Port of New Orleans lays down groundwork for future growth

Jeff Berman, Senior Editor -- Logistics Management, 3/10/2008

NEW ORLEANS—Prepping for the future, with both long- and short-term growth in mind, the Board of Commissioners of the Port of New Orleans recently released its 2020 Master Plan, entitled “Charting the Future of the Port of New Orleans.”

This plan, said Port President and CEO Gary LaGrange in a statement, comes at an exciting and challenging time for the port, due in no small part to the future expansion of the Panama Canal and ongoing increase in global trade from emerging economies. These developments position the port to “capture new cargoes, create thousands of jobs, and provide new economic opportunities for the region, state, and nation,” said LaGrange. He added that getting started now is key in order to remain ahead of competing ports, with planned capital improvements for competing ports totaling $10.3 billion, representing an average of $858 million per port among the 12 ports the Port of New Orleans examined for comparison purposes.

Some of the Port of New Orleans’ growth plans include:

• the approximately $250 million construction of the second phase of the Napoleon Avenue Container Terminal, which would increase terminal capacity by two ship berths and almost 200,000 TEU (twenty-foot equivalent units). This effort would allow the port to attract additional container carriers and expand the business of existing operators, as well as add container cranes and re-locate the current Napoleon Avenue Intermodal Yard;
• the $240 million third phase of Napoleon Avenue, which the port said would increase terminal container capacity to more than 1.3 million TEU to meet an expected tripling in global container traffic by 2020;
• and a $75 million investment to develop a new facility possibly on the West Bank of the Mississippi River to expand breakbulk cargo capacity outside the port’s traditional footprint. This facility would be comprised of two deep-draft ship berths, warehouse space, paved marshaling yards, and other infrastructure improvements.

While none of these plans above—and others in the plan—are brand new to the port, it is the first time they have been brought together in one document with price tags attached to it, coupled with a detailed explanation of things the port sees on the horizon and needed to prepare for, Port of New Orleans Spokesman Chris Bonura told LM in an interview.

“These efforts are several years in the making,” said Bonura. “If you look at the financing for this plan, it breaks down into a few different categories: state funding, federal funding, port-generated funding, and public-private partnerships (PPP), which would bring some private equity investment into the port.”

According to news reports, port officials have laid out a plan to spend $574.4 million through 2012, followed by another set of projects from 2013 to 2020 that would total $465.1 million, with the Napoleon Avenue Container Terminal expansion, serving as the centerpiece.

Bonura said that the Port of New Orleans had worked on bringing private equity backing into the port prior to the events of Hurricane Katrina in 2005. But Katrina put that investment on hold so the port could focus on recovery efforts, he explained. And the details in this plan allow the port to grow and go beyond recovery, according to Bonura.

“We have recovered for the most part, [and] the cargo is back, and now we can focus on the long-term,” he said. “This includes not just getting the port back to where it was but to also position it for future growth. This plan touches all the lines of business we do at the port, and it is just a recognition of our need to further modernize our facilities, and take advantage of the inland connections via railways, waterways, and highways. It is also a further diversification of the port. We don’t want to forget where we come from with breakbulk cargo. But we also see the trend where breakbulk cargo is going into containerized cargo, so if we stand still the trend is going to pass us by.”