McLean's - American Shipper

TRANSPORT / PORTSThe trolley that moved the container cranes at the France Road Terminal wasknocked off track by Hurricane Katrina. the terminal remains inoperable.financial and logistical challenges.LaGrange acknowledged the MRGOmight be near the end, yet he is remindingeveryone the change would come at a cost.He estimates that 30 percent of pre-Katrina operations are located on “innerharbor” locations, mostly on the IHNC.Although much of New Orleans maritimeoperations are back up and running, mostnotably the facilities located on the crescentof the Mississippi River, important questionsmust be answered concerning the operationshistorically dependent on MRGO access.A cyclical upturn in steel imports in Februaryput port statistics back up to Pre-Katrinalevels — at least on paper. But LaGrangenoted in his port address that there is noway to sustain those numbers until officialsdetermine how to replace the facilities andcapacity lost in the hurricane.There are nine major companies thatlocated their operations along the inner harborsite, with an estimated 1,000direct employees. Thousands ofother jobs are linked to thoseoperations.LaGrange said it would cost$360 million to relocate thosecompanies, along with the existingterminals. The container terminalsand cold storage facilities alonewould account for $180 millionof those costs.LaGrange said officials haveexplained the situation to bothstate and federal authorities, buthe is now challenging them to helpprovide a solution.“The losses that this industry issustaining are a direct result of thefailure of the federal governmentto provide a shipping channel thathad adequate flood protection measures,” hesays. “The federal government has a fiduciaryresponsibility to provide deepwater access tothe people who depend on the MRGO. Wedon’t care how they do it. But if they aren’tgoing to dredge the channel, they have tomake these companies whole by helping tomove their operations.”Even if the MRGO is shut down for good,LaGrange said, that does not mean the endfor everything along the IHNC.He pointed out that before Katrina hit theport had 77 agreements with 50 tenants onthe IHNC. Short term, the port has takensteps like deferring rent for some of them tohelp them survive the immediate aftermathof the hurricane.A handful of companies have left, but thereare still 45 companies with agreements tolease property in the industrial area.“From these figures, it’s clear to see thatthe IHNC will remain a great place forindustrial development in the city of NewOrleans,” LaGrange said.Even if deep draft vessels never use theMRGO again, one alternative is to restorethe lock system that was in place for decadesbefore the construction of the MRGO.The locks are old and outdated, but alreadysome companies are using them.New Orleans Cold Storage, a key portcustomer that moves high volumes of frozenpoultry for international customers, is usingan existing 80-year-old lock to access companydocks at the Jourdan Road Terminal,restarting operations earlier this year. Thecompany has also been trucking some cargoto an upriver wharf.Should old locks be modernized, access toIHNC companies could be greatly improved,LaGrange said.Other vessels that are too long or withdrafts that are too deep are coming into theIHNC from the Mississippi River.Still, the solutions created out of necessityafter Katrina are not always a match forwhat was in place beforehand.For example, LaGrange noted cold storagecompanies have lost the competitive advantageof having dockside facilities, wherecompanies like NOCS could blast freezepoultry and put it directly onto a ship.In addition to seeking state and federalfunding to relocate some facilities, officialswill have to find suitable new locations forthose operations.“We are now faced with the challengeof shoehorning some of the capacity andfacilities that we lost on the IHNC intoour current footprint along the MississippiRiver,” LaGrange said.There is some room for growth on theMississippi River Terminal Complex onthe East Bank of the river. But there are noobvious locations on the West Bank.“In some cases, we probably won’t findthe footprint we need on either theEast of West banks,” LaGrangeconceded.The goal is to keep companiesthat cannot resume operations inNew Orleans in state.LaGrange said he would beworking with the Ports Associationof Louisiana. Companiescould also be enticed to use otherLouisiana ports capable of providingsimilar services.For the other 70 percent ofthe operations not located on theIHNC, operations are gettingclose to pre-Katrina levels.The recovery efforts haveprompted the port chief to adopta new motto: “It’s not how far youfall, but how high you bounce.” ■AMERICAN SHIPPER: APRIL 2006 91