Katrina-Hit Port Recovering Business
NEW ORLEANS – After Hurricane Katrina destroyed about one-third of the Port of New Orleans, the port's chief executive turned an offhand remark into a challenge to restart a vital part of the city's storm-ravaged economy.
"It all came out as kind of a joke when someone told me, 'You won't have a ship in this port for six months,"' port chief Gary LaGrange recalled. "My response, with a lot of bravado, was we'll be back at 70 percent within six months."
So far, so good.
The port, a major entry point for imported steel, natural rubber and coffee, received its first post-storm ship Sept. 12, two weeks after Katrina. Just over three months later, the port is running at about half capacity, LaGrange said in an interview. Before Katrina hit Aug. 29, it was getting 36 to 40 ship calls a week. Now, the count is 18 to 20.
By March or April, the goal is to hit 70 percent of pre-Katrina calls.
But many hurdles remain: finding enough truck drivers to haul and deliver containerized cargo, and enough longshoremen to handle bulk loads; getting cruise ships that handled 700,000 passengers annually back on schedule; and keeping finances in line with diminished business.
In 2003, New Orleans ranked fifth among U.S. ports in tons of cargo handled, and 12th in total foreign trade, according to the latest figures available from the American Association of Port Authorities.
LaGrange estimated the port sustained $100 million in damage, while port-dependent businesses had another $280 million to $300 million in damage. The portion of the port nearest the Industrial Canal, the site of devastating flooding, was virtually wiped out.
"Thirty percent of the port is no longer in existence as we knew it Aug. 28," LaGrange said.
One of the businesses that depends on the port is Cold Storage and Warehousing Ltd., which exports frozen chickens. The company was stuck with 52 million pounds of rotting chicken after its power was knocked out by Katrina.
"The port's success has allowed us to grow our business a lot in the last 10 years," said Mark Blanchard, the company's executive vice president. "Without the port, we wouldn't have a customer base to fill three cold-storage warehouses."
Cold Storage hopes to reopen with half its capacity early next year.
The storm also has created difficulties for port businesses because of their dependence on the Mississippi River Gulf Outlet, a 76-mile man-made channel from the Gulf of Mexico that allows ocean-going ships access to the port's Inner Harbor Navigation Canal. Most deep-draft ships can't get to the inner harbor from the Mississippi River because they can't fit through the current lock on the Industrial Canal.
Now, with the outlet blamed by some for helping to flood St. Bernard Parish during Katrina, calls are rising for its closure. If that occurs, lock improvements will have to be hastened, businesses moved to other sections of the port or goods trucked to ships along the river, LaGrange said. A source of funding for such a move has not been secured, but one possibility could be federal money now earmarked to keep the outlet dredged.
Last year, 1,904 ships loaded and unloaded cargo at the port, a series of terminals and wharfs on the Mississippi River. The port handled 10.4 million tons of general cargo and 169,304 freight containers at a site that included 22-million-square feet of cargo handling areas.
One group watching the comeback bid with keen interest is union longshoremen, who've seen their ranks trimmed from roughly 5,000 in the 1950s to 460 today as automation and container cargo have sharply reduced the amount of heavy labor needed.
Jim Campbell, president of the International Longshoremen's Association local at the port, said about 220 of his members have returned to the area and more are ready to come back if the work picks up.
"We've got enough people to handle the work we have," Campbell said. "But we're begging for work. If we can get more work, we can get more people."
For now, some longshoremen are staying on cargo ships at the port. Campbell said his members need emergency trailers for their families and schools for their children.
"We're not asking for anyone to come help us out of this," he said. "We're asking to be able to help ourselves."
LaGrange said temporary housing and schools also would help alleviate another problem — a shortage of truck drivers displaced by the storm.
"Any longshoreman, trucker or port worker is more apt to feel at home even if that trailer is for a year or two," he said. The port, which had about 1,500 truck calls per day before Katrina, now receives about 600.
"As the ship calls increase, the truck calls will have to increase proportionately," LaGrange said.
The port itself employed 330 workers before Katrina and now has a payroll of 275, after accounting for employees who don't plan to return to New Orleans and the elimination of jobs vacant before Katrina.
One possible scenario LaGrange can't avoid is that his operation will never again be as big as it was before the storm.
"There's always that possibility, but I thought there was that possibility before Katrina," LaGrange said. "Competition is not a new wrinkle. Katrina simply escalated it."
In the meantime, the port is expecting a jump in foreign steel imports following the elimination of steel tariffs, a restart of the cruise business — including the first post-storm passenger call Dec. 31 — and increased poultry exports.
Although the port hasn't asked for direct federal aid for its basic operations, LaGrange said he's hoping for congressional action that would allow it to refinance about $110 million in outstanding debt. One refinancing proposal would give the port a "payment holiday" for two years, followed by interest-only payments for two years and an extended amortization schedule.
"We wouldn't turn it down," LaGrange said of direct federal payments. "But we haven't been standing there with our hand out."