Southern Illinois Transfer: In It For The Long Haul
While working as a lawyer in the Gateway City’s grain industry, Kurt Johnson gained an appreciation for the industries that keep cargo on the move and commodity companies in the black.
As he recalls: “It seemed to me that a lot of grain clients were actually transportation companies that originated their own cargoes, and that transportation was a key aspect that was not always given the attention it deserved.”
Along with that observation came entrepreneurial aspirations.
“Learning about the towing business and the rail car industry inspired me to want to get out and be a business owner rather than a lawyer,” says Johnson, who jumped at the opportunity to take the helm of Southern Illinois Transfer in 2007.
“I was in the right place at the right time with the right group of guys,” says Johnson, whose partners in the venture include brothers Mark and Ronald Arbeiter and Michael Howe.
By that time, Southern Illinois Transfer, founded and operated by the Brown family, had been a trusted name in the river industry for nearly 50 years. Today, the Sparta, Ill.-based business continues to offer safe and efficient harbor services, along with barge moving, cleaning and repair.
With nine towboats in its fleet, Southern Illinois Transfer serves as the towing company supporting product shipments on portions of the Mississippi and Kaskaskia rivers. Partnering with the Kaskaskia Regional Port District (KRPD), the company operates barge terminals in Baldwin, Ill. (KRPD 2, Mile 18.5) and New Athens, Ill. (KRPD 1, Mile 24.5). In Missouri, Southern Illinois Transfer runs a dock for Mississippi Lime Company, as well as providing harbor services for Kellogg Dock at St. Genevieve.
“Between the three terminals, we’re handling several million tons of product a year,” says Johnson. Those products include slag, fertilizer, limestone, steel coils, frac sand and coal.
“We basically manage all functions at the terminals, including unloading and loading product,” says Johnson. “We are responsible for building and maintenance of equipment and spotting and moving barges. We also work with the customer to arrange land transportation when needed.”
While its terminal services are tried and true, in recent years Southern Illinois Transfer branched out into a new line of business.
Building Tomorrow’s Towboat
In 2013, the company partnered with George Foster and his company, JB Marine Service of St. Louis, to launch Barbour JB Shipyard, officially entering the boat-building business. Working in a 30,000-square-foot, temperature- and humidity-controlled warehouse at KRPD 2, a highly skilled crew of eight is putting a new twist on the traditional towboat.
Their efforts put the company at the leading edge of a resurgence of the Barbour hull design. Compared to the traditional flat hull, the double chine of the Barbour hull provides better water flow to the propellers. As a result, it can effectively boost a boat’s rated output by the equivalent of hundreds of horsepower.
“The Barbour hull design performs like a boat with 20 percent more horsepower,” says Johnson. “It pushes better than anything on the water. It’s everything we’d hoped it would be.”
This means the recently completed 1,500 hp. Kaskaskia Warrior, a 68- by 26-foot harbor boat, will equal the capabilities of an 1,800 hp. conventional boat. The second harbor boat built by Barbour JB Shipyard, the Kaskaskia Warrior is now the largest boat in Southern Illinois Transfer’s fleet.
“The efficiency of the Warrior is pretty amazing,” says Johnson. “Compared to our other boats, we can push a four-barge tow about 25 percent faster on about one-third less fuel. Working with the Shearer Group, we came up with a design that’s pretty magical.”
Barbour JB Shipyard is now building the first new boat in the Midwest to incorporate the Z-drive, which replaces conventional steering equipment, including propellers and rudders. With the ability to rotate 180 degrees, a Z-drive provides powerful thrust and speed, backwards as well as forward.
The combination of the Barbour hull and Z-drive save both time and fuel, which give boats built by Barbour JB Shipyard an obvious advantage.
A single boat can take up to 10 months to build. But as the builders gain experience, they have whittled down construction time. In fact, Johnson says they were able to reduce construction time by as much as 25 percent between their first and second boat.
With a need to replace up to five boats in the Southern Illinois Transfer fleet, Johnson is in the enviable position of keeping or selling the boats produced by Barbour JB Shipyard.
“We have the luxury of building on spec,” says Johnson. “I’d love to keep these boats for our business, but if someone shows up with a check, I’d love to sell it to them.”
Considering their added power, efficiency and agility—not to mention advances in crew comfort—not everyone is eager to sell.
“Our fabricators do outstanding work. These boats are a source of pride for the guys working on it,” he says. “And of course, our crews are hoping we don’t get it sold.”
From Lawyer To Leader
Having traded in his law office for life on the river, Johnson strives to maintain the family-oriented culture begun by the original owners of Southern Illinois Transfer.
“We’re a small company, and we’re able to run it that way,” says Johnson. “If someone has a sick child and needs to be off work, we try to accommodate that. It’s easy to have that culture when you have good people who don’t abuse it.”
Whether building boats or wrangling barges, the nearly 50 employees at Southern Illinois Transfer and its sister companies have earned Johnson’s utmost respect.
“They have years of experience and skill sets that are honed over time,” he says.
“Basically, my management approach is to find good people and get out of their way. My job is to help meet their needs in terms of equipment and support—and to listen to them,” says Johnson. “Those guys are the experts. They know this business better than I do.”
Many, in fact, have decades of experience. That, combined with low turnover, leads to a very stable, efficient and safe workplace.
“We take safety seriously and do everything we can to keep our boats in compliance,” says Johnson. “We have good people who work safely. Our record is very strong.”
To make sure it stays that way, Southern Illinois Transfer works with Rushing Marine to create timely, effective safety programs and conduct quarterly training. Rushing Marine is also helping the company develop Subchapter M compliance plans.
From partners like George Foster to employees and customers, Johnson prizes long-term relationships.
“We try to accomplish what our customers need—sometimes even when it costs us a little more to do it,” says Johnson, who always takes the long view. “We would never take advantage of a customer’s bad situation to make a quick buck. That’s one of the reasons our long-term relationships are very strong.”
Those positive relationships extend to the U.S. Army Corps of Engineers, which works with companies like Southern Illinois Transfer to enhance river navigation and manage emerging issues like flooding, ice and river traffic.
“We work very well with the Corps. They go out of their way to help,” says Johnson. “They do a great job supporting navigation on the Kaskaskia and we appreciate that. The Corps is just as interested in seeing the Kaskaskia grow and develop as we are.”
On The Horizon
Now in his 11th year as president of Southern Illinois Transfer, Johnson sees both challenges and opportunities in the years ahead—beginning with Subchapter M compliance.
“Subchapter M requirements are going to be difficult to meet,” says Johnson. “Subchapter M presents a new twist, a new challenge, but we are working with Rushing Marine to get ready for it.”
And he is not blind to the silver lining of Subchapter M, as owners look to replace an aging fleet.
“A high percentage of the harbor boat fleet was built in the 1970s and 80s. Those boats are nearing the end of their life,” he says. “In light of new regulations, it may be easier to start looking at a new boat rather than upgrading a 40-year-old boat.”
With that in mind, he and JB Marine are prepared to expand Barbour JB Shipyard in terms of both staff and space to accommodate growing demand.
“Once our name gets out there and people see how these boats push, we hope to double our capacity,” says Johnson. “We’re excited about that.”
Johnson also hopes to expand the types of cargo the company handles. Southern Illinois Transfer is in a prime position to begin loading coal combustion waste products from Prairie State Energy Campus, as well as handle an expected increase in frac sand for the oil industry.
During his time working as a transactional lawyer, specializing in mergers and acquisitions, Johnson saw firsthand how often business leaders fail to see a situation clearly.
“I saw a lot of mistakes and bad ideas as a lawyer, and I try not to have that same near-sightedness,” says Johnson, who values a second opinion. “Sometimes, it’s important to step back and let someone else look at things.”
But one thing he never second guesses is his decision to “jump ship,” from the legal profession. As it turns out, the transportation industry delivered on Johnson’s dreams.
“Working for yourself is a lot more fun than being a lawyer,” says Johnson with a laugh. “Plus, you don’t have to track your time in six-minute increments.”