U.S. economy could face big bill if traffic stopped on river

Published 6:44 am Friday, May 13, 2011

NEW ORLEANS (AP) — If the lower portion of the flooding Mississippi River is closed to ships, the U.S. economy could face a bill running into the hundreds of millions of dollars a day.

The Port of New Orleans was told Thursday by the Coast Guard that a river closure between the Gulf of Mexico and Baton Rouge to deep-draft ships was possible as early as Monday. Ships approaching the river from the Gulf and approaching Baton Rouge were warned of the possibility.

Shipping interests and the port pushed for the opening of the Morganza spillway northwest of Baton Rouge to divert water from the flooded Mississippi into the Atchafalaya River, saying the move would keep ships cruising. No decision on the spillway had been made Thursday after more than a week of discussion, but Gov. Bobby Jindal was telling residents in Atchafalaya flood plains to prepare for an evacuation.

But if the river closes, history shows the costs grow quickly into staggering figures.

In 2008, a 100-mile stretch of the river was closed for six days after a tugboat pushing a barge collided with a tanker ship, spilling about 500,000 gallons of fuel and stacking up ships. The Port of New Orleans, citing an economic impact study it commissioned, estimated the shutdown cost the national economy up to $275 million a day.

“From my experience, any study like that generally understates the cost,” said Sean Duffy, a maritime advocate with the Mississippi River Maritime Association.

Grain and other farm products come down the river to the Port of South Louisiana, north of New Orleans, for export. In addition to such cargoes as steel and coffee, the Port of New Orleans handles the big metal containers — often carrying finished goods from overseas — that can be easily transferred to railroad cars and trucks. In March, the port handled 43 container ships, with another 44 coming in April.

And no matter where the final destination is, a large number of ships come into the country bound for other river systems and depart through the lower Mississippi carrying almost every imaginable type of cargo.

Controlling traffic on the Mississippi is a never-ending process involving the Coast Guard, captains of ships both big and small, and experienced pilots who are supposed to know every nook and cranny of their watery turf — the depths of the channels and the location of shallow spots and sandbars where a vessel could run aground.

That task becomes much tougher when the Big River shows its teeth as it has this spring, said Michael Lorino, the head of the Associated Branch Pilots whose members steer ships along the Mississippi on the lower reaches of the river. Currently, ships are having to travel at much faster-than-normal speeds to handle the strong current, he said.

One navigation fear — even when the river is moving normally — is that a ship could lose power or barges being pushed or pulled by tugboats could break away and slam into protective levees.

The Coast Guard is operating on the idea that the river could reach 18 feet sometime Monday — and necessitate closure. Lorino said the math could be changed by opening the Morganza, which would drop the river by two feet in a hurry.

“We’ve had numerous 17-foot rivers and have been able to operate,” he said.

Although a go-order hadn’t been issued for the Morganza, an additional 113 bays were opened Thursday at the Bonnet Carre Spillway on Thursday, for a total of 223. The spillway, about 30 miles northwest of New Orleans, has a total of 350 bays that divert Mississippi water into Lake Pontchartrain.

Most industries dependent upon the river have been willing to say little more than “the situation is being closely monitored.” In fact, the high water didn’t dampen plans for a Saturday christening of the future USS Anchorage, a big amphibious Navy assault vessel, for Saturday at the Avondale shipyard, located on the Mississippi River near New Orleans. The shipyard’s owner, Huntington Ingalls Industries, said that in the meantime, rolling stock, material and other portable equipment were being moved to higher ground.

Carnival Cruise Lines — another of those monitoring the situation — still planned its usual schedule through New Orleans.

But some of the chemical plants and the refineries on the lower Mississippi in Louisiana use barges and small tankers to bring in at least part of their raw materials and ship out finished products. Royal Dutch Shell said it was lining up trucks and rail cars in case of a river interruption. Other refineries, citing competitive reasons, wouldn’t discuss their supply chains.

The huge oil tankers that bring in crude from overseas are too large to navigate the Mississippi, instead using the Louisiana Offshore Oil Port, located offshore at Port Fourchon.

Vessel operators don’t make money by sitting on the river.

A parked vessel, depending upon its size, will run up $3,000 to $20,000 per day in costs, Duffy said. Then, the cost of tugboats required to park the vessel and guide it back into the river have to be added on. Currently, river pilots are now mandated to be on parked ships 24 hours a day — another cost.

In addition, the high river now offers less parking space. Parked vessels normally have to have 200 to 300 feet between them, but the Coast Guard is now requiring 1,200 feet, Duffy said.

At least 10 freight terminals along the lower Mississippi River between Baton Rouge and New Orleans have had to suspend operations because of the high water, said Roy Gonzalez, acting president of the Gulf States Maritime Association, which represents steamship agents and terminal operators. In many cases, their docks are already at water level or going under, he said.

Vessels scheduled to use the terminals will either have to wait out the high water, divert to other terminals and in the case of inbound foreign vessels, use other Gulf ports. In either case, the additional vessel costs for delays can routinely run $20,000 to $40,000 per day, Gonzalez said.

“All delays have multiple costs,” Duffy said. “They can get real expensive in a hurry.”