Gulf Coast shipping wins big in federal project funding

The Trump administration has allotted $274.3 million in federal money for the Port of Mobile, Alabama, to deepen and widen its channel to take on bigger and heavier ships.

The funds were included in the U.S. Army Corps of Engineers fiscal year 2020 Work Plan, released Monday, from funding authorized in water-resources legislation. Also included was $85.4 million to begin dredging a 260-mile stretch of the lower Mississippi River from Baton Rouge to the Gulf of Mexico — a critical gateway for U.S. agribusiness imports — from its existing 45 feet to 50 feet.

“The completion of this transformative project is expected to [stimulate] immeasurable economic growth and will position Alabama and the Gulf Coast region for success for generations to come,” U.S. Sen. Richard Shelby, R-Ala., said in reference to the Port of Mobile deepening.

The project will expand the port from its current dimensions of 45 feet deep and 400 feet wide by deepening three channels adjacent to the port by 5 feet to a project depth of 50 feet. The project also includes widening the Bay Channel by 100 feet for 3 nautical miles.

“The big shippers that are driving the modernization are our coal and containerized shippers on the deepening and widening, and the petroleum terminal shippers (private terminals) mostly on the widening,” Judith Adams, vice president of marketing at the Alabama State Port Authority, told FreightWaves’ American Shipper last year.

The Port of Mobile ranked 11th in total trade in 2018 among U.S. ports, and ranked third, behind the Port of Houston and the Port of New Orleans, in Gulf Coast container volume, according to the American Association of Port Authorities.

U.S. Rep. Steve Scalise, R-La., noted that the lower Mississippi River “has an unprecedented impact on our national economy, global competitiveness, and American job creation. Modernizing our infrastructure and deepening the river to 50 feet will help strengthen Louisiana’s dominance in domestic and international commerce.”

Deepening the lower portion of the river is considered critical for agriculture exports — particularly soybeans. Exports out of the Gulf of Mexico account for 60% of all U.S. soybean exports, according to the Soy Transportation Coalition (STC).

Research conducted by STC in 2018 found that shipping costs for soybeans from Mississippi Gulf export terminals would decline 13 cents per bushel, or $5 per metric ton, if the lower Mississippi River were dredged to 50 feet. “A deeper river will allow both larger ships to be utilized and current ships being utilized to be loaded with more revenue-producing freight,” STC noted.

The deepening would also benefit the Port of South Louisiana, which oversees a 54-mile stretch of the river north of the Port of New Orleans and is the country’s largest port by overall cargo tonnage.

Separately, the port received on Feb. 11 a $13.4 million grant from the U.S. Department of Transportation’s Port Infrastructure Development Program for improvements at its Globalplex Intermodal Terminal.

“These upgrades will complement projects currently underway, including dock reinforcement and new mobile harbor cranes, and stimulate nearby industrial development by allowing the dry storage and transloading of various construction materials,” the port said in a statement.