Monday, September 10, 2012

Merchant Marine Interest: Economic Health of the Work Boat Sector:


 The latest edition of WORKBOAT magazine is out. - Maritime News, Commercial Marine and Dayrates

 WORKBOAT provides unique insight into the health of the "Jones Act or "work boat" economic sector. Roughly every three months we try to provide our readers with a snap shot of the economic health of our domestic and international U.S. flag Merchant Marine.
The domestic fleets include the towing industry, the ferry and excursion boat industry, the harbor and near coastal tug industry, and the offshore service vessel industry. The international fleet consists of our U.S. flag freighters , tankers, and container ships engaged in international trade and logistic support of our armed forces deployed overseas. Included in our two economic snapshots are the suppliers that provide for these fleets and the yards that build and repair the ships, boats, and barges.
Tug Boats At Deck
Tug Photo by Eddie Fouse:


Today the publication of the September 2012 issue of WORKBOAT completes our compilation of references we depend on to provide the simplified snap shot of the domestic fleet. There are links to WORKBOAT, THE WATERWAYS JOURNAL, and many other trade journals that we utilize for this report available on line from links in our NEWS SERVICE.

The work boat sector continues its strong performance despite some serious problems in inland barge transportation caused by prolonged drought in the Mississippi Valley. 

On Mississippi /Ohio Navigation System Barge Traffic Is Down By Half DueTo Low Water.

_UP Date (8/4/2012):

The Mississippi River system is presently negatively impacted by the related problems of a shortage of water and cargo. The same drought that has reduced river levels to a point that is seriously problematic for tow boats and barge navigation reducing payloads and profits per ton mile has also damaged or killed much of the corn crop in the Midwest. The corn crop is the single most important southbound cargo this time of year. Draft restrictions alone according to one report cost some operators as much as $500,000 a month. Hurricane Isaac helped the lower valley somewhat but was not a drought breaker and the first of the frontal rains of Fall have already moved through. The drought is expected to end and the industry will come out of this "rough patch". So far the hopefully temporary dent in profitability has not materially affected investment interest. The industry is not plagued by aggravating factors such as over building. The boat, barge availability seems well matched to the conditions in "average" or "typical years".

 The offshore service sector reported a rise in day rates for for "deep water" offshore service vessels (OSVs). The larger supply vessels over 200 ' in length posted a hefty $3,770 increase in average day rates according to WORKBOAT. The WORKBOAT COMPOSIT INDEX which tracks publicly traded stocks of work boat operators, suppliers, and yards rose for the second consecutive month, gaining 32 points in July, or 2.5 percent, winners topped losers by a 9-5 ratio.

 Our admittedly over simplified "bottom Line" is that the recovery that has been underway for more than nine months now in this economic sector continues strong, stronger than many other sectors of the economy. A drought that continues deep into Fall could damage the inland towing sector, but would not be a sign of a general economic down turn, just a natural disaster that we certainly don't need.

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