By Mark Sisson, PE
As fuel costs and roadway congestion continue to increase, the appeal
of transferring freight via water should be increasing as well.
Although this type of freight movement is very common in certain
corridors, especially in Northern Europe and along the Mississippi
river, intra-coastal movement of freight has yet to take hold on the US
In order to better understand how appealing a truck ferry might be,
this paper examines the potential costs of a truck ferry running between
the extreme ends of the US West Coast: Southern California and the
this hypothetical operation, a truck driver would drop off a trailer at
a marine terminal at either end of the route, and a separate truck
driver would pick up the trailer at the other end. Ships used would need
to be constructed in the US and staffed with US crews in order to
comply with the Jones Act.
Totem Ocean Trailer Express (TOTE) operates just such a service
between Tacoma and Alaska. TOTE has the powerful advantage that the
roadway connections between the Seattle Area and Alaska are relatively
poor, whereas the hypothetical service described in this paper would
compete with an end-to-end truck trip via Interstate 5, which runs
directly between Southern California and the Seattle Metro area.
Table 1 lists the primary cost assumptions for freight transportation
either as a direct truck move or as a truck-ferry-truck move where the
truck trips are made by different local tractors on each end and the
trailers are moved on a custom built ferry.
Table 2 lists the operating assumptions of each mode.
The end-to-end truck move is fairly straightforward to understand.
The ferry + truck alternative depends on many factors, perhaps the most
important is the proximity of the origin and destination (O/D) to the
ferry terminal. Unless a warehouse is located directly at the ferry
terminal, a truck trip will still be required at each end of the
journey. Another very important input is the utilization of the ferry. A
tractor is not going to make a line haul move at less than 100 percent
utilized but a ferry must sail on a periodic schedule and incur the
related costs regardless of the number of trailers it is carrying.
Figure 1 shows the overall results for O/D distances between 50 and
150 miles away from the ferry terminal, and for ferries at 80%
utilization and 50% utilization.
As Figure 1 shows, if ferries can run reasonably full, they can move
freight between the extreme locations on the US West Coast cheaper than
an end-to-end truck move. The two variables are related because if the
ferry can be profitable at O/D locations up to 150 miles from the
terminal, it has a much larger pool of potential business and therefore
is more likely to operate at a high level of utilization.
In order to better understand why ferries have a cost advantage over
trucks, Figure 2 looks at the unit costs for ferries vs. trucks with
ferries operating at 80% utilization. The cost for the ferry example in
Figure 2 does not include any of the local trucking cost on each end of
Figure 2 highlights the relative strengths of each mode. Ferries are
much more fuel-efficient than trucks, and require much less labor.
Ferries cost substantially more to build than trucks, and also require
additional costs at the terminals on each end. The largest cost item in
Figure 2 is fuel cost for trucks. This analysis is based on $4/gal
diesel. If this cost rises significantly, the advantage of truck ferries
will only increase.
While many of the assumptions in this basic analysis could be
refined, the overall conclusions are unlikely to change. Over a long
distance such as the Southern California to Puget Sound, truck ferries
can save cost if they can be run at high utilization.
So if truck ferries are such a good idea, why haven’t they been
implemented? The major hurdle is a combination of cost and complexity.
Starting up a ferry route with two vessels is a $100M investment and
most trucking companies are small businesses without the access to this
type of capital. The best opportunity seems to be for an existing Jones
Act carrier with trailer expertise such as TOTE or Pasha to attempt to
capture domestic coastal business. Another opportunity is for one or
more large trucking companies to partner on a joint venture since they
could guarantee a high level of utilization by diverting some of their
It is also important to consider the significant social benefit of a
reduction of truck travel along the I-5 corridor. There will be savings
in freeway maintenance, and in congestion, especially in urban areas
along the route such as Sacramento, California and Portland, Oregon.
There will also be substantial reductions in air emissions. If the
combination of these factors is great enough, it may motivate various
state and federal agencies to offer incentives for one or more ferry
operators to develop routes along the coast.