Inland Marine Transportation Market, Part 2

Part
01
of three
Part
01

Marine Lubricant Market Size

The US market size for marine lubricants in 2019 is calculated as 477,400 tons. We have provided a step-by-step analysis of all the calculations we performed below.

US Market Size for Marine Lubricants

Research Strategy

To find the market size for marine lubricants in the United States, we began by searching through the public domain for market report analysis on the size of the United States market marine lubricants. We also searched through trusted media sources such as Forbes, NYTimes, Business Insider and others. After an extensive search, we identified a report by Statista on the size of the United States market marine lubricants in dollars. All attempts at finding the volume equivalent proved abortive.

Next, we extended our scope to the North American region. This strategy was aimed at finding reports/market analysis on the North American marine lubricants. This strategy yielded no result as there was no market report for the North American region available in the public domain. We further expanded our search to a global level. At this point, we found several reports about the nature of the global marine lubricant market, many of which were valued in dollars. We chose the report by Grand View Research as it provided us with the market size in tons.
Having identified the global market size for marine lubricants in tons, we went on to find the global market size for marine lubricants in dollars. To calculate the size of the US marine lubricants market, we have performed the below-stated calculations.

Triangulation

1.) Calculations to obtain the 2016 US market size for marine lubricant.
  • 2016 global market size for marine lubricants (in dollars) = $5.40 billion.
  • 2016 global market size for marine lubricants (in tons) = 1,841.4 kilotons.
  • 2016 United States market size for marine lubricants (in dollars) = $1.2 billion.
  • Let "X" represent the 2016 United States market size for marine lubricants in tons.
  • To find X, we equate similar values and apply the cross multiplication formulae.
  • Global market size for marine lubricants ($5.40 billion) = global market size for marine lubricants (1,841.4 kilotons)
  • US market size for marine lubricant ($1.2 billion) = X.
  • Therefore; X = (($1.2 billion × 1,841.4 kilotons) ÷ $5.40 billion) = 409.2 kilotons = 409,200 tons.

2.) Calculations to obtain the 2019 (current) US market size for marine lubricant.
  • Let "Y" represent the 2019 United States market size for marine lubricants in tons.
  • 2019 United States market size for marine lubricants (in dollars) = $1.4 billion.
  • To find Y, we equate similar values and apply the cross multiplication formulae.
  • 2016 US market size for marine lubricants ($1.20 billion) = 2016 US market size for marine lubricants (409.2 kilotons)
  • 2019 US market size for marine lubricant ($1.2 billion) = Y.
  • Therefore; Y = (($1.4 billion × 409.2 kilotons) ÷ $1.20 billion) = 477.4 kilotons = 477,400 tons.
Part
02
of three
Part
02

Inland Marine Transportation Market

The US inland marine transportation industry is moderately consolidated with a mix of few large organizations and numerous small businesses. The liquid transportation market is highly consolidated, with about 66% of the fleets being operated by the top-5 companies in the US. Additionally, the dry transportation market is moderately consolidated with small independent operators comprising more than 45% of the industry fleet. It is noted that the inland tug and towboat industry is highly fragmented, with the market share of top-7 companies to be less than 25%.

Industry Overview

  • According to a recent report by First Research, the US inland marine transportation segment comprises about 350 companies, generating an annual revenue of about $7 billion. Alternatively, reports by IBISWorld and Census Bureau estimate the industry size to be about $9 billion and $7.99 billion, respectively.
  • The NAICS Association states that a total of 1,234 marketable businesses are present in the US. Further, 807 firms operate in the freight transportation segment, and 427 firms operate in the passenger transportation segment.
  • According to reports by First Research, IBISWorld, NAICS, and AWO; some prominent players operating in the US market include Ingram Barge, American Commercial Barge Line, Kirby Inland Marine, American River Transportation, among others.

Industry Segmentation

Industry Consolidation

  • The First Research report states that the US market majorly consists of independent companies and their captive subsidiaries. Additionally, the report also states that the US market is highly consolidated, with the top-50 companies generating nearly 95% of the industry revenue.
  • The top-seven liquid carrier companies comprise nearly 72.1% of the inland fleet in the US. These companies include ACBL, Kirby Corp., Canal Barge, Ingram, Florida Marine Transporters, Blessey Marine Services, and Marathon.
  • The top-seven dry carrier companies comprise nearly 73% of the inland fleet in the US. These companies include Ingram, ACBL, American River Transport Co., Cargill, CGB Enterprises, SCF (Seacor), and Campbell Transportation Co.

Top-5 Inland Liquid Transportation Carriers

  • The total number of liquid barges operating in the inland waterways of the US: 3,850 vessels.
  • Kirby Corporation: 1,065 vessels with a market share of 27.66%
  • American Commercial Lines: 409 with a market share of 10.62%
  • Canal Barge Company: 323 with a market share of 8.38%
  • Ingram Barge Company: 276 vessels with a market share of 7.1%
  • MPLX (“Hardin St. Marine”): 256 vessels with a market share of 6.64%
  • Florida Marine: 201 vessels with a market share of 5.22%
  • We note that the market for inland dry transportation vessels is highly consolidated because the total contribution by top-5 companies is nearly 66%.

Top-5 Inland Dry Transportation Carriers

  • The total number of dry barges operating in the inland waterways of the US: 19,141 vessels.
  • Ingram Barge Company: 4,294 vessels with a market share of 22.43%
  • American Commercial Lines: 3,159 vessels with a market share of 16.50%
  • American River Transportation: 1,830 vessels with a market share of 9.56%
  • Canal Barge Company: 393 vessels with a market share of 2.05%
  • Parker Towing Company: 324 vessels with a market share of 1.69%
  • Independent Operators: 8,660 vessels with a market share of 45.24%
  • We note that the market for inland dry transportation vessels is moderately consolidated because the total contribution by top-5 companies is more than 52%. Alternatively, small independent operators contribute about 45.24% of the total dry vessel market.

Top-7 Inland Tug and Towboats Operators

  • The total number of tow and tugboats operating in the inland waterways of the US: 4,000 boats.
  • Kirby Corporation: 304 boats with a market share of 7.6%
  • American Commercial Lines LLC: 190 boats with a market share of 4.75%
  • Ingram Barge Company: 140 boats with a market share of 3.5%
  • Florida Marine: 90 boats with a market share of 2.25%
  • Moran: 80 boats with a market share of 2%
  • McAllister Towing: 75 boats with a market share of 1.87%
  • Crowley Marine: 60 boats with a market share of 1.5%
  • We note that the market for inland tug and towboats is highly fragmented because the total contribution by top-7 companies is below 25%.
Part
03
of three
Part
03

Fragmented Markets

Differentiation and online marketplaces are two of the best tactics that a company can employ to grow or gain market share in a highly fragmented industry.

Differentiation

  • Perhaps the most widely discussed and recommended strategy for growing or gaining market share in a highly fragmented market is differentiation, as highlighted by top-tier outlet Forbes, startup trade Entrepreneur, business trade Inc, software trade Hubspot, publishing outlet Medium, business blog Sunjan Patel, and numerous other credible resources.
  • Notably, a recent study by consultancy PricewaterhouseCoopers found that companies that differentiate themselves in a crowded marketplace see the highest median five-year CAGR (10.9%).
  • Differentiation specifically refers to the tactic of ensuring that a company has a unique value proposition for potential customers and, in some cases, taking steps to grow the awareness of a business's unique offerings or attributes.
  • The specific way a business differentiates itself can vary from cost differences, product innovations, personalization or even customer service, however this strategy ultimately relies on the fact that when customers appreciate the unique value offering of a company, they are more likely to purchase a specific good or service from that company.
  • Meanwhile, a prominent example of a company that successfully grew its market share in a crowded industry is the cross-platform messaging app WhatsApp.
  • WhatsApp was not the first product of its type, nor was it one of only a few that were offered when the company launched, however the company managed to become one of the most successful in its market with over 1.2 billion monthly active users.
  • Ultimately, WhatsApp achieved this tremendous increase in market share by differentiating its product through the removal of ads, marketing or subscription fees for the first year of service.

Online Marketplace

Sources
Sources

From Part 02
Quotes
  • "Companies in this industry provide inland water transportation of cargo on US lakes, rivers, or intracoastal waterways. "
  • "Major companies include independents, such as American Commercial Barge Line, Ingram Barge, and Kirby Inland Marine, and captive subsidiaries of companies that transport commodities, such as American River Transportation (owned by Archer Daniels Midland)."
  • "The US inland water freight transportation industry includes about 350 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $7 billion."
  • "Demand is driven primarily by the level of agricultural exports, petroleum refining, coal usage, and chemical shipments"
  • "Large companies have advantages in handling a broad range of cargo types, along with economies of scale in purchasing and marketing. Small companies compete by specializing in particular cargo types or services, subcontracting to larger companies, and offering responsive customer service."
  • " The US industry is highly concentrated: the largest 50 companies generate about 95% of industry revenue."
  • "Major services are freight transportation (80% of industry revenue) and towing and tugboat services (20%). Freight transportation services consist of dry cargo (such as grain, coal, steel, fertilizers, and aggregates) and liquid cargo"
Quotes
  • "The companies holding the largest market share in the Inland Water Transportation in the US industry include Kirby Corporation, Ingram Industries Inc. and American Commercial Lines LLC."
Quotes
  • " A 2017 report commissioned by AWO and put together by Pricewaterhouse Coopers shows the industry supports over 301,500 jobs nationwide, with a total gross domestic product of $33.8 billion and moves more than 760 million tons of cargo annually."
  • "Today, the top seven carriers — ACBL, Kirby Corp., Canal Barge, Ingram, Florida Marine Transporters, Blessey Marine Services, and Marathon — make up 72.1% of the industry’s liquid fleet."
  • "On the dry side of the fleet, Ingram, ACBL, American River Transport Co., Cargill, CGB Enterprises, SCF (Seacor), and Campbell Transportation Co. own 73% of the barge fleet."
Quotes
  • "Our industry’s 5,500 tugboats and towboats and 31,000 barges fuel the American economy by transporting more than 760 million tons of domestic cargo each year, including petroleum products, chemicals, food and farm products, coal, steel, aggregates and containers."
  • "The industry provides family-wage jobs and ladders of career opportunity for more than 50,000 Americans, including nearly 39,000 positions as mariners on board our vessels, and supports more than 300,000 jobs in related industries across the nation. "
  • "AWO members operate on the rivers, coasts, Great Lakes, and harbors of the United States, moving economically critical cargo safely, reducing pollution and highway congestion, and protecting homeland security. "
Quotes
  • "Florida Marine is one of the largest U.S. towboat operators. It runs more than 90 towboats across the Gulf Intracoastal Waterway from Corpus Christi, Texas, to Florida, and throughout the inland waterway system from Pittsburgh to Minneapolis to New Orleans. "
Quotes
  • "Check out this video documenting the rebuilding and refurbishment of one of our towboats for a glimpse of our commitment to continuous investment in our fleet of 3,550 barges and nearly 190 towboats and in the people who are the true power behind our operations."
Quotes
  • "As the leading carrier, we operate a fleet of approximately 140 towboats and 5,000 barges that transport aggregates, grain, fertilizer, coal, ores, alloys, steel products, chemicals, and other products."
Quotes
  • "The largest North America-based tug ownership groups include Crowley Marine, Moran, McAllister Towing & Transportation and Kirby Corp."
Quotes
  • "Today, an estimated 4,000 towboats operate along the rivers of the United States, hauling 25,000 barges and carrying 630 million tons of cargo along 25,000 miles of waterway every year. Utility providers rely on rivers for 20 percent of their coal, while about 22 percent of domestic petroleum and more than 60 percent of farm exports move on inland waterways."
Quotes
  • "On inland river system Kirby is the leader in the liquid segment (with approximately 26% of total inland capacity), Q4 2018 results indicated a firming marketplace. With a fleet of more than 1000 tank barges barges (total capacity on the order of 23 million barrels) and more than 300 inland towboats projected at the end of 2019, fleet growth has been fueled by consolidation (rather than through newbuilds). "
  • "Early in 2018, Kirby acquired Higman Marine Inc. with 159 inland tank barges and 75 boats. Also, 27 additional barges joined the KEX fleet in late 2018 in a deal with CGBM, and in January 2019 announced a $244 million acquisition of Cenac Marine Services and its 63 barges (30,000 bbl) and 36 boats."
  • "Other carriers in this segment include privately owned Canal Barge Company (also active in dry), Magnolia Marine, Florida Marine Transporters (also active in dry) and Southern Towing."
  • "The dry sector, where privately held Ingram Barge, based in Nashville, has the largest fleet, has seen restraint on new ordering in recent years. "
  • "Other large players include American Commercial Barge Line, and American River Transportation (linked to agribusiness giant ADM). Grain major Bunge Corp, through an arrangement with Seacor Holdings Inc. (Seacor), controls a large dry barge fleet and Marquette Marine (also active in grain trades)."