As Transport Costs Rise, Barging Becomes More Important
The Wall Street Journal recently ran an article titled, “The Cost of Transporting Pretty Much Everything Just Won’t Stop Going Up,” focusing on diesel fuel costs — up by 77 percent over the past year — and how trucking firms and rail companies can’t avoid passing along those costs to consumers.
Of course, diesel increases hit barge companies, too. Marine diesel fuel costs have gone up between 47 percent and 74 percent above last year’s prices, according to various sources.
But while diesel increases affect everyone, at the same time, they magnify the per-ton-mile cost advantage of barging versus other transportation modes. That cost advantage is front-of-mind for anyone who has a mega-project that requires the movement of bulk commodities or project cargoes.
Just look at the past year alone. This issue reports on the $15 billion Mesabi Metallics steel plant to be located on the banks of the Mississippi River in Iowa. When completed, it will be the nation’s largest-ever steel plant. While ore for the site will be sent by rail, barges will be important in bringing construction materials and transporting finished product.
A location near the confluence of the Ohio and Mississippi rivers was a part of the site selection process for the Paducah American Energy Hub AI data center campus, part of a $100 billion privately funded group of projects announced in August.
Ground was broken in March for the $36 billion PORTS Technology Campus, to be built on the site of the former Portsmouth Gaseous Diffusion Plant in Pike County, Ohio, near the Ohio River.
The Memphis Colossus mega-project was sited there in great part to take advantage of the Mississippi River as a transport corridor as well as a water source.
Other projects under development or discussion include Project River, an industrial campus with a large planned data center in Bradley County, Tenn., along the navigable portion of the Hiwassee River, dredged by the Tennessee Valley Authority (TVA).
Amazon and Entergy projects are under discussion for barge-served sites in the Lower Mississippi as well. Data centers want rivers as providers of cooling water, but also for barging in heavy equipment and the large amount of petroleum products to fuel dual-reserve backup generators. Austal USA’s decision to locate a 390-square-foot Module Manufacturing submarine-building facility in Mobile, Ala., the first phase of which opened June 4, likewise figured barge transportation into its calculations.
All of these mega-projects have made the availability of barge transport a key part of their decision-making. The longer inflation continues, the larger looms barging’s cost advantage.
