Profile: American Commercial Lines Inc. (ACLI.O)

American Commercial Lines Inc. (ACL) is a marine transportation and service company. ACL provides barge transportation and related services, and manufactures barges, towboats and other vessels, including ocean-going liquid tank barges. Barge transportation accounts for the majority of the Company's revenues, and includes the movement of grain, coal, steel, liquids and other bulk products in the United States. ACL operates in two primary business segments: transportation and manufacturing. ACL's transportation segment includes barge transportation operations in North America, and domestic fleeting facilities that provide fleeting, shifting, cleaning and repair services at various locations along the inland waterways. The manufacturing segment constructs marine equipment for external customers, as well as for the Company's transportation segment. In April 2008, the Company acquired the remaining 70% of the environmental and civil engineering services firm, Summit Contracting, LLC.

To support its domestic barging fleet, the Company operates port service facilities. ACL Transportation Services LLC operates facilities throughout the United States Inland Waterways consisting of the Mississippi River System, its connecting waterways and the Gulf Intracoastal Waterway (the Inland Waterways), which provide fleeting, shifting, cleaning and repair services for both barges and towboats, primarily for ACL, but also for third-party customers. ACLT has facilities in various locations, including Lemont, Illinois; St. Louis, Missouri; Cairo, Illinois; Louisville, Kentucky; Baton Rouge, Louisiana; Vacherie, Louisiana (Armant fleet); Harahan, Louisiana; Marrero, Louisiana, and Houston, Texas. Its operations consist of fleets, towboat repair shops, dry docks, scrapping facilities and cleaning operations.

ACL operates a coal receiving, storage and transfer facility in St. Louis, Missouri, and also owns, operates and charters river vessels suitable for transportation of coal on the Mississippi River. Together with Burlington Northern Santa Fe Railway (BNSF), the Company also transports coal from mines in the Powder River Basin of Wyoming and Montana, to the Louisiana Generating LLC (LaGen) power plant in Louisiana under an agreement with LaGen. The Company's St. Louis terminal also receives and stores coal from third-party shippers, who source coal on the BNSF and ship to inland utilities on ACL's barges. The Company’s liquid terminal in Memphis, Tennessee, provides liquid tank storage for third parties and processes oily bilge water from towboats. The oil recovered from this process is blended for fuel used by ACL's towboats or is sold to third parties. The Company owns 50% of BargeLink LLC, a joint venture with MBLX, Inc. BargeLink LLC provides third-party logistics services to international and domestic shippers, who distribute goods primarily throughout the inland rivers.

Transportation

The Company provides dry cargo barge transportation and liquid cargo barge transportation on the United States Inland Waterways. Its dry cargo barges transport a variety of bulk and non-bulk commodities. ACL also transports chemicals, petroleum, ethanol, edible oils and other liquid commodities through its fleet of tank barges. During 2008, ACL’s transportation segment transported approximately 35.4 billion ton miles of cargo under affreightment contracts, and an additional 4.1 billion ton miles under towing and day rate contracts for a total of 39.5 billion ton miles. During 2008, bulk was ACL's largest class of cargo transported (23.5% of transportation revenue), followed by grain, steel and coal. Bulk commodities contain a variety of cargo segments, including salt, alumina, fertilizers, cement, ferro alloys, ore and gypsum.

As of December 31, 2008, the 2,645 barges in the Company's domestic fleet included 1,873 covered dry cargo barges, 381 open dry cargo barges and 391 tank barges that carry liquid cargo. It operates 452 of these dry cargo barges and 38 of these tank barges pursuant to charter agreements.

As of December 31, 2008, ACL's barge fleet was powered by 132 owned towboats and 20 additional towboats operated exclusively for the Company by third parties. ACL provides additional value-added services to its customers, including third-party logistics through its BargeLink LLC joint venture, and limited container transportation services between Chicago and New Orleans. The Company's operations incorporate advanced fleet management practices and information technology systems, including its ACLTrac real-time global positioning system (GPS) barge tracking system, which allows the Company to manage its fleet. ACL's barging operations are complemented by its marine repair, maintenance and port services (such as fleeting, shifting, repairing, and cleaning of barges and towboats) located throughout the Inland Waterway.

The Company's primary customers include industrial and agricultural companies in the United States. ACL enters into a variety of contracts with these customers, ranging from single spot movements to renewable one-year contracts and multi-year extended contracts. Its customers include Cargill, Inc., North American Salt Company, the David J. Joseph Company, Consolidated Grain and Barge Company, Bunge North America, Inc., United States Steel Corporation, Nucor Steel, Alcoa, Inc., Lyondell Chemical Company, Shell Chemical Company, Koch Industries, DuPont and Nova Chemicals, Inc. It has contractual relationship with LaGen, a subsidiary of NRG Energy, Inc, and Burlington Northern Santa Fe Railway (BNSF). In 2008, the transportation segment generates over 72% of its revenues under term contracts and spot market arrangements with customers to transport cargoes on a per ton basis from an origin point to a destination point along the Inland Waterways on the Company’s barges, pushed primarily by the Company's towboats. ACL's dedicated service contracts typically provide for dedicated equipment specially configured to meet the customer's requirements for scheduling, parcel size and product integrity.

Manufacturing

The Company's manufacturing subsidiary, Jeffboat LLC (Jeffboat), is a manufacturer of dry cargo and tank barges in the United States. Located in Jeffersonville, Indiana, Jeffboat is an inland single-site shipyard and repair facility, occupying approximately 68 acres of land and approximately 5,600 feet of frontage on the Ohio River. ACL designs and manufacture barges and other vessels for third-party customers and for its inland river transportation business. It also manufactures equipment for coastal and offshore markets. In addition, ACL provides complete dry-docking capabilities and machine shop facilities for repair and storage of towboat propellers, rudders and shafts. Its Jeffboat facility also offers technically advanced marine design and manufacturing capabilities for both inland and ocean service vessels. The primary third-party customers of Jeffboat are other operators within the inland barging industry. ACL's transportation segment is a significant customer of Jeffboat.

ACL competes with Trinity Industries, Inc.