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Moving Freight in Alaska: commodities important to transportation industry.


Alaska's isolation from the rest of the country has always made logistics a problematic issue for the young state. This has not changed significantly in the early 21st century.

Many parts of Alaska are not accessible by road and continue to depend on barge and container-ship traffic to bring goods to their communities. This affects both the local people directly, as the supplier of groceries and other needed items, but is also vital to the success of construction companies doing work in remote Alaska locations. In Nome, for example, construction material for the new hospital must be barged in during the narrow window of ice-free seas between mid-June and early September, said Neeser Construction's senior project manager, George Tuckness.

"Logistics planning becomes very important on a project like this. We have to plan to keep materials on site because it can be a long wait for the next barge load," Tuckness says.


Several companies provide waterborne freight service to Alaska from the Lower 48 and between various ports-of-call within Alaska. These may be divided between those that offer or specialize in barge service and those that utilize container vessels. Lynden Transport, for example, provides both barge service through its subsidiary, Alaska Marine Lines (AML), and regular steamship service to major ports, such as Anchorage. Lynden also provides direct trucking service to Alaska via the Alaska Highway. Samson Tug and Barge, on the other hand, specializes in moving cargo by barge.

Other major shippers include Pacific Alaska Freightways, Northland Services, American Fast Freight and Horizon Lines. Horizon Lines does not operate barges, depending entirely on Washington-based container ships to move a wide variety of freight from Tacoma to Anchorage, connecting through the Port of Anchorage to the Interior by way of the Alaska Railroad and a network of trucking services. The company also services Kodiak and Dutch Harbor with container vessels, according to a company spokesman.


Lynden's steamship service includes connections to such far-flung Alaska locations as Fairbanks, North Pole, Delta Junction, Fort Knox gold mine, Prudhoe Bay, Kenai and Railbelt destinations such as Eagle River, Palmer and Denali Park. Northland Services provides delivery in Western Alaska to major hubs like Dillingham, Naknek, Bethel and Nome, as well as more than 80 small villages, including those in the Yukon River basin. These shipments include heavy equipment, building material, groceries, dry goods and fishing supplies.


According to the Alaska Office of Economic Development, bulk commodities also are an important factor in the Alaska shipping business. Coal from the Usibeli Mine near Healy, is moved by rail to Seward and bulk loaded on ships bound for overseas ports. While the timber industry is a much smaller player now than it was in the 1970s and 1980s, logs are still shipped from Native corporation lands on Afognak Island, Kodiak Island and in Southeast Alaska. Most of them are bound for China, Korea and Japan and are carried on foreign-flagged vessels. On the import side of the equation, bulk cement from China has been delivered to Port MacKenzie on the Matanuska-Susitna side of Knik Arm.

A major staple of the shipping industry's cargo is Alaska fish products. Samson Tug and Barge moves vast quantities of containerized salmon from Prince William Sound (PWS) every summer, said spokesman Jerry Morgan.

"In the summer, we move a lot of fish," Morgan says. "Canned, frozen and fresh salmon goes out in dry and refrigerated containers." AML also depends heavily on the fishing industry in both PWS and Southeast for a significant percentage of its business. The cargo is barged to Seattle and is then transshipped to its ultimate markets.

Fish from Kodiak and King Cove also leave their homeports packed in containers that are then moved by barge. A regular service provided by Samson positions containers at the two ports and, when they are loaded with fish, transports them by barge to Dutch Harbor where they are transferred to container vessels bound for Asia. American President Line, a subsidiary of Singapore-based Neptune Orient Lines, and Maersk Line, headquartered in Denmark, are the two main carriers transporting fish from Dutch Harbor to Asian ports, according to industry officials.


"A lot of people don't realize how important fishing is" to the freight business in Alaska, says AML President Kevin Anderson. "It is simple economics. If we did not have large numbers of southbound containers loaded with fish to move every summer, rates would have to be much higher to cover the cost of business. Fishing is critical to getting freight moved north into Alaska."

The hundreds of container loads shipped each month during the summer makes possible year-round barge service to the small communities in the Southeast panhandle of the state. "The majority of container shipments during the remaining nine months of the year," says Anderson, "represents a one-way market."


AML and Northland Services supply the Southeast communities with a wide variety of commodities with their barge service. They call at Ketchikan, Wrangell, Petersburg, Juneau, Sitka, Skagway and Haines. The barges bring in groceries, dry goods, curios, building materials, mining supplies, sporting goods, hardware, automobiles, heavy equipment and personal household goods.

"Barges deliver just about anything you can imagine," Morgan says.

AML calls at Southeast ports twice weekly, according to Anderson, and arrives in Whittier once per week.

"For the communities in Southeast," Anderson says, "barging is the only way to get things there. The only other choice is air cargo," which is not a practical or economic alternative for many items.


It may seem odd, but Sitka-based Samson Tug and Barge does not call at Southeast ports, other than Sitka. Rather, its emphasis is on Prince William Sound communities, including Cordova, Valdez and Seward. As previously mentioned, the company also calls on Kodiak, King Cove and Dutch Harbor.

"We move a lot of oil field service equipment through Valdez and Seward," says Morgan. From Valdez, the cargo can be moved to Fairbanks and the North Slope via truck traffic on the Richardson Highway. From Seward, it can connect to the Alaska Railroad and travel to the Cook Inlet fields and points north along the Railbelt.

"The majority of our cargo is containerized," Morgan says, "but our barges also carry roll on/roll off equipment," including heavy construction machinery. "General commodities and personal goods are included in the containerized shipments."

AML's once per week service to Whittier connects Lower 48 shippers with the Alaska Railroad, which operates a rail-barge and container transfer facility in the isolated port on the east side of the Kenai Peninsula. "We have a contract with Alaska Railroad to serve the Port of Whittier," Anderson says. "On the main deck of our barges we load rail cars, and we have a rack over the top that is loaded with containers."


This way, each barge can deliver a variety of cargo and shipping modes, making the most of every weekly run. In addition, AML provides barge service to Cordova and Valdez out of Whittier on a year-round basis. "They are big southbound fish customers in the summer," Anderson says, "and we provide 12-month inbound service, supplying groceries, staples, building materials and all the other commodities we deliver to Southeast communities."


One commodity that regularly makes the trip south is refuse from communities in Southeast. Towns like Wrangell, Petersburg and Ketchikan need to get rid of large amounts of garbage and trash, and barges are the only reasonable choice for this kind of cargo.

"With all the new regulations, it is extremely difficult to permit new landfills, especially in an area so wet," Anderson points out. Therefore, garbage from most Southeast Alaska communities is shipped by barge to Seattle and then by rail to landfills in the eastern parts of the Pacific Northwest. The two major receivers of Alaska refuse are Waste Management Inc., a Houston, Texas, based company, and Allied Waste Industries of Scottsdale, Ariz.

Waste Management is the largest refuse-disposal company in the United States, and, according to published company information, is committed to partnering "with communities to manage and reduce waste from collection to disposal." The company's Washington-based office takes delivery of Alaska refuse in Seattle and sends it by rail to one of its many landfills. The formerly family owned Redanko Ltd., now owned by Allied Waste Industries, is based in Bellevue, Wash., and operates a modern, environmentally friendly landfill in Klickitat County. Barge services in Alaska are responsible for safely delivering Alaska trash to these two disposal companies.

Removing refuse from Southeast Alaska communities has, since the late 1990s, become an important component of the barging business in Alaska. According to Anderson, AML collects garbage in 40- and 48-foot, open-top containers in Haines, Sitka, Wrangell, Petersburg and Ketchikan, and delivers it by barge to the Port of Seattle.


Scrap steel is another commodity that barge companies regularly transport out of Alaska. SeaTac Marine Services LLC is a Seattle-based marine logistics company that specializes in barging of material. The company regularly calls at Alaska ports and collects bulk cargoes of scrap to be hauled to the Port of Tacoma for reclamation. AML also hauls scrap to either Seattle or Tacoma, depending on the customer, said Anderson.

"We haul both scrap and contaminated soil on barges from Southeast Alaska to either Washington port, according to the needs of our customers," Anderson said. Under rules formulated by the federal Environmental Protection Agency (EPA) and the State of Alaska Department of Environmental Conservation, many former industrial sites in Alaska are subject to remediation, and this often entails removal of soil containing petroleum or other contaminants.

When the scope of the remediation project calls for the removal of volumes that cannot be easily transported in barrels, or when there is an accumulation of contaminated soil that can constitute a barge load it is transported south on marine equipment under EPA hazardous material regulations.


A recent addition to the list of products moving south on barges is concentrate from the new Kensington Gold Mine at Berners Bay, near Juneau. Owned and operated by Coeur Alaska, a subsidiary of Coeur d'Alene Mines Corp., Kensington is an underground gold mine that began producing gold concentrate in June 2010. According to the company, it produced more than 15,000 ounces in the third quarter of 2010. The company expects Kensington to produce an average of 125,000 ounces per year for the life of the mine. Gold is not processed at the mine site, but is shipped as a concentrate. Coeur CEO Dennis Wheeler said about half of the Kensington concentrate will be sold to China National Gold Group, a company based in Beijing, China. The remainder is going to other refiners.

AML has the contract for moving Kensington Gold Mine concentrate from Alaska to Seattle. "We haul it in 20-foot containers (so-called foreign boxes) to Seattle and load them onto foreign vessels for delivery to the Asian purchasers," Anderson says. This new contract has added a welcome year-round commodity to the list of products moving to market via barge.

During the nine months of the year when the fishing industry is not producing cargo for shippers to haul to markets outside Alaska, there is a trade imbalance that results in many empty containers being back-hauled to the Lower 48. That's why a new production, such as gold concentrate from Kensington, is so important to the shippers.

"We'd love to see new manufacturing industries start up in Alaska," Anderson says. Not only would it create new local jobs, it would contribute to the overall economy, not least by helping keep shipping costs under control.

Asked about whether there were incentives available to businesses that may be considering producing new products that could be shipped out of Alaska by barge, all the barging companies agreed that there are possibilities for competitive shipping prices. "There are certainly opportunities for private-shipping contracts at rates that could be quite attractive," Samson's Morgan says. No matter what, barge and container shipments to and from Alaska are a fact of life that is not likely to change any time soon.
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Comment:Moving Freight in Alaska: commodities important to transportation industry.(TRANSPORTATION)
Author:Phelps, Jack E.
Publication:Alaska Business Monthly
Date:Apr 1, 2011
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