Memphis could be hub in trade lane
Cargo ships may run the Mississippi
Between Memphis’ high bluffs and the Gulf of Mexico are 730 winding miles of Mississippi River.
You see cargo barges on the river. You see towboats. You don’t see ships off the Memphis bluffs.
Now there’s talk about making this decidedly inland city a port for ships handling ocean-bound cargo.
A deal taking shape to build a special port in Louisiana served by a new fleet of river ships could make Memphis a key hub for freight traveling through the Panama Canal.
Who’s behind the notion?
For that you have to begin with Joseph Gehegan, a 1967 graduate of the U.S. Merchant Marine Academy.
He sold off a fleet of 30,000-ton tanker ships a few years ago. Then he looked around for what comes next. He hit on an idea long thought impossible on the country’s largest river.
Big cargo ships, he reasoned, could sail the river hauling heavy oceanbound freight now trucked and railed to and from seaports.
Ever since the steamboat era faded decades ago, leaving Memphis’ Front Street cobblestone landing as a tourist attraction, the city’s reputation as a major U.S. logistics point has relied on trains, trucks, pipelines and Fedex air freighters.
The city had been founded on the river in 1819 and the river still had its role, particularly barge traffic. But once the
interstate highways were built, and railroads got good at moving oceangoing containers from the seaports, no one saw the river as necessary for ships carrying goods, even after freight congestion at terminals in Los Angeles and Chicago disrupted shipments.
Then Gehegan came along. He's a ship guy, a mariner by training. Why not put cargo ships on the Mississippi?
”People are slow to change,” Gehegan said. “On the Mississippi River people have done certain things certain ways for years. They're big tug and barge people. People are reluctant to change.''
He helped found Miami-based American Patriot Holdings in 2015 and shortly after looked up the officials in Louisiana leading a county-level agency named the Plaquemines Port Harbor and Terminal District.
The Commercial Appeal earlier reported the Miami firm and the Louisiana port announced a letter of intent Thursday to explore a shipping venture. They are studying the financial feasibility now. The first ship could reach the river in 2023.
What's revolutionary in the idea isn't really putting ships on the river. What would be revolutionary is the direction freight would move. America has been an east-west country for cargo flows for two centuries.
“We're creating a new north-south trade lane,'' said Sal Litrico, a partner in American Patriot and former chief executive of a fleet of cargo ships.
No one prior to now was able to pull together the elements to make a northsouth lane financially doable. It was usually less costly for an importer in Memphis to rail or truck cargo from a West Coast port than bring it up from the Gulf of Mexico.
Litrico describes forming a network like a passenger airline's hub-and-spoke system. Containers arrive at the ports just in time for loading aboard the ship. And the ship fills up, running at optimum cargo capacity.
‘‘We have to have a very slick system,'' said Litrico, who will run the river ship line. He said four elements are in American Patriot's favor:
• Plaquemines Port Harbor is ready to commit to building a 1,000-acre terminal complex. It would be able to handle ocean ships holding 22,000 cargo containers. That would make it a key rival for West Coast ports.
• The recent Panama Canal expansion allows bigger ships holding 18,000 cargo containers, compared to about 5,000-container ships before the expansion.
• American Patriot bought special designs for new river ships 595 feet in length holding up to 2,375 containers. These low, broad ships would quickly load at Plaquemines, bring containers inland, squeezing under the bridges that now bar ocean ships from moving upriver beyond Baton Rouge.
• River ports including the Port of Memphis are seriously interested in building river ship terminals. Special cranes would load and unload the ships quickly. Given its role as a logistics center, Memphis would be a key hub.
''We are building a system and that system is set up to create logistical efficiencies to create the lowest landing costs,'' Litrico said. “You have to have all those pieces come together. No one has ever had them before.”
None of this might ever happen. Yet both speak as if he is certain it will.
Gehegan said Friday he expects vendors will begin giving him prices in September for equipment destined for a new river fleet costing more than $10 million per vessel.
Four river ships measuring 595 feet in length could be built, the first completed in 2022, he said. He expects up to seven U.S. shipyards will bid on construction and eventually a dozen American Patriot ships could sail the river.
Sound like water under the bridge? Not really.
Ted Evanoff, business columnist of The Commercial Appeal, can be reached at evanoff@commercialappeal.com.