In an effort to ease highway congestion and reduce air pollution, Louisiana port officials have turned to a shuttle service that sends empty cargo containers to Baton Rouge, where they are loaded with plastic resin pellets, an increasingly important commodity, and shipped by barge to New Orleans to be exported.
The aptly named container-on-barge service, which launched last year, is ramping up as U.S. production and sales of resin, the raw material of all plastic products, have continued to grow.
In Louisiana, that increase is driven largely by historically low natural gas prices that are propelling the state's biggest industrial boom in decades.
In the Baton Rouge area, large-scale resin producers include ExxonMobil, Dow Chemical and Shintech.
Resin exports, however, are big business across the U.S. In the first 10 months of 2016, the port of Houston exported nearly 154,000 TEUs, or 20-foot equivalent units — a measure of cargo capacity for containerized shipping. That accounts for almost 46 percent of the total U.S. volume, according to a recent report by the research firm IHS Markit. New Orleans ranked No. 2, with nearly 46,000 TEUs, just above the combined totals of Los Angeles and Long Beach, California.
In Louisiana, the burgeoning container-on-barge service is operated by Seacor AMH, a Florida-based marine transportation company. The firm collects empty containers in Memphis, Tennessee, and transports them to Baton Rouge for loading before they are sent to New Orleans.
The port is moving an average of 200 containers a week of resin, which are shipped primarily to destinations in Asia, Europe and South America.
That number is expected to grow. Experts project an additional 400,000 TEUs of all commodities will be shipped through the Gulf Coast region between 2017 and 2020, in large part driven by Louisiana-produced resins.
Some — but not all — of that increase is likely to travel through the New Orleans port, which handled more than a half-million 20-foot equivalent units of all commodities in the 2017 fiscal year, which ended in June.
To help support the effort, the U.S. Department of Transportation last year awarded a $1.75 million grant to the two Louisiana ports. In Baton Rouge, the bulk of the money will be used to buy specialized equipment that will reduce how long it takes to load the containers, which will make the process more efficient.
A similar container-on-barge service was offered more than a decade ago but fell by the wayside around the time of Hurricane Katrina in 2005.
The decision to bring it back stemmed from a push by chemical exporters who "recognized that the demand for their products is going to be increasing significantly," said Robert Landry, the New Orleans port's vice president of commercial operations.
Proponents of the plan also note the findings of a U.S. Department of Transportation study, which concluded that the state could save $118 for each round trip a shipping container makes down the Mississippi River instead of along Interstate 10 between Baton Rouge and New Orleans.
Retired Rear Adm. Mark Buzby, who leads the U.S. Department of Transportation's Maritime Administration, paid a visit to the New Orleans port recently. He described the program as "a great use of a natural resource — the river — an already established mode of transportation, and stitching together needs in a couple of different places."
"You make the whole logistics chain so much more efficient any time you can cut out a movement; you've made the whole logistics chain run smoother," Buzby said. "That's the beauty of this: It utilizes an underutilized asset, and that's our waterways."
Already, Seacor is considering expanding the service, optimistic that it will grow as much as one-third by early next year, said Richard Teubner, the company's vice president.
In Baton Rouge, port officials expect that new equipment will enable workers to lift containers on and off a barge more quickly, which will help cut costs since the work is done on an hourly basis. Each barge holds about three dozen loaded containers.
As it is, stacking containers is a tough job using a stick crane, which Jay Hardman, executive director of the Port of Greater Baton Rouge, acknowledged is "a very slow, inefficient way to move either empties or full containers."
"I see the efficiencies increasing dramatically," he said, estimating that the port will be able to move two dozen containers in an hour, versus six with the stick crane.
His port's effort to buy this specialized equipment has been slowed partially because only a few U.S. companies can build it, he said, but he expects to release a request for proposals soon and could have the equipment in about 18 months. The price tag: about $1 million.
Relying on the river for shipping resin offers inherent advantages, such as reducing congestion on the roadways in both cities and along the highways in between, Hardman said.
"I think it's catching on," he said. "The shippers are getting comfortable with it."
As it is, the Baton Rouge port is handling the work on about 4 acres and could try to gain additional space to stack and maneuver the containers if there's a need for it.
It's possible that the service could also begin moving cargo back to Baton Rouge, filling up the barges once they're unloaded, possibly with grain. "I do think it presents an opportunity for some northbound cargo to start utilizing the service," Hardman said.
The Baton Rouge port gets about $30 a box for the service, bringing in roughly $360,000 a year in revenue.
For now, even as resin production continues to swell, the biggest challenge will be getting shippers comfortable with the 12-hour trip from Baton Rouge to New Orleans.
"Even before Katrina, from an operational perspective, it worked very nicely," Landry said. "I think sometimes, you have people who are so conditioned to 'speed is everything,' but there's a flow for cargo that can be just as efficient."