Norfolk-to-Richmond barge service sold to tug company

NORFOLK

T. Parker Host Inc. has sold the James River Barge Line, a river-based cargo transportation service to be launched between Norfolk and Richmond next month, to Norfolk Tug Co., the companies announced Wednesday.

Norfolk Tug acquired the business within the past week, said Steve McGowan, the company's operations manager. He declined to disclose the purchase price.

The renamed 64 Express barge line will make its inaugural trip Dec. 1 and operate under the same business plan as the James River line, McGowan said. Each week, the barge will haul the equivalent of up to 128 20-foot cargo containers each way along the James River between Norfolk and Richmond. From Richmond, the cargo will travel to stores, factories and other locations by truck. From Norfolk, the cargo will be shipped overseas.

The sale is an unexpected move by David Host, president and chief executive officer of Norfolk ship agency T. Parker Host and former president of the barge line. He has worked on the venture for more than three years.

The transfer of ownership was "in the best interest of keeping this important project on track," Host said in a statement. "T. Parker Host will assume a moral support role in seeing the '64 Express' become something we can all be proud of."

He declined to comment further.

Edward D. Whitmore, president of Norfolk Tug, said the sale was motivated by a desire to save money on insurance and other operating expenses.

The tug company was originally going to operate the barge line under T. Parker Host's ownership. But under that plan, "a lot more money was going to be required," Whitmore said. "T. Parker Host was going to have to buy many of the same insurance products that I already own."

As of early October, he had still planned to move forward with the James River Barge Line, continuing to gather state and federal funding, solicit customers and complete logistical arrangements for the business.

Now, those grants, including $2.3 million in Congestion Mitigation and Air Quality funds administered by the Federal Highway Administration and the Federal Transit Administration, will transfer over to Norfolk Tug and be administered by the Virginia Port Authority, McGowan said.

Virginia Secretary of Transportation Pierce Homer has also pledged $400,000 in state funding, Host said in October.

"There are a lot of very good, positive and strong reasons why this, even in today's economic downturn, is still a good and viable way to move containers between here and central Virginia," McGowan said. "It's still very important to this area."

Within three years, the 64 Express should remove 58,000 trucks from Hampton Boulevard and Interstate 64, according to a news release from Norfolk Tug. That will reduce traffic congestion and ease wear and tear on the roads, McGowan said.

The barge line should become profitable within a few years and eventually more weekly trips may be added, he said.

"I think that cargo will move to central Virginia regardless of the downturn in the economy," Whitmore said. "And whilst they may be a bit less voluminous for now, it certainly is only for now."

Kathy Adams, (757) 446-2583, kathy.adams@pilotonline.com