Tank Barge Market Report - Oct 2021

Of the 3,720 barges and 13,606 vessels we currently track, 679 are tank barges with 19 inland and 25 ocean or coastal barges officially on the market for sale. The 19 inland tank barges were built between 1943 and 2015, with 12 or 63.2% 25 years of age or over. The oldest inland tank barge listed today is a 78 year old, 9,000BBL tank barge previously used for transporting #2 oil in the U.S. Great Lakes. This old lady is counterbalanced by a foreign-flagged 2015-built 19,150BBL capacity tank barge located on the South American East Coast. In the 10 to 15 year old range, we have two U.S.-flagged and two foreign-flagged, double-hull inland barges ranging from 28,000 to 39,775BBL. One year ago, 27 inland barges were available with an average age of 25 years and five years ago, 56 inland barges were available with an average age of 27 years. The inland barges currently available for sale average 29 years old. Excess barges continue to sit on the market, with the continuation of scraping or selling for conversion to deck service.

Of the 25 ocean/coastal barges, five are 10 years of age or less. Eight or 32.0% of the ocean & coastal barges are at least 25 years old with the oldest one, a U.S. flagged, double-hull, 41,000BBL barge, built in 1955 and rebuilt in 1978. This is countered by a 2016 built foreign flagged 38,000BBL double hull barge. In November 2016, 53.6% of the 28 ocean and coastal barges listed for sale were 25 years of age or older. Today, three fewer ocean/coastal barges are officially available for sale compared to five years ago and nine more than one year ago. Average age of all ocean/coastal barges for sale today is 21 years old (200), compared to 26 years last year (1994) and 36 years five years ago (1980). The decline in average age suggests that while older barges have been disposed of, relatively younger units are coming onto the market for sale.

Eight inland tank barges which Marcon had listed for sale on the report date are located in the U.S., followed by four each in Europe and Latin America and one each in Africa, the Mediterranean and location unknown. Twenty ocean / coastwise barges listed for sale are in the U.S., followed by two in Southeast Asia and one each in the Far East, in Latin America and with undisclosed location. Thirty-seven of the 44 tank barges listed for sale worldwide are double hull. Twenty-five of these are U.S. flag of which 19 are 10 – 25 years old and the remaining six barges are 26 - 66 years of age. The foreign double-hull barges range from five years old in the Far East up to 63 years old in the Mediterranean.

Marcon's Market Comments
The tank barge market in the United States continued to struggle for meaningful traction these past several months. Much of this can be attributed to the reduced shipment volumes related to the emergence of the Covid-19 Delta variant and its general effect on demand. The continual start again, stop again nature of demand and consumption for clean and dirty products is of course being experienced by most every industry in the US, and elsewhere. We would expect this to continue until the pandemic has run its course and things settle into a new normal. The inland tank barge market will likely see more improved gains over the next two quarters versus the coastal market. The inland market's utilization was hit harder by Hurricane Ida, which made landfall in August at the country's refining headquarters in Louisiana. We expect to see a slow and steady improvement in both the coastal and inland markets as the pandemic fizzles out over time, hopefully allowing the market to at least return to pre-Covid-19 utilizations levels. This is expected despite daily rate levels and terms (spot or long term hire) being below what the Owners and Operators in the market desire. The Bouchard bankruptcy liquidation auction by the Southern District Court in Texas saw the company broken into several parts with a portion of the idle / non-working assets winding up in the hands of Centerline Logistics, LLC of Seattle, WA. Up until the time of that transaction it was our experience, as brokers, that there was very little demand for the tonnage that was laid up and offered for sale, either in the black oil or clean service category. This continued lack of demand will likely press further against potential values for the available tonnage that may be considered for re-entry. The majority of those assets are likely to remain in lay-up without an industry wide growth of real demand in order to move the idle assets off the dock, into dry-dock and recertification and employment in the market.

 

Commercial Marine Brokers since 1981