The future of the Texas economy is dependent on global trade and the overall competitiveness of all of its ports, but it is especially dependent on the Port of Houston.
Fortunately, it appears that future is very bright as the port is currently seeing the largest level of cargo activity in its history.
“There are a lot of good things happening,” said Port of Houston Authority Executive Director Roger Guenther. “With our steel tonnage, which is very cyclical, last year was the highest year in history for imported steel tonnage, with over 6.5 million tons. On average, over the last 30 years, it was about 3 million tons.”
Though the recent downturn in drilling resulted in imported steel going down to a more normal level in the past several months, Guenther insists the port’s container activity remains “very, very strong.”
Earlier this year, a significant amount of cargo was diverted from the West Coast of the U.S. into Houston, due to notable congestion issues that negatively impacted the supply chain.
“They found a home in Houston,” Guenther said, addressing the 2015 Petrochemical & Maritime Outlook Conference held recently in Pasadena, Texas.
“We can all be thankful we have a very good and productive workforce in our port, a workforce that shows up each and every day without interruption, and we’re very thankful for that,” he said. “A lot of that cargo found a home, and it stayed here because of the reliability and assistance they can get here in Houston, Texas.”
Guenther said the port experienced a 30-percent increase in volume over a six-month period beginning in 2014. East Asian imports currently represent 25 percent of Port of Houston’s total inbound container trade volume.
“In fact, our port during the last year was the fastest-growing container port in the nation, second only to the port in Savannah, Georgia,” he said.
The dramatic spike in volume is a testament to the greater Houston area’s ability to perform.
“It’s difficult because you really can’t prepare your infrastructure or your workforce for an increase of 30 percent in your container business that happens overnight. But we did very well,” Guenther said. “We did things like extending our operating hours to make our terminals more available, so our truckers could get in and out of our terminals.
“A big part of this supply chain, we believe very strongly, is truckers. They have the right to make a good living, and we need to make sure they get in and out of our terminals efficiently.”
Noting how rapidly the needs of industry change, Guenther said the Port of Houston is committed to anticipating and adapting to those changes. “We have to stay ahead of it,” he said. “We have to be more productive tomorrow, we say, than we were today. We continue to improve our position in our port to handle the growth as we move ahead. And the key to this is to plan strategically.”
Guenther identified the Port of Houston’s immediate initiatives in the development of its long-term strategic plan “for the port to move the world and drive regional prosperity”: to further diversify cargo and trade services, to continue to modernize and improve facilities, and to generate funding for future channel maintenance and expansion.
“First and foremost,” he added, “is the continued emphasis on the need to maintain the Houston Ship Channel as the busiest waterway in the nation.
“The basis of this plan includes input from port customers, stakeholders, the users of the port’s facilities and its pilots — all of the interests that have a stake in this great waterway to be America’s distribution hub for the next generation.”
Recognizing opportunities, meeting challenges
Attracted by its demonstrated ability to move cargo seamlessly and provide reliability, shippers nationwide are eager to do business with the Port of Houston.
Though it is located within the largest petrochemical complex in the nation, Guenther said the Port of Houston Authority is expanding its marketing efforts to reach industry beyond the energy sector.
“There’s a tremendous opportunity for refrigerated cargo — both produce and fresh fruits — to come into Houston, as well as the export of some of the frozen goods — the meats and the poultry — that are produced in our region,” he said.
But the Port of Houston is by no means abandoning its energy roots.
“The main thing we’ve been talking about for years as well is the new wave of polymer exports throughout our facilities,” Guenther said. “The billions of dollars of investments that have been made in this region are coming to completion. These manufacturing plants will come online very soon and significantly increase the amount of exported plastics that we have running through our port.”
Despite the Port of Houston’s many successes, including being recognized as “the epicenter of chemical exports,” Guenther recognizes the many challenges that face the region.
“Big opportunities have big challenges,” he said. “These challenges include things like our channel, our Port Authority infrastructure and the mobility of our cargo and our vehicles in moving our goods to market.
“All these assets are our strengths. They are the strength of everything we’ve done for many, many years, but we can’t afford for them to become weaknesses.”
The Houston Ship Channel is the busiest waterway in the nation and requires deepening and widening to maintain that status as well as to assure the safety of its partners, customers and community.
“Any time we see an extended closure of our channel, we understand it’s extremely impactful to our businesses,” Guenther said. “Any type of closure not only has an impact on our local economy but also to the state and to the region. This highlights the critical need for continued investment in our channel to ensure safe navigation.”
As a local sponsor of the Houston Ship Channel, the Port of Houston Authority continues to work with the Army Corps of Engineers, as well as the Houston Pilots who navigate ships safely through the channel.
“Collectively, we will continue to study the recommended improvements for safety and efficiency of the Houston Ship Channel,” Guenther said.
Guenther believes another significant challenge facing the Gulf Coast region’s economic prosperity is to ensure the reliability of a freight network that can move goods to market.
“We all know the easiest way to move freight is to put it on a truck and take it from Point A to B, but there’s a limit to how quickly and how much we can continue to expand our roads,” he observed. “Our corridors are becoming limited with more and more trucks on the road.”
Expanding the freight network must include a diverse variety of transportations, “and not be limited by our ability to pour concrete,” Guenther added. “We’re going to have to do that, but we’re going to have to find ways to get other freight corridors. Maybe rail, perhaps even waterways. We need to get innovative in order to remain competitive, to look for opportunities for inland depots, for certified rail and other modes to move our cargo out quickly and efficiently.”
Guenther also noted the importance of a workforce that’s reliable and sufficient to support growth can’t be understated.
“Nothing is more important or instrumental to our continued success in our greater Port of Houston than our workforce. In 2009, we decided to take up this issue and explore solutions,” he said. “We want to continue to do everything we can to keep this effort going and work with this community to make sure we have the workforce to serve our region.”
Infrastructure, expansion and the future
Guenther believes it is incumbent upon the Port of Houston Authority and its partners to consider the future construction needs of the port and the Houston Ship Channel.
“We continue to use our funds we generate from our cargo, container and real estate operations to put more capital investments into our facility, drive more cargo and create more jobs,” he said. “But the ships are getting larger at an exponential pace.”
Fabricated in South Korea, four new cranes each towering nearly 30 stories tall have been installed at the Port of Houston’s Barbour Cut Container terminal in anticipation of super-post-Panamax vessels that are too large to fit through the Panama Canal.
Additionally, the berthing area and container yards have been expanded for greater strength, capacity and efficiency.
Approved by port commissioners in March 2012, this expansion and upgrade is a big part of the $700 million project to fully update this terminal and dredge it wider and 45-feet deeper. Completion is anticipated in mid-2016.
“We spend a tremendous amount of money for the greater Houston Ship Channel — hundreds of millions of dollars just upcoming over the next five years to support the channel, the disposal areas, the maintaining of those things that are for the greater good of the port that the Port of Houston Authority isn’t getting directly compensated for,” Guenther said. “As we continue to remain competitive in our cargo operations, we’re going to need that support from other sources that help us make those investments that will continue the commerce through our ports.
“We’re diligently preparing for the next generation. I’ve had the opportunity to be in many ports throughout the country, and I can honestly say that because of this community and the unified effort we put together to grow our industry and grow together, this port industry is not one of the best. It is the best, and I’m proud to be a part of it.”
For more information, visit www.portofhouston.com or call (713) 670-2400.
