Major new resin shipping centers planned for Texas might not do much to help domestic resin distributors.
“Those might not have a big impact on domestic business,” said Mike Pignataro, vice president of Bamberger Polymers in Jericho, N.Y. “The bigger impact will be to exports.”
“It makes sense to build them, but it remains to be seen what impact they'll have,” added Ed Holland, president and CEO of M. Holland Co. in Northbrook, Ill. “I think it will help exporters a bit. And there are a lot of empty containers in Dallas and Chicago and other parts of the country that need to be filled.”
New construction is being spurred by the addition of massive amounts of new polyethylene resin capacity being built in North America, primarily on the Gulf Coast. Newfound supplies of natural gas throughout the region can be refined into ethane and the into PE feedstock ethylene.
Rail giant BNSF Railway Co. and Texas-based firms Hillwood Development Co. LLC, and Packwell Inc. are working on a resin shipping center in Fort Worth. That project will be part of the AllianceTexas mixed-use development and is expected to come online during the fourth quarter of 2017.
The Hillwood/Packwell/BNSF effort will be part of a new global supply chain route that enables Packwell to ship resins in containers to end users through ocean steamship lines that work with BNSF. This route will connect Texas to Asia through ports in California.
The proposed facility will cover 500,000 square feet and will employ 100. The $50 million site will be operated by Packwell, which will unload resins and repackage them for sale in Asia and other parts of the world, President Al Duran said in a recent phone interview.
Union Pacific Corp. — another railroad leader — and shipping firm Katoen Natie also have announced a new Dallas-to-Dock shipping service, along with plans to build a major resin shipping center in Dallas.
The Dallas-to-Dock service “provides plastic producers with a low-cost export solution for plastic pellets, expanding their reach overseas,” officials said in a news release. The service transports plastic pellets in hopper cars from the Gulf Coast region and ships the product to Dallas, where the pellets are packaged and transferred into intermodal containers. The containers then travel to ocean ports via Union Pacific's premium intermodal service.
To support the service, a plastics packaging facility will be built in Dallas' Prime Pointe Industrial Park, a 3,000-acre industrial park in South Dallas County served by rail by Omaha, Neb.-based UP, which ranks as the largest rail provider in the U.S. The 500,000-square-foot location will be adjacent to UP's Dallas Intermodal Terminal and is scheduled for completion in the third quarter of 2017.
Distributors shipping materials such as engineering resins and bioplastics in less than railcar amounts also won't likely benefit from the new shipping centers, according to industry veterans Kevin Chase and John Moisson. Chase and Moisson each said their firms are in that category. Chase is president of Chase Plastics in Clarkston, Mich. Moisson serves as president for Jamplast Inc. in Ellisville, Mo.
Even though the shipping centers might not have an immediate impact for domestic distributors, they might be of some help in the future, according to Shawn Williams, senior vice president of plastics with Nexeo Solutions in The Woodlands, Texas.
“A lot of rail infrastructure is aging and inefficient,” he said. “So going forward, new infrastructure might provide an opportunity to help us grow.”