COVER STORY
River Rising Barge markets continue to rebound. By Pamela Glass, Washington Correspondent
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fter suffering big losses as demand for barging plummeted in the early days of the pandemic, business over the past year has been steadily improving across all barging sectors. Operators are busy again moving cargo along inland rivers, including an unusual bump in coal exports, effects of the pandemic appear to be waning, and many companies report that demand has returned to pre-pandemic levels. Movements of construction and steel materials are strong, reflecting spring construction season demand and an infusion of federal infrastructure money, coal and corn are on the move to export markets disrupted by the war in Ukraine, and refined petroleum and petrochemicals have rebounded as refineries have fired up production. Strong barge utilization coupled with scant new barge construction due to high steel prices have kept barge supply tight and freight rates elevated. “We’re off to a very strong start to 2022, with the first quarter having the highest volume that moved on the inland waterways since 2013,” said Ken Ericksen, senior vice president and expert in energy, transportation and agribusiness at IHS Markit, a consulting firm. “It’s a big rebound that has taken place, and it’s been broad in scope.”
As David W. Grzebinski, president and CEO of Kirby Corp., Houston, the nation’s largest tank barge operator, put it: “As soon as Omicron started to dissipate in March, things really started hopping. Barge utilization is up to 90 percent and still going strong. Refiners and petrochemical companies are doing better, and there has been about the best pricing environment we’ve seen” for barge contracts. But operators have been thrown a new curveball: repercussions from Russia’s invasion of Ukraine are causing shortages of certain products, a disruption of the world agricultural and steel markets, supply chain and trade problems, and skyrocketing fuel and energy prices that are the main drivers of inflation. Consumer prices were 8.6% higher in May compared with the same month a year ago, the fastest growth in 41 years, driven by pent-up consumer demand after the pandemic lockdowns were lifted and persistent supply shortages. The situation has worsened since the Russian invasion of Ukraine in February. Analysts now predict weak global economic growth coupled with rising inflation at a time when the world is struggling to recover from the pandemic. This outlook has many barge companies worried.
The 2,600-hp Kirby Navigator pushing a tank barge tow on the Atchafalaya River near Morgan City, La.
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