American Commercial Lines Inc. posted a loss in its third quarter, based largely on drought conditions that slowed barge transportation on the Mississippi River.
According to the results reported Thursday for the quarter ending Sept. 31, the inland barge manufacturing company posted a loss of $297,000 in the quarter, compared to $5 million in the third quarter last year.
“The low water levels on the Mississippi River and the extreme drought conditions during the third quarter have resulted in some of the most challenging conditions our industry has experienced in nearly a half century in terms of severity, duration and the impact on the agriculture industry,” said ACL President and CEO Mark Knoy in the earnings statement. “Current operating conditions and the drought’s impact on what had previously been expected to be an all-time record U.S. corn harvest have led to lower revenues and higher costs in the short-term. Initial USDA forecasts, had suggested harvest levels that would have resulted in corn exports through the Gulf [of Mexico] at levels nearly twice what we currently expect them to be.”
For the third quarter alone, ACL reported costs of more than $24 million in “drought, flood and other costs.”
Revenues posted by the company in both transportation and manufacturing — Jeffboat — were down.
Transportation segment revenues decreased 20 percent to $157 million, while total ton-mile volume decreased 25 percent to 6.2 billion ton-miles in the third quarter. The average number of barges in service was down by 19.5 percent, compared to last year, which accounted for a significant portion of reduction, according to the earnings report.
The low water conditions during the quarter also led to reduced loads and transit delays.
According to the earnings report, on average, the per-ton barge load for a dry cargo barge declined by nearly 7 percent during the quarter. The decline resulted in a reduction in earnings of $9.8 million for the quarter and $10.9 million for nine months. The reduction in barges-per-tow also required more tow boats to be in service to deliver the same amount of freight costing the company $5.9 million in the quarter and $6 million for nine months.
Revenues for the transportation of liquids actually increased by $2.3 million, driven by a 30 percent increase in the dedicated petroleum services in the Gulf Coast region, according to the earnings statement.
Overall, for nine months ACL’s transportation segment revenues were down slightly, at $513 million, compared to 2011 for the nine month period at $521 million.
According to the report total ton-mile volume decreased 4.6 percent to 21.7 billion ton-miles. And after giving consideration to the estimated impact of the drought, the total ton-miles declined less than 1 percent for the year-to-date period.