U.S. Ports: Sizing Up The Logistics Industry

Trade wars may come and go, but U.S. ports are in it for the long haul: expanding their services and dredging harbors to make way for ships carrying gigantic containers.


https://businessfacilities.com/2019/10/u-s-ports-sizing-up-the-logistics-industry/
Trade wars may come and go, but U.S. ports are in it for the long haul: expanding their services and dredging harbors to make way for ships carrying gigantic containers.
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U.S. Ports: Sizing Up The Logistics Industry

Trade wars may come and go, but U.S. ports are in it for the long haul: expanding their services and dredging harbors to make way for ships carrying gigantic containers.

U.S. Ports: Sizing Up The Logistics Industry

By Mary Lynn Beaver
From the September/October 2019 Issue

From sea to shining sea, record growth is taking place in America’s $1.64-trillion logistics and transportation industry. Strong economic growth fueled an 11.4-percent increase in transportation and logistics services last year, according to the Council of Supply Chain Management Professionals in its annual State of Logistics Report released in June.

U.S. ports
The Port of Savannah is the fastest-growing port in the U.S., with a $973-million expansion project nearing completion, including dredging of the shipping channel and its entrance to accommodate Post-Panamax container vessels.

Supersize is in. Ports are expanding to welcome gigantic containers that can now move cargo cheaper and more quickly through the expanded Panama Canal. Record-breaking growth is taking place, port authorities say, despite the market uncertainty that accompanies tariffs and international trade negotiations.

The exploding e-commerce sector is creating demand for mega-sized warehouses of 1 million square feet or more near intermodal centers while spawning new industries and innovations in recycling and inventory management.

Blockchain technologies and software startups are on the cusp of improving data transparency, data sharing and communications technology—creating even greater efficiencies for the industry.

It seems everywhere you look, today’s logistics are finding new and better ways to move goods to market faster, cheaper and more efficiently. Whether the economy cools or heats up, everyone agrees innovation in this intensely competitive industry is on the rise. Here’s our annual look at some of the hottest locations in logistics and distribution.

ON THE MOVE IN GEORGIA

In Georgia, it’s smooth sailing with global industries continuing to look at the Peach State’s maritime assets as their gateway to expansion.

Georgia’s deepwater ports in Savannah and Brunswick, together with inland barge operations in Bainbridge and Columbus, are catalysts for opportunity, says Griff Lynch, Executive Director of the Georgia Ports Authority (GPA).

The ports’ latest fiscal results bear that out. “We just wrapped up our fiscal year,” Lynch said. “We grew 7.5 percent in total cargo with 4.5 million 20-foot equivalent units,” the standard measure for cargo containers.

The solid growth is due to the state’s strategic foresight in continually investing in cargo capacity, Lynch said, whether by land or sea.

Indeed, the Port of Savannah is the fastest growing port in the U.S. and continues to grow. The massive $973-million Savannah Harbor Expansion Project began in 2015 and is nearing completion. Work to deepen the 20-mile entrance to the channel to 49 feet at low tide has been completed. Dredging to deepen the inner harbor to 47 feet at low tide begins this fall with completion expected by the end of 2020. The entire project is scheduled to be completed by January 2022.

The U.S. Army Corps of Engineers is overseeing the 75 percent federally funded project. The state of Georgia is contributing 25 percent of the cost. When finished, Army Corps studies predict container volume passing through the federally-owned channel will rise to 6.5 million 20-foot cargo containers by 2030, with an estimated annual transportation cost savings of $327 million a year.

“The Savannah Harbor Expansion Project is the single largest dredging project for ports with one of the highest paybacks,” Lynch said. “For every dollar the federal government spends, $7.30 is going back into the economy.”

Deepening the port allows larger shipping vessels to come through at low tide, lowering costs per container and making American-made goods more competitive overseas. With more cargo coming through, the GPA embarked on a long-term strategy to extend the Port of Savannah’s reach through rail, Lynch said.

Rail growth, he noted, is outpacing everything else with intermodal cargo continuing to trend upward, increasing 10.5 percent in July alone. Over the past three years, rail volume at the Port of Savannah has grown by 35.4 percent, completing more than 507,000 intermodal lifts in the fiscal year that ended in June, he added.

The Mason Mega Rail project now underway will double rail lift capacity at Garden City Terminal to 1 million containers per year by the end of 2020, Lynch said, with capacity for even further growth. “It’s opening up new markets for Georgia across what we call the Mid-American Arc—broadening our reach well beyond the traditional hubs of Atlanta, Memphis or Charlotte.”

Connecting to the middle of the country is a new battleground for ports. “We are the first port of discharge for many goods coming from Asia through the Panama Canal. That works well for rail cargo, too. By extending even further, our customers can save time and money through port and on rail.”

Growth at the ports creates an economic ripple effect that is already taking hold across the state, he added.

“When you see an explosion of cargo at the port, it has to go somewhere. We have 67.5 million square feet of warehouse in the Savannah market alone.” He pointed to recent announcements by Gov. Brian Kemp of new and expanding fulfillment centers from the likes of Amazon, Wayfair and others bringing in new jobs and investment to the state.

“We have great leadership in the state at all levels and across all agencies. We are in lock step together to make sure we have the right infrastructure in place to support distribution and manufacturing facilities. At the end of the day, we are all making sure we stay ahead of the growth curve. That’s our strategy going forward.”

ARKANSAS: LOGISTICS POWERHOUSE

From agriculture to merchandising, technology is pushing the boundaries on how the world does business. Given its central location, it’s no surprise that transportation and logistics figure prominently in the Arkansas economy.

U.S. ports
Several of the top employers in Arkansas are major logistics players, including USA Truck, which has its headquarters in Van Buren, AR.

Arkansas is home to 10 major trucking companies and 80 distribution centers. Of the top 25 largest employers in Arkansas, 16 percent of them are in logistics. Approximately 55,000 Arkansans are employed in distribution centers and trucking firms. Some of the largest employers in the state are in the industry, including J.B. Hunt, USA Truck, FedEx Corporation and Union Pacific Railroad.

The story these days, says Mike Preston, Arkansas Department of Commerce Secretary, is technology. “We’re seeing a lot of growth in the technology aspects of supply chain. Technology has infiltrated every industry, and logistics is no different. It’s the reason why Gov. Asa Hutchinson partnered with IBM to host a blockchain technology summit (BC4AR) last year. The summit attracted dozens of business, government, agriculture and education leaders from across the state.”

Fortune 500 companies such as Walmart, Tyson Foods and J.B. Hunt are investing heavily in technology, and spurring innovative companies to come hither. They may not be household names yet, but these companies and others are playing a pivotal role in supply chain management.

Software company SupplyPike recently announced it is moving to Fayetteville, AR, creating nearly 180 new jobs within the next five years. The company’s digital platform for consumer-packaged goods is designed to help companies increase sales, manage orders and monitor shipments. SupplyPike is making its move to Arkansas from California, where it began as the research-and-development arm of CaseStack, a cloud-based equity company.

Plug and Play is opening a supply chain and logistics accelerator program in Northwest Arkansas. “This new program gained the support of Walmart, Tyson Foods and J.B. Hunt, as well as the University of Arkansas, to bring innovative start-up companies from around the world to Arkansas,” Preston said. Plug and Play will work collaboratively with participants from the region to focus on supply chain optimization, blockchain, last-mile delivery, warehouse automation, IoT sensors, predictive analytics and machine learning.

That’s not all. Transplace, a third-party provider of transportation management services and logistics technology, is building a new office in Northwest Arkansas. The company plans to add hundreds of new employees in the next several years at the facility, doubling its workforce. “What makes Transplace a great fit for Northwest Arkansas is that it combines one of our state’s longtime stable industries (logistics) with our growing technology sector,” Preston said. “And, its proximity to the University of Arkansas means that it has a steady supply of future workers.”

And there’s Fuel, a 16-week enterprise growth engine that began earlier this year and matches early-stage supply chain-focused startups with key enterprise partners. RevUnit and Startup Junkie are behind the accelerator which is designed to “level up” supply chain startups to the point where they are prepared to meet with buyers, run successful pilot programs and work with large clients.

“We’ve always known that logistics plays a vital role in the Arkansas economy. With our continued emphasis on technology and innovation, that will continue,” Preston said.

THE SKY’S THE LIMIT IN KENTUCKY

Change is in the Kentucky air.

With a new Amazon air cargo hub coming to the Cincinnati/Northern Kentucky International Airport (CVG), and a multi-year expansion at the UPS Centennial Ground hub just completed at Louisville International Airport (SDF), this manufacturing heavy state’s core logistics capabilities are taking off.

U.S. ports
UPS 757 unloads at the Worldport Dock at Louisville Muhammed Ali International Airport (SDF).

As one of Kentucky’s target industries, logistics and distribution employ nearly 68,000 people at 532 facilities. That represents an increase of more than 130 facilities and 18,000 jobs since December 2014.

“Things are changing technologically. In the world of e-commerce, fast is never fast enough. For some, two days may be too late,” said Jack Mazurak, communications director for the Kentucky Cabinet for Economic Development.

Skyrocketing growth in e-commerce is driving an explosion in air and ground transportation needs, he says. “That’s why you see Amazon putting its air hub in Kentucky, DHL expanding and UPS expanding.”

In May, Amazon broke ground for its inaugural $1.5 billion air operation at CVG. Company officials say the 3-million-square-foot air hub, which is scheduled to open in 2021, will add up to 2,700 new jobs. Amazon already employs more than 10,000 people at 11 fulfillment centers in the state.

Strategic foresight contributed to the site selection, Mazurak said. “The airport board and CEO Candace McGraw showed tremendous foresight in acquiring the land when it was available years ago. They recognized that if you don’t have a growth strategy, you may be left behind.”

While Amazon was breaking ground on its air hub, UPS was completing a multi-year expansion of its Centennial Ground hub at the Louisville Muhammad Ali International Airport (SDF).

The $310 million UPS expansion added more than 838,000 square feet to accommodate increasing demand. “The UPS expansion is turning over 130 aircraft per day at USP Worldport and is doubling sorting capabilities at the Centennial Ground hub to 85,000 packages an hour,” Mazurak said.

Meanwhile, DHL Express, which ships more than 250,000 packages a day worldwide, recently completed a $108 million expansion at CVG.

“We are quickly becoming, if not already, the no. 1 air cargo state by weight annually,” Mazurak added. “Even before Amazon announced its air cargo plans in 2017, Kentucky had more, and still does, Amazon employees than any other state, except its home state of Washington.”

The e-commerce explosion is feeding another industry, too: recycling. “That story alone is indicative of market change that’s propelling the logistics industry,” Mazurak noted.

In as far west in Kentucky as you can get, Wickliffe, a tiny town of 670 sits at the confluence of the Mississippi and Ohio rivers. The town’s paper mill once employed hundreds, supplying coated paper for magazines and other print media. But the market shifted and the plant eventually closed in 2016.

E-commerce brought it back to life.

A Chinese-owned paper company purchased it in August 2018 and invested $150 million in renovations and upgrades. The mill opened earlier this year and produced its first roll of bleached, hardwood pulp on May 29. The facility now employs more than 200 people and has an annual capacity of 300,000 tons of pulp and brown paper—specifically for boxes and void fill—products in tremendous demand thanks to e-commerce.

But the pulp thickens.

Amid national-level trade tensions, China earlier this year stopped taking recycling products from the U.S. For the Wickliffe mill, that was opportunity knocking as the per-ton price of baled cardboard and paper recycling plummeted.

“Cities and towns across the country are choking on the amount of paper recycling,” Mazurak explained. “If you own a paper mill, chances are you can’t get enough logs to meet demand. With the national unemployment rate so low, many industries—including logging—can’t get all the employees they need.”

In August, the governor and the mill’s new owner, Phoenix Paper, announced a $200 million expansion at the Ballard County mill. The company plans to build a separate paper-and-cardboard recycling facility to feed pulp into the mill.

The recycling facility will add jobs, furthering Phoenix Paper’s 500-employee goal. And it will take advantage of the strategic location, given the ability to truck in recycling from across West Kentucky and nearby states if need be, and barge out finished paper and pulp roles on the nation’s two largest rivers.

“With one investment, we have a business that’s growing and thriving because of the internet,” Mazurak said. “With a second investment, it will be positioned to scale between two raw materials based on availability and price. The huge demand for packaging is a real example of businesses proactively responding to a shifting economy.”

ILLINOIS: CROSSROADS OF COMMERCE

Illinois has long been known for its logistics network. With seven Class 1 railroads, 12 major interstates, five international airports and the third largest intermodal port in the world, the state is an economic gateway to global markets.

Illinois Waterway
The 336-mile-long Illinois Waterway, a system of rivers, lakes and canals from the mouth of the Calumet River to the mouth of the Illinois River (above), provides a shipping connection from the Great Lakes to the Gulf of Mexico.

“Manufacturing, food production, pharmaceuticals and a host of other industries rely on a great logistics network. Illinois has that in spades,” said Erin Guthrie, Acting Director of the Illinois Department of Commerce and Economic Opportunity.

The state has the third largest intermodal system in the world with 25 percent of all U.S. freight passing through the Chicago railyards. The CenterPoint Intermodal near Joliet in Will County is home to the largest master-planned inland port in North America. More than 3 million containers pass through the Will County inland port each year. Statewide, 23 intermodal terminals move more than 105 million tons of freight annually, valued at $1.3 trillion.

Logistics strengthens the Illinois manufacturing and industrial network of pharmaceuticals, life sciences, food and automotive production, contributing to the state’s $764-billion economy. Indeed, the Land of Lincoln is the fifth largest GDP in the nation and the 19th largest economy in the world.

“Businesses are willing to build here. They’re willing to invest here,” Guthrie said. “There are currently three projects with 1 million square feet or more of warehouse capacity being built in the state right now. When you see a million square feet being built on spec, you know you’re doing something right,” she added.

She attributes the growth in distribution to the state’s wealth of infrastructure assets as well as the presence of a talented workforce and Gov. JB Pritzker’s commitment to creating a business-friendly environment in the state.

The proposed South Suburban Airport in the far south suburban area of Chicago near Peotone, IL in Will County is one example. In June, Pritzker included $162 million in the state’s 2020 budget to build road access to the proposed airport, including a new interchange at I-57, local road upgrades and utility connections.

“The state recognizes the value of having a passenger and air cargo airport closer to the intermodal hubs without relying on getting freight in and out of O’Hare,” Guthrie said.

Since 2000, the Illinois Department of Transportation has spent more than $100 million to purchase 4,500 acres for the proposed airport. Land acquisition and planning for the airport is now 90 percent complete as the state works with the Federal Aviation Administration to move the project forward.

The state’s strategic location and abundance of assets also contributes to its ability to attract foreign direct investment. The state is home to nearly 2,000 international companies—including Novartis, Ricoh, Bombardier, Siemens and BP—and a magnet for international employers looking to expand in the North American market.

As a result, Illinois is the number one exporting state in the Midwest and ranks sixth in the United States. Last year alone, $65 billion worth of Illinois goods were sold to 217 countries all around the world. Exports account for eight percent of Illinois’ gross state product.

When German company HARTING announced plans to spend $100 million to expand its North American operations in Elgin, Illinois, and add 250 jobs over the next five years, company officials cited the workforce and strategic location as contributing factors. “Illinois was the right fit for this new expansion due to the unrivaled workforce and strategic location,” said HARTING North America President and CEO Jon DeSouza.

In the first phase of the expansion, HARTING will invest $6 million to add a lab and showroom to the distribution center and increase the company’s injection molding and die-casting processes.

HARTING is a family-owned company founded in 1945 that manufactures products for the connector industry.

Meanwhile, the state is investing heavily in infrastructure improvements. In June, Pritzker signed into law the state’s largest capital improvement plan ever. The $45-billion Rebuild Illinois initiative is expected to upgrade aging infrastructure, update state facilities, fund education programs, expand broadband and create 540,000 jobs over the next six years, according to the governor’s press office.

Rebuild Illinois allocates $33.2 billion for transportation projects statewide and dedicates $420 million to expand and update broadband to the health, education and economic development sectors across the state.

“Rebuild Illinois will improve our infrastructure at a historic scale, and it lays the foundation for economic progress and educational success for decades to come,” the governor said.

Guthrie agrees.

“Investing in roads, rail, commuter rail, reducing freight congestion—it makes logistics even better in Illinois.”

PORT OF BALTIMORE: SUPERSIZED

If America is the land of opportunity, the Port of Baltimore is the beacon for diversity in maritime trade.

The inspiration for Francis Scott Key’s Star Spangled Banner from nearby Fort McHenry, the port is a major shipping hub for automobiles, trucks, heavy-duty farm and construction equipment, forestry products as well as home to major cruise lines.

Maryland
Ports America Chesapeake employees work a tandem lift (above) to transfer a Royal Smit Transformers B.V. for rail service. Dundalk Marine Terminal is equipped with cranes that can handle all types of breakbulk cargo.

The port’s public and private terminals combined handled a record 43 million tons of international cargo worth $59.7 billion in 2018, breaking a 44-year record. The port now ranks 11th in the nation for cargo transport, ninth for cargo value and has generated nearly 16,000 jobs. The state-owned port terminals handled a record 10.9 million tons of general cargo in 2018, surpassing 10 million tons for the third consecutive year, according to the Maryland Port Administration.

“We’re a very diverse port. Most ports concentrate a large percentage of their business on containers and container trade. About 20 years ago, we developed a long-term strategy for diversifying cargo, concentrating efforts on cars, light trucks, ro-ro, forest products, breakbulk and containers,” said Richard Scher, Director of Communications for the Port of Baltimore, Maryland Port Administration (MPA).

The strategy paid off.

“We are the No. 1 port in the U.S. for ro-ro and we’re in the top two for forest products,” Scher said.

And roll on, roll off they do. For the eighth consecutive year, the Port of Baltimore handled more cars and light trucks than any other port in the United States, with 850,000 cars and light trucks coming through the port last year alone.

The port’s container business is booming as well.

With the widening of the Panama Canal in 2016, “containers are just going gangbusters. We hit a record last year, breaking the 1 million TEU (20-foot equivalent unit) mark. And we’re tracking ahead of that pace now,” Scher said.

Baltimore is one of a few East Coast ports that can handle the supersized ships coming through the canal, he said.

In May, the Seagirt Marine Terminal welcomed the Evergreen Triton, the largest ship ever to dock in Maryland—that’s four football fields long—carried more than 14,000 20-foot containers filled with toys, clothes, consumer electronics and other goods bound for distribution points across the country.

The Port Administration and Ports America Chesapeake, the private company that operates the Seagirt Marine Terminal through a public-private partnership with the state, have spent millions to accommodate these ocean-going hulks, dredging to the magic 50-foot depth mark and adding four massive 1,550-ton cranes to take containers off the ships.

To continue growing, the Port Administration and Ports America Chesapeake are constructing a second 50-foot-deep berth at Seagirt. The $32.7 million project gets underway later this year and is scheduled to be operational in 2021.

“It’s almost an arms race to accommodate these massive ships. We’re still ahead of the game with one of the few ports who can handle these ships. Having two 50-foot-deep berths will allow us the opportunity to handle supersized ships simultaneously,” Scher said.

With the first quarter already setting records for ro-ro, the state and private developers are looking to make room for more. A $4.6 million project at the Locust Point Marine Terminal, a former fruit pier slip, is expanding the auto import area. Meanwhile, private developer Tradepoint Atlantic is turning Sparrows Point into a $2 billion multimodal facility. Once home to Bethlehem Steel, Sparrows Point now houses warehouses and fulfillment centers for Under Armour, Amazon, Home Depot, FedEx and others as the redevelopment effort continues. In February, Volkswagen Group of America signed a lease to process 120,000 vehicles at Sparrows Point.

With growth comes a laser-like focus on ongoing physical and cyber security measures for trucks coming in and cargo going out, Scher added. The Maryland Port Administration just received a federal grant on port security to improve software, access control programs and help on the cyber security front.

“It’s an ongoing effort. We need to keep moving forward to do well. If you stay static, then you are probably going backward.”

WINNING WITH PEOPLE IN MISSISSIPPI

From deep space exploration to agribusiness to advanced manufacturing, the Magnolia State is working hard to feed, make and deliver what America needs. Just about anything anyone in America uses has a tie to a manufacturer in Mississippi, says Glenn McCullough Jr., Executive Director of the Mississippi Development Authority (MDA).

Unemployment is low, and the number of Mississippians working in non-farm jobs is at an all-time high, with more than 1.1 million employed in July, the most jobs ever recorded in the state.

“Gov. Phil Bryant is justifiably proud of our workforce and the numbers show it. He likes to say we make things in Mississippi and we’re proud of it. Nearly 13 percent of our workforce is employed in manufacturing and that number is growing,” McCullough said.

No matter the industry, the state’s multi-modal connectivity gets product to market quickly, McCullough added. Located halfway between Laredo, TX and Detroit, MI, key supply locations can be reached within a day’s drive from the Magnolia State.

Recent announcements of growth in advanced manufacturing, defense, distribution of consumer goods, shipbuilding and aerospace technology are keeping the state on the move.

In August, Medline Industries, Inc., a manufacturer and distributor of medical supplies, announced a $46 million investment to locate its distribution operations in Southaven, adding 450 new jobs to North Mississippi.

In July, NASA gave the go-ahead to the Stennis Space Center in Hancock County, Mississippi, for core stage testing of the new Space Launch System (SLS) rocket, which will carry astronauts into a new era of deep space exploration. In preparation for the series of tests next year, operators at Stennis have been upgrading the B-2 test stand at the center, NASA’s largest rocket testing center. During testing, operators will install the SLS core stage on the B-2 test stand and fire its four RS-25 engines just as if it were an actual launch.

“Most people don’t realize the path to the moon and beyond goes through Mississippi, and it’s all done at the Stennis Space Center on the coast,” McCullough said with pride.

In May, the Pentagon awarded shipbuilder VT Halter Marine in Pascagoula a $745-million contract to design and construct the Coast Guard’s next-generation heavy icebreaker.

Known as the Polar Security Cutter, it will be the U.S. Coast Guard’s first heavy icebreaker built in the last four decades. The project will create 900 jobs over the next five years and includes a $37.5 million investment by the shipbuilder to expand and modernize its Pascagoula facility. VT Halter Marine expects to deliver the Polar Security Cutter to the U.S. Coast Guard in 2024.

Employers such as Vt Halter Marine, Nissan, Toyota, Chevron, NASA, Boeing, GE, Ashley Furniture and dozens of others point to the right-to-work state’s collaborative, business friendly environment as a key differentiator. These are not just nice words in a mission statement hanging on the wall, they say, but reality.

“There seems to exist two Mississippis in the United States, the one I was told about and the one I’ve had the opportunity to become acquainted with—a land steeped in history and rich in passionate, intelligent and dependable people,” noted Parmida LED Technologies Vice President, Peyman Mahrou, when the lighting products manufacturer announced in July it was locating its latest North American distribution and e-commerce operations to Indianola.

“Economically, Mississippi is at a high point in our state’s history. We are in the most competitive region in the United States. Under Gov. Bryant’s leadership, the state is creating innovative programs with a laser-like focus on workforce development,” McCullough said. “Our innovative initiatives are connecting educational opportunities with the needs of business leaders.”

With the creation of the Mississippi Works Fund in 2016, new investments and opportunities are opening up across the state, he added. The program allocates $50 million over 10 years to the state’s community colleges for workforce training.

The state boasts several industry-driven academies that are turning out skilled labor in furniture manufacturing, diesel mechanics, shipbuilding and most recently coding for computer programming. A soon-to-debut energy academy targets students eighth grade through high school to introduce the next generation to careers and potential internships in the energy industry. “We’re looking at all opportunities,” he said.

Other programs include a state-assisted tuition scholarship program for eligible community college students, on-site training programs at major employers and ongoing reforms in the state educational system. All are designed to ensure the state is turning out the kind of people with the skillsets that businesses need, McCullough said.

“We play as one team—industry leaders, the MDA, utilities, community colleges, our congressional delegation, the governor—we all work together. We get up every day with a passion to even better our game so companies can achieve their goals in our state. We win with people.”

LEADING THE WAY IN THE LONE STAR STATE

By just about any measure, Texas stands out as the nation’s leader for logistics.

For the 17th year in a row, Texas topped the nation as the number one exporting state. For the 15th consecutive year, Texas was named the Best State for Business by Chief Executive Magazine. Texas also ranks number one in capital investments, serves as the leading destination for companies relocating from other states and was most recently named the Best State for Women Entrepreneurs. If Texas were a nation, it would rank as the 10th largest economy in the world.

Growth in logistics is occurring through increased global trade, especially in the oil and gas and technology industries. Houston, Beaumont and Corpus Christi ship 80 percent of the nation’s crude exports, contributing to the United States’ success in exporting more oil than it imports. Texas also exported more than $47.8 billion in high tech goods last year alone, making the state the number one exporter in technology for the sixth year in a row.

Texas is home to the headquarters of nearly 50 corporations on the 2019 Fortune 500 list.

One of the key drivers of Texas’ economic success is the strength of the state’s 2.7 million small businesses, which account for nearly 93 percent of all Texas exporters. Texas keeps up with the global needs of these companies thanks to a rapidly growing transportation and logistical infrastructure. Recognizing that technology rapidly changes the way businesses move and track products, the state is building out infrastructure supported by a 10-year and more than $70 billion commitment to new state roadway projects.

The state has 52 operating freight railroads, ranks first in the United States for air and vessel commerce, and has more ports than any other state in the nation, creating millions of jobs. In May, ceremonies were held to kick off a $92 million expansion of the Corpus Christi Ship Channel in a bid to attract larger oil tankers in Texas.

Meanwhile, Gov. Abbott signed legislation this past session that strengthens ports during recovery from natural disasters and gets ports back up and running quickly after such events. These bills include House Bill 5, requiring the Texas Division of Emergency Management to develop a catastrophic debris management plan and model contract for debris removal. House Bill 7 requires the Office of the Governor to develop a list of waivers that could be implemented following a disaster. And Senate Bill 7 establishes the framework for providing $1.6 billion through the Texas Infrastructure Resilience Fund.

Container volume overall at Port Houston continues to break records, up 12 percent for the year compared to last year, Executive Director Roger Guenther recently told the Port Commission. Port Houston facilities have handled nearly 1.5 Million TEU through the first half of 2019.

Port Houston handles nearly 70 percent of all containers that move through the U.S. Gulf of Mexico and volume is growing rapidly due to surging demand for imports and a robust export base driven by petrochemical and resin markets.

Strong demand has attracted new services and made upgrades of existing services the norm at Port Houston. In August, the 2M Alliance (comprised of Maersk and MSC, the world’s first and second-largest ocean carriers) announced a new Trans-Pacific all water service to call Houston starting in mid-September, with Houston as its first port of call after crossing the Panama Canal.

Steel movements into Houston’s multi-purpose terminals at City Docks, Woodhouse, Care and Jacintoport also continues to be strong and are up 14 percent for the year. “Overall business continues to be strong through our port,” Guenther said. “We look forward to that continuing for the rest of the year.”

For more than 100 years, Port Houston has owned and operated the public wharves and terminals of the greater Port of Houston—the nation’s largest port for foreign waterborne tonnage and an essential economic engine for the Houston region, the state of Texas and the nation. The Port of Houston supports the creation of nearly 1.35 million jobs in Texas and 3.2 million jobs nationwide, and economic activity totaling $339 billion in Texas—20.6 percent of the state’s total gross domestic product—and more than $801.9 billion in economic impact across the nation.

Universal Africa Lines (UAL), a conventional ocean transportation carrier that specializes in handling project cargo, breakbulk and containers, announced in July that it will now call Port Houston’s City Docks as part of their U.S. Gulf/Mexico to West Africa liner service. The change was effective with the first regular vessel call of the MV MarMalaita July 10.

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