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 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

                              Recent Developments

                              Mar 4, 2023 - Mississippi River Shipping Crisis Eases
                              • Barge freight rates on the lower Mississippi River have decreased as the water level of the drought-stricken river returns to normal. The barge rate for a shipment originating in St. Louis was $18.55 per ton in early February, according to the US Department of Agriculture. That is 26% less than a year earlier. Freight rates for St. Louis cargo hit $105.85 per ton in October 2022. Mike Steenhoek, executive director of the Soy Transportation Coalition, notes that it takes time for barge and river traffic to resume normal volumes, however. This will impact the southern movement of grain for export channels and inputs and other products being moved north for the 2023 growing season. Commerce on the Mississippi River accounts for a majority of the country’s agriculture and grain exports.
                              • Recent rainfalls in the Midwest have improved the outlook for water transport on the Lower Mississippi River, but water travel won’t be at full capacity until spring 2023, according to industry experts. The Lower Mississippi River extends downstream from Cairo, IL, to the Gulf of Mexico. The continuing bottleneck from the drought has caused slowdowns for transporting goods such as grain and fertilizer, which are already in short supply globally. These supply chain issues have boosted costs for farmers.
                              • World trade in goods is likely to slow more in 2023 than previously expected, according to the World Trade Organization (WTO). Slowing demand in the West and China's economic struggles, driven largely by increasing bad debt levels related mostly to the real estate sector and to continuance of its Zero COVID policy, are weighing on imports and exports. The WTO lowered its forecast for global economic growth in 2023 to 2.3% from 3.3% and warned of an even steeper drop if central banks raise their key interest rates more than expected. A United Nations agency said in early October 2022 that raising interest rates to fight inflation could inflict worse damage globally than the financial crisis in 2008 and the COVID-19 shock in 2020. The WTO also noted several long-term trends affecting international trade, including de-globalization — a reversal of decades of ever-closer economic integration, that accelerated during the coronavirus pandemic.
                              • 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.
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