Houston is King! A View From the Top

By: Dave Cooley, GHPB

Introduction
This article concludes our series on the U.S. waterborne trade by suggesting a process for monitoring the pulse of the port. By selecting a series of essential factors affecting port activity, agreeing on factors determining success, and associating relevant metrics indicating whether or not success is being achieved, the maritime community could check for emerging trends. The template can be expanded to include the various characteristics of a particular facility (or the entire port) against which various scenarios and the anticipated outcomes can be applied. The results would be a manifestation of metrics that allows various conclusions to be evaluated. The benefit of such a process is that it allows the maritime community to challenge the status quo.

Table1

Table 1

A suggested template is shown by Table 1. 
The basic premise supporting this concept is the thought that ships, the waterway, the terminals, and all the people create a cohesive unit moving toward a universal goal of safe and efficient maritime operations.

Events
The Houston Port is both essential and diversified. When thinking about moving forward, all possible future events can be classified into two basic branches. Events can be either controllable (endogenous) or not controllable (exogenous) and will drive either a positive outcome (success) or a negative outcome (failure). With this premise in mind, no attempt will be made to suggest controllable projects as this is the purview of the individual participants comprising the maritime community. However, several exogenous projects will be articulated that will offer examples as to the operation of this rudimentary port assessment concept.

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Any unplanned exogenous event will affect either the supply or demand of a particular good and, as such, must be adroitly managed. This is especially important, given the unplanned nature of the event. There are two possible outcomes of an exogenous event: a benefit to the port community (success) or a detriment to the port community (failure). Furthermore, exogenous events can occur within the bounds of the port community and cause a direct impact or occur outside the bounds of the port community, creating an indirect impact.
For example, a hurricane passing through Galveston Bay is a direct exogenous event. The port and all within are directly affected. Last year’s labor issues on the West Coast that disrupted the waterborne flow of trade is an indirect exogenous event, when the Port reaped the benefits as shipping lines redirected ships to different ports-of-call, including Houston.

To demonstrate the process, Table 2 offers an array of favorable and unfavorable outcomes that could result from several possible exogenous events along. It offers hypothesized actions that would affect port operations and suggests outcomes that can be utilized to assess the overall impact to a port. Impact assessment includes possible indicators of success and the associated metrics.

Table2

Table 2

Conclusion
Over the 11 year analysis period, the Houston Port rarely relinquished its ranking. When the ranking did change, it was generally a move up as opposed to a move down. One of the key aspects of the Port of Houston is its involvement across the spectrum of goods and commodities flowing in the waterborne foreign trade of the U.S. It enjoys a reasonably balanced yet diverse trade structure. The Port moves finished and semi-finished goods that are consumer-ready and very prevalent in the container trade and commodities as well as unfinished goods, and products transported aboard bulk and break-bulk ships that provide the opportunity for indigenously produced value-added manufacture or processing here at home.

One of the key reasons for the continual success of the Port of Houston is its unique blend of public and private ownership, investment, and structure. This blend allows the Houston Port to be agile, responsive, and forward-looking as it handles the vast majority of the essential commodity groups moving in the U.S. waterborne trade. May the data and concepts offered by this series stimulate innovative thought!

  • Date March 3, 2016
  • Tags March 2016