The U.S. barge industry has been suffering from an equipment surplus during past few years. There wasn’t enough cargo to put enough barges to work while supporting healthy freight rates. Now, that scenario is starting to change, experts said during a panel session at the Inland Marine Expo in St. Louis on Monday.

“We are starting to see a bottom here in the barge market,” Ken Eriksen, senior vice president, Informa Economics IEG, Memphis, Tenn., said. “The market is trying to right-size the fleet.”

Informa’s numbers show a decrease in the number of barges being built. “We still had some pretty decent newbuilds for 2017 but not what we saw in 2016,” said Eriksen. “So this fleet has maybe stabilized a bit.”

In fact, so severe are the projected cuts in the number of barge newbuilds going forward, Jeffboat, a titan of the barge building industry, closed the doors to its Jeffersonville, Ind., facilities this month. Mark Knoy, president and CEO of American Commercial Lines, Jeffboat's parent, told WorkBoat earlier this year that to be financially rewarding the boatbuilder would have to build about 250 barges annually and maintain 600 to 800 employees, but management didn’t see that happening. (Trinity Industries is expected to purchase much of Jeffboat’s equipment.)

So far in 2018, the tank barge industry is seeing a spike in utilization. “We’ve seen a utilization pick-up on the liquid side,” said Chaz Jones, Informa’s senior transportation analyst. “We’ve seen spot market pricing turn more favorable for the liquid carriers.”

Good news on the dry cargo side includes higher than expected northbound cargoes; problems for U.S. commodity competitors, particularly Argentina; and an uptick in export coal, which has “sucked up a lot more bottoms,” said Eriksen.

The “trade war” between the U.S. and China was put on hold this weekend, and that is also good news for barge operators carrying certain commodities.

“We have the cheapest soybeans in the world right now, and that’s through the end of July,” said Andrew Holthaus, vice president of finance, Heartland Companies, which provides barge line services, barge management, barge charters, and marine consulting and brokerage services for the inland waterways. The company also owns dry barge builder Heartland Fabrication, Brownsville, Pa. “We anticipate barge rates will remain high into the harvest season this year,” Holthaus said.

Other positives Holthaus mentioned include the high price of steel which makes scrapping barges more profitable, the feds now allowing 100% bonus appreciation on the purchase of used barges, not just newbuilds, ethanol exports, and the number of new chemical plants coming on line in the near future.

Ken Hocke has been the senior editor of WorkBoat since 1999. He was the associate editor of WorkBoat from 1997 to 1999. Prior to that, he was the editor of the Daily Shipping Guide, a transportation daily in New Orleans. He has written for other publications including The Times-Picayune. He graduated from Louisiana State University with an arts and sciences degree, with a concentration in English, in 1978.