2009 will be more difficult than last year for the barging industry. The U.S. economy is in a recession that may last for several more quarters. Certainly, tank barge volumes will be lower, reflecting lower demand, lower inventories and reduced consumer buying power.
Exports of U.S.-made chemicals will also be reduced from 2007 and 2008 levels, based on weaker global demand and additional chemical capacity coming on line, principally in the Middle East.
The bright spot may be grain exports, which will benefit from low ocean freight rates that encourage use of the lower Mississippi River system. The increased ethanol gasoline standard will also encourage the barging of grain. Offsetting a favorable environment for grain transportation will be reduced imports of steel and cement and reduced coal exports.
2009 will also mark the year the Coast Guard unveils proposed inspection regulations for “brown-water” towing vessels. The industry has generally supported this regulatory process in an effort to encourage higher standards for the industry, and looks forward to this milestone in the progress toward this goal.
Tank barges have been inspected by the Coast Guard for years but, notwithstanding a number of statutory and regulatory standards applicable to them, the towing vessels used to move all inland barges have been classified “uninspected” vessels vs. “inspected” vessels. As these rules are implemented, they may cause some towboats to be forced out of service as operators choose not to spend the effort or money needed to meet the new standards.
The timing of these regulations may be fortuitous, given the expected reduced demand for towing vessels because of the recession combined with an expected surge in deliveries of newly constructed boats.