Squeezing the Balloon
To a child, a balloon can be remarkable play toy. It can be stretched to the breaking point, twisted into colorful animals that can be made to dance in the wind, or simply batted about like a gravity-defying ball. Its entertainment value is nearly limitless; however, once the opening is tied and your breath is sealed within the polychloroprene vessel, the volume is set. You can constrict its center and watch the ends expand or squeeze an end and watch the opposite portion of the balloon grow. It’s just a fact of life that you cannot force any more air into it once the knot is tied.
Fortunately, ports are a bit more fluid than a distended balloon. Yet, a system of ports – such as the one that endows the coast of Texas – can be impacted in a similar fashion as a squeezed balloon. Think about what happens when a port is closed in anticipation of a major storm – ships seek an alternate port. What happens if persistent fog halts maritime commerce into a particular waterway? Vessels will either lie at anchor or divert to a destination that is open for business. Ultimately, the goods will reach their designated market; albeit, not necessarily as initially anticipated. In the last month, there was much of that afoot.
Overall, 2019’s blue water arrival numbers for the state lag last year by 1%. The brownwater transits across the nation’s busiest waterway remain a disheartening 11% below 2018’s tow movements. Yet, the situation is not completely unexpected given that March is generally a peak month and it was hamstrung by a number of extensive waterway closures in the upper Houston Ship Channel. This was followed by April’s cumulative monthly gain of 4% for bluewater arrivals and 6% for regional inland tow activity which reflected a return to normalcy following prolonged restrictions at several of Houston’s major terminals.
On a port-by-port basis, Brownsville adhered to the typical trend – a 32% jump from February to March followed by a 32% plunge in vessel arrivals from March to April. The net result for the first third of 2019 was a 16% increase in waterborne arrivals. Trade with Mexico is solid from this particular port of entry and will continue to build as more concrete is poured and terminals rise along its waterfront. Corpus Christi also peaked in March as reflected in the most recent 6% drop in vessel arrivals; however, it lags 2018 by 1%. This should be no cause for alarm since the port’s export potential continues to grow along with its burgeoning infrastructure. LNG and crude exports are the rage these days in the Lone Star State. Hence, all that stands between the port and a record year is a healthy dose of dredging.
Traipsing up the coast, the port of Freeport also posted two very solid months with March outperforming April by just over 2%. Freeport is currently a respectable 6% higher than 2018’s arrival numbers and forever striving to break into triple-digit arrival numbers. Speaking of 100-vessel arrival months, Galveston broke through that threshold with ease as it posted its best month in years with 104 arrivals. April’s robust showing was 7% higher than March and pushed the port into the top spot with a year-to-date arrival count that eclipsed last year’s by over 21%. Cruise ships certainly helped but closures at the upper end of the Houston Ship Channel also caused several vessels to moor at this end of the waterway. Further up Galveston Bay, Texas City experienced a similar situation. It too, recorded a triple-digit arrival month in April which netted a 12.4% monthly improvement. Unfortunately, that was not nearly enough to pull the port into positive year-to-date territory. It remains 9% from last year’s arrival tally.
At the far eastern recesses of the Texas string of ports, Sabine has been racking up commendable arrival numbers for the year. The first four months of 2019 are outpacing 2018 by 8% even after the most recent 16% monthly decline in arrivals. It is noteworthy that Sabine was within a statistical hair of cracking the 300-vessel-arrival milestone in March. Like Corpus Christi, the only thing that stands between the port and continuous record commerce across its terminals is…dredging.
Mind you, no amount of dredging over the past two months would have aided the port of Houston in outpacing its 2018 arrival count. Figuratively speaking, the balloon was squeezed tight on the upper reaches of the Houston Ship Channel as terminals were closed and fleets quarantined due to a prolonged oil spill recovery evolution. In this case, the port’s capacity was severely limited above the impacted waterway; particularly during the month of March. All told, the year-to-date arrival count lags 2018’s figures by nearly 6%. Nonetheless, April’s 19% monthly rise indicates that derailed trade in March is making its way back into the system through April and May.
To date, the vast majority of the vessel categories calling upon the port of Houston are performing more poorly this year as compared to last year. Notable exceptions are general cargo arrivals which are up 1% after a blistering 52% monthly leap – steel has been on a tear – and a 12% increase in the movement of containers. It is of note that Houston’s two container terminals were below the impacted areas of the ship channel, but the general cargo terminals were not. Thus, idled cargo from March poured into the system in late April after the status quo was restored.
The remainder of the categories, except for containers and car vessel arrivals, were up for the month – in many cases by double digits. Bulkers by 22% but down almost 7% for the year; chemical tankers to the tune of nearly 29% but are off 1% for the year; LPG climbed 14% but trails last year by 6%; tankers rose 9% but are just shy 11% behind last year’s arrival pace. In short, vessel traffic measures that limited March’s performance were tapering in April which ensured that vessel movements would not be inordinately impeded. Undoubtedly, there is still more catching up to do.
This certainly gives 2019 a chance to surpass 2018’s maritime commerce tonnages as most regional economic indicators foretell of growth rather than stagnancy.
The system has certainly been tested these last few months. Closures here, restrictions there, and a host of diversions everywhere. Yes, indeed, the balloon was squeezed rather tight and its volume was piled up at the various ends of the marine transportation system that serves the nation’s busiest waterways. Fortunately, its resiliency proved to be sound and the dance of commerce continues unabated.
- Date June 3, 2019
- Tags 2019 May