Port of Houston Authority Weathers Economic Slowdown; Diverse Business Portfolio Credited

April 26, 2016

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HOUSTON–(BUSINESS WIRE)–During a period of low oil and gas prices, container and bulk cargo have supported resilient results for the Port of Houston Authority, Executive Director Roger Guenther announced today in his report to the Port Commission of the Port of Houston Authority, during its regular monthly meeting. “Even though the price of oil continues to impact the local and national economy, the Port of Houston Authority has thus far been able to weather this slowdown by leveraging our diverse portfolio,” Guenther stated.

Loaded container units were down 3 percent for the first quarter of 2016; however this is in comparison to the same period last year, which was the strongest quarter in the Port Authority’s history. The Port Authority retained much of the business that was diverted from the West Coast ports last year, further demonstrating its resiliency. Additionally, the Port Authority experienced continued organic growth in container volume.

Bulk cargo increased by 379,000 tons or 19 percent, due to a rise in grains and pet coke exports. Containers and Auto tonnage also increased by 17 percent during the first quarter. Though there was modest growth in container revenues, overall Port Authority revenue of $71 million declined about 5 percent, “which is indicative of the drop in import steel,” said Guenther.

Also in today’s meeting, the Executive Director announced that Maersk Line and Mediterranean Shipping Co. have joined forces to begin a direct all-water container service between the U.S. Gulf and Asia. The first sailing is scheduled to depart Asia on May 2, with Houston as the first inbound port call. “These additional Trans-Pacific all-water services to the Port Authority demonstrates our ability to provide a cost-effective supply chain option connecting Asia to local and key Midwest markets via the Gulf of Mexico,” Guenther stated.

The Executive Director also highlighted progress on the Port Authority’s Infrastructure Goals and Initiatives during today’s meeting. This month, the Port Authority began its support of the U.S. Army Corps of Engineers (Corps) initial work on the Houston Ship Channel Feasibility Study to plan future improvements on the ship channel. The Port Authority as the non-federal sponsor of the channel, will share the estimated $10 million study cost with the Corps, and in the coming weeks, the Port Authority will assist the Corps as it hosts two public meetings. The purpose of these public forums is to engage, inform, and allow for public comment on the study project.

To demonstrate its continued focus on channel improvements, Guenther highlighted an innovative solution with the Corps to address the Bayport Flare, an area deemed critical for the safe navigation of the larger container ships that are expected to call the port.

In addition to channel improvements, Guenther also featured improvements being made at its facilities and to equipment, to ensure the Port Authority’s terminals remain modern and efficient. For example, Bayport Container Yard 6 is scheduled to be expanded by nearly 47 acres to accommodate more containers. The Rail Spur at Bayport is scheduled to begin in the 4th quarter of 2016. The project includes construction of approximately 6500 track feet of rail to the Bayport Terminal.

The Port Commission underscored its commitment to ensure that the Port Authority remains ready for the increased opportunities expected at its terminals. Among several important items on its agenda today, it awarded significant construction contracts at the Bayport and Barbours Cut Container Terminals. McCarthy Building Companies was awarded a $35 million construction contract to build Wharf 2 at the Bayport Container Terminal. Additionally, a $10 million construction contract was awarded to C.F. McDonald Electric, Inc. to provide upgraded electric power to all dock cranes on the wharves at the Barbours Cut Terminal.

The next Port Commission meeting is scheduled May 23.

About the Port of Houston Authority

For more than 100 years, the Port of Houston Authority has owned and operated the public wharves and terminals of the Port of Houston – the nation’s largest port for foreign waterborne tonnage and an essential economic engine for the Houston region, the state of Texas, and the nation. It supports the creation of nearly 1.175 million jobs in Texas and 2.7 million jobs nationwide, and economic activity totaling almost $265 billion in Texas – 16 percent of Texas’ total gross domestic product – and more than $617 billion in economic impact across the nation. For more information, visit the Port Authority website at: www.portofhouston.com.

Category: Oil & Gas