Port Watch-Riding the Wave

Tom Marian        Buffalo Marine Service, Inc.

Just as nature abhors a vacuum, smaller ports feed off the excess of their larger brethren. If there is a superabundance of chemical tankers and gas ships at one port, an adjacent port will leverage its infrastructure to absorb some of that capacity. In other instances, if a nearby port can facilitate the more efficient movement of cargo into or out of its waterway, vessels will migrate in that direction. Ultimately, one port’s growth will inure to the benefit of regional ports when everyone has the ability to tap into the same export base. Over the past few years, Brownsville, Freeport, and Corpus Christi have all benefited from such circumstances. This year, the Calhoun Port Authority is riding that same wave.

Like the bulk of Texas ports, Port Lavaca-Point Comfort’s vessel count was below that of March by 6 vessels or 21%. However, unlike the other Texas ports, April’s vessel count was lower than the three prior months. Yet, this pint-sized port is currently outpacing last year’s arrival tallies by over 30% as chemical tankers, ocean-going barges (ATBs) and gas ships export liquid bulk cargoes across the globe. Indeed, the investments made over the last several years to capitalize on its proximity to the state’s shale gas fields are bearing much fruit.

April-Deepdraft Vessel Arrivals by Port

The only ports that managed to register a percentage gain for April – following a torrid March -were Sabine and Texas City. Sabine saw a 13% monthly jump in vessel arrivals and is now outpacing last year by over 15%. In fact, April’s arrival count was the highest for the year. The same is true for Texas City with its most recent 4% monthly gain. The port is also up nearly 8% on a year-to-date basis. Perhaps, what is even more interesting, is that Texas City witnessed its first VLCC transit ever. Yet, another reminder of the frenzy to export the bounty of crude that is flowing from fracked oil plays.

There were a few ports that continue to struggle to repeat last year’s performance. Brownsville’s monthly arrivals plummeted by 31% and lag by 7% against the first four months of 2017. Corpus Christi’s arrival numbers were also down 10% for the month and 10% when compared to last year; however, the port continues to attract ever larger tank vessels in order to maximize its export of crude and petrochemicals. Freeport, on the other hand, managed to hold its own for the month by equaling March’s arrival numbers. Nonetheless, the port is still 5% behind its record performance of 2017. Galveston is clearly out-distancing its 2017 count even after factoring in a 6% monthly decline. At present, the first third of the year is nearly 21% above that of the previous one. With oil tempting the $70/barrel mark, there is a glimmer of hope that offshore activity will ramp up so that there is a solid recovery from the $30/barrel days. Unfortunately, pumping oil from the Permian Basin is less costly than the deep Gulf.

April-Houston Deepdraft Arrivals by Type

After setting a record in March, Houston predictably experienced a drop in arrival numbers. Nonetheless, after a 7% dip, the port still remains almost 2% ahead of last year’s arrival count. Most vessel categories were off for the month but there were a few bright spots. General cargo posted its best numbers for the year and yielded a 14% gain – enough to pull this category into positive territory for the year (i.e., 1%). Oceangoing tows followed suit with a 6% monthly gain but remain 14% off for the year. Bulk cargoes slumped 14% over the course of the last month and are languishing to the tune of 8% year-over-year. Container vessel chalked up one of their biggest monthly gains in years at 11%, underscoring that there is no letup in demand for foreign-made finished goods or plastic pellets bound for overseas ports. Finally, while all of the petrochemical ship movements failed to outpace March’s record arrival numbers, Tanker, LPG and Chemical Tanker numbers exceed last year’s arrival count by 6%, 7% and 8% respectively. In fact, there is so much LPG being produced it cannot be exported fast enough.

Overall, the year continues to shape up quite nicely for ports big and small in Texas. Port authorities across the state are clamoring for deeper channels, more fluid interfaces between the ship and the shore, and greater swaths of land for more tanks, terminals and roads. At some point all of this activity will balance out but, until that time, there is a vast amount of economic energy funneling into the nation’s leading maritime state.

  • Date June 6, 2018
  • Tags 2018 May