Port Improvement Plan Outline for Port of South Louisiana - Paper Example

The Port of Louisiana is located along Mississippi River between New Orleans, Louisiana and Baton Rouge near Laplace which is the headquarter of the Ports operations. Mostly, the port handles grain shipments accounting for 60% of all raw grain exports. Along the Mississippi River, there are three ports namely the New Orleans, Baton Rouge, and South Louisiana. The three ports play a significant role in the economy of the United States. Globally, the South Louisiana port is ranked third, New Orleans is ranked fourth, while Baton Rouge is ranked fifteenth in terms of total trade. With regard to dollar value, the port of South Louisiana is ranked 12th globally (Christopher, 2015). According to the North American Export Grain Association, the port of South Louisiana served as a gateway for nearly thirty percent of all corn, soy, and wheat exported by the U.S in 2004 (Cieslak, 2005). These statistics show the significance of the port of South Louisiana to the American economy. In addition, they indicate the significance of ensuring that the port has the state of the art equipment and chain of operations to increase efficiency hence the need to upgrade.

According to USACE Waterbourne Commerce Statistics Center, five of the top 13 ports with the highest tonnage in the United States were in Louisiana in 2004 (Laska et al., 2005).

In 2004, the total weight of cargo moving in and out of the ports amounted to 18% of the total U.S tonnage. The significance of the region to Americas economy is further illustrated by a report titled Delivering the Goods: Ports in the South (CanagaRetna, 2002). According to the report, Louisiana is the second largest natural gas producer and third largest crude oil producer in the country. In addition, the South Louisiana port operates as a critical supply base for the offshore oil and natural gas in the U.S. Another report prepared by Dr. Ryan in 2001 titled The Economic Impacts of the Ports of Louisiana and the Maritime Industry shows that the South Louisiana port is a key component of the states economy as evidenced by the expansion of the maritime industry by 6% between 1997 and 1999 (Ryan, 2001). The four economic areas impacted by the South Louisiana port include earnings/employment, tax revenues, spending, and cargo tonnage.

In order to develop an improvement plan for South Louisiana port, it is important to evaluate its strengths, weaknesses, threats, and opportunities (SWOT analysis).

Strengths

The port has access to bulk and break-bulk freight markets such as coal, chemical, petroleum industries hence a good base for export cargo.

The connectivity of Mississippi River to inland U.S and international regions ensures the movement of bulky cargo.

The port receives ten container calls every seven days from Latin America

The presence of good inland transport infrastructure such as Six Class I railroads provide interstate highway connectivity.

The port is closer to the Gulf than Houston hence a competitive advantage.

Weaknesses

One of the weaknesses of South Louisiana port is shallow channels. In the recent past, the political leaders from the region have intensified their calls for deeper river channels. Typically, deeper channels would help increase the amount of cargo transported through the port by enabling large vessels to dock. According to data released by the Association Ports of Louisiana, the port provides jobs to more than 400,000 people, and about $20 billion in personal earnings are a direct result of the port. These figures illustrate the high value of the port hence the need to fix its challenges.

Another challenge facing the Port of South Louisiana is lack of dependable ways of dredging and insufficient funding. Many ports in the United States are dependent on the money from the federal government. Without federal funding, very little can be achieved. Other weaknesses include:

Lack of regional industrial and consumer demand

Lack of inland infrastructure that other competing ports have (for instance, centralized warehousing and intermodal transport facilities).

Negative perceptions by the market.

Low short-term container capacity.

Lack of unified strategy for movement of goods. Other ports have a unified strategy that is focused on promoting economic development through interconnectivity of international and regional assets.

The absence of an effective local marketing strategy.

Absence of a centralized form of port governance

Opportunities

Well-positioned to focus on specific industries through a differentiation strategy rather than focusing on wide market.

Short-term and long-term diversion opportunities focused toward Mexico and other Latin America countries with containerized cargo.

Threats

The rapid expansion of the ports of Gulf coast.

Stiff competition from emerging regional players that steal away the trade.

East Coast ports including Norfolk and Savannah might continue to establish themselves as better alternatives for trade from Europe to Central U.S.

West Coast ports such as Oakland and Seattle might continue to establish themselves as best options for trade from Asia to Central America.

Recommendations

Based on the analysis of the strengths, weaknesses, opportunities, and threats to the Louisiana port, the following recommendations will help to improve the efficiency of operations in the port.

The North-South trades are among the strengths of port hence most of the marketing efforts should be focused here. In addition, it will reduce investment risks because it is a balanced trade. Marketing strategies should concentrate on regional transporters in the Latin America and Mexico trade.

There is a need for centralized and unified market strategy to facilitate investment in coordinated infrastructure and unified marketing.

Short-term decisions should promote tactical efficiency.

The Port and the whole region should consider new projects based on their contribution economically and their ability to improve service delivery and reduce operational costs.

Following the recommendations above, the strategies below will significantly help the port to leverage its assets hence increasing efficiency and international trade.

Strategy Short-term Medium-term Long-term

Entry market strategy

This strategy will concentrate on cargo that is inclined to regional strengths and goods that yield maximum economic benefit to the region. Make traffic from Latin America as the primary target from the beginning.

Create and implement a go-to-market strategy based on the industries selected.

Identify and explain key performance indicators to act as metrics for strategy effectiveness. Establish an overseas presence in primary target markets.

Carry out periodic reviews of the strategies to maintain competitive positioning. Continued expansion and refining.

Pursue other opportunistic trades

physical infrastructure strategy

this strategy will focus on providing modern and support infrastructure well-suited to the regions major trading markets. Assess short-term infrastructure improvements by comparing with mid-term infrastructure needs.

Aligning short-term investments with regional strategies.

Development of non-transport infrastructure strategy for other facilities like warehouses. Come up with long-term handling capacity for containers based on the future projections of the region.

Develop sufficient transport infrastructure for international cargo.

Implement non-transport infrastructure strategy Expand container capacity

Regional coordination strategy

This strategy will be aimed at ensuring all stakeholders have aligned their interests to facilitate the realization of infrastructure milestones. Identify and evaluate an institutional framework that will support coordination of governance.

Create institutions to supervise regional coordination.

Bring the stakeholders together to develop a cargo transportation strategy with definite mission, goals, and vision. Execute alterations in governance.

Carry out an independent assessment of regional coordination efforts with a focus on the cargo transportation strategy.

Carry out changes to the plan as necessary. Oversee and determine the effectiveness of cargo transportation strategy.

In conclusion, the discussion above shows that Louisiana port is important to the local economy, the state economy and the economy of the United States. Economic data shows that Louisiana has been ranked as the second state nationally in terms of tonnage of sea imports and exports. Also, the state has five ports out of the top thirteen ports in the United States. With the recent discovery of huge oil reserves in the Gulf of Mexico, it is expected that coastal ports will play a key role in promoting the economic well-being of the country. As a result, this will translate to increased cargo passing through the port. Therefore, it is vital that the improvement plan described above is implemented to increase the cargo handling capacity and efficiency of South Louisiana port. Even with the improvement plan, funding remains a major obstacle. Without adequate funding from the state and the federal government, very little improvement can be achieved. Therefore, it is necessary that governance coordination and funding is implemented.

References

CanagaRetna, S., M. (2002). Delivering the Goods: Ports in the South Presentation Prepared for the Council of State Governments Southern Legislative Conference in Atlanta, GA.

Christophe, A. S. (2015). Hurricane Katrina 10th Year Anniversary: Status of The Minority Population In Regards To New Orleans Port Infrastructure & A Sustainable Wetland Environment. Race, Gender & Class, 234.

Cieslak, V. (2005, October). Ports in Louisiana: New Orleans, South Louisiana, and Baton Rouge. Congressional Research Service, Library of Congress.

Laska, S., Wooddell, G., Hagelman, R., Gramling, R., & Farris, M. T. (2005). At risk: the human, community and infrastructure resources of coastal Louisiana. Journal of Coastal Research, 90-111.

Ryan, T. P. (2001). The economic impacts of the ports of Louisiana and the maritime industry. University of New Orleans.