The Itawamba County Port Commission recently announced the county has signed a three-year contract with SEACOR AMH to operate the Marine Highway Container-on-Barge system and assume daily operations of the public terminal at Port Itawamba. The deal marks the end of a six-year project, initiated by former ICDC Executive Director Greg Deakle, to launch a container-on-barge service at Port Itawamba and an investment of $4.2 million in the county.
What exactly does the partnership mean for Itawamba County and the future of Port Itawamba? Acting ICDC Director Harvey Clements, who fostered the deal in its final months, sat down with The Times to explain:
Q: Can you please explain a bit about what container on barge service is and how it will work in Itawamba County?
A: There’s a big business on the west coast. It comes in on the west coast and is trained all the way to Memphis. This gives a route — especially once the Panama Canal is fully open — to come here and just come a short distance up the Waterway. The items are already packed. They’re sealed; they’re locked. It’s safer. They just load them overseas … put them on a barge, ship them over here, we unload them, set them on a chassis and ship them out. What we’re working towards is becoming a distribution center, here … With I-22, the Waterway and the railroad, we’re trying to make a hub, if you will. Hopefully, we’ll encourage companies like Toyota — that are bringing freight in all the way from the west coast to Memphis and then trucking it down here — to set it down here and truck it to them a short distance.
Economically, it should be competitive. And it’s certainly better for the environment. You can put so many more containers on a barge … You’d probably need 50 trucks to do what one barge can do.
Really, there are four things involved in container on barge: A broker or “freight forwarder” who, once the materials hit the United States, will arrange for it to ship to its destination; your end user; your rates; and relationships. That’s how you build container on barge.
Q: Before this was set up, how was our port being used?
A: We’ve never handled container on barge. This is a brand new service for us. This was a kind of dream for Maritime and Greg [Deakle]. They knew this could be done, that the waterway could be used the way it was originally intended to be used. This is going to open up that business and, what we hope, is that it will open up the export business out of Fulton, of which we do very little at the port … Now, we can go out by truck, train or barge. Export could be a very big business.
Q: With SEACOR taking over the daily operation of the port, what measure of control will the county have over how the port is run? Is the county relinquishing all control? Or do they still have a say?
A: The agreement is, they have to meet a certain performance level. They have leased that port entirely. They are going to run it. Bryan Hunt is their manager … he’s a local guy from Tupelo. They will take care of the day-to-day operations and report to the port commission on monthly activities. They are also going to solicit the commission’s input … We’re trying to find them connections.
We’re going to try to work together with them, but they’re going to run the port.
Q: So, they’re going to be the ones to try to bring in new businesses, customers to use the port?
A: Yes. They’ve got to massage the customers and convince them [to use the port].
[SEACOR] is paying a big lease. It behooves them, if they want to be successful, to move freight. So, this is not a fly in the wind agreement. They are paying dearly for what Greg [Deakle] has accumulated down there. It behooves them to be successful, or they’re going to lose money, big time.
Q: So, if they bring in a new customer to the port, does the county make any money off that?
A: No. They pay a lease to the county every month.
Another interesting thing: They’re going to try our [two] employees. They’re going to work for SEACOR for up to 120 days. Then, SEACOR will decide whether or not to keep them or let them go.
Q: Does that mean SEACOR will take up paying them?
A: Yes. So, the county will have no expenses. They will take up paying the electric bill, everything. It will be a steady income for the county for the first three years, and then it will be adjusted to the National Consumer Price Index.
Q: What are they paying, according to their lease?
A: Twenty-eight thousand dollars a month.
Q: I’m assuming that’s more than the county was making prior to them leasing the port?
A: Oh, we were barely breaking even. There were days down there when we didn’t have anything to do.
Now, they won’t start out at $28,000. They have a grace period of three months where they only pay $8,000. But it jumps up quickly afterward. Within a year, they will be paying $28,000 a month. It’s a pretty good deal.
Q: Traditionally, the ICDC director is also the port director. Does this mean the county no longer has to have a port director?
A: When we look at [new ICDC directors], port experience won’t even be necessary. If he can market the port properly, that’s all we care about.
Q: What kind of changes need to be made down at the port to accommodate SEACOR?
A: Whether it’s SEACOR or anybody else, we will have to move North Mississippi Rail. Greg had three companies wanting to do this, and in every discussion, they didn’t want [the railway] there. We’ve agreed to move them to somewhere else on the port property.
Q: They’ve agreed to this move?
A: In the agreement we negotiated with them, we have nine months to move them.
Q: When will all of this begin? When will SEACOR take over operations?
A: It’s done. The tenth of November.
Q: The current lease is for three years, after which time I assume you get to reevaluate the relationship. What are you hoping to happen within these three years?
A: I’m hoping we’ll finally make this port successful. It will probably start off slowly, but I think by the end of three years, we should know if container on barge is going to be successful here. And probably the biggest thing is we’ll heal the budget and be back in the black.
We’re taking a third party, betting on them and betting that the port’s going to be successful. I think, if they do their homework and convince people they’ll be reliable, they’ll have plenty of business.
You’re sitting down there with this beautiful port, but we never had the money to run it properly. We didn’t have a marketing person, or someone to make the sales calls or the budget to go around to businesses and say “Hey, we can take care of you.”
I think the key story here is we’re going to have professional people running it and the opportunity to develop an intermodal service here in Itawamba County. If the rail does its thing and the waterway is there, I don’t know how it can’t be successful.