A long-awaited project to deepen the Lower Mississippi River ship channel to 50 feet from the Gulf of Mexico to Baton Rouge, La., is now underway. It will eventually allow larger ships to call at ports and refineries farther upriver than is currently possible, reducing shipping costs for exporters.
The U.S. Army Corps of Engineers estimates it will take four years to dredge about 66 miles of the river, opening up 256 miles of the Lower Mississippi to post-Panamax vessels with drafts of 50 feet, according to Sean Duffy, executive director of the Big River Coalition, an industry group working to promote the project.
The total cost of the project will be about $271 million, with about $133 million slated to be paid by the Louisiana Department of Transportation and Development, according to Ricky Boyett, spokesman for the Army Corps’ New Orleans District. The project will provide annual benefits of about $127 million to the national economy, said Col. Stephen Murphy, commander of the district.
The cutterhead dredge Capt. Frank, operated by Weeks Marine of Cranford, N.J., began work in early September just above Head of Passes, where the main section of the Mississippi divides into three branches at its mouth. The calculation of river miles starts at Head of Passes.
Deepening the channel is essential to keep the five major Louisiana ports on the Mississippi competitive, since a 50-foot depth is the new normal in the shipping industry. Combined, these five ports handle over a half-billion tons of cargo each year, with four of the ports among the top 13 in the country based on tonnage.
“This is already spurring investment (along) a lot of the Lower Mississippi River because we will be able to handle the industry’s largest ships,” said Matt Gresham, spokesman for the Port of New Orleans. The only American ports that can now handle ships with a 50-foot draft are Baltimore, Hampton Roads, Miami and New York/New Jersey.
The first phase of the project involves dredging Southwest Pass. The second phase, to start in the summer of 2021, will dredge the river’s lower nine crossings, according to Marti Lucore, senior project manager at the New Orleans District of the Army Corps. Crossings are places where sediment builds up in the river’s curves. Target areas include Fairview Crossing, 116 miles above Head of Passes, up to Medora Crossing at 211.3 miles.
The third phase, scheduled for the summer of 2022, will involve dredging the next two crossings upriver: Sardine Point Crossing at 218 miles and Red Eye Crossing at 223.2 miles. The fourth phase is at the Baton Rouge Front crossing at 228.4 miles.
The dredging alone will cost $184 million, with the federal government paying 75 percent ($138 million) and the Louisiana Department of Transportation and Development paying 25 percent ($46 million), Boyett said. In addition, it will cost $87 million to relocate pipelines under the river, which is assigned to the state. However, Louisiana is working with the pipeline owners to pay half of that sum, according to Lucore. Since the pipeline project is non-federal, the U.S. government will not fund it, Boyett said. The Soy Transportation Coalition contributed $2 million to help defray the state’s cost.
Nearly 11,000 foreign vessels called on Louisiana ports on the Mississippi in 2014, including containerships, tankers and bulk carriers, according to the Army Corps’ 2018 general re-evaluation report on the project. The current 45-foot depth of the ship channel means that larger vessels have to either carry less cargo or unload cargo to navigate farther upriver, which increases transportation costs. Every one foot of channel deepening equals $1 million of additional cargo per ship, Duffy said.
“For that additional five feet, you have the advantage of being able to ship an additional $5 million of cargo per vessel,” he said. “It’s a major cost savings for shippers.”
Other domestic ports are pursuing a 50-foot depth to accommodate larger ships, but Gresham believes the Mississippi deepening will have the biggest impact on U.S. trade.
“We think the Lower Mississippi (project) is going to benefit a much larger piece of the nation than a lot of these other projects, because here you have the oil refineries, the chemical plants, the grain terminals, the import-export terminals,” he said.
Right now, cargo ships no larger than 10,000 TEUs serve Gulf of Mexico ports, according to Gresham. Despite that limitation, it’s a booming business. In 2019, the Port of New Orleans set a record by moving 648,538 TEUs, up 10 percent from 2018. With a channel 50 feet deep, the port would be able to handle containerships up to 22,000 TEUs. The only limiting factor at that point would be the vessel’s air draft, the distance from its highest point to the waterline.
Two new container terminals already in the planning stages will benefit from a deeper channel. The Plaquemines Port Harbor and Terminal District is working with several companies to build a 1,000-acre multimodal container facility 50 miles from the mouth of the Mississippi, and the Port of New Orleans is working on site selection for a second terminal downriver from the port that would have unlimited air draft.
“The new terminal, which will have a throughput capacity of up to 2 million TEUs, will require an investment in excess of $1 billion,” Gresham said.
Commodities expected to gain the most from the project are crude oil, pig iron, iron ore and gasoline on the import side, with corn and soybeans leading on the export side, according to an economic impact report written by Dr. Timothy Ryan.
Louisiana ports handle 60 percent of U.S. soybean exports and 59 percent of corn exports, according to the Soy Transportation Coalition. Larger ships would mean that loads could increase from 2.4 million bushels of soybeans per ship to 2.9 million bushels. It would cut the shipping cost of soybeans by 13 cents per bushel, a significant figure for an industry competing with farmers in Argentina and Brazil, said Mike Steenhoek, executive director of the soy coalition. Soybean farmers in the 31 states connected to the Mississippi River would make an additional $461 million per year.
Deepening the Lower Mississippi also will help the towing industry. “It will be an incremental, beneficial increase,” said Mark Wright, vice president of the American Waterways Operators’ Southern Region, when asked about the project’s impact on barge traffic. “In the long run, you could see a 10 to 20 percent increase in work.”
Harbor tugboat operators are expected to gain as well. “The bigger ships also create demand for tug services, for ship assists with tugs,” Wright said. “It’s likely to create more work.”
On the environmental side, the deepening project will help restore marshland at the mouth of the river. Nearly 1,500 acres of open water will be converted to coastal marsh habitat, according to the Army Corps’ 2018 general re-evaluation report.
The origin of the project goes back almost 40 years. A 1981 federal feasibility report recommended that the Lower Mississippi from Baton Rouge to the gulf be deepened to 55 feet, and Congress authorized the depth in 1985. Louisiana’s proposed share of the cost of dredging beyond 45 feet was prohibitive, however, so between 1987 and 1994 the channel was deepened from 40 feet to 45 feet.
In 2012, the Big River Coalition led the effort to deepen the channel to 50 feet. Then in 2016, Congress passed a bill that changed the cost-sharing formula for Army Corps projects to a 75 percent federal contribution and a 25 percent non-federal contribution, which often comes from states. The project soon gained momentum and the federal government authorized funds. •