Ports & Terminals

Speakers At New Orleans Cargo Connections Conference Discuss Tariffs, Resins

The Port of New Orleans was onto something when it named its annual commodities event the “Cargo Connections Conference.” From start to finish, the conference emphasized and reinforced the idea that waterway stakeholders, whether shippers, carriers, operators or developers, are all connected in one way or another.

Early into the conference, the focus was on how stakeholders are connected by politics. Charles Brittingham II, senior vice president for Cassidy & Associates, a Washington, D.C.-based government relations firm, and Bill Ralph, president and maritime economist for RK Johns & Associates, examined the political and economic realities that affect the maritime industry.

Ralph was blunt in his assessment of trade and tariff threats between the United States and China, saying that all China would have to do to win that war would be to stop buying U.S. debt or, worse, begin selling bonds. Ralph also pointed to China’s recent ban on foreign waste—or recyclables like scrap paper and plastics—as a major disruptor for the U.S. economy.

“About all I can say is ‘Thank God for resins,’” Ralph said.

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And it’s the resin industry that is largely fueling a bullish Gulf Coast economy, Ralph said. Gulf Coast ports led growth statistics in 2017 for both imports and exports, and Ralph is predicting a 7 percent growth this year for imports and 8 percent growth for exports, largely driven by resins.

Brittingham focused more on the infrastructure challenge, particularly the funding problem for roads and waterways in the United States. While legislative accomplishments of late, including the Water Resources Reform and Development Act of 2014 and the FAST Act, have improved funding mechanisms for the nation’s infrastructure, the gas tax still dramatically underfunds the entire system, he said. One interesting statistic from Brittingham’s presentation, particularly with U.S. infrastructure shortcomings in mind: Of the top 20 ports in the world, 15 are in Asia.

Later in day one of the conference, John Foster, president of Kurt Orban Partners and chairman of the American Institute for International Steel, gave a presentation on the steel industry in American and commented on steel tariffs currently in place.

According to Foster, the steel industry in the United States was actually doing well without the tariffs. The industry as a whole has been profitable every year since 2009, Foster said. He also said the number of steel supply chain jobs in the United States (jobs connected to imported steel) outnumber steel manufacturing jobs by 10 to 1, meaning far more people stand to feel the negative effects of steel tariffs than those who will benefit. Foster also pointed out that grain exports in 2016 alone totaled 400 million metric tons, far outpacing steel, which means retaliatory tariffs on American grain exports could be far more damaging to the U.S. economy than the country’s tariffs on foreign steel.

Perhaps just as powerful as those political connections, cargo stakeholders are also connected by partnerships and common challenges. Throughout the two-day conference, panels made up of competitors and partners alike discussed common challenges and collaborative solutions.

To start day two, Lee Goodwin, manager for international transportation for Boise Cascade; Randy Guillot, president of Triple G Express; and Doug Sturgis with The Dow Chemical Company discussed ways to boost supply chain efficiency. All three discussed truck driver and chassis shortages. Sturgis mentioned his company’s eagerness to use the container-on-barge service between Baton Rouge and New Orleans and emphasized the benefit of getting product onto ships quicker, as opposed to moving containers by rail across the country to ports on the West Coast.

“Those rail delays hurt us,” Sturgis said.

Guillot discussed at length driver issues facing his company, including laws that place age restrictions on drivers. For instance, Guillot said an 18 year old can drive across 1,000 miles of Texas highways, whereas a driver must be 21 to drive from Orange, Texas, just a few miles east to Lake Charles, La.

Top Shippers, Carriers Honored

Regardless the challenges facing shippers and carriers, those attending the Cargo Connections Conference had one thing in particular in common: a common port of call in the Port of New Orleans.

And to recognize those connections and mark the 10th annual Cargo Connections Conference, the Port of New Orleans honored the top 10 shippers and top 10 ocean carriers who call on the port. Port officials arrived at the top 10 lists by calculating each company’s average overall tonnage of cargo moved through the Port of New Orleans over a 3-year period.

Perhaps unsurprisingly, the top three shippers honored were all resin producers who export resins packed into shipping containers through the Port of New Orleans. Shintech was the top shipper for the Port of New Orleans, followed by The Dow Chemical Company and ExxonMobil.

Besides moving resins by truck, producers moved around 16,000 FEUs (40-foot equivalent units) of resins via container-on-barge in 2017, thanks for Seacor AMH’s twice-weekly line service between the Louisiana capital and New Orleans. Officials at the Port of New Orleans believe container handling at the port could increase by as much as 25 percent by 2020, fueled in large part by the growth of resin exports.

Monsanto was fourth on the list of shippers, followed by Dak Americas, Unitcargo, Chemours, Folgers, MTS Logistics and CSN.

Mediterranean Shipping Company led all ocean carriers, followed by Hapag-Lloyd, CMA CGM, PACC Line, Seabord Marine, SK Shipping, ZIM Integrated Shipping Services, Toko Line, Maersk Line and Hamburg Sud.