Port Watch – A Foggy End to a Year of Improbabilities

Brexit, Angelina and Brad parting ways, and the crumbling of the blue wall resulting in the nation’s first President without any previous government service were but a few of the bigger surprises of 2016. On the vessel arrival front, any hope for an end-of-year surge was dashed by an unrelenting fog which resulted in a sea of anchored vessels offshore. Unfortunately, those delayed arrivals pushed the final month of the year into last place – a position usually reserved for the month of February.

Overall, the arrival numbers were off 2% for the month and fell short of 2015’s Texas vessel arrival tally by nearly 4%. Meanwhile, the “denizens of the ditch” - inland tow traffic – managed to eke out a 0.4% gain over 2015 - despite a rather significant monthly decline of 6%. There were some bright spots that cut through December’s gloom. Sabine experienced a very robust 21% monthly jump after five consecutive percentage dips. Nevertheless, Sabine’s 2016’s results were over 7% behind that of the previous year. Corpus Christi also enjoyed a positive December with a nearly 7% rise reflecting the third highest arrival number for the year. Yet, the port’s final arrival count was 11% off of 2015’s; primarily due to less crude output and commercial activity tied to the shale gas fields. Brownsville found itself in the opposite position as its big sister port in that its arrival count plummeted over 15% for the month; however, it managed to hold onto a 7% annual gain. Indeed, this is a tribute to the port’s resilience and efforts to diversify its cargoes.

December’s darling was Freeport which put up its best arrival numbers for the year. As the only port to tabulate both positive monthly numbers – at over 16% - and improve upon 2015’s arrival figures by 4%, it is evident that Freeport is attracting new business and capitalizing on its rejuvenated infrastructure. Galveston’s experience was the antithesis of Freeport in that its arrivals waned by 4% for the month and it saw the largest percentage deficit vis-à-vis last year at over 13%. In short, the offshore exploration slump has not been too kind to this port. Texas City fared slightly better than Galveston in terms of its year-to-date percentage losses with only a negative 2% change. Retrospectively, that should be considered a bit of a victory in the wake of December’s 10% descent.

Coincidentally, the Port of Houston’s percentage performance was quite close to that of its nearest port – Texas City. Mind you, it is never heartening when a decline comes on the heels of one of the lowest months. Hence, thanks to the fog, Houston saw its lowest number of arrivals for the year. This resulted in a 9% monthly fall which dragged down the annual arrival performance of the port by over 1%. Several vessel categories saw near bottom vessel arrival numbers for the year. December’s tanker arrivals, in particular, were 20% below the previous low of last January. Incredibly, after a 17% nosedive, 4.4% more tankers called upon Houston in 2016 compared to 2015. Chemical tankers managed to creep out a gain of just shy 2% but were hard pressed to match 2015’s white hot performance as 5.4% fewer of these vessels plied the Houston Ship Channel. LPG remained a hot export play in 2016 with 6% more activity for the year after factoring in a 7% decrease. The picture in the world of containers was not clearly reflected in the vessel count since 6% fewer ships transported 2% more containers in the last year.

Not surprisingly, in a low-growth environment, there were far fewer bulkers and general cargo vessel calls for the year. The former was off 5% for the year after a 15% tumble and the latter category of vessel remained 16% below 2015’s count following a respectable 7.5% monthly rise. Overall, Port Houston racked up 11% more general export in 2016 but the 51% crash in steel exports underscored how many landside E&P projects had been shelved in the last few years. The one silver lining was the consumer’s penchant for that new car smell as car carriers met solid demand with ever more foreign vehicles.

The ultimate positive note is that the maritime supply chain from both an export and import perspective generally pushes the delays of one month into the gains of the following month. Therefore, as the fog lifts, all of those vessels anchored offshore will find their way to a designated terminal. The big question remains whether or not the historical trade picture will remain intact or will 2017 be filled with surprises that will drastically alter the flow of goods to and from the international marketplace.

  • Date February 14, 2017
  • Tags February 2017