Inland Water Transportation

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 560 inland water transportation providers in the US transport freight and/or passengers on lakes, rivers, or intracoastal waterways, except for the Great Lakes System. Freight transportation accounts for 92% of industry sales; passenger transportation accounts for 8%. Freight transport includes dry bulk; bulk liquids and gases; automobiles and light trucks; boxed, or palletized goods; waste; and livestock.

Vulnerability to Weather or River Conditions

Marine transportation is vulnerable to adverse weather or river conditions, which can delay, divert, or postpone travel and increase operating costs.

Aging Infrastructure

The US inland waterway system is aging and in desperate need of repair.

Industry size & Structure

The average inland water freight transportation provider employs fewer than 20 workers and generates about $21 million annually, while the average inland water passenger transportation provider employs fewer than 10 workers and generates about $1.8 million annually.

    • The inland water freight transportation industry consists of 290 firms that employ about 16,600 workers and generate about $6 billion annually, while the inland water passenger transportation industry consists of 270 firms that employ about 3,400 workers and generate about $490 million annually.
    • The industries are highly concentrated; the top 50 inland water freight transportation providers account for 94% of category revenue. The top 50 inland water passenger transportation providers account for almost 88% of category revenue.
    • Large firms include Kirby, American Commercial Barge Line (emerging from bankruptcy), and Ingram Marine Group. Large refining and petrochemical companies own and operate captive fleets.
    • The US has 25,000 miles of inland, intracoastal and coastal waterways that are maintained by the US Army Corps of Engineers, of which about 11,000 are fuel-taxed inland waterways. Inland waterways are composed of interconnected rivers and canals that are shared by 38 states and serve 635 shallow draft ports. The Illinois Waterway and Mississippi River are the major waterways that are responsible for moving agricultural and farm products through barges.
    • The Mississippi River and its tributaries and the Gulf Intracoastal Waterway connect Gulf Coast ports, such as Mobile, New Orleans, Baton Rouge, Houston, and Corpus Christi, with major inland ports, including Memphis, St. Louis, Chicago, Minneapolis, Cincinnati, and Pittsburgh, according to the US Army Corps of Engineers. The Mississippi River from Baton Rouge to the Gulf of Mexico allows ocean shipping to connect with the barge traffic, making this segment vital to both domestic and foreign trade. In the Pacific Northwest, the Columbia-Snake River System allows navigation 465 miles inland to Lewiston, Idaho.
    • Inland water transportation is critical to the agriculture and energy sectors; 60% of grain exports are moved by barge, 22% of domestic petroleum and petroleum products, and 20% of coal used to generate electricity, according to the US Army Corps of Engineers (USACE).
                              Industry Forecast
                              Inland Water Transportation Industry Growth
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              Mar 4, 2024 - Firms Increase Prices
                              • Inland water transportation firms significantly increased their prices during 2023 to match increasing demand for their services. Industry employment increased significantly during the first half of the year but lost about half of its gains during the second half. Inland water transportation industry sales are forecast to grow at a 4.98% compounded annual rate from 2022 to 2027, faster than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc.
                              • The average retail price of diesel decreased about 5 cents per gallon during the seven-day period ending on February 26 according to the US Department of Energy/Energy Information Administration. The small movement in recent weeks, except for a 21-cent increase in mid-February, contrasts sharply with the volatility of the weeks prior to that, according to FreightWaves. Since a 2 cents-per-gallon increase on December 25, 2023, the changes up or down, besides the 21-cent increase, have ranged from negative 4.8 to positive 3.5 cents a gallon. The 5.1-cent move during the seven-day period ending on February 26 was larger than those other recent changes.
                              • A $2.5 billion federal program to fund lock and dam modernization projects along the inland river system faces cost overruns due to inflation and other factors, according to the Waterways Council. Seven river projects were selected to receive money, with five to get enough for completion. The five slated to be funded to completion, Three Rivers, Montgomery Lock, TJ O’Brien, Lock and Dam 25, and Kentucky lock, are experiencing cost overruns and need more money to finish, ranging from $330 million to $800 million per project, said Tracy Zea, president of the Waterways Council. Much of the inland waterway infrastructure is 60 years old and frequently shuts down for repairs or maintenance, according to the Waterways Council. Eighty percent of locks are beyond their design life of 50 years, and only two locks are under 10 years old.
                              • Shippers should be prepared for the risk of extreme weather returning in 2024 to hamper the flow of goods on vital waterways and should work on the resilience of their supply chains, according to multinational banking and financial services corporation ING. Seasonal and temporary low water levels in rivers and lakes aren't a new phenomenon, and it can be exacerbated by recurring weather events such as El Niño. but more rain and longer-lasting droughts across the world in recent years may be a new reality going forward, ING analysts say. Last year was the sixth warmest year since global records began in 1880, according to the National Oceanic and Atmospheric Administration's annual global climate report. This means that the 10 warmest years ever have all been recorded since 2010. 2023 now seems on track for adding to this statistic. Low water levels lead to capacity reduction on ships, surcharges, rising transportation costs and delays.
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