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A publication of the Upper Mississippi Waterway Association.
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June 2018 
 
UMWA pioneered cooperative boarding

(Editor’s note: The much talked about Subchapter M, which goes into effect July 20, sets uniform minimum safety standards for U.S. inland waterway towing vessels and institutes an inspection protocol that vessels must pass.) 

      UMWA members with long memories recall that almost 25 years ago the organization’s leadership, working with the Coast Guard’s St. Paul Marine Safety Detachment (MSD) pioneered a new way of doing vessel safety inspections on workboats.  Called the “Cooperative Boarding Program (CBP),” it foreshadowed today’s Subchapter M which goes into effect next month.
     Lee Nelson, president of Upper River Services (URS), and past UMWA President and Chairman, says the idea for CBP came from something Upper River had been doing informally while the company’s boats were idled for winter maintenance.
     “At that time the Coast Guard office was just across the river in St. Paul and we had been asking the MSD to come do a walk-through on the shutdown boats and identify potential issues of concern should the Coast Guard do a boarding,” Nelson says.
     “I liked the feel of that,” he says. “We had developed a good rapport with the Coast Guard and they liked the idea of being invited in rather than being confrontational.”

A more formal program     
     Traveling to a joint out-of-town speaking engagement, Nelson and Lt. Bob McFarland, who headed the St. Paul Coast Guard operation at the time, began talking about a more formal program of consultative and cooperative safety inspections.
     Once the Cooperative Boarding Program was begun, it was quickly adopted throughout the 2nd Coast Guard District.  When the 2nd was absorbed into the 8th District, it was extended even further. 
     The Upper River Services boat Itasca was the first vessel to receive certification under CBP and received decal #1 which was posted on a pilot house window.  A CBP decal is still there.

TPOs are necessary
     These days, in addition to running URS, Nelson is Immediate Past Chairman of the Towing Vessel Inspection Bureau (TVIB), a Coast Guard certified Third-Party Organization (TPO). 
     TVIB provides training and education to certify auditors and surveyors for, “Objective and independent audits and surveys of marine operations in the U.S.”  In other words to do Subchapter M inspections.
     “Subchapter M is really a culture change, and anyone who has worked on or been involved in a culture change knows it takes a long time to accomplish,” Nelson says, “And Third-Party Organizations are a necessary part of the new regime.”
 
(Above)  The Mv. Itasca belonging to Upper River Services, was the first vessel certified under the Cooperative Boarding Program.  It has retained its decal since then.  (Photo courtesy Upper River Services)
 
From the Executive Director

The quaint functionality of Mississippi River tows 
     Railroads are taking an even smaller slice of the overall transportation pie.  If this trend is accelerated by autonomous trucking, railroads that go about business-as-usual will eventually become like barges that ply the Mississippi River -- quaint and functional -- but will be left out of the fastest growing areas of the economy.”
     This statement from Bill Stephens in the June issue of Trains magazine reflects a different perspective on domestic freight transportation.  In it, Stephens argues that railroads are not participating in the rapidly growing freight market that is principally made up of shipments less than 500 miles and in truckload sizes, about 20 tons or smaller.  That’s because the growing domestic freight transport is overnight or by next day truck.  Kevin Horn of WorkBoat magazine who reviewed Stephens’ article, said you might term it the “Amazon freight market – [make one call and] get your freight overnight.”
 
Implications for barges
     Likewise, the implications for the barge sector, says Horn, are clear.  Growth in the 1,500-ton barge bulk commodities market has been low relative to the rest of the transport sector.  Some of the bulk cargo sectors that traditionally move by rail and barge have seen growth stagnate.
Think the decrease in coal shipments and grain sectors that have been weakened due to strong international competition.  For their part, railroads have been able to attract some long haul intermodal freight, but this market is limited in size and its profit margins are thin.  At the same time, long-haul intermodal for the barge sector is mostly nonexistent unless there are special mitigating factors such as overweight containers for truck. 
     Still, says Horne, the sight of a Lower Mississippi River 35-barge tow is anything but quaint and functional.  “Yes” he said, growth and new barge cargoes and markets seem far distant, but the stuff that is moving on the inland waterways dwarfs other transport sectors in scale and scope.
 
     For years transport sectors have vied over what the different modes and operations do best from an efficiency perspective.  Viewed this way, said Horn, he would take the quaint functionality of the big Lower Mississippi  tows as the only alternative is unit trains not trucks, or whatever more exciting dynamic forms of transport that might lie somewhere on the horizon. 
     “I’m positive” concluded Horn, “that Amazon will not be able to deliver the equivalent of a Lower Mississippi River 35-barge 52,500-ton bulk cargo tow the next day.”
     With the above nod to the barge industry, we think it only fair to report that the earlier referenced Train magazine also contained a supplement listing some of the railroads’ earlier blunders that threatened their survival.  For example, in the last quarter of 1887, in response to growing public anger over railroad financial scandals, price gouging and poor service, Congress created the Interstate Commerce Commission (ICC) and subsequently passed other legislation that set railroad rates that had to be assessed against all customers, large and small. 
 
Railroads withered  
  Progressives and agricultural interests applauded the new rules, but railroads withered as the rigid rate structure hampered their ability to meet rising truck competition.  Railroads “didn’t set the pricing right” and rails didn’t have the money to stop their downhill fall, some to their demise, according to government officials.
     Not only did railroads have to file for rate increases, they had to file for rate reductions as well.  And, in the infamous Big John case, it took years for the Southern Railway to get regulatory approval to introduce 100 ton covered hopper cars and lower grain-hauling rates. 
     Railroads may have been too slow to recognize the Populist backlash against their practices that introduced differential pricing which allowed railroads to charge different shippers different prices depending on the shippers’ competitive alternatives.
 
Slow on intermodal
     Railroads didn’t catch onto intermodal traffic in the early days either.  According to the supplement, they were reluctant to invest substantial money in a business that was regarded as more a hassle than an opportunity for growth.  This reluctance set back the intermodal boom by a decade or more while rail executives worried that intermodal would shift freight from the relative high-profit carload business to low margin intermodal trains.  Railroads said it cost a lot, doesn’t earn that much, and is hard to run, said a former Norfolk Southern executive.  In truth, it was easier to run coal and grain unit trains.
      And finally, there is was the dysfunctional merger of the Pennsylvania Railroad and the New York Central in 1968 that was one of the biggest railroad blunders of them all, if not the biggest.
     The Penn and the Central were the nation’s two largest railroad and fierce competitors.  Still, they had fallen on hard times because of industrial flight to the South, governmental regulation of railroad rates (rate deregulation didn’t come into effect until 1980) and massive federal/state investments in roads, airports and locks/dams.  As one person described the merger:  it was like putting two stones together and expecting them to float. 
     To make matters worse, the Penn Central’s CFO was more interested in Penn Central’s non-rail investments than running a railroad.  He diverted millions of dollars from the railroad to the company’s hotels, office buildings, amusement parks, an air charter service and interests in sports teams.
     The merger lasted just over two years and the federal government spent $8 billion to clean up the mess.
 
13 flubs
     In total, the supplement listed 13 such flubs, foul-ups and paux pas that shaped the industry, ranging from narrow gauge fever, mismanaged megamerger bids and the inertia of railroad culture.
     However, said Dan Machalaba, a retired Wall Street Journal reporter “Give credit to the industry’s staying power, efficient steel-wheel-on-steel-rail technology, and to all the dedicated railroaders.  They’re all part of the rail culture.  That may help explain why even with the blunders, railroads are healthier than ever (at least financially) and continue to play an important role in the U.S. economy.” 
     Remember too, that short-line railroads transport producer inputs and transport grains to inland river terminals and the Great Lakes. 
 
Disclaimer:  Thoughts and opinions expressed in this column are those of its author and not necessarily those of the Upper Mississippi Waterway Association or its members.
 
Other Items of Interest

*   A couple of new YouTube videos showcase the economic importance of the inland waterways and the towing industry and the beauty that towboaters see every day.  One from Brennan Marine was premiered at the recent Inland Marine Expo in St. Louis and the other is a message from the Waterways Council.

*      The Woodbury Bulletin reminds its readers that recreational boating on the Mississippi River and going through locks requires basic knowledge.  In addition to following directions of lock masters, the Bulletin says boaters should remember to keep their distance from towboats and other commercial vessels which have priority.  The story directs readers to the St. Paul COE District’s website for more information.

*     Upper River Services workers Russ Galvan, Randy Kohl, Beasley Baker, Jesse Harrison and Ben Brooks recently were given the Dakota County Sheriff’s Award for Excellence and the U.S. Coast Guard Certificate of Merit for their successful life saving efforts rescuing a man from the swift waters of the Mississippi.

*     The Milwaukee Journal Sentinel says infrastructure on the Mississippi River is “deteriorating faster than it's being replaced.”  With an anticipated increase in river commerce, the paper says the need is critical. “Should any lock or dam fail long-term, it could create havoc for U.S. commerce.”  Accompanying the story online is an amazing series of time lapse photos of a lock passage. 

*    Towboat pilot Kyle Pfenning recently video taped an unusual hazard to navigation about 10 miles north of Cape Girardeau.  The tornado didn’t impact his tow, but did provide some spectacular footage.


     

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