All the Gold in the World

Posted By: Tom Marian Port Bureau News, Port Watch,

The din of Independence Day fireworks has already been overtaken by the dog days of summer.  The various celebrations commemorating our nation’s quest for liberty and self-rule are not completely unique to America. In ancient Greece, the Athenians resisted Sparta’s efforts to subjugate the Peloponnesian peninsula; native Cubans fought valiantly to cast off the yoke of Spanish rule prior to the Spanish-American War; and the Republic of Ragusa adopted the motto, “Liberty is not sold for all the gold in the world” after Venice was forced to yield all its claims to Dalmatia in 1358.

Ragusa’s domain, encompassing the Dalmatian coast, was the maritime gateway for the flow of goods to and from the Adriatic Sea. Caravans ladened with precious spices and other valuable merchandise hailing from the Ottoman Empire relied upon Ragusa’s merchants to trade with the Republic of Florence. By the late 1400s, Ragusa had displaced Venice as the region’s premiere maritime player and enjoyed the economic prosperity associated with that role.

As the United States’ premiere maritime state, Texas ended the first half of 2023 a tad behind 2022 for both bluewater and brownwater vessel activity. This was somewhat expected given the hyped pitch of trade in early 2022 following the COVID quarantine trade malaise. Nevertheless, there are signs activity on the waterfront may be tempering for a few of the energy-centric ports.

Texas City ended the second quarter of the year on a high note with a robust 22% jump in monthly arrivals. The impetus for the stellar June was chemicals as 52% more of these vessels called upon the railroad port. Conversely, the monthly tanker count plunged 36% and remained off by 25% for the year. Overall, Texas City’s 2023 arrival numbers are down by 10% for the year, reflecting a dampening demand for energy exports. Nevertheless, on the international trade front, the demand for chemical components appears to be guardedly positive.

The nearby port of Freeport is a testament to the relative staying power of chemical exports. While tanker and LNG arrivals are off by 16% and 15% respectively, chemical tanker numbers lag on a year-to-date basis by a mere 2%. Interestingly, Freeport’s monthly arrival numbers slid by 1% even though tankers and chemicals were up by 22% and 21% respectively. Unfortunately, the 23% decline in LPG vessels and 5% fewer LNG arrivals more than offset the monthly gains posted by tankers and vessels loaded with chemicals. Admittedly, Freeport’s second quarter was far superior to the year’s first quarter. Alas, the poor first quartile continues to drag the port’s year-to-date performance 10% into the red.

Situated between these two ports, lies Galveston – the year’s bright spot – thus far. Galveston weathered a very lackluster second quarter. It was 16% below that of the first 3 months of the year, with a 13% year-over-year gain. Intuitively, as a cruise ship port, one would assume that the post-COVID return of cruising was primarily responsible for Galveston’s positive performance. That said, the “lay-berthing” of chemical tankers has added handsomely to the port’s tally with an impressive 34% year-to-date increase.

In the land of porous borders, Brownsville has quietly regained trade traction after a rather moribund first quarter. The port ended the first half of the year 16% ahead of last year after logging a 4% monthly gain. Bulkers were primarily responsible for the year-over-year gains given that this vessel category is up 30% for the year. Oceangoing barges also added to the bounty with 71% more of these vessels calling upon Brownsville than in the previous year.

Traipsing to the opposite end of Texas, Sabine persistently piles up the gains. June’s 3% uptick contributed to the port outpacing the first half of last year by 6%. The only soft spot in the BTU realm was tankers; there were 9% fewer arrivals. All else was rosy. Chemical tankers registered a 31% gain for the year; LPG arrivals outpaced last year by 11%; and LNG traffic was up 10% year-over-year.

The Port of Corpus Christi, on the other hand, could not claim as many positives as Sabine. It currently trails last year’s arrival count by 1% despite June’s sanguine numbers (i.e., 8% rise). Like Sabine, chemical tankers have been in the limelight for 2023 given that 21% more have plied its waterways. All other vessel categories – with the exception of general cargo – have been left in the wake of 2022’s figures. It is somewhat telling that LNG and LPG arrivals have waned by 10% and 3% respectively; however, that may simply be a seasonal flattening when one takes into consideration that tanker arrivals have slipped by a paltry 1%.

The pieces of the Texas port puzzle become clearer when the waterway that serves the country’s fourth largest city and second-fastest growing county is assessed. Houston finished the first six months of 2023 2% below that of the first half of 2022 following a 7% monthly arrival dip in June. Historically, the onset of the hurricane season heralds the start of declining vessel activity which reaches its nadir in August. Hence, there should be some tepidity in the arrival numbers at the half-year mark.

Bulk and general cargo numbers are down significantly over the last year – 17% and 14% respectively. This lends some credence to a pause in major projects that rely upon this mode of transportation. While container vessel arrivals are up across the board, the TEU count is off by 2% for the year. A further dissection of those numbers reveals that full export TEUs have climbed 14% but full import TEUs have faltered by 7%. Thus, a bit of steam has abated on the consumption front.  Robust export container numbers are consistent with ever-climbing chemical tanker counts which are 9% higher than last year. The same holds true for LPG traffic - to the tune of 6%. Yet, tanker traffic wallows 6% lower vis-à-vis 2022’s statistics and ocean-going tows have plummeted 36% year-to-date.

Relatively speaking, a 2% decline for the nation’s busiest port is nothing to lose sleep over given the trade state of ports on the west and east coasts. Historically, the picture is far brighter than what the Republic of Ragusa faced when Portuguese sailors explored the Americas – and beyond - and capitalized on the bounty of raw materials that European markets hungered for. Thus, Ragusa’s standard featuring Saint Blaise was found on far fewer merchant ships by the 1600s. Ultimately, its command of the Dalmatian coast came to an end when it was incapable of defending itself against Napoleon’s armies. Ironically, it had lost its liberty for failing to invest its gold wisely.

About the Author

Tom Marian is the General Counsel of Buffalo Marine Service, Inc. He also serves on the Executive Committee of the Port Bureau Board of Directors.