An appetite for international goods in the U.S. is contributing to booming business for the Port of Houston and the 12 other deep-water ports in Texas, a trend reflected by record income for the Port of Galveston.
Unlike most other Texas ports, however, Galveston's record $22 million in total revenues for calendar 2006 was credited to cruise ship operations at its recently refurbished cruise terminals, Port Director Steven Cernak said.
Although cruise ship operations are helping reverse nearly two decades of decline that left port facilities in a poor state of repair, international imports played a role and are expected to eventually drive the recovery, port officials said.
A $38,000 audit by the Houston accounting firm Null Lairson — made public Monday at a meeting of the Galveston Wharves Board, which oversees the port — showed the port earned $21.96 million in revenues and $4.54 million in net income, the largest such figures recorded since the city took over operation in 1941, Cernak said.
Board Chairman Benny Holland said he expects the growth to continue and predicted a 25 percent increase in port-related jobs over the next three to five years.
A boom likely to continue
Galveston and the other 12 deep-water ports in Texas are growing at 10 percent per year, a rate that will accelerate when widening of the Panama Canal is completed, said R. Bowen Loftin, vice president and chief operating officer of Texas A&M Galveston.
Holland and Loftin agreed that Galveston and other Gulf Coast ports are benefiting from a decline in U.S. manufacturing that has led to an increase in U.S. imports. Shippers are turning more and more to Gulf Coast ports because West Coast and East Coast ports are overcrowded and have no plans for major expansion, Loftin said.
Freighters from Asia, the source of most U.S. imports, often line up outside West Coast ports, Loftin said. "Time is money, so ships don't want to wait too many days," he said.
Ships too large to navigate the Panama Canal sometimes take the long route through the Suez Canal in Egypt to avoid the West Coast traffic jam, he said.
The increasing U.S. thirst for imports is reflected in the demand for graduates from Texas A&M University at Galveston's Maritime Academy.
Loftin said the the academy could find jobs for three times the 70 merchant marine officers it graduates a year, most stepping into $65,000 per year jobs.
Taking advantage of a trend
Business for the ports of Galveston and Houston could double in the next decade if the plan to widen the Panama Canal is completed on time and an agreement by the ports to open a new containerized facility on Pelican Island, next to the Port of Galveston, is realized at about the same time, Loftin said.
"It's got the makings of something very, very big," Cernak said.
Galveston also is astride the Intercoastal Waterway, but until the Pelican Island facility is built it will be unable to take advantage of increased shipping on the artery because it lacks cranes needed to unload containerized goods, Loftin said.
Holland said the port needs at least $500 million in repairs. Unlike most ports, Galveston has no taxing authority and relies on revenues for expansion.
By HARVEY RICE
Copyright 2007 Houston Chronicle