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Port of Entry: FreeportEconomic Impact, 2015
Texas' location, geography and diverse economy offer unique trade opportunities with other states and countries. Texas has a number of ports of entry, including seaports, inland ports and border crossings, which facilitate the movement of imports and exports. Texas ports of entry contribute to the state and local economies, each in a very distinctive way.
The state of Texas accounted for nearly $650 billion in international trade in 2015. Of Texas' total international trade, $204 billion or 32.3 percent traveled through the state's seaports, with Port Freeport accounting for 3.4 percent of the seaport trade – approximately $7 billion. 1
Based on the Comptroller's analysis, the net benefit of trade associated with the Freeport port of entry contributes an estimated 26,000 net jobs to Texas and a minimum of $3.7 billion in gross domestic product (GDP) to the Texas economy.2 (The Comptroller acknowledges there may be other economic activities directly and indirectly associated with the use of this facility that may not be reflected here.)
Port Freeport
Port Freeport is one of 10 seaports along Texas' 367 mile-long coastline along the Gulf of Mexico.3 Each seaport facilitates the movement of goods between Texas and nations throughout the world. Each Texas seaport is unique, offering different capabilities and a variety of shipping options, including bulk, roll-on/roll-off, container and liquid/gas shipping.4
The port of Freeport was originally established in 1925, with its first two docks built in the 1950s. It's the only deep-water port on the U.S Gulf Coast prepared for large, post-Panamex container ships as it has a channel depth of more than 45 feet and recently completed the Velasco Terminal's Berth 7 project, which includes two ship-to-shore container cranes with post-Panamex capabilities.
To allow safe transit of the larger ships, the federal Water Resources Reform & Development Act of 2014 authorized the port to deepen its harbor channel to 55 feet and widen it to 600 feet. In October 2014, work began on a $30 million dredging project to widen a 4.5-mile portion of the main channel from 400 to 600 feet.5 The port also is moving forward with continued development of the Velasco Terminal, including an extension of Berth 7 and the creation of an additional Berth 8.6
Port Freeport includes:
- 18 docks (including seven public ones);
- about 600 acres of developed land;
- 5,600 additional usable acres on site including 1,400 acres ready for immediate development;
- a harbor channel currently 400 feet wide and 45 feet deep, approved for deepening (up to 55 feet) and widening (to 600 feet);
- 554,000 square feet of dry warehouse space;
- 38,600 square feet of cold storage space; 7
- a 70-foot-deep berthing area; and
- access to a Union Pacific rail line.
Port Freeport is 7.5 miles (or about 45 minutes) from deep water, making it the state's closest to deep water port. It is covered by a General Purpose Foreign Trade Zone (FTZ) #149 designation.
Economic Data
In total, shipping activity at the port of Freeport accounted for $7 billion in trade in 2015, an increase of 39 percent from 2003 ($5 billion).8 Port Freeport ranks 27th in the nation for foreign trade tonnage.
The Port directly employs 34 and FTZ #149's active sites employed a total of 2,600 people. The Port also reports another 2,029 employed in other water transportation areas and 6,678 employed in petroleum products, refining, and other related industries directly affected by port operations.9
In 2015, 99,000 containers moved through the port (up from 77,000 in 2006).10 Also, given its depth, Port Freeport is considered best poised among Texas ports to accommodate the bigger ships traversing the enlarged Panama Canal as it has sufficient depth for these larger ships and hundreds of acres of open land ripe for development.11
- Top origination/destination for goods: Venezuela; Saudi Arabia
- Top Imports through Freeport: oil; chemicals; produce
- Top Exports through Freeport: vehicles; plastics; chemicals
| Overall Trade ($ billions) | Trade with Venezuela/Saudi Arabia ($ billions) | ||||||
|---|---|---|---|---|---|---|---|
| Total Trade | Exports (only) | Imports (only) | Total Trade | Total Trade % | Exports (only) | Imports (only) | |
| 2015 | $6.92 | $3.43 | $3.49 | $3.27 | 47.25% | $0.820 | $2.45 |
| 2014 | $9.20 | $2.70 | $6.51 | $5.70 | 61.96% | $0.079 | $5.62 |
| 2013 | $7.44 | $1.54 | $5.90 | $4.92 | 66.13% | $0.058 | $4.86 |
In 2015, Freeport opened a new automobile terminal operated by a subsidiary of H&oumi;egh Autoliners, with an initial 100 acre build-out and capacity to handle 150,000 vehicles per year. The terminal has separate processing centers for vehicles and heavy equipment (e.g. cranes and excavators). Up to seven vessels each month use the port's recently expanded roll-on/roll-off capabilities (that is, the ability to drive vehicles directly onto or off ships). The H&oumi;egh Autoliners facility has transformed Port Freeport into a major player in vehicle exports, especially to the Middle East. Prior to the facility's opening, less than $36 million in exports went through Freeport to Saudi Arabia, Qatar and Kuwait combined. In 2015, more than $1 billion in cargo was exported to these three countries.12
Federal Customs District Growth
Port Freeport is part of the larger Houston-Galveston Customs District, which includes the area stretching along the Gulf coast from Corpus Christi to Galveston, and inland from Freeport northward to the Houston International Airport. With $193 billion in trade in 2015 (rising from $82 billion in 2003), the Houston-Galveston District relies heavily on seaports for its trade volume and in 2015 ranked first in the U.S. for cargo volume, at 249 million metric tons.13
Texas has 29 official ports of entry that serve as critical gateways to global trade. Each port, whether accessible via air, land or sea, serves a variety of domestic and international economic activity across multiple industries. The high quality of Texas' ports has a significant impact internationally as well as across the state from its largest cities to the most rural counties. Texas ports play an important role in the state's transportation network, as each directly contributes to and thus affects the entire transportation system. Texas ports contribute to the overall strength and diversity of the Texas economy, which ranks 10th in GDP when compared to other nations.14
- 1 To access the trade data for each port area, the U.S. Census Bureau's USA Trade Online data tool was used. A log-in is needed (https://usatrade.census.gov/). Harmonized System (HS) Port-level Data was used for both export and import data which were added together manually to determine total trade for each port.
- 2 Comptroller staff applied Texas trade data supplied by the U.S. Census Bureau as an input using the REMI (Regional Economic Models, Inc.) model for Texas and attributed total trade value for the port as a percent of Texas' total trade value. This data was used to generate a weighted estimate of net jobs and GDP associated with trade at the port.
- 3 U.S. Census Bureau: Economic Indicators Division USA Trade Online," http://www.txdot.gov/inside- txdot/projects/studies/statewide/border-crossing.html.
- 4 Texas Department of Transportation."Texas-Mexico Border Crossings," http://www.txdot.gov/inside- txdot/projects/studies/statewide/border-crossing.html.
- 5 Joseph Bonney, "Port Freeport, Texas Awards Dredging Contract," JOC.com, September 15, 2014, http://www.joc.com/port-news/dredging/port-freeport-texas-awards-dredging-contract_20140915.html.
- 6 Texas Department of Transportation, "Overview of Texas Waterways and Ports," presentation to the Senate Select Committee on Texas Ports, May 4, 2016, https://tti.tamu.edu/policy/wp-content/uploads/2015/08/TxDOT-Ports-Testimony-050416.pdf; and Highway 36A Coalition, Port Freeport, Texas: 36A Coalition Delegation Visit," January 17-20, 2016, http://www.fortbendcounty.com/wp-content/uploads/2016/03/36A-Panama-Collateral-Piece.compressed.pdf.
- 7 Port Freeport – Comprehensive Annual Financial Report, Fiscal years ending September 1, 2015 and 2014.
- 8 Texas Centers for Border Economic and Enterprise Development, "U.S. Exports & Imports Trade Activity,"
- 9 Port Freeport Economic Impact Analysis – Final Report, February 2016
- 10 Port Freeport – Comprehensive Annual Financial Report, Fiscal years ending September 1, 2015 and 2014.
- 11 Dug Begley, "Port Freeport States Its Claim on Cargo Boom," Houston Chronicle (May 9, 2016), http://www.houstonchronicle.com/news/transportation/article/Port-Freeport-stakes-its-claim-on-cargo-boom-7423346.php.
- 12 Hoegh Autoliners, "New Terminal Facility in Freeport, Texas," June 16, 2015, http://www.hoeghautoliners.com/news-and-media/announcements/americas/new-terminal-facility-in-freeport-texas; and U.S. Census data.
- 13 WorldCity, Inc., WorldCityTrade Numbers," https://www.ustradenumbers.com/dashboard/customs-districts/.
- 14 The World Bank, "GDP Ranking," http://data.worldbank.org/data-catalog/GDP-ranking-table; and U.S. Bureau of Economic Analysis, "Gross Domestic Product Second Quarter of 2016 (Second Estimate)," https://blog.bea.gov/2016/08/26/gross-domestic-product-second-quarter-of-2016-second-estimate/.