All sea lanes continue to lead through Houston on the Gulf Coast. Like the two West Coast container conduits of Long Beach and Los Angeles, the port at some stage figures in virtually all shipping line services to the region.<\/p>\n
As Ricky Kunz, Port of Houston Authority vice-president of Trade Development and Marketing, notes, 70% of all container traffic in the region, and 95% of Texas traffic (serving a population of 25m) goes through Houston.<\/p>\n
Considerable heat has been generated in the past month over a state investigation, known as the Sunset Report, into the port and port authority. The port has been fending off public, uninformed anxiety that the single biggest contributor to the local area\u2019s economy is in peril, with some exaggerated speculation that serious operational problems have been revealed.<\/p>\n
The opening line of the 86-page report has heightened the anxiety. \u201cThe Port of Houston Authority is not a broken organisation\u2026 Certainly, the Authority has had its missteps and the scrutiny and criticism those missteps attract are justified.\u201d<\/p>\n<\/p>\n
Back office<\/b> <\/p>\n
Yet, the specific criticisms are confined wholly to the administration structure, chain of responsibility, accounting methods and contract tender procedures. Operations and technical planning are not subject to any censure and the \u201cmissteps\u201d are minor.<\/p>\n
An industry insider, speaking privately, says: \u201cThe impression is that the investigators had to come up with some blemishes to justify their weeks of effort. Minor defects were uncovered but the port is in good shape, now and in the future.\u201d<\/p>\n
Complicating the issue is the background to the investigation.<\/p>\n
Houston came under the public spotlight because of controversy over the former executive director using a port launch, used for public tours, for a private party. He later resigned, earning severance pay of several hundred thousand dollars. (Some critics have said that the outcry against the executive was caused by wider political tussles in the state over the control of the port.)<\/p>\n
The impression is that the state government ordered the investigation because of the incident. The peculiar nature of the politico-legal system in Texas is in fact the reason. Sunset Reports are launched every year to monitor agencies that receive state funding, and this year the port was among those selected, albeit partly because of the furore over the former chief executive. (The port gets no state government funds for its day-to-day operations.)<\/p>\n
Perhaps the only criticism in the report that touches on operational efficiency is over the contract\/tendering process (what the report terms \u201cprocurement\u201d). The report calls for contract bids to be more arm\u2019s-length, contracts with commercial lawyers looked at closely and nepotism safeguards tightened. There are also questions over the use of political lobbyists.<\/p>\n<\/p>\n
Forecast focus<\/b> <\/p>\n
Puzzled frowns have greeted the report\u2019s assertion that much better forecasting is needed. In June, Houston issued a 50-page five-year forecast of container traffic increasing between 2.3%\u20134.2% to 2016. General cargo prospects are more uncertain, and are set within a range of a decrease of 4% up to an increase of 7%.<\/p>\n
Mr Kunz is optimistic about prospects and expects 3%-5% growth in breakbulk and container volumes over the next five years. Much of his optimism stems from the widened Panama Canal. \u201cWe reckon we will get a gain of 15% in container volumes in Asian trade over the next 12-24 months,\u201d he says. Two new carriers are coming to the port and new retail chain distribution centres are being opened.<\/p>\n
Like other Gulf Coast ports, Houston is ambivalent about traffic moving away from the West Coast. \u201cThey will lose some, and others lose some, but it will not be a huge swing from the West Coast. Prince Rupert will probably not be affected as much as anyone because it has the rail link to the Chicago market,\u201d says Mr Kunz.<\/p>\n
The most contentious issue for the port, although no one will say so outright, is channel deepening and the disposal of the dredged material. A proposal to use the dredge soil to form a 400-acre marsh was abandoned after local groups objected and the material will be dumped in an existing site on Atkinson Island.<\/p>\n
Houston has broken protocol by trying to get round the time consuming practice of relying on the Army Corps of Engineers to handle the environmental and bureaucratic processes, which take up to 10 years, as well as deal with the costs involved.<\/p>\n
Events are moving much faster than bureaucrats. \u201cWe can\u2019t afford to wait that long,\u201d says Mr Kunz. The main channel is 45 ft, with a draft capacity for 8,500 teu vessels. \u201cWe only expected 8,000+ teu vessels to come in 2014, and larger vessels are here already.\u201d The two channels feeding off that, servicing Bayport and Barbour\u2019s Cut, are at 40 ft but the plan is to deepen them to 45 ft as well by 2014. \u201cWe are doing the permitting process through the Corps of Engineers but we will pick up the $150m bill ourselves,\u201d Mr Kunz says. The port still has to work out how to raise the money<\/p>\n<\/p>\n
Full ahead<\/b> <\/p>\n
Working on the 2014 assumption, the port is pressing ahead with Bayport and Barbours Cut container terminals. Work is just short of 50% complete at Bayport, with full build out planned to be reached between 2018-2020 (\u201c2020 is more likely,” according to Mr Kunz). Three more super post-panamax cranes are on order for the 33,000 ft of berthing space.<\/p>\n
Rehabilitation and reconstruction is the main theme at Barbour\u2019s Cut in a 10-15 year programme, costing $3bn.<\/p>\n
More than 65% of the authority’s $213m in 2011 revenue came from those two container terminals.<\/p>\n
Steel continues to be the main component of the breakbulk business, recording a 50% increase in the first half of the year, although volumes are flattening out in the second half. Total revenues at the port for the year could rise by 5% over 2011.<\/p>\n
The management model will continue, with an operator at both container terminals (APM Terminals operates one small facility) and there is no intention of privatising or setting up a public-private partnership, says Mr Kunz, or of changing the policy of leasing out the facilities beyond the turning basin. \u201cBut you can never say never and perhaps one day things will change.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Characterised by steady growth, Houston remains the main anchor of the Gulf. Martin Rushmere reports<\/p>\n","protected":false},"author":8,"featured_media":8569,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[58],"tags":[],"sponsor":[],"class_list":["post-8568","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-container-cargo-handling"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/posts\/8568","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/comments?post=8568"}],"version-history":[{"count":1,"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/posts\/8568\/revisions"}],"predecessor-version":[{"id":8570,"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/posts\/8568\/revisions\/8570"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/media\/8569"}],"wp:attachment":[{"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/media?parent=8568"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/categories?post=8568"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/tags?post=8568"},{"taxonomy":"sponsor","embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/sponsor?post=8568"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}