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The following is the August, 1999 edition of "The Bulletin". Any questions or comments regarding content should be addressed to Alistair Macnab at 713-678-4300.
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The Editorial
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How are we ever going to persuade the good folks who live around the Bayport area that the proposed Bayport Terminal now being developed by the Port of Houston Authority to take care of container and possibly cruise ship business in the 21st Century, need not be an unfriendly neighbor?
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A lot of valuable time and printer's ink have already been spent on analyzing whether we need a new container terminal in the first place, or if its shown that we do, then where it should be located, and everyone seems to be ignoring the fact that these questions have been addressed a long time ago and that Bayport is currently the best answer on the table.
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Whether a new container terminal is located in Bayport, Texas City, Galveston, Freeport, Beaumont, or Corpus Christi, the justification is the same. The production and consumption region encompassed within the Houston-Dallas-San Antonio triangle is the third-largest of its kind in the United States and a new and expanded container-handling facility is needed to connect us with the rest of the world.
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Each port can make its own good case for its participation in this same business but it is only metropolitan Houston, standing on its own, that represents 50% of this world-class traffic. And it's to the Port of Houston that the international ocean steamship companies want to come. Where are all the banks, consulates, trade delegations, ocean transportation intermediaries, and technical and transportation services providers already located?
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Why not Galveston? Its closer to the sea. Why not any of the others? Well, the Galveston question was answered a long time ago and as for the other contenders, putting it quite simply, they're not Houston. In transportation terms, the closer you can get to your destination by sea, the cheaper your transportation costs. The Houston market could be served from the other ports but why pay extra for the long-haul trucking? Its simple economics 101.
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But if Houston is not in a position to handle the normal growth of container business or to permit ocean-going container ships to be worked efficiently and expeditiously, the owners of these ships might very well decide to cut their losses and land Houston's cargo in Savannah, Jacksonville, or Charleston, save themselves the extra four days' steaming into the Gulf, and let the railroads bring the goods the rest of the way. Not good news for the bright, shining container terminals built in places other than Houston, and waiting in vain for business.
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Whether we like it or not, the merchants of the world and the steamship carriers who serve them, want to do business in Houston and we can either accommodate them or send them away. They see Houston as a destination and source of business in its own right and they also see Houston as the gateway to the Houston-Dallas-San Antonio triangle with its growing population and expanding economic strength.
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A very good case for expanded container-handling facilities in Houston has been made and Bayport has been selected as the best location. As a matter of fact, a container terminal need not be an inconvenient neighbor: one can think of other less salubrious uses for the Bayport property which the Port Authority owns on behalf of the citizens of Harris County. If no other location can be demonstrated to have Bayport's advantages (and I believe none can) then let's get down to the business of making it a good neighbor, an environmentally friendly partner, and even something of a showcase for thoughtful and sensitive industrial development. This we can do for our communities, our county, our city, and our region.
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Alistair Macnab
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House Appropriations Subcommittee Chair Promise ACE/ACS Funding
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U.S. Representative Jim Kolbe, (R-AZ), Chairman of the House Appropriation Subcommittee, has promised to fund Custom's new Automated Commercial Environment (ACE) and Automated Commercial System (ACS) as soon as Customs presents completed planning documents requested by the Committee.
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This promises to be good news for all users of Customs current system for clearing cargo as this Subcommittee is the only one responsible for funding the new ACE in the House.
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The National Customs Brokers & Forwarders Association and other supporters of the new system are working to make sure that funding requests for ACE and ACS appears in the Administrations budget request for this year, without having it tied to an increased merchandise processing fee.
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Maersk Parent Group Agrees to Purchase Sea-Land Services
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The A.P. Moller Group, parent company of Maersk Lines, a major steamship line, will purchase the liner services and terminal operations of Sea-Land Service, the largest U.S.-flag container line for a rumored $800 million.
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The two companies have previously been cooperating on global operations for the past several years, but did compete in sales and marketing.
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The new company will combine both companies under the name Maersk-SeaLand and will have nearly 250 ships with a total capacity of about 550,000 TEU's, 24 terminals including 13 in the United States including Sea-Land's current terminal at the Port of Houston's Barbours Cut Terminal. CSX Corporation, present owner of Sea-Land will keep Sea-Land's domestic service between the mainland U.S. and Hawaii, Puerto Rico and U.S. territories in the Pacific. In order to allow foreign owned Maersk to continue to receive U.S. subsidies for Sea-Land's U.S. flag vessels, the new company will set up a U.S. owned third-party company to operate those vessels. This is the third sale of a U.S. owned steamship operator in the last few years, starting with purchase of American President Lines (APL) by Singapore based Neptune Orient Lines and CP Ships Ltd's purchase of Lykes Brothers Steamship Lines.
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Grain & Feed Association Joins Fight Against Dredging Tax
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The National Grain and Feed Association, a group representing nearly 1,000 grain and feed-processing companies has joined with several other organizations such as the American Association of Port Authorities (AAPA), the National Mining Association, the American Forest and Paper Association, the National Association of Manufacturers, the American Iron and Steel Institute and even the AFL/CIO's Maritime Trades Department in opposing the Clinton Administration's plan to pay for harbor maintenance dredging and deepening though increased user fees on vessels.
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All these organizations are very much opposed to new user fess for this purpose and want such cost to be paid for from the general treasury funds. In fact a bill to do just that has been introduced into Congress by Reps. James Oberstar (D-MINN) and Robert Borski (D-PA), which has drawn support from the above associations along with some three dozen Congressmen. These organizations and Congressmen believe that harbor channels are a national benefit which helps the country as a whole and should be funded at the national level to allow for efficient and easy means to allow ships to move cargo to and from America.
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Port of Houston; Citizen's Advisory Group
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What can the ordinary citizen do to assist the Port of Houston Authority in its search for the right policies and decisions that will allow it to preserve, protect, and increase the thousands of jobs that rely on the international commerce that makes the Port of Houston Number One in our Nation?
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That was the question put to a representative group of citizens on July 20th. at the downtown offices of Vinson and Elkins, as Mr. John Hall, of John Hall Public Affairs, introducing himself as the Convener of a meeting sponsored by the Port of Houston Authority, asked those present to identify themselves and their special interests and affiliations.
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While it was recognized that the principal topic was to provide citizen input into the design and eventual operation of the proposed Bayport Terminal and to look at the various issues raised in connection with the planned container and cruise ship facility, there were, nevertheless, several speakers who wanted to know more about the rationale for a new terminal in the first place or who questioned the need to locate it on the Bayport Channel.
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Mr. Ned Holmes, Chairman of the Board of Commissioners of the Port of Houston Authority, was present to outline the many years of planning that have gone into the Authority's current plan for locating the needed expansion of container and cruise ship facilities on the Bayport property which the Port has acquired over many years.
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There was a definite and demonstrated need, continued Holmes, to create new container-handling berths as the Authority's Barbours Cut Container Facility was nearing optimum utilization and taking it beyond that stage, even if Port customers could be persuaded to call at a congested complex, would only create inefficient operations to the detriment of the working environment and the quality of the work.
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"Our leading role as the perceived Gulf Loadcentre is ours to loose", stated Holmes. "Our customers can easily take their ships elsewhere and the Commissioners would not be doing their duty if they were to allow this to happen. Too many jobs are at stake."
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In a review of those present, Holmes asked if there was as much opposition to a cruise terminal as there was to a container facility? It was clear from the raised hands that most had no objections to cruise ships but that objection to container ships was quite strong. "You must realize that we can't build the cruise terminal without making it possible to also work containers," replied the Chairman. "Simple economics tells us that we can have a container facility without a cruise terminal but not the other way around."
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The meeting continued with a quick overlook by Ms. Sharon Maddox of Vinson and Elkins at the permitting process and the Environmental Impact Study and Statement which will be carried out by the U.S. Army Corps of Engineers. This was followed by a more detailed discussion and review of the many issues, concerns, and expectations of the advisory panel. Many topics were raised including traffic and safety issues, transportation and infrastructure questions, environmental and recreational matters, and land use and esthetics concerns. It was also suggested that there should be an expanded membership in the Citizens Advisory Group to include representation from several organizations not originally invited. A code of behavior was recognized so that proceedings would remain cordial and courteous.
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Mr. Hall, in his closing remarks, emphasized the need for frank and open discourse. The Port Authority was wanting to hear from the Group, which was the reason for its formation in the first place. With good will and a positive attitude, a great deal could be achieved and the eventual outcome a credit to all those who are participating in this advisory process. Further meetings are scheduled over the next several months.
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Port of Galveston's $1 Million for Capital Improvements and Business Development
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The Port of Galveston refinanced its bonds in 1998 allowing for the realization of $1 million to be used for capital improvements and business development and the elimination of a $3.5 million payment due in 2004.
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Other benefits arising from the refinancing included elimination of the
mortgage on the shipyard located on port property, reduced interest rates,
and elevation of the Wharves Board bond rating back to investment grade
status.
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Recent new business attracted to the Port include a bulk cement terminal
at Pier 28, the development of a flexible pipe manufacturing business at Pier
14, a new cruise line for the Cruise Terminal, and a significant expansion of
offshore vessel and drilling repair and fabrication activity by a local
company on six acres of waterfront land and storage facilities.
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Noting these various developments, Mr. Fred Wichlep, Chairman of the
Board of Trustees declared that the time was ripe to take advantage of
current market conditions and the Wharves' improved financial position. By
putting money back into the facilities and maintenance projects, the Port was
now able to continue to market itself to businesses interested in sites for
future growth and development.
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For more information on the Port of Galveston, call Mr. Ron Popham,
Director of Marketing, on 409-766-6112 or 281-286-2484 ext.112
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HGAC Strategic Freight Corridor Workshop
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With a look at several intermodal planning success stories and an explanation
of the funding process for local intermodal projects, the Houston-Galveston
Area Council's workshop on July 16th. was off to a busy session with over
seventy interested parties in attendance.
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Opening remarks by HGAC's MPO Director, Alan Clark, and its Executive
Director, Jack Steele, were followed by explanations of such funding
mechanisms as ISTEA and TEA-21, perhaps only acronyms that a bureaucrat could
love, but necessary tools for anyone hoping to be able to tap into federal
money to implement an intermodal project.
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Typical intermodal projects were defined as truck-rail; truck-water;
truck-air; truck-rail-water; or rail-water connections. Altogether, some 159
projects, located in 42 states involving some $4.8 Billion of planned and
programmed public and private investment were said to be currently in
existence. In the Houston area, these included highway access, bridge and
overpass reconfigurations to accommodate high loads, and improved rail grade
crossings.
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But since the purpose of the workshop was to identify new projects that might
be candidates for future public funding, breakout groups were formed after
the mid-morning break and the results of these deliberations later reported
back to the full assembly. A list of problem areas revealed by this process
was then drawn up and will be submitted to detailed examination and review by
the program's organizers.
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To bring a most informative and instructional morning to a close, the Port of
Houston Authority sponsored a box lunch during which representatives from
airports, seaports, railroads, trucking, and government were encouraged to
discuss their own particular intermodal problems with the Bureau's Alistair
Macnab acting as Moderator.
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The project continues under the direction of Jerry Bobo of the HGAC and TEI-Traffic Engineers, Inc. lead by Ms. Susan Alleman, acting as project managers. Ms. Alleman can be reached on 713-270-8145 for further information.
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Port Bureau's Lecture Series For Maritime Professionals
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The enclosed flier will draw your attention to the series of lectures on topics of interest and importance to the marine professional. The introductory course will be available on three occasions throughout the fall on September 1st. October 13th. and November 17th. whilst the more advanced study program will consist of three, one-day concentrations on specific subjects such as Chartering, Claims, and Logistics, to be held respectively on September 22nd. November 3rd. and December 15th.
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This series of training modules is being offered in furtherance of the development of a Center for Maritime and Commercial Education designed to offer Houston's international shipping community with local access to opportunities to develop greater personal skills in their chosen field. As the Nation's Number One seaport in respect on international tonnage shipped through the Port of Houston, it is imperative that we encourage promising new entrants into our ranks while at the same time ensuring that today's shipping executives are fully prepared and ready to conduct world class business from positions of knowledge and experience.
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For corporate and individual applications to reserve places in the various modules, please call Cynthia on 713-678-4300. Classes are small and filling fast.
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Don't Forget Your Entry for the Bureau's Millennium Directory
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The Greater Houston Port Bureau, the Marine Exchange of the West Gulf, the Houston Customhouse Brokers and Forwarders Association, and the U.S. Gulf International Commerce Club will be combining their membership into one Millennium Edition of a Membership and Services List to be published later this year.
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A flier enclosed with this month's Bulletin gives you an opportunity to ensure that your free entry is exactly as you would want it. There is also an opportunity for you to display your corporate message in narrative form.
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The list of members will be supplemented by a list of service providers
displayed by type of service offered by the membership. This will provide an
important cross-reference for the Directory's users and is designed to
enhance its value as an essential reference and resource tool.
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Advertising opportunities will be available as well. For more details please
call Alistair on 713-678-4300
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Houston in Running for Pilothouse Simulation Center
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Operators of tug and barge services in the Texas Gulf and Intracoastal
Waterways have come together in support of bringing a Pilothouse Simulation
Center to Houston. This is an orientation and training program designed by
the Center for Marine Education and already in operation at their facilities
in New York and Paducah, KY.
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The success of the existing programs and the growing interest of the towboat
industry have encouraged the Center, which is an offshoot of the Seamen's
Church Institute (SCI) of New York and New Jersey, to seek support for a new
installation in the Gulf. The ports of Houston, Houma LA, and New Orleans are
possible locations currently being evaluated.
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The Rev. Peter Larom, the Executive Director of the SCI, who is currently
leading the evaluation of the competing sites, was here in Houston in early
August to meet with representatives of the interested parties including the
Texas Waterways Operators Association, the Port of Houston Authority, The
Greater Houston Partnership, the Houston Pilots, the Greater Houston Port
Bureau, and the Houston International Seamen's Center.
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There is much local enthusiasm for locating this facility here in Houston. As
the Nation's Number One Seaport in international tonnage terms, it is
recognized that the broadest range of maritime activities has to be available
if the Port and the region are to continue to develop and grow in world-class
terms.
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A Houston Center for Marine Education with the pilothouse simulator as its
core activity will be a worthy and logical adjunct to the substantial,
international maritime business already centered in our city and region. The
Port Bureau is a strong advocate for the creation and delivering of
professional learning programs and has already embarked on a series of
courses for Fall 1999 which offer a range of educational opportunities
extending from generalist one-day seminars to in-depth study programs
designed to assist the maritime executive brush-up his skill sets.
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The tug and barge industry, through the TWOA, has certainly stepped up to the
line in recognizing the need to train and constantly update the skills of its
tug captains and pilots. That the barge traffic on the Houston Ship Channel
exceeds the deep-sea traffic by a factor of more than 10 to 1 only highlights
the need for operational safety in this sector. With the pilothouse simulator
program domiciled in Houston, yet another aspect of maritime commerce can
"come of age" and help Houston grow.
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Houston Pilots Demonstrate New Communications System: Trial Pilot Booking and Boarding Confirmation Program Unveiled to Agents
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To a gathering of the ship agents and ship operators who collectively
account for the greatest percentage of pilot demand in the Port of Houston,
Captain Tom Phelps, Presiding Officer of the Houston Pilots recently offered
a look at the new communications system now undergoing a test with selected
users.
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The system has been developed in-house by the Pilots and creates a
printed record of confirmed pilot call outs and vessel boardings with only a
ten-minute delay. Seen as a major advance in the exchange of instruction and
information between the Pilots and their Customers, the program presently
runs to nominated fax terminals but is likely to be extended to communicate
with E-Mail addresses in accordance with the wishes of the system's trial
users. All information is secured by means of PIN and image numbers and
customers can call up their assigned data fields upon demand.
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To date, however, the program has been well received. During the next
several months, the program will be further improved in preparation for a
wider availability. For more information, call Theodore Nelson or Dave
Morrell on 713-645-9620
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In a separate but associated development, the Marine Exchange of the West
Gulf, has recently installed new computers in preparation for the upgrading
of the Port Traffic Intelligence system which is expected to provide a wider
and more comprehensive range of ship, berth, and agency activities for
subscribers. The Exchange also captures data from other Texas seaports and is
linked to Marine Exchanges throughout the United States for the retrieval and
dissemination of maritime information on a nationwide basis.
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Commenting on the Houston Pilot's new program, Alton Landry, Manager of
the Marine Exchange, noted that any program that improved the flow of
information and made it easier to do business in the Port of Houston was to
be welcomed. The Pilots' offer of confirmed booking and boarding data is seen
as complimentary to the Exchange's "Passing Morgan's Point" live reporting
and its specialist telephone answering and connecting services. The Marine
Exchange of the West Gulf is a wholly owned subsidiary of the Greater Houston
Port Bureau. Alton may be reached on 713-678-7711
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Commercial Marine Vessel Contributions to Emission Inventories
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It has come as something of a shock to note that when it comes to measuring
the extent and range of air pollutants in Galveston and Harris Counties, that
ocean-going marine vessel emissions together with contributions from towboats
and other harbor craft, are said to comprise a frighteningly high percentage
of the total.
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The development of a State Implementation Plan to reduce emissions has to be
in place by November 15th. and there is a deadline in the year 2007 after
which Federal penalties will kick in should the accepted clean air standards
not be attained.
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While Houston's ranking near the top of the pollution scale is nothing to
boast about, the official quantification attributed to marine vessels is
based on hypotheses and estimates from 1990 which now seem to be in error and
greatly exaggerate commercial shipping's contribution to the base line.
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A study is now under way and a stakeholders meeting was convened by the Port
of Houston Authority on July 29th. to examine the situation and to seek the
help of interested parties who might be of assistance in re-examining the
governing data now believed to over assess pollution from the maritime
sector. It is appreciated that any amelioration from one pollution source
will have the effect of lowering the overall benchmark for the region as a
whole and greatly assist in any attainment process.
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Bruce Anderson of the Starcrest Consulting Group LLC, has been engaged to
lead the study and already the official estimate of pollution from marine
vessels has been found to be based on all deep-sea vessels traversing the
entire length of the Houston Ship Channel which is not the case. In reality,
most vessels stop off at their destinations well short of the Turning Basin
at the head of navigation. It has also been found that the official count
supposes motor ships to be operating on boiler fuel while navigating in our
area whereas the reality is that many ships convert to light diesel during
maneuvering.
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Overall, hopes are high that on the marine vessels side, at least, a
reassessment of the emission inventory base line will greatly assist
Galveston and Harris Counties to better achieve overall compliance and spare
us all the threat of draconian measures imposed by a bureaucracy not in
possession of the true facts.
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If you feel you can offer information in support of Bruce Anderson's study,
you can reach him on 713-789-2213
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Steel Roundtable Convened by PHA Trade Development
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Executives representing Houston's international steel trading sector were
brought together by the Port of Houston Authority during July for a working
lunch, to examine the current depressed state of steel traffic passing across
the Port's wharves and to look at the prospects for the rest of 1999
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For the first half of 1999, an estimated 990,000 short tons of steel products
were received over the Public Wharves. This compares with 1,716,349 short
tons for the same period last year. It is unlikely that the record tonnages
handled in 1997 and 1998 will be matched this year.
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Overall, in the USA as a whole, steel imports have slipped 8.6% when
first-half 1999 is compared with first-half 1998 so it can be seen that
Houston's shortfall is more dramatic than that experienced by many other
ports of entry.
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During the first half of 1999, more than 25% of steel imports into the USA
have been bought from our neighboring NAFTA partners of Canada and Mexico as
opposed to overseas producers. The big declines in import tonnage have been
experienced by Japan, Russia, Australia, Turkey, and Ukraine.
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PHA staff introduced Bob Moore, Vice President of the American Institute for
International Steel (AIIS) and Curtis Spencer, President of IMS Worldwide,
Inc., who presented a thoughtful reassessment of the value of utilizing Free
Trade Zones for the purpose of substantially converting steel imports into
export goods without actually "entering" the commerce of the United States.
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Bob Moore, the local representative of the AIIS, can be reached on
713-968-6540 and Curtis Spencer of IMS Worldwide is available at his Houston
head office on 281-286-0008
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John Rydlund, PHA's Trade Development Officer and Walt Kleczkowski, the
Port's Manager of the Turning Basin facilities, concluded the meeting with a
description of the proposed Berth No.33 which has been conceived as a
straight-line extension to the East of the existing Turning Basin Berth
No.32. The particular interests of the steel group will be an influencing
factor in the final design and layout of this new facility. More information
may be obtained by calling John on 713-670-2582 or Walt on 713-670-2435
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Bulk Liquids Terminals Managers Meet to Consider Cooperative Strategies with Chemical Tanker Operators
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Recent moves by chemical tankers operators to examine ways to facilitate
the port operations of their vessels in the Port of Houston were reflected
when a similar gathering of bulk liquids terminal managers was convened to
examine the same issue.
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The Greater Houston Port Bureau has offered its neutral and
organizational facilities to both groups in an effort to encourage open
discourse. There is no disputing that delays to vessels can occur during port
operations. Whether or not significant operational efficiencies can be
contemplated will depend very much on all parties' ability or willingness to
work cooperatively within the continuing framework of existing proprietary
parameters.
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The Bulk Liquids Terminals group met at the Bureau on July 20th. when an
ad hoc representative committee was formed that will eventually liaise with
the Carriers' group established earlier this year in June.
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Alistair Macnab of the Port Bureau has been appointed as Recording
Secretary to both groups, which will continue to meet on a regular basis. For
more information, Macnab can be reached on 713-678-4300
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West Gulf Maritime Association; Political Action Committee
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Many Port Bureau and Marine Exchange members are also supporters of the
West Gulf Maritime Association and its Political Action Committee (PAC) which
was formed in 1994 to promote the best interests of the maritime industry.
Such purpose is accomplished by raising and collecting contributions, which
are expended in support for, or in opposition to, candidates for public
office, and measures or proposals submitted to the people affecting our
industry's best interests.
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Each year, the WGMA PAC holds a fundraising social evening which, this year, is to be held at the Radisson Hotel on the Gulf Freeway on October 15th. The theme for this year's event is "Hawaiian Nights".
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For more information please call Jim Morrison at the WGMA on 713-678-7655
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