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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

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

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

Industry Profile Excerpts

Industry Overview

The 535 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 91% of industry sales; passenger transportation accounts for 9%. 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 about 57 workers and generates about $22 million annually. The average inland water passenger transportation provider employs about 12-13 workers and generates about $2.5 million annually.

    • The inland water freight transportation industry consists of 286 firms that employ about 16,300 workers and generate about $6.6 billion annually. The inland water passenger transportation industry consists of 249 firms that employ about 3,100 workers and generate about $619 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

                              Coronavirus Update

                              May 16, 2022 - Carbon Neutral Propulsion Unlikely To Be Revenue Neutral
                              • Recent advances in alternative propulsion technology now open the door for segments of America’s inland water system to switch from diesel fuel consumed by towboats that push and navigate barge tows to a technology like electric power. Experts note, however, that taxes from diesel fuel provide the funding that sustains operation of the American inland water system. Tax revenue from alternative means of propulsion may not be adequate. A diesel tug of 3,200 HP can consume up to 5,500 US gallons of fuel in 24 hours, costing about $17,000 at current prices. A battery-electric boat of 2,400kW (3,200 HP) running for 24 hours (57,000k-hr) and recharging on off-peak electric power at 6 cents per kW-hr would incur an energy cost of $3,500 to $4,300 per charge. The Department of Transportation would likely need to revise revenue collection methods that would sustain the operation of a future inland waterway transportation system.
                              • United Parcel Service (UPS) launched a pilot project to move trailers by barge across New York Harbor. The experimental shuttle runs a 4.5-mile route across the harbor between Red Hook in Brooklyn, NY, and Bayonne, NJ That compares to a nominally 19-mile highway route through Staten Island and over the Verrazzano-Narrows Bridge. UPS officials say that it is evaluating an alternative to trucking on the region’s notoriously congested roadways. Federal officials are promoting more use of short sea freight operations through its America’s Marine Highways Program. New York City officials are looking to a renewal of barge transport – once a mainstay of the city’s everyday supply chains – to reduce heavy truck traffic, pollution, and congestion.
                              • The US Senate passed in mid-March appropriations bill that funds projects intended to improve the efficiency of ports, harbors, and inland waterways. The Energy and Water Development fiscal year 2022 appropriations bill passed as part of the larger appropriations package totals almost $55 billion in new discretionary budget authority, $3.2 billion more than fiscal year 2021. The bill provides over $10 billion to improve the nation’s water infrastructure, which includes funding for the Army Corps of Engineers’ Civil Works program at $8.3 billion, an increase of $548 million over fiscal year 2021.
                              • Legislators and agricultural groups are urging the US Army Corps of Engineers to prioritize construction of the Navigation and Ecosystem Sustainability Program on the Upper Mississippi River System, which would be funded through $2.5 billion designated for inland waterways in the recently approved Infrastructure Investment and Jobs Act. Hundreds of locks and dams along the US inland waterways system have exceeded their lifespans, which causes delays, greater costs, and reduced transportation efficiency the groups say. Upgrading the aging inland waterways systems is critical to increasing barge capacity for shipping larger loads expected as part of pandemic-driven supply chain adjustments.
                              • Inland water transportation may be negatively impacted by the ongoing shipping container shortage, as good arriving via water transport may have to wait to be transferred into containers for further transport. Mike Steenhoek, executive director of the Soy Transportation Coalition, specifically addressed the serious issues facing agricultural shippers, "Because of the pressure to move increased freight with a given capacity, there has been increasing pressure on bringing in shipping containers full of consumer goods or component parts from China to the United States, unload them, and return them to China where they will be reloaded for repeat journey. Therefore, there is an increased unwillingness for ocean vessel companies -- the owners of the shipping containers -- to allow them to deviate from this route in order to be loaded with agricultural or other products for export from the United States. This lack of availability is causing significant stress for those US agricultural exporters who utilize containers."
                              • The National Grain and Feed Association (NGFA) will seek to secure $7 billion to finance congressionally authorized inland waterway navigation projects, including long-delayed lock-and-dam projects on the Upper Mississippi and Illinois Waterway system. NFGA officials said that they hope to capitalize on attention directed to resolving supply chain disruptions caused by the coronavirus pandemic.
                              • The pandemic has forced many maritime companies to retool their services and business plans. Demand for inland water transport of energy-related products has declined due to depressed worldwide demand for oil while lines that carry grain mostly for export have thrived, for example. American Commercial Barge Line, one of the nation’s largest barge operators, said it has transported more than 1.6 million gallons of denatured ethanol, a key ingredient for alcohol-based hand sanitizers, disinfectants, sprays, wipes, and cleaners, along the inland river system since the pandemic began. Industry experts expect high demand for residential housing to drive transport of wood products during 2021.
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