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CEOs at Ports of Houston and Seattle Bullish on Future, But See Challenges

The CEOs of the ports of Houston and Seattle are bullish on the future of their regions and their ports, though for different reasons. Population growth in the U.S. Southwest and an expanded Panama Canal will drive new business to the Port of Houston, says CEO Alec Dreyer, while Port of Seattle CEO Tay Yoshitani sees proximity to Asia and a strong sustainability program as growth drivers for his Pacific Northwest gateway.

Yoshitani also points to momentum, with the Port of Seattle coming off a very strong year in 2010. "We posted a 35-percent increase in business over 2009," he says. "A lot of that growth was organic, but we also gained market share. We were very pleased with those numbers."

Dreyer points to the Port of Houston's location in a rapidly growing state and region. "From the Port of Houston, you can reach anywhere in the heartland of America within one or two days by truck," says Dreyer. Equally important is additional traffic that will move through the Panama Canal when a new set of locks is completed in 2014. "Today 20 percent of our traffic goes through the canal, and we think that will easily double over the next five to 10 years," says Dreyer.

The canal expansion may be a short-term negative for the Port of Seattle, as some freight will doubtless be diverted from the West Coast, Yoshitani says. "An expanded Panama Canal will give shippers another option to get cargo from the Far East to the U.S. Midwest and East Coast," he says. "In the long run, though, I think there will be capacity constraints for all U.S. ports. I don't know how long it will take, but there will come a time - not so far in the future - when shippers will be happy that they have options on all coasts."

Capacity constraints and insufficient infrastructure are challenges facing all port directors, Yoshitani says. "Infrastructure for all freight modes is something that has been neglected by the federal government for years," he says. "This has to change."

Dreyer agrees. "We can't just focus on the seaside infrastructure," he says. "We have to deal with the landside infrastructure that backstops the investments we make."

Both Dreyer and Yoshitani stress the "green" aspects of their respective ports. The Port of Seattle, in conjunction with its neighbor, the Port of Tacoma, funded an independent study to measure the carbon footprint for cargo moving from Shanghai, Hong Kong and Singapore to the U.S. Midwest via different West Coast ports and the Panama Canal. "When you actually measure the carbon footprint, it turns out that the Pacific Northwest is the most optimal because of our proximity to these Asian ports," Yoshitani says. The two ports are using this data to designate and promote their ports as "green gateways," he says.

Dreyer points to the Port of Houston's ISO certification for environmental management systems as representative of Houston's sustainability efforts. "We have created more marshlands than any other port complex by using dredged material," he says. "We also have a significant program to reduce diesel emissions from trucks in the port and we are working with other environmental groups to make sure that whatever we do from an infrastructure investment standpoint lives up to our commitment to the environment."

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