Sail Freight Business Handbook Summary
Steven Woods, Elliot Stevenson, and Justin Sharp authors
The Sail Freight Business Handbook was compiled for the Center for Post Carbon Logistics (Center) by a team of three Sustainable Innovation MBA (SI-MBA) graduates from the University of Vermont Grossman School of Business (UVM GSB). It has been designed to provide readers with the fundamental business analysis and route identification tools to bring the Center’s goal of increasing, year-round near-zero-emission coastal maritime trade in the United States. By covering the fundamentals of business logic, financial analysis, carbon emissions, and route selection criteria, this report gives the foundation for building a near-zero-emission coastal short sea shipping fleet in the Northeast US. A YouTube video of the presentation is available here.
The study concludes that using sailing vessels under 500 Gross Tons (GT) is the optimal approach for the sail freight industry, with a focus on local routes where a cost leader or cost stabilization strategy can be used to compete with trucking. A business-to-business (B2B) sales approach is recommended, as opposed to competing as an import-export business with a sailboat component like the predominant European model for sail freight. Due to the range limitations and economic viability for small sail freighters, these routes will be under 150 miles initially, except where trucking rates are exceptionally high.
The sail freight business must be interoperable with conventional and sustainable transportation on land to reduce the cost to customers of switching freight modes. Year-round packet or liner routes between designated ports are favored, alongside long-term contracts for cargo where possible to optimize new customer acquisitions and increase retention. Tramping does not appear to be economically viable at this time in coastal trade and is ruled out of scope. Despite their prevalence in other sail freight models, passenger service and paying trainees are excluded from this report’s model. The regulatory burden for taking on passengers adds unnecessary complexity and expense to the business operations. Trainees will be salaried employees, not paying guests, if the industry is to grow rapidly and be taken seriously. Routes which could not compete without these additional revenue streams were judged non-competitive in our analysis and ruled out of scope.
This report focuses on sail freight in US Territorial waters and falls under US regulations and requirements that may not be applicable to vessels engaged in international trade or based in other jurisdictions. While the applicability of certain regulations will be examined for each new route, the remainder of this report’s findings; basic business logic, range calculations, and other elements should be translated to other US regions without significant modification. For those looking to engage in foreign voyages, there are a wide range of additional regulations that must be considered.
The Handbook concludes that sail freight can be competitive in the transportation industry in the Northeast US, so long as it is technically compatible with existing transportation systems. Route selection, capacity matching, and a strategy appropriate to the economic and geographic environment of a route are critical to success. Having multiple routes of varying profitability all under one umbrella company to cross-subsidize marginal routes is also recommended as a way of rapidly expanding a regional sail freight network.
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Moving goods and people from place to place in a carbon constrained future will be dependent on sailing vessels, hybrid/fossil free electric ships, and people powered transport for first and last mile logistics.
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The path we’re on is unsustainable. Continuing with “business as usual” leads to a future defined by catastrophic food and energy shortages, breakdowns in transportation, failing infrastructure, rising sea levels, financial collapse, and the social unrest that follows. As the climate crisis accelerates, we must act with purpose and urgency to build resilient systems that prioritize local solutions and sustainable practices.
Possible response strategies:
- Denial/Blissful Ignorance: Ignoring the warning signs and continuing as usual.
- Last One Standing: Reacting with anger, blame, and conflict over dwindling resources.
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