In a graphic with a Sept. 14 Business article on the economic impact of Hurricane Katrina, production data for oil and natural gas were transposed. Oil production in the Gulf of Mexico was down 56 percent from normal levels, and gas production was off 37 percent.
Port Comes Back Early, Surprisingly
Wednesday, September 14, 2005
NEW ORLEANS, Sept. 13 -- The Port of New Orleans began unloading its first cargo ship since Hurricane Katrina on Tuesday night, months sooner than was predicted, a sign that disruption to the nation's shipping capacity may be less severe than originally forecast.
After the storm, port officials figured it would take six months to resume service in New Orleans and at facilities throughout the Gulf Coast. Importers scurried to reroute coffee, steel and other commodities, and Midwest farmers worried that they wouldn't be able to ship their grain to the rest of the world during the harvest. The disruption threatened the supply of goods across the United States, and some forecasters said it would cause a drag on the economy.
But Tuesday, the port was coming back to life, with electrical power restored to parts of the facility by late afternoon. About 8:30 p.m., the Lykes Flyer container ship pulled into the port, and towering cranes began lifting boxcar-size containers of plywood and coffee beans from the ship, as if they were children's building blocks. The goods were to be placed on trucks that would carry them out along newly cleared roads, for distribution across the nation.
Gary P. LaGrange, chief executive of the port, said he expects it to be at 80 percent of capacity within three months. The Port of South Louisiana and Port Fourchon, on the Gulf Coast, have also partially restored service, and the Port of Pascagoula, Miss., expects to resume service by early October, according to the American Association of Port Authorities.
That has made economists more optimistic about the hurricane's impact on the nation. "I was surprised at how quickly the ports got going again," said Mark M. Zandi, chief executive of Economy.com, a research firm. "The longer they remained closed, the greater the risk that we'd all be paying higher prices for coffee, cocoa, lumber, steel, zinc, aluminum and any number of other things. Now that things are going well, there's likely to be no measurable disruption at all."
That doesn't mean the economy is in the clear. Zandi noted that disruptions to energy production have been more persistent, and the drop in employment and production in the Gulf Coast is likely to be great. The improved expectations depend on continued progress, and there are no guarantees that it will continue at this pace, analysts said. Coastal Cargo Co., for example, operates barges from a terminal at the Port of New Orleans and on Monday shipped out a load of steel coils to an automaker in Alabama. But that was after a two-week effort to get back to business, and the company has only two -- instead of its usual 10 to 15 -- "gangs" of workers, each of which has about a dozen people. One of Coastal Cargo's barges was washed ashore in the storm, but was in decent condition, said Mike Lauland, the company's director of risk management. So it has been put to use to help clear out barges clogging shipping channels.
More will be needed to get the local economy fully back in business.
For example, Folgers coffee has a roasting plant in New Orleans that accounts for more than half its supply. For the first 10 days after the storm, it was unreachable except by helicopter, because of downed trees and security concerns on the roads. For the plant to be reopened, it needs a return of water, sewer and natural gas service, said Doug McGraw, vice president for global coffee at Folgers' parent company, Procter & Gamble.
There is enough green coffee in storage to supply the roasting plant for now, but without water and fuel, the company lacks the ability to turn bitter green coffee beans into the Folgers that shows up on shelves.
"We're hopeful that between starting some initial production, and living on inventories in the distribution centers and at retailers, the disruption to consumers will be limited," McGraw said. "But it's going to be a problem."
Nonetheless, the work at the Port of New Orleans proceeded at full speed Tuesday as workers toiled to reopen a trading hub through which 31 million tons of cargo flowed last year.
The faster-than-expected reopening came about through some bureaucratic arm-twisting, coordination between groups, and a careful focus on the most urgent areas for repair, said LaGrange and outside analysts.
"They're moving at light speed," said C. James Kruse, director of the Center for Ports and Waterways at the Texas Transportation Administration. "It's been an example of good cooperation between federal agencies and the port authority, and an action plan to get to the critical things first and fix other problems later."
LaGrange, a large, jovial man who Tuesday wore tennis shoes and a purple baseball cap that reads "Port of New Orleans," was celebrating his fourth year as head of the port. The most immediate problems, he said, were finding workers and getting a place for them to stay. The federal Maritime Administration provided ships with sleeping quarters , which are docked at the port and serve as floating dormitories for longshoremen and managers .
The port also collaborated with the dockworkers' union, the International Longshoremen's Association, to bring in workers from other ports. LaGrange said it was necessary because most Port of New Orleans employees were forced to leave the area and could not be located.
And state police are guarding the access roads from hijackers, and agreed to give truck drivers delivering goods to and from the port clearance to deliver their loads. Tyrone Dolese, 51, of Destrehan, La., is a clerk for the Port of New Orleans who usually works in the office. But because of a shortage of help, Dolese agreed to work outside under the hot afternoon sun at the Napoleon Avenue Container Terminal about five miles down the road to help prepare the cargo for export . He helped inspect containers that were to be a part of the first shipments exported.
"We are going to get this place back," he said.
Irwin reported from Washington.