Transportation Rate Analysis

This research effort developed transportation rates ($/net ton) from origin to destination—including transfer and handling fees—for a non–statistically significant sample of 200 waterborne movements and their alternative least-cost all-overland routings (i.e., rail, truck, or both). The sample consisted of originating, terminating, internal, and through movements on three waterways: Gulf Intracoastal Waterway–East (100 movements), Arkansas River (50 movements), and Red River (50 movements) in the United States. Water line-haul rates obtained from two major barge operators and handling rates obtained from terminal operators were compared with the corresponding rates obtained from the barge costing model (BCM). It was found that the BCM underestimated waterborne charges and that its definitions of cost components were inconsistent with real-world barge operations. Terminal operators interviewed were not aware of any—or could not identify any—specific off-river origins or destinations, so none was associated with any of the movements. Line-haul rail rates were obtained from the Surface Transportation Board's Carload Waybill Samples 2009 and 2010 and Uniform Railroad Costing System. Truck rates were obtained from national and interstate motor carriers. In most cases (171 of 200 movements) the least-cost, most practical land-only line-haul alternative to barge was found to be rail. Overall, this research concluded that barge shipment was the least-cost transportation alternative for every commodity group on the Gulf Intracoastal Waterway–East and Red River and for the majority of commodity groups on the Arkansas River, with annual savings of $2.85 billion. Additional field data collection efforts based on larger, statistically significant samples are needed to implement improvements in the BCM.