Houston port haulers facing 5 to 10-year transport infrastructure gap
Transport congestion is forecast to worsen around the port, spurring new logistics solutions in the interim before government infrastructure is built, Scott Campbell, Associate Director of Customer Fulfilment at Lyondellbasell, said at the Petrochemical Supply Chain and Export Logistics 2016 conference in December.
The growth of the Houston petrochemicals industry will bring 400 to 600 extra trucks per day to the roads around the Port of Houston, according to a 2016 study by the Logistics and Transportation Committee of the East Harris County Manufacturers Association (EHCMA), led by Campbell.
"That's going to stress an already stressed infrastructure", Campbell told conference attendees.
EHCMA Logistics and Transportation Committee members met with the Port of Houston, local mayors and the Economic Alliance to identify infrastructure improvements which include the implementation of Texas Port Transportation Corridors and extending the hours of operation at the Port of Houston container terminals.
The main problem, according to Campbell, is that the public sector work to a different timeline to industry.
"Their timelines are five to ten years out," he said.
"If you look at the expansion of the plant volumes that start up over the next 12 months... there's a lot of congestion in and around the port of Houston... You're going to have a period where you're going to stress an already stressed infrastructure and continue to stress that... before you get any relief."
Port of Houston container commodities exports (2015)
Source: Port of Houston Authority (PHA) Market Development, Journal of Commerce/ Piers data.
Lyondellbasell, one of the world's largest plastics, chemical and refining companies, is in the process of building two major plants in the Houston area.
The company has selected its La Porte, Texas, manufacturing complex as the site for a new High Density Polyethylene (HDPE) Plant. The plant will be the first commercial plant to employ LyondellBasell's new proprietary Hyperzone PE technology and will have an annual capacity of 1.1 billion pounds (500,000 metric tons).
Plant construction is scheduled to begin in early 2017 with start-up planned for 2019. The company is also building the world's largest propylene oxide (PO) and tertiary butyl alcohol (TBA) plant in the Houston area, due for completion late 2019 or early 2020. Combined investment in the two facilities is $2.8 billion-$3 billion, according to Campbell.
Transportation Committee members are looking into a range of logistics solutions to ease congestion until more infrastructure can be built.
"You have to challenge yourself to look at other technologies and what other parts of the world are doing, for example a heavy weight corridor which allows you to become more efficient and reduce the overall number of trucks on the road,” Campbell said.
“Or a port navigation system that allows the Port of Houston to move vessels through the port on a more efficient basis. For a period of time we're going to have to find ways to deal with the infrastructure as it is today."
Campbell is optimistic that a new heavy haul corridor proposed by the Port of Houston will pass the next Texas legislature.
The Port of Houston Authority (POHA) said last year that it was considering the use of fully automated, electric-powered transporters that would move containers to and from port terminals along elevated guideways.
POHA and Freight Shuttle International (FSI), designer of the Freight Shuttle System, have signed a memorandum of understanding to evaluate options for deploying the system. Benefits include avoidance of delays caused by traffic and regulations.
Logistics will be one of the main concerns during the growth period of the North American petrochemical industry, Debra van Holst, Director of Global Logistics at Canada-based Nova Chemicals, told the conference.
NOVA Chemicals Corporation, a leading supplier of polyethylene in the Americas, completed in December its new world-scale linear low density polyethylene (LLDPE) gas phase reactor at Joffre, Alberta.
The facility is the first new LLDPE reactor in the Americas in over a decade and increases Nova Chemical's annual LLDPE production capacity by around 1 billion pounds.
"With our new growth project the majority of the product will go by rail, van Holst said.
“We'll target as much domestically as we can and the remainder of that will go out to export, typically through multiple alternate supply chain channels," she said.
Industry partners must work together to achieve the best supply chains during the growth phase, van Holst added.
"It's all about understanding what your options are. Understanding what your supply chains can be…running through each one of those strategies and understanding your risk mitigation strategies is really key,” she said.
By Zara Maung