Shipping and Logistics

Not Smooth Sailing for the Port of Houston

August 31, 2017

All facilities at the Port of Houston are still closed as of Thursday, Aug. 31, following the devastation of Hurricane Harvey. The Coast Guard has cleared ports in the area for restricted vessel access for ships waiting offshore. Drafts cannot exceed 33 feet at the ports of Texas City, Galveston and Freeport, and no more than 37 feet at the Port of Houston. Only daylight access is permitted. Some carriers are diverting cargo to the Port of New Orleans.

Severe currents and hazards have closed the Upper Houston Ship Channel until conditions improve.

A visual inspection of the port area by a steel trader revealed the following as of Aug. 30:

City Docks: Only open for tenants. The North side was flooded, but water drained off and as far as known the docks should be dry again.
Greensport: Closed, and as reported flooded still in some areas
Industrial Terminal: Still fully flooded
Jacinto Port: Closed and gate entrance blocked by containers – condition unknown
Inbesa (Contanda) Terminal: As far as visible, dry
Texas Terminal: Open, but condition unknown
Care Terminal: As reported, was not flooded.
Manchester Terminal/Woodhouse Terminal: Unknown
Various pipe yards/storage areas: Partly flooded, but drainage in process

Dock flooding in Houston

BSNF railroad crews are working to restore rail service and facility operations in the Houston area and southeastern Texas. BNSF reports rail yards at Silsbee, Galveston and Beaumont remain closed due to flooding. South Yard, Dayton Yard and Casey Yard have reopened with limited operations. The Houston (Pearland) Intermodal Facility is accessible through the automated gate system (AGS) and train loading and unloading operations have resumed. The Houston (Pearland) Automotive Facility is also now open with unloading operations starting back up today. BSNF expects road closures in the area may continue to cause problems accessing the re-opened facilities. Day shift operations at the Port Terminal Railroad Association (PTRA) yards are expected to resume tomorrow.

BSNF flooding

A service center in the Houston area reports minimal loss of product at their facility, losing only a few sheets of steel and pup coils. Two of its CTL machines are back in service and the slitter was expected to be running today. Deliveries are being rescheduled. Operations are being staffed by only a quarter of the employees.

“We had about one-quarter of our employees show up yesterday and about one-half today,” said the service center rep. “We are spending time ripping up carpet and calling customers to reschedule deliveries. A lot of local customers are not open yet, or are in the same boat as we are.”

Another service center in the area reported their facility undamaged and running. “We have heard of some inventory damage at the docks, but too early to know how much is in jeopardy.”

A Texas steel distributor is working with service centers to keep plants running and assist customers. “Texas spirit in action. We are all pulling together to help the relief efforts in any way possible.”

“I have learned of a few locations that are dry, though have seen pictures of acres and acres of line pipe under water,” added the distributor. “Economic impact just in the steel industry will be catastrophic. My company alone has over 8M pounds of coil on the ground in Houston.”

The economic impact of the storm could cut 0.3 to 1.2 percentage points off the 3 percent U.S. economic growth expected in the third quarter, says forecasting firm Macroeconomic Advisers.

The hurricane may be a short-term boon to the auto industry, however, as consumers replace flooded vehicles in the coming months.