This column is brought to us by Al’s Emporium, written by Dow Jones Newswires columnist Al Lewis, offers commentary and analysis on a wide range of business subjects through an unconventional perspective.
By Al Lewis
Every so often, an entrepreneur comes along with an idea so obvious that its adoption is only a matter of time. But first, the rest of humanity must scoff at it for a while.
Ten years and many millions of dollars into his idea, New York real estate magnate Percy R. Pyne IV is almost through the scoffing phase.
America’s streets are crumbling. Its bridges are falling into rivers. Its highways are gridlocked. And government funds to fix them are depleting. Then there’s the rising dependence on foreign oil, planet-warming carbon emissions, and mass unemployment that eats at the core of the U.S. economy.
At 63, Pyne has his eyes on a highway that most people don’t see: Unused lanes requiring zero maintenance and less fuel to ride.
He envisions a new transportation industry that would employ hundreds of thousands of people. But when he talks about it, some people tell him he’s crazy. “Nobody seems to recognize the value of it,” he said.
Pyne is hardly a voice from the wilderness. He’s the son and grandson of notable businessmen, philanthropists and financiers, as well as the son-in-law of former Mobil Oil chairman Rawleigh Warner Jr. And he’s developed millions of square feet of property.
Pyne is also the founder of American Feeder Lines, which he envisions as a fleet of specialized container ships that will move freight on a marine highway from Halifax, Nova Scotia, to Houston, Texas, and several ports in between.
The intermodal, hub-and-spoke systems that would evolve around interconnected ports would ease the strain on highways across the continent, reduce fuel consumption and carbon emissions from long-haul trucking, and create jobs where none before existed.
“This is one business we don’t have to invent,” Pyne said.
Short-run container transportation has long thrived in Europe and Asia. But in the U.S., the interstate highway system gave rise to a trucking industry so efficient that routes along America’s coastline were abandoned.
To restart this industry in the U.S., Pyne must comply with the Jones Act, which regulates commerce in U.S. waters between U.S. ports. The law requires domestic shipping by American owned, operated and staffed ships. The ships must also be built in the U.S., presenting huge challenges.
Not only are the shipbuilding costs higher in the U.S., but the nation’s commercial shipbuilding capabilities have declined since the 1950s. And Pyne has to find ways to ramp them up to build the sophisticated ships his fleet requires.
He’ll also face challenges raising hundreds of millions in financing, as well as getting America’s companies to change the way they move materials and goods around the country.
But Pyne says he’s well on his way. He has taken on partners who understand the shipping business in Europe, including Tobias Koenig, founder of Koenig & Cie., an investment firm that finances ships, and Johannes Bitter-Suermann, former senior vice president at HSH Nordbank in Germany.
Pyne also recently launched a ship that runs between Halifax; Portland, Maine; and Boston, hauling scrap metal. He hopes to show companies how they can lower their transportation costs on American Feeder Lines without sacrificing much on delivery times.
“We think it’s the greatest transportation opportunity in the last century,” Pyne said. “I’m drinking my own whiskey, but I’ve been drinking it long enough to feel comfortable saying that.
“Just think of it as the Long Island Expressway. It just doesn’t have any trucks on it.”
Perhaps Pyne will go down in history, like Malcom McLean.
Who’s Malcom McLean? He developed the metal shipping container in 1956, revolutionized the way cargo is handled around the globe, and died in 2001 with great wealth but in relative obscurity.
“Twenty years from now … the country will have adopted this,” Pyne said. “There will be lots of companies doing it. There will be hundreds of thousands of people … employed in the business. And, we’ll have a much greener footprint because of it.
“Nobody will remember where it started,” Pyne said. “It doesn’t matter. We just have to get it started.”
(c) 2011 Dow Jones & Company, Inc.