Much of Bayport’s Growth to Flow From Asia: Congestion on West Coast Could Send Many Ships on Alternate Route Via Panama Canal

By Anastasia Ustinova, Houston Chronicle

Feb. 4–The first ship that delivered cargo to the Bayport container terminal Thursday came from China, a sign of how important Asian trade is to the growth of the Port of Houston.

The ship, which brought cargo containers from the ports of Chiwan, Shanghai and Hong Kong, is operated by the shipping giant CMA-CGM, which plans to expand its service between China and Houston by year-end.

“Asia is our largest single trading partner, and we are expending our capacity in the Gulf Coast,” said Frank J. Baragona, president of CMA-CGM (America), based in Norfolk, Va. Its French-based parent is the third-largest container shipping line in the world.

The Houston port holds a small but fast-growing piece of the trade between China and the United States. Port officials estimate that more than 5.1 million tons of cargo were transported from and to China in 2006 — up 82 percent from 2.8 million in 2005. Overall, the Port of Houston’s facilities handled more than 40.6 million tons of cargo in 2006.

“Asia is one of the fastest-growing areas for imports to as well as exports from Houston,” said John Horan, the port’s trade development director. “And Bayport is being built to really respond to that growing container business.”

He noted that several shippers are considering adding services to the port.

Crowded in Los Angeles While most imports from Asia have taken the shorter trip through West Coast ports, labor problems and congestion in Los Angeles and Long Beach have spurred shippers to seek alternative routes.

CMA-CGM made these commercial deliveries to Bayport last week when it started its regular service at the new container facility. These ships, capable of carrying 5,100 20-foot equivalent containers — a standard unit of measurement in this business — will travel to Houston via the Panama Canal.

Paul Bingham, an economist at research firm Global Insight, said though the trip from China to Texas via Panama is longer and may cost more than going to the West Coast, some shippers are willing to switch because the Asian cargo will soon exceed the capacity of ports there.

“It means that shippers themselves will see Houston as an improved option, as their retail gateway,” Bingham said. “Houston has capacity for very large vessels, and that gives it an advantage.”

Bingham said CMA-CGM dominates the Asian imports through Texas, but as the market expands, Houston may soon see new shippers calling at the Bayport terminal.

Containers from China Since China’s ascension to the World Trade Organization in 2001, the number of Asian containers crossing the Pacific has soared. U.S. imports from China have jumped from the equivalent of 2.1 million standard sized containers in 1997 to over 8.2 million in 2005, with Gulf Coast ports handling roughly 1 percent of them, according to the center for Transportation Research at the University of Texas.

“From Houston’s perspective, that number is growing very rapidly,” said Nathan Hutson, a research science associate at the center. He added that Houston’s port has increased its dominant share of the Gulf Coast container business since New Orleans was battered by Hurricane Katrina.

Industry observers note that retailers like Wal-Mart and Home Depot, which depend on shipments from China, have big local distribution centers, which are also drawing carriers.

“The overall volume coming through Texas has increased with growth in the company’s imports over the years, but not necessarily at the expense of other ports,” a Home Depot spokesman said in an e-mail. “We have been shipping through the Port of Houston since 1996 primarily to serve our stores in the Gulf region and for cargo originating in South America.”

anastasia.ustinova@chron.com

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Copyright (c) 2007, Houston Chronicle

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