A Swift Return Planned for Port

The economically crucial port in New Orleans aims to reopen for commercial business Wednesday and to recover completely in six months -- a quicker-than-expected comeback from Hurricane Katrina but still not fast enough to prevent additional financial hardship among American farmers.

The Port of New Orleans this week began unloading federal ships bearing relief supplies, and port President Gary LaGrange said the port could be operating at 25% of its capacity in a month, at 75% in three months and at full steam in six months.

“It’s been just inch by inch, but every day, you can see a little more progress,” he said, citing a just-cleared trucking route to the docks and a longshore workers union’s promise of an adequate labor supply by next week.

But the peak of the fall harvest begins in late September, and a New Orleans port operating at 25% won’t unwind a traffic jam of hundreds of loaded barges stuck on the Mississippi River.

“It’s not enough,” said David Sehrt, chief operating officer of Ingram Barge Co., the largest U.S. barge company. Many grain elevators are filled up, and empty barges are so scarce that shipping costs have doubled to a 100-year record, Sehrt said Friday.

“If the elevators don’t have any capacity, it has to go on barges. And if there’s no barges, I don’t have any idea where they put it,” Sehrt said. Grain prices have fallen, and some corn, soybeans and wheat originally slated for export might instead be sold at a loss on the local market.

Even without that price pressure, farmers could face as much as $2 billion in storm-related losses, including $500 million in extra transportation costs, according to the American Farm Bureau Federation, which represents 5.6 million farms.

As New Orleans-bound barges pile up on the river, some major producers have temporarily turned to the railroads, said federation economist Megan Provost.

But such alternative routes aren’t feasible in the long term, because moving inexpensive bulk commodities by rail or inland waterway to Houston and other seaports adds too much to the price, said Jim Kruse, director of the Center for Ports and Waterways at the Texas Transportation Institute, a research agency affiliated with Texas A&M; University.

“It just takes a penny here and a penny there to make it not worth doing anymore,” he said.

The Mississippi and its tributaries span nearly 15,000 miles and reach 33 states, providing by far the least expensive route for commodity exports and many imports. New Orleans and nearby ports handle most of the country’s grain exports and the most overall weight of any U.S. site.

The health of the New Orleans-area economy is inextricably bound to that of the port, which claims direct or indirect responsibility for 107,000 jobs and $13 billion in annual spending.

And just as the port’s comeback is crucial for the city, a New Orleans revival may speed the port’s progress.

Kline Sack, New Orleans port manager for shipping giant Norton Lilly International, said he believed that ship traffic would increase rapidly over the next two years, to well beyond pre-Katrina levels, because of the demand for building materials.

“It’s going to be very, very busy,” Sack said. “They’re rebuilding an entire city.”

LaGrange and outside experts said they expected the port to return with few modifications, continuing to focus on grain exports and such imports as oil, steel, rubber and coffee.

LaGrange acknowledged that some ships that had shifted away from New Orleans, including two from Zim Integrated Shipping Services of Israel, wouldn’t come back.

But many shipping lines say they expect to return.

“As soon as the situation is normalized, we are going back to the same regular schedule,” said Sergio Larrondo, regional operations manager for Chilean line Compania Sudamericana de Vapores.

New Orleans should be able to use insurance and anticipated federal funding to improve the existing port facilities, especially if it stays true to its traditional strengths in cargo.

“Our game plan is to first get up and running, and then we can think about what to do different,” said Ed Preau, assistant secretary of the Louisiana Department of Transportation.

The chief obstacle is the lack of a labor force to rebuild, work the docks and support the shipping industry with related services.

For a time, the Texas Transportation Institute’s Kruse said, the port will function like an oil rig, with workers housed on boats. But Shashi Kumar, a professor of maritime economics at the Maine Maritime Academy, said that if the authorities made New Orleans safe to live in, the increased shipping would bring back the population.

“When the trade comes back, all these people will come back,” Kumar said. “I’m optimistic.”