Upswing in Logistics Activity Bodes Well for Port of Houston

Gus J. Bourgeois, III

May 23, 2011

Research firm Armstrong & Associates ( reported that most third party logistics providers (3PL) experienced improved financial performance in 2010 and into 2011. In its annual report released May 20, 2011, Armstrong & Associates noted that while both revenues and profits of 3PL’s were generally higher during those time periods, the trend was strongest in the international transportation management segment.

Meanwhile, in an unrelated report, the Los Angeles Economic Development Corporation recently predicted that the volume and value of international trade in the Los Angeles Customs District (including the Long Beach Port, which has long been the dominant US port for imports from Asia) is expected to grow in 2011. But Donald Sachs, the executive director of the Industry Manufacturers Council, cautioned about whether Southern California would continue to reap the benefits of the resurgence in international trade. “I hate to rain on their parade,” he said. “But until we know what effects the widening of the Panama Canal will have, we won’t really have a clear picture.” According to the Inland Valley Daily Bulletin, which reported the story, Sachs is concerned that allowing bigger ships to go through the canal will give a lot of the local Customs District’s business to Texas ports.

The upshot of these reports? With economic trends now firmly reflecting a rebound in international trade, and with the long awaited completion of the Panama Canal expansion only three years away, the hope that the Port of Houston will reap immediate and significant benefits from the expansion — at the peak of the economic cycle — is getting closer to reality.