Port of Houston offers Asian shippers new gateway to US Midwest

2012 03 07

THE Port of Houston, on the Gulf of Mexico, which already enjoys direct access to the burgeoning Latin America market, is also becoming an increasingly attractive option for shipping lines operating on the Asia-US east coast all-water route.

Speaking recently to the Hong Kong Shipping Gazette, Port of Houston Authority vice president of origination, Ricky Kunz explained that a number of shipping lines running services to the US from Asia were in discussions with the port to commence direct calls to Houston in the coming year.

"We are hopefully going to be ready to announce major changes soon. While we cannot give any specific details, I can say that we are talking to several carriers, and some of them are now ready to make the move," Mr Kunz said.

At present Asian cargo represents Houston's fastest growth market, and with the current expansion of the Panama Canal expected to be completed by 2014, the origination vice president believes the port will be in an advantageous position to pick up more cargo from the region going forward.

The expansion of the canal will also enable larger vessels to call at Houston, which will not only be attractive for shipping lines hoping to achieve an economies of scale, but also will garner cost savings for shippers as well.

Houston presents shippers with more than just flow-on benefits from the shipping lines. The port's proximity to a large portion of the US population is also making it an attractive option for retailers looking to establish distribution centres in the region to serve not only the state of Texas, but the wider US Midwest as well, of which there is a population of roughly 100 million people - a third of the US population.

"Major retailers are already setting up distribution centres in Houston to take advantage of the dense population in the region, as well as supplying to Middle America," Mr Kunz said.

Houston is also supported by an "excellent system" of interstate highways connecting the port to inland markets and extending to the population-rich US Midwest, the vice president said. Key rail operators, Burlington Northern Santa Fe (BNSF) and Union Pacific (UP) are also serving the city with 94 trains a week to destination across the United States, including cities as far north as Chicago.

The State of Texas also provides the port with a sizeable population base, which includes the cities of Houston, Dallas, Forth Worth, Austin and San Antonio. The city of Houston itself is America's fourth largest city with a population of six million, a number expected to double between 2035 and 2040.

In recent years the Port of Houston has fared comparatively well, in contrast to some of the east and west coasts ports that have recorded double-digit contractions during the worst years of 2009 and 2011.

Mr Kunz attributes Houston's solid performance to a combination of a steady local economy and growing business from the emerging markets.

"The state of Texas has enjoyed a robust economy. We were the last one into the recession and the first one out. Last year, we had more growth than expected. One factor was the growth in Indian, Middle Eastern and South American trade," he said.

As an ongoing initiative to improve the port's facilities to meet market demand, the newest Bayport Container Terminal which opened in February 2007 has installed the latest cranes that can handle the larger post-panamax ships. The entire project will be completed in 2020 and the terminal will be able to handle 2.5 to three million TEU a year. A process is also underway to revamp the Barbours Cut Terminal to cater bigger ships and to increase its capacity to two million TEU. Total capacity will double to five million TEU, he said.

In 2005, the Port of Houston completed a five-and-a half year plan to deepen the channel from 40 to 45 feet and to widen it from 400 to 530 feet. The port can now accommodate vessels up to 8,500 TEU.

The Port of Houston has launched a "Gulf Coast Advantage" programme which is aimed at offering shipping lines operating on the Asia route a full shipload to the Gulf, while enabling them to leave with a full load and not having to venture further up to the east coast.

Source Shipping Gazette - Daily Shipping News

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