QUESTIONS have been raised whether the Port of Houston is ready to handle an additional 500,000 TEU a year expected when the flood of plastic resin exports begins to flow.
These concerns were raised at the JOC Gulf Shipping Conference earlier this month despite the commencement of two transpacific services to the US Gulf last year.
Shippers of cotton, forest products and other commodities were told to plan for the possibility that they may need to seek alternative and more expensive export outlets in coming years.
These developments come as the Port of Houston undergoes significant upgrades to handle the volumes, “but it doesn’t do any good if there isn’t more ocean capacity to take that freight where it needs to go, primarily China,” said Dunavent Global Logistics chief operating officer Richard McDuffie.
“Obviously, if that capacity doesn’t come in, you will have to come up with other land bridge alternatives that a lot of people aren’t going to want because they are more expensive and require more handling.”
As long as the capacity is there, the resins, like almost all US exports, would overwhelmingly move through Houston, with some moving through Mobile and New Orleans, because Houston is the closest port to the major manufacturing plants.
All of the known additions in manufacturing capacity scheduled to come on line through the end of 2019, a total of 22 manufacturing projects, are located in the Gulf region.
Volumes are also beginning to ramp up, with expected major additions coming with plant openings such as the Exxon Mobile plant at Baytown later this year.
At Houston, cumulative annual growth of resins exports from 2011 to 2015 was just two per cent, but year-to-date resins exports grew 17 per cent.
The port, for its part, believes the capacity will be there to handle the demand. “We’re really, really confident about vessel capacity. Every year, year-over-year, we’ve been adding vessel capacity,” said the port’s trade development chief John Moseley.
Transpacific services are the focus because China is expected to account for the majority of the growth in resin exports in coming years.