2003

“AWO members will continue to lead theway to new frontiers in safety, security andenvironmental protection.”

Craig E. PhilipChairman of the Board

The American Waterways Operators

2003was a year of newfrontiers for the

American Waterways Operatorsand the tugboat, towboat andbarge industry. These new frontierswere encountered in the areas ofsafety, security, and in the vision ofthe future held by AWO members.

A new frontier of industrysafety was a major focus of 2003.With safety as the number onepriority of members, AWOembarked on a quest to examinethe possibility of establishing a newtowing industry safety regime thatwould build upon the innovativeAWO Responsible Carrier Program.That quest continues in 2004 as we engage the Coast Guard andCongress in the dialogue. As we do so, we are also proceeding onother fronts to develop safetystandards to protect people,property and the environment. A prominent example is thedevelopment of the Crew EnduranceManagement System (CEMS) by the U.S. Coast Guard, withassistance from AWO membercompanies. CEMS is a managementsystem employed by companies to recognize and mitigate thephysiological, operational,environmental, and psychologicalfactors that can affect crew alertnessand stamina. AWO members are in the process of understanding the program’s application andincorporating its principles intotowing vessel operations.

In another cooperative effort,the Coast Guard-AWO Bridge

Allision Work Group report wasreleased in May, just before the first anniversary of the tragicbarge/Interstate 40 bridge accidentin Oklahoma. The Work Groupundertook an intensive analysis of barge/bridge allision data fromthe past decade to determine the causes of bridge allisions, to helpprevent future allisions, and tomitigate the consequences of thosethat do occur. Industry safety wasalso scrutinized when a bargeaccident resulted in an oil spill inBuzzards Bay in April. AWO wasable to place the accident into thelarger context by providing facts on the positive tank barge industrysafety record. That record showsthat tank barge oil spills have been reduced 92% since theenactment of OPA 90 and themulti-billion dollar commitmentmade by the tank barge industry to transform the nation’s fleet of single-hull vessels intoenvironmentally friendly double-hulls, enhancing safety andenvironmental protection.

A second frontier of 2003involved maritime security.Immediately after the terroristattacks of September 11, 2001,AWO acted proactively to developthe AWO Model Vessel SecurityPlan as a template for the industry to use in assessing securityvulnerabilities and developingmitigation measures. AWO becameone of only three organizations to have its Alternative SecurityProgram officially approved by the

U.S. Coast Guard as an industrystandard, meeting the new federalmaritime security regulations. As a result, AWO members will findcomplying with these new securityregulations to be much less costlyand burdensome. On another frontinvolving maritime and nationalsecurity, AWO fought to close aJones Act loophole being exploitedby foreign corporations to gainaccess to the domestic maritimetransportation market

The final large frontierencountered this year involved thevision that AWO members hold for the future of our association. A member task force developed a new strategic plan for theassociation that focuses on AWO’score missions – advocacy andsafety – and reaffirms AWO’svision, mission and values.

As 2004 begins, we face itschallenges, both known andunknown, with determination and a commitment to making ourindustry the best it can be. Onething is certain: AWO members will continue to lead the way tonew frontiers in safety, security and environmental protection.

AWO ANNUAL REPORT 1

Chairman’s Message

2003

Craig E. Philip

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2003 Executive CommitteeAWO’s Executive Committee, responsible to the Board of Directors, guides policymaking and exercises day-to-day oversight of the affairs of the association.

Craig E. Philip Chairman of the BoardIngram Barge CompanyNashville, TN

Edmond J. Moran, Jr.Vice Chairman of the BoardMoran Towing CorporationGreenwich, CT

Steve T. Scalzo Immediate Past Chairman of the BoardFoss Maritime CompanySeattle, WA

Walter E. Blessey, Jr.Blessey Marine Services, Inc.Harahan, LA

Mark R. Buese Kirby CorporationHouston, TX

George Clark Harley Marine ServicesSeattle, WA

Bruce Croushore Bender Shipbuilding and Repair Co., Inc.Mobile, AL

Keith M. Darling MEMCO Barge LineChesterfield, MO

David Hanby, Jr.McDonough Marine ServiceMetairie, LA

Donald Ivins Express Marine, Inc.Pennsauken, NJ

Peter Nistad Moran Towing CorporationNorth Charleston, SC

Dale Sause Sause Bros.Coos Bay, OR

William D. Stegbauer Southern Towing Co.Memphis, TN

Royce Wilken American River Transportation Co.Decatur, IL

Craig E. Philip Chairman of the BoardIngram Barge CompanyNashville, TN

Edmond J. Moran, Jr.Vice Chairman of the BoardMoran Towing CorporationGreenwich, CT

Steve T. Scalzo Immediate Past Chairman of the BoardFoss Maritime CompanySeattle, WA

William L. Arnold Garvey Marine, Inc.St. Charles, IL

Terry Becker Riverway Co.Eden Prairie, MN

Walter E. Blessey, Jr.Blessey Marine Services, Inc.Harahan, LA

Gerald W. Brown Cargo CarriersMinneapolis, MN

Mark R. Buese Kirby CorporationHouston, TX

Timothy J. Casey K-Sea Transportation Corp.Staten Island, NY

George Clark Harley Marine ServicesSeattle, WA

Bruce Croushore Bender Shipbuilding andRepair Co., Inc.Mobile, AL

Larry R. Daily Alter Barge Line, Inc.Bettendorf, IA

Keith M. Darling MEMCO Barge LineChesterfield, MO

Wm. Lamar Doyle Suderman & Young Towing Co., Inc.Houston, TX

John Dragone Maritrans Operating Company L.P.Philadelphia, PA

Taylor DuChaine Cenac Towing Company, Inc.Houma, LA

George Foster JB Marine Services, Inc.St. Louis, MO

Robert A. Fry, Jr.Megafleet Towing Co., Inc.Pasadena, TX

C. Barry Gipson McNational, Inc.Hartford, IL

James L. Guttman Mon River Towing, Inc.Belle Vernon, PA

David Hanby, Jr.McDonough Marine ServiceMetairie, LA

Roger Harris Magnolia Marine Transport CompanyVicksburg, MS

Charles Haun Parker Towing Company, Inc.Tuscaloosa, AL

Barbara Holland Garvey Schubert BarerSeattle, WA

Robert J. Hughes Hughes Bros., Inc.Edison, NJ

Donald Ivins Express Marine, Inc.Pennsauken, NJ

Gordon A. Keenan Martin Midstream Partners, LPMobile, AL

Charles H. King, Jr.Buffalo Marine Service, Inc.Houston, TX

Mark Knoy MEMCO Barge LineChesterfield, MO

Walter K. Kristiansen E.N. Bisso & Son, Inc.Metairie, LA

H. Merritt Lane, IIICanal Barge Company, Inc.New Orleans, LA

Stephen D. Little Crounse CorporationPaducah, KY

A.J. McAllister, IIIMcAllister Towing &TransportationNew York, NY

T.F. Mercer Pecos, Inc.Seattle, WA

Michael J. Monahan TECO Barge LineMetropolis, IL

Charles Nalen Crowley MaritimeCorporationSeattle, WA

Peter Nistad Moran Towing CorporationNorth Charleston, SC

Deane Orr CONSOL, Inc.Elizabeth, PA

Charles Peterson Coastal Tug & Barge, Inc.Miami, FL

John D. Roberts Florida Marine Transporters, Inc.Mandeville, LA

Christopher W. Roehrig Roehrig Maritime, LLCGlen Cove, NY

Dale Sause Sause Bros.Coos Bay, OR

Cathy Shantz-Hammond Inland Marine ServiceHebron, KY

Dixon Shaver Shaver TransportationCompanyPortland, OR

Ric Shrewsbury Western TowboatSeattle, WA

Richard Smith Westar Marine ServicesSan Francisco, CA

William D. Stegbauer Southern Towing Co.Memphis, TN

Herschel Vinyard Atlantic Marine, Inc./Alabama ShipyardJacksonville, FL

Ted Waxler Waxler Towing Co., Inc.Memphis, TN

W.N. Whitlock American Commercial Barge Line LLCJeffersonville, IN

Royce Wilken American River Transportation Co.Decatur, IL

George Wittich Weeks Marine, Inc.Cranford, NJ

AWO ANNUAL REPORT 3

2003 Board of Directors

2003was a watershedyear for AWO.

It was a year in which AWO was tested in prosecuting its corebusiness lines. It was a year inwhich the association worked hardto further enhance its value to AWO members and to America.

2003 was also a watershed year for AWO because it wascharacterized by work thatextraordinary associations are able to do simultaneously – toadvocate effectively on the publicpolicy agenda; to strengthen safetyand environmental performance,both for today and for the future;and to maintain a clear vision of the future, refreshed to ensureits relevance to contemporaryindustry and national needs. In 2003, AWO accomplished all of these things.

AWO’s quest for advocacyexcellence continued unabated in2003. This report presents only the highlights of a broad array of issues on which the associationeffectively projected its views and offered solutions. Mostimportantly, AWO’s advocacyefforts yielded tangible results onseveral significant matters. Themost prominent is the CoastGuard’s approval of an AlternativeSecurity Program for the tugboat,towboat and barge industry,establishing a practical frameworkfor implementing new maritimesecurity standards. We got to the one-yard line in securingCongressional repeal of the

4.3-cent fuel tax. We effectivelyblocked the Administration’sproposal to raid the InlandWaterways Trust Fund for projectsfor which it was not intended. We gained important support inCongress for closing the loopholein the Jones Act that allows foreign vessel owners to engage in domestic commerce. AWOmembers became more active and energized members of theassociation’s advocacy team with the first ever Congressional “Barge-In” on Capitol Hill.

AWO’s work in 2003 inmaritime safety was especiallyimportant. AWO members engagedin an intense, year-long dialogueabout the next frontier in maritimesafety, and worked just as intenselywith the leadership of the CoastGuard through the Coast Guard-AWO Safety Partnership to define a common vision of that nextfrontier. The Board of Directorsvoted overwhelmingly to approvemoving forward with the CoastGuard to recommend to Congressthe enactment of a new towingindustry safety regime that willraise safety and environmentalprotection standards industry-wideas a matter of law and regulation.The historic dimensions of that voteare hard to overstate. The proposednew regime holds the prospect of improved performance by allcompanies in the industry and theprevention of future accidents.

Performance of this kind is no accident. It is the result of a

strategic plan that compels AWO to strive harder and stretch further.It is the result of a consciousmanagement philosophy that seeksto lead and innovate. It is the resultof an operational game plan thatfocuses the organization on thematters that produce true value forthe membership. AWO sought in2003 to be the genuine value leaderamong maritime trade associations.

As AWO begins the celebrationof its 60th anniversary, we aremindful of the obligations we havethat derive from the watershedevents of 2003. We know thatadvocacy excellence demandsredoubled effort and moresignificant results. We know thatthere is unfinished business on the public policy front. We knowthat we must ensure genuineimprovement in marine safety andmaritime security. We know thatwe must produce greater value forthe member investment we enjoy.We know, too, that our industryhas the obligation to increase thevalue it provides to the nation.

We begin 2004 mindful ofthose obligations and with anunshakable confidence that we are up to the task.

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President’s Report

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Thomas A. Allegretti

2003

Ensuring Maritime SecurityAWO members participated inforce in the U.S. Coast Guard’scongressionally-directedrulemaking projects on maritimesecurity. Nearly 150 AWOmembers spoke in favor of the use of alternative securityprograms at public meetings inJanuary and February. When theCoast Guard published interimsecurity rules in July, AWO

members again mobilized todevelop comments on the rulesand to transform the AWO ModelVessel Security Plan into anAlternative Security Program forthe towing industry. Workingclosely with the Coast Guard,AWO obtained approval of the AWO Alternative SecurityProgram as part of the agency’sfinal security rulemaking packagein October, making AWO one of

only three organizations with aCoast Guard-approved industrystandard security program.

Outreach on Buzzards Bay Oil Spill In the aftermath of a bargeaccident in April resulting in an oil spill in Buzzards Bay, AWOleveraged its full complement ofpublic affairs, legislative affairs,regulatory affairs and AtlanticRegion resources to mitigate the effects of the incident on the industry as a whole. AWO conducted outreach tomedia outlets, federal and state government officials,environmental groups, and theCoast Guard. AWO pledged the industry’s cooperation and used the opportunity to educatestakeholders on the tank bargeindustry, its positive safety record,and the important role played by shippers in single-hull vesselphase-out. As a result, theindustry was able to provide inputinto the post-accident Ports andWaterways Safety Assessment,conducted to determineappropriate next steps to ensureoptimum safety and environmentalprotection for the transportationof oil by barge through thesensitive environmental region.

AWO ANNUAL REPORT 5

Responsible and Responsive:Exploring New Frontiers of Safety and SecurityResponsible and Responsive:Exploring New Frontiers of Safety and Security

AWOAWO was tested on a number of fronts in 2003, particularly on issuesinvolving industry safety and maritime security. AWO embraced one of its core missions –advocacy – in confronting the following major challenges of the year.

The tugboat, towboat and barge industry comprises the largest segment of the U.S.-flag fleet.

Preserving the InlandWaterways Trust FundWhen the Administrationsubmitted its budget for FiscalYear 2004, it contained aproposal to raid the waterwaystrust funds – including the InlandWaterways Trust Fund. Under the plan, trust fund monies wouldhave been diverted from theirintended purposes to pay aportion of operation andmaintenance of the inland system.AWO and other waterwaysgroups immediately and stronglyobjected. The proposal violatedconditions placed upon the trustfund when it was created,

reserving it for new constructionand major rehabilitation on theinland system. In addition, theproposal would exhaust the trustfund in only three years, leavingno money for new constructionand creating pressure forincreased fuel taxes to pay foroperation and maintenance.

AWO and its allies weresuccessful in conveying theirmessage. The authorizingcommittees rejected the proposalin their annual “Views andEstimates” letters. The Budgetcommittees rejected the proposalin their budget resolutions. The appropriations committees

rejected the proposal when theywrote the FY ’04 appropriationsbills and the accompanyingcommittee reports. In addition,separate groups of Senators and Representatives wrote lettersto the Administration’s Office of Management and Budgetobjecting to the proposal. AWO has urged OMB not toinclude the proposal in its FiscalYear 2005 budget request.

Waterways transportation is the most environmentally-friendly mode of commercial transportation.

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Towing Vessel Officer LicensingAWO worked closely with the Coast Guard to bring thenine-year process of improvingqualification and trainingstandards for wheelhousepersonnel on towing vessels to a close with the publication of a final rule on licensing of towing vessel officers. The final rule improved previously issued interim regulations byincorporating three AWO-recommended changes to addressthe special needs of coastal andharbor towing vessel operators.

Defending the Jones ActFocusing on an issue of primaryimportance to all AWO members,AWO continues to work toprotect the integrity of the JonesAct, the statutory foundation of the U.S. maritime industry. In 2003, AWO worked withcongressional allies to craft a proposed legislative fix totroublesome loopholes in the U.S.ownership requirements of theJones Act. While falling short ofsecuring a legislative solution thisyear, AWO remains staunchlycommitted to closing theseloopholes in 2004. Significantly,the Coast Guard is poised toissue new regulations on vessellease financing requirements inearly 2004. AWO also continuedto engage U.S. trade negotiatorsto ensure that the Jones Actremains off the table ininternational trade agreements to which the U.S. is a party.

Advocating InfrastructureModernization AWO continued to supportimprovements in the waterwaysinfrastructure of the nation, with the goal of a world classwaterways system for the 21st Century. Despite anAdministration request for FY ’04that was half a billion dollarsbelow the previous year, the finalappropriation for the U.S. ArmyCorps of Engineers was almost$400 million higher. Still, theoverall number was $120 millionbelow FY ’03, and the constructionaccount was down $20 million.During FY ’03, the Corps was able to focus its limitedconstruction money on higherpriority projects in an effort tocomplete these as soon as possible.Under general investigations,sufficient funds were included toallow completion of the UpperMississippi navigation study,scheduled to be released in thesummer of 2004.

Protecting the Missouri RiverA significant event in the MissouriRiver flows debate occurred thisyear when the Mississippi Riverwas closed to navigation inAugust after a court rulingmandated decreased flows in theMissouri River. This closure of themain U.S. waterborne commerceartery, predicted by the state ofMissouri’s Department of NaturalResources and AWO, focused theattention of the media, electedofficials and the U.S. Army Corpsof Engineers on the economic

impacts of this decision on theMississippi Valley region and U.S. trade. A new BiologicalAssessment presented to the U.S. Fish & Wildlife Service by the Corps of Engineers inNovember contained new andbest available science that AWOand the Coalition to Protect theMissouri River (CPR) worked tohave included in order to resolvethis water dispute to benefit theeconomic and environmentalneeds of both the Missouri andMississippi basins. AWO ishopeful that this controversy will be resolved in early 2004.

AWO ANNUAL REPORT 7

Waterways transportation contributes to quality of life by helping reduce congestion on roads and rails.

Repealing the 4.3-centGeneral Fund Excise Fuel TaxOnce again, in the 108thCongress, AWO worked with railinterests to repeal the 4.3 cent-per-gallon general fund excise fueltax first imposed in 1993. Repeallegislation was introduced againin both houses of Congress; in the House of Representatives byCongressman Kenny Hulshof (R-MO), and in the Senate bySenators Trent Lott (R-MS) and John Breaux (D-LA).

Repeal was included in theenergy tax package reported outof the House Ways and MeansCommittee and subsequentlyincluded in comprehensive energylegislation adopted by the fullHouse of Representatives. In theSenate, an identical provision,repealing the tax effective January 1, 2004, was adopted bythe Finance Committee as part of its energy bill tax title. Repealwas included in the final versionof the energy bill reported out of the conference committee. The House of Representativessubsequently approved theconference report by a vote of240-186. The bill faced a filibusterin the Senate, however, and justbefore Thanksgiving, the Senate felltwo votes short of a motion to endthe filibuster. Therefore, furtheraction on the bill was halted forthe first session of the 108thCongress. Senate Majority LeaderBill Frist (R-TN) has promised to bring the bill back before theSenate when Congress reconvenesin 2004, and AWO will onceagain use its grassroots resourcesto urge passage of the legislation.

Making TankLevel/Pressure MonitoringDevices DiscretionaryWith the strong backing of AWOand the tank vessel industry, the Administration submittedproposed legislation to Congressto clarify that the Coast Guard’sauthority to require tank level or pressure monitoring devices on tank vessels is discretionary, an important change given thetechnological and economichurdles to implementation of suchrequirements. The Administration’sproposed language was includedin the Coast Guard authorizationbill approved by the House ofRepresentatives in November;identical language is included inthe Senate version of the CoastGuard bill, which awaits a voteby the full Senate. The provisionwill pave the way for the CoastGuard to withdraw its 2002 rulerequiring cost-prohibitive devicesthat provide little or noenvironmental benefit.

Obtaining Effective FireSuppression and VoyagePlanning RulesActive AWO member involvementin the Coast Guard’s rulemakingon fire suppression systems andvoyage planning requirements fortowing vessels was instrumental

in securing a final rule thatestablishes a practical andeffective framework for enhancingfire protection and navigationsafety on towing vessels.Extensive analysis of engine roomfire casualty data conducted byAWO and the Towing SafetyAdvisory Committee (TSAC)convinced the Coast Guard thatits requirements should reflect thedifferences in inland, harbor, andcoastal towing vessel operations.

U.S.-Canada Memorandumof UnderstandingThe long-awaited Memorandumof Understanding (MOU) between the Coast Guard andTransport Canada signed late in 2002 allows each country to recognize the other nation’srequirements for licensing andtraining of vessel operators under the rigorous standards of STCW, an internationalagreement on mariner trainingand qualifications. The MOU was driven by AWO requests on behalf of member companiesoperating in both U.S. andCanadian waters. The agreementand subsequent Coast Guardpolicy guidance have helped tosimplify and streamline STCWrequirements for coastal towingvessel operators.

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AWO members and staff meet withCongressman Bob Filner (D-CA) during thefirst annual AWO “Barge-In” on Capitol Hill.

The inland barge industry pays over $100 million a year in fuel taxes that support waterways modernization.

Congressional/Administration OutreachAWO conducted its firstcongressional “Barge-In” onCapitol Hill in conjunction with its annual Spring Convention inApril. AWO members visited theoffices of key Members of Congressto express their needs and ask forcongressional support for importantindustry initiatives. Due to thesuccess of this maiden effort, AWOintends to make the “Barge-In” an annual public affairs event.

In other outreach topolicymakers, AWO providedbriefings for Members of Congresson the tugboat, towboat and barge industry as part of itsCongressional Education Program.Also, before the first anniversaryof the tragic Interstate-40barge/bridge allision, AWOreleased the Coast Guard-AWOBridge Allision Work GroupReport, which examined ten yearsof data on bridge allisions in orderto try to determine their causes,prevent future bridge allisions, andmitigate the consequences of thosethat might occur. AWO briefedinterested Members of Congressand the Administration on thereport’s findings.

Safety EducationIn the wake of a barge accident and oil spill in Buzzards Bay, AWO conducted outreach to

AWO ANNUAL REPORT 9

Public Affairs Outreach

AWOAWO’s public affairs outreach efforts in 2003 focused on communicating toboth policymakers and the general public the value of the industry to the nation as well as thecommitment that all AWO members have made to the highest standards of safety, security andenvironmental protection.

New England media outlets,legislators and regulators in order to provide facts and information onthe industry’s positive safety record,the Responsible Carrier Program, the commendable rate of single-hullphase-outs being undertaken by the industry, the Coast Guard-AWOSafety Partnership, and AWOmembers’ overall commitment to the highest safety standards toprotect people, property and theenvironment.

In other efforts to convey theindustry’s safety achievements, AWOdeveloped a new industry safetystatistics section on the AWO Website (www.americanwaterways.com).AWO also produced an award-winning AWO Safety Calendar, with Crew Endurance Managementas its theme. The calendar was aimedat vessel crewmembers and providedmonthly safety messages, based onthe U. S. Coast Guard-developedCrew Endurance ManagementSystem, to help mitigate the job-related physiological, operational,environmental and psychologicalchallenges that can affect crew-member alertness and stamina.

Industry AwarenessCampaign As part of its industry imagecampaign, AWO developed andlaunched a new radio advertisement,focused on the economic,environmental, national security

and quality of lifebenefits provided bythe towing industryto the nation.Targeted at federalpolicymakers, the ad aired on two all-news radio stations in Washington,D.C. The ad can also be heard onthe AWO Web site.

Public Relations Outreach –“Towing a Legend”In a special public relations outreacheffort, AWO provided support forthe historic voyage of the LST-325(Landing Ship, Tank) up theMississippi and Ohio rivers. AWO member companies providedtowing assistance to the World WarII-vintage ship on its two monthjourney to educate Americans aboutthe role LST ships played in U.S.history. The voyage drew strongmedia attention to the inlandwaterways and the towing industryas the ship made its way to theheartland of America in the processof becoming a floating memorial.

USS LST Ship MemorialPhoto by Mark G. Wise

The 2003 AWOSafety Calendar

Coast Guard-AWO BridgeAllision Work Group ReportThe Coast Guard-AWO SafetyPartnership served as the forumfor crucial Coast Guard andindustry attention to a high-profilepublic safety issue facing the bargeand towing industry: bridge transitsafety. In May, the partnership’sBridge Allision Work Groupreleased its analysis of 10 years of casualty data on towing vesselaccidents with bridges, including a five-point action plan to reducethe frequency of bridge accidentsand minimize the consequences of those that do occur. Thepartnership’s analysis will provideimportant context for forthcomingCoast Guard and NationalTransportation Safety Boardreports on bridge accidents thatoccurred in September 2001 andMay 2002.

Crew EnduranceManagementThe Coast Guard-AWO SafetyPartnership also served as thevenue for continuing Coast Guard-AWO cooperation on the issue ofcrew alertness, an area of focus for all modes of transportation. A Coast Guard-AWO workinggroup promoted industry adoption of the Crew EnduranceManagement System (CEMS), aholistic, science-based approach to mitigating risk factors that can affect safe crew performance.

With support from the CoastGuard, AWO members in theinland and coastal towing industrybegan implementing CEMS ontheir vessels. Together, the CoastGuard and AWO worked to make CEMS training andcomputer-based tools availableto the towing industry and topromote greater focus on crewalertness through a multifacetedindustry outreach program.

Responsible CarrierProgram – Vendor SafetyThe AWO Board of Directorsapproved a significant changeto the Responsible CarrierProgram regarding vendor safety, requiring AWO membercompanies to give “preferencewhen assigning towing, vesselassist services and/or fleetingservices to vendors that adhere to a safety management systemsuch as the Responsible Carrier Program (RCP), or theInternational Safety Management(ISM) code.” This change alsorequires that vendors who are notmembers of AWO, but who have a routine business relationshipwith an AWO member company,maintain an acceptable level ofsafety as verified by either an on-site inspection of the vendor’svessels and facilities, or pre-qualification through aninterview and completion of asafety assessment checklist.

Responsible CarrierProgram – Auditor Ethics ProceduresThe AWO Responsible CarrierProgram Accreditation Boardadopted an auditor disciplinaryprocedure. The procedure asdeveloped by the AccreditationBoard details the steps it wouldtake if an auditor’s credibility were called into question, andhow such a situation would be resolved.

AWO Safety CommitteesImprovements in the integration of the Responsible CarrierProgram with the work of theCoastal and Interregion SafetyCommittees and the CoastGuard-AWO Safety Partnershipresulted in significant progress ina number of areas. In the area ofbridge transit safety, the CoastalSafety Committee completed asample Bridge Transit Procedurethat can be used by companies as a template for developing theirown customized procedure forbridge transits. To address theproblem of falls overboard, theInterregion Safety Committeepublished a handout on FallOverboard Risk Factors. Aimedat crewmembers, this handouthighlights risk factors to considerduring specific inland operations,such as locking, making tow, andwalking on gunwales.

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New Frontiers in Safety

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SAFETY

Safety, especially the protection of people, property and theenvironment, is AWO’s number one priority. AWO devotes majorresources to meet new industry safety challenges head-on andto lead the entire industry to higher safety standards.

According to the Oil Pollution Act of 1990 (OPA 90), all single-hulled tank vessels that carry oil in bulk must be phased out by2015. Current statistics illustratethat the U.S. tank barge industryis leading the way in phasing outsingle-hulled vessels years aheadof the congressionally mandateddeadline. The capital investmentrequired to overhaul the fleet issignificant: a typical inland bargecosts some $1.5 million to build,while a larger coastal tank bargecarries a price tag of $15-17million. The cost of a state-of-the-art articulated tug-barge unit, or ATB, is $26-27 million.

AWO estimates that thedomestic U.S. tank barge fleetconsists of 3,870 vessels. As the chart shows, double-hulledbarges numbered 2,640, or68.3% of the fleet. The rest of the fleet is divided nearlyevenly between 616 single-hulledbarges and 614 other hull types(double-side, double-bottom, andother reinforced hull designs).Analysis of the individual vesselsretired from and entering the fleet shows that the industry is continuing to remove older tank barges of all hull types and replace them with moderndouble-hulled tank barges.

America’s tank barge operatorshave invested over $1 billion indouble-hulled barges since thepassage of OPA 90. As Americancompanies strongly committed tothe U.S. market, AWO membersstand ready to make the necessaryinvestment in new double-hulledvessels to meet the nation’s energy transportation needs, and to continue providing safe,environmentally friendly, andeconomically efficient service toU.S. shippers and consumers.

AWO ANNUAL REPORT 11

Industry Safety Statistics: Double-Hull Conversions

STATISTICS

U.S. Tank Barge Fleet by Hull Type

Double-Hull. . . . . 2,640Single-Hull . . . . . . . 616Other . . . . . . . . . . . 614

16%

16%68%

Over 68% of the U.S. tank barge fleet isdouble-hulled, as the industry leads the way to transform the nation’s fleet of oil-carrying tankvessels into environmentally friendly double-hulls.

In 2001, 99.9997% of oil moved by tank barges was delivered safely.

VisionThe American WaterwaysOperators is the leading nationaladvocate for, and promoter of, asafe, secure, and environmentallyresponsible tugboat, towboatand barge industry.

MissionThe American WaterwaysOperators is the national tradeassociation representing theowners and operators of tugboats,towboats, and barges serving the waterborne commerce of theUnited States. Its mission is topromote continuous improvementin safety and environmentalstandards, the long-termeconomic soundness of theindustry, and the importance of waterborne commerce in thenational transportation system.

Goals1. Be an effective and

proactive advocate with the U.S. Congress.

2. Be an effective and proactiveadvocate with federal agencies.

3. Promote continuousimprovement in industry safety, security, andenvironmental performance.

4. Promote positive publicawareness of the industry.

5. Influence state and regionalinitiatives that affect industryinterests.

6. Inform the membership onpublic policy issues.

7. Ensure effective and efficientmanagement and governance of the association.

ValuesAWO Members:• Recognize the fundamental

responsibility to operate theircompanies in an ethical, safe,secure, and environmentallyresponsible manner that benefits their employees, theircustomers, the public, and the environment.

• Embrace continuousimprovement in safety andenvironmental performance and compliance with safetymanagement systems such as theResponsible Carrier Program.

• Recognize that the waterways of the U.S. are a national assetand a shared resource requiringstewardship and improvement.

• Constructively engage the public policy process on matters that affect safety,security, the environment, the communities in which we operate, and the economicsoundness of the industry.

• Continue the industry heritageof cooperation, draw strengthfrom member diversity, andsupport initiatives that fortifythe industry and fosterachievement of its goals.

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The American Waterways OperatorsStrategic Plan

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2004-2006

Barges carry 20% of the nation’s coal . . . enough to produce 10% of all U.S. electricity used annually.

Thomas A. AllegrettiPresident & CEO

Lee H. HillChief Financial Officer & Senior Vice President

Jennifer A. CarpenterSenior Vice President – Government Affairs & Policy Analysis

Anne Davis BurnsVice President – Public Affairs

Robert L. ClintonVice President – Safety

E. Boyd Hollingsworth, Jr.Vice President – Legislative Affairs

Gerald P. McMahonVice President – Pacific Region

Lynn M. MuenchVice President – Midcontinent

Linda E. O’LearyVice President – Atlantic Region

Kenneth R. WellsVice President – Southern Region

Marilyn D. ClarkDirector – Membership & Meetings

Amy K. BrandtManager – Government Affairs

Traci L. FischerManager – Communications

Leslie A. KagariseManager – Finance &Administration

Katherine M. RehakManager – Safety Programs

Douglas W. SchefflerManager – Research & Data Analysis

Megan E. TuckerManager – Legislative & Political Affairs

Vickie M. HammondAssistant to the President

Mary C. MillsReceptionist

AWO STAFF

Graphic Design: Howell Design, Inc.

The National Trade Association of the Inland and Coastal Tugboat, Towboat and Barge Industry

801 North Quincy Street, Suite 200Arlington, Virginia 22203(703) 841-9300www.americanwaterways.com

The AmericanWaterways Operators

2003