Kirby cheers higher pricing

The chief executive of Kirby Corp., the country’s largest operator of tank barges, cheered another quarter of higher contract pricing as the industry continues to improve after three years of tough times that followed the oil bust.

“It still needs to go meaningfully higher,” David Grzebinski, CEO of the Houston company, told investors. “With the utilization where it’s at, everything is set up to continue the price increase.”

The three months ending Sept. 30 marked another quarter of improvement for the marine transportation sector, which overbuilt barge equipment during the shale boom. When oil prices plummeted, the market dried up and the excess barge capacity pushed down prices that companies could charge. The industry has since consolidated, retired barges and built few new pieces of equipment.

Due in part to an uptick in pet-

rochemical and black oil business, the use of Kirby’s barges to move petroleum, petrochemical and other products inland along the Gulf Intracoastal Waterway and U.S. rivers was in the mid-90 percent range at the end of the third quarter.

That helped increase pricing for short-term contracts by 3 percent to 5 percent, compared with the second quarter of this year. It’s up 20 percent from last year when some companies offered short-term contracts at prices below the cost of the service, Grzebinski said.

Longer-term inland barge contracts also repriced higher.

The company’s business of moving barges along the coast, which requires larger and more rugged equipment, has been slower to recover. But this sector has started showing signs of life, Grzebinski said.

Its recovery could continue — and be strengthened — if the gap between lower-priced U.S.-produced crude and the European Brent benchmark keeps growing, meaning more American-built tankers will move U.S. crude around the country and stop competing with Kirby’s coastal business moving petrochemical products and black oil.

“I do feel more confident that we are seeing improvement in this business,” Grzebinski said.

Kirby Corp. reported third-quarter earnings of $41.8 million, up 46 percent from the same threemonth period last year. Earnings per share were 70 cents, up from 52 cents last year.