The barge industry is a major piece of the U.S. economy. According to the American Waterways Operators, the industry’s economic contributions to employment, gross domestic product, and taxes at the national and state levels is substantial. A 2017 report commissioned by AWO and put together by Pricewaterhouse Coopers shows the industry supports over 301,500 jobs nationwide, with a total gross domestic product of $33.8 billion and moves more than 760 million tons of cargo annually.
Barging commodities is cheaper than hauling by rail or truck, if the playing field is level and you travel in a straight line from point A to point B. However, if there is product manufactured or grown in the middle of Montana that needs to get to a ship at the port of New Orleans, a barge company cannot go to the middle of Montana to pick up the load, bring it to the inland waterway system and barge it down to the Crescent City. It takes an intermodal effort.
“We don’t really compete with truck and rail. We need them to make our industry work, ” Mark Knoy, president and CEO of American Commercial Barge Line (ACBL), said during his keynote address at the Inland Marine Expo in St. Louis on Wednesday. "We really compete against each other.”
Knoy touched on a number of issues during his speech including high water, consolidation, technological advancements, supply and demand equilibrium and winners and losers in today’s river industry.
Consolidation leads to efficiencies of scale, creating robust capability across end markets and geographically increases offerings and capabilities at less cost per unit, Knoy noted. Also, fewer carriers to choose from, but more capabilities to handle ship-load quantities to end markets. “Carriers must be vertically integrated just to get the work done,” he said.
Today, the top seven carriers — ACBL, Kirby Corp., Canal Barge, Ingram, Florida Marine Transporters, Blessey Marine Services, and Marathon — make up 72.1% of the industry’s liquid fleet. On the dry side of the fleet, Ingram, ACBL, American River Transport Co., Cargill, CGB Enterprises, SCF (Seacor), and Campbell Transportation Co. own 73% of the barge fleet.
Yet Knoy warned that one big negative of all this consolidation is a smaller pool of workers with leadership qualities. “Consolidation creates a leadership vacuum,” he said. “What can we do to lead our industry? Volunteer for something. That’s how I learned about this industry.”
Knoy touched briefly on the high-water situation on the inland waterways, without belaboring the obvious. “We haven’t taken a 40 barge tow down the lower Mississippi in six months,” he said. What more needs to be said?
On the tech side, he pointed out the importance of auto-assist and drone assist, and Rose Point electronic mapping, which has improved situational awareness and overall safety, made for more efficient transit times and increased reliability. “Rose Point is the best investment in tech that we’ve made in a long time,” said Knoy. And electronic buoys and other navigation aids go hand in hand with electronic mapping.
As for drones, he said having one tethered behind a tow enhances the perspective of those in the wheelhouse when navigating through a bridge, for example.
Knoy also spoke about changes in propulsion, including Tier 4 engines, Z-drives, diesel-electric and hybrid engines, and articulated or multiple steering rudders. “We have these engines talking to us constantly,” he said. “This is a huge improvement.” Of course, with all of these improvements, comes increased costs, he said.
Communication aboard the boat has improved drastically for workers, Knoy said, with mariners now able to take advantage of advancements such as live streaming of local news, face time conversations and video calls.
In addition, today the boats have equipment with manufacturers maintenance schedules, managed inventories, asset management, and electronic sensors and alarms. Soon the boats will be enhanced by real time shoreside oversight, preventive maintenance based on failure analytics, artificial intelligence and data mining.
There is also better communication for online training, video conferencing, and more information shared securely between nearby vessels, service providers, and lock operators.
As for the biggest winners and losers, Knoy said they include the shippers, the general public and the environment. “There are just so many things our industry can do that no one else can do,” he said. “I think the U.S. maritime industry is going to be a winner.”