Bob Blocker Senior Vice President Sales and Customer Service American Commercial Lines

Transcription

1 Indiana Logistics Summit October 17, 2012

2 Bob Blocker Senior Vice President Sales and Customer Service American Commercial Lines 2

3 American Commercial Lines A Leading Inland Barge Transportation Company Headquartered in Jeffersonville, IN Operating since 1915 on the U.S. inland waterways Approximately 2,300 employees A fleet of more than 1,900 barges powered by approximately 100 towboats Fleeting facilities Lemont,IL St. Louis, MO Cairo, IL Baton, Rouge, LA Harahan, LA Houston, TX Transloading and storage terminals Lemont, IL St. Louis, MO Memphis, TN Core Network 3

4 Committed to Investing in a Fleet for the Future ACL s fleet 321 tank barges 1,617 hopper barges 101 towboats Average age of fleet Tankers 20 years Covered hoppers 12.6 years Towboats 34.9 years In 2012, ACL Built eight 30 k tank barges, purchased eight 20 k tank barges and has the capacity to add 1.8 million barrels of additional capacity over the next 12 to 18 months Built 10 covered, dry cargo barges Continue to invest in our fleet to take advantage of market opportunities 4

5 Jeffboat ACL s Manufacturing Division The second largest manufacturer of brown water barges in the U.S.* The largest inland shipyard in the U.S. 68 acres on the Ohio River 1.1 mile riverfront 4 assembly lines A leader in marine design and construction Lean manufacturing initiatives drive efficiency and productivity Industry leader in safety Building replacements for retiring units in the ACL fleet and for select external customers * Source: Criton Corporation year-end 2010 data 5

6 ACL s Business Portfolio T O N N A G E M Tons Bulk/ Non-bulk 10.8 M Liquid 5.6 M Grain 6.7 M Coal/ Energy 10.4 M 1 st Half M Tons Bulk/ Non-bulk 4.9 M Liquid 3.1 M Grain 3.3 M Coal/ Energy 6.1 M R E V E N U E Bulk/ Non-bulk 33.5% 2011 Liquid 23.1% Grain 22.7% Coal/ Energy 20.7% Bulk/ Non-bulk 33.2% First Half 2012 Liquid 27.5% Grain 18.5% Coal/ Energy 20.8% 6

7 Driving Injuries to Zero Estimated National Injury Rates for 2011: Waterborne Transportation: 3.0 Shipyard Industry: ACL Jeffboat

8 Inland Waterways Transportation Industry Dry Carriers Total Dry Barges Liquid Carriers Total Liquid Barges Number % of Total Number % of Total Ingram Barge Co. 3, % AEP River Operations 3, % ACL 1, % American River Transport 1, % Cargo Carriers 1, % All Other Carriers 5, % Total 17,996 Kirby Corp % ACL % Canal Barge Co., Inc % Marathon Petroleum Co % Ingram Barge Co % All Other Carriers 1, % Total 3,084 Source: Informa and Company - December 31,

9 Inland Waterways Transportation The inland waterways transportation industry is an integral part of our nation s economy, moving raw materials and cargo to our cities, industries and regions of agricultural production. Key Commodities Moving on the Inland Waterways Minerals & Stone, 17% Grain & Agricultural Products 12% Metals & Ores 5% Chemicals & Petroleum 34% Coal 32% Coal 31% 571 Million Tons Annually Source: March 2012 Informa Economics Barge Commodity Profile 9

10 The 2012 Drought s Impact on the U.S. Inland Waterways Persistent low water conditions on the Mississippi River, particularly from St. Louis to the Gulf, and the Ohio River On October 3, five of the 15 river gage locations monitored by the Corps of Engineers were at action stage, the point at which federal agencies implement dredging, increase reservoir releases, and establish draft and tow size restrictions to improve navigational conditions Vicksburg, MS Greenville, MS Memphis, TN St. Louis, MO Herman, MO The low water conditions have approached those of the nation s last severe drought in 1988, with some channels that are normally 1,000 feet or wider now narrowed to a few hundred feet The barge industry continues to work with the U.S. Coast Guard and Army Corps of Engineers to ensure commerce continues to move safely on the U.S. inland waterways The infrastructure constructed on the Lower Mississippi River by the Corps of Engineers since the last severe drought in 1988 has made dredging easier and likely prevented more river closures this year 10

11 What a Difference a Year Makes on the Mississippi River The High Water Mark in 2011 Was 48 Feet on the Memphis Gage. On October 15, 2012, the Water Mark on the Memphis Gage was -9.3 Feet, a Difference of About 57 Feet. Normal Water Levels The Low Water Mark Reached in the Historic 1988 Drought Was 10.7 Feet on the Memphis Gage. Historic Flooding of 2011 Historic Drought of

12 The 2012 Drought s Impact on the Inland Barge Industry Low Water Requires Smaller Tow Sizes A Typical Northbound Tow on the Lower Mississippi with Normal Water Levels Is 30 Barges NB Tow Size Is Down as Much as 33% A Typical Northbound Tow on the Lower Mississippi with Low Water Levels Is 20 Barges A Typical Southbound Tow on the Lower Mississippi with Normal Water Levels Is 35 Barges SB Tow Sizes Are Down as Much as 43% A Typical Southbound Tow on the Lower Mississippi with Low Water Levels Is 20 Barges 12

13 The 2012 Drought s Impact on the Inland Barge Industry Loading Drafts are Severely Restricted by Low Water Conditions Barges normally loaded to a draft of 12 feet are being loaded to a draft of 9 feet For every inch of water loss, a typical 25-barge tow loses 425 tons of capacity. For every inch of water loss, a typical 35-barge tow loses 510 tons of capacity. For every three feet of water loss, a typical 25-barge tow loses 15,300 tons of capacity. For every three feet of water loss, a typical 35-barge tow loses 18,360 tons of capacity. 13

14 Drought Impact on Operating Costs River delays and closings due to low water The cost of a towboat sitting idle for one day is estimated to be $10,000 by the American Waterways Operators Lost barge productivity days Groundings Increased navigational and safety challenges posed by low water conditions 14

15 The 2012 Drought s Impact on Grain Exports Corn crops 2011 production 12.4 billion bushels Pre-drought forecast 14 billion bushels Oct forecast 10.7 billion bushels Soybean crops 2011 Production 3.1 billion bushels Pre-drought forecast 3.3 billion bushels Oct forecast 2.9 billion bushels Barge shipments of corn to New Orleans are loaded 11% lighter than in normal years, according to the USDA Reduced barge capacities limit grain sourcing by barge for export YTD grain inspections for export are down 11% from last year YTD weekly grain barge unloads in New Orleans are down 2% from the four-year average Source: USDA Grain Transportation Report 15

16 The Big Picture The American Waterways Operators estimates that the record drought of 1988 cost the inland barge industry approximately $1 billion Losses of this size have ripple effects Cost increases for consumers Impacts to the industries that rely on inland barges for cost-effective transportation The loss of revenue to the barge industry The impact to the many Americans employed by the inland barge industry 16

17 Legislation Impacting the Inland Barge Industry - Infrastructure Investment WAVE 4 bill, introduced in March and now stand-alone legislation in the House, includes a consensus plan to improve the inland waterways navigation infrastructure Developed by a partnership of business leaders and the Army Corps of Engineers and endorsed by the congressionally established Inland Waterways Users Board If enacted, the plan will: Prioritize the completion of navigation projects across the entire system Improve the Corps of Engineers project management and processes to deliver projects on time and on budget Reform project cost allocations Deliver 25 modernization projects and $8 billion of job creation Recommend an affordable user fee funding mechanism to meet the system s needs Realize a sustainable annual appropriation of $380 million 17

18 Coal Legislation Impacting the Inland Barge Industry Cross-state Air Pollution Rule (SAPR) was defeated in August due to its limitations of states powers Mercury and Air Toxics Standard (MATS) expected to kick in for the majority of companies in % of the lost coal burn will occur by 2015 due to the MATS regulation by the Environmental Protection Agency* Announced coal plant retirements through 2020 equate to 34,217 MW of capacity lost Coal consumption lost equates to nearly 62 M tons or about 40,000 barge loads at current 9 ft. draft The Stop the War on Coal Act, approved by the House in September and yet to be considered by the senate, will prevent the EPA from enacting laws negatively impacting the coal industry and jobs * Estimated by Doyle Trading Consultants 18

19 Commerce continues to move on the U.S. inland waterways as the barge industry works closely with the Army Corps of Engineers and the Coast Guard to safely navigate the challenging low water conditions resulting from the historical drought of

20 Q & A 20