Maritrans used market models to survive a fleet ban; stock nearly doubled

The Oil Pollution Act of 1990 mandated early retirement for all large single-hulled vessels carrying petroleum products. Maritrans, whose business ran on such ships, saw its stock lose 80 percent of its value.

Through a sequence of studies, Maritrans improved its understanding of its market and developed a strategy for rebuilding its single-hulled fleet. Its models demonstrated to the US Maritime Administration that loan guarantees for new ships would create excess capacity, depressed rates, and government expenditures to cover loan losses — and the program's threat receded.

The company also modeled operating petroleum-product terminals and backed off after showing they would not gain synergies with marine transportation. Combining the models, it formed an integrated strategy for rebuilding its Gulf Coast fleet, announced it in 1997, and its stock almost doubled to levels not seen since the Act passed.