Downriver Louisiana port ideas look for anchorage

New Orleans CityBusiness, Jun 16, 2008 by Jaime Guillet

Louisiana is trying to make up lost ground in international trade -- and fast -- but plans to make New Orleans a preferred seaport for container cargo have been floating around for a decade with no real resolution.

A $380 million cargo facility near the mouth of the Mississippi River is just one of the ideas being suggested to reposition New Orleans in advance of the Panama Canal expansion, scheduled to open in 2014.

Sea Point, proposed by former Lykes CEO W.J. "Jim" Amoss Jr., is the latest in a line of proposals to attract more container cargo to southeast Louisiana. Amoss wants to build a privately funded container transfer facility in Venice, 12 miles north of Head of Passes and 36 miles upriver from the Gulf of Mexico. Sea Point would take 89 miles off the upriver trip to the Port of New Orleans.

Amoss claims to have unofficial commitments from four Asian carriers representing six shipping lines and the support of Gov. Bobby Jindal. The state has authorized $300 million in Gulf Opportunity Zone bonds, which Amoss said JPMorgan Chase will sell on the bond market. He and private investors will contribute another $100 million.

"We hope to get financed soon enough to start construction by the third quarter," Amoss said.

He is banking on Sea Point's appeal to containerized cargo carriers, particularly from rapidly growing Asian exporters. Containerized cargo has become the chief seaborne method for transporting consumer goods, such as items that end up being sold at Wal-Mart, and facilities at ports such as Long Beach, Calif., and Los Angeles continue to barrel toward max capacity, as does inland rail capacity.

In addition to providing more convenient access to the Mississippi River, Sea Point also offers the use of barges -- the most inexpensive form of cargo transportation compared with railroad and truck transport.

Sea Point plans call for an automated sorting system to move containers from ships to barges, which would then move them upriver to railroad yards, trucking depots, the Port of New Orleans or continue inland to ports such as Memphis, Tenn., or Chicago.

"Sea Point will provide significant savings to the carriers over routing to mid-America from the West Coast," Amoss said.

Sea Point would not be a competitor of the Port of New Orleans, he said, claiming it will attract carriers who would normally not do business upriver. It would even bring business to the Port, he said.

"We want to use their docks. We will use their docks," Amoss said. "We think the Port of New Orleans will have doubled or tripled their container volume after one year."

Sea Point, he said, will save about $100 per container by keeping it "off the streets" or from being trucked from the port's container facility at Napoleon Avenue.

While maintaining a neutral stance on the Sea Point project, Port President and CEO Gary LaGrange said the Sea Point concept has a few issues. One includes the significant time delay associated with barging cargo.

"There's no denying (barging) is the cheapest form of transportation," LaGrange said. "His idea is good in that sense, but not everything should be moved by barge."

LaGrange said some shippers require cargo reach distribution facilities or retail markets in 36 hours or less. A ship can travel 125 miles upriver to the Port of New Orleans at about 12 mph whereas a barge would average about 5 miles per hour.

Another issue is the "simple rule of Port 101," that every time freight or cargo goes through an additional transfer handling, costs are added for the shipper, he said. Since Sea Point lacks direct road and rail access, there will always be added layers of handling, LaGrange said.

He said Sea Point would cause a major loss of port-related jobs because about 45 percent of the containers currently going to New Orleans would be lost to ports in Houston or Gulfport, Miss., since about 80 percent of cargo that comes into the port is bound for other destinations.

Port consultants have figured that about 45 percent of that cargo would stop at a downriver port and continue on to other ports, never stopping in New Orleans.

Sea Point is not the only port proposal floating around. Another downriver concept, the Millennium Port, had the backing of the Port of New Orleans when it was first suggested in the late 1990s. The proposal died, said Ned Peak, executive director of the Millennium Port Authority, when the state did not provide funding for it.

State Sen. A.G. Crowe also has authored a bill to create a container transfer facility on the east bank of Southwest Pass. Although the cost would depend on the facility's size, Crowe estimates a $1 billion to $3 billion price tag.

To increase its ability to handle more containerized cargo, the Port of New Orleans plans to expand its Napoleon Avenue facility.

World Trade Center Executive Director Eugene Schreiber said he believes there will be enough trade, especially after the Panama Canal expansion, to make all the facilities viable.

"If it's a growing pie as I think it is, you could call it competition. But they're each going to get a piece of the pie," Schreiber said.