Nation's third port expands in recession
From his ship's top deck 60 feet above the Port of Houston's busy wharves, Capt. Nurio Tamura pointed to the 52-mile ship channel linking Houston with the Gulf of Mexico. ''I don't like this narrow passage,'' he said.
But Captain Tamura's 650-foot Vermilion Highway, with its 12 decks designed to carry 4,951 Japanese cars, regularly sails through the channel's $15 billion gantlet of petrochemical plants. The attraction is that the Port of Houston provides easy access to major American markets.
''Doesn't it get too congested?'' asks a visitor to the port, where one can find a giant aerial photo showing the ''downtown'' port's crowded main channel. Officials reply that the port has an elaborate traffic and cargo control system and cite the 1981 record of 105,862 ship movements with just 21 accidents.
On the wharf alongside the giant Japanese car carrier, stevedore T. J. Landry explained that some 5,500 ships a year sail into Houston, because ''we excel in all the work we do.'' Other Texas ports specialize in handling certain cargoes, he said. ''But we do drums, we do heavy lifts like oil rigs for the Middle East, we do containers, pipe, steel, general cargo.'' After his 30 years at the Port of Houston, he is confident that ''our men here can handle any cargo.''
Other Texas ports are working hard to expand and diversify. But most major new port facilities planned for the Gulf Coast have stalled, victims of recession in general and slumping crude oil imports in particular. Meanwhile the water looks just fine for the leading Texas port, Houston, now the nation's third-ranking port in total tonnage handled.
Galveston, Freeport, Corpus Christi, and Brownsville all have impressive plans for new deepwater port facilities. These plans, however, grew out of the assumption that the United States would continue to be a major importer of foreign crude oil. Today, that assumption seems uncertain at best. To add to the uncertainty, federal funds traditionally used to build new port facilities may be drying up under the Reagan administration.
Such problems don't bother Richard P. Leach, the Port of Houston Authority's executive director. Having anticipated a downturn in business this year, he is busy constructing new facilities, because he is confident that the downturn is temporary.
Along with the entire US port industry, Mr. Leach is battling a recession-driven drop in port activity. For Houston, declines in grain and oil shipments are cutting this year's total tonnage by more than 24 percent over 1981. After handling 97 million metric tons in the 12 months ending June 1981, Houston dropped to 74 million for the year ending June 1982. But this plunge still leaves Houston with a third of total Texas tonnage and behind only New York and New Orleans.
Ted Thorjussen, vice-president of the West Gulf Maritime Association, warns that Houston is in a ''very serious cargo slump.'' But Leach looks on the brighter side. The port is ''moving ahead with major development plans for two reasons,'' he explains. ''One is that we are getting construction at very reasonable prices. . . . Second, it takes a couple of years to build a new wharf and we don't see a protracted recession ahead.''
With the recession stalling construction projects even in Texas, says Leach, construction companies are willing to work for less. As a result, two major new Port of Houston facilities are being built for $13.2 million instead of an expected $19.6 million.
The Port of Houston is also pushing to open a unique multi-site foreign trade zone. If the project wins federal approval, it will enable about 25 companies to run certain manufacturing operations as if they were outside US borders, with many tax breaks.
Leach expects that new facilities will attract more tonnage once the US and world economies build up steam. But he warns that just as ports were the last to feel the recession, ''We'll feel recovery later, too.'' Houston is well positioned for recovery, he explains, because it is both a major population center and well connected by road and rail with the Midwest and West.
Leach welcomes the idea of competing ports, such as Galveston and Freeport, building deepwater facilities for crude oil supertankers ''if industry wants and needs them.'' But he doubts that the superports will come, because ''the volume of crude imports is down and the projection is that it will probably continue to diminish.'' The fact that Louisiana's offshore ''LOOP'' oil terminal is operating below capacity supports this view.
Unlike smaller Texas ports, Houston is not counting on a possible surge in oil, coal, or grain tonnage. Instead, Houston is built around facilities able to handle a full range of cargoes.
The port's tonnage performance would be worse without the increased steel and auto imports, which have offset some of the decline in grain and oil movements. One result is that Leach is concerned by US steel and auto industry attempts to curb imports. He warns that any new American trade barriers could trigger retaliation, ''causing economic activity to slow down both in America and worldwide.''
Houston's answer is to shop for more port business. So 18 Japanese businessmen touring the port recently got VIP treatment and detailed answers to their questions. The Japanese asked about labor relations at the port, specific cargo handling facilities, and access to major US markets. Their hosts spelled out the port's advantages, hoping to sign up more business with Japan, which has been Houston's leading trading partner for the past 20 years.