Landside Logistics: Key to the Gulf Advantage
Drive around Houston today and you will see new construction of warehouse space popping up everywhere. From Baytown to Brookshire, the Houston area is seeing a record number of industrial buildings hit the market. Interestingly, these buildings are being built or leased by a variety of companies, across different industries. Resin producers, packagers, retail distribution, food & beverage companies, and third-party logistics providers, all are setting their sites closer to ports, rails, and population centers.
So why all the demand?
The resin boom is here and expected to only increase over the next several years. While packagers have secured space, other commodities have felt the tightening of supply and followed suit.
The E-Commerce or “Amazon effect” continues to play out. Consumers and end users expect their products to be available faster. What was true in retail, has now spread to become a cultural trend, expanding to raw materials. Distribution networks are now forced to locate closer to the end user, along with utilizing multiple supply chain options to reach the market.
Houston is blessed as a natural gateway for both import and export container trade. As the dominant option in the Gulf for container volume traffic, handling over 70%, Houston presents alternative options from the West Coast, through several all water Asian services. ZIM, as an example, recently joined the 2M Alliance and will increase their Asia service into Houston. This gives customers in the Dallas-Fort Worth area a compelling option from both a cost and transit time perspective versus using the West Coast.
Trucking capacity continues to be an industry challenge. As companies improve the quality of the life aspect of the job by increasing home time, drivers are staying closer to base or dedicated to set routes more often. These network changes increase demand on regional warehouses within a hub-and-spoke type network.
Gulf Winds has seen this play out in Houston over the last 25 years and invested heavily in port related infrastructure to meet the needs of our clients. Our transload campus stretches from the gates of Barbours Cut to Bayport terminals, covering over 1,500,000 square feet of space, handling over 50,000 containers annually.
Transloading of ocean containers, especially near ports and rails, has been a growing submarket of port logistics for many years. With ocean container transloading, the container is picked up from the port, brought to a warehouse, and the cargo is unloaded. The cargo is then reloaded onto another mode of transport, such as truck, for its final delivery. The combination of increased container trade, costs of demurrage, more efficient management of equipment by the steamship lines, and increased regulations on trucking have all led to the growth of this logistics process.
Gulf Winds recommends a variety of products for transloading. These include:
• Rail Commodities: lumber, metals, palletized products
• Bulk: sand, flour, plastic pellets
• Liquids: ethanol, biodiesel
• Oversized: transformers, machinery, military vehicles
• Sensitive Products: frozen food, produce, other perishables, parcel
Although not a solution for every shipper, depending on the cargo, and ultimate destination, the advantages of transloading are many.
From a cost perspective, the ability to save 20%+ on ocean freight by shipping heavier weights (60,000+ lbs.) is significant. Being able to transload adjacent to the port terminal has additional opportunities to increase flow and save on fees.
Savvy shippers have also recognized the environmental benefits of eliminating the roundtrip miles on an ocean container delivery to Dallas/ Fort Worth, by transloading to a one-way truckload. In these cases, there is a 50% reduction in CO2 emissions and traffic congestion to the network.
Finally, an added benefit is the import box being immediately available for export use, given growing demand. The quick turnaround benefits all stakeholders: steamship line container utilization, the importer maintains lower costs of equipment, and exporter has available boxes to meet booking needs.
Houston offers a variety of options for shippers to get product to market in an efficient and cost-effective manner. Landside logistics, such as transloading capacity, remains a critically important piece of the puzzle for our region’s long term success as an international gateway.
- Date July 25, 2019
- Tags 2019 July