Looking for a lift
Despite port slowdown, commissioners will buy cranes to handle future demand
LOW oil prices slowed the volume of general cargo the Port of Houston Authority handled in the first five months of the year, commissioners said Tuesday. Yet, signaling long-term confidence, the Port Commission also awarded a contract for up to $34.4 million to buy three cranes for its Bayport Container Terminal.
“We’re planning for the future,” Port Authority executive Director Roger Guenther said following the Port Commission meeting. “You’ve got to stay ahead of the demand curve.”
The Port Authority reported that its general cargo, measured in tons, was down 19 percent for the first five months of the year. Steel saw the most significant drop,
to 1 million tons, down 67 percent from 3.1 million tons through May 2015.
“We expected our volumes to return to a more normal level,” Guenther said.
The soft energy market has resulted in less drilling, which he said caused a drop in steel imports for pipes related to drilling.
“Until you see drilling pick up or any major construction, we’re going to see more of the same,” said Bill Diehl, president of the Greater Houston Port Bureau.
Container TEUs, an industry term that measures a container ship’s capacity in 20-foot equivalent containers, dropped 6 percent through May. However, the first five months of 2015 saw a significant spike in business as labor issues along the West Coast diverted cargo to Houston. The Port Authority was able to retain much of that cargo, Guenther said.
The container business also is expected to get a boost from a new weekly container service that began earlier this month from Asia. The area’s pet- rochemical boom will help, too.
“We’re doing a lot of this expansion to get ready for this tremendous increase of plastic resins that we’re going to be shipping starting out next year,” Guenther said.
The construction contract for three new cranes at Bayport Container Terminal was awarded to Shanghai Zhenua Heavy Industry Co.
The cranes will be able to unload ships with 22 rows of containers, said Jeff Davis, chief port operations officer for the Port Authority.
With the addition of these cranes, the Bayport Container Terminal will have 12 cranes. Ships generally require three to six cranes to load or unload containers.
“As our container volumes grow, either the size of the vessel is going to grow or we’re going to get more ships,” Davis said. “We’re expecting larger vessels. But with those larger vessels, we’ll have to put more cranes on each vessel.”
The Port Authority reported a 9 percent drop in operating revenues to $119.2 million through May, 6 percent less than its budget, and a 27 percent drop in net income to $31.4 million.
Guenther also said operating expenses are 5 percent below what was budgeted.
“The volume is down, but we had planned for that,” he said, “and we’re trying to use strict management of our expenses because of the volume being down.”