American Commercial Lines Inc. is seeking to ride troubled waters to a successful initial public offering.

In the wake of Hurricane Katrina, which boosted river freight rates with the Midwest grain harvest underway, the maker and operator of dry-cargo river barges was expected to price its offering on Oct 6.

But the Jeffersonville, IN company's IPO also comes after a long streak of offerings in the shipping industry, causing some analysts to suggest that investors' enthusiasm for the sector has waned.

"The industry sectors, from the standpoint of investment, are like a pendulum on a clock," said John Fitzgibbon, an analyst with ipodesktop.com. "What we are watching now in the shipping sector is on the downside of that pendulum."

American Commercial Lines makes and operates mainly dry-cargo river barges that carry grain, coal and other commodities on the Mississippi River System and the Gulf Intracoastal Waterways. The company is riding a wave of unprecedented high shipping rates that result from a confluence of factors, industry observers said.

Lower exports and rising steel prices contributed to a sharp reduction in the domestic barge fleet in recent years, as barge companies often found it more profitable to sell barges for scrap rather than operate them on reduced cargo, said Jerry Fruin, an applied economics professor at the University of Minnesota. Fruin specializes in the transportation and marketing of commodities.

The smaller number of available barges already had sent freight rates up in early August ahead of the Midwest harvest season. Then Hurricane Katrina struck, sinking and stranding barges and damaging freight terminals and grain elevators in the Gulf region, sending shipping rates through the roof, Fruin said.

"You were getting ready for the fall shipping season," Fruin said, "and then of course everything went to hell along the Mississippi, and the barge rates doubled."

Sandor Toth, publisher of River Transport News, an industry newsletter, said that more than one month after Katrina struck, river shipping rates still are rising, especially in Northern states where the US Department of Agriculture forecasts a corn harvest bigger than previously expected.

Shipping rates, "are triple what they normally would be at this time of year," Toth said. "I've never seen them this high ever."

How long the surge in freight rates will last is anyone's guess, but American Commercial Lines itself warns in its prospectus, filed with the Securities and Exchange Commission, of the highly cyclical nature of the industry, with rates fluctuating widely from season to season and year to year.

Supply and demand

The size of grain harvests and the demand for other commodities typically drive the industry. American Commercial Lines' revenue is substantially larger during the second half of the year, when grain must be shipped from the Midwest to Gulf ports for export.

"The barge industry is probably one of the purest markets governed by supply and demand," Toth said. "And we've had a contraction in supply primarily, which is now exacerbated by harvest season demand."

In an environment of skyrocketing gasoline and diesel prices, the barge industry holds competitive advantages over its rail and road counterparts, as towboats and barges use far less fuel than trains and trucks to carry an equivalent load.

In its prospectus filed with the SEC, American Commercial Lines also said it believes the relative dearth of dry-cargo barges means the company is poised to take advantage of increased demand in coming years both as a barge operator and a barge manufacturer.

Beyond the temporary rate hike and increased demand for barges, research analyst Sam Snyder of ipohome.com said investors should look at the company's history, which includes an emergence from bankruptcy protection just nine months ago and net losses in all but one of the past five years.

Snyder praised the company's experienced management and said it is protected by the Jones Act, which fo