Protectionism Harms the Safety and Efficiency of Texas Waterways

Colin Grabow

Connecting the busiest port in the United States to the Gulf of Mexico, the Houston Ship Channel is one of the country’s most important waterways. It’s also home to a bizarre maneuver known as the “Texas Chicken.” To perform the Texas Chicken, ships traversing this vital commercial artery sail almost directly at each other and then make a starboard turn to avoid a collision before resuming their previous path. Just take a look:

Unlike its automotive counterpart, the Texas Chicken isn’t the result of ship captains wishing to engage in a nonsensical test of their courage but rather the channel being too narrow to accommodate two‐​way traffic at safer distances. “Even with the incredible skill this maneuver requires,” says the Port of Houston, “there is no question that a wider channel is a safer channel.” The National Transportation Safety Board, meanwhile, describes the challenges involved in navigating the narrow waterway as “significant.”

That Houston lacks the wider and safer ship channel it sorely needs in large part due to outdated U.S. maritime protectionism. Namely, the Foreign Dredge Act of 1906 and the 1920 Jones Act.

In many countries, dredging needs are addressed through a competitive bidding process open to firms from around the world. Not so in the United States. Instead, the Foreign Dredge Act and Jones Act mean dredging projects are restricted to domestic vessels that are severely limited in both numbers and capacity.

In terms of hopper dredges—the type of vessel generally preferred for dredging coastal harbors—there are only 16 in the entire country. In comparison, a single international dredging firm, Belgium‐​based Jan de Nul, owns 30. Jan de Nul’s dredges aren’t just more numerous but larger as well. Ten of their hopper dredges have larger capacities for storing dredged material than the biggest such dredge in the U.S. fleet, making them more efficient to operate.

And that’s just one foreign firm.

It should come as no surprise that the U.S. dredging fleet’s small size has led to limited competition for the projects bid out by the U.S. Army Corps of Engineers (USACE). In fact, according to data from the USACE, two‐​thirds (67 percent) of the 701 dredging contracts awarded from 2014 to 2018 featured only one or two bidders.

The inevitable result of limited dredging options is high costs and unnecessarily lengthy timelines for the completion of urgently needed projects. And the Texas Chicken.

But the Texas Chicken isn’t the only burden imposed as a result of protectionist dredging policy. Compounding matters, the Port of Houston has been forced to limit the entry of large containerships to a mere one per week. That’s because the ships are too long, and the channel too narrow, to allow for two‐​way traffic. Such are the compromises that must be made to ensure the flow of goods when faced with waterways that are inadequately dredged.

Small wonder the USACE has declared that the Houston Shipping Channel is “currently suffering inefficiencies due to the high vessel transit count and congestion within the current channel configuration.” Such inefficiencies mean constrained economic growth and job opportunities.

Insufficiently dredging is also a key culprit behind another phenomenon particular to the energy industry. The largest and most economic vessels used for crude oil transportation are tankers called—rather unimaginatively—Very Large Crude Carriers (VLCCs). The insufficient depth of shipping channels, however, means these ships cannot directly access Texas ports.

So instead, VLCCs must sit offshore where they are met by smaller tankers that transport the oil to them. Known as reverse lightering, the process is estimated to take two‐​to‐​three days longer than direct loading and, depending on freight rates, can tack on over $1 million to shipping costs.

Politicians on both sides of the political aisle are currently chomping at the bit to spend vast sums of taxpayer dollars to improve the state of the country’s infrastructure. But before spending a dime they should first reconsider their disastrous support of outdated protectionist maritime laws that have so badly failed the country’s ports and waterways.