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Nov. 7, 2005
When Logistics Today began publishing its Top 50 Most Logistics-Friendly Cities a few years ago, an economic development official asked, "How does a city

When Logistics Today began publishing its Top 50 Most Logistics-Friendly Cities a few years ago, an economic development official asked, "How does a city gain or lose position in the ranking?" The simple answer was: Improve logistics-related infrastructure and services and the ranking will go up; allow them to deteriorate and the ranking goes down. But keep in mind, this is an evolutionary process. Dramatic change isn't likely.

That's true when a city government approves infrastructure improvements that take 10 years to complete and highway access and traffic flow increase. It also applies to a dredging project where the port gains more capacity due to a deeper draft. Runway expansions that allow larger aircraft and longer-range flights to serve an area could also bring added cargo capacity. Each of these would affect some of the key factors used in ranking cities for their logistics friendliness.

As we are learning from the 2005 hurricane season, natural disaster can work much faster to reconfigure critical infrastructure than a city government. When Expansion Management and Logistics Today developed our ranking system, Hurricanes Katrina and Rita weren't yet a factor. However, Katrina's impact on Louisiana, Mississippi and Alabama has had a wild-card effect on our rankings.

Tables 1 and 2 offer a look at the hurricane-affected areas and their current rankings. Destruction of critical infrastructure and disruption of services in areas that are important to logistics operations will affect these rankings. There is no telling by how much or for how long. At presstime, Hurricane Wilma was tracking towards southern Florida, having reached a magnitude equal to or greater than the force of Hurricane Katrina. Wilma had lost a little of its strength, but continued to threaten islands in the Gulf of Mexico and a large part of Florida.

The tremendous efforts of ports and transportation companies in the paths of Katrina and Rita allowed much of the transportation network to get back online quickly. Within three days of Rita striking the Gulf Coast, most rail and port services were back in operation.

New Orleans is in the unique position of being the only U.S. port served by six major railroads. A report by the Intermodal Association of North America (IANA) notes the railroads quickly cleared and repaired their lines and began hauling relief supplies into the stricken area.

As the first storm approached, says IANA, the Burlington Northern Santa Fe railroad (BNSF) suspended service into New Orleans and held freight until it could assess damage and reschedule deliveries. Service was reestablished on September 1, just days after a critical rail bridge was damaged when it was struck by a barge.

CSX saw the most damage to its system, concentrated along a 100-mile route from Pascagoula, Miss. to New Orleans. Norfolk Southern was able to restore service over the 5.8-mile bridge over Lake Ponchartrain and reopen interchange points with western railroads within 13 days.

Table 3 illustrates the economic impact of Katrina on all shippers, based on the Freight Pulse study undertaken by Morgan Stanley, Logistics Today and the National Industrial Transportation League (see cover story, "Higher costs aren't dampening shipper confidence"). According to Morgan Stanley, most of the disruptions caused by the hurricanes will persist for a few months at most. In the longer term, rail and flatbed truckload capacity should see modest incremental demand as the affected areas are reconstructed.

A ranking of the cities in the Northeast can be found on p. 24. To see a ranking of all U.S. cities, go to:

Table 1. Metros Affected by Hurricane Katrina
City LT Site Selector National Rank
Gulfport/Biloxi, Miss. 111
Mobile, Ala. 48
Pascagoula, Miss. 138
Pensacola, FL 84
New Orleans 23
Table 2. Metros Affected by Hurricane Rita
City LT Site Selector National Rank
Beaumont/Port Arthur 54
Houma/Bayou Cane, La. 277
Houston/Galveston 2
Lake Charles, La. 101
Lafayette, La. 163
Table 3. Impact of Hurricane Katrina on Freight Shipments & Costs
Disrupted more than 5% of shipments 26%
Caused non-fuel freight spend to increase by more than 5% 29%
No material impact on freight shipments or spend 53%
Source: Morgan Stanley/Logistics Today/NITL