800 North Capitol Street NW

Washington, DC 20573

FEDERAL MARITIME COMMISSION

Competition and Integrity 

for America’s Ocean Supply Chain

March 2, 2021

Dear Mr. Campo and Captain McKamie:

In the past year, we each had the opportunity to tour and meet with the Port of Houston, the 

pilots, its stakeholders, and the Houston channel operations apparatus. We each, 

unfortunately, came away with a similar impression; that the passage of the Houston Ship 

Channel (HSC) Large Vessel Restriction (SB-2223) that restricts the temporary one-way transit of 

longer sized vessels over 1,100 feet in length (Neo-Panamax) could severely hamper the 

competitiveness of the Port of Houston and impact the long-term competitiveness of the entire 

Gulf of Mexico’s ocean container trade. 

As you know, the FMC functions to “establish a nondiscriminatory regulatory process for the 

common carriage of goods by water in the foreign commerce of the United States”, and 

consistent with our statutory mandate, regulations, and decisions, can generally evaluate the 

reasonableness of shipping practices.

To begin, we are concerned that the new regulatory structure governing navigational safety in 

the HSC, counters the federally delegated authority of the U.S. Coast Guard. Traditionally, the 

U.S. Coast Guard works closely with U.S. pilots and industry stakeholders to facilitate access to 

U.S. ports in an impartial but navigationally safe manner. We are unaware of examples in the 

United States where a local Commission is empowered to unilaterally restrict interstate and 

foreign commerce. We would note that other states facing similar Neo-Panamax navigational 

safety issues have addressed such challenges by coordinated federal/state/local management 

plans, under the purview of the U.S. Coast Guard, that have included temporary one-way 

transit through navigational channels. 

While the legislation was purported to remedy the safe navigational operation of Neo-Panamax 

vessels in the confines of the HSC, we understand there were no reports of any safety issues 

under the previous safety regime. It appears the restrictions had more to do with concerns 

about management of the waterway and potential restrictions on access. We are evaluating 

Mr. Ric Campo

Chairman 

Port Commission of the Port of 

Houston Authority

111 East Loop North

Houston, Texas USA 77029

Captain Reginald McKamie

Chairman 

Pilot Board

Houston Pilots

203 Deerwood Glen Drive

Deer Park, TX 77536
800 North Capitol Street NW

Washington, DC 20573

FEDERAL MARITIME COMMISSION

Competition and Integrity 

for America’s Ocean Supply Chain

whether the current regulatory provisions restricting access of larger sized vessels into the HSC, 

are in fact being discriminatorily applied to the container shipping industry. 

Prior to passage of SB 2223, we understand that Neo-Panamax container vessels were 

restricted to daylight operations and were required to employ an additional pilot and tug 

assistance when operating in the HSC. These additional navigational restrictions were imposed 

under the navigational safety authorities of the U.S. Coast Guard, and in concert and 

coordination with the Houston Pilots.

Secondly, if such discriminatory practices are being applied, what impact would this have on the 

Gulf regions container trade? We have seen that the Port of Houston is the hub of the Gulf 

region’s container trade. Currently, 70-75% of all containerized imports in the Gulf Coast are 

carried into Houston, with an equal balance of imports and exports. The HSC serves upwards of 

eight states in the region and touches many more inland destination points throughout the 

United States.

We understand that newer generation Neo-Panamax vessels, because of economy of scale, 

carry cargo at substantially reduced costs between 15-25% less per container. Access to this 

reduction in cost will substantially decrease retailer import costs and assist in making U.S. 

exports more competitive.

Looking ahead, clearly, the HSC needs to be widened to accommodate the full range of 

maritime shipping and projected volume increases in what has become one of the busiest 

shopping channels in the world. The recent enactment of provisions included in the Water 

Resources Development Act authorized the HSC widening and affiliated enhancements that are 

projected to cost close to $1 billion dollars in public/private investment in infrastructure

funding for the project. This project is essential and must be completed in a timely manner and 

with appropriate environmental control. However, the reality is that a project of such 

magnitude, with environmental approval, engineering, and construction, will be multi-year 

endeavor and could endure unforeseen delays.

Simply put, the completion time frame for widening of the HSC does not appear to synch up 

with the current rapid container market growth and future demand the Gulf region is 

experiencing. Delaying the utilization of the HSC as a conduit to the Port of Houston’s marine 

terminals for Neo-Panamax shipping could cause a permanent change in the pattern of delivery 

of containerized cargo to the entire Gulf Coast and impact the South Atlantic containerized port 

services. Currently, the Ports of Houston, New Orleans, Mobile and Tampa Bay are all in the 

process of investing over a combined two billion dollars in water deepening, and other affiliated 
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Washington, DC 20573

FEDERAL MARITIME COMMISSION

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for America’s Ocean Supply Chain

shoreside improvements to handle the newer container vessel fleet sizes. Capacity 

enhancements at these ports are scheduled to be completed within the relatively near future.

Alternate port services for Neo-Panamax shipping can be found in Freeport, Bahamas, Kingston, 

Jamaica, and East Coast Panama Canal marine terminals to facilitate Neo-Panamax utilization 

outside of the United States, and continuation of service into the U.S. Gulf Coast with smaller 

container feeder sized vessels. We feel that it can be safely said that a longer duration decision 

that would restrict access to Neo-Panamax vessel service to Houston, would adversely impact 

not only the Port of Houston container shipping but also the entire Gulf Coast.

Finally, the U.S. and the rest of the world now face a global pandemic wreaking havoc on our 

supply chain. The unintended consequences of the global pandemic have led first to record 

declines in container shipments into the U.S., and then to record volume surges at our nation’s 

gateways. The cruise ship and energy transportation sectors have been severely harmed; 

however, container shipping has been critical to our nations efforts in this volatile time as we 

work to defeat COVID-19. From November 2019 to November 2020, nationally, the container 

volumes shot up by 23 percent, as Americans purchased greater volumes of PPE, e-commerce, 

and other essential supplies, demonstrating the vital importance of this sector of our economy. 

At a time when national, state, and local maritime industry leaders are struggling to increase 

maritime capacity throughout the country, the enactment of the HSC restrictions seems 

shockingly out of step and dangerously short sighted. 

 

To help us in our evaluation of the current structure of HSC access to marine container 

terminals, we have the following questions: 

1. To what extent was there evaluation of navigational safety of Neo-Panamax 

vessel transits on the HSC, before the implementation of SB 2223, and what 

were the results of this evaluation? Was the U.S. Coast Guard consulted?

2. Prior to the implementation of SB 2223, how many Neo-Panamax vessel transits 

were limited to one-way transit, what does this translate into actual time spent 

in HSC channel utilization in total, and roughly by percentage of potential total 

capacity utilization?

3. What actions have been taken to explore and/or adopt new rules to restore twoway traffic on the HSC, and is there any consideration of attempting to consider 

scheduling two-way transits to accommodate Neo-Panamax vessels by identify 
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Washington, DC 20573

FEDERAL MARITIME COMMISSION

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for America’s Ocean Supply Chain

smaller or more narrow vessels to be transit in partnership with Neo-Panamax 

vessels?

4. What action has been taken, to date, to implement the waiver process 

established in SB 2223?

We look forward to receiving the requested information and continuing to work with 

the Gulf Coast region in addressing the HSC restriction and capacity challenges. Please 

feel free to reach out to us directly. 

Sincerely,

________________________ _____________________

Carl W. Bentzel Louis Sola

FMC Commissioner FMC Commissioner

cc:

Port Commissioners of the Port of Houston Authority

Dean E. Corgey, Commissioner 

Clyde Fitzgerald, Commissioner

Stephen H. DonCarlos, Commissioner

Roy D. Mease, Commissioner

Wendolynn “Wendy” Montoya Cloonan, Commissioner

Cheryl D. Creuzot, Commissioner

Roger Guenther, Executive Director

Pilot Board Commission 

Michel Bechtel, Commissioner

Frances Castañeda Dyess, Commissioner

Roland Garcia, Commissioner

Brenda Hellyer, Commissioner

Brad Hance, Commissioner

Darrell Morrison, Commissioner

Bruce Oakley, Commissioner

Randy Wilson, Commissioner

Captain M. Tyler Gavis, Executive Director

Coast Guard

Captain Jason Smith, Commander, Coast Guard Sector Houston-Galveston (Captain of the Port)

Alan Robb, President, ILA South Atlantic and Gulf Coast