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For Immediate Release: Nov 26, 2003
Contact: Kirsten Stade (202) 265-7337

BARGE TRAFFIC DOWN AGAIN IN 2003

Industry Cites Overcapacity & Slow Growth -- Undercutting Case for Mississippi Lock Expansion


Washington, DC -- Barge tonnage hauled on America's waterways has declined again in 2003, continuing a decade-long period of stagnation, according to the latest U.S. Army Corps of Engineers figures released today by Public Employees for Environmental Responsibility (PEER). At the same time, the nation's largest barge company is predicting continuing slow growth, sees room for major industry efficiencies derived from scheduling barges and admits that the river infrastructure now in place generally exceeds traffic needs.

Monthly tonnage indicators compiled by the Corps through October 2003 continue a slide in barge traffic levels that started in the summer of 2000. This downward trend in barge traffic comes on the heels of a leveling off of the demand for barge transportation throughout the decade of the 90s (see graphs below).

These new traffic figures confirm the barge industry's own latest traffic projections but are at odds with rosy Corps forecasts of continued steady growth. Craig E. Philip, President and CEO of Ingram Marine Group, now the nation's largest barge carrier, laid out a less than expansive future for his industry in a presentation to other transportation industry professionals in late September. Bankruptcies and mergers have transformed the barge industry in the past year. Philip remarked that further consolidation and efficiencies are needed to preserve industry profitability due to:

  • Stagnating Demand. "Tonnage increased 10% over the last decade; slow growth is forecast to continue."
  • Excess Capacity. "…generally capacity exceeds demand"; and
  • Inefficiency. Philip noted that better "logistics management" through scheduling of barges and better using existing communications to achieve "real time tracking" can yield significant industry cost savings.

Ingram Marine's largest competitor, American Commercial Lines, echoed these views in a presentation to Marine Money Week, stating, "industry fleet level has peaked and is projected to decline." ACL is now attempting to reorganize out of a bankruptcy caused by "a decline in barging rates, reduced shipping volumes and excess barging capacity" according to a recent filing with the Securities and Exchange Commission.

These latest Corps figures combined with barge industry bankruptcies and consolidations undercut the need to undertake a massive new expansion of the lock system on the Upper Mississippi River and Illinois Waterway, where traffic is also well below Corps forecasts (see below). Top Bush Administration officials are now reviewing a controversial multi-billion dollar Corps plan to expand capacity on these systems. A decision is expected by mid-December.

"The only way the Corps can justify this boondoggle is by deliberately ignoring economic realities," stated PEER Executive Director Jeff Ruch. PEER represents Corps economists who revealed that the agency had "cooked the books" in a previous study and PEER has filed a challenge against the current Corps study for relying on bad economic models. "We schedule planes, trains and buses but not barges because the Corps has no fiscal incentive to promote efficient transportation but has every fiscal incentive to pour tons more concrete into our rivers."

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View the Latest Corps Figures for Inland Barge Tonnage

Scan the Ingram Marine PowerPoint on Industry Future

Examine the American Commercial Lines presentation at Marine Money Week Read the ACL Annual Statement

See the Gap between Actual Traffic and Corps Forecasts on the Upper Mississippi River (two biggest locks):

Review the History of Inflated Traffic Forecasts by the Corps