Inland tank barge owners are finally showing some restraint. After years of building hundreds of steel boxes for hauling liquid cargo along the Mississippi River system and its connecting waterways, 2017 is shaping up as one of the least productive years — in numbers of tank barges built — in almost two decades.
According to River Transport News’ midyear survey, for the first six months of 2017, only 34 tank barges were delivered, down from 63 during the same time period in 2016. “Deliveries of new inland tank barge equipment is down across all market segments,” RTN said.
While this is bad news for barge building yards such as Trinity Marine Products and Jeffboat, it is good news for an industry that became sorely overbuilt over the last several years. “Overall, if the pace of new tank barge deliveries that occurred in the first half of the year is maintained, total tank barge deliveries in 2017 will fall to their lowest levels since at least 2000,” RTN’s report said. “Over the past 17 years, the weakest year for new tank barges in terms of number of barges delivered was 2002, when the industry took delivery of 74 inland tank barges … ,” RTN said. “The weakest year this century in terms of total aggregate capacity was 2000, when the industry took delivery of 81 inland tank barges.”
How did the industry become so overbuilt? The reasons are numerous, but the two leading catalysts were cheaper steel prices and cheap and available funding. Going back just four years, barge owners took delivery of 336 tank barges in 2013. In 2014, 344 were delivered and about 250 were built in 2015. Barge owners began pulling back in earnest last year when only 112 tank barges were delivered. The industry is on pace to deliver just 68 this year.
As an example of how anemic new tank barge deliveries have been in 2017, Jeffboat cranked out more barges in the first six months of this year than any other inland barge builder — 10. “Given the dramatic decline in new tank barge deliveries which occurred during the first half of this year, there has been a significant reduction in the number of shipyard operators active in the market,” RTN said.