GALVESTON — For nearly a decade, conventional wisdom has been that a terminal to unload containerized cargo — railcar-sized boxes filled with everything from televisions to tennis shoes — wouldn’t work in Galveston.

The hard proof is at Pier 10, where cranes to handle those containers sit rusted and rotted and where even the deep-pocketed Port of Houston couldn’t make a terminal work.

So, when the ports of Houston and Galveston last month said they planned to co-develop a six-berth container terminal on Pelican Island in the next 12 years, some questions begged to be answered. The first being: Are they serious?

“I’m counting it as the next terminal after Bayport,” said Tom Kornegay, executive director of the Port of Houston Authority. “But there is a lot to be done between now and then.”

For a container terminal to be viable, cargo must move seamlessly from ships to freight trains to trucks. That means there would have to be rail access from Pelican Island to the mainland. It would mean widening or replacing the Pelican Island Bridge. And it would mean working with or around the state’s perennial pondering about a bridge to Bolivar Peninsula. Though daunting, resolving those issues is in the realm of possibilities, officials say. But getting some Galvestonians to play along may be the biggest challenge of all. Some island residents harbor an almost innate distrust of the Port of Houston. In 2001, after intense campaigning and bitter rhetoric, island voters sank a proposed merger between the Houston and Galveston ports. Waterfront relations have been choppy ever since.

“That’s the question mark that remains — how people react,” Kornegay said.

The Port of Galveston’s distance to road and rail connections and to distribution centers is the reason the island hasn’t been able to make a container terminal work.

The port has tried. In the 1970s, the island port installed four cranes at Pier 10 to handle containerized cargo. At the time, tenants mostly handled breakbulk cargo on pallets and in bales.

The port was attempting to adapt to a fast-changing industry. About 83 percent of all general cargo is containerized now, up from 23 percent in 1980, according to TranSystems, a Norfolk, Va.-based transportation consulting firm.

But as container ships got bigger and able to carry more cargo to fewer, larger ports, the island terminal fell on hard times. It became cheaper to sail past Galveston to the Port of Houston, and Pier 10 fell idle until the Port of Houston came along.

If the island port didn’t have enough container cargo, Houston had too much.

In 1997, the Houston port, seeking a way to alleviate congestion at its Barbours Cut container facility, agreed to lease Pier 10. Supporters of the lease agreement said it would bring needed jobs to longshoremen. The Port of Houston agreed to pay $500,000 the first year and $1 million in rent each year for Pier 10.

But it has been four years since containers pushed through the Pier 10 terminal. The cranes are in such disrepair that longshoremen couldn’t unload a container ship if one called, officials say. The lease, with renewal options, had the potential to span 40 years. Some island residents accused the Port of Houston of keeping Pier 10 idle to punish Galveston for the failed merger.

“That’s ridiculous; that’s crazy,” Kornegay said. “Why would we spend $1 million a year to punish you? We wouldn’t do that.”

The reason the terminal is idle is that no one wanted to use it, Kornegay said.

“Additional trucking costs always have been a problem,” he said. “The one time we got a customer to move there, Galveston helped subsidize the trucking.”

Pier 10 became a sore spot and appeared headed toward a courtroom. But last month, the waterfront managers agreed to end the controversial lease and ward off potentially years of costly litigation. The decision came after Port of Galveston officials in late September sent a letter to the Port of Houston officials warning them to repair machinery or risk violating the lease.

This month, the Port of Houston Authority agreed to terminate the lease, returning control of the terminal to Galveston.

As the ports announced they had ended the Pier 10 lease, they also made the surprising revelation that they would spend the next 90 days drafting a memorandum of agreement about their intentions for a container terminal on 1,200 acres on the southeast side of Pelican Island.

Galveston owns 100 acres and Houston has 1,100 it purchased about eight years ago from developer and oilman George Mitchell. While Houston owns the bulk of the land, the island parcel is needed to allow for six berths, officials say.

“Our property provides for three berths on the channel,” Port of Galveston Director Steve Cernak said. “Combining the two parcels makes the upland portion of their parcel more valuable.”

Nothing has changed in Galveston to make it a particularly ideal place for a container terminal.

But much is changing around the world that could greatly benefit the island port.

The Port of Houston handles 64 percent of all the container activity along the U.S. Gulf Coast and 94 percent of the container activity in Texas.

It took the port 12 years — from 1987 to 1999 — to see container volume increase from 500,000 to 1 million TEUs, officials have said. A TEU is a 20-foot equivalent unit of containerized cargo.

But in 2005, the Port of Houston handled a record 1.6 million units and expects container volume to reach 2 million next year, officials have said.

The Barbours Cut container facility is at 125 percent capacity. Longshoremen, some who can’t keep busy in Galveston, work day and night to handle all the container cargo at Houston docks.

To alleviate the traffic, congestion and air pollution that come with ships, trucks and port-related vessels involved in transporting containers, the port must find more land.

Last week, after a test run, the Port of Houston said its $1.2 billion Bayport container facility near Seabrook would open in January. That container terminal, with seven berths, is expected to absorb about 25 percent of Barbours Cut container activity in the first two years.

The Port of Houston, in its most conservative estimates, expects container cargo volume to grow between 10 percent and 15 percent for the next three to five years, Kornegay said.

Helping to drive growth expectations are plans to expand the Panama Canal.

That expansion includes construction of new locks and the widening and deepening of the canal to allow super-sized vessels through the critical waterway.

As it stands, the Port of Houston handles few post-Panamax vessels — ships too big to fit through the Central American canal.

Most of those ships come from Asia and travel west through the Suez Canal to get to the U.S. East Coast. But Port of Houston officials have said that the expansion of the Panama Canal would allow it to compete with East Coast ports for the massive vessels.

Almost every manufactured product likely was shipped in a container to distribution centers around the nation and stores such as Wal-Mart.

The China trade is booming and shows no signs of slowing. Meanwhile, the ports of Los Angeles and Long Beach, the two largest U.S. container seaports, are forced to limit growth as they grapple with port-related air pollution. That also potentially leads to more business for the Port of Houston and possibly Galveston, officials say.

“The ports of Los Angeles and Long Beach are full,” Cernak said.

“Cargo is going to have to find other ways to get to the market.”

The city of Houston does not meet federal air quality standards, meaning growth at the port could exacerbate that problem.

Truck and rail congestion also is an issue, officials say. The Port of Houston also must contend with a scarcity of land, making Pelican Island more appealing for a container terminal.

“The growth has been so profound, but it has all been concentrated at the northern part of Galveston Bay,” Cernak said. “It has grown to a point that the only potential is going to the south.”

Officials from both ports say it’s too early to divulge details about the proposed Pelican Island facility.

Port officials haven’t even agreed on an agreement to develop the terminal. They plan to hammer out that memorandum of agreement within 90 days.

But officials say that the project would have to have the right mix of rail and truck traffic to work. There is no rail access from Pelican Island to the mainland. And while rail would play a larger role at the terminal, trucks would be a part of the equation. The

Pelican Island Bridge would have to accommodate those trucks, Kornegay said.

“That bridge would have to be replaced or strengthened or widened or both,” he said.

Port of Houston officials also are intensely interested in the Texas Department of Transportation’s talk of building a bridge to the Bolivar Peninsula. Travel between Galveston and the peninsula is provided by the state via ferry. The state’s cost to maintain the ferry system is about $12 million a year.

The Texas Department of Transportation has floated several plans to build a bridge between the two communities. One possibility is using Pelican Island as a corridor.

“Depending on where they put that road, it could severely hamper the development of the terminal,” Kornegay said. “There are a lot of issues, and we’re dealing with them already.”

So far, the ports’ plan to develop a Pelican Island container terminal hasn’t met with public outcry.

BP this year delayed controversial plans to build a $650 million liquefied natural gas terminal on Pelican Island. The company cited market conditions as the reason. But its plans met with resistance by some residents who feared an LNG terminal would pose environmental and safety hazards.

Industry changes demand cooperation between both ports, officials say.

“I think we have a working relationship that is sometimes stronger than other times,” Kornegay said. “I am comfortable with our working relationship.”