Port Watch-No Summer Slumber Here!
In contrast to July’s healthy arrival numbers, there were a few monthly sleepyheads as the aggregate monthly arrival number in August fell by nearly 2%. All told, the majority of the ports west of the Louisiana border registered monthly declines. Three of those were in the double digits. Ironically, the biggest monthly gainer in August is the sole port that lags 2017’s number. Corpus Christi saw its 2nd highest monthly arrival count for the year resulting in a near 10% increase. Nevertheless, it remains off by about the same amount vis-à-vis last year. Rising exports of crude and initiatives to further deepen its ship channel have yet to bear fruit. This is further aggravated by a near cessation of soy exports. To the southwest, the Port of Brownsville experienced its 4th consecutive monthly decline in arrivals – the most recent at just shy 14%. Despite that negative “four-peat”, Brownsville is powering past last year’s arrivals by 15%. This trend will most likely continue as Mexico and the United States ink a revamped trade deal that portends to be a boon to this growing border port.
Unlike Brownsville, Freeport’s gaze is not on Houston; rather, it is focused on attracting evermore importers to feed the thriving Texas economy and exporters to transport the growing bounty of BTUs that are flowing from endless layers of shale. Following back-to-back monthly gains, Freeport is out-pacing last year’s arrivals by nearly 4% – a respectful gain following a record year of trade. Galveston is also enjoying a positive 2018; albeit, in a rebound sort of way. It has certainly been a beneficiary of the burgeoning cruise line business; however, the long dormant Gulf of Mexico oil patch remains groggy at best, even after a steady 4% year-over-year up-tick. In the past, $70/barrel oil would have provided ample incentive to breathe new life into a struggling offshore exploration market. Nonetheless, the petrochemicals keep a-flowing. This is no more evident than what is moving through Sabine – another port that has chalked up month-to-month percentage dips. Yet, it is well beyond where it was this time last year as reflected in its current 2nd- best arrival percentage rise within Texas at over 15%. Even the compact port of Texas City is enjoying the state’s crude export boom with its 3rd triple digit arrival count for the year. To date, Texas City is surpassing its prior year vessel arrival count by 6.5% on the heels of its most recent 10% monthly climb.
What of the Bayou City’s gateway of all things maritime? Is its export dominance headed for thin ice with the ever-escalating crescendo of tariff wars? It seems that a regional economy that remains in overdrive, combined with a record amount of crude exports, is oblivious to the woes of those that have hitched their trade fortunes to China. Houston is in the midst of an impressive trade run on nearly all fronts. July’s arrival count was nearly 6% above that of June’s and while August’s arrival tally waned by a mere 1%, the port’s year-to-year vessel arrivals almost doubled percentage-wise. Thus far, Houston’s 2018 activity tops 2017 by 5.3%; underscoring that this is anything but a sleepy summer for the port that built the city. As to the specifics, nearly all vessel categories are up for the year. It should come as no surprise that the dominant feature of Houston’s ship channel were the chemical tankers, LPG carriers and tank vessels that crisscrossed one another’s wakes. Granted, all 3 categories were down for the month – 3%, 10% and nearly 4% respectively. This comes after several months of consistent showings that currently place this armada of vessels at over 12% (chemical tankers), over 19% (LPG) and 7.5% (tankers) beyond last year’s arrival statistics. Simply put, energy exports continue to dominate and Texas’ export of crude eclipses its imports.
There are a few soft spots in the Houston maritime trade picture. Bulkers were down for the month by 1.6% and remain down for the year by over 12%. There are also signs that tariffs on aluminum and steel have slowed imports but that is offset by the rally general cargo is having this year. After three straight monthly gains – the most recent weighing in at 5% – this class of vessel on a year-to-date basis moves from the red to the black. The latest move was from negative 2% to 4% – an impressive swing to say the least.
Perhaps the same could be said when one compares inland tow movements with that of offshore tows calling upon the port of Houston. The latter category remains mired in the red by over 13% while the former is enjoying an 11.4% year-to-date gain.
How goeth things on the consumer front? Perhaps the answer can be divined by the import of cars and containers. If so, it would be quite swimmingly, to say the least! Car carrier arrivals tied their high for the year at 14 due to the combination of the need for more cars to replace that which was destroyed by Harvey and a job market that won’t stop growing. Ultimately, one needs to fill the trunks of all those vehicles or the rooms of all those rebuilt houses with goods. The containers that descended upon the Gulf of Mexico’s largest container port did just that. Four percent more container ships carried 5% more containers over the last month. There are some nascent signs that full exports are off by a few percentage points; however, imports of full containers stacked ever higher with 9% more passing through the port in 2018. Undoubtedly, Houston is anything but a Sleepy Hollow these days.
Retrospectively, the fact that the tariff jingoism that has dominated the headlines has not created commerce hiccups shouldn’t be surprising. The post-Harvey reconstruction; completion of pipelines from the Permian, Wolfcamp and Eagleford shale fields; continuing expansion of existing chemical facilities along the coast; and ever-growing population sprawl fueled by record employment are but a few factors that under gird record trade through Houston and its sister ports. Indeed, there is little time to rest for it is always best to harvest when the sun is shining!
- Date September 26, 2018
- Tags 2018, 2018 Sept