Tanker delay costs rise in Houston Ship Channel

OREANDA-NEWS. September 18, 2015.  The growth of the Texas petrochemical industry is leading to costly wait times for petrochemical tankers looking to load and unload at the Houston Ship Channel, according to a study funded by the state of Texas.

Of the 19,000 vessel movements the Houston Ship Channel's ship pilots logged last year, almost 1,400 of them were "nonproductive moves," that is a movement where a vessel is moved simply to get out of the way of other traffic and not to load or unload. While this number has remained steady over the past several years, it is expected to grow significantly over the next few years.

Nonproductive moves are not unique to Houston, but since the Houston Ship Channel is a long waterway without areas for deep drafting vessel to pull over and wait, this means many vessels have to go back out to sea to anchor and wait for another terminal accept them.

The cost of that downtime, known as demurrage, is difficult to quantify, but It could range into the hundreds of millions of dollars per year for port customers, according to Jim Kruse, head of Texas A&M's Center for Ports & Waterways, which studied the issue.

With channel traffic growing by 1 to 2pc each year, that means the rising costs of delay are hitting the petrochemical tanker industry, which makes up about 40pc of all the channel's traffic, particularly hard.

Solutions to cutting back on nonproductive moves and lengthy wait times will have to be logistical, Kruse said. The infrastructure for the channel is well established and unlikely to change, so a better sharing of information among tankers, railcars, terminals, and others would likely be the best method of reducing delays.

One possibility is establishing a harbormaster responsible for actively managing berth assignments, an idea with both strong support and strong opposition. Another idea would be forming a management district similar to the Houston Ship Channel Security District to manage berths.

nsl/tdf

. A move can be thought of as simply moving a vessel from point A to point B. The number of vessels is increasing 1 to 2pc every year in the channel and causing an increase in nonproductive moves — a move that is essentially getting out of the way and waiting. There were more than 1,400 nonproductive moves logged the same year.