Port Watch – Finding the Second Wind

By: Tom Marian, Buffalo Marine Service, Inc.

Last month, 7 of the 8 Texas ports were down due to Hurricane Harvey. This month, 7 of the 8 ports saw sizeable percentage gains as the state’s ports got back on their feet. The cumulative monthly increases were an impressive 23%, but that jump was not enough to place the first three quarters of 2017 ahead of 2016’s – the latter still outpaces the former by 1.7%. Granted, there is still room for additional improvement in the year-to-date numbers given that some of the residual effects of Harvey bled into September. This is especially true for the inland tow movements which were stacked up on either side of Matagorda Bay due to unprecedented shoaling. Consequently, the month of September saw the second fewest number of movements for the year despite the recent 43% leap in the monthly numbers. To date, tow movements across the Houston Ship Channel marine thoroughfare remain 5.5% below last year’s transits.

September’s maritime commerce picture featured four ports posting yearly arrival highs. The Lilliputian port of Port Lavaca/Comfort nearly doubled its monthly vessel tally but lags last year’s numbers by 12.5%. Brownsville is also lagging last year’s vessel arrival throughput by nearly 13% even though it experienced a hefty 42% jump in vessel calls. In fact, September’s arrival count was 22% above its previous high. The Port of Galveston’s monthly rebound was even more stellar than that of Brownsville’s at over 44%. It, too, exceeded its prior high-water-arrival mark by over 23%. Unfortunately, that superb showing was not enough to push the port into positive territory when compared to 2016; it remains off by over 2%.

Corpus Christi, on the other hand, is one of two ports that continues to outperform last year. While its post-Harvey bounce was just over 9%, it continues to remain slightly ahead of last year’s number to the tune of one-half of one percent. Mind you, the year-to-date numbers are a bit deceptive since the port continues to attract ever larger vessels in order to accommodate the growing demand attributable to the export of crude and various petrochemical cargoes. The port of Freeport continues to shine as 2017’s darling. September may have not have been its zenith in terms of its monthly ship count. Nevertheless, it still saw a 22% monthly increase which bolstered its year-to-date numbers with a 14% gain. The port of Sabine was on the opposite end of the spectrum both geographically and statistically as the only Texas port that posted a decline for the month. This 5.5% drop was exacerbated by the extensive shoaling caused by Harvey’s floodwaters and the fact that the port was not fully opened until well after the first of the month. Unsurprisingly, a negative month begets a negative year-to-date tally which currently stands at over 2%. Texas City’s September arrival data was fairly positive with a 16.5% positive showing. In spite of that, 2016 continues to outpace 2017’s numbers by 8%.

The Port of Houston was the fourth and final port to log a monthly arrival high for the year with a total of 734 deep draft vessel calls. This eclipsed the previous high which took place back in January by almost 3%; yielding a robust 32.5% monthly climb. Yet, like many of the other ports in the state, Houston’s ship count for this year is not what it was last year by nearly 2%. In the wake of fewer ships is not necessarily less commerce. The year-to-date indicator is somewhat deceptive. This is particularly true with respect to container ships. Overall, this category’s vessel count is down by over 1%; however, 11% more containers flowed in and out of the port. Interestingly, this month’s haul of container ships surged by nearly 45%. Yet, the container count was up 36% for the month. General cargo vessels also logged a monthly high on the vessel arrival front. This was a welcome respite for the longshoremen that handle the cargoes from these ships; particularly when one considers that the year-to-date vessel count remains 10% below 2016’s. Bulkers, like its general cargo counterpart, also recorded a 53% monthly gain but year-to-date are 8% to the good.

Given that every ship category that transited to and from Houston was up for the month, it may be more instructive to focus on how the remaining categories are chalking up against 2016’s arrival counts. To that end, chemical tankers continue to remain as one of the dominant growth players with 11% more arrivals in 2017. Tankers, on the other hand, continue to reflect a market in transition as crude exports ramp up and the pipeline infrastructure moves increasing quantities of domestic feedstocks. Accordingly, 11% fewer tankers have called upon Houston over the first 9 months of the year. The LPG vessel count has been consistent throughout the year and continues to exceed last year’s count by 1.5%. Car carriers are down nearly 4% for the year but there is enough movement afoot to indicate that demand will take off during the final quarter of the year.

All in all, as Harvey taketh away, it may giveth back during the final quarter of the year. After all, it is one thing to restore the status quo after taking it on the chin – as reflected in September’s solid rally – but it is yet another thing altogether when you take into consideration the sheer volume of materials that will be required to replace all that was lost. Think of it as a second wind that has the potential to lift 2017’s trade volume well above that of 2016.

  • Date November 20, 2017
  • Tags November 2017