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Transportation infrastructure is decimated by Katrina

NEW ORLEANS, La. - Efforts to repair damaged transportation facilities and resume service in the U.S. Gulf Coast following Hurricane Katrina have commenced, but the extent of the destruction will like...


NEW ORLEANS, La. – Efforts to repair damaged transportation facilities and resume service in the U.S. Gulf Coast following Hurricane Katrina have commenced, but the extent of the destruction will likely mean that the region’s transportation infrastructure will remain compromised for weeks, if not months.

Katrina caused massive service disruptions for all modes of transportation. The region’s road network was swamped with flood waters and concrete bridges have toppled.

Many roads remained impassable days after the hurricane hit. Portions of the I-10 serving Louisiana, Mississippi and Alabama suffered heavy damage from flooding, debris and bridge deterioration and some remained shut down at press time while others were open only to emergency vehicles.

Many port and rail facilities were also shut down for days.

The Lower Mississippi River had been re-opened to deep draft vessels with a 35-foot draft or less for one-way daylight traffic, according to the U.S. Coast Guard but some port facilities may take weeks to re-open.

The city of New Orleans, 80 per cent of which was under water after Katrina hit and which could take up to 80 days before it is completely drained, is a major hub for general cargo.

Its port, which handles 11.2-million tonnes of cargo annually and offloads about 60 per cent of U.S. grain exports, will be closed for at least two to six weeks.

Although not as hard hit as other parts of New Orleans – for the most part the port’s wharves appear to be intact and able to conduct cargo operations and the transit sheds incurred damage but could be used while repairs are being made – the port is sure to find it difficult to procure the labour necessary to commence with repairs and work the vessels.

Many port workers have been left homeless and the city has been ordered evacuated.

“The outcome is not good, and it has been aggravated by unexpected flooding conditions following the storm,” said Gary LaGrange, president and CEO of the Port of New Orleans, after surveying the damage to his port last week.

The Port of New Orleans also handles considerable amounts of rubber, copper, plywood and manufactured goods.

It is the top American port for the movement of imported steel and the nation’s main coffee handling port.

Its 14 coffee warehouses are estimated to hold about a quarter of U.S. raw coffee supplies. And the city is a hub for industrial supplies such as chemicals and coal headed to the southern U.S. and containers being marshaled across the country on rail.

More than 70 truck lines, 50 ocean carriers, 16 barge lines and six Class I rail lines serve the port.

The Port of Gulfport, Miss., was also in the direct path of Katrina and the storm knocked down container cranes, blew apart sheds and scattered 40-foot containers through downtown Gulfport, according to media reports.

The port specializes in shipments of bananas and other perishables.

The Port of Mobile suffered minimal damage aside from mud and debris and did open on the weekend after the storm.

But its warehouses were unable to receive cargo subject to contamination until they were properly cleaned.

Disruptions to North American supply chains caused by the compromised transportation infrastructure will be punctuated by increased freight rates resulting from the spike in fuel pricing that immediately followed the storm.

“Ultimately it’s going to have to be reflected in higher freight rates,” affirmed Doug Switzer, manager of government relations for the Ontario Trucking Association about the spike in diesel fuel pricing.

The Canadian Industrial Transportation Association is attempting to get an accurate gauge on the impact of the storm on supply chains of Canadian shippers.

It sent a notice to all its members asking for comments on the direct or indirect impacts of the storm on their operations.

In the U.S. the damage to supply chains is much clearer.

“One of the initial considerations will be corn, wheat and soybean shipments on the lower Mississippi River where barges were damaged, navigation markers destroyed and parts of the river re-channeled. The movement of grain shipments from the Midwest to the Port of New Orleans will be significantly affected by the disruptions caused by Katrina. The shortage of barges will cause reduced storage capacity in Midwest grain elevators,” reported Fletcher Hall, executive director of the Agricultural and Food Transporters Conference of the American Trucking Associations.

There is also concern about supplies of sugar.

The hurricane was the latest in a series of events that has severely tightened the sugar market and threatened the U.S. domestic production of sugar-containing foods. Sugar supplies are reported to be at their lowest levels in over 30 years.

Other agricultural commodities which will likely feel the impact of Katrina include shrimp and chickens, according to Hall. And, according to a report from Associated Press, Hurricane Katrina may have destroyed about 1.5 million sacks of coffee stored in New Orleans warehouses.

The destruction to warehouses and in-transit commodities caused by Hurricane Katrina has naturally raised questions about insurance and liability.

CSX was among the first carriers to release itself from liability for damages to freight by calling upon force majeure provisions in its contracts.

Following is a mode by mode report on the challenges carriers face in resuming operations:

Truck

Motor carriers attempting to resume serving the region are thwarted by a shredded road infrastructure.

In Louisiana the I-10 between New Orleans and Slidell suffered heavy damage, including the loss of multiple sections of the major bridge known as the Twin Span over eastern Lake Ponchartrain, according to a U.S. Department of Transportation Situation Report. In Mississippi, the agency says US-90 is “basically destroyed” with three bridge structures damaged with spans missing or moved.

Many other major roads throughout Louisiana, Alabama and Mississippi suffered flood damage and, at press time, were either partially closed or open to emergency traffic only.

“It’s a major logistical problem,” American Trucking Associations president Bill Graves said in a televised interview with CNBC.

And of course some carriers are also hampered by the damage to some of their own facilities. For example, Reimer’s parent company Yellow Roadway Corp. has about 20 terminals affected by the storm.

“In fact a terminal that sits in New Orleans is basically half-buried right now,” Allan N. Robison, president and CEO of Reimer Express Lines Ltd., told Truck West shortly after the storm.

Ocean Carrier

Shipping lines serving the Port of New Orleans and other affected ports were scrambling to divert their operations to other ports.

Shortly after the storm, Crowley announced that it had suspended its liner shipping operations in the U.S. Gulf Coast. Its Gulfport, Miss., port facilities and New Orleans office were closed until further notice due to damage from Hurricane Katrina.

All sailings were being handled over Port Everglades, Fla., for the foreseeable future.

New Orleans-based break bulk carrier Intermarine shifted its operations to Houston.

Rail

Rail service into the Gulf area was severely disrupted with railroads suspending service to the area prior to the storm.

Katrina flooded some of the rail lines while others were closed due to debris, downed power lines or damaged bridges.

Norfolk Southern, CSX Corp., BNSF Railway and Union Pacific all stopped freight traffic into the New Orleans region.

The railway lines are cooperating on alternatives for rerouting traffic to the Gulf Coast region. For example, the Kansas City Southern Railway is working with CSX Corp. and Meridien & Bigbee Railway to look for ways to divert non-intermodal traffic from New Orleans and Birmingham, Ala.

Air

Louis Armstrong International in New Orleans and Gulfport Biloxi International, which closed for several days following Hurricane Katrina, are now open but, at press time, were operating on a limited basis and handling only emergency relief operations, according to the Federal Aviation Administration.


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