Port Watch – Enjoy ‘What Was’ for the Bottom Looms
By Tom Marine, Buffalo Marine Service, Inc.
Despite the fact that 2015 ended above 2014, things have been rather unsettled as of late. Stock markets across the globe have been in a tailspin since the beginning of 2016; a barrel of crude has fallen below the $30 floor and may in fact descend to the teens if Iranian oil exports flood an already super saturated market; and the prospect of a full-fledged currency war is poised to further dampen U.S. exports. Beyond the aforementioned points of pessimism, the final month of the year logged fewer arrivals than the previous one. Additionally, there may have been some economic foreshadowing with respect to 2016 in that 2015’s December numbers were the lowest in the past half-decade after experiencing the strongest January in the last five years.
There was at least one port that ended the year as strongly as it kicked off 2015. Specifically, the Port of Brownsville took home top honors for all Texas ports with a 19% annual jump after a 4.5% monthly rise. Conversely, Corpus Christi’s arrivals for December were among the lowest for the year after a very impressive January. Consequently, Corpus Christi’s final month was 9% below that of the preceding month and a percent off of 2014’s totals. Mind you, given the state of the oil market, this should not be a surprise to anyone in the oil transportation business. The Port of Sabine ended the year on a surprising note particularly in light of the fact that it entered 2015 with the lowest arrival count of the year. Nevertheless, Sabine closed its 2015 books with the highest arrival count of the year for a monthly climb of over 8%. This capped off its most robust quarter, resulting in a nearly 10% higher vessel count. Its second-place finish out of all of the Texas ports was primarily attributed to a substantial climb in LPG ship traffic and the onset of oil exports. Galveston’s 8% increase over last year earned the port a commendable third place in the arrival improvement rankings. Unfortunately, on a month-over-month basis, it fell 8.5%.
The Port of Freeport was one of three Texas ports that failed to see positive territory for the year with a 7.4% wane. It certainly did not help matters that December was 13% below that of November. Nonetheless, its final quarter of 2015 was the most active of the year. The only other port that did not exceed its 2014 arrivals in 2015 – Texas City – was also a victim of the slackening of crude demand. Texas City did manage to eke out a modest 1% monthly gain but it was down 4.6% for the year. Incidentally, its fourth quarter was by far the weakest quarter of the year.
The Port of Houston’s final quarter of 2015 was also its weakest; however, the last month of the year was 2% higher than the prior month. All in all, the state’s most active port beat 2014’s arrival count by one-half of one percent. With respect to the vessel category counts, most of the vessel types began the year much stronger than it ended the year.
Hence, bulkers peaked in April, fell dramatically in May and ended the year with 14% fewer arrivals. Not surprisingly, the fourth quarter was the nadir for the year. General cargo experienced a similar pattern for the year, although it peaked in August and gave up its gains in the last five months of the year. The year closed out in very poor shape with a 27% monthly drop due to the lowest vessel count of the year. This category was off 11% for the year. Container vessels did quite well this year as the total container count broke through the two million TEU mark and finished the year with 9% more containers passing through the port’s terminals. Remarkably, this was accomplished by 9 fewer container ships (i.e., 1% difference). Of course, it did not hurt that there were 9% more arrivals over the last month. Car carriers also posted a 1% decline for the year, but 2 more vessels (i.e., 25%) arrived in the port over the last month.
On the energy side of the ledger, the results were mostly positive. Chemical tankers posted some of the best arrival statistics of all categories that called upon Houston. 2015’s arrivals eclipsed those of 2014 by 18%, and the month-over-month picture was equally sunny with a surge of 13%. Likewise, the number of LPG vessels that transited the Houston Ship Channel may have set a record with a 23% leap for the year-- this, despite a paltry 1% monthly gain. Tankers, on the other hand, were off 2.6% for the year after a lackluster fourth quarter showing. Then again, 2014 was a banner year for this category given the demand for distillates. At present, the export demand has fallen precipitously over the last several months.
Closer to shore, the inland tows that crossed or transited through the Houston Ship Channel held their own with a 1.5% monthly increase culminating in a 6% gain for the year, but this particular segment of the marine transportation world is beginning to suffer the fallout from too many barrels of domestic crude chasing too few dollars. Fleeting areas are increasingly full, term rates are plummeting, and the hyper activity at the shipyards that specialize in building tank barges and inland pushboats is becoming a thing of the past. All of this points to more tightening of the belts and less optimism in the near term. Historically, regime change years (i.e., election years) are periods where the bears tend to outnumber the bulls. Given all the chaos afoot, it is very unlikely that 2016 will improve upon 2015.
- Date February 5, 2016
- Tags February 2016