Not surprisingly, the Covid-19 pandemic has put a dent in the refined product volumes inland barge operators transport from refineries and chemical plants, particularly along the Gulf Coast, which houses half of the nation’s oil refining capacity.

With  Gulf Coast refinery and petrochemical plant utilization hovering between 70% and 75% going into the third quarter, Kirby Inland Marine saw the utilization rate of the nation’s largest inland tank barge fleet decline by around 20% from early April to the end of June. “With inland barge utilization starting the (third) quarter in the mid-70-percent range, we expect our average third quarter utilization will be sequentially lower and spot market pricing could remain under pressure until a more meaningful improvement in demand is realized," David Grzebinski, president and chief executive officer of Houston-based Kirby Corp., said in the company’s Aug. 2 earnings call.

At the end of the second quarter, Kirby’s fleet was comprised of 1,131 tank barges and 324 towing vessels, though a number of barges were scheduled to be retired over the second half of 2020.

Despite signs pointing to refinery and chemical plant utilization improving near year-end, Covid-19 remains the wild card. “While this is positive, the resurgence in positive virus cases, new government restrictions and continued high unemployment creates uncertainty as to the timing of a material economic recovery,” Grzebinski said.

Martin Midstream Partners LP, for another, is advancing scheduled drydockings in hopes refinery demand picks up in the fourth quarter. “Looking towards the third quarter, we continue to see weakness in marine transportation utilization. Based on this weaker near-term outlook, we plan to accelerate the remaining four regulatory required barge drydockings from the fourth quarter into the third quarter,” Executive VP and Chief Financial Officer Robert Bondurant told analysts on July 28.

The Kilgore, Texas-based company engages in the storage, transportation and distribution of petroleum products and byproducts. The company’s marine transportation group, which operates exclusively on the Gulf Coast, has a fleet of 33 inland tank barges, 18 inland pushboats and one offshore articulated tug/barge unit.

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