Boom Time for Project Cargo Imports

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• published: 27 Jan 2016
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Reports coming out in the trade indicate that U.S. Gulf ports – from Florida to Texas – are experiencing increased import volumes of steel and project cargoes. This strong flow of project cargo is as a result of better economic conditions and a strong dollar, according to an article in the Journal of Commerce (JOC). Low oil and natural gas prices in Texas and Louisiana have fueled investment of tens of billions of dollars in building and expanding petrochemical and oil refining plants, which are comprised of components from all over the world, explained the JOC article. Additionally, population growth and the building of automotive plants farther east is attracting steel and forest products imports for the housing markets. Expectations are that this will likely last for several more years to come – even if the dollar’s strength wanes in the future. “There are some pretty substantial projects happening here in the Gulf, and that’s going to continue for the next few years,” said Steven Neuendorff, head of Americas at Hansa Heavy Lift, a Danish carrier specializing in transporting equipment for oil and gas projects.” In fact, the backlog of project cargo for the many petrochemical plants and refineries under construction in the western Gulf is pegged for several more years to come. According to the Port of Houston’s Executive Director, Roger Guenther, there is about $50 billion in investment funneling into the region around the port, and as much as $100 million into the entire western Gulf oil patch. “There’s a boom in investment in the downstream side, even though drilling is down,” Guenther told the JOC. The Port of Houston is also expecting to benefit from a projected boom in plastic resin exports, the state’s, and the opening of the larger locks in the Panama Canal next year, according to recent article in American Shipper. Ricky Kunz, chief commercial officer for the Port of Houston Authority, was quoted as saying: “Today our container traffic is stronger than it has ever been. One reason is the surge in resin exports that the port is expecting to see beginning in the fourth quarter of next year and ramping up through 2020. We are talking about hundreds of thousands of TEU that will be produced in this area.” Vanessa Talbot, global sales and optimization planning manager for plastics and resins at ExxonMobil Chemical, underscored Kunz’s expected boom in plastic resin exports, telling American Shipper that her company is expanding its Baytown, Texas complex and expects exports of polyethylene resin pellets to increase six-fold – from about 50 containers a day to over 300 containers a day in 2017 or 2018. Steel and iron imports have also been at record or near record levels at the Houston and New Orleans ports up until this year, with 2014 imports up more than 101% over prior year. And, although imports in this area have begun to level off, there is still an uptick, according to the JOC article. Steel imports through New Orleans were up 19%, nonferrous metals up 36% and forest products up 4% in short tons through May,” said Gary LaGrange, president and CEO of the Port of New Orleans. Steel cargoes in the Port of Mobile are also doing well. In fact, the port opened a $36 million steel terminal this year to handle the steel coils being produced by nearby mills. Mobile also handles a lot of project cargo imports for numerous automobile assembly plants and the auto parts plants that supply them in and around Alabama. Growth in Florida’s population is driving Tampa’s breakbulk cargo volumes. According to Raul Alfonso, executive vice president and chief commercial officer of the Tampa Port Authority, they have had “substantial growth of their breakbulk cargo coming in, fueled by housing construction and industry.” The port has been handling 30,000 to 400,000 tons a month of breakbulk steel, mostly imports from South Korea and Turkey. Roanoke Trade specializes in providing insurance solutions to those in the global logistics and supply chain industry. We are ready to provide the protection needed to those companies in the supply chain as expansion and growth takes place at ports around the U.S. Give our professionals a call at 1-800-ROANOKE (800-762-6653) to discuss our solutions further. https://www.roanoketrade.com/project-cargo-imports/