Gulf Coast Ports: A Tale of Two Octobers

As the leaves turn and the air grows crisp, so too do the fortunes of Gulf Coast ports. October saw a mixed bag of freight traffic, with container volumes dipping at some ports while crude oil exports surged at others. Let's dive into the numbers and analyze the trends shaping this vital region.

Ports in Houston and New Orleans reported decreasing container volumes in October, with Port Houston seeing a 15% year-over-year drop to 309,623 twenty-foot equivalent units (TEUs). The decline was largely driven by a 25% decrease in steel product shipments, reflecting a 7% year-over-year decrease in Texas onshore and offshore rig activity. This slowdown highlights the impact of commodity prices and industry dynamics on Gulf Coast ports' performance.

On the flip side, demand for exports of crude oil remained strong at the Port of Corpus Christi. The port handled 11.2 million tons of crude oil in October, an 8% increase from the same period last year. This surge can be attributed to Western European buyers seeking alternatives to Russian crude, with the U.S. and its allies imposing restrictive trade sanctions on Russian crude oil as a result of the Russian invasion of Ukraine.



While the semiconductor shortage continues to impact the automotive industry, the easing of supply constraints has led to a boom in roll-on/roll-off (RoRo) cargo at East Coast ports. The Georgia Ports Authority (GPA) reported a 46% year-over-year increase in RoRo cargo at the Port of Brunswick in October, handling 70,235 units. This growth is a direct result of the increased availability of computer chips, allowing carmakers to increase production and manufacturers to push for end-of-the-year volumes.

In the face of market volatility and external challenges, it's crucial for investors to stay informed and adapt their strategies accordingly. The Gulf Coast ports' performance in October underscores the importance of understanding individual business operations and their specific market dynamics. As the global economy continues to evolve, investors should remain vigilant and seek opportunities in under-owned sectors, such as energy stocks, while also considering strategic acquisitions for organic growth.

The author's core investment values emphasize stability, predictability, and consistent growth, favoring 'boring but lucrative' investments like Morgan Stanley. By adopting a balanced portfolio, investors can combine growth and value stocks while prioritizing risk management and informed market predictions. As the saying goes, "Don't let the market downturns scare you away from strong, enduring companies like Amazon and Apple."