Ports consider deepening the river channel
With the bottom dropped out of the world maritime shipping industry, Louisiana's ports face a long and slow recovery. But at the end of the tunnel, officials of the Port of New Orleans see black: coal.
Coal shipments along the Mississippi plummeted to 7 million tons in 1982 after a record of nearly 13.9 million the year before. Forecasters aren't projecting a real turnaround nationally until 1984, according to Connie Holmes, executive director of the Coal Exporters Association of the United States in Washington. Recovery will be gradual, she adds.
But officials here are confident that coal will loom large in the nation's energy picture. The lower Mississippi, end point of 19,000 miles of navigable inland waterways, has an advantage in access to both Eastern and Western coal.
In anticipation of a new surge in shipments of coal, an idea that's been around for a while is being dusted off and given another hard look: deepening the river channel.
New Orleans is one of several US ports - including New York; Baltimore; and Mobile, Ala. - whose cargo mix could justify deepening the channel from the current 40 feet. Coal, grain, and petroleum traveling in and out of the lower Mississippi could be shipped with much greater economy of scale in bigger ships. (Popular perception notwithstanding, a shallow channel doesn't keep big ships out, it just keeps them from coming in fully loaded.)
What's tricky is the question of how the deepening would be paid for. Given the current philosophy in Washington, it is likely to be a self-help project. It's expected that Uncle Sam would put forward the up-front money. But the local area benefited - in this case, the State of Louisiana - would have to pay at least part of the cost, and recover its expense by levying some sort of charge on the ships using the channel.
This puts the onus on the state to make a good case for the expense involved - a justification bankers can appreciate. As port director Ned Reed puts it, ''The kind of collateral that's offered by cuts in mud under 40 feet of flowing mud-filled water slowly filling up is very poor collateral.''
A gubernatorial task force has commissioned the New York consulting firm of Tippetts-Abbett-McCarthy-Stratton to do a major study of the economics of deepening the channel. Its report isn't due out until next month, but preliminary findings suggest that going as far as 60 feet could be cost-effective about two-thirds of the way from New Orleans to Baton Rouge. Going farther upriver, however, would bring the law of diminishing returns into play.
The problem lies in all the pipelines and cables in the Baton Rouge area, according to Joe Cocchiara, executive director of the task force.
The analysis has had to consider not only whether enough ships would use the deeper channel but whether the trade utilizing it would stand up to the necessary charges.
''You have to look at the world markets - it's fine for the government or [ Budget Director David] Stockman to hit 'em with a charge, but if that charge puts you out of world commerce, you'll end up with nothing,'' Mr. Reed says.
Sen. Mark O. Hatfield (R) of Oregon has introduced a bill calling for levying a flat charge on vessels according to the value of their cargo - figured to be about 0.03 percent, according to one of the senator's aides. These vessel charges would pay about 40 percent of the basic cost of maintaining the nation's waterways, the aide says. The remaining 60 percent would come out of general federal revenue.
Deepening the channel, under the Hatfield bill, would be paid for jointly by local areas and the federal government, the local share increasing with depth. The states could finance their share by whatever fee schedule they wished.
Hearings on the bill are expected soon.
Meanwhile, Mr. Reed says the nation's ports won't really see economic recovery until Europe recovers - in 18 to 24 months. The maritime shipping industry is at only 45 to 60 percent of capacity, Mr. Reed says, and that has certainly affected New Orleans. ''We've got 'dead' ships tied up down there right now,'' he says with a glance out the window of his International Trade Mart office.
When final 1982 figures are in, port business is likely to prove down by as much as 30 percent, one observer says. But port construction continues to the tune of $2 million a month.
US Corps of Engineers rates New Orleans as the largest port in the United States in terms of tonnage shipped; some 5,000 ships and 100,000 barges call here in a year.
New Orleans's forte is bulk, rather than general, cargo. The trend in general cargo over the last few years has been slightly down, even before the recession. But bulk cargo, though down now, more than tripled from 1971 to 1981, with especially sharp rises over the last couple of years.