Galveston Wharves Leaders Right To Leverage Cargo With Cruise Cachet

Credit: Dan Kb/Unsplash

Galveston Wharves Trustees such as Jim Yarbrough who advocate for leveraging the port’s success in the cruise industry to chase some success in cargo lines are on the right course, reports Galv News.

World’s third largest and fastest growing cruise brand

Late last month, the Port of Galveston said it was negotiating with MSC Cruises, billed as the world’s third largest and fastest growing cruise brand, to develop a fourth terminal at piers 16 through 18.

The port and MSC on Dec. 7 signed a non-binding memorandum of understanding outlining a potential agreement for the fourth terminal.

That news came just more than a month after the port celebrated opening of its third cruise terminal, a $125 million facility near Pier 10.

MSC Cruises is based in Geneva, Switzerland, with 30,000 employees globally. The company is considered a market leader in Europe, South America, the Persian Gulf region and Southern Africa, with a strong presence in the Caribbean, North American and Far East markets.

MSC, which stands for Mediterranean Shipping Co., is the world’s largest container shipping line, overtaking Maersk this year, according to reports.

The company operates in all major ports, including the Port of Houston.

MSC’s interest

Some members of the Wharves Board of Trustees, including Yarbrough, see an opportunity for traditional cargo business in negotiating with a global player in the maritime industry.

Just on its face, MSC’s interest is more good news for the port, which continues to outperform even the most optimistic expectations islanders had when the public docks resumed operating a single cruise terminal more than 20 years ago.

If negotiations with MSC are successful, the development would bring European-style cruise ships to the island, elevate the port’s status as a top U.S. homeport and boost the regional economy, port officials said.

The deal also would allow MSC to reach a new market of millions of cruise passengers in the Central United States, Port Director Rodger Rees said.

But some members of the wharves board, which governs the port, also see potential to enter partnerships with MSC on cargo and container terminals, which create high-paying jobs and generate revenue for the landlord port.

Port of Galveston

The Port of Galveston long has sought industrial cargo for berths west of 28th Street and cruises and softer tourism sectors on its eastern piers, Yarbrough told The Daily News recently.

The port seeks to forge public-private partnerships beyond cruise ship terminals, Yarbrough said.

It’s already well established that the Port of Galveston is a success in the cruise industry.

It’s the fourth most popular cruise homeport in the United States, visited by more than 1 million cruise passengers a year.

The port’s 2022 cruise activity generated 3,500 jobs, $568 million in local business revenue and $73.5 million in local purchases by passengers and crew, Rees said.

The port projects a fourth cruise terminal will generate 925 jobs, $177 million in revenues and $21 million in local purchases, he said.

The port is forecasting $58.7 million in total revenues in 2023, of which $40.55 million would be generated by its cruise business, Rees said.

As we’ve noted before, Galveston entered the cruise business with considerable trepidation, which was completely justified. It had been burned before by cruise lines loading up and sailing off to more lucrative ports.

It was stuck with an idle terminal and a mechanical albatross — an elaborate, expensive and useless automated baggage handling system, among other downsides.

That fear of abandonment might be less rational now, given the $100 million Royal Caribbean International has invested on the public docks.

But it’s still far from neurotic for port leaders to keep the memory of that past experience alive and always keep an eye on diversification.

It’s good business and good sense.

Interestingly, Rees, who’s sometimes accused of being too focused on cruise business at the expense of cargo, has always argued the former would one day benefit the latter.

Perhaps that day is at hand.

That would be a remarkable change in fortune for the port. Waterfront leaders always have chased cargo business, mostly without much success.

The port in those days was down on its luck, chasing business hat in hand, wearing worn-out shoes and sometimes a little success is just what you need to catch a lot more success.

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Source: Galv News