The shipping industry is intensely competitive and is influenced by events largely outside the control of shipping companies. Varying economic factors can cause wide swings in freight rates and sudden shifts in traffic patterns. Vessel redeployments and new vessel construction can lead to an overcapacity of vessels offering the same service or operating in the same market. Changes in the political or regulatory environment can also create competition that is not necessarily based on normal considerations of profit and loss.

Historically, the shipping industry has been cyclical. The profitability and asset values of companies in the industry have fluctuated in part because of changes in the supply and demand of vessels. The supply of vessels generally increases with deliveries of new vessels and decreases with the scrapping of older vessels.

The Company’s fleet also includes three LASH vessels, one Dockship, and 917 Lighter Aboard Ship, or LASH, barges. In its transoceanic liner services, the Company uses the LASH system primarily to gather cargo on rivers, in island chains, and in harbors that are too shallow for traditional vessels.

The Company has five operating segments: Liner Services, Time Charter Contracts, COAs, Rail-Ferry Service, and Other. In addition to its five operating segments, the Company has investments in several unconsolidated entities of which it owns 50% or less and does not exercise significant influence over operating and financial activities.

In its liner services segment the Company operates one or more vessels on established trade routes with regularly scheduled sailing dates. The Company receives revenues for the carriage of cargo within the established trading areas and pays the operating and voyage expenses incurred. The Company’s liner services include a U.S. flag service between U.S. Gulf and East Coast ports and ports in the Red Sea and Middle East, and a foreign flag transatlantic service operating between U.S. Gulf and East Coast ports and ports in northern Europe.

Time charters are contracts by which the Company’s charterer obtains the right for a specified period to direct the movements and utilization of the vessel in exchange for payment of a specified daily rate, but it retains operating control over the vessel. Typically, the Company fully equips the vessel and is responsible for normal operating expenses, repairs, crew wages, and insurance, while the charterer is responsible for voyage expenses, such as fuel, port and stevedoring expenses.

Contracts of Affreightment, or COAs, are contracts by which the Company undertakes to provide space on its vessels for the carriage of specified goods or a specified quantity of goods on a single voyage or series of voyages over a given period of time between named ports or within certain geographical areas in return for the payment of an agreed amount per unit of cargo carried. Generally, the Company is responsible for all operating and voyage expenses. The Company’s COA segment includes a molten sulphur transportation contract with a major sulphur transporter.

Gross voyage profit decreased 15% from $27.1 million in the nine months ended September 30, 2003 to $23 million in the nine months ended September 30, 2004.

Interest expense decreased 17.6% from $9.6 million in the nine months ended September 30, 2003 to $7.9 million in the nine months ended September 30, 2004.

Tax provision was $1.3 million in the nine months ended September 30, 2004 and $2.1 million for the nine months ended September 30, 2003 at the statutory rate of 35% for both periods.

Equity in net income of unconsolidated entities, net of taxes, increased from $260,000 in the nine months ended September 30, 2003 to $3 million in the nine months ended September 30, 2004.