Jeffboat LLC is closing its doors in May because it was the only choice left for the shipyard, according to the barge builder’s parent company, American Commercial Lines (ACL). Jeffersonville, Ind.-based ACL is owned by Platinum Equity LLC.
“To be financially rewarding we have to build about 250 barges (annually) and employ 600 to 800 employees,” Mark Knoy, ACL’s president and CEO, said in a WorkBoat interview. “In reality, it just didn’t appear that was going to happen. It was just too much of a financial struggle.”
The Jeffersonville shipyard is over 180 years old, having been established in 1834. Late last year, shipyard officials began wholesale layoffs, saying half its workforce would lose their jobs by the first quarter of 2018. In February, Dawn Landry, Jeffboat’s senior vice president and general counsel, said in a notice to state labor officials that shipyard management expected to layoff 226 positions by April of this year but had no plans to close the facility.
But Jeffboat ownership had to rethink that position. “There’s just not enough building to support the number of shipyards out there,” said Knoy. “It’s been coming for some time. There’s not going to be enough for everyone to keep going. I wish there was an answer.”
The barge industry has been suffering from an oversupply of equipment, particularly barges, over the past two years. New tank barges last year were at some of the industry’s lowest levels since at least 2000, according to River Transport News. The low price of steel and the availability of funds sparked a rush to build for several years prior to 2016, when the overhang of equipment became a serious problem. But Knoy said there were problems even before then. “What separates us is our size,” he said. “We can’t survive on the numbers some of the smaller shipyards can.”
Knoy said ACL is still an extremely sound barge company. “ACL is still going strong,” he said. “It is the end of the Jeffboat era, but ACL is still very healthy.”
As to what will become of the Jeffboat facility, Knoy said no final decision has been made. “Don’t know what the future holds for that property yet,” he said. Located on the banks of the Ohio River, the shipyard spans 80 acres with one mile of riverfront.