“We’re moving more and more tank barges up and down the Ohio River for major petroleum companies. We’re focusing on that for the future …We asked ourselves, what do we invest in? We knew we were going to be subject to a diffi cult market. We worked to develop a platform, a solid base for future growth.”
CAMPBELL TRANSPORTATION COMPANY
Campbell Transportation Company, Inc., is a fully integrated, privately owned, marine service company headquartered in the Pittsburgh suburb of Houston, PA.
Campbell knows the Ohio River and its tributaries well – it’s been working those rivers for over 80 years. The company, with close to 500 employees, owns facilities in 15 communities along the Monongahela and Ohio Rivers, locations that provide harbor services, cranes, construction, barge services and new construction. Campbell’s transport service is much bigger, extending throughout the inland river system from Pittsburgh to Cairo, Minneapolis and Chicago to New Orleans, Paducah, KY to Mobile, AL. The upper Ohio River has been important for Campbell’s success. That muscular, industrial region burned and exported a lot of coal. The bulk of that was moved by barge. For coal markets, times have changed, to put it mildly.
Campbell executives, looking down from the bridge, so to speak, seek a far-sighted perspective for their company, a long view to position for opportunities that will include coal, but beyond coal also. “2016 coal markets were tough,” explained Peter Stephaich, Campbell’s Chairman and CEO, “people were getting coal that they didn’t need.” It’s taken a year for inventories to shrink. 2017 is better and Campbell’s coal shipments have been up recently. “But not anywhere near where we used to be,” Stephaich added. Metallurgic coal (met coal) is more of a bright spot, compared to steam coal, for electric utilities.
Campbell’s view is that coal is important and the company will keep working in that sector, particularly with met coal, serving steel producers. But overall, coal is a declining market sector and growth will come from other investments. Another drag on rates and margins is too many barges. Over capacity, for example, affected the grain market. “A lot of grain is moving,” Stephaich said, “but I don’t think that anyone is making any money.” He predicts it will take 3-5 years to correct this over capacity.
There’s no little irony in the fact that regional coal has been supplanted by regional, cleaner-burning natural gas. The upper Ohio region is at the forefront of huge natural gas plays, newly recoverable by hydraulic fracturing (fracking). This energy development is the main reason that Royal Dutch Shell is constructing a multi-billion dollar ethane cracker plant on the Ohio in Monaca, PA, 25 miles north of Pittsburgh. It’s expected to start-up in 2020. Development offi cials predict extensive economic benefi ts. To be sure, energy and petrochemicals are on Campbell’s radar.
They have delivered equipment and construction supplies for energy projects. “We’re moving more and more tank barges up and down the Ohio River for major petroleum companies,” Stephaich said. “We’re focusing on that for the future.” Uncertain times gave Campbell’s team the space to review its internal “infrastructure,” Stephaich’s term, part of a deep-look evaluation and planning process. “We asked ourselves, what do we invest in? We knew we were going to be subject to a diffi cult market. We worked to develop a platform, a solid base for future growth.” This introspection resulted in new and substantive investments including new software, IT servers, accounting systems, and, critically, personnel. The company now tracks all its boats in real-time, getting positioning updates every 15 minutes.
Additionally, Campbell retains core, important oldschool strengths: limited debt, access to capital, low overhead, and, importantly, its “deck hand school,” a careerpathway apprenticeship program. Because of its relatively small size, Campbell can be nimble, as situations warrant. “If we can fi nd a contract for 50 barges,” Stephaich commented, “that’s good for us.”
Rebuilding is always critical. “We did a lot of upfront work in preparation for an opportunity when it came along,” Stephaich explained. Indeed, opportunity came along in a big way this year when Campbell announced in May that it signed an agreement with American Commercial Barge Line LLC to acquire certain affreightment contracts, four towboats and 155 barges for its Ohio River operations (the deal was completed June 30).
Campbell now owns and/or manages 50 towboats and over 1,100 barges. “We wouldn’t have been able to do this if we hadn’t started the preparatory moves taken during our rebuilding,” Stephaich said. The new equipment positions Campbell to expand in new and targeted markets, in addition to coal.
Planning is important but the ability to move on those plans is even more important – that’s the work that secures the future. For Campbell, that’s likely another 80 years, at least!