SIC 4492

This classification covers establishments primarily engaged in furnishing marine towing and tugboat services in the performance of auxiliary or terminal services in harbor areas. The vessels used in performing these services do not carry cargo or passengers.

NAICS Code(s)

483113 (Coastal and Great Lakes Freight Transportation)

483211 (Inland Water Freight Transportation)

488330 (Navigational Services to Shipping)

Industry Snapshot

Approximately 15 percent of the total amount of transportation in the United States travels through inland waters, while 4 percent of this traffic takes place on the Great Lakes, and 5 percent along coastal ocean routes. Operators of tows and tugboats work these inland waterways, providing services such as docking ocean vessels, shifting floating equipment with harbors, marine towing services, tugboat services, and undocking ocean vessels. As of July, 2002, there were 5,445 towboats in the entire U.S. fleet, some 3,429 of which operated in the inland waterway trade, according to The Transportation Institute.

Cargo transported along the U.S. inland waterways can be moved by barge or towboat. Barges range from 100 to 300 feet in length, carry a wide variety of cargo, and serve as a floating work station for offshore construction. Some barges certified for coastal and ocean service are capable of transporting liquid cargoes, such as oil. Companies that operate tugs and towboats usually have barges in their fleets. However, barge operations have been classified separately under SIC 4449: Water Transportation of Freight, Not Elsewhere Classified.

Many different types of tugs and towboats work the various inland waterways. Towing-supply vessels are from 150 to 222 feet in length and are used for towing drilling rigs, service and supply rigs, and offshore structures from shore. Supply vessels are 160 to 252 feet in length and handle supplies, equipment, and materials. They usually are outfitted with special pneumatic tanks for bulk cargoes and can be adapted to perform research. Utility, production, and line handling vessels are much smaller than the other two types, ranging in length from 65 to 130 feet. They can transport crews and light equipment, carry supplies, and are often utilized as a general utility vessel. Offshore tugs are for any kind of ocean towing. They tow mobile drilling rigs and service the construction and pipe laying industry. They also are used for commercial ocean towing. Inland towing vessels range from 400 to 2,000 horsepower and are used for any kind of coastal and river towing. They can tow drilling rigs and barges within various coastal area inland waterway systems, such as lakes and bays. They also are commercial tows, providing service to industrial clients. Crew boats are much smaller than the other types of vessels, ranging in length from 76 to 125 feet; they can transport light cargo and passengers at high speeds.

Background and Development

Establishments that provide marine towing and tug-boat services primarily work the inland waterways of the Atlantic, Gulf, and Pacific coasts; the Mississippi River; the Great Lakes; and the domestic ocean. These North American waterways comprise more than 26,000 miles of navigable rivers, canals, lakes, and coastal regions. The largest is the Mississippi River system, which runs more than 8,950 miles through the middle of the United States and intersects with the Missouri and Ohio rivers.

One of the earliest functions of the tugboat was to tow sailing ships into and out of the harbor and to assist in berthing (docking and undocking). The tug also was used to assist steamships. Although these vessels were able to enter and leave the harbor on their own, they were unmanageable to dock. Even though ships continue to be built with increased power and maneuverability, the tug remained necessary due to the ships' corresponding increase in size and tonnage.

Currently, the auxiliary propulsion force of tugs and towboats can serve many purposes. Large ships need tugs to assist in docking operations, to maneuver in confined waters and narrow channels, and to escort to clear waters. Items such as barges, cranes, "A" frames, derricks, lighters, tank barges, and railroad floats are towed by tugs. Towing also may be necessary to move a non-self-propelled piece of floating equipment. Such items might include mining equipment, drill rigs, dredges, barges, floating towers, "dead" ships, scrap hulls, and damaged marine equipment.

Tows have been ideal for river trade due to their shallow draft and ability to navigate the upper reaches of the Mississippi, Missouri, Ohio, and Columbia Rivers. Unlike ships, tugs are adaptable to changing needs with a minimum of delay because they do not have to wait until cargo is discharged before moving on to another job. The use of tows and barges historically has been one of the least expensive ways to transport coal, lumber, ore, oil, and bulk cargoes in the river and coastal trades.

Canal tugs operate on the canals of inland waterway and intracoastal systems and are designed to pass under low bridges covering most waterways. Railroad tugs haul car floats that transport railroad freight cars. The railroad tug must maintain a tight schedule and therefore has been specially designed for maneuverability, power, and visibility.

Coastal tugs are heavier than harbor tugs, and consequently have greater horsepower, larger all-around dimensions, and increased fuel capacity. American ocean tugs have been among the largest towing vessels utilized worldwide, second only to the enormous river towboats. Actually, the ocean tug is similar to a small ship. It has a large fuel capacity, quarters for a crew, and stores provisions for extended operations. Rescue and salvage tugs are at least as large as ocean tugs and contain extensive equipment for diving and salvage work. These vessels usually operate on short notice.

In the 1980s, inland waterway commerce rose slowly. However, the towing and tugboat services industry, especially the inland towing sector, was slowed by "the effects of overcapacity and slower-than-expected growth in markets for grain and other bulk materials," according to American Shipper. The Midwest flooding of 1993 further hindered the industry; tugboat and towing operations came to a complete halt on the Mississippi River at the height of the shipping season. Widespread economic growth in 1993, however, gave industry operators reason to believe that tugboat and towing services would be in high demand for the next several years.

Environmental concerns, especially relating to the prevention of oil spills, led to increased competition among tug service operators on the West Coast. As the state laws regarding tanker movement in the San Francisco bay have tightened, some tug operators already have begun to purchase specially equipped vessels to use as escorts in the area. More specifically, California's Office of Oil Spill Prevention and Response established new rules that require tankers to have a tug escort when moving in and out of the San Francisco bay. The ruling mandated that tankers carrying a minimum of 5,000 tons of oil must have enough tugs on hand to provide one horsepower of pulling power for every deadweight ton. The bay area has been home to several major oil terminals and bulk ports, and has at least 1,000 tankers travel into the area annually.

Tanker operators were hoping that double-hulled vessels would be exempt from the escort requirements; that has yet to occur. The average tug escort costs between $8,000 and $10,000, depending upon the size of the vessel and the distance traveled. Tanker operators estimated that using tug escorts could add more than $1 million a year to the cost of their shipping operations. The California ruling also mandates that the "best achievable technology" must be used to avoid accidents. Tug operators are hopeful that the use of tractor tugs will become mandatory.

Hoping to take advantage of the new oil-spill prevention laws, Crowley Maritime Corp. had planned to spend nearly $100 million on a fleet of these specialized tugs. "This is the Swiss Army knife of tug boats," Crowley's engineering manager, Ed Schluter, told interviewers in Popular Science. The article featured the two 153-foot, 10,200 horsepower tractor tugs built by Crowley and delivered to Alaska's Alyeska Pipeline Company in early 1999.

The U.S. inland towing industry spent the 1980s recovering from the boom in shipbuilding during the 1960s and 1970s. However, many vessels in the tug and towing industry have reached the end of their economic life span—approximately 20 years—and some operators began to update their fleets. National Marine, for instance, spent more than $10 million annually from 1988 to 1992 on new vessels. National's efforts to improve its fleet included a purchase of three 6,800-horsepower line haul towboats. Such new models incorporate the latest technology and have been built to operate in an increasingly restrictive regulatory environment.

The National Transportation Safety Board (NTSB), the Coast Guard, and the tugboat industry have been exploring increased requirements for towboat pilot licensing, mainly resulting from major incidents occurring in the past few years. A 47-death accident occurred in 1993 when barges being pushed by a tug in heavy fog conditions hit and damaged a bridge. The result was an Amtrak train plunged into an Alabama river. The NTSB's recommendations were drafted into new rules by the U.S. Department of Transportation, and included increased proficiency requirements for towboat pilots, as well as regular performance evaluations, plus mandates that towboats be equipped with current radar systems and appropriate charts and compasses. In January 1996 near Rhode Island, a Scandia tugboat was pulling a barge carrying 4 million gallons of fuel oil. The Scandia became disabled by fire resulting in the barge leaking 800,000 gallons of oil. A representative of Soundwaters Environmental Group, Stephen Tarrant, said: "This incident is just a reminder that something like that can happen at any point." In fact, between 1986 and 1994 tugboats and barges were accountable for 23 percent of all oil spills, compared with tankers, which comprised 60 percent, and 8 percent were attributable to oil drilling rigs, according to Coast Guard statistics.

The American Bureau of Shipping is an industry regulatory organization that conducts annual inspections of larger tugs, such as the Scandia. However, coastal tugs usually are small enough to be prohibited from requiring inspection by the Coast Guard. Oil companies, which charter tugs, frequently have their own inspections. Jack Morgan of American Waterways Operators claims Coast Guard and industry studies indicate that "two-thirds of the accidents are human error rather than equipment failure." Fires and electrical failures account for 1.7 percent of towing vessel accidents, according to Coast Guard statistics. After the Amtrak derailment, the Coast Guard increased requirements for licensure of tugboat skippers, including formal training in the use of radar. Federal regulations already mandate that the captain and pilot have firefighting training and equipment. In addition, towing firms and the industry association agreed to improve training and equipment by the late 1990s.

A few maritime events during 1998 and 1999 were illustrative of the versatile applications of tow boat and tug boat services. When two Carnival cruise ships caught fire in two separate incidents (July of 1998 and September of 1999), tow boats pulled the damaged ships safely back into harbor. Elsewhere, on an historic December 31, 1999, the government of Panama assumed control of the massive Panama Canal. In the late 1990s, tug boats were often called upon to assist super-sized Panamax vessels into the lock chambers by maneuvering the vessels into position and pushing on the stem of the vessels. Even though this assistance facilitated the passage of such wide-berthed ships (with less than 12 inches separating the ships' sides and the Canal walls) through the Canal, the vibratory damage to the concrete lock walls has become increasingly alarming to the U.S. government. The ability of the Panamanian government to assume maintenance and upkeep on the Canal was of heightened international significance for the twenty-first century.

Current Conditions

As of July 2002, there were 5,445 towboats in the entire U.S. fleet, some 3,429 of which operated in the inland waterway trade, according to the Transportation Institute. From the middle of 2002 to the middle of 2003, there were 56 new tugs built worldwide. Of these, 33 were azimuthing stern drives, 16 were conventional tugs,

SIC 4492 Towing and Tugboat Services

four were Voith tractors, and three were azimuthing tractors.

A boon to private industry came in the late 1990s when the U.S. Navy began chartering tugs instead of replacing its fleet. Not only had this move buoyed the industry, it saved an estimated $18 million annually in taxpayer money. By 2003, companies such as Moran Towing and Transportation that provided tugs to the Navy had upgraded to required technologies through the latest tractor-tugs. These state-of-the-art tugs replaced the standard Navy yard tugs, which were low-horsepower, single-screw tugs.

As a consequence of the Navy contracts, demand for the latest and greatest tugs has been going up in other markets. From 1997 to 2003, 89 cycloidal-drive and ASD tugs were built in the United States, 10 more than had been built in the preceding three decades. The move industry-wide was toward tractor tugs, a trend that was expected to continue.

Industry Leaders

Crowley Maritime Corp. Crowley Maritime was not only the domestic industry leader, but was one of the largest companies in this industry worldwide as of 2003. Headquartered in Oakland, California, Crowley had approximately 100 offices in major ports and cities, and a fleet of 300. A family-owned operation, the company had about 5,000 employees and generated an estimated $1 billion in revenue in 2001. Crowley Maritime Corp. was founded in 1892 when Thomas Crowley, Sr., began a ferry service with an 18-foot Whitehall rowboat. Working in the San Francisco bay, Crowley hauled transport crews, merchants, supplies, and equipment from the docks to cargo ships anchored in the bay. In latter 1999, the company decided to divest its interest in South American operations, which produced two-thirds of its revenues.

Crowley Maritime has been an industry leader in instituting computer technologies. Crowley utilizes automated tariff retrieval systems, electronic data exchange, data communications, and electronic imaging. More than 150 users work with Crowley's automated tariff retrieval system to produce rate quotations, billings, audits, and other tariff-related functions. Customers can access the data through a mainframe computer located at company headquarters in Oakland, California. Crowley also joined in the Information System Agreement (ISA), a group created in 1991 by American President Line Ltd., Maersk Inc., P&O Containers, and Sea-Land Service to exchange information in the maritime industry. The group has been working with ports and government agencies to "streamline" electronic data exchange (EDI) standards on a global basis, and published a 600-page EDI implementation guide. In early 1999, Dakota Creek Shipyard signed a $26 million contract to build three new tugboats for Crowley in Valdez Harbor and Prince William Sound.

Tidewater, Inc. A New Orleans-based public company, Tidewater owns and operates marine vessels used by the international offshore energy market, particularly oil. Founded in 1956, the company had 6,800 employees and generated $729 million in annual revenue in 2001. By 2003, Tidewater boasted a fleet of 570 vessels. In 1992, the company merged with Zapata Gulf Marine Corp., its marine service joint venture. Tidewater's Marine Division provides a full range of marine services including the transportation of supplies, materials, and personnel; towing of mobile drilling rigs and construction barges; positioning and anchor handling of drilling rigs and construction and pipe-laying barges; standby services; and diving and marine maintenance support.

Other notable companies in the industry include Seabulk International Inc. of Fort Lauderdale, Florida, with $347 million in 2001 revenue and 2,600 employees, and Moran Towing and Transportation Company Inc. of Greenwich, Connecticut, with $214 million in 2001 revenue and 900 employees.

Research and Technology

In the late 1990s, Halter Marine Co. of Gulfport, Texas, announced the development of a new class of harbor tug boats, called ship docking modules (SDMs). These 90-by-50-foot tugs were especially designed to assist in maneuvering ships into tight dock spaces. They were equipped with 4000 horsepower, twin Caterpillar diesel engines and could provide 100 percent power in any direction.

Other new designs in the 2000s were incorporating the best parts of stern-driven ASD and forward-mounted Z-drive tractor tugs into one tug for maximum handling. As of 2003, the West Coast was seeing the addition of many technologically advanced tugs and tug equipment.

Further Reading

Baker, Deborah J., ed. Ward's Business Directory of US Private and Public Companies. Detroit, MI: Thomson Gale, 2003.

Buls, Bruce. "Harbor Masters: The Ship Assist Industry Is Well-Equipped and Very Competitive." Workboat, July 2003.

Hocke, Ken. "In the Navy: Agency Officials Pleased with Move to Privatize Tug Operations." Workboat, December 2003.

——. "Less Pull: New Tug Construction Cools Off." Workboat, November 2003.

Hoover's Company Fact Sheet. "Crowley Maritime Corporation." 3 March 2004. Available from .

Hoover's Company Fact Sheet. "Tidewater Inc." 25 March 2004. Available from .

Krapf, David R. "Tugs Save Taxpayers Money." Workboat, December 2003.

The Transportation Institute. Industry Profile: 2004. 20 March 2004. Available from .

U.S. Census Bureau. County Business Patterns 2001. 20 March 2004. Available from .

Wilson, Jim, and Stefano Coledan. "The Shape of Tugs To Come." Popular Mechanics, May 1998.

User Contributions:

Comment about this article, ask questions, or add new information about this topic: