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Port of Houston teams up with Panama to draw a piece of Asia's massive trade away from West Coast
Houston Chronicle ^

Posted on 11/07/2004 6:58:42 AM PST by maui_hawaii

When Wal-Mart's enormous distribution center in Chambers County opens next year, it will trigger a substantial increase in shipments from Asia through the Port of Houston.

And it didn't happen by accident.

The costly statewide push to snare the 2 million-square-foot warehouse operation is a big win. The facility under construction will cover 50 acres and ultimately could double in size.

Wal-Mart, the world's biggest retailer, depends so much on shipments from the East that shipping lines are adding service.

From the day — 90 years ago this month — that the Houston Ship Channel officially opened, its backers have been constantly pushing for business from around the world.

While the city cheered as a boat loaded with cast iron pipe moved up the Houston Ship Channel in October 1914, just weeks before the official opening, port backers had just begun.

They convinced the master of that vessel, the Henry C. May, to contact the captain of a coal-carrying vessel to urge him to bring that cargo to the unproven port.

Capt. Benjamin Benson ultimately brought the 290-foot-long vessel Dorothy, which sailed from Philadelphia loaded with 3,000 tons of coal. Instead of going to Galveston, it plied the newly dug Ship Channel.

The entrance of that load of coal was front page news in the Houston Chronicle because the arrival of oceangoing freight was still a rarity in the city.

Leading player Today, the port is first in the United States in foreign tonnage and second in total tonnage, thanks in large part to the huge trade in petrochemicals, a natural outgrowth of the city's role as an energy capital.

But the port has also become a dominant player in the container business, handling roughly two-thirds of all containers that enter the Gulf of Mexico. This hasn't come as easily as the long-established oil business. The port is banking that it can grow, however, persuading voters to back bonds for the billion-dollar Bayport expansion.

Voters also were asked to back bonds for the first wharves built for the new Ship Channel in 1914.

Global logistics The port has pushed trade with Asia up by 28 percent over the past two years. Goods transported solely by ocean vessels amounted to about 9.4 million tons in 2002 and are expected to jump to about 12 million tons for 2004, according to statistics and projections from the Port of Houston Authority.

Trade officials at the Port of Houston say they expect business will continue to expand.

"Houston is getting back into the East Asia trade," said John Horan, the port's trade director. "There is so much growth in East Asia in manufacturing, particularly in China, and major retailers are sourcing a lot of their consumer goods out of East Asia."

Pete Smith, director of trade development for NYK Line, which recently added service through the Panama Canal to the port, said Houston won big when it snared Wal-Mart's new distribution center. U.S. consumers have an enormous appetite for shopping, and Wal-Mart is the biggest importer, he noted.

"Wal-Mart, to a certain degree, is on the cutting edge of global logistics," he said. "Different gateways in the U.S. are reaching saturation thresholds, and that will be revealed over the next three to five years at different ports."

Houston stands to gain because it will be a major distribution point for the huge retailer when its center is completed next year, he said.

The combination of Wal-Mart and the existing Home Depot distribution center near the port is driving carriers to come to Houston, said Rick Couch, who runs Osprey Line.

"Houston is becoming a pretty big option," Couch said.

Smith noted that because Americans also are moving away from expensive areas to live and shifting to places like Arizona, Houston is becoming a natural gateway.

Waiting on Wal-Mart The focus on grabbing more Asian trade is just the latest of many marketing pushes for the port. In recent years, its promotion efforts have aimed at seizing opportunities in Asia and Latin America.

This year, China has been one of the world's biggest engines for economic growth. But to tap into this burgeoning manufacturing center, Houston has had to hurdle a big obstacle: Historically, most goods from Asia move through West Coast ports.

The trip to the West Coast ports and then onto trains has been quicker and cheaper than traveling through the Panama Canal, which allows for only limited ship sizes. But congestion at West Coast ports coupled with labor problems and rail congestion have led shippers to seek alternatives.

"A lot of big retailers say they want an alternative to the West Coast, to come through the Panama Canal and come to Houston," Horan said. "The near- and long-term future for us both looks very good."

Several carriers already provide service between Houston and Asia via the Panama Canal, but other shipping lines reportedly are considering adding service once the Wal-Mart center is open.

Ties to Panama Canal This growing trade could forge an even closer relationship between the port and the Panama Canal, two entities that share common roots. Both are man-made, and both opened within months of each other: the canal in August 1914, the Ship Channel in November of the same year.

Numerous improvements have been made at the Panama Canal in recent years to handle more and bigger ships, and discussions are under way to expand the "big ditch" more.

Last year, the Port of Houston and Panama Canal Authority entered into a business agreement aimed at attracting more goods from Asia by promoting the route.

"The most recent is NYK Line with Panama-Houston relay service," Horan said. "And we have got several major ocean carriers looking at Houston for East Asia services."

The initiative for the service by NYK and Megacarriers, which began in August, came from Wal-Mart, according to NYK's Smith.

Each of the two vessels used for the service carries 500 20-foot-equivalent containers at a time and can easily traverse the canal.

But the fact remains that many vessels steaming to the United States from Asia are too big to pass through.

West Coast bottleneck Currently, cargo is backing up again on the West Coast, with as many as 40 vessels at a time anchored in the harbor at Los Angeles.

The problems on the West Coast stem from labor shortages as well as rail congestion.

Shippers here are also experiencing rail headaches, with demand growing faster than Union Pacific can handle. The port's Barbours Cut container terminal is operating at capacity.

For that reason, the construction of Bayport was a big topic of discussion when Houston port officials went on a trade mission to East Asia recently, calling on corporations and government officials in Tokyo; Taipei, Taiwan; and Shanghai, China.

Plans call for the initial phase to come on line in 2006, although Bayport opponents are pursuing legal challenges.

NYK Line said it likes what it sees in Houston.

"Overall, the Port Authority of Houston has become very aggressive," Smith said. "They've done their work and seem to have enough foresight and a good plan."


TOPICS: Business/Economy; US: Texas
KEYWORDS: walmart
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To: j_accuse; maui_hawaii

RE: Hutchinson Wampoa is a British company

And is the guy who heads it up some British guy living in the UK? [I already know the answer, but do you?]


21 posted on 02/08/2005 12:35:44 PM PST by GOP_1900AD (Stomping on "PC," destroying the Left, and smoking out faux "conservatives" - Take Back The GOP!)
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To: GOP_1900AD
Fill us in.

Link

22 posted on 02/08/2005 12:42:09 PM PST by maui_hawaii
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To: Ben Ficklin; Diddle E. Squat; Dog Gone; MeekOneGOP; Paleo Conservative

Here's story of what is happening now... Sorta fits in with transportation plans... I-69 looks more and more like it maybe needed.....


23 posted on 02/08/2005 12:45:05 PM PST by deport (There are two kinds of pedestrians: the quick and the dead.)
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To: deport

If Houston keeps growing at this pace, Beaumont will be one of its suburbs before long.


24 posted on 02/08/2005 12:52:45 PM PST by Dog Gone
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To: deport

I just looked up some stuff on I 69. Are you pro or foe to the plan?


25 posted on 02/08/2005 1:06:09 PM PST by maui_hawaii
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To: maui_hawaii; bayourod
As you may or may not know, we have a distinct guest worker visa classification known as Crew Worker Visas. I don't recall the visa number but it was created in 1990.

Crew workers work on the docks and supposedly supplement the work of the union employees. It is likely that the crew workers do all the work and the union men handle the clipboards.

Of course, one of the regs on crew workers visa is that when the union goes out, the crew worker has to stop working.

26 posted on 02/08/2005 1:07:40 PM PST by Ben Ficklin
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To: Dog Gone

If Houston keeps growing at this pace, Beaumont will be one of its suburbs before long.




It's amazing the growth in that area.... I spend a good bit of time on some of the area byways and construction is ever present both roadway and land development.

They mention the Baytown-LaPorte tunnel being removed without interuppting ship channel traffic.... They plugged the tunnel into three sections and floated each section some 30 miles off Galveston and sank them for reefs...


27 posted on 02/08/2005 1:08:28 PM PST by deport (There are two kinds of pedestrians: the quick and the dead.)
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To: TexasCajun

And they differ from the rest of Harris county government how?


28 posted on 02/08/2005 1:11:53 PM PST by TXBSAFH (Never underestimate the power of human stupidity--Robert Heinlein)
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To: maui_hawaii
Are you pro or foe to the plan?
Neither...... but Texas must address the transportation needs as much of the major population centers are nothing but congestion centers. If the influx of goods from S.America becomes a reality then it will transverse Texas into the heartland of America somehow like it or not. Where some of the S. America goods may come into Texas

Here is another story on goods eventually coming into Texas via the West Coast of Mexico. La Entrada al Pacifico

29 posted on 02/08/2005 1:21:31 PM PST by deport (There are two kinds of pedestrians: the quick and the dead.)
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To: TexasCajun
Oh really, please specifically state your allegations or reasons why the port shouldn't expand on property it already owns.

Everything I've read is that the port opponents are just a bunch of NIMBY's (Not In My Back Yard) who fight any industrial development over there these days. Which is even more silly given the fact that there are already huge petrochemical factory complexes right across highway 146 from the subdivisions in Shoreacres and La Porte. The Bayport turning basin has been in existance for years, along with vacant land for development. No housing is planned to be acquired to expand the port, correct? They are in the process of studies to upgrade Hwy 146 to a freeway(or tollway), and the land for that is already set aside between the existing frontage roads. They are also going to put a ramp from the freeway to the port property. So what exactly is ya'll's complaint?

BTW, for those not familiar with the area, Bayport is a relatively narrow strip of Pasadena(owned by the Port of Houston) fronting Galveston Bay, located south of La Porte between Shore Acres(small residential community between La Port and the port) and Seabrook (home of The People's Republic of Seabrook.) Some also may recall that a year or two ago a Seabrook city official was caught on tape cussing out a patrolman who made a DWI stop and trying to pull a "Do you know who I am?" Especially listeners of Chris Baker's radio show, she's the one with the "You bleeping hillbilly!" soundbite.

Anyway, here's a aerial photo of the Bayport channel and surroundings, persons can decide for themselves if this is an appropriate place for the port to expand onto land it already owns.

Bayport photo

Note the petrochem complexes on the left (west) and bottom sides of the channel. One can zoom in on the picture by putting your mouse over where you want to focus on and clicking.

30 posted on 02/08/2005 1:38:14 PM PST by Diddle E. Squat
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To: maui_hawaii

As I understand it, the unions are a huge hurdle for CA ports, with their 6 figure incomes and inflexible rules (though IIRC they did relent and let the ports of LA and Long Beach operate 24 hours, unlike many ports these thugs strangle.)

Another problem is that all the shipping lines try to dump everything in LA/LB, instead of underutilized Oakland, Portland, Seattle, and Vancouver, though that is starting to change. Huge concentration of distribution centers in the LA area. Also there may be a shift to Mexican ports such as Lazaro Cardenas and Manzanillo.

The railroads have also been a big bottleneck coming out of all the port cities, they just don't have the capacity in many of the east-west lanes right now, and have struggled to add capacity since they are barely meeting their cost of capital.


31 posted on 02/08/2005 1:50:25 PM PST by Diddle E. Squat
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To: Ben Ficklin

This is one case where I have a very hard time believing the crew workers are doing jobs Americans don't want to do.


32 posted on 02/08/2005 1:58:57 PM PST by Diddle E. Squat
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To: Diddle E. Squat
I haven't seen this thread for a while.

Bayport Phase 1 is well underway.

You sound a lot like our Ex-mayor "Quimby" who we recalled for trying to tell us what we need and want!

He pulled a JohnKerry, said he as against it to get elected then began working feverishly with the Port Authority.

...him and some of his pro-port friends are now back home drinking beer.

33 posted on 02/08/2005 2:08:51 PM PST by TexasCajun
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To: Diddle E. Squat
It is being driven by the union just like ag visas have been driven by the United Farm Workers for the last 30 years. The UFW was joined at the table by the AFL-CIO 3 years ago.

No doubt, the dock workers fought expansion of the work force but would allow experienced workers from asia to be rotated in and out on a visa. That allows the union rate to rise and lowers the average rate.

34 posted on 02/08/2005 2:23:20 PM PST by Ben Ficklin
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To: maui_hawaii

http://en.wikipedia.org/wiki/Li_Ka_shing

Pip, pip. Cheerio! [Not!]


35 posted on 02/08/2005 2:31:37 PM PST by GOP_1900AD (Stomping on "PC," destroying the Left, and smoking out faux "conservatives" - Take Back The GOP!)
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To: maui_hawaii; Ben Ficklin; zeugma; Diddle E. Squat; deport; MeekOneGOP; ken21; SwinneySwitch; ...
If there's this much traffic, perhaps container facilities would be justified in Ingleside? Unfortunately the Port of Corpus Christi can't handle modern container ships due to clearance limitations under the harbor bridge. It was the highest bridge in Texas when it opened in 1959. There have been some proposals to build an even bigger replacement bridge that would allow the largest container ships to enter the Port of Corpus Christi.


36 posted on 02/08/2005 3:00:20 PM PST by Paleo Conservative (Hey! Hey! Ho! Ho! Andrew Heyward's got to go!)
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To: TexasCajun

Good for ya'll. But you still haven't given any reason why this port project shouldn't move forward.

I did some research, and the nearest residence in your town (Seabrook) is more than a mile away from any of the actual port channel. In fact relatively little of the port actually borders Seabrook, which shares far more borders with chemical plants. The closest residences are actually in the Pasadena and La Porte city limits (didn't realize that LP owned a 2 block wide strip between the port and Shoreacres.) The relatively small backside port property that does front Seabrook will, once development of that land begins in a later phase) be lined with a 20 foot tall berm (along Toddville Road) to block noise and unsightly views.

So specifically, what is the problem?

BTW, you do realize that Texas City is also about to open a container port, so if for some reason ya'll were successful in delaying Bayport further, it would result in increased truck traffic on 146 through Seabrook, traffic that otherwise would have started at Bayport and moved north, avoiding your city.


37 posted on 02/08/2005 3:04:31 PM PST by Diddle E. Squat
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To: Paleo Conservative

Would be a waste of money to replace that bridge before its useful life was over. Especially since ships headed to the proposed Ingleside container port wouldn't need to pass under it or any other bridge while coming in from the Gulf.

Corpus is at a big disadvantage to Houston when it comes to containers, since Houston is developing into a regional hub of large redistribution facilities, many shipping lines would prefer to offload at one stop rather than a string of ports, by itself is a relatively tiny market, isn't much closer to San Antonio or Mexico, further from Austin and DFW(the largest market), and faces competion for N. Mexican traffic from other Mexican ports. Brownsville may even have a better shot at attracting container traffic than Corpus. The CC port will probably still be dominated by bulk and niche products for a long time into the future.


38 posted on 02/08/2005 3:16:37 PM PST by Diddle E. Squat
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To: Diddle E. Squat
I thought the Texas City project was still on hold due to Bayport proceeding?

I've forgotten some of the talking points, but I believe one major concern was a rail spur to support rail transport of containers, and the traffic.

What really concerns me is what is planned for Red Bluff Rd.

Red Bluff is the most direct route to 146 from Beltway-8. My neighborhood is at Red Bluff and 146.

There was a lot of fur flying over this project, but you can't stop 'progress'. The truth and fiction of it were often blurred.

39 posted on 02/08/2005 3:17:55 PM PST by TexasCajun
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To: Diddle E. Squat
Would be a waste of money to replace that bridge before its useful life was over. Especially since ships headed to the proposed Ingleside container port wouldn't need to pass under it or any other bridge while coming in from the Gulf.

That's pretty much what I think. There's no need for container facilities in both Corpus Christi and Ingleside. The Harbor Bridge is just 45 years old, and should be easily good till it reaches 100. The promoters of a new bridge say it would have room for shoulders and pedestrian lanes, but that isn' worth spending $100 million+ to replace the existing bridge.

40 posted on 02/08/2005 3:24:36 PM PST by Paleo Conservative (Hey! Hey! Ho! Ho! Andrew Heyward's got to go!)
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