Estimating short-run costs of a barge company

By extending a methodology developed by the US Army Corps of Engineers, firm-specific short-run costs of a barge company are estimated in this paper. The estimated costs include average costs, marginal costs, and cost elasticities. These estimates led to a breakeven analysis and an analysis of financial conditions of the barge industry in general. Findings include that the breakeven ton-mile rates range from 0. 52 to 0.72 cents for a full-capacity operation and that the costs of barge services are highly inelastic. A questionnaire survey of 256 barge and towing companies has also been shown to corroborate the findings of this paper.