When Opportunity Docks
As other ports struggle with delays, South Louisiana ports are in the perfect position to secure new business.
While the pandemic may have taken a heavy toll on local industries like hospitality, tourism, and even oil and gas, for the state’s maritime industry and Louisiana ports, it may have provided additional opportunities for the region to grow and become a bigger player on the world’s shipping stage.
Ongoing supply chain issues have led to backups on the West Coast, such as in the twin ports of Los Angeles and Long Beach, which, according to Bloomberg, account for nearly 40% of the nation’s imported goods. Ships crossing the Pacific Ocean can sometimes spend several weeks waiting offshore before they’re finally allowed to dock and unload.
In response, many international shipping companies are looking to other ports to avoid additional delays — especially for goods destined for the middle of the country —namely, the ports of the Gulf Coast.
“I think the congestion factor and the supply chain chokehold on the West Coast is going to prompt supply chains to automatically look more to the U.S. gulf,” said Greg Rusovich, chairman of the Louisiana Board of International Commerce (LaBIC). “I think there’s a natural shift and I think we have an opportunity to take advantage of that.”
For state officials like Rusovich, the goal is to persuade shippers to steer their vessels into Louisiana ports rather than Houston or Mobile, Alabama. He said the benefits of additional cargo extend far beyond the ports themselves — they also create additional jobs and stimulate the local economy.
“You get spinoffs of distribution facilities and truckers, and warehouse workers, and freight forwarders and customs brokers,” Rusovich said. “The whole supply chain network goes to work, and it goes to work right here in Louisiana.”
Rusovich also believes the new Amazon distribution centers being built in Shreveport and Baton Rouge are examples of even more opportunity for Louisiana’s ports. In addition to creating warehousing and trucking jobs, a lot of the goods housed at the centers arrive as cargo by boat. “It’s really terrific to have those distribution facilities,” he said. “There’s so much potential there.”
Brandy Christian, president and CEO of the Port of New Orleans, agrees.
“The Port NOLA gateway and Southeast Louisiana are primed to grow in this space,” she said. “We may not have the population of Houston, L.A., or Miami, but our strategic location and rail and barge access to middle America markets are attractive to these types of businesses.”
Christian believes that providing a wide range of industry-related activity, such as distribution centers, allows the region to “punch above our weight class,” by attracting new cargo and new business from the ocean carriers, and in turn, creating more jobs and business opportunity for Louisiana.
And she’s not alone.
“It’s the onward movement of cargo that really makes the port,” said Maynard “Sandy” Sanders, executive director of Plaquemines Port. Sanders points to the recent merger of Canadian Pacific Railway and Kansas City Southern, which will create the first US-Mexico-Canada rail network. “Instead of goods having to go from the Midwest to the West Coast, now it can get on a rail and come down south. That’s huge,” he said. “It helps Gulf Coast ports get a more even balance of trade.”
Digging Deep and Aiming High
Louisiana ports are no stranger to international trade. In fact, they’re some of the oldest in the country, and can trace their roots back to before the nation was even founded.
“New Orleans and Louisiana’s history and success in trade dates as far back to the early 1700s,” said J. Edwin Webb, CEO of the World Trade Center New Orleans (WTCNO), an organization whose mission is to accelerate business growth in the region through international trade.
According to Webb, more than 95% of the cargo entering the U.S. arrives by vessel to over 360 commercial ports, 30 of which are in Louisiana. In order to continue to grow and expand the role local ports, the state of Louisiana is making enormous efforts to attract the larger, taller shipping vessels of the future.
One such endeavor is the Mississippi River Ship Channel Dredging Project, which is a mouthful, but the idea is simple. “We need a deeper channel,” said Rusovich. “Ships are getting larger. We need the additional draught in order to receive the ships and improve the economy of Louisiana. Every ship we get has a positive economic impact on the state.”
The $250 million dredging project aims to dig the depth of the lower Mississippi from its current 45 feet to 50 feet, with some estimates saying that each new foot of depth could allow approximately $1 million in additional cargo. According to the U.S. Army Corps of Engineers, the project is expected to return $7.20 for every dollar spent. And the benefits extend beyond the maritime community.
“One of five jobs are related to ports in Louisiana,” said Christian. “A deeper channel will create thousands of jobs and the dredge material will be used to restore nearly 1,500 acres of our wetlands.”
Along the same lines, but above the water, the Port of New Orleans recently received four, 250-foot-tall, 1,600-ton metal gantry cranes, which can reach containerized cargo stacked 20 containers across a ship. The $112 million project, which also includes upgrades to the wharf and rail lines, will allow the port to unload the larger ships much more efficiently.
“Maritime assets like these new gantry cranes attract related industry and business, create family-supporting jobs, ensure Louisianans get the goods they need,” said Christian. “They also keep Louisiana competitive in international trade.”
Once the cranes are fully installed, Port Nola will be able to receive more than 1 million containers a year, nearly double its current capability.
Will violet be the right fit?
Ask anybody who knows anything about Louisiana’s maritime industry, and chances are they’ll bring up the proposed $1.5 billion container ship terminal project in Violet in St. Bernard Parish. And they’ll probably have a pretty strong opinion about it, too.
“It’s literally a game-changer for the state, and it’s rare that you get this kind of opportunity,” said Rusovich. “We can have the megaships come right from the Panama Canal, and we want them stopping in Violet. We don’t want them going straight to Savannah or Houston.”
If built, the facility would allow the Port of New Orleans to receive more of the larger container ships, which currently can’t fit beneath the Mississippi River bridge. Proponents, especially port and state officials, say that the new container facility is critical if New Orleans wants to be able to compete with other ports in the gulf.
But the port’s project is currently in hot water. Local officials, cultural associations, businesses, and residents have banded together to form a group called Stop the Destruction of St. Bernard, and they’ve filed a lawsuit to stop the terminal facility’s construction.
The group argues the project violates Louisiana’s nuisance laws and poses a threat to public health, quality of life, and the environment. They’re worried it’ll create too much truck traffic and destroy wetlands and other facilities that are critical to ensure proper drainage, which is crucial in an area that was recently devastated by Hurricane Ida — and may likely face future storms.
They also believe there are better alternative sites, such as a proposed development at the Plaquemines Port, an idea that Sandy Sanders supports — he argues that there aren’t any bridges or residents in the area where he would build a container facility.
However, Port Nola officials say that the lawsuit is premature at this stage of the project. In a written statement, the port’s head of public affairs, Matthew Gresham, said that any environmental and quality of life concerns will be addressed in the “multi-year federal and state permitting process that is just now beginning.” The port has also pledged to hold additional community meetings to discuss the Violet terminal’s impacts.
At the end of the day, whether it’s in Violet or further downriver at the Plaquemines Port, the prospect of a container ship terminal facility that increases the state’s ability to receive the megaships of the future and satisfies the concerns of the community — a potential win-win — is yet another opportunity for Louisiana’s maritime industry to grow and expand.