Too many tank barges?

The inland tank barge market may be overheating.

Fueled by an abundance of cheap natural gas and strong demand from chemical shippers, tank barge capacity is tight and new bottoms are being built in bunches. Last year, deliveries of new liquid cargo barges increased 60 percent over 2011 (see Ken Hocke’s tank barge report on page 40). In 2012, shipyards delivered 261 tank barges, compared to 165 in 2011, according to River Transport News. And RTN publisher Sandor Toth believes that 2013 may top last year’s figures.

Business is so hot that Trinity Marine Products, which built 112 tank barges last year, is enhancing one of its tank barge facilities to add a few more production slots and also plans to reposition its hopper barge facilities to build small tank barges. The company said that increased movements of petroleum and chemical products have created “robust demand” for tank barges. As a result, Trinity’s barge business set a new annual revenue record in 2012.

Trinity isn’t the only builder who has ramped up tank barge production. Conrad Industries built 37 tank barges last year and Jeffboat also built 37.

As for operators, Kirby had 56 new tank barges built last year and acquired 17 more. Though the Houston tank barge giant also retired 55 barges in 2012, the company still ended up with a net gain of 22 tank barges and increased its capacity by 483,000 bbls.

American Commercial Lines invested $69 million in 35 new tank barges in 2012 and plans to invest another $38 million this year. Both Kirby and ACL reported strong fourth-quarter utilization for their tank barges. ACL CEO Mark Knoy said that with tank barge capacity in tight supply, the company was confident that it would quickly “realize the new earnings benefit of the new tank barges” due for completion soon at Jeffboat.

But all this construction has operators like Blessey Marine Services worried about overcapacity. “The market is in equilibrium now, but there is a lot of building going on,” said Blessey CEO Walter Blessey. He thinks the tank barge market may be overbuilt by 2014 or 2015, and shippers will then have their choice of equipment. 

Right now the demand is there, but if that changes next year, a lot of new equipment will be looking for work.


About the author

Workboat Staff

Leave A Reply

© Diversified Communications. All rights reserved.