The pandemic has accelerated the demand for industrial space, increasing warehousing developments in the Houston region. According to JLL’s Q2 2022 report, “While inventory and supply chain issues made recent headlines, retail and related industries have continued to take sizable, long-term positions in Houston given its growing population base and strong port.” Additionally, JLL states, “Robust leasing activity continued with 11.4 million square-feet of deals signed, including two transactions over one million square-feet in size.”¹

Port Houston saw an increase in tonnage of 15% at the end of 2021, and so far in 2022 there has been no slowing down with a 24% increase in tonnage year-to-date. Much of this surge in demand, has been due to larger volumes of imports and exports around Port Houston’s container terminals. Through July 2022, Port Houston’s container terminals have handled more than 2.2 million twenty-foot-equivalent units (TEUs), an increase of 17% compared to the same time last year.

The surge in imports and longer dwell-times has factored into the decision-making by Port Houston leadership to accelerate infrastructure improvements. Port Houston is investing $700 million in the next five years at Barbours Cut and Bayport Container Terminal to advance cargo movement. We’re building new yard space and wharves as well as making improvements to the Houston Ship Channel, Bayport Ship Channel and Barbours Cut Ship Channel to make way for larger cargo vessels. As more goods move across Port Houston’s docks, the need for additional space to store that cargo will continue. We are seeing industrial warehouses in the Port Houston region being built to keep up with demand.

Growth of Distribution Centers

In February 2022, Macy’s Inc. signed an agreement with Tomball City Council to relocate its distribution center to the Lovett Industrial development near the Grand Parkway Toll Road in southern Tomball. The company currently operates out of a facility in Houston but will move to a 900,000-square-foot distribution center within Tomball city limits. Construction on the new facility has begun and is expected to be completed by mid-2023.

Ferguson Enterprises is adding another 750,000-square-foot distribution center to its collection. This DC is among the largest in the Houston region and will give Ferguson a key competitive advantage in the wholesale plumbing products and supplies industry.

Target has invested another five billion dollars in operations and is opening its first sortation centers in Houston and in Dallas. These are the first-of-its-kind concept that help Target stores do even more and strengthen their delivery capabilities for the future.

In 2021, Ross Stores Inc., which owns the Ross Dress for Less and d.d. Discount brands, opened its largest US distribution center in Waller County 20 miles west of Houston. The 2.2 million square foot distribution center in Brookshire was a $300 million project intended to service more than 1,800 stores nationwide.

Floor & Décor and Lowe’s also added 1.5 million square foot distribution centers in Houston and New Caney areas. Webstaurant Store and Article Furniture opened their distribution centers in Baytown with proximity to the Houston Ship Channel.

Cold-Storage Warehouses

The growth in demand doesn’t stop with standardized containers. Port Houston is also seeing a tremendous uptick in reefer (refrigerated) cargo resulting in the construction of new cold-storage facilities and construction plans at Barbours Cut and Bayport Container Terminals to provide more reefer cargo capacity.

In March 2022, Maersk companies chose Houston for its first-ever cold-storage facility which is on track to open in August 2022. The 90-foot unloading dock and temperature-controlled facility will support cold chain services to handle frozen and fresh commodities including fish, poultry, beef, pork, fresh fruits and vegetables. Connectivity through Port Houston and access to rail lines and highways will support Maersk Ocean Services cold chain integration to its current logistics efficiencies.

Custom Goods CES unveiled its new warehouse in Pasadena, TX near Port Houston’s Bayport Container Terminal. This state-of-the-art facility has more than 353,000 square feet of storage space for refrigerated and dry cargo. It’s strategically located between Bayport and Barbours Cut Container Terminal for fast turnover times. This facility is one its final stages of construction and will be fully operational starting in October 2022.

In 2021, Blackline Cold Storage started constructing their new 298,000 square foot cold-storage facility strategically located near Barbours Cut and Bayport Container Terminals. This facility features multiple segregated temperature zones, black freezing capabilities and up to 50 truck doors. The facility at full buildout will expand up to 650,800 square-foot. The Blackline facility represents the newest large-scale cold-storage facility near Port Houston and opened in 2022.

It doesn’t look like the warehousing frenzy will slow down anytime soon. Dallas/Fort Worth, Austin, and Houston are seeing increases in demand for storage space. Retailers in Texas and beyond are investing in Houston thanks to its growing port, a strategic gateway for cargo, centrally located to support movement of goods between Port Houston and inland points.²

References

¹ Alexander, R. (2022, July 2). Houston Industrial Insight – Q2 2022 [Review of Houston Industrial Insight – Q2 2022]. JLL. https://www.us.jll.com/content/dam/jll-com/documents/pdf/research/americas/us/q2-2022-industrial-insights/jll-us-industrial-insight-q2-2022-houston.pdf

‌² Jensen, G. (2022, July 2). Austin Industrial Insight – Q2 2022 [Review of Austin Industrial Insight – Q2 2022]. JLL. https://www.us.jll.com/content/dam/jll-com/documents/pdf/research/americas/us/q2-2022-industrial-insights/jll-us-industrial-insight-q2-2022-austin.pdf

‌³ Thomas, N. (2022, July 2). Dallas-Fort Worth Industrial Insight – Q2 2022 [Review of Dallas-Fort Worth Industrial Insight – Q2 2022]. JLL. https://www.us.jll.com/content/dam/jll-com/documents/pdf/research/americas/us/q2-2022-industrial-insights/jll-us-industrial-insight-q2-2022-dallasfort-worth.pdf

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Port Houston and industry stakeholders meeting with U.S. Rep. Kevin Brady.

Port Houston executives and Targa Resources welcomed U.S. Rep. Dan Crenshaw’s staff at the Bayport Container Terminal Aug.19.

The officials highlighted the importance of the Houston Ship Channel Expansion Project to the nation and the value of the channel and the industry and jobs that it supports.

Just days later on Aug. 27, Port Houston’s Executive Director Roger Guenther and channel industry partners briefed U.S. Rep. Kevin Brady on the project. The waterway’s importance to the nation’s economy was the key focus of the meeting.

Port Houston and industry stakeholders are working together to address the challenges with the current channel, as well as meeting the industry needs for future improvements.

The Port of Houston is an asset to the state and national economies. Widening the nation's busiest waterway to allow for improved two-way traffic should lead to safer and more efficient economic growth.

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John Martin of Martin Associates presents at April Port Commission meeting.

Thousands of new jobs were created in and around the Port of Houston in 2018, as Texas’ most prolific economic engine has been continuing to create positive economic impact for the region, state and nation.

That’s the finding of the most recent study by Martin Associates of economic activity created by the port. The study that focused on 2018 was similar to Martin’s last comprehensive study of the port, which was in 2014.

In 2018, marine cargo activity at the public and private marine terminals at the Port of Houston and along the Houston Ship Channel supported a total of $339 billion of total economic value in the state of Texas. That includes Port Houston’s eight terminals, along with the estimated 200 private terminals along the Houston Ship Channel.

The $339 billion represents about 20.6 percent of the $1.6 trillion state of Texas Gross Domestic Product (GDP).

Port Houston Chairman Ric Campo, who addressed Harris County Commissioners Court in April, told the commissioners that because the port is a national asset, the Martin study also covered the national impact.

“The port generated $801 billion in economic value, sustained 3.2 million jobs and provided $38 billion in tax revenue,” Campo noted.

The study is based on interviews with 986 different firms that provide services for the cargo and vessels handled at Port Houston’s terminals and the private terminals.

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Port Houston generated more than 38 million tons of cargo in 2017, Chairman Janiece Longoria told attendees at the Houston East End Chamber’s Port Appreciation Day Expo and Luncheon July 25.

Longoria highlighted the port’s role in the community as an economic driver and thanked local industry and labor for their contributions to the business and the Houston Ship Channel.

The annual event recognizes the port’s contribution to the community. 

“The Houston Ship Channel hosts one of the largest and most productive petrochemical complexes in the world. The channel still remains the busiest waterway in the nation,” said Longoria.

Containers continue to be the port’s fastest growing business line because of the port’s location on the U.S. Gulf Coast, she noted.

Longoria added, “Port Houston remains the fastest-growing port in the nation, growing more than two and half times faster than the average U.S. port in container activity.”

The greater Port of Houston is an economic engine for the Houston region and the state and is essential to the economic and energy security of the nation.

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Port Houston welcomed the House Select Committee on Texas Ports, Innovation and Infrastructure at the Bayport Container Terminal Nov. 1.

Created earlier this year by Texas House Speaker Joe Straus, the committee is responsible for reviewing state policies and discussing long-term challenges facing Texas ports and infrastructure and to propose solutions to address those needs and keep ports competitive.

Port Houston leadership and staff discussed the port's role and operations and provided an overview of the greater Port of Houston, highlighting its economic impact to the state.

Chairman Janiece Longoria noted that the port’s container traffic is growing every year. A total of 63 percent of Port Houston's cargo is containerized, with East Asia cargo making up 37 percent of the port’s containerized imports.

Executive Director Roger Guenther noted that technologies are all about creating a more efficient port for the users.

Port Houston Channel Development Director Mark Vincent gave a presentation about Houston Ship Channel development activities, while Chief Port Infrastructure Officer Rich Byrnes discussed transportation, logistics and freight mobility. 

The visit concluded with a container yard tour of both Bayport and Barbours Cut terminals.

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Port Houston received the Economic Impact Award from the Indo-American Chamber of Commerce of Greater Houston at the chamber's annual gala Sept. 30.

Port Chairman Janiece Longoria accepted the honor on behalf of the organization. As one of the world's busiest ports, the business activity in the greater Port of Houston generates more than one million jobs throughout Texas and $265 billion in statewide economic impact.

“The port long has been a significant economic driver for our region and our state and we are working hard to make sure that continues,” Chairman Longoria said.

Port Houston provides a strategic gateway for cargo and has been instrumental in the city of Houston’s development as a center of international trade. It is home to a sprawling petrochemical complex, which is the largest in the nation and the second largest in the world.

The Indo-American Chamber of Commerce of Greater Houston was established in 1999 to address an increasing need to educate local businesses and the Indo-American community at large about doing business with India.

The chamber focuses on local jobs by encouraging exports to India, and on bilateral trading opportunities.

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Port Chairman Janiece Longoria provided a port update focused on Hurricane Harvey during Economic Alliance Houston Port Region's Gulf Coast Industry Forum Sept. 20-21.

“Our quick return to serving ship channel industries and Port Houston customers was made possible by the extraordinary teamwork of our port staff, stakeholders and the maritime industry who pulled together 24/7 to make this happen for the good of our region,” said Longoria.

Chairman Longoria also provided updates regarding continued growth and investments along the Houston Ship Channel.

Houston is home to the largest petrochemical complex in the U.S., supplying significant products that drive the nation and its economy. Colliers International has cited the port as the “Irreplaceable Port,” noted Longoria. 

Port Houston Senior Director of Trade Development John Moseley served as moderator for a global shipping panel, where it was noted that Port Houston has seen 24 percent growth in imports and is the seventh largest container port in the U.S.

“Houston is one of the most profitable trades. The route is a profit leader for ocean carriers,” said Bill Ralph, president of R.K. Johns and Associates, who was a member of the panel.

Port Houston was the presenting sponsor for the event, which was held at the Pasadena Convention Center.

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