(FORTUNE Magazine) – Mobile, Alabama, has seen some hard times. While it was largely spared by Hurricane Elena in early September, six years ago Hurricane Frederic smashed into the area and did $940 million in damage. The sleepy Southern port then weathered a downturn in shipping and shipbuilding that kept unemployment in double digits even as the rest of the U.S. rode the recovery. Now that's all changing. The Tennessee-Tombigbee Waterway, a 234-mile-long canal from Iuka, Mississippi, on the Tennessee River to Demopolis, Alabama, on the Warrior- Tombigbee river system, should help turn Mobile into a boom town. The waterway, built with nearly $2 billion in federal money, over the squawks of environmentalists, officially opened in June. It trims up to 900 miles from the Mississippi River routes to the Gulf of Mexico, saving shippers as much as $131 million a year. For Mobile, at the mouth of the Mobile River and the last stop on the way to the Gulf, that means new industry, new jobs -- and new optimism.