Cover Story

By Megan Hill

Contributing writer

It’s been a year, but the reminders are still painfully present.

In New Orleans, neighborhoods hard hit by Hurricane Katrina last August still look almost exactly as they did when the levees broke and the water rushed in. The crumbling facades of flooded homes, forlorn and forgotten, are constant reminders of the morning that forever changed the Big Easy and has reshaped the entire Gulf Coast.

And then there are the cars.

Flooded cars, yet another symbol of Katrina’s destruction, are finally being removed from public rights of way in New Orleans.

The Mobile-based firm, DRC Recovery Services, Inc., won a contract to remove scores of flooded cars and abandoned boats and trailers in New Orleans and throughout Louisiana. The damaged vehicles have remained abandoned since the storm, their bodies coated with despondent gray silt brought in from the flood. Many of them are located under interstate overpasses in New Orleans in an eerie automobile graveyard.

DRC won the $33 million contract to remove the nearly 100,000 vehicles. They expect to complete the terms of the contract by September, said DRC Program Director Steven James.

DRC began the work June 19 and is hauling an estimated 500 cars per day, said James. In addition to the cars, DRC is removing 6,236 vessels, and 2,000 trailers in parts of Louisiana affected by both hurricanes Katrina and Rita, said James. James is a displaced New Orleanian, as are a handful of other DRC employees.

“Needless to say, we draw some satisfaction from being able to take such an active part in the state’s recovery,” James said.

James said DRC is engaged in numerous other contracts related to hurricane recovery, both in Louisiana and throughout the Gulf Coast. These involve debris removal and installation of FEMA trailers, among other disaster recovery projects.

And as New Orleans faces still more challenges on the bumpy road to recovery, Mobile stands to pick up additional business from its Gulf Coast neighbor.

With the port of New Orleans facing numerous challenges, one important corporation and its subsidiary decided to make the move to Mobile.

International Shipholding Corp. will bring its corporate headquarters from downtown New Orleans to the RSA Tower, and with it, 150 jobs. International Shipholding offered for their New Orleans employees to keep their jobs once the company moves to Mobile, but they are unsure how many will make the move, said Erik F. Johnsen, chairman. Realistically, he said, they expect to hire at least some Mobilians.

International Shipholding, through its subsidiaries, runs a number of waterborne freight transportation services. One of its subsidiaries, CG Railways, is also moving to Mobile. CG is packing up their operation in New Orleans because of the closing of the Mississippi River-Gulf Outlet, Louisiana’s shipping shortcut from the river to the Gulf of Mexico. Nicknamed “hurricane highway” because it funneled storm surge from Katrina into residential areas, MR-GO was a quicker path for deep-draft shipping vessels en route to New Orleans. Because the channel will no longer be dredged, CG had to find another way to conduct business.

Johnsen said CG had the option of moving to either Pascagoula or Mobile and chose Mobile for two reasons: “the management experience of the state docks, and the five class-1 railways serving Mobile.” The state of Alabama and the Alabama State Docks will build a $19-million terminal on the Mobile River for the company’s operations there.

While CG was forced out of New Orleans, International Shipholding chose to move, said Johnsen. The firm hired a consultant to conduct a “careful study of the economic future” of both New Orleans and Mobile, as well as other locations.

“Mobile offered the company and its employees better opportunities for the short and long term,” Johnsen said. “We were looking for a city with similar maritime interests.”

Johnsen said Alabama Gov. Bob Riley asked International Shipholding to consider moving its headquarters after it was decided CG would move its operations to Mobile.

The decision was “seriously and carefully” considered, Johnsen said, because International Shipholding has been in New Orleans for 60 years.

“The hurricane had a great deal to do with it,” he said. “But we were also satisfied with the business climate of Mobile and Alabama. It far outweighed what was happening in Louisiana.”

CG operates a short line railroad connecting the railways of southern Mexico to the U.S. and Canada as well as a rail-car-on-barge service. CG transports coffee, beer and other products to and from Coatzacoalcos, Mexico. CG moved from Mobile to New Orleans in 2005 when the state of Louisiana promised up to $15 million in port improvements as an incentive. CG decided to leave Mobile because of construction on the docks’ container terminal at Choctaw Point.

The move has been heralded as a huge asset, both for the economy of Mobile and the Alabama state docks.

“CG Railways will add 90 ship calls to our port, and bring in revenues over $2 million,” said James Lyons, director of the Alabama State Port Authority. That’s an increase of nine percent in terms of ship traffic at the docks. “Alabama shippers will be able to benefit from a very competitive new service. The maritime service sector will bring in another couple of million and new jobs will be created.” Any maintenance on the ships will be done in local shipyards, which Lyons estimates can bring in up to $1 million.

As far as International Shipholding goes, Lyons said the company “will be a good corporate citizen,” and the entire city will benefit. “There could be many beneficiaries, ranging from the United Way to the arts and beyond.”

International Shipholding plans to move to the RSA Tower as soon as it is completed, said Johnsen. He said that if the tower is finished by year’s end, the company will be there in late January or early February.

Lyons said he hopes that this move will encourage other businesses to do the same, but he is unaware of any that have already followed suit.

The Port of New Orleans, which is suffering, paints a sharp contrast to that of Mobile. “We have picked up incremental business with our existing customers and are adding capacity,” Lyons said.

The docks have been growing at over 10 percent each year for the past few years, said Lyons. “While nothing is this business is permanent, we feel good about the future of this port and our ability to sustain and grow,” Lyons said.

The port has purchased two used container cranes from New Orleans, which are currently being refurbished and will be delivered in October. Lyons said they are needed because the number of containers the docks are handling is expected to double by the end of the year.

Apart from DRC and RSA, another local company is reaping the opportunities presented by New Orleans’ devastation.

Among the myriad boats that were victims of Katrina is the former Belle of Orleans, a gambling boat docked on Lake Pontchartrain. The boat was badly damaged and is being repaired at Bender Shipbuilding, a Mobile shipyard.

The gambling boat broke loose from its moorings during Hurricane Katrina and rammed into a pier, damaging its hull.

The riverboat will move from New Orleans to St. Mary parish, Louisiana, and will be docked on Bayou Boeuf. It will be renamed the Amelia Belle, and the opening date is projected for late October or early November. The boat is owned by casino and hotel operator Columbia Sussex.

An executive at Bender declined to comment about the status of the ship, but said the shipyard has not repaired any other vessels from New Orleans, nor have they had any other Katrina-related business. A spokesman for Columbia Sussex did not respond to requests for an interview.

In some cases, what was New Orleans’ loss during Hurricane Katrina has turned out to be Mobile’s gain. These three examples demonstrate that Mobile is in a unique position on the Gulf Coast and may be situated to draw more business from devastated cities near by.

“In certain industry sectors, I think that’s a correct assessment,” said Leigh-Perry Herndon, vice president of communications at the Mobile Chamber of Commerce. “Will there be more companies looking to Mobile to meet their future business needs? Quite possibly.”

Herndon emphasized the Chamber does not try to lure businesses away. “We consider this poaching,” she said. But the Chamber does work with businesses interested in moving to the Port City.

Herndon said Mobile’s economy was going strong even before Katrina, noting the last two years have brought Mobile more economic development projects than in the last two decades. She also said the Chamber is not currently working on any projects related to businesses moving from Mississippi or Louisiana.

But while New Orleans and much of the Gulf Coast reels from Katrina’s sharp blow, Mobile has a number of things going for it.

“Mobile is the largest fully-operational city along the Gulf of Mexico between Houston and Tampa,” Herndon said.

There are numerous factors that make Mobile a good place to do business, she said.

“For any business looking to locate in the Mobile area, the basic selling points are the same – Alabama’s a right-to-work state, property taxes are low, incentives are balanced, we have an educated and available workforce to meet growing needs, the residential market is well below the national average; and the cost of living is lower than any metro area in the state and along the Gulf Coast.”

And that, along with the fortune of not being devastated by a major hurricane, may prove to be very lucrative for the Port City.

Megan Hill is a writer living in Mobile. E-mail her at mahill@stumail.shc.edu

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