GlobeSt.com UPDATE: Failed Port Merger Won't Stall Growth

HOUSTON-Port of Houston Authority commissioner James Edmonds tells GlobeSt.com that the Houston port will meet market demands of the container shipping industry despite the failed merger with the Port of Galveston. Tuesday, 57% of Galveston’s voters rejected a plan for a regional port despite city support on both sides of the fence.

“It would have been a nice fit,” Edmonds says. But, he quickly adds, the Port of Houston’s goal is still reachable: cornering all container-shipping locally. The Houston port currently controls 63% of the market share for container shipping in the Gulf of Mexico. Edmonds says there are no plans afoot to lob a similar play with other ports such as Texas City, Freeport or New Orleans.

Edmonds says the 720-acre Bayport container terminal and a 120-acre industrial development area in southeast Harris County are proof of the Houston port’s ability to handle future growth. By developing Bayport, the port can keep pace with the anticipated and expanding growth patterns in the container industry. A “no-build scenario” is not an option if Houston is to maintain its current customer base. Expansion also could spread to Pelican Island to support growth.

Edmonds concedes other cargo lines may suffer as a result of the failed merger. He says the authority will have to come up with alternative solutions for those problems.

Galveston too says “other solutions” will have to come to the foreground. The plan called for Galveston to kick in 300 operating acres in city limits and 500 acres on Pelican Island, just outside of Galveston proper. Houston was to pay $30 million over 10 years to Galveston Wharves and serve as the regional port manager. Galveston also would have reaped added trade from the Port of Houston’s well-oiled marketing plan. But, says Donald L. Schattel, Galveston Wharves’ board chairman, “The people are always right. We will have to look for other solutions.” He says those solutions could entail leasing, privatization or just continuing on its present course.

Schattel believes Galvestonians shot down the merger because the terms called for the Houston to manage the regional port. But, he contends the terms and conditions didn’t outweigh the loss of control for a property that has historical significance for the people of Galveston. “The port (of Galveston) will continue on,” he says, “and we will continue to seek ways to bring more business to the port.