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Cargo vessels stranded by closure of Mississippi

Cargo vessels stranded by closure of Mississippi
By Robert Wright in London
Published: September 2 2005 20:46 | Last updated: September 2 2005 20:46

The shipping industry has been forced almost to a standstill on the lower Mississippi River following Hurricane Katrina, blocking one of the US's main arteries for the transportation of bulk commodities such as coal, oil and grain.

The river where many vessels and oil rigs have sunk or run aground, including 100 barges is one of many elements of transport infrastructure to have suffered severe damage.

The busy port of New Orleans and other regional ports were also facing damage even before Friday's riverside explosions, whose impact is still unclear.

The emergency has also prompted President George W. Bush to suspend the Jones Act, which normally prevents non-US flagged vessels from transporting passengers or cargo between US ports.

The US Coast Guard has ordered the river's closure between Natchez, Mississippi, and the sea to anything but rescue vessels and tugs and barges of very shallow draft. The decision is thought to have caused heavy disruption to shipping, and 86 vessels are waiting either to berth at New Orleans or to pass the flooded city.

There are concerns about possible movements of silt that could have changed navigable channels on the river, and that buoys and other navigational markers could have been moved. The Coast Guard expects significant waterways management and environmental clean-up operations.

Neil Davidson, ports analyst for the London-based Drewry Shipping Consultants, said the damage was significant because the Mississippi was such a significant artery for US trade.

“There are millions and millions of tons of cargo moved up and down the Mississippi every year,” he said.

Four US ports at New Orleans, Gulfport, Pascagoula and Panama City are closed. Ports in the area handle significant quantities of bulk products and imports such as fruit.

The good news for grain shippers is that corn and soyabeans, the main crops shipped through New Orleans, are still a few weeks away from harvest.

“Although there's never a good time, it's not as critical as it would be, say, six or eight weeks down the road,” said Terry Francl, an economist for the American Farm Bureau Federation in Washington.

However, some sections of the maritime industry look set to benefit from the hurricane after oil refinery closures drove up charter rates for tankers that carry refined products such as petrol. The rates for oil product tankers on routes to the US had risen by up to 70 per cent since the storm, says Ole-Rikard Hammer, head of research at Oslo-based PF Bassoe shipbrokers, which specialises in tankers. The effect was more marked in the product sector than for crude oil carriers because the US had plenty of crude oil in the strategic petroleum reserve and could still import through the Louisiana Offshore Oil Port (Loop), the most significant crude oil import facility, Mr Hammer said. Loop had survived the storm and was working again.

However, charter rates for product tankers to the US yesterday stood at 425 on the Worldscale system, which calculates rates against a standard set of charges for each route. They had been only 260 last week.

Additional reporting by Joseph Menn and Claire Hoffman of the Los Angeles Times


LINK: http://news.ft.com/cms/s/1938e1ba-1be8-11da-9342-00000e2511c8.html