The Port of Houston says its decision to limit the calls of 9,000-TEU-plus ships to one a week won\u2019t hamper the port\u2019s volumes, but transportation providers and packagers supporting resin exporters, expecting a surge in shipments, aren\u2019t convinced.<\/p>\n\n\n\n
The rule limits containerized cargo vessels of greater than 1,100 feet from traversing the 52-mile trip from the entrance of the channel to the port\u2019s two terminals. The impact is heightened by a decision by Houston ship pilots to prohibit two-way traffic in the channel in some circumstances when a mega-vessel is en route. Smaller ships going in opposite directions are able to swerve around each other in the channel. But the pilots say the channel is too narrow for nearly 1,100-foot-long ships to make that maneuver, and their safe passage requires that big ships can be the only ones in the 530-foot-wide channel as they pass through.<\/p>\n\n\n\n
While port officials say they believe that the one-vessel-a-week rule won\u2019t limit container movement through the port \u2014 and they are moving to speed up a dredging project to widen the channel \u2014 the rule has raised concerns that it could hamper port growth, prompting shippers and ocean carriers to take their business elsewhere.<\/p>\n\n\n\n
Rising volumes bring bigger ships
\nHouston\u2019s loaded cargo volume grew 9.5 percent year over year to 2.21 million TEU in 2018, with exports up nearly 9 percent and imports up 11.4 percent, according to PIERS, a sister product of JOC.com within IHS Markit. Houston\u2019s volume growth outpaced that on the Gulf Coast and the US as a whole, which grew 8.1 percent and 5.1 percent, respectively. The only major US ports that grew faster were Seattle and Wilmington, North Carolina. Houston\u2019s port\u2019s loaded cargo to and from Asia jumped 17.4 percent, with imports up 19.5 percent and exports, 11.34 percent, PIERS data show.<\/p>\n\n\n\n
Resins are a crucial element of the export growth. The availability of cheap shale gas has triggered a surge in new and expanded petrochemical plants, pipelines, and liquefied natural gas (LNG) export facilities along the US Gulf Coast, and Houston is a key export port. Joel Morales, executive director Polyolefins Americas with IHS Markit, said he expects US net exports of polyethylene to increase from 6.3 million metric tons annually to 10.4 million metric tons annually from 2018 to 2023.<\/p>\n\n\n\n
Marc Levine, president of Plantgistix, a Houston-based resin packaging company, said he only learned of the rule Thursday, but already doesn\u2019t like it. He fears the regulation could restrict the port\u2019s expansion, and send cargo to East Coast ports, such as Savannah and Charleston.<\/p>\n\n\n\n
\u201cWe’re shipping exports like gang busters,\u201d said Levine, who said he shipped 24,000 FEU in 2018, a 50 percent increase over 2017, and expects that volume to grow another 35 percent in 2019. \u201cIt’s going crazy. We love it. It’s a huge boon to our industry,\u201d he said. \u201cWe need these big ships. One per week sounds very restrictive.\u201d<\/p>\n\n\n\n
Roger Guenther, executive director of the Port of Houston Authority, said he \u201ccouldn\u2019t speculate\u201d on what impact the rise in cargo volume in the future might have on the port\u2019s ability to handle it with a big-ship limitation in place. But he said shippers should feel secure.<\/p>\n\n\n\n
\u201cI don\u2019t believe they should be worried at all,\u201d he said. \u201cIt\u2019s change management. Things are going to continue to change, and I am confident that we are going to continue to grow with the demand here.\u201d<\/p>\n\n\n\n
He cited the example of the pilots\u2019 rule allowing one-way traffic only when a big ship goes down the channel. After reanalyzing their ability to maneuver ships in the channel, the pilots on Wednesday changed the rule so that ships up to 600 feet long are now allowed to be in the channel with a mega-ship, but larger ships are not.<\/p>\n\n\n\n
At present, only one carrier, Mediterranean Shipping Co., sends large container ships into Houston, the latest of which, the 1,104-foot, 9,200-TEU MSC Joanna, will call at the port Sunday. Port officials say only 10 vessels of that size have called at the port since the first one arrived in August, and only four are scheduled in the next four months.<\/p>\n\n\n\n
But that could change rapidly if, for example, growing regional demand pushed a carrier to place an 1,100-foot vessel on a weekly service to the port.<\/p>\n\n\n\n
Ric Campo, chairman of the Port of Houston Authority, speaking at the April 8 meeting before the vote to limit mega-vessels, said he had spoken extensively to both MSC and Maersk Line, who together handle about one-third of the port\u2019s cargo. MSC said one sailing a day would not \u201cnegatively impact\u201d its business at present, he said.<\/p>\n\n\n\n
Still, Campo acknowledged that the limitation is only an interim measure. One attendee, for example, asked him what would happen if a second carrier announced in six months that it wanted to bring a large vessel into the port to equalize the \u201ccompetitive edge\u201d that MSC gets from operating larger ships into the port.<\/p>\n\n\n\n
\u201cUltimately, we have to be able to deal with the situation as it arises,\u201d Campo said. \u201cIf we ended up at the beginning of next year with a bunch of these ships, then we’ll have to have to get in a room with them and figure out how we’re going to organize it.\u201d<\/p>\n\n\n\n
Long-term impact
\nMSC could not be reached for comment, but other ocean carriers are watching the situation closely. Johanna Stroex, a spokeswoman for Hapag-Lloyd, said the carrier is aware of the decision, but \u201cat this point in time the limitation has no impact on the business of Hapag-Lloyd.\u201d<\/p>\n\n\n\n
\u201cNonetheless, it needs to be considered for future planning,\u201d such as if the carrier wants to use larger ships, she said.<\/p>\n\n\n\n
Tom Boyd, a spokesman for Maersk, said it is \u201csatisfied with the deployment\u201d of vessels it currently has through Houston, none of which exceed 9,000 TEU. He welcomed the port authority\u2019s plan to widen the channel, saying that at the moment the channel is \u201ca bit limiting \u2026 We have to watch our vessel size.\u201d<\/p>\n\n\n\n
Shareen Larmond, president of the West Gulf Maritime Association, which represents terminal operators, ocean carriers, stevedores, and other port employers, said the channel-widening project could take at least four to five years. In the meantime, she said, the association would \u201ccontinue to discuss and collaborate with the Port of Houston regarding this issue.\u201d She said the port is \u201copen and willing to accommodate and continue accommodating ship calls.\u201d<\/p>\n\n\n\n
The port authority on Wednesday said it is working with the US Army Corps of Engineers and other representatives of the federal government to obtain authorization and accelerated funding for the project. The project could cost $1 billion, and the authority is looking at all private and public options for funding to speed up the project, especially if they allow the port to avoid relying on money from congress, which will only increase the time to completion.<\/p>\n\n\n\n
\u201cWe need to fix the channel now, and we are looking to make this project be the model of how to get channel improved quickly,\u201d he said.<\/p>\n\n\n\n
At the April 8 meeting, the authority also approved a fund of $500,000 to support a traffic efficiency group for the channel. The group will consist of port stakeholders, who will work with US Coast Guard, the pilots, and others to share data and insights to help optimize channel traffic flow.<\/p>\n\n\n\n
M. Can Fidan, vice president of business development for MTS Logistics, a New York-based non-vessel-owning common carrier that specializes in shipping resins, said he doesn\u2019t \u201csee any problem as of yet.<\/p>\n\n\n\n
\u201cI don\u2019t think this will have any immediate effect,\u201d he said. \u201cAnd I don\u2019t think it is very different than what POHA was advising in the past about the capacity of the vessel they can handle.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
The Port of Houston says its decision to limit the calls of 9,000-TEU-plus ships to one a week won\u2019t hamper the port\u2019s volumes, but transportation providers and packagers supporting resin exporters, expecting a surge in shipments, aren\u2019t convinced. The rule limits containerized cargo vessels of greater than 1,100 feet from traversing the 52-mile trip from …<\/p>\n","protected":false},"author":1,"featured_media":1478,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20,59],"tags":[141],"class_list":["post-1477","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","category-port-news","tag-houston"],"_links":{"self":[{"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/posts\/1477","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/comments?post=1477"}],"version-history":[{"count":0,"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/posts\/1477\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/media\/1478"}],"wp:attachment":[{"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/media?parent=1477"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/categories?post=1477"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/tags?post=1477"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}