Plaquemines Port pushes joint venture alternative to Port NOLA’s downriver container terminal

The head of Plaquemines Port is pushing Gov. Jeff Landry and other top state transportation officials to back a West Bank alternative to the $1.8 billion container terminal that Port of New Orleans plans to build at Violet in St. Bernard Parish.

Charles Tillotson, who took over as executive director of Plaquemines Port two years ago, wrote last month to Landry to push his plan for a 50/50 joint venture between Plaquemines and Port of New Orleans that would place the container terminal about 35 miles farther downriver from Violet, at mile marker 50 on the Mississippi River, around West Pointe à la Hache.

The Landry administration, in an emailed response on Wednesday, said it would remain neutral on the proposal for now and urged officials from the two ports to continue to talk.

The move is the latest in a long-running saga over where to build a new downriver terminal, which is seen as vital for the state of Louisiana to stem the loss of container ship market share to rival Gulf ports like Houston and Mobile, Alabama. Containers have accounted for a growing share of world shipping for decades.

Houston has more than doubled its container shipping volume over the past decade to around 4 million standard units, while Port NOLA has remained static at just below 500,000 units. Mobile, meanwhile, has grown from a negligible volume to surpass New Orleans, driven largely by a Hyundai assembly plant that was built in Montgomery, Alabama, in 2005 and Walmart’s Mobile distribution center, which came online in 2018.

Port NOLA has found it difficult to grow business at its Napoleon Avenue container terminal because the ever larger container ships cannot make it past the Crescent City Connection to dock upriver.

Port NOLA has made significant progress on its Violet project in recent years to help alleviate that disadvantage, though it has yet to start construction.

In 2020, it purchased an 1,100-acre site at Violet and, in late 2022, secured an $800 million investment commitment from New Jersey-based Ports America and the U.S. investment arm of the Switzerland-based Mediterranean Shipping Co. to help develop the facility. It has also been awarded a record $300 million in federal grants.

Beth Branch, who took over as CEO of Port NOLA in December, said in an interview soon after joining that she expects to start construction on the Violet terminal this year if the project gets approvals from the U.S. Army Corps of Engineers. The first phase would start receiving ships in 2028.

Obstacles remain

Still, the Violet terminal continues to face opposition from some residents in St. Bernard Parish, which has resulted in several lawsuits. The entire parish council stands against it and Branch has acknowledged that a proposed toll road connecting the terminal to the interstate would need to be built or it wouldn’t be viable.

In his letter to Landry, which copied Julia Cormier, commissioner for the state’s office of intermodal transport, Port NOLA Board Chair Michael Thomas and other top advisers to the governor, Tillotson argued that the West Bank site has several key advantages over Violet.

For one, because of its proximity to the mouth of the river and location on a wide, straight stretch, the West Bank site would be much cheaper for visiting ships, saving them a full day and more than $400,000 per call, the letter says. 

Also, a West Bank rail link that ties into the Union Pacific line would provide a more direct connection to growing markets to the west, like Dallas, while Violet would be limited by its heavy reliance on truck transport linking to markets east of the Mississippi, Tillotson’s letter said.

The letter also suggested that proximity to the Belle Chasse Naval Air Station and to the Avondale Gateway industrial complex would have strategic advantages, though it doesn’t elaborate.

Thomas said Wednesday that Port NOLA has evaluated Plaquemines Port’s proposal with an open mind and weighed its pros and cons from a business standpoint.

“We’ve already purchased our property, and as far as we know, they don’t own any property for this facility, so for us that’s a problem,” Thomas said.

He said other problems include the fact that the Plaquemines location is outside the zone covered by the Lower Mississippi River flood protection system and that it lacks a rail link.

“We’re the only deepwater port in the country that has six Class One railroad accessibility,” Thomas said. “Currently, they do not have railroad connectivity. They have discussed connectivity of the Union Pacific line that would involve moving it then changing its direction, which I think would lead to environmental studies and lawsuits.”

Moving ahead

Tillotson indicated this week that Plaquemines Port would push ahead with its own proposal if it isn’t able to secure a joint venture with Port NOLA. The port announced a year ago that it had entered into a nonbinding deal with APM Terminals, a division of A.P. Moller-Maersk, to build the facility.

Privately, Port NOLA officials have pointed to the fact that APM Terminals operates both Mobile and Houston ports and would have an interest in preventing a rival from operating in New Orleans.

“Plaquemines Port is working closely with all the other lower Mississippi River ports cooperatively, and our discussions with the Port of New Orleans are a part of that,” Tillotson said via email Wednesday.

“Meanwhile, we will continue to grow to become the fifth largest U.S. port by tonnage in five years, not counting our container terminal, which should come online at the end of that period,” he added.

The growth forecast appears to be referring to liquefied natural gas exports from Venture Global’s $21 billion Plaquemines facility, which is within the port’s jurisdiction. The plant began production in December and has received regulatory approval to increase its export capacity by 13% a year.

When Landry took office last year, he established the Louisiana Port and Waterways Investment Commission to devise an overall port strategy for the state and curb bickering among the various fiefdoms. Asked to comment on Plaquemines Port’s proposal, Landry and commission Chair Marc Hebert deferred to Cormier, the commissioner of intermodal transport, to speak on the state’s behalf.

“We are faced with two potential container terminals, both funded with private capital, in close proximity to serve a similar market,” Cormier said in an email. “The Port of Plaquemines has proposed a ‘joint venture,’ which consists of eliminating Port NOLA’s project and offering them a potential revenue share with much left to be discussed or proposed.”

She noted that neither project had been vetted by Hebert’s new commission. 

“For the state to take a position supporting one over the other would be irresponsible,” she said. “We encourage both ports to continue their diligence.”