Offshore container port studied for St. Mary Parish

MORGAN CITY, La. -- The possibility of the construction of a large international container port in the outlying waterways of St. Mary Parish, which would take advantage of the expansion of the Panama Canal expected to be completed in 2015, is being studied by parish leaders.

Paul Naquin, parish president, said, Chinese corporations are interested in the project, and the funding for the port — which would have railroad and highway connections — would come from Chinese investors. Large container ships that cannot yet fit through the Panama Canal would come to the port and off load containers, some of which would go onto smaller ships for U.S. and Caribbean port destinations.

“This group has been looking at sites in the Gulf of Mexico. They had actually looked at a site in Mississippi. They had looked at a site at the mouth of the Mississippi River,” said Frank Fink, economic development director for St. Mary Parish.

“They looked in Jamaica, Colombia, and Panama. So, this port would probably handle five million containers per year. Most of them would be for the United States,” Fink said.

China Communication Construction Company — known as CCCC in the shipping world — is interested in making a port in St. Mary Parish similar to one it has in China.

Naquin and Fink have twice visited China — once in July and once in October — about the project.

“I want to really express that this project is still in the pre-feasibility study phase,” Fink said.

Much of the container traffic that is envisioned to pass through such a port in St. Mary Parish is now going to West Coast ports, especially Long Beach, Los Angeles, Seattle, Tacoma and Vancouver, where the containers are put on trains for various destinations in the central and eastern United States.

“The Chinese ship about 25 million containers to the West Coast, mostly for further shipping to the interior of the United States. That gets expensive. What we’re looking at here is taking about five million containers from that number,” Fink said.

“They have been shipping from China completed products. What they are talking about here is the possibility of shipping parts, and we would set up assembly facilities from basically Lafayette to New Orleans. So, the impact, you can’t even put a number on it.”

Fink said that a location for the port — which would require the construction of an artificial island — has yet to be determined.

“Right now, we’re looking off the coast of the parish near the mouth of the Atchafalaya River but inside state waters,” he said. “Access to the waterways is very critical.”

“We’re going to be very close to the I-149 and the BNSF Railway,” Fink said.

“When you look at the fact that there are six railroads in New Orleans, that we can access the Canadian National Railway, we’re talking about Chicago, Pittsburgh, St. Louis and Memphis,” he said.

Fink said that no railroad companies had yet been contacted about the possibility of rail traffic from the port — which would require new track to be built from the BNSF’s east-west mainline across the parish — but, “that’ll be on our list now that we are at the point that we are.”

Containers with destinations within a few hundred miles of the port would leave by truck, and shippers and economists have minimum lengths for which travel by rail is practical.

“Our estimates indicate that depending on value of cargo and volume, the break even for truck versus rail varies between 250 and 750 miles,” Walter Kemmsies, chief economist for Moffat & Nichol in New York, said.

Aaron Ellis of the American Association of Port Authorities put the number right at 500 miles.

Naquin said that consultants helped make a connection between the parish and Chinese businesses.

“Frank and I met with CCCC China Harbour, a holding company for several large Chinese firms, in July to encourage them to look at St. Mary Parish and all it has to offer as a deepwater port location,” he said.

“Mr. Eugene Ji, an American citizen from China, set up these high level meetings. Eugene’s firm represents the G2 Deepwater Partners, interested in developing this port facility in St. Mary Parish,” Naquin said.

Fink said that during the July visit, he and Naquin visited the Port of Yangshan, a three-square-mile island container port built 20 miles off the coast from Shanghai.

Naquin said that he was impressed with what he saw.

“We did visit the Yangshan port. It’s unbelievable what engineers and consultants can do if they’ve got money. It took them six years just to design and engineer this port,” Naquin said.

Fink said, “CCCC China Harbour expressed a desire about conducting a feasibility study, but we were concerned about environmental permitting and the Jones Act as it related to dredging. Paul said he would do some preliminary review of these issues. Paul and I had numerous meetings with the U.S. Army Corps of Engineers, the Department of Natural Resources, Gov. Jindal’s office, the State Economic Development Department, Louisiana ports including the Port of New Orleans and numerous federal, state and local elected officials upon our return and have received positive feedback.”

He said that the Chinese company will conduct soil borings offshore in St. Mary Parish, hopefully before year end.

“If the results from the borings are successful, an engineering, economic and environmental study will be commissioned that will take approximately one year. If the results of the study are positive, the actual design and permitting of the project can begin as early as 2014,” Fink said.

According to data provided by Ellis, the deepest draft for the largest ocean-going container ships is about 50 feet. Of all U.S. ports on the Atlantic and Gulf Of Mexico coasts, only Hampton Roads, Va., and Baltimore, Md., have 50 foot depths.

Even with the artificial island port being offshore, dredging would need to be done, but it would help nearby coastal restoration efforts, Fink said.

“We’re like at 20 feet. They’d still have to dredge to 50 feet to bring big container ships into this facility. That would probably create millions of cubic yards of dredge material which could be used beneficially for Terrebonne Parish and other coastal areas.”

“It would be mostly dredging in federal waters. We spoke to Garret Graves in the governor’s office, who deals with coastal restoration, he said, ‘I’ll take every ounce of sediment you can give me,’” Fink said.

He said that the main concern of the Port of New Orleans was that a large container port in St. Mary Parish would take away some of its business.

“The greatest client at the Port of New Orleans is Europe. So, it’s a different market that we would have with our port, and it’s a market that’s primarily served by West Coast ports,” Fink said.

“In fact, they think that we’ll probably bring them more business,” he said.

“This is an alternative to the West Coast ports. They told me that it costs $75 to get one TV set from Seattle to Chicago. That’s just on a train and truck. We’re not necessarily picking up new cargo,” he said.

“Their port in Yangshan does 15 million containers a year, and it also ships containers from other countries like South Korea and Vietnam. It’s an issue of cost effectiveness. They’re going to consider shipping assembly items here and having us assemble them on U.S. soil. In China, labor rates are going up. So, they’re looking at us as a cost-effective alternative to them. Plus, it will put them in a better light by having China provide jobs in the United States, rather than the other way around.”

Fink said that the Chinese businesses also like the fact that St. Mary Parish has a “substantial transportation network to deliver to offshore rigs.”

With the expansion of the Panama Canal — which involves a new wider set of locks next to the century-old locks currently in use — several U.S. ports along the Atlantic Ocean and Gulf of Mexico have taken steps to expand capacity, with many of them taking federal and state funding in the hopes of attracting business, but Fink said that the proposed port in St. Mary Parish would be built due to existing demand.

“The point here that is different from other port expansions is that the customer is already set. For other ports, their approach is ‘build it and they will come.’ So, of all the money that will be put in this port, it will be investors and no public funding,” he said.

“The irony of it is all the other ports have to go for public funds. This here would be a whole different scenario. If the government would save the money that you’d spend on upgrading on all of these ports, maybe you could reduce the deficit.”

Of the Chinese investors, Naquin said that “the ball is in their court” with soil boring expected to happen next but that the proposed port would be significant.

“If this deepwater port comes to pass, it’ll be the biggest thing ever for St. Mary Parish.”

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