Water Shipping Rendered Uncertain by Katrina

While the impact on energy markets has been the biggest economic story to arise from Hurricane Katrina, shippers who use the inland waterway system are all waiting to see what the storm’s full impact on Gulf Coast shipping will be.

A Tuesday, Sept. 6, report from Bloomberg News says that the Port of New Orleans is now open to relief cargo and that the lower Mississippi River has also been cleared to handle many cargo vessels.

The Bloomberg report quotes Port of New Orleans spokesperson Chris Bonura as saying the river was opened to commerce on Sept. 1, three days after Katrina hit, handling vessels with 12 feet of draft, such as river barges.

He also notes, though, that his agency and is still scrambling “to get the channel open [and] to get the port facilities open. That is what we are working pretty frantically to do now.”

The U.S. Department of Transportation has provided generators to help power cargo handling equipment, according to the Bloomberg report, while a vessel that can temporarily house some 1,000 dockworkers is also expected soon.

An article appearing on the Los Angeles Times Web site one day earlier, however, referred to the Mississippi River as being a closed passageway, and speculated that agricultural shipping in particular could be affected dramatically and negatively.

It appears likely that to whatever extent the port is functioning, the handling of inbound relief and rebuilding supplies will be a priority.

New Orleans also serves as a major shipping point for outbound scrap metal and paper and inbound finished steel and ferrous scrap substitutes.

Statistics collected by the United States Geological Survey (USGS), Reston, Va., show New Orleans ranking as the eleventh most active customs district in terms of ferrous scrap export volume, and the seventh most active in terms of dollar value in the first six months of 2005.

From January to June of 2005, scrap exporters shipped out 137,000 metric tons of ferrous scrap through the Port of New Orleans, worth a combined $56 million. In the same six months, just 3,000 metric tons of ferrous scrap was shipped through the Port of Mobile, Ala., one of the nearest port alternatives. (That port has re-opened, but with some facility size restrictions as of the Labor Day weekend.)

The heavy hitters in ferrous scrap exporting are the Ports of Los Angeles/Long Beach, with 1.1 million metric tons of ferrous scrap shipped out so far this year, and the New York/New Jersey port district, with 784,000 metric tons shipped out in the first half of this year.

If inbound finished steel shipments are substantially halted, this could place added demand on domestic steelmaking facilities, although such shifts are still speculative.