U.S. port execs tell Propeller Club, trade dispute with China hurts imports and exports

At the annual Propeller Club convention that took place at New Orleans between October 15-17, representatives of the Ports of New Orleans, Virginia, Seattle and Tacoma, reported declines in business due to the U.S. trade dispute with China:

• In 2019, the Port of Virginia lost an annual 20,000 containers of wood product exports to China that were cancelled by Chinese buyers, according to Russ Held, vice president economic development for the Port of Virginia.
  
• Bobby Landry, chief commercial officer, Port of New Orleans reported decreases in U.S. soybeans exports transiting the Port due to reduced demand from China. At the same time the imposition of tariffs on foreign steel imports by the Trump administration has reduced imported steel imports into the Port. The resulting decline in loaded containers filled with steel products has increased shipping costs for US agricultural exporters who must now pick up the backhaul cost of paying for empty containers, which used to arrive paid for by purchasers of imported steel products. The broader concern is whether the trade dispute with China will mean the permanent loss of soybean and other agricultural export markets for U.S. farmers.
  
• Kurt Beckett, deputy chief executive officer, Northwest Seaport Alliance (NWSA) composing the ports of Seattle and Tacoma says the two ports have experienced a decline in agricultural exports to China. The ports are facing additional problems because they have lost business to the Canadian Pacific Coast Port of Prince Rupert.
  

The Ports of Virginia and New Orleans both report an increase in the use of containers being transported by barge instead of by truck, Landry and Held said. The service is still small but contributing to a decline in truck traffic and the vehicular emissions generated at the two ports.

The Port of Virginia has had a successful container on barge service that has been operating between the Ports of Norfolk and Richmond for 10 years, Held said. The service has created new business for the Port of Richmond, reduced some truck congestion at Port of Norfolk terminals as well as reduced truck emissions.

The Port of New Orleans cruise ship business is growing and generating new income for the port, Landry said. Cruise ship business does create new challenges when ships are late and passengers loudly complain about dislocations to port officials.

At the Port of New Orleans, vessel pilots now board the ships in pairs because there are so many safety demands from cruise ship operators so two pilots are required instead of the traditional one.

2019 Floods Impact Mississippi River

In a separate presentation to the Propeller Club, Sean Duffy, executive director for the Big River Coalition reported that the 2019 floods placed a major strain on flood control infrastructure on the Mississippi as well as dislocations of Mississippi river tug and barge shipments including agricultural exports.

Duffy said that a major increase in dredging was necessary to move a record amount of sediment from the Louisiana ship channel that had been generated by the floods. He said “Dredging companies have dredged an estimated 87 million cubic yards of sediment within the last year, twice the annual average.”

The result was that the Big River Coalition and other Louisiana shippers lobbied Congress “to double the annual appropriation for US Army Corps of Engineers (USACE) dredging in Louisiana to address the shoaling threat. The effort was successful and Congress allocated $245 million dollars for Mississippi River dredging.”

In addition, $14.5 billion was allocated to repair the damage caused to New Orleans and Louisiana by Hurricane Katrina in 2005. The investment improved USACE flood controls protecting Louisiana and New Orleans. The $14.5 billion is credited with helping New Orleans avoid hurricane devastation in 2012 when storm surge defenses kept New Orleans safe from Hurricane Isaac which drenched New Orleans and Louisiana with heavy rains and high winds.

However, Suzanne Van Cooten, a meteorologist with the National Oceanographic and Atmospheric Administration (NOAA) said that Hurricane Barry could have done serious damage to New Orleans. The hurricane was described “as an unusually asymmetrical tropical cyclone that made landfall in Louisiana in July 2019, causing $600 million in damages.” The hurricane’s storm surge could have had a serious impact on the Mississippi River and New Orleans because flood waters were still very high. Duffy noted this is an unusual combination that could have had a devastating impact. Fortunately, the storm lost its velocity over land. Van Cooten said that the hurricane had transformed from a tropical storm into a hurricane unusually quickly making predictions difficult.

Mississippi River Cities and Towns Push for U.S. Infrastructure Bill to Boost Flood Protection

Colin Wellenkamp, executive director, Mississippi River Cities & Towns Initiative (MRCTI), based in Saint Louis, represents 95 Mississippi cities and towns from St Paul, Minnesota to New Orleans and the Gulf of Mexico in 10 states. MRCTI is dedicated to “dramatically increasing demand for effective river protection, restoration, and management.”

In an interview with AJOT Wellenkamp said, “The ability of waterborne commerce to expeditiously flow down the Mississippi is increasingly challenged by flooding and a lock and dam infrastructure built in the 1930s that is well beyond its ability to function and is increasingly prone to shutdowns and closures.”

In September, MRCTI and the Rotary International formed a partnership, “to restore natural and built infrastructure of the (Mississippi) Corridor to enhance community resilience.”

Wellenkamp says the price tag for reconstruction is getting more expensive and now there is 2019 flooding damage to repair, “Our estimate is there is an immediate need for $1 billion in wetlands augmentation.”

In addition, “There is a $2.2 billion investment necessary to rebuild locks and dams in Missouri and Illinois that will improve tug and barge traffic and also improve flood controls. Altogether we believe there is a total need for a $12 billion investment to upgrade flood control systems along the entire Mississippi River.”

The $2.2 billion funding to replace the seven locks and dams is still in a pre-construction process in 2019, eighteen years after the feasibility study began in 1991 and twelve years after its authorization by Congress in 2007.

The flooding of 2019 requires new spending to upgrade flood controls along the Mississippi, “What we are seeing is that the traditional levee system no longer works in controlling higher levels of flooding from more rains on the Mississippi. The levees move the flood waters to somewhere else and they narrow the river making it easier for higher water to flood and flood more frequently. So, we need to revisit the need for more natural means of controlling flooding. The best means of flood control are wetlands that naturally absorb flood waters.”