Resilient But Suffering
Kirby Corporation’s reported first-quarter results were just beginning to show the effects of COVID-19 on its operations. Despite 4,490 delay days, average barge utilization remained in the low- to mid-90 percent range during the quarter. Seacor’s first-quarter results, too, showed a barge sector at least holding steady.
The crisis in the oil sector took a big toll on earnings from Kirby’s oil-services business, however. After a bump of barge storage of oil products, Kirby said it expects figures to show barge utilization declining beginning in mid-April.In the first few weeks of the shutdown, those who remained employed were grateful as millions of restaurant workers and others whose businesses depended on foot traffic or food service lost their jobs, some perhaps permanently. People hunkered down and observed social distancing. Companies, including barge companies, absorbed added costs to implement safety measures.We are cheered that those methods seem to be working. Far fewer hospital beds were needed than once predicted. While new cases continue to rise, that is partly the effect of greatly expanded testing. It now increasingly appears that the mortality rate may wind up well below one percent.
As the curve seems to flatten, reports indicate that hundreds may have died from other treatable illnesses because they were afraid to go to their doctors or to hospitals. The World Health Organization has doubled its estimate of the number of people worldwide who will face starvation this year. While support for some form of social distancing and other safety measures remains strong throughout the country, many are wondering if the economic shutdown and movement restrictions might have effects worse than the disease itself.
Our industry is more fortunate than some. Goods continue to move on the rivers and coastal water, keeping tens of thousands employed not just in our industry, but in those of our customers and suppliers.
Barge workers, along with other transportation workers, were declared “essential” and allowed to continue to operate. The nation needs barges to keep moving, and the industry as always is prepared to make that happen.
But though its importance is out of all proportion to its small size, our industry can’t be insulated from the larger economy. The COVID shutdowns, food supply chain disruptions and severe drops in demand for oil are devastating our customers. Sooner or later, that pain will show up in our balance sheets as well.
