Good Company

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Thursday, September 08, 2005

Mississippi River Traffic Flowing - Challenges Loom

As rescue and recovery efforts continue, the vital Mississippi River shipping trafffic picks back up, slowly, but steadily, as set out here:
In the last few days, ships laden with American grain have been steaming out of the mouth of the Mississippi River headed for overseas markets. And dozens of vessels full of imported goods have been steering away from New Orleans and the harbors of other damaged cities to unload at alternate ports eager for the business.
At a staging area near the river's entrance, called the Southwest Pass, the number of idled ships dwindled to 19 Tuesday morning from 86 about a week earlier, the Coast Guard said, as some were rerouted to ports in Texas and elsewhere and others were able to sail upriver to drop off and take on cargo.
With Midwest grain harvest season upon us, it is vital to keep the trade lines flowing.

UPDATE: How big an impact could New Orleans port closure have? A report on a University of Nebraska study:

"A moderate to medium disruption of exports at this critical 'eye of the needle' supply chain point in the U.S. is estimated to conservatively result in a loss of U.S. export value of $600 to $900 million a year" in lost exports and other costs, he said.

Researchers wanted to know the economic ramifications of a terrorist event that destroyed the marketing infrastructure of the grain industry, Conley said. He focused on what would happen if something destroyed bridges, rail lines, waterways or damaged the Port of New Orleans.

"When we came to work last week, we realized that the devastation from Hurricane Katrina would have some of the same effects on the nation's export markets as our study," he said. The port was shut down last week in the hurricane's wake and reopened on a limited basis this week.

Conley said the actual impact of this disruption is hard to predict. If the port isn't running at full capacity for two of the critical upcoming four to five months, losses could be similar to the $600 million annual figure in the study, he said.

That's because 50 percent to 60 percent of the port's total annual corn exports need to move through during and after harvest.

Between 70 percent and 75 percent of U.S. corn exports go through New Orleans.

"The amount of corn that goes through other ports is nominal compared to New Orleans," he said. "New Orleans really is the major pipeline for corn leaving the U.S."
Of course, in addition to the finacial loss is the disruption experienced by those who are to receive the grain ....

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