Texas approves higher truck weights at ports ahead of petrochemical export surge

US petrochemical producers scored a big win from the Texas Legislature this year with a new law that allows trucks to move export-bound containers filled to the brim to Port Houston's pair of container terminals.

The law signed by Governor Greg Abbott in late May establishes a $6,000 annual permit for so-called "heavy haul" on designated routes within 30 miles of international ports and bridges. It means trucks carrying plastic pellets to Port Houston for export can reach a gross weight of up to 100,000 lb, up 19% from the port's current limit of 84,000 lb — the first increase since the 1970s.

The change, effective in January, puts Port Houston on par with all other major US ports that already allowed heavy haul, including Los Angeles and Long Beach, California; New Orleans; New York/New Jersey; and Savannah, Georgia. Some other Texas ports already allow heavy haul, such as the Port of Brownville for steel movements, but the new law spreads it to the rest.

The increase also addresses a concern from polyethylene producers who expect to export hundreds of thousands of metric tons of new output through Port Houston per year once new plants begin ramping up. ExxonMobil Chemical President Neil Chapman said earlier this year, before the legislation was signed, that ports with heavy haul could handle full polyethylene containers while those in Houston hold 10% to 15% less — a difference of up to more than 9,000 lb.

A full PE container typically holds 26 mt to 27 mt, or nearly 60,000 lb.

ExxonMobil is among a slew of producers that will start up eight new steam crackers and 14 new polyethylene plants along the US Gulf Coast this year through 2019 in the first wave of new petrochemical infrastructure stemming from the cheap US natural gas boom. Nearly 6.7 million mt of new polyethylene capacity is slated to start up in that span — 57% of that this year. Most if not all the new output is expected to ship out to international markets — largely Asia — because North America is already oversupplied, according to Platts Analytics.

A key link in that export chain is movement of polyethylene-filled containers to a port. Producers make the pellets and move them via truck or rail to packaging warehouses where they are typically packed in 55-lb (25-kg) bags. Packagers stack the bags on pallets and load them into containers that move via truck or rail to ports. Massive cranes then put loaded containers on ships bound for international markets.

Last year the Houston district as defined by the US International Trade Commission, which includes Port Houston and the Port of Freeport, handled 84% of all US waterborne polyethylene exports. That dominance is expected to continue as new capacity ramps up. However, other ports are marketing themselves as alternative outlets for excess polyethylene, often touting their heavy haul corridors as an advantage over Houston.

"Now there's a compelling reason, a competitive factor for us to hang on to that business," said John Moseley, senior director of trade development at Port Houston, in a recent interview. "It's ticking boxes off a list of things to make us a more competitive gateway port."

Most of each $6,000 permit fee will go to the Texas highway fund and affected counties, but 16% will be equally divided among cities and towns along the port that will see heavier traffic. Trucks that weigh 100,000 lb must have seven axles to safely distribute the weight as well as roll stability and truck blind spot systems.

Opponents included several affected towns, some labor groups and railroads facing more cargo-hauling competition from trucks. La Porte sits between Port Houston's container terminals and is home to new polyethylene plants starting up this year and in 2019. Its city council in February unanimously voiced opposition to the higher limit, as it had during previous legislative sessions when heavy haul initiatives went nowhere.

La Porte Mayor Louis Rigby said a study commissioned by the city several years ago showed 59,000 trucks moved through town in a 24-hour period. He expects more with the upcoming surge in polyethylene production, and said the $960 per permit that will be spread among towns like his will not be enough to enforce the new limits.

"We won't even be able to put one new officer on the street," Rigby said. "But we're working on some things. We won't challenge it — just enforce it."