When New Orleans Cold Storage opened a riverfront cold storage plant last month, company and port officials were exultant. They had a right to be after what the 126-year-old company had endured in the last seven years.
Hurricane Katrina in August 2005 left New Orleans Cold Storage with a messy problem: a warehouse filled with 52 million pounds of rotten chicken, on a waterway that suddenly was no longer accessible to anything but the smallest ships. Things looked bleak for the company, which specializes in exports of poultry and meat.
Disposing of the spoiled chicken was bad enough. NOCS finally was able to haul it away, with help from $4.5 million the government chipped in for biohazard remediation. Port access was a tougher problem.
The NOCS warehouse at the Jourdan Road terminal is on the Mississippi River Gulf Outlet, a shortcut between the port and the Gulf of Mexico. The MRGO silted in during Katrina and was closed after being blamed for contributing to levee breaks that flooded much of the metropolitan area.
The waterway’s closure left the NOCS warehouse accessible only via the narrow Industrial Canal locks to the Mississippi River. That meant most of the warehouse’s export cargo had to be drayed across town to riverfront wharves.
Neighborhood opposition scuttled an effort to build a new terminal at the only riverfront site available, a breakbulk wharf at the edge of the French Quarter. The port then helped arrange for NOCS to take over Ports America’s lease a few miles upriver at the Henry Clay Avenue Wharf.
The existing wharf was demolished and replaced with a 140,000-square-foot facility representing a $40.3 million investment.
The process of finding and developing the riverfront site was difficult, but it worked out for the best, CEO Mark Blanchard said. “It’s a much better location. It has much better access. We have the flexibility to ship breakbulk or containers,” he said.
The Henry Clay facility is adjacent to two breakbulk berths, and is only a few blocks from the port’s Napoleon Avenue Container Terminal. Industry trends make proximity to the container terminal especially desirable, Blanchard said.
Much of the poultry and meat exported through Gulf ports still moves breakbulk, but the market is shifting toward containers. Containerized exports of poultry through Gulf ports increased to 28,715 20-foot-equivalent units in 2011 from 8,464 in 2007. Containerized meat exports rose to 20,650 TEUs from 9,261 during the same period.
New Orleans Cold Storage warehouses at Houston and Charleston rely on containers for virtually all of their exports. The mix at New Orleans is still tilted about 70-30 toward breakbulk, Blanchard said.
NOCS continues to operate at Jourdan Road, which handles small breakbulk vessels that can fit through narrow Industrial Canal locks to the Mississippi River. The company is selling another New Orleans warehouse, at Alvar Street, for use as a dry storage facility.
The new Henry Clay facility can freeze up to 1.25 million pounds of product daily and store 38 million pounds of frozen goods between minus-15 and minus-40 degrees Fahrenheit, making it what officials say is the largest blast-freeze operation in the Northern Hemisphere.
Poultry and meat exports are an important commodity at several Gulf ports, but business has been choppy in recent years. “From what I understand, none of us are setting the world on fire,” said Mark McAndrews, executive director of the Port of Pascagoula, Miss.
Pascagoula’s once-thriving poultry exports have been in steady decline. The reason: reduced shipments to Russia, which has lowered import volume as it moves toward self-sufficiency in poultry production.
In July, Russian Prime Minister Vladimir Putin said the country would import up to 330,000 tons of poultry. Imports up to that level would pay a 15 percent tariff. Above that, a prohibitive 75 percent tariff would be imposed.
The volume represents a sharp drop from just a few years ago, when Russia imported more than 1 million tons a year. Russia has imposed similar restrictions on pork, and said it expects to be self-sufficient in poultry by 2013 and pork by 2015.
“Prior to 2010, we handled 300,000 to 350,000 tons of poultry annually,” McAndrews said. “In 2010, we handled 158,000 tons. In 2011, 90,000 tons. So far this year, we’ve done about 30,000 tons, none to Russia.”
Gulf Coast Cold Storage has two Pascagoula warehouses totaling 150,000 square feet, with blast freezers and storage. McAndrews said the company is trying to diversify to other commodities and markets. Poultry shipments this year have gone to Cuba, Turkey and the U.K.
The nearby Port of Gulfport has long been a big player in banana imports from Latin America. Gulfport’s refrigerated breakbulk exports have been disrupted since Katrina leveled the port’s refrigerated warehouses. The port plans to have new facilities in place by 2015.
Overall U.S. poultry exports rose 13 percent year-over-year to 1.66 million metric tons in the first five months of this year. Export value for the period jumped 24 percent to $2.22 billion, according to the U.S. Foreign Agricultural Service.
Statistics show more diversification among U.S. export customers, said Toby Moore, vice president of the USA Poultry & Egg Export Council. In 2007, Russia and China accounted for 45 percent of U.S. poultry exports.
Russia, China, Mexico, Canada and the European Union nations were the only countries to import more than 100,000 tons apiece in 2002. Last year, 11 nations’ shipments from the U.S. were in triple digits, led by Mexico with 16.8 percent of the total.
Markets wax and wane, but Blanchard said he expects U.S. exports of protein-based commodities, including poultry, beef and pork, to rise as the middle class expands in developing nations. “When they increase their standard of living, one of the first changes they make is in their diet, to include more protein,” he said. “It’s a good market for us.”