This past April, the local Port Authority implemented a rule limiting the number of calls a 9,500+ TEU vessel can have in the Houston Ship Channel. Piggybacking on the decision, Houston Ship Pilots also decided to prohibit two-way traffic on the narrow passageway further restricting the number of times a mega-vessel can visit to once weekly. Shippers expressed great concerns, citing increases in resin exports and volumes as a sign that more mega-vessels could be seeking access to the Port of Houston and that restrictions would, ultimately, hurt the port’s economy.
Now, non-cargo port users are building on the new rule and are pushing for further legislation to make these significant changes permanent. But locals aren’t just pushing for size restriction, they want more control, too. Locals also filed a secondary bill to remove decision-making authority on the Ship Channel from the Port Authority into a new, independent seven-member body appointed by the City.
Ultimately, the goal is to expand the channel in order to accommodate all waterway activity, but that target is more than five years from completion and immediate safety is of great concern in the narrow passageway. But Port Commissioners are not eager to give away their decision-making authority and believe legalizing the measures would bring unnecessary restrictions to a fluid system that currently allows for creative problem-solving instead of legal violations.
The Port of Houston currently handles more than two thirds of U.S. Gulf shipments and volume of both imports and exports have grown over 11 and 9 percent, respectively, year-over-year. As one of the top 5 fastest growing U.S. ports, Houston shippers, carriers and brokers are seeking to keep the legislation at bay and keep the free flow of commerce going.
Local trade associations have sent requests to shippers asking them to oppose HB 4445 and SB 2223.
For companies seeking to participate in the opposition, the following draft letter can be used and issued to the supplementary list of Texas legislators:
DRAFT
[INSERT DATE]
[INSERT NAME AND ADDRESS]
RE: Oppose HB 4445 and SB 2223
Dear [INSERT NAME]:
We are a Texas based exporter/importer of [INSERT COMMODITY] writing to you to express our company’s opposition to HB 4445 and SB 2223, which would restrict container vessels exceeding 1100’ from calling at the Port of Houston more than once per week. This action would very negatively impact our business.
The availability of large vessels with increased container capacity, such as those that would be restricted under the proposed legislation, drives efficiency and significantly reduces transportation costs for importers and exporters alike. Restricting access to large vessels will put Texas exporters at a competitive disadvantage. Given the intense pricing competition in export markets, the inability to remain cost competitive on transportation will undoubtedly result in the loss of business for our company and others in the region.
The Port of Houston is the largest container port in the Gulf region handling more than two-thirds of the Gulf’s container volumes. It is the fifth largest port in the U.S. and a vital link in the international supply chain. The Port has worked hard over the past decade to attract additional container services. Industry stakeholders, including the Port, surrounding communities, and exporters and importers alike have invested in infrastructure to support these large vessels. The construction of new warehouses, installation of ship-to-shore gantry cranes, container yards, wharf rehabilitation, and road and rail improvements have been made as well as jobs created. HB 4445 and SB 2223 will significantly reduce incentives for investment in expanding container services at the Port of Houston.
Ocean carrier service providers have built services around our export and import requirements, to and from Asia, Latin America, and Europe to the Gulf coast. This legislation will impose severe restrictions on these services and future services offered to Texas exporters and importers.
The legislation sends a powerful message to our company and others doing business in Texas relying on containerized shipments that Texas does not want our business nor that of our ocean carrier service providers. HB 4445 and SB2223 will disrupt basic supply chain processes throughout Texas and will slow cargo throughput at the Port of Houston.
This risks the economic viability of the Port by virtually ensuring that export and import cargo will move to other regional ports. Thus, the legislation will have a long-lasting negative economic impact making the Port of Houston less competitive and simultaneously harming local and regional exporters.
In short, the passage of these bills will hurt our company and the greater Texas supply chain. We urge you to vote against HB 4445 and SB 2223.
FOR A LIST OF LOCAL LEGISLATORS:
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