US Inland Waterway Transportation Outlook

Thursday, June 14, 2012

A rise in freight transportation and revenue from fuel surcharges will restore growth according to new IBISWorld research report

With consumers increasing their spending as the economy recovers, and manufacturers likewise boosting their production, demand for inland water transportation will get a boost.

Additionally, rising fuel costs will lead to operators earning more money from fuel surcharges. However, the industry will experience some turbulence from rail transport providers, which are often seen as cheaper, faster and more environmentally friendly. For these reasons, industry research firm IBISWorld has added a report on the Inland Water Transportation industry to its growing industry report collection.

The Inland Water Transportation industry dipped as the economy sank into recession. Over the past couple of years, consumers have decreased spending, and manufacturing industries have decreased production. Consequently, fewer goods have been transported along domestic inland waterways, decreasing revenue.

In 2008, the industry dodged a bullet when rising fuel prices caused industry operators to impose fuel surcharges, which increased revenue. “However, rising revenue from fuel surcharges has not hit the industry's bottom line because fuel purchase costs for operators have increased as a result of the rising prices,” said IBISWorld industry analyst Lauren Setar.

This industry operates in rivers, ports and other bodies of water in the United States. While operators provide passenger ferry services, transporting freight commodities generates the majority of revenue. In 2006 and 2007, demand for coal, petrochemicals and grain was particularly strong, and worldwide demand for commodities, especially from China, further fueled revenue growth.


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