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The following is the November, 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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In a way, October is the administrative month from hell as it's filled with reporting just what we've been up to all year and with making plans for the year to come. And when you add in the campaign for the Port of Houston Authority's bond issue, it can be said that this October has been more hectic than would otherwise be the case.
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As I write, the bond issue has been satisfactorily resolved with a substantial vote of confidence from the electorate. The Environmental Impact Study now being conducted by the Army Corps of Engineers is the next hurdle and the Port Bureau will be on hand to assist the Port of Houston Authority in its quest to ensure that the Bayport Container and Cruise Ship Terminals are demonstrably good neighbors.
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Programs already under way towards this end include a study to introduce more efficient and clean burning power units for Port equipment, the development of a trucker database to identify return loads and reduce bobtail runs, and the Authority's commitment to the Environmental Protection Agency's "Project XL" program whereby the PHA will work towards providing leadership to develop innovative programs that achieve superior environmental performance leading to cleaner and cheaper results than are achieved by current regulatory approaches.
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But all these good intentions rely on people who are similarly committed. The public and private Port of Houston stand on the brink of a new century and if we all commit to working towards one single goal, Houston will prosper as a super-regional transportation powerhouse and benefit us all. I like the way we're modest about our vast petrochemical complex. We don't need to crow about our ranking as the USA's premier international trading port in tonnage terms. What's really important is that the 21st. Century is going to belong to Houston. By continuing to do the right thing, our juggernaut is moving forward and we're on our way to a true world-class position.
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But we must also take responsibility to guard against any unintended consequences. The environment must be protected and the quality of life continuously improved. We need good educational opportunities for our young folks and for our aspiring professionals eager to participate in the exciting and ever-growing fields of international commerce.
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This is Houston's destiny. The citizens want it so.
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Alistair Macnab
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Letters to the Editor...
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From Steve Stewart, Gulf Winds International:
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"I do not feel you need to go overboard and want to see "The Bulletin" concentrate on news. I am not opposed to advertisements."
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Editor:
Points well taken.
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From Svein Gystad, Interbulk Shipping:
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"Let me congratulate you on the launching of the "Bulletin" which I read a copy of the other day. I noticed that you are listing the "Top Ten Houston Agents" by vessels handled in 1999. We find it hard to believe we did not make this list. I would appreciate if you could check this out and let me know."
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Editor:
The list was included as a filler sidebar and comes from the data collected by the Marine Exchange of the West Gulf, our wholly owned subsidiary. Unfortunately, the data are accurate but its true to say that the rankings of numbers seven through twelve are neck-and-neck. A monthly report of agency activity is available by subscription from the Marine Exchange.
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From Jack Holman, Holman Shipping, Inc.
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"I just finished reading Volume 12 of "The Bulletin" and I wanted to let you know how much I enjoyed it. Somehow, the Port of Houston Authority's glossy magazine is more of an advertisement for the Port these days, and that's a pity.
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"It seems to me that a down-to-earth picture of what's going on in the port is of more interest to port people and that's what I see in "The Bulletin". Don't change unless it's for the better.
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"Hard questions need to be aired. At a time when ship agents, linesmen, tugs, and longshoremen are having to do more and more with less and less, it's difficult to accept the fact of increased port charges. I'd also like to see Port people visiting my office from time to time.
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"Keep up the good work and remember a news letter serves the people and not just the companies that fund it."
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Editor:
What can I say, Jack? You've said it all!
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Port Bureau Briefs Directors
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In accordance with revised business practices introduced in 1998, the Bureau's Board of Directors was presented with a quarterly report on the Bureau's and Marine Exchange's progress at a noontime buffet lunch on Wednesday, October 27th. 1999.
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The Executive Vice President, Alistair Macnab, was on hand to review the Bureau's activities in such areas as the development of the proposed Houston Maritime Education Center, and its participation as Recording Secretary for the upcoming joint meeting of the Chemical Tankers and Bulk Liquids Terminals Groups presently scheduled for Wednesday, December 1st. 1999.
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The Bureau's support for the Port of Houston Authority's Bond Issue was also described with the placement of over 4000 yard signs and posters and of the many business meetings and lunch groups that were addressed to help create a favorable view of the PHA's Bayport project.
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Support for the "new" "Bulletin" had proved to be very strong, noted Macnab. There was general agreement for a modest amount of paid advertisements but the overall feeling was that the editorial and news content were most important and should be further developed as Houston's maritime community had never received the sort of print coverage it probably warranted. Already there were several provocative and stimulating "Letters to the Editor" which were certainly "newsworthy"!
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Other points of interest included the Marine Exchange's recent membership in the Maritime Information Service of North America (MISNA) and in the Executive Vice President's participation in the Clean-Gulf '99 Conference in Galveston on November 10th.1999.
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A further out-of-town trip is scheduled to Paducah KY to observe the pilothouse simulator program of the Seamen's Church Institute of New York. It is proposed that an updated version of the Paducah installation will be brought to Houston during 2000 as the centerpiece of the Houston Maritime Education Center to be built on Port Authority grounds.
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The next Directors' Briefing will be held in January 2000.
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Rolling on the River
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Out of the corner of my eye I can see the St. Louis Arch and what looks like one, (or is it two?) domed stadiums away over to my right. But, truth to tell, I'm not here to admire the panoramic view but I'm busy lining up my tug and ten barges to safely pass under the central span of the M.L. King Bridge and still be in position to clear the Eads Bridge which immediately follows.
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As a deep-sea sailor, I'm well out of my depth as I attempt to bring my tug with its 14,000 tons of river cargo down the Mississippi. Admittedly, this is only a simulation but with the throb of the diesels underfoot and the constant chatter over the many open communications channels, its easy to be transported to the real thing with its attendant responsibilities and pressures.
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I'm here at The River Center in Paducah, KY and the high-tech instructors have been kind enough to let me have a run on their tug wheelhouse simulator. With a current behind me, I find that the bow may respond to my tiller commands but that my stern is being swept to one side or the other and that not only do I have to pass under the bridge spans but I also have an air draft problem with my tug superstructure as I have to be in the exact middle of the arch if I'm to avoid a nasty clang as I hit something overhead.
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The Center for Marine Education's Paducah facility is run by the Seamen's Church Institute of New York and New Jersey and is the prototype of one that will be coming to Houston in 2000 but in a more advanced form. When fully operational, the Houston Center will provide tug captains and pilots with advanced pilothouse management courses as well as other courses designed to promote safety and to improve vessel- and emergency- handling skills such as accidental oil spill and man overboard incidents.
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This may be only a simulation but as I navigate the m.v."City of Paducah" past the floating casinos and keep a watchful eye on other river traffic, I see the Poplar Street and MacArthur Bridges up ahead and already I can feel the river wanting to take me in a direction I'll need to correct if I'm going to earn my Certificate. |
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Greater Houston Partnership
Visit of Nigerian Transportation Minister: Mrs. Kemafo Chikwe
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By Michel Benoit
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In continuation of its program of bringing Houston and the countries of Africa together, The Greater Houston Partnership hosted an African Forum on Friday, October 1st 1999, at which the Honorable Mrs. Kemafo Chikwe, Minister of Transportation for the Republic of Nigeria was the Guest of Honor.
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Mr. Chris K. Wilmot, President and Chief Executive Officer of W.C.W. International, Inc., mediated and explained the purpose of the meeting before introducing the Honorable Minister. Mr. Wilmot advised that Mayor Lee Brown is a fervent supporter of the tour to Africa, which purpose is to visit four countries including Nigeria, in order to create strong connections that will lead to genuine business opportunities.
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The trip is designed to strengthen the relationships between Houston and the African countries to be visited, and certify the credibility of African partners.
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Mr. Wilmot also mentioned the opportunity to create a gateway between the two communities; and that a strong team including members of Houston's business community, such as Mr. Kase Lawal (CEO of Camac Holdings, Inc.) is constantly working on it. The entire program noted Mr. Wilmot is within the framework of this administration's "Africa Policy" of which, Rodney Slater, Secretary of Transportation has declared that, "Nigeria is the focal point when it comes to investing in Africa".
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The Honorable Minister, Mrs Chikwe, in her opening remarks went deeper into the investment and technology transfers initiatives, as she clearly affirmed her desire to foster genuine business between Houston and Africa.
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Mrs. Chikwe identified the areas she considered needed a lot of investments:
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- Flow of merchandise,
- Development of physical infrastructure,
- Improvement of port infrastructures and other transportation facilities,
- International Private Sector.
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The economical isolation, which Nigeria suffered in the last decade, has put the country in a critical situation. However, it is a challenge for the new government to catch up with the international trade community and "refresh" the Nigerian economy.
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Modernization of the Port infrastructure is an important issue considering that, 5 to 6% of the cargo entering West Africa is Nigeria-bound. And thanks to openings and fresh initiatives to international trade, this percentage is expected to increase. Mrs. Chikwe highlighted the importance of linking the commercial, industrial, and agricultural sectors for an efficient and powerful Nigerian economy.
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Asked about the question of corruption in Nigeria, which she conceded is "an important issue", Mrs. Chikwe recommended that, because Nigeria's image has greatly suffered from corruption within the past decade, the current government has presented an anti-corruption Bill. The system is based on honesty, transparency, responsibility and honorable citizenship. So, in general, the Government is moving into a new direction. "I invite you to take advantage of the business opportunities that are offered to the World and to Houston", said Mrs. Chikwe.
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The current Government is very keen on respecting free trade agreements, which Nigeria signed, so, dealing with the conflicts between Nigerian traders and International traders is also a challenge. Besides, to illustrate the modern ideology of the new system, for the first time ever, six female ministers have been welcomed in the Government. Under the former regime, this would have never happened. The six ministries in question are Health, Science and Technology, Defense, Solid Minerals, Foreign Affairs, and Transport.
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Regarding changes in inland waterways, the Minister of Transportation discussed some dredging programs currently ongoing. "There is a great emphasis on inland waterways", she said, "but because of the current financial difficulties, it is hard to define priorities among health, education, agriculture, and other issues." Regarding airport improvements, Mrs. Chikwe mentioned a lot of investments, and a lot of programs set in motion about safety for people and goods movements. And as a last word, the Honorable Transportation Minister, recommended to the African-Houstonian community to promote a good image of Nigeria: "Ethical business conduct is crucial," she said.
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Meanwhile, as Mayor Lee Brown and his group of Houston businessmen have now embarked on their journey to Africa, it is legitimate to raise a question dealing with some of the consequences of political wrongdoings in Nigeria, and in Africa in general. One of the consequences, being that it's been more and more difficult for developing countries to obtain the required support from the international community.
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The rejection of the Africa Trade Bill in the Senate on November 1st is a case in point. Ongoing opposition to NAFTA is reflected in the attitudes of many in the USA to any foreign initiatives, with Africa, as a potential market of 700 million consumers and cheap production costs, viewed as just another vexing competitor.
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This means that African leaders, in order to face inevitable bigger challenges, will have to implement transparent policies and work harder than ever. Rules change, times change, and so do political leaders... The credibility crisis that Africa went through, and might still be going through has made it easier for some opponents to object to even constructive and good initiatives for the benefit of developing countries.
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The debate will continue but, in the mean time, Houston, Nigeria, and other African States can get on with the real business of developing economic independence tomorrow, to compliment political independence previously attained. |
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STEEL WARS:
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The fortunes of U.S. steelmakers continue to fluctuate with third-quarter losses reported by USX-U.S. Steel Group, AK Steel Holding Corporation, and Weirton Steel, but with Nucor of Charlotte NC reporting increased earnings over the same period.
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Many reasons are offered for poor performance including lower added-value product mix, increased labor costs, low-value long-term contracts, and in the case of AK Steel Holdings, costs associated with its merger with Armco, Inc.
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On the other hand, minimill steelmaker, Nucor, attributed its increased earnings from a rise in spot-market prices and increased sales in sheet and structural beams. Market analysts, Salomon Smith Barney, confirm that contract prices are currently low whereas spot prices are rising.
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Normally, a rising spot market would be good news, not only for U.S. steelmakers but also for international steel traders. But in today's atmosphere of protectionism, steel importers and their customers are being constantly hemmed in by an ever-increasing campaign to limit their access to free-market international steel products.
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There have been a few small victories on the steel import front, as reported by the American Institute for International Steel (AIIS). These include the recent defeat in the U.S. Senate of the steel quota bill and the preliminary negative injury decision by the International Trade Commission (ITC) on imports of beams from Germany and Spain.
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But the bad news is ongoing. The steel protectionists continue to press the U.S. Government to ensure that any negotiated steel suspension agreements have their prior approval and have even convinced the U.S. Congress and the President to sign a bill giving the steel industry's weakest companies $1 billion in guaranteed loans. What's more, an old idea from the 1980s has resurfaced - the so-called private right of action. This bill would allow companies which have won trade cases to sue importers for monetary damages.
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On another front, protectionists are attempting to convince the government to keep trade laws off the table when the next round of World Trade Organization negotiations begin this month in Seattle. Astoundingly, there are at least 100 co-sponsors of this non-binding resolution and the AIIS has been busy with a writing campaign to each member of the House urging them to vote against the resolution.
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All these and other pressing matters will be on everyone's mind as members and guests of AIIS meet for the Annual Dinner at New York's Plaza Hotel on November 29th. 1999 to celebrate the 49th. Anniversary of the Institute. This year's dinner speaker will be Norm Ornstein of the American Enterprise Institute.
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For more information from AIIS you may call on 202.628.3878 to speak with David H. Phelps, Executive Director in Washington DC or on 713.968.6540 to speak with Bob Moore locally in Houston.
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Houston-Galveston Area Council (H-GAC):
Strategic Freight Corridors Steering Committee Examines Port Traffic Problems.
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Quick Response (QR) action for improved ports access was recommended by Ms. Susan Alleman, Principal of TEI Traffic Engineers, Inc., at the October 26th. meeting of the Steering Committee of the ongoing Strategic Freight Corridors Study held at the offices of H-GAC.
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1. At Houston's Barbours Cut Container Terminal, there was a lack of information signs to guide visiting truckers who were unfamiliar with the terminal layout. It might even be more appropriate to erect signs in Spanish or in international pictograph format to highlight lanes and gates.
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2. Galveston would benefit from a Harborside Drive traffic study since port traffic to and from the various terminals was constantly being required to cross lanes carrying vehicles moving in the opposite direction.
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3. An additional study done for the Port of Freeport has identified the need for a queuing lane before the Port gate and perhaps also the installation of a second point of access into Port property.
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These ports issues and other Strategic Freight Corridor connector problems will be part of the final report now due in early 2000 but in the mean time, Ms. Alleman's interim report was reviewed by the Committee and critiqued by Chris Olavson of the Texas Department of Transportation (TxDOT) who suggested that the various problem areas be ranked in some order of priority and that actual traffic volumes be identified for each facility or "cluster" of facilities.
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The next meeting will be held on December 14th. 1999 at which time there will be discussion of a Newsletter and a look at draft deliverables due at completion of the project. For more information, contact Susan Alleman on 713.270.8145
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Gulf Ports Association of the Americas.
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The Fall Conference of the Gulf Ports Association of the Americas (GPAA) was postponed because of hurricane conditions in Mexico but has now been rescheduled for February 16-18th. 2000. It will be held at the Hyatt Regency Hotel in Villahermosa and further details may be obtained from the GPAA Chairman, Pete Reixach, Jr. on 409.233.2667.
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Port Authority and Area/Regional Emergency Response Programs.
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At the bi-monthly meeting of the Community Advisory Group held on Tuesday, October 26th. 1999, Mr. Ted Walters, Director of the Port of Houston Authority's Protection Services Division, was on hand to present an Emergency Response Overview as one of the matters called for by the Group as it continues its examination of the PHA's plans for the Bayport Terminal.
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The Port Authority is empowered by the Texas Legislature to promote the safety of life and property on or adjacent to the Houston Ship Channel and the Port Authority has introduced Rules for preventing, detecting, controlling, and fighting fires and for the handling of hazardous commodities.
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Mr. Walters described the Port's Emergency Rapid Response Plan and its links to other area and regional emergency response plans. Incidents are initially rated as minor or major with the Incident Command having a continuous interface with Houston Hazmat Teams, the Channel Industries' Mutual Aid Group (CIMA), and professional contractors.
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A First, Second, and Third Alarm Dispatch List, links CIMA to area fire departments and to the many resources available from the oil and chemical companies which participate in the program. Emergency services such as foam supply, ambulance transportation, trained personnel, and experienced rescue teams are all on call, dependent upon the nature and extent of the emergency.
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Special equipment such as Celanese's or Montell's Command Vans; Baker Petrolite's and Goodyear's Generators; and the Port Authority's Fireboats: "Tellepsen" and "Ms. Louise" are just part of what has been described as the world's largest industrial emergency mutual aid organization which takes in over one hundred municipalities, government agencies and industrial participants.
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The Houston Ship Channel has possibly the largest concentration of refineries and petrochemical plants in the world and the Port of Houston Authority, together with these industries, recognizes its responsibility to protect neighbors in the surrounding communities.
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For more information, please call Mr. Walters at the PHA on 713.670.2632 or CIMA on 281.476.5040.
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Port Bureau’s Annual Report to the Port of Houston Authority
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At the October 25th. Open Meeting of the Board of Commissioners of the Port of Houston Authority (PHA), Captain Alistair Macnab, Executive Vice President of the Greater Houston Port Bureau, Inc., presented his Annual Report to the Commissioners.
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During 1999, the PHA has participated in three of the Bureau’s projects. These are The Texas Gulf International Shippers’ Council, the Houston Ship Channel Traffic Management and Safety Program, and a Port User and Port Public Awareness Program.
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Macnab offered an interim report on these activities before moving on to describe the Bureau’s Business Plan for 2000 which previews four new projects for which the participation and support of the PHA is solicited.
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The Bureau recognizes, stated Macnab, that the Port Authority is interested only in projects which do not duplicate existing Port staff activities and that any investment by the Port will continue to be on a minority basis with project outcomes clearly stated and achievable.
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During this past year, the Bureau has endeavored to redefine its role as a provider of logistics-related assistance and to expand its relevance as a source of maritime information and education for its many Members, including the Port of Houston Authority. The Bureau’s recent activities in the many aspects of international commerce on behalf of its entire membership were surely beginning to earn widespread acceptance in the maritime community.
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Mr. Ned S. Holmes, Chairman of the Board of Commissioners thanked Captain Macnab for his report and indicated that he thought the Bureau was doing a fine job. A detailed submission of the four, Year 2000 projects will be made to the Port Executive during November 1999. |
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Houston Center for Marine Education: "Cargo Claims and Recoveries"
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The Port Bureau’s Education Program continues with a one-day seminar on "Cargo Claims and Recoveries" which was held on November 3rd. This is one of the "advanced" modules that make up the body of learning currently offered by the Center and which also includes logistics management and Bills of Lading studies.
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The agenda included discussions on arbitration and litigation, the insurance and reinsurance markets, the Harter, Hague, Hague-Visby, and Hamburg Rules, General Average considerations, and a study of the Jason Clause and Clause Paramount.
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During the course, several well-known experts came by to discuss their specialties: George Chandler III from Hill Rivkins spoke about Arbitration; Art Flanagan of William Rigg discussed the Insurance Market; and Christine Knake of Avalon Risk Management examined the various rules by which ocean carriage is undertaken.
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In the New Year, several new "advanced" modules will be introduced, among them: "Warehouse and Terminal Management" and "International Trading". As customary, these programs will alternate with more "generalist" topics. For a full brochure of courses on offer during the first quarter of 2000, please call Alistair or Cynthia at the Bureau on 713.678.4300 to request a copy.
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Each one-day module costs $95.00 and includes a light lunch. Class sizes are strictly limited and must be prepaid. Fees are transferable to other modules or to other individuals with prior notice but are forfeited after three no-shows.
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The entire program developed by the Houston Center for Maritime Education is designed to provide local learning opportunities for maritime personnel. Corporate sponsorship of employees is invited as are individual applicants seeking to upgrade their skill sets.
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The next class will be held on November 17th. 1999 and will be the Refresher Course: " Shipping Documentation and Ocean Carriage". This will be followed by the last module for 1999 on December 15th. entitled: "Logistics Management". Call the Bureau for details of course content or to reserve your place.
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Maritime Houston’s “Big Night Out” at the Bureau’s Dinner and Entertainment
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Over 190 Port Bureau and Marine Exchange Members and their Guests were on hand on Wednesday evening, October 27th. to help celebrate the 70th. Year of the Bureau’s involvement with the Port of Houston.
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Formed in 1929 by rice, cotton, and oil interests to help market the then fledging Port of Houston and its unlikely location 50 miles from the open sea up a man-made channel, the Bureau has always taken a pro-business and international position as it has sought to represent the best interests of its private-sector constituents.
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This year’s celebration which was held at The Houstonian, was a demonstration, if one were needed, that the Bureau continues to this day with the full support of Houston’s world-class commercial and transportation interests.
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The Guest Speaker was Ned. S. Holmes, Chairman of the Board of Commissioners of the Port of Houston Authority. His mission was to encourage a vote for the Port Bonds at the upcoming election and his matter-of-fact presentation was well received.
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Throughout the evening, Stanley Fontenot Jr. was on hand to signal each change of pace with his Scottish Bagpipes. His exuberant playing heralded the call to Dinner at 8.00 PM when Grace was offered by the Rev. Peter Larom from the Seamen’s Church Institute, New York, and again at 9.00 PM when an ensemble from Stratford Playhouse presented excerpts from their upcoming production of “Oklahoma” which will play in January 2000.
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This Annual Dinner is the principal fund-raising event of the year for the Bureau and the Marine Exchange, noted Lamar Doyle, President of the two organizations, as he expressed his thanks for the generous support and attendance. “The Bureau is constantly mindful that its very legitimacy rests on the continuing support of its Members.”
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It would seem that Houston’s maritime community is in agreement with that sentiment.
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"Project XL" Environmental Excellence and Leadership
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Upon the recommendation of the American Association of Port Authorities (AAPA), the Port of Houston Authority has been invited by the U.S. Environmental Protection Agency (EPA) to examine current environmental regulations and policies with a view to testing their efficacy or to suggest alternative solutions.
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At the first meeting of the Project XL Group on Thursday, October 28th. 1999, Ms. Laura Fiffick, Environmental Affairs Manager of the Port of Houston Authority, brought together representatives from the EPA lead by Ms. Adele Cardenas, and a cross section of participants and stakeholders who are likely to have an interest in the project. Among those invited were Port tenants, business and environmental organizations, and local universities.
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In 1997, the AAPA received a grant from the EPA to develop an Environmental Management Handbook for the port industry. This was completed in 1998 and provides a wide range of guidance to ports and their tenants in developing and implementing environmental management programs. The Port of Houston Authority is now proposing to develop a "model" tenant environmental program with the active participation of the Port’s tenants as participants and representatives of the general public as stakeholders.
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The object is to develop cleaner, cheaper, and smarter ways of protecting the environment and public health. Lessons learned from successful XL projects will improve EPA policies, regulations, and programs.
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The eight criteria required for an XL project include:
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- Produce superior environmental results;
- Produce savings such as cost savings, paperwork reduction, and operational flexibility;
- Garner stakeholder involvement and support;
- Achieve innovation/multi-media pollution prevention;
- Be transferable;
- Be feasible;
- Identify monitoring, reporting, accountability, and evaluation methods;
- Avoid shifting the risk burden.
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Ms. Cardenas stated that the PHA’s proposal to develop environmental Stewardship programs through cooperation between the Port and its tenants, might take several years. Audits and re-audits would be continuous but the end result would be good for the environment, good for business, and good for our communities.
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Stakeholder meetings to inform, discuss, and steer the direction of the project are expected to be held on a semi-annual basis with notifications of meetings made through the local press, a mailing list, and on the PHA’s web site. The point of contact for this XL Project is Ms. Laura Fiffick on 713.670.2438 or lfiffick@poha.com
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GAO REPORT EXPECTED TO HELP SHIPPERS’ FIGHT AGAINST NEW HARBOR TAX
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A new report not yet released to the public by the General Accounting Office, requested by the House Transportation Committee, is predicted to provide shippers with additional help in fighting the Clinton Administration’s plan to replace the defunct Harbor Maintenance Tax with a new set of taxes on carriers.
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Leaders of the House Transportation Committee which has primary jurisdiction over channel dredging and maintenance at the nation’s ports and harbors, asked the GAO for a thorough summary of shipping -related user fees, taxes and other charges.
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The report entitled "Commercial Maritime Industry Updated Information on Federal Assessments", stated that shipping assessments totaled $21.8 billion in fiscal 1996, and $21.9 billion in each of the last two fiscal years with most of the money coming from customs duties paid by importers, and that eleven federal agencies charge a total of 124 charges on ocean shippers, carriers and intermediaries. The report also states that collections are increasing, with shippers being hit the hardest. More importantly the report also concludes that most of the monies are notused to enhance transportation service. Both the National Industrial Transportation League and American Association of Port Authorities used this report as proof that additional taxes or levies are not needed.
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The GAO’s report claims about $20 billion of fiscal 1998 revenue was deposited directly into the government’s general revenue fund and not earmarked specifically for shipping or transportation-related purposes. Of the amount remaining after this money was placed in the general revenue fund, about $995 million was credited to agency accounts for purposes of reimbursing the various federal agencies for the cost of issuing permits, conducting inspections and other activities.
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The GAO report claims taxing imports but not exports constitutes an illegal trade barrier, that the total of 124 agencies levying assessments has increased from 119 agencies in fiscal year 1992 and since 1992 50 charges were added, 45 deleted and 44 were altered. In addition, the surplus in the Harbor Maintenance Trust Fund, which was $1.3 billion at the end of fiscal year 1998, will rise to $2.5 billion in fiscal 2004.
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TRANS-PACIFIC SHIPPERS CLAIM OCEAN SHIPPING ACT HAVING DESIRED EFFECT ON RATES
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Shippers in the Trans-Pacific trade are claiming that the Ocean Shipping Reform Act (OSRA) of 1998 is having the desired effect on rates by allowing market forces to be large factors in ocean rates. The shippers state that rate levels are being determined by market forces instead of carrier cartels, despite the anti-trust immunity still allowed carriers by the Act.
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When the OSRA was passed , even though pro-shipper reforms such as no longer having to file public rates and allowing shippers to sign confidential contracts, were included, many people believed allowing carriers to retain anti-trust immunity and maintain rate-setting cartels would offset the pro-shipper reforms. However, recent statistics released by the Federal Maritime Commission show that confidential contracting has surged under shipping reform and has allowed market-based forces to affect rate negotiations. FMC stats show that the number of service contracts filed with the Commission has increased from about 300 from May 1 to June 30 in 1998 to nearly 15,000 during the same period in 1999. Also during the first four months after the OSRA was in effect, nearly 34,000 service contract amendments were filed. Even though the contracts and amendments are considered confidential, anecdotal evidence indicates some carriers agreed to lower rates or drop their peak-season surcharge due to the entry of six new carriers into the trade resulting in a surplus of vessel capacity.
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The nationwide shipper organization the National Industrial Transportation League released a poll of its members and stated that 74% of those responding stated that OSRA has resulted in benefits for shippers.
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DOT TO HOLD HEARINGS ON INTERMODAL EQUIPMENT SAFETY
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The United States Department of Transportation (DOT) is holding a series of public hearings to learn more about the safety practices in handling of intermodal equipment.
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These hearings stem from a petition filed two years ago by the American Trucking Associations (ATA), which had asked DOT to require parties tendering intermodal equipment to motor carriers to "insure the road worthiness" of the equipment. ATA claimed that carriers receiving the equipment were not in a position to do any required maintenance, and the primary responsibility should be on the party or parties tendering the equipment. DOT did initially start a rule-making proceeding, but only recently did ATA ask DOT to extend the comment period in order to gather more information, and as a result requested DOT hold these public hearings to gather such information.
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HOUSE JUDICIARY CHAIR PROMISES LEGISLATION TO END OCEAN SHIPPING ANTI-TRUST IMMUNITY
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U.S. Representative Henry Hyde (R-IL), Chairman of the House Judiciary Committee has promised to introduce legislation into the House ending anti-trust immunity for ocean shipping lines.
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Now however, Rep. Hyde has promised to introduce a bill called the Free Market Antitrust Immunity Reform Act of 1999, in hearings before his Committee early next year. It is believed even with Representative Hyde’s support, it could take up to two years for the bill to actually be approved and signed into law due to possible resistance from the maritime sector. Such resistance however, is expected to be lessened due to the absence of Sea-Land Service Inc., which is in the process of being acquired by the A.P. Moller Maersk Group of Denmark. Mr. Hyde’s position is consistent with views he put forth at hearings held less than a week after the OSRA became law. Rep. Hyde at those hearings stated in his opinion, anti-trust immunity favored foreign carriers to the detriment of American consumers.
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Rep. Hyde stated that in the ensuing period since the OSRA became law three developments have occurred which brought the anti-trust matter to the forefront:
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- The sale of Sea-Land’s intermodal services, which he claims undercut the key reason for anti-trust immunity an American owned carrier.
- Continued complaints about abuses by discussion agreements, OSRA-sanctioned groups in which all carriers in a trade can cooperate on prices by following voluntary rate guidelines.
- A shift away from anti-trust immunity by U.S. trading partners.
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Representative Hyde did state that the bill would keep anti-trust immunity for ports and marine terminals stating that he has not heard of any complaints in this sector about abuse of anti-trust immunity.
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Ending of anti-trust immunity has long been a goal of many organizations including the National Customs Brokers and Forwarders Association of America (NCBFAA). Although the NCBFAA tried to do away with anti-trust immunity when the Ocean Shipping Reform bill was pending in Congress, it was unsuccessful. In addition, Rep. Hyde’s proposal drew support from many transportation intermediaries or NVO’s .
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However opposition to Rep. Hyde’s bill has developed from two large shipping lines, Denmark based A.P. Moller Maersk and APL Lines which is a wholly owned subsidiary of Singapore based NOL Lines. Both carriers are urging Congress to wait for a few years to give OSRA a chance to work before making changes such as removing anti-trust immunity.
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US STILL DISSATISFIED WITH JAPANESE PORT REFORM PROGRESS
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More than two years after the FMC threatened to impose large fines on Japanese-flag vessels entering U.S. ports, the United States is still not satisfied with Japan’s efforts to reform port practices it claims are detrimental to U.S. and other non-Japanese interests.
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Foreign line carriers are still not permitted to operate their own terminals and must obtain prior approval from the Japanese Harbor Transportation Association for scheduling or other changes in their operations. However Japan claims that it has mad substantial progress in improving the prior consultation system and is taking steps to prevent labor harassment of new entrants in the trade. In addition, the Japanese legislature is considering a deregulation law which would include a provision eliminating the "supply and demand" tests for licensing port operators. If this law were passed, new operators would be screened to determine if their entry into the market would cause a disruption.
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Although U.S. leaders are unhappy with the lack of progress by Japan, few seem to want any return to threats of sanctions or monetary fines as happened previously. Both sides are urging more talks and efforts by both sides to prevent the interruption of the free flow of commerce.
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