Port Watch – Something Big Stirreth

Tom Marian, Buffalo Marine Service, Inc.

It was the antithesis of last month. It was a bold beginning to the final quartile of 2016. It was a breath of fresh air to those that were tired of the economic malaise of the last several months. In short, it was the best month of the year in the aggregate for the state’s maritime gateways. The monthly arrival haul for Texas ratcheted up 5%. Of course, one month cannot undo the downs of the previous several; however, it was a very welcome sight for sore eyes – in most of the ports.

Starting in the southwest corner - or the western terminus of the Gulf Intracoastal Waterway - the port of Brownsville shattered its previous monthly high by 27% with a 52% monthly leap. Exports in this “outpost” port have received a strong boost from ever-cheaper barrels surging from the Permian basin. To date, Brownsville remains 7% ahead of 2015 arrival totals. 120 miles to the north, the “Sparkling City by the Sea” – Corpus Christi – eked out a 1% gain. Alas, it remains over 12% below 2015’s arrival statistics. Nonetheless, there are signs that a second-wind is brewing as consolidation in the shale gas fields and aggressive cost cutting revive that which was dormant a year ago.

It was not Freeport’s best month but second-place will certainly do with its most recent 9% monthly improvement. Freeport is also experiencing a heady year as it outpaces the previous one by 5%. As of late, it has done a superb job attracting new customers seeking a less congested alternative to importing goods into the Texas marketplace. The nearby port of Galveston also racked up its second-best arrival month but it continues to encounter trade headwinds as reflected in its 14.4% year-to-date decline following a 1% monthly fall. Ultimately, the exploration paralysis in the Gulf of Mexico will come to an end which should bring a bounty of additional trade to this port.

Sometimes a rising tide does not lift all boats and leaves a straggler or two behind. The port of Sabine was of that ilk as it yielded its lowest monthly count for 2016. This was the port’s 5th consecutive monthly wane with its most recent one at over 3%. 2016’s 4% decline is predominantly attributable to a less-than robust oil market and continued infrastructure build-out focusing on LNG exports, ethane production and LPG transportation to foreign markets. The good news is that most of the logistics pieces are in place to reverse the trend of the last several months. The Port of Texas City tied its monthly high for the year with a 2% uptick but, on a year-to-date basis, is down by 2%. The heartening news is that Texas City has seen triple-digit arrival totals for 4 consecutive months as more foreign crude has flowed into its terminals.

Port Houston, after last September’s poor performance, had nowhere to go but up. Indeed, the 7% rise in the monthly arrival count reflected the biggest monthly change of the year as October’s arrivals exceeded the previous high by 1%. Every vessel category, save one, posted monthly gains. More impressively, the bulk of those percentage gains were by double digits. In fact, the only major category that failed to register a monthly increase were chemical tankers. This category of vessel matched its September numbers which were the high for the year. Hence, back-to-back highs – what’s not to like! Even the languishing bulk and general cargo vessel counts were up 7.4% and 15.5% respectively; albeit, both remain in the red for the year - to the tune of 6.6% and 16% respectively.

Container vessel calls saw their biggest monthly jump for the year – nearly 17%. Yet, the TEU count was off by 1%. The good news is that the Port is on track to exceed last year’s record container count. LPG had a top-three month with a nearly 22% arrival hike placing this category further into positive territory for the year at over 7%. A fairly strong demand for vehicles throughout the region pushed up the monthly car carrier count by two. On a year-to-date basis, 2016 is slightly ahead of 2015’s cumulative arrival count. Tankers squeaked out a ½ percent positive performance but 2016 is on pace to outperform 2015. To date, 5% more tankers have called upon Houston since the beginning of the year. Perhaps the surprise vessel category for the year has been ro-ro which appeared to be on the verge of extinction. This year’s count is nearly three-fold higher than last year . Further evidence that Houston continues to focus on diversification and attracting new lines of business as the oil business gains a more solid footing due to less volatile market conditions for this commodity.

When pondering such a positive month, one wonders, why such robust numbers? Was this a foreshadowing of the anticipated infrastructure boom promised by the Trump administration? Was this no more than a typical seasonal peak on the heels of a rather poor September? Could this be an inkling of a trade break out due to bolstered economic activity associated with a less-fettered tax environment? No matter the reason, while it is still too early to decipher how a political course change to the right will impact the regional marine trade picture, something big has stirred and it is infused with hope.

  • Date December 15, 2016
  • Tags December 2016