The complete cessation of all that was normal. Churches shuttered for Easter; masked grocery shoppers engaged in the “social distancing” waltz; the disappearance of rush hour traffic; empty airport terminals; and, a myriad of other apocalyptic scenes beamed into everyone’s living room have become the order of the day. What is one to do when the constant barrage of panic and gloom is ubiquitous? Quite simply, talk about something else!
Gasoline is certainly inexpensive at the pump these days and, while those that are working from home can find some solace in the fact that they are now getting “3 weeks to the gallon” - regardless of the size of their vehicle - we still need to visit the local gas station. Amazon is hiring in order to meet the unprecedented e-commerce demand from all those sheltering in their abodes. Hence, the record number of trucks hurtling across the highways distributing goods from warehouses to the consumer. Finally, maritime commerce continues to deliver goods to Texas ports and export petrochemicals. Thus, commerce continues but the price of a barrel of crude is starting to take its toll on a region that is heavily dependent upon the oil industry.
Perhaps the earliest sign of things to come is unfolding in Texas City. The port had a very strong start to 2020 through the end of February. Unfortunately, March was anything but that. Historically, if March arrivals can’t beat February, all is not well. In Texas City’s case, March’s arrival count was nearly 19% below that of February. This was primarily attributable to the drastic decrease in crude exports. Nearly every terminal saw double digit monthly declines in ship calls. In one instance, there were 73% fewer moorings at a particular facility. Thus far, Texas City remains ahead of last year’s pace by 13%; however, unless the price of oil and international demand rebounds, 2020’s year-to-date numbers will pale compared to 2019’s.
On the opposite end of the spectrum, things are in overdrive in Freeport; as it shattered yet another monthly-arrival record. March outdistanced February’s count by an impressive 33%; further bolstering its year-to-date numbers by more than 40%. At this juncture, Freeport is leaps and bounds ahead of the pack with respect to its 2020 percentage gains. Corpus Christi is a distant second, year-to-date wise, with a 19.5% increase. Yet, March was a mere 6% higher than February; a rather paltry showing when one accounts for the two additional days. Thus, this could be another sign that record low oil prices combined with ever-growing inventories does not bode well on the export front.
The port of Sabine has yet to post a monthly gain in 2020 as its arrival count fell by almost 2%. Things are off over 7% for the year and may well fall further unless the oil glut headwinds abate. Brownsville’s proximity to the border and smaller portfolio insulated it somewhat from the oil malaise. It posted a 15.4% rise for the month, bringing its year-to-date tally up to 12.5%. Galveston’s March numbers were a bit misleading, given all of the cruise ship in-and-out of port moves due to the cancellation of cruises combined with the need to manage crews. Thus, its arrival count was up an impressive 28.6%; however, despite that strong monthly performance, 2020 is only ahead of 2019 by 6%.
The port of Houston logged its first 700+ month of the year, resulting in a monthly tally that exceeded the prior month by 11.5%. To date, Houston is up over 6% vis-à-vis 2019’s arrival figures. On the non-liquid cargo front, bulkers were up 22% for the month but remain off by 20% for the year. General cargo buried last month’s number by 33% allowing it to nudge it into positive territory for the year to the tune of just shy 3%. The container vessel count was flat for the month but is outpacing 2019’s first quarter by 13%. Yet, full export containers was the only positive monthly number at 4%; full import containers waned by 2%. On a year-to-date basis, container movements exceed last year’s figure by 11%. Car carriers are also off for the month and the year indicating that demand for new vehicles may be diminishing.
LPG movements were weak as well - as evidenced by a monthly decline of 2.5%. While the year-to-date picture remains positive at nearly 20%, the next few months will be telling with respect to the global demand for this energy commodity. Chemical tankers held their own over the last month with a 15% uptick. This kept things on the plus side of the ledger from a year-to-date perspective. Oil tankers did not fare nearly as well but a near-10% monthly gain is a keeper when one considers the current price of oil.
Yes indeed, the pesky price of oil is certainly shaking things up. After all, a year ago, who would have thought oil would be below $20 a barrel. Then again, a year ago, who would have imagined that an economy tied to energy would come to a screeching halt but that’s an entirely different topic to talk about!