Louisiana state legislators have earmarked $230.5 million to the Port of New Orleans, funding that will be used for new infrastructure projects.
Approved during the state’s 2024 legislative session, most of the large investment will go towards the port’s conceived Louisiana International Terminal (LIT) and St. Bernard Transportation Corridor, a proposed roadway that will connect the LIT to the interstate system. Such a road has been long desired by stakeholders and local residents. Of the state funding total, the terminal will receive $150 million for design and construction, while $50 million will be endowed towards the roadway project.
The remaining $30.5 million will go towards maintenance for a bridge upriver from the Port of New Orleans.
While ground has yet to be broken on the LIT, as it currently wades through a federal permitting process, the new facility is expected to open sometime in 2028, adding an anticipated 280,000 TEUs in handling capacity for the port. Its location will be south of New Orleans, along the Mississippi River, in Violet, a town in St. Bernard Parish (county).
Aside from the support of state investment, the terminal has garnered funding commitments from private interests and the federal government alike. Last month, the Port of New Orleans was awarded $73.77 million from the federal government, while two terminal operators, Ports America and Geneva (associated with shipping line MSC) contributed a combined $800 million.
Additionally, with its envisioned position along the Mississippi River, a dozen inland ports and agricultural associations across several states have also provided support. The Port of New Orleans, situated on the river and upstream from the Gulf of Mexico, holds a strategic advantage, unlike no other U.S. port. Midwest shippers, particularly agricultural exporters, will route outbound loads onto barges from inland riverports, like St. Louis and Memphis, to New Orleans. From there, given the Louisiana port’s handling capabilities and proximity to the ocean, these deposits of exports will be transferred onto outbound ships, delivering the sellers’ goods to overseas markets.
The Port of New Orleans touts that LIT will be able to serve vessels of all sizes, improving its import and export capacities. In the longer term, the port projects by 2050, LIT will generate 32,000 new jobs nationwide, 18,000 in Louisiana, and 4,300 locally around the terminal.
Mississippi River conditions a wildcard for New Orleans port business
For two consecutive years, the Mississippi River has experienced severe drought and low water levels, a hapless blow to barge movement, the preferred mode for Midwest bulk exporters. To make matters even worse, both dry spells occurred during the U.S. harvest season, a period where demand to move agricultural commodities are at its peak.
Barge shippers, without a contingency plan, were forced to face delays of up to several delays, while simultaneously, paying as much as six times what usual barge rates would go for. As shippers with low-cost freight, the elevated transportation costs were a nightmare scenario.
While it is uncertain whether the Mississippi River will see a drought for the third consecutive year, shippers who rely on river barges on this well-trafficked and important lane should nonetheless have backups in case conditions do take a turn for the worse.
It is relatively more expensive than traditional barge rates, but rail can be a viable, emergency, option in the case of another drought during harvest season. Afterall, during a dry spell, barge rates would equal or surpass freight rail costs in most cases anyway.
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