Time to Go Deep

Southeast Louisiana maritime professionals continue their fight to dredge to 50 feet

The 230 miles of the meandering Mississippi River on either side of New Orleans are home to the world’s largest port system. Collectively, the five deep-water ports on the lower Mississippi River — New Orleans, South Louisiana, Baton Rouge, St. Bernard, and Plaquemines — handle more tonnage than any other port in the world, providing billions of dollars in annual economic impact and supporting hundreds of thousands of jobs.

Nearly 12,000 ships — including 6,000 oceangoing vessels — travel the lower river corridor annually, carrying 500 million tons of cargo and 700,000 cruise passengers. Those numbers may soon increase, as the U.S. Army Corps of Engineers has a plan to increase the depth of the Mississippi River to accommodate larger cargo ships built in the wake of the Panama Canal expansion.

Life on the Mississippi

The Mississippi River and its tributaries connect 31 states and two Canadian provinces through the third largest river basin in the world, all of which funnels through southeastern Louisiana.

In a 2012 paper prepared for The Ports Association of Louisiana, The Economic Impact of the Ports of Louisiana, LSU economist James A. Richardson said the combined economic impact of the state’s ports, providers of port and vessel services, businesses operating within the ports, and cruise ship operations — most of it centered in the lower Mississippi River corridor — includes almost 73,000 jobs created and supported. It also includes personal earnings of $3.96 billion, and state and local tax collections of $517 million per year with approximately $289 million going to the state government and $228 million going to local governments.
When connected industries — including agriculture, oil and gas, petrochemical and coal products, chemicals and related products, food and related products, paper, wood, and fabricated metals — which rely on the ports to assist in moving their goods are included, Richardson said the figures jump to almost 400,000 jobs and personal earnings of close to $20 billion.

Those figures are based on the Mississippi’s current maximum depth, which is supposed to be maintained at 45 to 47 feet, but has been as low as 41 feet in recent years. That has caused some larger ships to unload some of their cargo before they enter the river’s mouth, resulting in delays, increased logistical costs and a reduction in the region’s ability to compete globally by pushing business away from Southeast Louisiana.

Deeper River, Healthier Wetlands

One of the most exciting aspects of the U.S. Army Corps of Engineers’ plan to increase the depth of the Mississippi River is its idea to use dredge sediment to help restore more than 1,400 acres of wetlands in Plaquemines Parish in the federally owned Delta National Wildlife Refuge and the state owned Pass-a-Loutre Wildlife Management Area.

It is estimated both wildlife areas have lost more than 800 acres over the past 50 years due to saltwater seepage from the Gulf of Mexico into the freshwater wetlands. The Corps expects the dredging project to produce about 18 million cubic yards of sediment.

As an added benefit, diverting the mud into the restoration of the nearby wetlands is expected to be cheaper than transporting it from the riverbanks. A lower bill helps taxpayers, but that’s not the only way we win. More wetlands mean more protection from the wrath of storm surge and flooding from future hurricanes and tropical storms, hopefully limiting the financial exposure to rebuilding projects.

Panama Canal expansion drives global change

The expansion of the Panama Canal in June 2016 has created waves of change around the globe as the maritime industry continues to react to larger ships with nearly tripled cargo capacity being allowed to traverse the nautical shortcut.

The widening and deepening of the canal led to the creation of the Neopanamax, or New Panamax, size limits for ships to safely travel through the canal. Based on new lock dimensions of 1,401 feet in length, 180 feet in beam (width), and 60 feet in depth, the canal can now accommodate ships with a 1,201 foot length, 160-foot beam, 50-foot draft, and a capacity of 14,000 20-foot equivalent units (TEUs), the size of a standard shipping container. Its previous maximum was ships 950 feet in length, with a 106-foot beam, 39.5-foot draft, and 5,000 TEU capacity.
Naval architects and ship builders have been scrambling to construct new cargo ships to appease shippers, and ports are working diligently to update their facilities to accommodate the larger vessels. The shift has been so dramatic that according to the BBC, pre-expansion or “old Panamax” ships, some less than a decade old, have been sold for scrap.
Several U.S. ports, including New York and New Jersey, Miami, Norfolk and Baltimore, have or are in the process of increasing their wharfs’ depths to 50 feet to accommodate the new ships. Ports in Jacksonville, Florida, Savannah, Georgia, and Charleston, South Carolina, are considering going to 50 feet, and Mobile, Alabama, recently dredged to 45 feet.
Container shipping has been a major priority for the Port of New Orleans. In fiscal year 2017, the port handled more than half a million TEUs for the third consecutive year and is capable of handling 840,000 TEUs annually, with a potential expansion footprint at the Napoleon Avenue Container Terminal that allows for a capacity of up to 1.5 million TEUs.

A Mightier Mississippi

A Corps of Engineers study says the 50-foot depth would provide a $96.8 million annual benefit to the U.S. economy. The dredging project’s estimated cost is $238 million, of which the Louisiana Department of Transportation and Development (DOTD) would pay about $120 million, with annual maintenance and operating cost paid by the federal government.

Sean Duffy is executive director of the Big River Coalition (BRC), a collection of more than 110 maritime businesses, trade associations and port authorities that do business on the Mississippi River and its tributaries, which he describes as a maritime superhighway. Duffy says the benefits of dredging for the entire U.S. clearly far outweigh the costs.

According to the study “The Economic Impact of Deepening the Mississippi River to 50 feet,” co-sponsored by both the BRC and the DOTD, the U.S. economy will add 17,000 jobs as a result of the increase in production and $849.5 million in increased income for American workers.

“The BRC has often discussed the importance of the Mississippi River to the American farmers, as the ship channel connects over 350 million acres of agricultural lands to international markets,” Duffy said. “American farmers export up to 70 percent of U.S. agricultural exports to world markets via waterborne commerce on the Mississippi River, and the ship channel deepening project offers significant reductions in shipping costs. The math is easy.”

What’s Next?

The Corps is expected to approve and release a director’s report in May 2018, at which time Congress must approve the dredging project. Once funds are allocated and construction begins, the project is estimated to take between three to five years to complete. Port of South Louisiana Executive Director, Paul Aucoin, said Congress needs to approve the project and has the money to do it through funds raised by the harbor maintenance tax on all imported cargo with the funds directed to dredging.

“Fifty feet is what we ought to consider a normal depth – every day, all day,” Aucoin said. “It’s a U.S. issue, not just a Louisiana issue.”

Aucoin added that with grain from 31 states shipped though the mouth of the Mississippi River, it affects business across the country when a ship is quoted a shipping price of $22 a ton based on loading a ship to 45 feet of draft, only to face a restriction to 41 feet that causes them to loose valuable space and have that cost go up to $27 a ton. Plus, there is surplus of cargo left on the dock that must be dealt with. On the flip side, if a ship comes in from Shanghai at 45 ft, but can’t get into the river, it has to wait for the river to rise to unload some of its cargo before coming upstream, adding stops and increasing cargo storage, fuel and related costs.

“It doesn’t play well on the world market,” Aucoin said. “This is about being reliable and competitive. If we don’t address it, it’s going to affect us.”

 


 

Cargo Ship Comparison

The Panama Canal expansion, completed in 2016, allows much larger cargo ships to travel through the nautical shortcut. Panamax refers to size limits for ships to safely travel through the canal. The change has East Coast and Gulf Coast ports increasing the depth of their terminals to 50 feet to accommodate modern container ships built to the new guidelines.

* Deadweight tonnage is the amount of weight a ship is carrying
**Twenty-foot Equivalent Unit, the size of a standard shipping container