Good morning, and welcome to the Kirby Corporation 2022 Second Quarter Earnings Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. We ask that you limit your questions to one question and one follow up. [Operator Instructions]. Please note this is being recorded. I would now like to turn the conference over to Mr. Kurt Niemietz, Kirby's VP of Investor Relations and Treasure. Please go ahead.

Good morning and thank you for joining us. With me today are David Grzebinski, Kirby's President and Chief Executive Officer; and Raj Kumar, Kirby's Executive Vice President and Chief Financial Officer. A slide presentation for today's conference call as well as the earnings release, which was issued earlier today, can be found on our Web site at www.kirbycorp.com. During this conference call, we may refer to certain non-GAAP or adjusted financial measures. Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are included in our earnings press release and are also available on our Web site in the Investor Relations section under Financials. As a reminder, statements contained in this conference call with respect to the future are forward-looking statements. These statements reflect management's reasonable judgment with respect to future events. Forward-looking statements involve risks and uncertainties, and our actual results could differ materially from those anticipated as a result of various factors, including the impact of the COVID-19 pandemic on the company's business. A list of these risk factors can be found in Kirby's Form 10-K for the year ended December 31, 2021. I will now turn the call over to David.

Thank you, Kurt, and good morning, everyone. Earlier today, we announced second quarter revenue of 698 million and earnings of $0.47 per share, or $0.49 per share excluding one-time nonrecurring items that occurred in the second quarter. This compares to 2021 second quarter revenue of 560 million and earnings of $0.17 per share. Both of our segments continued to steadily improve during the quarter, delivering higher revenue and operating income sequentially and year-over-year. The quarter's results reflected improved market fundamentals in both marine transportation and distribution and services, and were partially offset by higher fuel cost and inflationary pressures as well as continued supply chain challenges that delayed sales in distribution and services. Before turning to the second quarter results, I would like to take a moment to comment on recent developments in one of our newest business lines, Kirby Offshore Wind. Following our first quarter announcement, we are pleased to congratulate our partner Maersk on signing a preferred supplier agreement with Equinor and BP for the 1.2 gigawatt Beacon Wind offshore project. This is in addition to the awards for Empire Wind 1 and 2. We are very excited about the outlook for this new business and look forward to building on our strong relationship with Maersk and its customers. Now, turning to the second quarter looking at our segments. In inland marine transportation, high refinery utilization led to a steady improvement in demand with our overall barge utilization increasing into the low 90% range. Tight market conditions, in part due to limited supply of barges, continued to put upward pressure on prices, with spot prices up approximately 10% sequentially and mid teens year-over-year. Pricing on term contracts moved higher as well with term contracts renewing up in the mid teens. Overall, second quarter inland revenues increased 14% sequentially…

Thank you, David, and good morning, everyone. In the second quarter of 2022, marine transportation revenues were $405.7 million with operating income of $30.8 million and an operating margin of 7.6%. Compared to the second quarter of 2021, marine revenues increased 72.8 million or 22% and operating income increased $12.3 million, or 66%. Compared to the first quarter of 2022, marine revenues increased $50.2 million or 14% and operating income increased $13.9 million or 82%. These increases were driven by strong customer demand and improved pricing. As expected, second quarter operating margins were impacted by increased fuel costs that increased revenues through rebuilds, but are dilutive to margins. We also continue to face inflationary cost pressures and expect to recover these increases in costs as contract escalators reprice throughout the remainder of the year and going into 2023. The inland business contributed approximately 78% of segment revenue. Average barge utilization was in the low 90% range for the quarter, which compares to the mid 80% range in the first quarter of 2022 and the low to mid 80% range in the second quarter of 2021. Long-term inland transportation contracts are those contracts with a term of one year or longer contributed approximately 60% of revenue with 57% from time charters and 43% from contracts of affreightment. Improved market conditions contributed to spot market rates increasing sequentially in the low double digits and in the mid teens year-on-year. Term contracts that renewed during the second quarter were up on average in the mid teens compared to the prior year. However, only a handful of smaller term contracts renewed during the quarter. Compared to the second quarter of 2021, inland revenues increased by 25%, primarily due to increased barge utilization, higher term and spot contract pricing, and increased fuel rebuilds as we…

Thank you, Raj. While our second quarter was not without challenges, we delivered incremental improvements in both our segments and we expect this trend to continue. In marine, strong demand driven in part by high refinery and chemical plant utilization should continue to increase our barge utilization. Combined with the limited barge supply, we expect this to contribute to further increases in the inland rates. In distribution and services, demand is healthy across the segment and we continue to receive new manufacturing orders. While all of this is very encouraging, we are mindful of near-term macroeconomic headwinds, including slowing economic growth, prolonged inflationary pressures and potential new COVID sub variants. As always, we will manage the factors we have control over and we will continue our focus on cost containment and working capital management. Looking at a more detailed outlook for our businesses, we expect favorable conditions to continue in inland marine. Refinery and petrochemical plant utilization is at near record levels resulting in increased customer volumes. Barge supply is constrained as there is minimal new barge construction. These factors are expected to contribute to our barge utilization running in the low to mid 90% range. These favorable supply and demand dynamics are expected to drive further improvements in the spot market, which currently represents approximately 40% of inland revenues as well as continued improvement in term contract repricing as renewals occur. The negative impacts of rapid increases in fuel costs and material inflation to costs are expected to be continued headwinds, but will be mitigated when escalations in contracts occur during the second half of the year and into 2023. Overall, for the full year, we expect inland revenues will grow approximately 20% to 25% with progressive growth throughout the year as the business improves in term contracts renewed…

We will now begin the question-and-answer session. [Operator Instructions]. As a reminder, we ask that you please limit yourself to one question and one follow up. Our first question comes from the line of Jack Atkins from Stephens.

Jack, are you there?

Yes. David, can you hear me?

Yes. Thank you.

Okay, great. Good morning. Thanks for taking my questions. Sorry about that. So I guess maybe to start, it's encouraging to hear the commentary about -- it feels like increasing momentum across the business. Maybe to start with inland, as you kind of think about your outlook for the pricing environment, as we kind of go into the back half of the year and maybe into early 2023, can you maybe frame that up with sort of how you're thinking about it today versus maybe how you were thinking about it three months ago, six months ago? It feels like momentum is maybe accelerating a bit there. So would just be curious about that. And then I guess from a bigger picture perspective, where would you say we are from like a pricing perspective today relative to 2019 levels, just to kind of level set that? And I will also be curious if you have a view on costs today versus 2019 levels?

Yes. Sure. Well, good morning, Jack. Yes, inland feels pretty strong right now. You've heard our comments on supply and demand. Demand is up. We've got refineries running flat out. The chemical plants are running pretty heavy. Crude is moving. So on the demand side, it's pretty strong. And as you know, there's not much in the way of new construction. So the supply and demand dynamic is better than we've seen in a long time. And I would say that is adding to an increase in momentum here. We've seen a very strong spot market. And I would say if anything, it is getting stronger. That's important as we head into contract renewals. As you know, contract renewals are back half loaded, typically late fourth quarter. And we're excited about heading into those renewals, given the market. Now, you did bring up inflation and costs. We are seeing it. The headline in PPI is 9%. But I can tell you steel, if you -- we repair a lot of barges. Steel is up over 200%. So we're seeing inflationary pressures, and that's frankly why the industry is able to get some of this pricing. We need it to absorb some of the inflationary costs. Crude transportation, for example, is up considerably. It's double digit. Food, everybody knows about food costs being up. So we are seeing inflation, but I would tell you we're getting real price increases. But we do need healthy increases to offset this inflation. I'd also tell you that the crewing situation across the industry is very challenging [ph]. As you know, the horsepower side of the equation is critical. And I think the industry is having problems crewing boats. Certainly, COVID hasn't helped that. So that is helping the pricing dynamic. And I would tell you that it's, whether you call it momentum or not, it's certainly contributed more in recent months. We just can't find mariners. Now fortunately, Kirby, as you know, has its own school. And we opened that school up last year in January and they've been hiring and training deckhands and tanker men and captains. So we're in pretty good shape. We've been able to crew our vessels, but it is tight. And it is an industry phenomenon that we're experiencing now and is helping rates, because you got to pay up to get crews and to get the horsepower to move barges. So I would say momentum is better is the short answer. And we're excited about where we're at and looking forward to rolling term contracts into '23.

Well, that's great to hear. And then I guess for my follow-up question, I'd like to maybe touch on the share repurchases. I think it's been quite some time since you all repurchased some stock. I guess could you maybe talk about what that may signal in terms of the opportunities for capital allocation? I know you guys would probably prefer to do strategic M&A, if it's available. I guess kind of -- if you kind of walk us through -- turning the buybacks back on and sort of how you're thinking about repurchasing stock versus M&A moving forward?

Yes, Jack, good morning. It's Raj here. So we did $18 million of share repurchase in Q2. Now the way we approach capital allocation is in a very balanced manner. Our three main priorities are debt repayment, returning capital to shareholders and, to your point, having dry powder to execute on value creating investments. The near-term goal is on the debt side to get the debt to EBITDA 2.5x or sub 2.5x. You've seen us pay down debt over the last 12 months, and we will continue to execute on that. But I think opportunistically, we'll be also looking to do share recall. You will have noted that we saw some slight headwinds in terms of free cash flow for the remaining part of this year. Actually, that's a good dynamic because we are building working capital for the growth that we are seeing, especially in the KDS business. But even after that, with the cash flow that we're generating, I think we're going to be in a good position to pay down debt, do a bit of share repurchases as the year progresses, as well as have some dry powder for investments that are value creating. We will continue to have this balanced approach, and that's going to be our main focus.

Okay, great. Thank you, Raj, for that. I really appreciate it, guys. I'll turn it over.

Thanks, Jack.

Thank you. Our next question comes from the line of Ken Hoexter from BofA.

Hi. Good morning, Ken.

[Technical Difficulty] on for Ken. Thank you for taking my question. Maybe just switching over to the coastal side, so you mentioned some momentum in this business but the supply/demand dynamics still remain a bit challenged. So how are you thinking about this kind of into '23? And maybe just talk about some of the moving parts on, what it will take to turn some of these things back into your favor from a pricing standpoint? Thank you.

Sure. Thanks for the question. Yes, the coastal business is much longer cycle than the inland business and it's really about the increments of capacity, right. On the inland side, it's 10,000 and 30,000 barrel barges. On the coastwise, they range anywhere from 80,000 barrels all the way up to just under 200,000 barrels. So the increments and capacity are bigger and the cost of the equipment is much more expensive. So it's a much longer cycle business in the coastwise business. That business got overbuilt when there was crude by barge and before crude was allowed to be exported. So the industry has been overbuilt. We've been taking out old capacity, others are as well. And the market is finally just getting back into balance. We got some price increases in this quarter on the handful of contracts that renewed. I would expect that momentum to gain. We got back into profitability. I think going into '23 and '24, I would expect the market to be very strong for the coastwise business. As you're aware, it takes two to three years to build new capacity in the coastwise business. To build a new 185,000 barrel barge and towboat probably cost you, oh gosh, $80 million or so, maybe $90 million or $100 million, with steel prices. So nobody's going to build new capacity in the interim. And I think that's going to continue to allow that supply and demand dynamic to tighten. We're certainly starting to see price increases and push those. Another dynamic in the coastwise business is ballast water treatment. We've been putting ballast water treatment systems in all of our barges and we're almost complete that process. That's adding some cost to the industry, which needs to be recovered. I would tell you we're ahead of most of our competitors in terms of installing ballast water treatment systems. And that sets it up nicely for Kirby, because we've got the bulk of that capital behind us. Now we still have some shipyards to do, and you'll see that model around in our quarters as certain shipyards go through. But we're really excited about where we are in the coastwise business. And it should be a nice dynamic for the next three to five years. Again, just to reiterate, because it takes so long for new capacity to come in and there's no new capacity even being considered right now. So we're excited about where coastal can go in the coming year.

Thanks for that. And then just following up on inland margins in 2023. With fuel recapture and pricing accelerating, do you think that 20% plus margins is attainable?

Yes, the short answer is yes. Margins have to progress. As you know, we have this big contract portfolio and it takes a while for that thing to -- all those contracts to rollover and frankly, it takes several years to really get them humming. The good news is, is spot pricing is probably good a 20% above contract pricing. So the contract renewals should kick in and start to show up in '23. I would hope by the end of the fourth quarter, we're into the mid teens in terms of margins for the inland business. And with contract renewals, it should get us into starting to touch the 20% margins sometime in '23. We haven't put pencil to paper on that. A lot depends on how this contract renewal cycle goes. But it's setting up nicely. And we're very excited about where we are. But again, just to reiterate, inflationary pressures are there. And a lot of this pricing is needed to offset inflation.

Thank you. Our next question comes from the line of Ben Nolan from Stifel.

Good morning, Ben.

I wanted to jump over to the D&S side of the business a little bit. I think you took down your revenue growth guidance a little bit. And I assume that's all just being shifted to the right because of supply chain constraints. First of all, I guess just to validate that. But then secondly, given that it seems like demand is substantially greater than your ability to or anybody's ability to deliver, are you beginning to see some pricing power there? And as a function of that, where do you think it's realistic, maybe next year or when -- as we look forward, what do you think is a realistic margin for that business in a healthy environment?

So Ben, good morning. I'll talk about the outlook for this business. Yes, the slightly lower outlook that we provided was due to supply chain. I'm going to say that's probably on the conservative end of the spectrum. The bottlenecks that we are seeing right now, it's fits and starts, right? So we didn't want to come out -- we didn't want to be too sporty with that number given what our recent experience has been with supply chain. It's not for lack of demand. That's the point I want to make for you. Demand is still strong. The order book is still strong. Backlog over the past 12 months has grown about 5x. So we're very encouraged. And this business is -- we're seeing a lot of activity. I think I spoke earlier about the working capital growth. And I look at that as a very positive sign, because we are building working capital for the anticipated demand that we're going to have going into later part of this year and into early next year.

Yes. On the pricing, let me comment on that, Ben. We are getting some pricing increases for sure. I think about it in terms of margins. We think KDS absolute margin should be able to get into the high single digits. We're pushing pricing where we can. Certainly, the demand picture helps that. And we're being judicious about it. And I'm pretty excited about the way that's going. But as Raj says, it's really a shift to the right, because of the supply chain. But the demand is there, the backlog is there and we're working through the supply chain issues, as everybody is. It's starting to feel like supply chain is a worn out excuse across the corporate America today, but it is real. We're seeing it in some small parts and actually some of the bigger OEM pieces as well. It's just a fact I think everybody's dealing with. But the good news is that the demand hasn't gone away. It's just fulfilling that demand has shifted a little bit.

Okay, that's helpful. And then if I can go back a little bit to Jack's question, appreciating that you guys haven't given any guidance for next year or whatever. But as you look forward, it seems like the business is going -- everything is going in the right direction. Cash flows are getting better, leverage is coming down. As we think about free cash flow going forward, I'm just trying to get a sense of, if there's any substantial CapEx that we need to be thinking about here, or alternatively are you sort of at a point here where you kind of -- outside maybe of the offshore wind, you've kind of spent what you needed to spend and incrementally as the cash flows improve, more and more of that should be dropping to free cash flow?

Yes. I think the latter is correct. We have no big CapEx spending outside of the wind. And even the wind is -- that's probably less than 100 million spread over the next two and a half years. So it's not going to be a big headwind on CapEx. Really, we've just got maintenance CapEx. I would tell you that our fleets are in about the best shape I've seen it. We've got a young, healthy barge and boat fleet. We've been maintaining it very well. So it's really just maintenance CapEx. We don't have any big capital expenditures on the horizon. So free cash flow should accelerate. And that's why you heard Raj talk about kind of our priorities here in terms of pay down a little more debt and then look at opportunistic share repurchases. And maybe there's an acquisition out there, but I would say the first two are a higher priority right now.

All right, I appreciate it. Well, actually just to tag on to that, dividends at all, is that -- I know it's never been part of the Kirby theme. But how do you weigh that versus buyback?

Yes. I think we prefer a buyback over dividends is certainly something we discussed at the Board level. But I would say we'd prefer a share buyback before dividend.

All right. I appreciate it. Thank you.

Thanks.

Thank you. [Operator Instructions]. Our next question comes from the line of Greg Wasikowski from Webber Research.

Good morning. Can you guys hear me all right?

Yes. Good morning, Greg.

Good morning. Sorry, I had some connection issues and missed a few questions. So if I'm repeating anything, feel free to give me the stiff arm. But I'll start with inland. How does the health of the 10,000 market compared to the 30,000 market right now? And if you're seeing any sort of lag, can you kind of talk about why that may be the case?

Yes. This is just on the margin, I'd say. The 10,000 market's just a little stronger than the 30,000 market. But they're both very strong -- to be honest, they're both very strong; 10,000 a little, because it tends to be more small lot chemicals, and that's been pretty strong. And a lot of that is up river. It goes up river. So 10,000s tend to be more in a line haul service that goes up and down the river. But they're both very strong right now. And I would say it's pretty balanced. At the margin, maybe 10,000s a little tighter. But yes, the good news is, they're both very tight.

Got you. Thanks. And then on D&S, how would you characterize D&S right now compared to sort of the heyday in 2018? If we remove the effects of supply chain constraints, do you think you'd be back on your way to 1.4 billion, 1.5 billion in revenue with high single digits, maybe even touching 10% operating margins? Or are there other factors in place, it's just a different ballgame here or is supply chain really the only thing holding it back at this point?

Yes, I'd say it's pretty much just supply chain holding it back. There are some inflationary pressures. But it's really the supply chain is holding it back. Would we be at the 2018 levels? I would say yes. You heard Raj comment, our backlog is up 5x what it was 12 months ago. So the backlog's there. We are getting quite a bit of electric frac type orders based on either E-frac or power generation, the equipment to generate power on a well site. It's basically a natural gas recip that we put together with some distribution equipment, electric distribution equipment, and that's been very strong. We're seeing a lot of demand for that. Electric frac is, I would tell you, the preferred frac equipment choice right now. And so that's been increasing. So the demand is there. Is it like 2018 yet? Sure feels like it. And then -- the only caveat is our customers, the pressure pumping companies are being very disciplined. They're not spending capriciously. They're being very disciplined, and I actually think that's healthier for the business. But at the root of your question, if we didn't have the supply chain, would we be close to what we were doing in 2018? I would say yes.

Got you. Thanks, David. I think I'm last in line here, so maybe I'll squeeze in one more, if you don't mind. Do you guys still have sideline capacity in inland? And if so, is that just a function of labor at this point? And then, if so, when do you expect to be able to potentially get that capacity back to work?

Yes, we have just a very small bit of capacity on the bank is what we would call it. You saw we brought in about nine barges off the bank. That's equipment we deferred maintenance on and put on the bank during COVID. And we're bringing it back. It's a small amount. I don't think it's material. We may have another 20 or so or maybe even more to pullback, but it's not material in terms of the industry. It will help us. Obviously, that's more capacity. I think that the gauging factor is, as you mentioned, the horsepower getting the towboats to run that equipment. And that's across the industry. Everybody's facing that. There's a shortage of horsepower. And frankly, that's a good thing, right? It makes the pricing environment good. It really tightens up the market nicely. But we do have, to your point, some equipment we can pull off the bank, but it's not material, Greg, but thanks for that question.

Got you. Okay. Thanks, David.

Thank you. Our next question comes from the line of Greg Lewis from BTIG.

Hi. Good morning, Greg.

Good morning, everybody.

Greg, are you there?

Hello. Do you not hear me?

Yes, we can hear you now. It seems like there was a pause for a second.

Okay, great. Well, hi, thank you and good morning, everybody. David, I had a question and I've been having some technical difficulties this morning. So I may -- someone may have already asked this. But clearly, you highlighted inflation being a headwind to margins, et cetera. But as we think about where we are in terms of inland pricing and spot and time charters, if we were to try to have inflation adjust where the market is right now, where are we? Are we kind of in a -- as I think about where margins are and where they're going, are we kind of in like a mid cycle pricing environment on an adjustment inflation, or are we are at -- any kind of color around that in terms of how we should be thinking about spot and time charters?

Yes, I think, one, that's a great question. I think mid cycle is about right. We're probably -- I was thinking as you were asking the question of the baseball analogy, what inning are we in? It's probably the third or fourth inning. It's really just tightening up. And we've got ways to go. Again, you look at that, the cost of building a new barge, a new 30,000 barrel barge is over $4 million, well over $4 million. So this is early innings is the way I think about it. We do have to have the price increases to offset inflation. That is real. I talked about steel, but labor costs are going up. Just things like paint, paint is up 25%, right? Hotels, we do crew changes and hotels are up 25%. Rental cars are up 25%. So that inflation is real. That's part of the price increases that we're getting. So that's why I say it's very early innings. We've got a long way to go to get to a reasonable return on capital, and we're going to get there. And the good news is the demand is there and the supply is in check. So I guess, just to reiterate, I think we're early innings, probably third and fourth innings.

Okay, great. And then I know we've been talking D&S and the dropping revenue, and I guess more of the pushing of the rights. Is there any way to kind of parcel out on the supply chain side? Clearly, E-frac is gaining momentum and is the future. But is there any kind of way to parcel out and maybe there is no difference between the supply chain for the conventional frac equipment versus the E-frac equipment? And around that, did that have anything to do with the change in the guidance?

No. It's funny. It's not any one particular thing in the supply chain. It could be, like I say, a pressure regulator that we need to regulate gas flow into a natural gas recip, or it could be an engine from one of the major OEMs or a printed circuit board. It's pretty much across the entire supply chain, and it's weird things that you wouldn't expect, like a pressure regulator. A $450 pressure regulator just seems like, is that holding up a shipment? And yes, it can. So it's not any one particular thing. It's more broad-based than that. The ones that -- the bigger right items from the OEM, whether they're engine packages or not, those are the ones that are more impactful just because of the size of the revenue associated with them. But it's hard to say it's just any one thing, Greg. We're managing through it. I think the customers and the suppliers are all trying to get everything lined out, and it's just a grind every day. But the good news is, nobody's canceling orders. Demand is still growing, and we just got to manage through it.

Okay. Perfect. Thank you for the time. Everybody, have a great rest of the day.

All right. Thanks, Greg.

Thank you. Our next question comes from the line of Ben Nolan from Stifel.

Hi, Ben.

I appreciate you letting me in again. I didn't want to overstay my welcome the first time, but I wasn't quite done. I do have two more, if you don't mind. So the first is one of the things -- and we've talked a little bit about labor, but one of the things we've heard out of the rails in particular is that in addition to just having shortages and challenges hiring, retention has been a big problem and they've lost people because people don't like the lifestyle or whatever. I'm curious if that spills over at all into what you guys are doing.

Yes, a little bit. It is a different lifestyle living on a vessel for a good portion of your working year. We have seen a little of that. I would tell you, we raised wages earlier than anybody else and it's a healthy increase, 7% to our mariners. But we felt that was necessary and we haven't seen our turnover go up. It's kind of at historical levels. But you hear anecdotes, you'll get an occasional -- you'll hear somebody say, hey, look, I'm just going to work from home and pivot to a different job. We have seen some of it. But is it a material impact to us? No, but it's certainly impacting the industry. There's enough out there that we know are exiting or don't want to work anymore. I think our package in terms of benefits and wages and the stability of working for somebody like Kirby is an attraction and it probably keeps our turnover a little lower than some others. That's on the marine side. I would tell you on the technician side for KDS, it has been a challenge. It's tough to find mechanics. It's tough to find assemblers. But we're grinding through it. I don't think we're any different than most industries right now. The labor market is tight. As you think about recession, that's probably one of the caveats. You don't see the unemployment that you would normally see within a recession. There are jobs out there if people want to work. So maybe that's what keeps us out of a recession is there's enough employment demand out there to keep this economy going. But I'm kind of bouncing around here, but I guess the long and the short of it is we're -- our turnover is about normal in marine, a little higher in our KDS side, but we're managing through it.

Okay, that's helpful. And then last, and honestly this is the last one for me. I think 40% of the inland market you'd said is spot. Contract renewals are coming up around at the end of the year. But it's a tightening -- market's already a little tightening. Do you think at all about sort of shifting the mix a little bit and saying, we think the market's going to be tight so maybe we're comfortable letting a little bit more ride in the spot market and trying to improve margins that way, or inverse of that. You go ahead and the business is good, so you lock it in?

Yes, a very intuitive question. You may have noticed that we've gone from about 35% spot to 40% spot. In a rising market, we prefer being in the spot market. So we've kind of intentionally done that. I will tell you another sign of the strength of the market is now customers are starting to worry about availability. So they're trying to term up more. So that's an interesting dynamic that's happening now. And in a very tight market, that's usually what happens. The customers get a little worried about availability. So they're like, well, now we better term up. But conversely, we like being in the spot market in a rising rate environment. That dynamic will shift here. And of course, we're going to take care of our customers first and foremost, but it's nice to see them to start worrying about barge availability.

All right. I appreciate it. Thank you, guys.

Yes. Thanks, Ben.

Thank you. This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Kurt Niemietz for any closing remarks.

Thank you everyone for participating on the call today. If you have any follow-up questions, please call me at 713-435-1077.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.