More ships sailed into the Houston Ship Channel in what will be a parade of vessels laden with crude oil, consumer goods and cruise passengers that have been unable to dock in a region devastated by Hurricane Harvey.
The storm spared the ports of Houston, Galveston, Texas City and Freeport from significant damages, but sitting idle had its own costs for companies that depend on the waterway.
“It’s lost business,” said Capt. Mike Cunningham, director of program management at the Greater Houston Port Bureau. “And every day the facility is closed costs more money without any revenue-generating stream.”
Pilots, tasked with guiding ships in and out of the ports, brought the first two tankers into Texas City on Wednesday, but traffic really picked up on Friday, which marked a week since the ports fully closed.
By one estimate, closing a major port like Houston for a week can cause financial losses of up to $2.5 billion from delayed or canceled business transactions, said Maria Burns, director for the Logistics and Transportation Policy Program at the University of Houston.
A lot of this can be recovered as a port reopens, but more employees and equipment will be needed to handle the influx in cargo. That could eat into the profits of certain companies, Burns said.
Some business could be lost altogether if ships unloaded cargo at other ports while Houston was closed.
“I think everybody is going to have to take a hit of some degree, though it may not be really severe,” said Jim Kruse, director of the Center for Ports and Waterways at the Texas A&M Transportation Institute. “I just cannot tell.”
The Coast Guard shuttered the ports on Aug. 25 and began reopening them, with restrictions, five days later. Only ships with certain draft sizes were permitted to move during the daylight.
Then on Friday, the Coast Guard lifted the daylight-only restriction and began allowing vessels with drafts of 45 feet to move throughout most of the Houston Ship Channel. The exception was the more inland portion of the channel, from Mitchell’s Point to the Turning Basin.
That segment remained closed because floodwaters were causing currents. They also could be washing obstructions into the channel or carrying sand and dirt that reduces its depth. More analysis is needed to see if those scenarios have occurred.
“The ports here are vital to the nation,” said Capt. Kevin Oditt, captain of the port for the Coast Guard Sector Houston-Galveston and incident commander for the Hurricane Harvey response. “We know it’s critical to get them up and running again and to get the Houston Ship Channel open for business again.”
Having little to no activity for a week, however, brings up two major concerns for Kruse. The first is with refineries, which he said don’t have a lot of extra materials on hand. If they run out of material, it becomes very difficult to shut down the refinery and bring it back up.
His second concern is with consumer goods for big-box retail stores. If containers aren’t coming through the port, then distribution centers could struggle to resupply local stores.
“I’m expecting you’ll see some empty shelves at Walmart and Home Depot for a while,” Kruse said.
Houston opened its Barbours Cut Container Terminal and Bayport Container Terminal Friday to handle the onslaught of containers waiting to be imported and exported.
“We have enough people to open our container terminals and get back to work, which I think is important for the community and the region to restart this economic engine,” Port Houston Executive Director Roger Guenther said.
Guenther said Thursday afternoon that some ships were waiting to get into Houston. Some vessels may have rerouted to different ports before returning to Houston, and others could have unloaded cargo in different ports and trucked those goods to their final destinations.
“All we can do is prepare and be ready to handle the volume of cargo and the business as it comes into the port,” Guenther said.
Other businesses were also gearing up for an influx. Houston-based Kirby Corp., the country’s largest operator of tank barges, has additional vessels and personnel standing by to meet the demand.
“We expect things to get very busy for us in the coming days,” said Matt Woodruff, director of public and government affairs for Kirby Corp.
The company’s vessels in other parts of the country operated normally during the past week. Closer to home, Kirby has begun moving some equipment that was held up during the storm. In portions of the waterways that are still closed, its vessels are manned and ready to operate as soon as it’s safe, Woodruff said.
And even though the upper Ship Channel remains closed, Oditt said the Coast Guard is allowing vessels in the area on a case-by-case basis. These vessels will most likely be tugs and barges to help prepare that section’s opening.
If silt or sand has collected and shallowed that portion of the channel, vessels could be forced to carry lighter loads, Kruse said. That makes it more expensive to transport goods because the company paying the freight is charged for the full cost of the vessel but not getting a full load.
Kruse said Congress has been historically quick with funding these types of emergency situations. It’s not like normal dredging requests that can linger for years.
‘Go do it’
“In an emergency situation, they don’t go through all that,” he said. “… It’s like, ‘Here’s the money, go do it.'”
Oditt said he’s not aware of significant shallowing in areas of the channel that have already been open to 45-foot drafts. But he said the pilots will bring in ships with shallower drafts first, just as a precaution.
As for the Port Coordination Team – a group of stakeholders at the port that includes the Coast Guard, Port Houston, companies and a variety of users of the Ship Channel – Kruse said it has done a good job of handling past emergencies. So he expects it will also do a good job handling Harvey.
“I really think Houston is a model port for how to get through a major problem,” he said.