US coastal and inland marine transport markets have improved this year, but crewing was challenged by a resurgence of Covid-19 issues, said one of the largest operators in the sector
Kirby Corp encountered considerable crewing challenges during Q1 2022 as many of its seafarers became ill with the Omicron variant of the coronavirus. Since March, these challenges have eased and demand for coastal and inland marine transport has risen, increasing utilisation of tugboats and barges.
“Kirby’s businesses continued to gain momentum with improved market conditions and increased demand, delivering sequential and year-on-year revenue and earnings growth,” said Kirby president and chief executive David Grzebinski.
The New York-listed group reported net earnings of US$17.4M in Q1 2022, compared with a net loss of US$3.4M in the same period last year. Its consolidated revenues for Q1 2022 were US$610.8M, versus US$496.9M in the first three months of 2021.
“Our outlook for 2022 remains favourable, and we expect meaningful quarterly earnings progression for the remainder of the year,” said Mr Grzebinski.
In coastal marine, Kirby saw modest improvements in demand for transporting refined products and crude oil, which raised barge utilisation and charter rates.
“However, the impact of the Omicron variant on operations and reduced coal shipments in our offshore dry cargo business resulted in lower revenues and an operating loss for the quarter,” said Mr Grzebinski.
“Inland marine was significantly challenged by the Omicron variant during the first two months of the quarter,” he continued. “Increased cases of the virus among Kirby’s mariners and quarantine protocols led to considerable crewing challenges, lost revenue and increased operating costs.”
Kirby overcame these challenges and benefited from the improvement in market conditions and increasing refinery output in March.
“These conditions contributed to Kirby’s barge utilisation increasing to over 90% since mid-March,” said Mr Grzebinski. “With this improvement and increased spot market and term contract rates, inland operating margins increased during March.”
At the end of March, Kirby announced a new business to benefit from renewed investment in offshore renewables. Kirby Offshore Wind was award a contract to provide barge transport services for offshore wind towers and turbines by Maersk Supply Service for the Empire Wind project in New York.
The 20-year framework agreement with Maersk, which will commence Q4 2025 or Q1 2026, “will provide significant revenue and earnings growth potential for our offshore business and greatly enhance our environmental, social and governance product and services offering in the future,” said Mr Grzebinski.
