Texas Ports: Gateways to World CommerceComptroller Study Highlights Economic Impacts

by Bruce Wright Published February 2017

An old truism says “geography is destiny,” and it certainly applies to Texas’ importance as a center for international trade.

Our central position in the continent’s road and rail grid, numerous seaports and a long border with Mexico all have helped Texas become a hub for international trade, and the nation’s top exporting state for 14 consecutive years.

And all this trade moves through one or more of Texas’ 29 official “ports of entry” — seaports, airports, border crossings and multi-modal facilities that offer train, air and roadway links to the state and nation (Exhibit 1).

Texas Comptroller Glenn Hegar recently completed a six-city tour of Texas ports of entry to highlight a new agency study that quantifies the economic benefits our state derives from these facilities. The Comptroller’s office estimates that nearly $650 billion in trade facilitated by Texas ports in 2015 directly or indirectly supported nearly 1.6 million Texas jobs and added $224.3 billion to our gross state product, or GSP (Exhibit 2).

“Texas ports of entry are absolutely essential to our economy,” Hegar says. “Every part of our state relies on them, from our largest cities to our smallest towns. They support agricultural production, manufacturing, the energy business and more. No matter where you are in Texas, you can see the benefits of foreign trade.”

In this article, we’ll examine several of our ports of entry in detail.

In that year, about 3,600 trains and 2 million trucks entered the U.S. through Laredo. Major trade activity at the port includes the movement of automotive parts, motor vehicles and petroleum products as well as associated warehousing and logistics facilities.

In addition to commercial trade, Laredo benefits greatly from other activities associated with the border crossing, including cross-border shopping that supports local merchants. One estimate has attributed about $2 billion in annual Border-area retail sales to Mexican nationals visiting the U.S. to shop, about 39 percent of it in Laredo.

The Comptroller’s office estimates that activities associated with the Laredo port of entry contribute 363,000 net jobs and at least $52 billion in GSP to the Texas economy.

Port Freeport

The port of Freeport, originally established in 1925, is the only deep-water port on the U.S. Gulf Coast presently prepared to receive the large container ships now beginning to visit the Gulf due to the recent expansion of the Panama Canal. To further accommodate these ships, the port has embarked on a $30 million dredging project to widen its main channel and has received federal approval to deepen its harbor.

Port Freeport includes 18 docks, 554,000 square feet of warehouse space and 38,600 square feet of cold storage facilities, and offers access to a Union Pacific rail line. The port is covered by a federally designated Foreign Trade Zone (FTZ) whose tenants employ about 2,600 workers.

The recent opening of an automobile shipment facility operated by a subsidiary of Höegh Autoliners has made Port Freeport a major player in the export of U.S. vehicles, particularly to the Middle East; in 2015, the port exported more than $1 billion in such cargo to Saudi Arabia, Qatar and Kuwait.

Trade associated with the Freeport port of entry supports an estimated 26,000 Texas jobs and contributes at least $3.7 billion in GSP.

Port of Port Arthur

In 2015, the Port of Port Arthur accounted for nearly 9 percent of Texas’ seaborne trade, valued at about $18.2 billion. The port is one of the nation’s busiest for fuels and other petrochemical products produced by nearby refineries, including an Aramco-Motiva plant that is North America’s largest crude-oil refinery. The port is covered by an FTZ and is a designated U.S. “strategic” port that regularly handles military shipping.

About 2,000 people in the Port Arthur area are directly employed in port-related activities, including employees of the port itself, workers at private refinery terminals and port and waterway security personnel, as well as rail workers, truck drivers, tug and barge operators, marine agents, dredging operators and harbor pilots.

In May 2016, voters in the Port of Port Arthur Navigation District approved an $89 million bond issue to modernize and expand port facilities. Construction associated with these bonds will commence in 2017 and employ about 350 construction workers during the two-year project.

The Comptroller estimates trade associated with the Port of Port Arthur supports about 68,000 net Texas jobs and contributes at least $9.7 billion to the state’s GSP.

Port of Houston

The sprawling Port of Houston is a 25-mile-long industrial complex comprising more than 150 public and private terminals that support many industries, including the nation’s largest concentration of petrochemical refineries. It’s the nerve center of the Houston Ship Channel, the nation’s busiest waterway, which is navigated by more than 8,300 large ships and 231,000 smaller commercial craft each year.