Sunday, November 18, 2012

Everything you wanted to know about the Port

Last week I got to attend a Houston Economics Club luncheon with Captain William Diehl speaking as the President of the Greater Houston Port Bureau.  He not only showed us a very impressive real-time Google Earth image with every ship anywhere near Houston (zoom, pan, flyover - all very cool), but also rolled off a string of impressive facts about the Port:
  • Houston is the #1 most active U.S. port with ~8,000 ship movements per year.  NOLA is #2 at ~6,800, and both LA and NYC are in the ~4,000 range.
  • Houston is #2 in tonnage just behind New Orleans, although they implied that NOLA might be doing a little double counting as ships move up and down the Mississippi to and from Baton Rouge.  Texas City is #10 nationally.
  • Galveston moves ~1 million cruise passengers a year, and mints money off of the parking for those cruises.  Houston recently secured a couple of new cruise ship contracts for the $108m white elephant Bayport terminal.
  • Galveston Bay is only 12 feet deep, but they have to dredge the channel to 45 feet deep.  Evidently they need $50m a year to keep up the dredging, and send $130m a year in fees to the Feds to do it, but the Feds only send back $20m a year to do the job - much less allocate enough for us to deepen the channel to open it up to larger ships.  So, yes, the Federal government is screwing Texas, again.
  • 70% of the the containers coming through the Gulf of Mexico go to or from Houston.  I was surprised to hear that the imports almost exclusively serve Houston, San Antonio, and Austin - nothing further inland.  Even Dallas gets their containers by rail from LA.  There is some thought we could seize that opportunity with more rail capacity north to Dallas, but the railroads are resisting because they make more money moving containers longer distances from LA.
  • Unlike many other major U.S. ports, Houston has lots of room to grow, and this has been and continues to be attractive to big shippers.
  • Houston handles 200,000 barge movements a year.  Those barges go all over the eastern U.S. using the inter-coastal waterway and the river network.
  • 96% of all imported Volkswagens come through Houston, many from Mexico in addition to Germany.  If you've ever driven northbound over the 610 Ship Channel Bridge and wondered about the giant parking lot with thousands of cars to your left, that's what it is.
  • 60% of the Port's business is petrochemicals.  Cheap natural gas is rapidly growing that business with $10 billion in new projects, while increased domestic oil production is reducing import tankers.
  • The Panama Canal expansion will allow 8,000 TEU ships instead of 4,500 TEU ships, which means much bigger ships with lower prices per TEU will be calling on Houston, although probably not more numbers of ships.  It will also enable the export of more petrochemicals to Asia.
  • Houston and Texas manufactures enough products we can actually fill quite a few containers for return trips to Asia, which is an advantage over CA ports, where ships often return empty.
If that's not enough for you, you can read more about the Port here, here, and here, as well as take a boat tour here.  It's truly an impressive asset for Houston, albeit one most of us non-eastsiders are rarely aware of.

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At 8:47 PM, November 18, 2012, Anonymous Anonymous said...

There was a recent report about the possibility of a major coal export facility. The proposed Pelican Island facility would be the Port of Galveston, but the article mentions that the Port of Houston already has export operations.

At 9:56 AM, November 19, 2012, Blogger kjb434 said...

With the pending strikes on the West coast ports, shippers are looking to other ports of call for delivering their cargo.

Houston's non-union setup allows for better flexibility in labor and prevents the port from not getting modernized.

Most port jobs can be done by machines and robots except for mooring a ship and the crane operator. Everything else can be automated and has been in ports around the world. Los Angeles and Long Beach wanted to implement this type of system to increase their inefficiencies since they can't expand. The unions put a stop to that.

Houston has the ability to go the way Rotterdam and Singapore have gone and automate when the time is right.

At 3:12 PM, November 19, 2012, Anonymous Mike said...

Rather infuriating that we can't even import Dallas's goods because of lack of railroad capacity. Would love to hear that this is changing soon.

What about the so-called Port of Dallas, where they are processing containers that come in through Houston? Seems to contradict what this is saying.

At 3:36 PM, November 19, 2012, Blogger Tory Gattis said...

I don't know about the "Port of Dallas". I point blank asked the speaker about serving the U.S. interior with containers coming into our port, and he said the containers were almost all local - then catching himself and mentioning San Antonio and Austin. He explicitly said Dallas gets their containers from LA. maybe not 100%, but the majority.

At 12:31 PM, December 05, 2012, Anonymous Keep Houston Houston said...

Is the HOU-DAL rail capacity really all that constrained? Even if UP didn't want to do it I'm sure KCS would happily step into the void, routing trains through Beaumont.

I'd wager it has more to do with the fact that Houston's an Atlantic port while LBC is Pacific. When New Panamax goes live in 2014 I'd expect to an uptick.

At 12:48 PM, December 05, 2012, Blogger kjb434 said...

Also,remember, just because a container doesn't ship to the interiors of the U.S. doesn't mean the goods don't.

Houston has a massive Walmart and Home Depot distribution point near the port. The Walmart center is the largest in the U.S. to accept shipping containers.

All the containers going to these locations in the 'local' area are actually going to be broken up and repackaged on trucks (most likely) and shipped all over the U.S.

It's a matter of semantics.

At 1:51 PM, December 05, 2012, Blogger Tory Gattis said...

Thanks kjb. I did not know that. Good info. Wish there were some clear stats on what interior U.S. destinations Houston should be going after vs. LA.

At 2:08 PM, December 05, 2012, Blogger kjb434 said...

I think the complicated part is that stats typically look at the containers themselves and how far they travel. The goods in those containers are examined.

The link below shows the two large Walmart building just south of SH 99 (Google has the label wrong area, should be labeled on the east). Home Depot's building is to the north. These facilities take containers from the Port of Houston.,-94.898443&spn=0.036562,0.066047&t=h&z=15


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