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The following is the May, 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 do you like our new look? This is just one of the formats we're trying out in a bid to make the Bulletin more attractive and readable. Now if only we can keep your attention on the content...!
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May is going to be a busy month with the Commerce Club embarking on Part II of our study of the Ocean Shipping Reform Act (OSRA) lead by Bob Nicholas of Baker and Hostetler. He has asked that attendees send him specific questions in advance so that the presentation can be more relevant. This way, the description of the somewhat arcane detail of the new system which made its debut on May lst., can be replaced by matters of more pressing and practical concern to us all. And yet, we'll have the whole enchilada available as well. Don't miss this one. We're tailoring it just for you people at the front end.
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Then there's our Y2K symposium and Workshop on May 26th. If you have put off doing anything about Y2K until now, you won't want to miss this quick study and opportunity to find out what others are doing or have already done. At $30.00, which includes lunch, this is the deal of the Century - what's left of it, that is.
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Look for articles about both these events inside. If this doesn't get you to turn the pages, then perhaps I should be looking for another job.
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Did you remember to send in the Port Bureau Membership Application Form? Let me gently remind you that copies of this Bulletin will soon be finding their way only to fully paid up members of the Bureau and the Marine Exchange. Sorry, old chum. "No got ticky; no get shirty", as my dry cleaner is fond of saying. Think of it as Economics 101.
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See you nect month (I hope).
Alistair Macnab
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Customs Urges Exporters To Sign On To AES System Now
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U.S. Customs is worried that delays by many companies who have not yet signed up to join the new Automated Export System (AES) could overwhelm the agency by forcing the exporters to file their shippers export declarations in paper form. This would lead to long delays and prevent Customs from processing the applications by the January 1, 2000 deadline, Customs now plans to end the existing automated filing system , known as the Automated Export Reporting Program by January 1, 2000. Customs stated that although many companies have already begun to sign up for the new program, many others have not yet done so.
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Although there was some opposition to the new AES program when Customs first proposed it, much of the opposition has dissipated and most trade organizations now support the program. However, the American Association of Exporters and Importers has urged Customs to promote the program to a greater extent saying that despite Customs efforts to reach out to the trade community, many exporters are still not aware of the AES program.
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Texas Gulf Ocean Traffic, 1st. Quarter, 1999
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The numbers are in for traffic performance at Texas Gulf ports over the first quarter of 1999 and although there is a overall downturn in the number of ship calls when compared with the first quarter of 1998, there are also some interesting surprises.
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In Houston, for example, calls by break bulk general cargo vessels are almost unchanged with 257 ships of this type arriving during the first quarter of 1998 versus 261 this year for an increase of 4. Full container ship calls, also, actually showed a substantial increase of 17.2 percent, quarter-on-quarter, with 179 vessel arrivals of this class this year outperforming last year's total of 167. The teu count for the first quarter, however, shows only a 3.5% increase so it would appear that real business growth and the number of ship calls are somewhat out of synchronization. Fortunately, full containers still outnumber empty containers on a 3 to 1 ratio, largely unchanged from a year ago.
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On the other hand, bulk carrier arrivals at Houston were down 21.6%, chemical tankers down by 8.4%, and oil tankers down by 8.3% when the first quarters of 1998 and 1999 are compared. Despite this, coke, grain, industrial chemicals, and other dry bulks showed increases in tonnages shipped. Overall, Houston's port traffic was 4.9% off within the same time frames. Other Texas ports also reported mixed results with Galveston and Corpus Christi showing little change but with Texas City, Freeport, and Brownsville returning numbers to reflect the general downturn in world maritime commerce. Year-to-date arrival statistics at these ports are:
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1Q 1999
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1Q 1998
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Galveston
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123
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129
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Texas City
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315
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348
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Brownsville
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37
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47
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Corpus Christi
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380
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383
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Freeport
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170
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197
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The Marine Exchange of the West Gulf collects and collates these statistics for members and also provides port activity by vessel type, agent, individual berth, and flag. Additional data can be captured upon demand. For more information, please call Alton Landry on 713.678.7711.
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ABS American Bureau of Shipping; The American Standard for Over 135 Years.
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If you're like me, you will have long looked at the venerable American Bureau of Shipping (ABS) as the organization that supervises the construction of ships and other marine structures and classifies their continuing seaworthiness through regular surveys.
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Just like me, however, you'd be well behind in your assessment of what ABS has become over the years and you might even be unaware that their world headquarters is now located right here in Houston.
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A recent interview with Tim Leitzell, who is Vice President of Engineering and Facility Verification, brought me up-to-date. I learned that in addition to their traditional classification services, ABS is, in fact, a global leader in assisting all their clients, whether on land or sea, to improve the safety of their operations, to enhance the quality of their services, and to minimize the environmental impact of their activities. In other words, when it comes to setting up your ISO or TQM systems, or when you need to prepare and implement such things as emergency response plans, ABS offers practical solutions and will partner with you to provide cost-effective answers to the safety, quality, and environmental challenges that face you in this increasingly regulated world. ABS, in fact, pledges to be responsive to the individual and collective needs of their clients, as well as those of the public at large.
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Their team of marine specialists and engineers offers a portfolio of survey, technical support, quality inspection, certification, consulting, training and engineering services. For more information, you should contact Tim by telephone on 281.877.6400 or you may use your email connection to tleitzell@eagle.org
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Port Freeport TX: Brazos River Harbor Navigation District
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State of the Port Address
by A.J. Reixach, Jr.,
Executive Port Director.
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In 1998, we began the countdown to the next millennium. 1998 was an important year and an exciting one by all accounts. With all that has transpired over the past decade and what is planned, it seems valid to say at the beginning of each year, "we've only just begun."
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Most, if not all, of our growth over the past twelve months has been guided by the Strategic Master Plan originally adopted in 1995. Since approximately 75% of what that plan called for was adopted or funded and set in motion, a revisit to the plan was called for with the results now in final draft form. This revisit was accomplished with input from the Board as well as senior staff and, as with the original plan, provides a mutually agreed road map which the entire institution will follow. Accomplishments of 1988 will provide for an expanded container yard to our ever-growing green fruit operators as well as new business, renovations to Berth 2 to provide a larger and more accessible waterside apron for the ease of working vessels calling on our port, and planning and design for the extension of Dock A to relieve vessel congestion.
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In 1998, we witnessed a number of mergers and acquisitions of which we have yet to feel the economic impact. The most notable was the merger between Diamond Shamrock and one of Brazoria County's largest employers, Phillips Petroleum. In spite of continued downsizing of other local industries in order to remain competitive in the global marketplace, Port Freeport continues to shine as the beacon of economic growth for southern Brazoria County. In addition to signs of continued growth from our green fruit operators in spite of huge damages to their plantations by Hurricane Mitch, as well as an expected financial recovery by American Rice, Inc., strong support from local manufacturers helped buoy 1998 tonnage at 931,168 tons compared with 1,062,308 tons in 1997. The decrease can be attributed to a decrease in bulk and breakbulk rice shipments that occurred as ARI was embroiled in a bankruptcy filing. As a result of some drastic actions by ARI, we are expecting a full recovery in the coming twelve months.
During 1998 we assisted local industry by issuing eight tax abatements on projects with an estimated cost of proposed improvements totaling well over $3 billion. The District also assisted in the activation of one new foreign-trade zone subzone user agreement and approved the filing of an application for another.
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During 1998, we added five new steamship lines to our customer list and hosted a number of semi-submersible operators to load and unload vessels in our Deep Berthing Area. We've also seen dramatic increases in vessel traffic to and from the private terminals, with Arco leading the way with 81 more vessels in 1998 than 1997, followed closely by Phillips and Dow with smaller but ever-growing numbers. Recent U.S. Bureau of Census statistics rank Freeport the 13th largest U.S. port for tanker cargo and the 19th. in the U.S. in total volume of trades at 19,138,006 tons. These increases can be directly attributed to the recently-completed 45-Foot Project making Port Freeport one of the deepest, most accessible ports on the Gulf Coast.
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With the recently-completed Economic Impact Study, an independent consultant tells us historic public and private cargo throughput within the Navigation District is estimated to be the cause of $7.06 billion in direct and indirect economic activity, responsible for 30,000 regional jobs. Just the public cargo flowing through the public docks in Port Freeport generates $450 million in economic activity and 2,100 jobs. Obviously, strategic planning, execution and a commitment to stay the course is and will have a long-range favorable impact on Port Freeport, the Navigation District and the region as a whole.
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The financial results for the year show that operating revenue for 1998 rose to $4.5 million, 10% over 1997, while operating expenses remained the same as 1997 at $2.6 million. After taking into consideration non-operating revenue and expenses, net income before operating transfers for the Navigation District for 1998 was $1.6 million, about the same as 1997. An operating transfer of $3.1 million was made for refinancing the new container crane with general obligation bond proceeds.
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Port Freeport has been and is viewed as one of the fastest growing Ports on the Gulf Coast recognizing our role as a niche port but yet responding to the needs of the private sector. We are indeed a beacon of shining light in what many describe as somewhat of an unstable environment. It has been an exciting year and we look forward to 1999.
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The foregoing statement was made to Members of the Board of Navigation and Canal Commissioners, Brazos River Harbor Navigation District, Freeport Texas on January 5th.,1999 and has been incorporated into the Port Freeport Annual Financial Report. For more details, contact Phyllis M. Saathoff, Managing Director, by telephone on 409.233.2667 or by fax at 409.233.5625.
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Job Hunter's Corner
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We wish we were in a better position to introduce some element of optimism into the lonely art of job hunting but this month's list or resumes received only points to the lengthening list of good and experienced people looking for jobs and the shortage of opportunities for employment on offer. Networking is everything. With more than 500 Bulletins now being distributed monthly, we shall continue to list individuals searching for work and would urge those who are in a position to offer employment to call us on 713.678.4300 to review our files. Yes; we do expect employers who find someone through our facilities to pay our costs but we believe that this is a case of "friends helping friends". This is a small, tight, professional group. Let's help each other.
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- NRG - A seasoned professional in worldwide shipping, logistics, business development and commodity trading seeks a senior level position. Extensive hands-on experience in conducting business globally with acknowledged skills and record of accomplishments in trouble-shooting. Unusual language competency.
- JHZ - International manager of inter-governmental and institutional relations in the USA and overseas through diplomatic initiatives. A people-focused manager specializing in leading teams in a multi-cultural and collaborative setting.
- ACZ - This applicant seeks a public relations or quality control management position and is tri-lingual in Spanish, French, and English. A degree in Industrial Chemistry has been followed by work experience with international oil and government.
- RLP - A background as an air export clerk at a major airport and with earlier experience in air export management and domestic inbound traffic, this applicant is looking for a position in Ocean/Air Import or Export.
- JS - Master Mariner with extensive port captain, quality control, safety management, surveying, and international ocean shipping experience looking for similar position. Substantial employment background with leading USA and overseas companies.
- NK - Upcoming honors BA from Texas A&M at College Station seeks employment in international exports where his knowledge of English, Arabic, Spanish, Urdu, and Hindi will be put to good use. Internships with family and other international businesses have provided a useful experience in office procedures and systems.
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Imports Threaten Steelworkers' Jobs But Steel Users' Jobs Are Also at Risk
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The chilling effects of recent actual and proposed anti-dumping measures and countervailing duties on imports of steel are showing up in the current downturn in the number of steel ships calling at the Port of Houston. The powerful lobbying of U.S. steel and steelworkers' unions in Washington has certainly been effective in seriously curtailing steel imports.
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And yet, U.S. steel producers have also been directly benefiting from low international prices as they themselves are major importers of semi-finished steel for further processing into value-added steel products.
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This apparent contradiction of intent has been the subject of articles in the Wall Street Journal which most recently attracted a letter from George Becker, President of the United Steelworkers of America, who advises that steel import-monitoring committees have been set up by USWA locals at many steel mill facilities but in many cases, they have been unable to fully document the problem of import purchases.
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Indeed, the USWA is angry and distressed about what they describe as "the so-called short supply requirement to meet customer needs" and would hope that the U.S. Senate and the President will pass the current steel quota bill which is now before them so that steelworkers will not be obliged to "pay the price of our failed trade policy with their jobs."
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Mr. Becker understands that the short supply purchases of imported steel by Big Steel are a direct result of the industry's wholesale shutdown of hot steelmaking capacity in the 1980s. "The shortsighted shutdown of older furnaces without making commitments to new hot steel capacity," he goes on to say, "has forced us (the union) to raise the issue of production investments and capital construction with nearly every producer."
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Apart from competitive international pricing and the ready availability of special steels for prompt shipment, the reduced hot steel capacity of U.S. producers can now be added to the list of reasons why U.S. steel consumers have elected or been obliged to buy from overseas. Past and current investment (or disinvestment?) policies by Big Steel must share the blame for last year's surge in imports which surely was driven, not by "illegally dumped foreign steel" but by steel consumers looking after their own business by buying on availability, price, and quality. The manufacturers of buildings, equipment, consumer goods, and vehicles, to name only a few industries which are steel buyers and users, also have an obligation to their own workers and shareholders.
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U.S. Gulf International Commerce Club (In association with the Greater Houston Port Bureau)
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Following last month's highly successful lunch program which took a preliminary look at the Ocean Shipping Reform Act which took effect on May 1st.,1999, our fearless guide, Mr. Robert H. Nicholas, Jr., has agreed to lead us in Part II of the same topic.
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Bob feels that probably more questions were raised than answers given at the first presentation and it may very well be a more comfortable format if members will come to the lunch on May 13th., having sent their specific questions to Bob in advance so that there is a more lively dialogue on issues of immediate importance and interest. Bob may be reached by fax at Baker and Hostetler on 713.751.1717 but you may also fax your questions to the Bureau on 713.678.4839.
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Again, we are expecting a good turnout so be sure to make your intentions to attend known to Cynthia or Jeannie on 713.678.4300. The date is May 13th.,1999 at 1145 Hours in the Plaza Suite of the Fountain View Restaurant at 2777 Allen Parkway (The Riviana Building). Lunch is $17.00 and Refreshment Tickets will cost you $3.00 each.
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The Industrial Port of Altamira:
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The Commerce Club has a treat in store for the June lunch. At that time, we shall have as our special guest, Ing. Pablo Medina, Director General of the Industrial Port of Altamira, who will be in town and has particularly asked to have the opportunity to speak with the movers and shakers of Houston's maritime and logistics business community.The date is June 10th. and we will be joined by members of the Houston Custom House Brokers and Freight Forwarders Association. Please mark your calendar for this very informative and worth-while lunch. Mexico is our biggest international trading partner and as the land border crossings have become more congested, shipments by sea begin to make sense. What's more, The Port of Altamira is also looking for partners to develop 4700 hectares of property under its control.
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For more information on Altamira without waiting for Mr. Medina's visit, please call Robert Klein, Altamira's USA representative in Dallas, on 214.521.0771.
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Dates to Remember:
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Thursday, May 13th.,1999 :
Mr. Robert Nicholas,Jr.
"The Ocean Shipping Reform Act"
Part II
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Thursday, June 10th.,1999 :
Ing.Pablo Medina
"The Industrial Port of Altamira"
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