American Feeder Line shutting down New England feeder service

by Peter Diehm on 2012-05-06 02:41:06

Anybody who has read the publication “The box that changed the World” by Arthur Donovan and Joseph Bonney, knows how the world wide container shipping business developed.

That it all began by shipping along the United States Eastern Seaports from places like New York down into the Gulf of Mexico to ports like New Orleans. First rail cars were put on those vessels, vessels which were in plenty supply because they had been built for World War II and were not needed anymore after that. Then truck trailers where put on those vessels and then it is said that Malcolm Mclean had the idea to take the wheels of those trailers and to stack the containers up. This changed the way we do business forever and opened the doors for the globalization we see today.

Because of that I was very thrilled when I heard that American Feeder Line (AFL) had been established to revitalize those routes along the Eastern Seaports. They started by providing a service from Halifax, Nova Scotia to Portland, Maine and Boston, Massachusetts. Considering that there are far less steamship lines calling the port of Boston versus New York it appeared to be good news for the New England Trade Community as it was giving them another option to bring in containers from Europe or the Far East via the port of Halifax. American Feeder Line operated a 700 TEU vessel to bring import containers from Halifax to New England or from New England to Halifax. Considering how expensive it has become to truck containers from New York to New England this appeared to be a very good alternative, considering that some of the vessels call Halifax before they continue to New York.

Also from an environmental view this was very promising. As short sea shipping is creating less carbon emissions than truck transport. Considering the state of the U.S. road and bridge infrastructure any container taken of the road is helping. The so called I 95 corridor leading from New England all the way down to Florida was also mapped as the M 95 corridor, M standing for the U.S. Marine Highway which is a very promising project.

This week now the news came out that AFL went out of business. Was their approach wrong how they started the business? Should they have built relationships with small barge operators along the Eastern Cost Seaports first? Perhaps acquire some of them and get access to their already existing customer base? At a conference in early March, Rudy Mack of AFL was begging importers and exporters to use American Feeder Lines service and to give them freight. So clearly the demand was too low to make this service worthwhile. Besides that also rates appeared not to be competitive. Another obstacle for American Feeder Line was the Jones Act which required that all vessels in the American Marine Highway shall be built in America and manned with an American crew. Perhaps also here starting out smaller which barge services and building up a customer base would have helped.

In an interview with JOC this week Rudi Mack of AFL stated: “The short-sea, Jones Act idea has died,” “If you can’t run a feeder service from Halifax to Boston and Portland, how will you be able to run other short-sea services?” Only the future will tell us if this is the truth. Let’s hope not.

At the same time of AFL closing down there is positive news from Europe regarding short sea and inland waterway shipping. As posted on the Inland Navigation Europe website “the Italian city of Pisa is the first new city to join the original five European capitals in an initiative that aims to enhance the role of inland waterway transport and step up dialogue with inland port and waterway authorities. The aim is to find sustainable solutions to urban freight supply and distribution challenges through greater use of the waterways flowing through their cities.

Pisa has lined up with the cities of Berlin, Brussels, Budapest, Paris and Vienna, who last September signed up to the ‘Connecting with Waterways: a Capital Choice’ charter. The charter, an initiative of Minister Brigitte Grouwels of the Brussels-Capital Region in cooperation with the European Federation of Inland Ports (EFIP) and Inland Navigation Europe (INE), aims to realise the EU ambition of achieving carbon neutral logistics in major urban centres by 2030.” (Source: INE Press release).

Inland and ocean shipping made a lot of those cities to what they are today, so it is good to see those cities getting back to their roots. Cities like Halifax, Boston and Portland also own a big part of their prosperity to hundred years of trading between them, Europe and other parts of the world. So let’s hope the American Marine Highway in the Northeast has still a future.

Please visit my blog carpediehm to learn more about sustainable logistics.