Monday, August 28, 2017

There's gonna be a few more delays for resin outta Houston

Also in this week's C&EN, an interesting look by Alexander H. Tullo on shipping logistics for Gulf Coast polyethylene, with this excerpt about the Houston Ship Channel: 
...With the buildup at hand, chemical company logistics managers are concerned about whether the region’s port, rail, and truck transportation systems will be able to handle the flood of resins that will leave the country through the Gulf Coast. They are working on strategies to use local ports as effectively as they can—and on contingency plans to circumvent the entire region if they need to.... 
...The waters around Barbours Cut and Bayport, the ship channel’s two container terminals, have been dredged down to a depth of 14 meters. The upgrades will allow the port to bring in the larger ships that have begun to transit the new lane of the Panama Canal, which opened last year. Before the expansion, the canal could handle container ships carrying 4,500 containers. Now, ships laden with as many as 13,000 can make it through. With its improvements, Houston will handle ships bearing 9,000 containers, Diehl says. 
The bigger ships will spur the port of Houston’s growth, Diehl argues. The boost in size of the ships will decrease the cost of shipping each box, improving the competitiveness of Houston and East Coast ports against ports on the West Coast. 
Additionally, Diehl says, Houston is strategically suited to take advantage of the larger ships. Many U.S. ports suffer from a container imbalance because they import more than they export. In Los Angeles, which is an arrival point for Chinese imports, boxes go back to China empty, driving up the cost of shipping because half of the shipping and handling is wasted on unused boxes. 
Houston, in contrast, is a large export port because of all the local industry. A good balance between imports and exports helps containers go in and out fully loaded and keeps shipping costs relatively low. Diehl sees a virtuous cycle. As plastics exports ramp up, shipping companies will increasingly use the port because they know they will be able to fill the boxes for the return trip from Houston...
The increased traffic will stress each mode of transportation differently: The rail system’s long-standing infrastructure is difficult to expand, trucking faces a limited supply of drivers, and marine shipping capacity has to grow as fast as the chemical exports.
First, best wishes to all the blog's readers in Houston. Here's hoping that the weather will be kind and that you all are relatively unaffected and will dry out soon.

I find the logistics of getting product to market to be pretty interesting, especially how it's really a set of guesses as to how all of this infrastructure will be able to adapt to larger volumes in the coming years. Here's hoping that Harvey didn't do any permanent damage to the expansion of the Ship Channel. 

1 comment:

  1. FYI. If you use a lot of acetonitrile, I'd start buying now. Suppliers might have to declare force majeure for some time. Inventory could get scarce and prices will spike unless you're on a supply contract (and I don't mean Fisher or VWR).