Strategically located astride the mouth of the Mississippi.
Population: 4.2 million
Land Area: 702 square miles
Waterborne Commerce: Louisiana’s five deep water ports handle more than 457 million tons of U.S. waterborne commerce a year, including half of all American grain exports.
Seafood Industry: Louisiana’s fishing industry is the second largest in America, accounting for 26 percent of all seafood landed in the country.
Louisiana is open for business,” says David Kane, director of logistics and transportation cluster development for Louisiana Economic Development.
A lot of food is imported and exported from the state, and Kane reports about one in eight workers in Louisiana is involved in transportation, logistics or supply chain management, representing about 250,000 people, or more than 12 percent of the state’s workforce. "So there's really a strong workforce with a concentration in logistics," he says.
"What we try to do is develop synergies between similar industries we feel have long--term growth potential," continues Kane, adding certain industries are clustered within a particular geographic area to work off each other’s operational synergies. For example, located in the Hammond area are distribution centers for Winn Dixie, Associated Grocers and Wal--Mart, which operates its own food and consumer goods DCs.
"Hammond is located right at the intersection of I--55 (for north/south movement) and Route 12 (for east/west movement)," Kane says. "So there’s excellent access to the City of New Orleans and Baton Rouge. We are also about one and a half hours from Jackson, MS, so it’s a good, centralized location for distribution throughout the Southeast."
Louisiana has a system of ports and waterways like no other state in the world. "We are at the mouth of the Mississippi River. The state has 26 ports, both inland ports and deep--water ports," says Kane. The state boasts an impressive 2,300 miles of navigable inland waterways connecting each of the state’s six deep--water ports. Ninety percent of Louisiana’s Inland Waterway System is available for container--on--barge shipping.
"We are the largest coffee port in the country importing coffee from around the world through the Port of New Orleans," says Kane. In fact, Folgers in New Orleans and Community Coffee in Baton Rouge each operate coffee processing plants. And the southern part of the state is the largest seafood producer in the country.
The mighty Mississippi flowing through the state is of particular interest to food logistics operations, Kane says. "The opportunity to use the inland river system is really gold waiting to be mined," he says. He notes that, with rail service experiencing congestion in some places, water transportation offers an economical option.
"Inventory visibility is what makes river transportation so viable," says Kane. "Where you can get consistent scheduled service, it’s really the same as having inventory in your warehouse and you always know where your inventory is while your container is on a barge moving up the Mississippi to Memphis or Pittsburgh. We will see more and more shipments using water. For instance, you can move a container from New York to Jacksonville faster on a ship than you can on I--95."
The state is a veritable transportation hub, offering just about every mode of interest to the food logistics industry. For example, New Orleans is one of only two cities in the nation (Chicago being the other) where all six of the country’s Class 1 railroads converge.
Louisiana has six interstate highways passing through it and it has seven commercial service airports and 71 general aviation airports. Potable water is plentiful and the communications infrastructure throughout the state is excellent as it’s wired with fiber optic cable and serves most metropolitan areas with DSL availability.
The entire state of Louisiana is a designated Enterprise Zone, meaning qualified employers creating jobs can realize state tax credits of up to $2,500 per employee.
"We also have a Quality Jobs Program for companies hiring full--time employees in manufacturing or processing industries," explains Kane. "If the employee works more than 35 hours a week, employers pay at least 85 percent of their health care benefits and qualified employers are eligible for an annual 6 percent refund of their payroll."
Kane cites a client with whom his organization is currently working, who will build a new facility and will employ 60 new workers at $35,000 a year in a manufacturing operation. "On 60 workers, at 6 percent, that equates to $126,000 a year. Since the program is applicable for 10 years, at the end of those 10 years that is $1.26 million that the employer will receive in cash refunds from the state," Kane explains.
Food is a major industry in the state. The commercial seafood industry alone brings in more than $2.7 billion in revenues to the state and supports more than 27,000 jobs, with more than 1.2 billion pounds of finfish, shellfish and crustacean harvest landed and sold annually. Louisiana is also where Tabasco Sauce is manufactured and bottled.
"Food is an important part of our culture and I’ve never seen so many people in one area whose hobby is cooking," says Kane.
New Orleans Cold Storage
New Orleans Cold Storage (NOCS), located at the Port of New Orleans, is 118 years old—with three locations in New Orleans, one in South Carolina and one in Houston.
NOCS recently began operating a new dockside 160,000--square--foot facility in New Orleans for frozen storage to keep up with its exploding business.
"We are located in major port cities and our function is to service primarily frozen and chilled food products for either export or import," says Mark Blanchard, executive vice president.
NOCS handles poultry primarily for export to Russia, Eastern Europe and Africa. "We don’t own any of the products and we are not the exporters––we are the service providers for the cargo," explains Blanchard.
He adds that the location at the port is very vital to the company. "We are either loading containers which go aboard ships or we are loading ships with refrigerated or frozen cargo," he says. On the outbound from New Orleans, NOCS shipped more than 250,000 metric tons last year, in addition to a large number of containers.
The company receives poultry on the inbound in refrigerated trucks from poultry processors in the Southeast. Inbound cargo to the New Orleans plants number about 20 containers a month––or 480 tons of a variety of refrigerated and frozen food per month. NOCS also receives shrimp on the inbound from local fisheries and these products are then shipped via refrigerated truck throughout the country.
Also on the inbound are imported foods––seafood, beef and pork––from South America, the Pacific Rim, Australia and New Zealand. Imported products are stored in NOCS’s facilities until its clients want those products shipped out. These shipments travel throughout the country to food distributors or food retailers by refrigerated truck.
As for business incentives, NOCS finds the state’s Quality Jobs Program helpful in creating jobs in the new facility.
"The program will allow us to get state and local sales tax rebates on equipment and building materials that were purchased for the new facility––which is justified through the creation of new jobs for the area," Blanchard says.
Although the incentives are beneficial to the company, they were not critical in the decision to expand and build a new facility. "But the incentives certainly had some impact on our decision to expand in New Orleans rather than in Texas or South Carolina," he says.