 million tons of scrap plastic, worth an estimated $495 million, to China.

News of the import ban received lots of attention in the recycling world. According to a November 30 Morgan Stanley report cited by the business press, the China ban could shift up to 2 percent of global polyethylene plastics supply from recycled to new material.

This could be good news for Gulf Coast processors of natural gas, from which plastic resins come. It’s unlikely that domestic sources of trash from China’s growing middle class will provide enough plastic feedstock for its ever-growing demand for plastic products.

Taking advantage of the fracking revolution that has dramatically lowered the prices of U.S. natural gas, chemical producers have over the past few years invested an unprecedented $185 billion to build new capacity in the U.S., according to the American Chemistry Council. The United Sates is now the world’s cheapest producer of plastics.

American Patriot Holdings LLC is developing an intermodal container terminal in Plaquemines Parish that will be adjacent to a planned LNG liquefaction plant. It is also developing patented self-propelled COB vessels for the Illinois and Upper Mississippi rivers.

Logistics experts say the key to making COB truly sustainable for the long term is having one or more reliable cargo that will use a given COB route regularly. Many other types of cargoes besides resins can profitably use COB, including wood pellets, paper products and furniture parts.

Seacor’s COB shuttle service that began in 2015 on the Tennessee-Tombigbee Waterway moves about 250 containers per month between Mississippi’s Golden Triangle region (West Point-Starkville-Columbus) and APM’s container terminal in Mobile, Ala. Seacor imports fabric, specialized wood, gliders and pre-manufactured components to serve Mississippi’s furniture makers.

On the Lower Mississippi, the plastic resin market is where Seacor expects real expansion to take place, as Teubner noted in these pages (WJ, February 29, 2016).  Could resins be the “anchor cargo” that will make COB truly sustainable? That depends on a lot of things, some of which are beyond the control of shippers and suppliers. But the possibility is encouraging enough to draw significant investment.

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