[StBernard] Shippers shifting to out-of-town operations

[Westley Annis]

Shippers shifting to out-of-town operations 
by Jaime Guillet 
03/19/2007  
  
Canal Barge Co. towboats M/V Merrick Jones and M/V Susan LCanal Barge Co.
towboats M/V Merrick Jones and M/V Susan L. Stall travel down the
Mississippi River in Baton Rouge as they move an offshore drilling rig to
the Gulf of Mexico. (PHOTO COURTESY CANAL BARGE CO.) 
 
Revenues spiked for New Orleans-area shippers in 2006 but the metro area
continues to lose its foothold as a hub for maritime operations. 
Many New Orleans-based companies managed to pique financial growth by
diversifying operations in other cities. 

"We've seen a lot of our New Orleans work go to Houston, Charleston, (S.C.),
and Jacksonville, Fla.," said Walter Boasso, president and CEO of cargo and
tank truck transporter Boasso America Corp. "It used to be done in New
Orleans (but) the volume is not what it was. It's getting harder for New
Orleans companies to hold on." 

Boasso's five locations outside Louisiana, which transport liquid bulk
commodities, have added volume - particularly at the Jacksonville site, he
said. 

Companies such as worldwide ocean transporter Intermarine LLC and World Ship
Supply Inc., which truck supplies to cargo ships, moved many operations to
Houston. 

New Orleans lacks three assets shipping companies want: proximity to the
Gulf of Mexico, experienced workers and adequate port facilities. The
absence helped spur an exodus of water-borne cargo carriers. 

Industry officials say the eight-hour distance for most ships from the Port
of New Orleans to the mouth of the Mississippi River compounds its inability
to increase its container cargo market share. 

"I can't tell you we're here because our business is here," said Intermarine
President and CEO Andre Grikitis. 

Intermarine considers its 120-acre Houston terminal - the largest private
project terminal in the United States - as its main location. The Houston
terminal contains deepwater berths for up to four ocean vessels, has more
than 2,000 feet of barge dock and receives three to four ships a week.
Seventy of its 100 employees are at Intermarine's Houston office compared
with 20 in the New Orleans office. There are no plans at this time for the
Houston employees to return to New Orleans, said Grikitis. 

World Ship Supply's vendors and subcontractors have either left the New
Orleans area or not reopened, contributing to its business shift to Houston,
said chief financial officer Mamie Henry. Since many new vendors are in
Houston, it's easier to supply vessels there, she said. 

"Our Houston branch is soaring," said Henry. "If we didn't have Houston, it
would have been difficult not to close down." 

Inland barge services such as Canal Barge Co. report business is good
because of a higher demand for barges and decreased supply. But the level of
work coming out of New Orleans has diminished and is scattering to other
locations. 

"Management of our company is based here (but) the assets are scattered all
over," said H. Merritt Lane III, president and CEO. "A very small percent of
business comes from New Orleans-based companies." 

In the oil and gas sector, 2006 was a rewarding year for the 50-fleet liquid
barge transporter Blessey Marine Services Inc. But New Orleans' anemic work
force is still the biggest hurdle, said CEO Walter Blessey. 

"(New Orleans) shipyards lost a large number of employees ... and the result
was supply-and-demand issues because it takes longer for maintenance and
repair work and the cost was up," Blessey said. "It's a people challenge.
For years our industry has not attracted a lot of younger people and we had
an aging work force come to a crisis position last year. 2006 was a very
interesting year and 2007 looks to be another good year.".