Port of Galveston has a reputation as the “Port of Everything” and is gearing up its West Port Complex to handle even more of everything.
Sandwiched between two of America’s busiest and most prominent ports—New Orleans and Houston — Galveston Wharves is ramping up for a new generation of growth by focusing on a modern era of marine cargoes.
What began as a lone trading post 200 years ago in 1825 on land owned and controlled by Mexico, and slowly grew into an active grain, bulk liquid and bulk fertilizer gateway, Galveston Wharves, the rebranded name for Port of Galveston, is gearing up for further expansion and revenue diversification with creative marketing and serious spending that has already attracted a new generation of global shippers and vessels. Port leadership isn’t content with going slow.
West Port Complex
“We are growing our business like never before,” Galveston Wharves port director and CEO Rodger Rees, told the American Journal of Transportation in an exclusive interview. Funded by $42.3 million state of Texas grants and $14.1 million in port funds, Rees says port staff has “already prepared engineering design and partial construction drawings for enclosure walls, a 1,340 foot-long-berth across two open slips and concrete paving.”
A future phase will include filling in two slips behind the enclosure walls which will add 14 acres for cargo operation, he says. Plans call for adding another 15-acres after demolishing an approximately 100-year-old grain elevator. The construction and expansion of the West Port Cargo Complex will add about one-third in size bringing the new total cargo operating area to about 90 acres.
“A major focus of the master plan is expanding our cargo business by increasing acreage at the Complex, but a top priority is improving decaying waterfront infrastructure after decades of neglect,” says Rees who is now in his sixth year as port chief, after serving five years as chief financial officer at Port Canaveral in Florida.
He added that the port is also “nearing completion of a two-mile long $3.15 million interior roadway reconstruction to move cruise and cargo traffic more efficiently, while helping alleviate congestion on nearby downtown roadways.”
Port of Everything
Indeed, Galveston Wharves is not making its changes from a standing start. It has long been known as the “Port of Everything.” It shares its space as an import and export center on the Gulf with a waterfront tourist area with restaurants and museums and three cruise terminals with a fourth to open next year.
Still, the port’s maritime operations have been growing internally and is expected to continue the trend. In 2023, the port moved more than 3.6 million tons of cargo including longtime staples of bulk liquids, bulk fertilizer, roll on/roll offs, breakbulk, and fresh fruit as well as more recently wind turbine components and other project cargoes. Now, emphasizes Rees, the port is shifting away from its traditional commodities like grains and fresh fruit to more profitable and in-demand ro/ro shipments like new automobiles, project cargo and breakbulk cargo businesses. Freight traffic is on its way to reaching four million tons in 2024, he adds.
Onshore alternative energy is gaining popularity in the US, but Galveston Wharves is not just coming to the party. “We’ve been doing wind turbines here long, long before I arrived, mainly because of the railroads we have on the port—the BNSF and the Union Pacific,” says Rees. “We have really good clearances.”
However, the port director says project cargo growth is largely by Galveston’s “natural location” and the on-premises railroads’ availability. “The biggest factor that everybody (project shippers) likes us is because these (railroad) tracks bypass Port of Houston and that we are so close to open water. In 30 minutes outside our channel, you are in the Gulf of Mexico. You save that big, long trek through the Houston ship channel to Port of Houston.” The port also has a short line railroad, called the Galveston Railroad, which feeds the two major on-port railroads.
In addition, highway access to the port is improving, Interstate Highway 45 is undergoing a widening that will take it from Galveston to Houston, a benefit to big rig trucks among others.
Rees credits the state of Texas for making the improvements at the port possible. “For the first time ever, the Texas legislature, which had a $26 billion surplus, gave ports money. Last session, it allocated Texas ports a total of $640 million for inside and outside the gates and ship channel improvements. We received $36 million. For us, we’re investing heavily in infrastructure improvements including another cruise terminal which will generate a significant cash flow so we can do all that work on the West End Cargo Complex.”
Fourth Cruise Terminal
The fourth cruise terminal will be built on the site where Del Monte Foods has long brought in a weekly break bulk ship from South America loaded with fresh fruit. Rees says the giant food company bought two ships and is switching over to containers for its fruit. “They told us of their plans several years ago and asked us to let them out of their lease. We agreed because we did not have the space to handle containers.” Del Monte exits the port in April.
It could come back. Rees told AJOT Galveston Wharves is teaming up with the Port of Houston to jointly build a container facility on nearby Pelican Island which has a bridge to land slated for construction in 2027. “We’re working on trying to get rail over there which is a big project,” he adds. The port owns 200 acres on the island and a facility.
A “shining star” at Galveston Wharves are ro/ro cargoes which are increasing year over year, particularly new cars and large construction and agricultural equipment, according to a port press statement.
Exports of non-automobile cargoes hit almost 500,000 tons in 2023, up 13.6 percent over 2022. New car imports, primarily BMWs imported from Germany, jumped 71 percent last year to 40,428 tons. The port imported 17,875 BMWs and Mini Coopers in 2023. The new cars are processed and accessorized at an on-port vehicle processing center before they are transported to dealerships.
As a landlord port, Galveston Wharves main ro/ro customers are Wallenius Wilhelmsen Ocean, American Roll-On Roll-Off and K-Line through a lease with Ports America. “We’ve been a popular ro/ro port for more than two decades because of our skilled labor and ideal location,” says Rees. “In fact, this year we’ve already seen volumes of new cars equal to all we had coming in last year. One reason we’ve received a lot more BMWs this year is because there have been supply chain issues in other countries.”
New Business
Asked if the port will seek additional foreign automobile manufacturers as customers, Rees says he doubts it now. “We just don’t have the lay down space. “The port had discussions with Volkswagen that moved its imports out of the Port of Houston, but it did not have the 100 acres required to accommodate the German automaker.
Looking ahead at other potential cargoes, Rees says the port is planning several export shipments of 2000 head of live cattle to the Mideast. One cattle-filled vessel shipped last year, and another one moved so far this year, with a “couple more” planned for this year. The animals are briefly kept in a corral on port property. It’s not a new commodity for the port. “We used to handle a lot of cattle back in the day,” he says.
Another source of “good business” for the port are the vessels “stacked up and waiting” to enter the Houston ship channel, says Rees. “They are coming into our port, fueling up, charging crews, getting Coast Guard inspections, and using every one of our available berths. That business kept us going during COVID.”
Overall, the future looks bright for Galveston Wharves. It recently received a $1 million grant to develop a shore microgrid to power cargo ships. It is also one of the first to make liquified natural gas (LNG) services available to ships.
But real revenue growth is likely to come from America’s move toward greater alternative energy. Last year, the port designated a 22-acre Free Trade Zone (FTZ) to import “hundreds of enormous” wind turbine components,” says the port chief.
“Galveston has long been a preferred port for wind turbine importers due to its skilled labor, rail and highway access and optimum clearances, some almost 250 feet long,” Rees says.
Indeed, Galveston Wharves has been importing on-shore wind energy components since 2007. Chris Cornwell, director of operations, Gulf Region for Metro Ports, a stevedore company. “They are literally coming in from all over the world,” he told AJOT in an interview. “The components include towers, blades, hubs, nacelles, drive trains. Last year, we handled 41,000 metric tons. “
This year, components for a wind energy project in Canada are coming through Galveston Wharves, he says, attracted in part by the port’s FTZ which allows the shipper or customer to avoid paying duties and taxes. Moreover, Metro Ports has 42 acres of laydown space at the port for the project cargoes, an acreage amount Cornwell expects will grow in 2024.
He expects wind energy cargoes moving through Galveston Wharves to grow. “Not only do we import replacement components, but wind farm sites are growing in the US.” To handle the current and future volume, Metro Ports has 10 mobile cranes on port property with varying lift strengths.
