No Recession at the Port of Houston
Friday, October 28, 2011 - 02:09 PM
(Houston--KUHF) The Port of Houston is busy these days. There are 25 miles of public and private facilities along the Houston Ship Channel, which brings in traffic from Galveston Bay and the Gulf of Mexico. Figures show the port ranks first in the U.S. in handling foreign waterborne tonnage and second in terms of overall tonnage. Officials tout numbers from a recent study showing the port has about a 118 billion dollar economic impact in Texas. There's also state and local sales tax revenues, pegged at close to four billion dollars.
"Any business that can demonstrate profitability in these times of economic uncertainty is on the right path," said Houston Port Authority Chairman Jim Edmond outlined successes and challenges in his annual "State of the Port" address.
Edmonds says diverse cargo is part of the reason for the port's strong performance in down economic times. They're handling more steel pipe for one, showing a 62 percent increase from last year, and officials say that's because of increased drilling activity. Edmonds cited a ten percent increase in total tonnage for the first nine months of the year, along with a 12 percent increase in revenue and a 35 percent increase in net income.
"The worst thing for the people of Houston and the state of Texas is to operate as though we are in a recession. We aren't. Economic recession can be a fear-driven dynamic," he said optimistically.
Still, challenges lie ahead for the Port of Houston. The widening and deepening of the Panama Canal is only a couple of years away and that could bring ships to Houston that are two to three times larger than the ones the port currently serves.
It's what Edmonds calls a "game changer." He says it will require three billion dollars in capital improvements to get ready for the bigger vessels. That includes work on six wharves at the 35-year-old Barbours Cut terminal, which sits at the mouth of Galveston Bay. Work is slated to begin next year.
"It's expected to take about 18 months to modernize each wharf at Barbours Cut at a cost of $25 million per wharf, and about $65 million per wharf to equip it with wharf cranes and RTG cranes," the shorthand for rubber tire gantry cranes for stacking and storing large quantities of shipping containers
Edmonds says the Port of Houston is one of about a dozen ports around the U.S. that's aggressively getting ready to handle the larger ships, in what he calls a "high-stakes" competition.