January 2016 Port Bureau News

Port Bureau January 2016

Greater Houston Port Bureau Houston Waterborne Foreign Trade Ports That Deliver

News

The Only Coach in the Bunkering Business Spotlight on Pat Studdert and Buffalo Marine Service, Inc.

www.txgulf.org

Port Bureau

News

Publisher/President CAPT Bill Diehl, USCG (Ret.), P.E.

16

8

Newark, NJ

3rd Value, 6th Tonnage

Norfolk-Newport News, VA

Editor Christine Schlenker

6th Value, 5th Tonnage

Los Angeles, CA

1st Value, 3rd Tonnage

Gramercy, LA

Charleston, SC

4th Tonnage

Long Beach, CA

4th Value, 8th Tonnage

Houston, TX

7th Value

Savannah, GA

2nd Value, 1st Tonnage

5th Value

Port Arthur, TX 7th Tonnage

8th Value, 2nd Tonnage

3 Captain’s Corner

16 U.S. Waterborne

4 Port Watch

Part IV of the Waterborne Trade Series

6 Port Bureau

Species and Ballast Water Management

The Appalachian Trail of Life Just Enough to Be Better

Updates

8 The Only Coach in the Bunkering Business

Spotlight on Pat Studdert and Buffalo Marine Service, Inc.

Like us on Facebook facebook.com/portbureau 2

New Orleans, LA

w w w .t x g u l f. o r g J a n u a r y 2 0 1 6

Foreign Trade - Ports That Deliver

26 Aquatic Nuisance Halting the Bioinvasion of American Waterways

32 December 2015

Commerce Club

With Capt. Mike Morris, Houston Pilots

Follow us on Linkedin linkedin.com/company/ greater-houston-portbureau

Copy Editors Christine Schlenker Judith Schultz Art Director Kyle Beam Writers Dave Cooley Christine Schlenker Judith Schultz Photographer Kyle Beam Port Bureau Staff Jeannie Angeli Al Cusick Megan Essenmacher Cristina Gomez Janette Molina Elizabeth Sandefur Patrick Seeba Printing Company DiPuma Printing and Promotional Products www.dipuma.com

For information about the Port Bureau: Phone: (713) 678-4300 Email: info@txgulf.org For information about the Port Bureau News stories or advertising: Email: editor@txgulf.org

Captain's Corner The Appalachian Trail of Life Ringing in the New Year usually rings in a round of personal resolutions. My own resolutions, however, took a new turn much earlier this year when my nephew, Patrick, announced his intention of spending time in the summer hiking the Appalachian Trail. Patrick had just finished up nearly ten years of service in the Marines - with his final years doing recon work -- and wanted to use the hike as a decompression time before starting college. His announcement took the family by surprise as I thought he would start college in the fall, but he said it would be the spring of 2016. I asked him about the delay, and he told me hiking the trail would take months, not weeks. So, I

looked up the trail.

What I learned was the Appalachian Trail (A.T.) is approximately 2,190 miles and spans the mountainous length of 14 states from Maine to Georgia. It is the longest foot-path in the world, and terrain varies from gentle woodland paths to nearvertical rock climbs. Hikers are on their own and hazards are widespread. Statistically, only one in four will complete it. Patrick, I am pleased to report, is now part of the 25% of hikers who succeed! We all admire his unique experiences of endurance and the vistas of awesome beauty the A.T. bestowed on him as he trekked day after day. If personal achievement motivation is any predictor of future success, Patrick is well on his way to accomplishing anything he wants to do in life.

Patrick earned the name “Mountain Goat” on the A.T. for – and I quote from a fellow hiker here – his “ability to gracefully hop from rock to rock without a pause.” His feet hurt for 900 miles. He worked for a bed and food with what he identified as a cult in Vermont and later had a victorious staredown with a momma bear and her cubs.

(I’m stating the obvious, but won’t those be useful experiences to draw upon for Left: a map of the Appalachian Trail.

Below: Patrick is roaring to go!

CAPT Bill Diehl, USCG (Ret.), P.E. negotiating tense situations in the future?)

Virginia brought him nine continuous days of wind, cold, and “hate-filled” rain. (Again, the life comparisons here are obvious.) An encounter with a pack of wild hogs was resolved when Patrick raised his hiking poles overhead and advanced toward the leading boar while roaring. The hogs fled.

I was so impressed with the power of my nephew’s journey that I have added it to my bucket list. I will not be hiking the A.T. this year, but it beckons and I plan to follow where it leads. In the meantime, I hope to imitate his perseverance on the A.T. here at home. The Port Bureau staff repulsed my suggestion of starting each work day with a running roar as a way of deflecting the obstacles to our goals, but I, personally, just can’t think of a better way of chasing off aggravating hogs that block better, faster, more cost-effective commerce than a good growly howl. I am open to suggestions.

None have been made yet.

We are anticipating great opportunities in 2016 for the port region. With oil prices at an all-time low, there may be some momma bears to stare down or wild hogs of some fashion to scare away, but we are resolved to meet the challenges with as much mountain goat grace as we can muster. We are dedicated to supporting our members through promoting the Houston Ship Channel community and serving as the information hub for maritime business.

Roaring is still optional, but persistence to finish the trail is definitely required.

ò

Happy New Year!

January 2016

w w w .t x g u l f. o r g

3

Š Buffalo Marine Service, Inc.

Port Watch

Just Enough to Be Better Tom Marian, Buffalo Marine Service, Inc.

H

opefully, the Thanksgiving leftovers have become a distant memory as the Christmas season unfolds.

No doubt, the end-of-year freneticism that seems to collapse the concept of time can be somewhat overwhelming but each day still has 24 hours and every port patiently tallies its harvest of vessel arrivals at the end of the day. Hence, as the month of November closed, it logged just enough of a bounce to all but ensure that 2015 will have seen more vessel arrivals throughout Texas ports than 2014. This was the case, despite one less day during the year’s second-to-last month where the aggregate arrival number was up 4.6% for the month and 2.1% for the year.

The end of a three-month arrival slide was welcomed in every major Texas port as they all posted monthly gains and half of those same ports were double-digit gains to boot. In fact, the ports of Freeport and Port Comfort saw their greatest haul of monthly arrivals for 2015 in November.

Unfortunately, in the case of Freeport,

4

w w w .t x g u l f. o r g J a n u a r y 2 0 1 6

port watch

the 26% monthly jump could not pull the port out of the red since it still remains 7.6% below 2014’s arrival numbers. A mere stone’s throw from Freeport, the port of Galveston was also the recipient of a double-digit monthly gain – to the tune of nearly 23%. While its November increases were primarily attributable to the onset of the cruise season and additional movement of molten sulphur to Tampa, Galveston is running 8% ahead of last year’s arrival totals.

It should come as no surprise that the continuing slide of the price of oil has dampened maritime commerce in the ports of Brownsville and Corpus Christi.

While these two ports are not recording the torrid marine activity they were posting in the first half of the year, they continue to hold their own due to the previous investments of fracking infrastructure throughout the Permian and Eagle Ford shale regions. Brownsville’s 16% monthly gain is a bit misleading since October was the port’s vessel-arrival nadir. Thus, it was unlikely that the arrival numbers would fall further into the teens; however, Brownsville continues to outpace 2014’s performance by 24%. Corpus Christi, on the other hand, is tenuously holding onto its year-to-date gain by a mere 7 vessels, or 0.3%. The port was

up for the month by a single vessel, or 0.5%.

The port of Texas City saw its first monthly arrival increase since last May. Granted, like Brownsville, the 8% November rise was in the wake of an arrival nadir.

However, unlike the state’s southernmost port, it remains 5% in the red. The port of Sabine – the other petrochemicalcentric port – benefited from back-to-back monthly arrival increases with an additional net change of 1.4%. This all but guarantees that Sabine’s 2015 arrivals will eclipse those of 2014. Currently, it is 9% higher on an annualized basis.

Houston, given its sheer numbers, should also outperform 2014 with its 2015 arrival count. Yet, the final gains will be incremental at best. Indeed, November’s paltry 1.4% rise followed the lowest arrival count for 2015. Hence, November’s arrival totals were the second-lowest for the year.

From a year-to-date perspective, Houston remains 1.4% above that of 2014. Of note, is the fact that without the onset of the cruise season and solid gains in LPG and tank vessel arrivals, Houston would have seen yet fewer vessels in November than in October.

On the non-energy commodity front, the container vessel count equaled that of October but the number of containers is

up 6% for the month and 11% for the year.

Bulkers saw a 15.5% monthly jump but their year-to-date pace continues to wane by 14%. Similarly, general cargo traffic bounced back by 7% for the month but lags 2014’s arrival count by 8%. Conversely, chemical tankers slogged into their end-of-year mode with a 14% monthly decline; however, 2015 remains in a very favorable light as evidenced by a year-to-date arrival climb of 19%. Finally, as further evidence that global demand for distillates is softening, tank vessel arrivals crept up by 3%. Nevertheless, November’s arrival count was the second lowest for the year and was not enough to pull this category into positive territory as it remains 1.5% off 2014’s figures.

Historically, the month of November is a flat to negative month vis-à-vis the October time frame in the maritime commerce arena. Yet, this particular November managed to defy that trend mostly due to the three previous months of decreases. No matter, a gain is a gain, and as Father Time’s annual relief hastens, one hopes that the growth in economic activity that has blessed Texas over these last several years will continue unabated. May you have a joyous Christmas season and a bountiful 2016.

ò

January 2016

w w w .t x g u l f. o r g

5

port bureau updates

February 2016 Commerce Club David Arsenault, Hyundai Merchant Marine America and Hyundai America Shipping Agency David Arsenault, president and CEO of Hyundai Merchant Marine America and Hyundai America Shipping Agency, is the featured speaker at the February Commerce Club luncheon at Brady’s Landing on Thursday, February 11, 2016.

As president and CEO, Mr. Arsenault is responsible for North, Central & South America. He is a graduate of the United States Merchant Marine Academy in Kings Point, New York, where he obtained a Bachelor of Science Degree, a Merchant Marine Officer 3rd Mates License, and a commission as a U.S. Naval Reserve Officer.

Mr. Arsenault is an industry veteran with over 28 years of experience in operations, sales, trade management, technology, and logistics, including five years in Asia serving as Country Manager in Thailand and later Taiwan for Sea-Land Service. He spent time on the 3PL side of the business during the integration of Buyers Consolidators with Mercantile to create Maersk Logistics. Mr. Arsenault transitioned into the maritime technology side of the industry while working at GT Nexus before becoming SVP at Globe Wireless. Mr. Arsenault joined Hyundai Merchant Marine (HMM) in 2004, where he was responsible for sales, before being promoted to his current role in January 2015 as the first localized president & CEO in the history of HMM. Thank you to our 2016 Annual Sponsors: Houston Pilots, Richardson Companies, and West Gulf Maritime Association. Register now by visiting www.txgulf.org/commerceclub.php or by calling the Port Bureau at (713) 678-4300.

Coming soon - the 2016 Port Bureau Membership Directory Join leading firms in the port region’s most popular year-round reference! Published in the spring, our annual Membership Directory includes a full page profile of every member company in the Port Bureau, making it an essential marketing and business development tool.

Highlights include: ✓✓ Company logo, website, and primary address and telephone numbers ✓✓ Two company contacts, with space for title, email addresses, and mobile phones numbers ✓✓ Introductory descriptive paragraph ✓✓ Services provided bullet points or room for additional descriptive content ✓✓ Company name/company type indexing Want to stand out? Purchase a directory ad to run adjacent to your member profile page.

Call the Port Bureau at (713) 6784300 for more information.

6

w w w .t x g u l f. o r g J a n u a r y 2 0 1 6

port bureau updates

Port Bureau Member News Lifting Oil Export Restrictions Elevates Prospects for Texas Ports Texas ports stand to benefit from recent legislation passed by lawmakers lifting the 40-year ban on crude oil exports. The extensive network of infrastructure existing along the coast and easy access to shipping lanes to Europe and Asia are seen as positives for exporting growth by industry watchers. Adapting port facilities to add the loading of crude oil to tankers could happen swiftly in terminals that have been expertly off-loading crude for years.

“This represents the most substantial energy policy enacted in a generation,” said Congressman Joe Barton (R-TX), who introduced legislation to lift the ban last February. “We have given all Americans a big Christmas present . . . Lifting the ban will have an immediate impact on all Texans.”

The measure to lift the ban was part of a $1.1 trillion spending bill that also includes adopting environmental and renewal energy measures. President Obama signed the bill into law on Friday, December 18, 2015.

U.S. oil producers, looking to expand their customer base, will now be able to sell crude oil to the international market. Currently, the bulk of domestic oil production comes from shale. Advocates of lifting the ban, enacted during the Arab oil embargo in the 1970s, believe its removal will stimulate the economy as well as boost national security.

Opponents feel the ban’s removal will lead to job loss and an increase in environmental risks.

To alleviate concerns that the ban’s removal could lead to high gasoline prices, the bill provides for the president to restrict oil exports under certain circumstances for up to one year. This includes cases of supply shortage or if oil prices climb significantly higher than global levels.

CAPT Diehl Serves on Senator Cornyn’s 2015 Service Academy Board CAPT Bill Diehl, president of the Greater Houston Port Bureau, participated on Senator John Cornyn’s 2015 Service Academy Board, adding his perspective to the committee’s resources in selecting applicants for nomination to the U.S. Above: CAPT Diehl served on Senator Cornyn’s Service Academies. Applicants considered 2015 Service Academy Board on November 20, for admission must be a United States 2015. citizen, at least 17 years old but no more Catapult signs Memorandum of than 23 on July 1st the year of admission, Understanding for Joint Activities and unmarried with no dependents. with JAMSS Senator Cornyn’s nominees must also be The Satellite Applications Catapult legal residents of the state of Texas. signed a Memorandum of Understanding The Board reviews comprehensive (MoU) with JAMSS America Inc. ( JAI) to applications that include standardized test create a framework of activities between the scores, school transcripts, personal essays, two organizations. The signing took place at and more.

1200 noon CST on the Catapult / Innovate Charterers Utilize RightShip’s UK stand at the SpaceCom Conference in Greenhouse Gas Emissions Rating Houston on November 19, 2015. Under the terms of the MoU, Catapult and Tool Industry leaders are utilizing JAI will cooperate to stimulate further RightShip’s Greenhouse Gas Emissions commercialization of their respective space Rating tool to find the more efficient vessels applications technologies and facilities. to meet their needs. Developed in 2010 and The agreement has a particular view on allowing charters and other stakeholders delivering their products and services into to assess the efficiency of vessels, the business opportunities in the UK, U.S., Greenhouse Gas Emissions Rating tool Japan, and other international regions.

“This MoU is a significant milestone is available free of charge to all RightShip customers at www.rightship.com and at in the Catapult’s ongoing development, with regard to our activities in the U.S. ShippingEfficiency.org.

“This is good news for the environment; and our growing international reach,” it’s good news for our customers as it said Stuart Martin, CEO of the Satellite supports their company corporate social Applications Catapult. “Since early 2015, responsibility policy while saving them we’ve met several times with JAI to discuss money through a reduced bunker bill, and cooperation in the commercialization it’s good news for those shippers that invest of both organizations’ space application in efficient vessels. With the continued technologies. Looking ahead over the oversupply of ships in the market, it is a next 1-2 years, we’ve identified several form of natural selection as more efficient major business opportunities to learn from vessels are selected,” said RightShip CEO each other and forge joint new business activities.”

Warwick Norman.

ò

January 2016

w w w .t x g u l f. o r g

7

spotlight

The Only Coach in the Bunkering Business Christine Schlenker, GHPB

F

amily businesses line the Houston Ship Channel, representing the hard work, success, and perseverance of generations. Situated at the top of the Houston Ship Channel, just as Buffalo Bayou morphs into the deepdraft channel, is one such company – Buffalo Marine Service, Inc., the largest bunkering services company in the Houston region. Led by president and CEO Patrick “Pat” Studdert, Buffalo Marine and its predecessor have been serving the port community for 80 years.

A visit to Pat’s office in the Buffalo Marine building shows a room filled with Texas and sports-themed memorabilia, photos with friends and politicians, and his father’s old desk. It is right next to the

8

w w w .t x g u l f. o r g J a n u a r y 2 0 1 6

dispatch office, and the phone is always ringing. But tucked away in filing cabinets and Pat’s keen mind is the remarkable history of rebuilding a family legacy.

Buffalo Marine has its roots in the J.S. Gissel & Co., of which Pat’s father, Tom Studdert, was a partner and ship agent starting in 1935. Gissel was a multi-service company, participating in dredging, agency, river towing, and bunkering, among others.

Gissel owned multiple brownwater vessels and one ship, and it ran a shipyard right at the juncture of Brays Bayou and Buffalo Bayou. Shuffling through old photos his father gave him, Pat finds a black-and-white shot of Gissel’s first boat, commenting, “It’s ironic that the first boat they ever built was called the Buffalo.”

Above: Pat Studdert, president and CEO, Buffalo Marine Service, Inc. Below: The first boat built by J.S. Gissel & Co., the Buffalo. Photos courtesy of Buffalo Marine Service, Inc.

spotlight By the time he was six years old, Pat was accompanying his father on vessel visits.

Tom worked out of the Cotton Exchange Building until Gissel built a new office near its shipyard on Erath Street in 1951. An article published in the Houston Magazine that year touted the modern Erath building’s “year-round air-conditioning”.

The company was a jack-of-all trades, but such diversity of services proved difficult to manage. Gissel fell on hard times in the early 1960s, just before Pat started high school. The company went into bankruptcy and was forced to sell off most of its assets.

A seismographic company bought the building, and what was left of Gissel moved into a nearby trailer. Tom managed to hold onto two tugs, three bunker barges, and his large wooden desk, but everything else in the office had to go. To young Pat, the sudden collapse “was pretty bizarre.”

“The whole thing should have never resurrected,” says Pat. But, determined to start over, Tom decided to pursue the service his former company was most successful at: bunkering. Pat, quoting his father, explains, “The only thing we ever did right around here was bunker ships.” Tom started Buffalo Marine, named after the bayou they worked along, with the tugs and barges left over from Gissel. Pat was competing in track and football in high school, but still made time to start working alongside his father at the new company on Saturdays and Sundays, acting in any role from go-fer to port captain.

Although he learned the ropes of the bunkering business, Pat’s passion was to coach high school athletics. He was already ingrained enough in Houston’s football scene to know he would have a good opportunity to pursue his coaching career in his hometown. Pat accepted a track scholarship to the University of Houston, where he competed from 1966 to 1969 while earning his Bachelors of Arts in Education. He was coaching athletic programs in Houston’s Third Ward by the time he was a junior at U of H. A new high school on the southwest side of Houston,

Sharpstown High School, was set to open shortly after Pat’s graduation. Ray Auburn, Pat’s coach from San Jacinto High School, was tapped to lead the development of its football program, and he brought along freshly-minted graduate Pat to join the coaching staff.

An eager problem solver, Pat left Sharpstown a few years later to fix the crumbling football program at Waltrip High School. On top of that, Pat was the

superintendent of swimming pools for the east side of Houston and continued working weekends at Buffalo Marine. “When you’re a football coach, you have two or three jobs” to make ends meet, he says, shrugging. He also earned a Superintendent Certificate from Texas Southern University, which would enable him to become a school principal or superintendent.

By 1976, the Buffalo Marine was stable enough that Pat decided to leave coaching

Below: Pat competed in track at San Jacinto High School and the University of Houston.

January 2016

w w w .t x g u l f. o r g

9

spotlight to work full time with his father. Pat knew the company had potential to succeed and grow, but it needed a revamp to move forward. Pat started pushing immediately to update their equipment. The boats were in rough condition, dirty and rusted, and the crews did not look any better. They took the risk on new investment, and within a couple of years, they had built two new barges and a new tug.

Even though it was normal for the time, the attitude and presentation of the employees were unacceptable in Pat’s eyes. The crews wore ragged t-shirts, the shoreside staff started drinking at 4 p.m., and customer service attempts usually devolved into a cussing match. The lack of discipline was shocking to him. He explains, “I’d come from this monstrous 5A football program, which is the most disciplined thing in America as far as I’m concerned.” His father said that it was just how business was done,

10

w w w .t x g u l f. o r g J a n u a r y 2 0 1 6

so Pat set out to change the mentality of the bunkering business in Houston. “We’re going to look like a Rolls Royce, and I don’t know how long it’s going to take me, but we’re going to win.”

“It took me about two years to get the crew straightened out around here,” Pat recalls. He brought the coaching mindset to managing the crews: getting everyone in uniform, hiring people willing to work in a disciplined environment, and instilling that discipline. He applied order to the chaos, teaching the crew to work like a team where each person had an integral part to play so that the team could win.

Pat’s father fell ill with lung cancer in 1978, and as the disease worsened over the next eighteen months, Pat took over more of the responsibilities of running the company.

When his dad passed away in 1980, it was just Pat, Mrs. Diane Howard, and one more person in the office. Faced with selling the

Above: Pat Studdert with the Sharpstown football coaching staff. Pat coached football at Sharpstown High School and Waltrip High School prior to working full-time for Buffalo Marine in 1976.

spotlight company to return to coaching or continuing the business, he decided to stay, thinking, “We’re not doing that great, but I’m going to give it a shot.”

His shot seems to have hit its mark. Over the last thirty-plus years, the company has

enjoyed substantial growth, now boasting a fleet of thirty-eight barges and nineteen tugs, and Pat was able to buy back the original building in the mid-1980s. Pat describes the evolution as a roller coaster. Success in the industry is not a given, and there are plenty

At Gulf Winds, our business is always about

MORE THAN THE MOVE

By partnering with Gulf Winds, your dollar goes to more than just moving freight. Gulf Winds continually partners with ICM (International Cooperating Ministries) to build churches and orphanages all over the world. We believe our company’s mission shouldn’t just be reserved for office walls.

Our mission is to glorify God by providing world class logistics services through continual investment in our people, clients, community and the world we live in.

www.gwii.com | 866.238.4909

of competitors in the market. “Everyone’s got a bunker barge in the world who wants one, just like having a football. Everybody’s got one. But it’s what you do with it.”

The majority of Buffalo Marine’s business is bunkering, with a small but growing amount of linehaul they started offering in 2004. By nature, the bunkering business follows closely with the economic health of the port. Pat has kept a handwritten log since 1976 detailing Buffalo Marine’s bunkering jobs, and major economic events – the oil bust of the 1980s, the recovery in the 1990s, the Great Recession in 2009, and the natural gas boom/oil price bust of the last few years – are mimicked in Pat’s numbers. After a lifetime in the business, Pat has gained some intuition about the unpredictable nature of bunkering. More importantly, gaining the trust of his suppliers and customers has allowed for open communications about their needs and how he can accommodate them. Pat considers the bunkering business to be at the heart of the port industry, and that Buffalo Marine is responsible for being there for the industry.

As a part of that, Pat holds Buffalo Marine equipment to high standards.

Consequently, he adopts technology as soon as he viably can. While he may not be a technology buff himself, he has surrounded himself with staff members who are, and he does not ignore sales calls. Pat keeps a comic strip on his desk as a reminder of this attitude. It depicts a king leading an army to war bearing their swords while dismissing a salesman because he’s too busy. The salesman is selling machine guns. Following this euphemism, Pat says, “It’s my responsibility to know what [my customers’] needs are, and when ‘the war’ comes, we’ll be ready…

The machine gun salesman’s out there.”

Pat shares the credit for the success of Buffalo Marine with his employees, their can-do attitudes, and their ability to work as a team. “Discipline and the educational attitude of coaching is the success of the whole thing,” he says. Pointing to his office doors, he adds, “I think it’s got a

January 2016

w w w .t x g u l f. o r g

11

spotlight lot to do with [the fact that] your people believe in you, you know what’s going on, and they trust you. Those doors never close.” Knowing an operation the size of Buffalo Marine cannot be managed alone, Pat makes sure he is approachable and his employees feel empowered enough to do so.

“When someone has a recommendation, I listen. And that’s a key, I’ll always listen. I may not always agree and I may ask a bunch of stupid questions, but I’ll listen.”

Pat continues to personally manage the weekly Tuesday morning safety meetings.

This permits him to interact with every Buffalo Marine employee, regardless of what rotation they are on. His employees – and many other leaders throughout the port – are the recipients of Pat’s “Buffalo Ball”, a symbol of camaraderie and responsibility.

Also, in honor of his father, he offers company-wide incentives for employees to quit smoking.

The result, as any coach would already guess, is that most of Buffalo Marine’s employees are fiercely loyal. In a workforce climate where experienced boat crews are constantly being poached, Pat knows that some of his crews will choose to pursue greener pastures. To that end, Pat encourages those employees to do what is best for them and their families. However, he tells them that the gate is always open for them to come back and, remarkably, seventy-five percent return. Mrs. Howard

12

w w w .t x g u l f. o r g J a n u a r y 2 0 1 6

Above: Pat Studdert takes Port Commission Chairman Janiece Longoria on a tour of the Houston Ship Channel aboard one of Buffalo Marine’s newest pushboats. recently celebrated her sixtieth year working at Buffalo Marine, a fete rarely seen.

Over the years, Pat has donated his time and financial support to numerous organizations, both for the maritime

community and for causes close to his heart. His maritime service has included leadership roles on the boards of the Houston Propeller Club, Texas Waterways Operators Association, Houston

ELECTRICAL | COMMUNICATIONS | TECHNOLOGY

Serving maritime energy through the

POWER OF EXPERIENCE

BE0005

www.shrader.net

SALES SERVICE RENTAL Forklifts, Terminal tractors, Railcar movers, scissor lifts and all lines of material handling equipment.

2014 #1

dealer in the world

8787 WALLISVILLE RD, HOUSTON, TX 77029 I (713) 672-1100 I briggsequipment.com

spotlight International Seafarers’ Center, Houston Maritime Museum, and Seamen’s Church Institute, and membership in American Waterways Operators Association, Greater New Orleans Barge Fleeting Association, International Bunker Industry Association, and Gulf Intracoastal Canal Association.

Buffalo Marine has been a long-standing corporate member of the Greater Houston Port Bureau. Civic engagements have included sitting on the board of St. Dominic Village which is a continuing care retirement facility that is part of the Texas Medical Center and Archdiocese of Galveston-Houston, a diabetes lab in the Texas Medical Center, and of course, education.

When he ran for La Porte Independent School District School Board in 1985, he found that his last name was a challenge for some people to remember or even pronounce, so his signs just said, “Pat: Enthusiasm for Education”. He won, and he was re-elected for the next twelve years. Once he moved into Houston city limits and had to vacate his seat, he continued supporting La Porte ISD by providing a $6,000 check to the annual “Teacher of the Year” winner. Buffalo Marine has also teamed up with San Jacinto College’s maritime program to develop the workforce needed in the Houston Ship Channel region.

Above: Bernt Netland (far right) presents Pat with a 1,000 mooring bollard as a birthday present from Intercontinental Terminals Company. in a shroud”: you can’t take anything with you, so share your wealth with those who need it. And third, the message of the movie “How Green Was My Valley,” a 1941 film about a boy growing up in a Welsh mining town. Despite hardship, the boy learns that the people he meets enrich his life, and the memories he keeps of them help make the valley of his life greener.

We have an obligation to this port to deliver these bunkers. And we take it to heart.

I would never abandon this port.

Describing himself as authentic and enthusiastic, Pat likes to share stories and anecdotes, but there are three he lives by.

First, “one monkey don’t stop no show”: no matter what happens to him, Buffalo Marine will keep on running. Second, “no pockets

14

w w w .t x g u l f. o r g J a n u a r y 2 0 1 6

Pat’s staff, friends, and industry colleagues had an opportunity to show him how important he has been to them.

Pat celebrated his seventieth birthday on December 11. In the morning, Pat received a surprise delivery from Bernt Netland,

president of Intercontinental Terminals Company: a 1,000 pound mooring bollard that Buffalo Marine had been using at ITC for decades, saved during ITC’s recent dock renovations. That same evening, after months of conspiring on the part of the Buffalo Marine staff and Pat’s family, a spectacular surprise birthday party guised as another company’s Christmas party was in store for Pat. The Buffalo staff went so far as to print a fake invitation for Pat to add to his planner and signage outside the Houston Club. In his usual good-natured way, Pat told everyone to go to Confession for the web of tales concocted to hide the huge surprise party.

The Port Bureau is already next in line to pay homage to Pat’s civic and business leadership in the Houston maritime community by selecting Pat as the 2016 Maritime Person of the Year. Pat describes his dedication best: “This is my port and my city, and I live here and I love it. It’s where I’m from. We have an obligation to this port to deliver these bunkers. And we take it to heart. I would never abandon this port.”

ò

Houston Waterborne Foreign Trade – Ports that Deliver By: Dave Cooley, GHPB

Houston waterborne trade The “ports that deliver” not only support, they sustain the flow of the U.S. waterborne foreign trade.

Some of the inherent characteristics of such a port include: • Adequate water depth, either natural or man-made, necessary to support current and expected vessel traffic; • Terminals, docks, and wharves to accommodate the flow of waterborne trade; • Infrastructure to facilitate efficient and prompt movement of goods to and from the port complex; • Property available within the maritime corridor to support expansion; • Well-established local or regional manufacturing facilities that produce goods desired worldwide; • A population in sufficient number to support significant local consumption of arriving goods; and, • A proactive leadership contingent.

As waterborne commerce has been around since time immemorial, it leads one to the conclusion that ports that deliver the goods have also been around for a long time as well. Generally, this is true, but a well-coordinated growth and development plan coupled with several innovative implementation ideas can allow an interloper to become a team member.

This is the fourth installment of the Port Bureau’s analysis of the waterborne foreign trade of the U.S. and addresses the flow of

trade by port; specifically the top eight ports at the end of 2014.

Data will show the trend in both value (U.S. dollars) and tonnage for the U.S. waterborne foreign total trade (imports plus exports), along with individual assessments for imports and exports, the type of movement (containers or bulk/break bulk) from 2003 to 2014, and display the top eight ports in each category. Figure 1 shows the top eight ports for both value and tonnage for 2014.

Figure 1: Top ports by value and tonnage Source: GHPB analysis of US Customs Bureau data

Newark, NJ

3rd Value, 6th Tonnage

Norfolk-Newport News, VA

6th Value, 5th Tonnage

Los Angeles, CA

1st Value, 3rd Tonnage

Charleston, SC

Gramercy, LA

7th Value

4th Tonnage

Long Beach, CA

4th Value, 8th Tonnage

Houston, TX

Savannah, GA

2nd Value, 1st Tonnage

5th Value

Port Arthur, TX 7th Tonnage

New Orleans, LA

8th Value, 2nd Tonnage

January 2016

w w w .t x g u l f. o r g

17

Houston waterborne trade Port Rank – Total Trade Value The value of the U.S. waterborne foreign total trade grew from $810 billion in 2003 to over $1,750 billion in 2014; more than doubling in 11 years. Figure 2 shows the ranking of the top eight ports and how the total trade values have evolved over the 11-year analysis period.

Features of the top eight value ports: • The top eight ports handle $994 billion or 57% of all waterborne foreign total trade of the U.S. (imports plus exports).

• The top three ports handle $609 billion or 35% of all waterborne foreign total trade of the U.S. (Houston is #2, handling $167 billion of U.S. waterborne foreign total trade).

• The top port accounts for $290 billion or 17%.

• Six ports of the top eight value ports are also in the top eight tonnage ports.

18

w w w .t x g u l f. o r g J a n u a r y 2 0 1 6

•

Four ports of the top eight value ports are located on the East Coast; two ports are located on the West Coast; and two ports are located on the Gulf Coast.

Tonnage The total U.S. waterborne foreign total trade tonnage discharged from and loaded aboard ocean-going ships grew slightly over 11 years from 1,210 million metric tons in 2003 to over 1,286 million metric tons in 2014; a net increase of just 76 million tons.

Figure 3 shows the ranking of the top eight ports and how the total trade tonnage has evolved over the 11-year analysis period.

Regarding tonnage, features of the top eight ports are: • The top eight ports handle 595 million metric tons or 46% of all waterborne foreign total trade tonnage of the U.S.; • The top three ports handle 322 million metric tons or 25% of all waterborne foreign total trade tonnage of the U.S.;

•

The top port (Houston), accounts for 148 billion metric tons or 12% of total trade tonnage • Six ports of the top eight tonnage ports are also in the top eight value ports; • Two ports of the top eight tonnage ports are located on the East Coast; two ports are located on the West Coast; and four ports are located on the Gulf Coast – two of which are in Texas.

Having established the bounds of the U.S. waterborne foreign trade, evaluating the individual trade components, imports and exports, as well as the manner of trade, viz., moving in containers or bulk/break bulk offers an interesting assessment of the top eight ports.

Cargo value and tonnage will be evaluated separately, and the top eight ports of each of four categories (import or export and container or bulk/break bulk) will be shown.

Houston waterborne trade

Figure 2: Value of U.S. total waterborne foreign trade by port The top 8 ports handle 47% of total trade; Houston ranks second.

Source: GHPB analysis of U.S. Census Bureau data 1,800

1,600

Value: Billions USD

1,400

Los Angeles, CA Houston, TX

1,200

Newark, NJ Long Beach, CA

1,000

Savannah, GA Norfolk-Newport News, VA

800

Charleston, SC 600

New Orleans, LA

All Other Ports 400 200

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Figure 3: Tonnage of U.S. total waterborne foreign trade by port The top 8 ports handle 46% of total trade; Houston ranks first.

Source: GHPB analysis of U.S. Census Bureau data 1,400

Tonnage: Millions Metric Tons

1,200

Houston, TX 1,000

New Orleans, LA Los Angeles, CA Gramercy, LA

800

Norfolk-Newport News, VA Newark, NJ

600

Port Arthur, TX Long Beach, CA All Other Ports

400

200

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

January 2016

w w w .t x g u l f. o r g

19

Houston waterborne trade

Figure 4: Value: top 8 ports by imports/exports and cargo type (in billions USD)

Port Rank – Value Figure 4 describes the top eight value ports by movement and cargo type.

Total Imports U.S. waterborne foreign trade imports during 2014 were $1,150 billion, $170 billion above the annual average from 2003 to 2014. Imports for the top eight ports total $712 billion or 62%.

Salient features for 2014: • The top waterborne foreign trade import commodity group imported at LA is boilers, machinery, motors, and electronics; at Newark and Houston, it’s energy; • The three top ports account for $454 billion or 40% of waterborne foreign trade imports; • Four ports are located on the East Coast, three ports on the West Coast, and one port on the Gulf Coast (Houston).

Container Imports Imports of finished and semi-finished goods that are shipped in containers totaled $723 billion during 2014 or 63% of total U.S. waterborne foreign trade imports and $170 billion above the 11-year average.

Container imports for the top eight ports totaled $584 billion or 81%.

20

w w w .t x g u l f. o r g J a n u a r y 2 0 1 6

Interesting features for 2014: • The top waterborne foreign container trade imported commodity group for all three top ports is boilers, machinery, motors, and electronics; • Top three ports total $391 billion or 54% of all imported waterborne foreign container traffic; • Four ports are located on the East Coast; three on the West Coast; and one port on the Gulf.

Bulk and Break Bulk Imports Waterborne foreign trade imports of bulk and break bulk commodities totaled $427 billion during 2014 or 37% of the total waterborne foreign trade imports and were $2 billion below the 11-year average. Bulk and break bulk imports for the top eight ports totaled $197 billion or 46%.

Intriguing aspects for 2014: • Energy is the top imported bulk/ break bulk waterborne foreign trade commodity group for all three top ports;

Houston waterborne trade • •

Top three ports total $107 billion or 25% of all waterborne foreign bulk/break bulk imports; Three ports are located on the East Coast; one port is on the West Coast; and four ports on the Gulf Coast – two of which are in Texas.

Total Exports U.S. waterborne foreign exports were $600 billion during 2014 and were $180 billion above the annual average from 2003 to 2014. Waterborne foreign exports for the top eight ports totaled $327 billion or 54%.

Interesting facts for 2014: • The top waterborne foreign export commodity group at Houston is energy; at LA it is chemicals, fertilizers, plastics, and rubber; and at NY it is boilers, machinery, motors, and electronics; • Top three ports for waterborne foreign trade exports total $172 billion or 29%;

•

Four ports are located on the East Coast; two on the West Coast; and two on the Gulf Coast, including Houston.

Container Exports Exports of finished and semi-finished goods that are shipped in containers totaled $261 billion during 2014 or 43% of total U.S. waterborne foreign exports and $67 billion above the 11-year average of total container exports. Container exports for the top eight ports totaled $194 billion or 74%.

Intriguing facts for 2014: • The top waterborne foreign export container trade at all three ports is chemicals, fertilizers, plastics, and rubber; • Top three ports total $93 billion or 36% of the total waterborne foreign export container trade; • Four ports are located on the East Coast; three ports on the West Coast; and one port on the Gulf

(Houston).

Bulk and Break Bulk Exports The export value of waterborne foreign bulk/break bulk trade was $339 billion in 2014, or 57% of the total waterborne foreign exports. This was $114 billion or 50% above the 11-year average. The top eight ports exported $163 billion or 48%.

Intriguing facts for 2014: • Energy, predominantly refined products exports, are the top waterborne foreign export bulk/ break bulk commodity at the top three ports; • Top three ports total $106 billion or 31% of the waterborne foreign bulk/break bulk exports; • Three ports are located on the East Coast; none on the West Coast; and five on the Gulf – one of which is Houston.

January 2016

w w w .t x g u l f. o r g

21

Houston waterborne trade

Figure 5: Tonnage: top 8 ports by imports/exports and cargo type (in million metric tons)

Across the Gulf Coast, we’ve been meeting the needs of our clients for 123 years.

With the Port of Houston expanding, do you have a bank that will grow with your financial needs?

With over 9 billion in assets, Trustmark offers expertise in the areas of Trade Finance, Maritime lending as well as a wide range of products and services tailored to meet your financial needs.

For more information on how Trustmark can assist you, please contact one of our experienced lenders.

Mike Quiray Senior Vice President, Trade Services & Maritime Finance 713.827.3707 MQuiray@trustmark.com

22

w w w .t x g u l f. o r g J a n u a r y 2 0 1 6

Jeff Deutsch Senior Vice President, Corporate Banking Manager 713.827.3717 JDeutsch@trustmark.com

trustmark.com

Member FDIC

Houston waterborne trade Port Rank – Tonnage Figure 5 describes the top eight value ports by movement and cargo type.

Total Imports

•

Four ports are located on the East Coast; three on the West Coast; and one port on the Gulf.

Bulk and Break Bulk Imports

Container Imports

U.S. waterborne foreign import bulk and break bulk trade tonnage was 519 million metric tons during 2014, or 77% of the waterborne foreign trade import tonnage and was 201 million metric tons below the annual average container import tonnage from 2003 to 2014. Tonnage imports for the top eight ports totaled 230 million metric tons or 44%.

Salient factors for 2014: • Energy is the top waterborne foreign import bulk/break bulk trade tonnage at the top three ports; • The top three ports account for 122 million metric tons or 24% of the waterborne foreign import bulk and break bulk trade tonnage; • One port is located on the East Coast; no ports on the West Coast, and seven ports on the Gulf Coast – three of which are in Texas.

U.S. waterborne foreign import container trade tonnage was 154 million metric tons during 2014, or 23% of total U.S. waterborne foreign trade import tonnage and was 19 million metric tons above the annual average container import tonnage from 2003 to 2014. Container tonnage imports for the top eight ports totaled 109 million metric tons or 71% of the total container imports.

Features of waterborne foreign imported container tonnage for 2014: • The top imported commodity group at LA is boilers, machinery, motors, and electronics; at Newark it is foodstuffs; and at Savannah is chemicals, fertilizers, plastics, and rubber; • The top three ports handled 70 million metric tons or 45% of the total imported waterborne foreign trade container tonnage;

U.S. waterborne foreign export trade tonnage was 613 million metric tons during 2014, which was 143 million metric tons above the annual average from 2003 to 2014.

Tonnage exports for the top eight ports totaled 325 million metric tons or 53%.

Salient features for 2014: • Energy is the top waterborne foreign export trade tonnage at both Houston (oil) and NorfolkNewport News (coal); at New Orleans it’s grains and milling products; • Waterborne foreign export trade tonnage at the top three ports totals 198 million metric tons or 32%; • One port is located on the East Coast; two ports on the West Coast; and five ports on the Gulf Coast – three of which are in

U.S. waterborne foreign trade import tonnage was 673 million metric tons during 2014, which was 163 million metric tons below the annual average from 2003 to 2014. Tonnage imports for the top eight ports totaled 302 million metric tons or 45%.

Salient points for 2014: • Energy, reflecting declining crude oil imports since 2006 as U.S. oil production increases, remains the top imported waterborne foreign trade tonnage commodity group for all top three ports; • Top three ports total 170 million metric tons or 25% of the imported waterborne foreign trade tonnage; • One port is located on the East Coast; one port on the West Coast; and six ports on the Gulf Coast – three of which are in Texas.

Total Exports

Texas, led by Houston.

Container Exports U.S. waterborne foreign export tonnage of container goods during 2014 was 107 million metric tons or 17% of total U.S. waterborne foreign export tonnage and was 20 million metric tons above the 11-year annual average. The top eight ports exported 77 million metric tons or 72%.

Interesting aspects for 2014: • The top waterborne foreign export container trade tonnage at both Houston and LA is chemicals, fertilizers, plastics, and rubber; and at Long Beach it is foodstuffs; • Top three ports totals 40 million metric tons or 38% of the waterborne foreign export container tonnage; • Three ports are located on the East Coast; four on the West Coast; and one on the Gulf Coast (Houston).

Bulk and Break Bulk Exports Export tonnage for the waterborne foreign bulk/break bulk trade for 2014 was 505 million metric tons or 83% of the total waterborne foreign export tonnage and was 122 million metric tons or 24% above the 11-year average. The top eight ports exported 281 million metric tons or 56%.

Intriguing facts for 2014: • Energy (refined petroleum products at New Orleans and Houston; coal at Norfolk-Newport News) are the top waterborne foreign bulk/break bulk export commodity at the top three ports; • Top three ports total $106 billion or 31% of the waterborne foreign bulk/break bulk exports; • Three ports are located on the East Coast; none on the West Coast; and five on the Gulf – one of which is Houston.

Summary By taking the top three ports from the above categories, 24 possible port and mode of transport combinations are created, which

January 2016

w w w .t x g u l f. o r g

23

Houston waterborne trade are filled by 10 unique ports. Out of these 24 possible combinations, the Port of Houston captures six; Los Angeles has five; Long Beach, Newark, New York, and New Orleans each have three; and Gramercy, NorfolkNewport News, Port Arthur, and Savannah are each mentioned once. Furthermore, the ports mentioned in the top-three group can be generally categorized as a container port, an oil port, or a diverse port.

Container ports: Container ports are generally characterized as a conveyor belt. That is, goods arrive by ship boxed in a container, are unloaded onto a chassis or train, and moved locally or inland to enter the distribution system. Loading a containership also utilizes the conveyor belt analogy in reverse. The cargo handled by a container port is generally high value-added finished or semi-finished products requiring little or no further manufacture. That is, the goods shipped in a container are generally consumer-ready and little value added is required. Container ports include Long Beach, Los Angeles, Newark, New York, Norfolk-Newport News, and Savannah.

Oil ports: An oil port functions somewhat similar to a container port in that there is unity of cargo serving a particular

24

w w w .t x g u l f. o r g J a n u a r y 2 0 1 6

logistics system. Specifically, an oil port is where the customer base is largely, if not completely, composed of oil refiners and oil terminals and where oil is the predominant flow of waterborne foreign trade moving through the port complex. Here is where the container comparison ends. Oil is a raw material and as such requires a valueadded activity to be transformed into a finished product. Any port handling any product that requires any further processing or transformation offers value-added opportunities and enhances growth of the economy. During 2014, high oil volumes coupled with high oil prices created prominence for several key ports being classed as an oil port, such as Port Arthur, TX and Gramercy, LA., both of which are included in the top-three analysis.

Diverse ports: Diverse ports exhibit attributes of both a container port and an oil port. That is, the port complex offers the logistics infrastructure to accommodate multiple modes of transport (containerships and bulk/break bulk ships), supports local waterfront processing or manufacture, and connects to local industry facilitating offsite value-added enhancements. Houston and perhaps New Orleans can be considered

diverse ports. Houston is active in both container and bulk/break bulk activities.

New Orleans, while container activity may be considered minimal, is quite active in various liquid and solid bulk commodities as well as handling various bulk/break bulk cargos.

As noted, Houston appears in six of the possible 24 top three categories. Specifically, Houston appears in bulk imports for value and for tonnage, in container exports for value and tonnage, and in bulk and break bulk exports for value and for tonnage.

Houston is the only port that appears in all four export categories – a testament to the diversity of not only the port but also the community.

Conclusion The waterborne foreign trade of the U.S. is quite stable, yet dynamic. Ports that are less flexible and less pro-active may find that when the list is published for next year, that port may not be found. Key attention to innovation and coordinated port development is essential. The fifth article, titled “Now you see me; now you don’t,” discusses the evolution of the top ranked ports and the events that occurred to change the port’s position in the ranking.

ò

Sea & Shore

Ship & Store

www.odfjell.com

The Odfjell Group is a leading participant in the global market of seaborne transportation and storage of chemicals and other specialty bulk liquids. The Odfjell Tankers fleet of about 90 ships, trades globally and regionally. The Odfjell tank terminal division of 12 partially owned tank terminals is in a network with 12 other tank terminals partly owned by related parties. The terminals are all strategically located around the world, and with Odfjell Group headquarters in Bergen, Norway, the Company has more than 20 offices world wide.Odfjell has about 3,500 employees and annual gross revenue of about $1.2 billion.

Ballast Water Management

Aquatic Nuisance Species and Ballast Water Management

Halting the bioinvasion of American waterways Dave Cooley, GHPB

L

awmakers continue to tackle the challenge of regulating ballast water management to protect U.S. rivers, lakes, and waterways. Recently a federal appeals court in New York ordered the government to rewrite its rules regulating the discharge of ballast water by ships. The ruling was a result of a lawsuit against the Environmental Protection Agency’s 2013 Clean Water Act Vessel General Permit brought about by the National Resources Defense Council, Northwest Environmental Advocates, the Center for Biological Diversity, and the National Wildlife Federation.

Issue On October 5, 2015, the U.S. Court of Appeals 2nd Circuit ruled that the Environmental Protection Agency (EPA) acted arbitrarily and capriciously when issuing regulatory stipulations of the Vessel General Permit (VGP). While not vacating the VGP, the Court remanded the issue to the EPA in order for it to consider alternatives with regard to referencing the International Maritime Organization (IMO) Standard utilized for Technology‐Based Effluent Limitations (TBEL), failing to consider onshore treatment for ballast water, failing to establish numerical standards for both TBEL and Water Quality‐Based Effluent Limitation (WQBEL), inappropriately exempting vessels plying only the Great Lakes (Lakers) built before 2009, and stating TBEL and WQBEL monitoring and reporting requirements that were inadequate to guarantee compliance and therefore not in compliance with law.

26

w w w .t x g u l f. o r g J a n u a r y 2 0 1 6

The EPA’s response to these issues, given the magnitude of the flow of waterborne foreign trade involving the U.S., could result in possible modifications to the existing IMO Convention for the Control and Management of Ship’s Ballast Water and Sediments.

Background Aquatic nuisance species (ANS) are non-native aquatic and terrestrial organisms artificially introduced into new habitats throughout the world. These nonindigenous species can dominate native species by spreading diseases or parasites, rapidly multiplying in the new environment, or simply out-competing native species for existing resources. As a result, ANS produce harmful environmental and economic impacts on native aquatic ecosystems and the human use of these aquatic resources. The most recent estimate offered by the Aquatic Nuisance Species Task Force suggests the economic cost of the damage inflicted by ANS is about $137 billion annually.

The first notice of a non-indigenous invasive species in the U.S. was the zebra mussel, native to the Caspian and Black Seas.

The zebra mussel arrived in Lake St. Clair, a freshwater lake near Detroit, Michigan, in the ballast water of a transatlantic freighter in 1988. The zebra mussel spread to all five neighboring Great Lakes within ten years and has now invaded most waters east of the 100th meridian.

Congressional Action In response to the invasion of zebra

mussels, Congress passed the Nonindigenous Aquatic Nuisance Prevention and Control Act of 1990 (NANPCA). NANPCA established the federal Aquatic Nuisance Species Task Force to work closely with lower levels of government to address the problems with zebra mussels. In addition, to prevent continued introduction of zebra mussels, it required all ships entering the Great Lakes to exchange ballast water in the open ocean before arrival. The ballast exchange process is discussed in more detail below.

Six years after passing NANPCA, additional harmful ANS were found across the country. Congress moved to expand the original act by passing the National Invasive Species Act of 1996 (NISA). Through NISA, the control of invasive species moves beyond zebra mussels and ballast water, although those two issues remain high in importance and priority. Two key ways that NISA updated its predecessor, NANPCA, include requiring all ships entering the U.S. to exchange their ballast water outside the 200-mile U.S. Exclusive Economic Zone and expanding the geographical scope to include areas outside the Great Lakes region.

Implementing these congressional actions, in 2012, the Coast Guard issued final ballast water regulations pursuant to NISA, as well as guidance offered by an IMO Convention on ballast water management adopted in 2004. Further supporting this effort, the EPA issued a VGP under Clean Water Act authority for controlling all

Ballast Water Management discharges for ships, including ballast water -- initially in 2008 and again in 2013.

Ballast Water In order to provide adequate stability to a vessel at sea, ballast is used to weigh the ship down and lower its center of gravity.

This is accomplished by pumping seawater into specially designated tanks aboard ships known as ballast tanks. Depending on the type of vessel, the tanks can be double bottom (extending across the breadth of the vessel), wing tanks (located on the outboard area from keel to deck) or hopper tanks (occupying the upper corner section between the hull and the main deck). These ballast tanks are connected to pumps which can pump water in or out as necessary to accommodate stability requirements of the ship.

Depending on the amount of cargo aboard, these tanks are filled to add weight necessary to the ship to achieve the required stability. Also, once cargo has been discharged, ballast is added to improve the ship’s stability

Ballast water exchange process. Diagram by MaxxL is licensed under CC BY SA 3.0.

Turn their ForEx mark-up into your margin.

If you have to ask if you’re paying too much in Foreign Exchange fees, you probably are.

The fact is, most project/asset managers do not even consider they can lower their fees.

Can you afford to be indifferent about it? With Blades International’s Foreign Exchange Rate Integrity™ you can track your foreign exchange costs and your ForEx providers’ profitability.

Transaction Time: 04/15/15 8:45 AM Delivery Date: 04/17 GBP 1,000,000 / USD 1,583,500 Rate: 1.5835 Market Rate: 1.5635

We’ll evaluate your current activities, assess your volume and banking relations and we’ll negotiate improved pricing structures, which could lower your ForEx costs by as much as 70 per cent.

For a free evaluation of your ForEx profitability: call Jack Borland or Bob Blades at 510-83 FOREX (36739) www.bladesintl.com

January 2016

w w w .t x g u l f. o r g

27

Ballast Water Management during the ensuing voyage to the next port (the “ballast” voyage) in order to load the next cargo.

Ballast Water Exchange

While pumping ballast aboard after cargo discharge or to improve stability, a ship could be unintentionally transporting aquatic species from one part of the world to another. By conducting a ballast water exchange in mid-ocean, the objective is to flush any hitchhiking aquatic species in the ballast tank and replace it with water free of any foreign aquatic species. While this process is generally effective, a ballast water exchange will not clear the entire ballast tank. Additionally, should the ship encounter inclement weather during the voyage, conditions may not permit a safe exchange of ballast water. For a detailed review of the topic, read the 2010 Marine Environmental Research article, “Brine-induced mortality of non-indigenous invertebrates in residual ballast water,” by Bradie, J., et al.

Types of Aquatic Nuisance Species Zebra Mussels In 1988, zebra mussels (Dreissena polymorpha) were found in Lake Erie and quickly spread to all the Great Lakes. Zebra mussels are still found today in each of the Great Lakes, as well as throughout the major navigable rivers in the eastern part of the United States. Recent reports indicate that this species has spread to California.

The zebra mussel most likely made its way from its native western Russia to North America through the release of ballast water from cargo ships traveling from the Black Sea to the Great Lakes. It spread further by being carried through the lakes and connected waterways via recreational and commercial traffic. The zebra mussel’s ability to disperse is enabled by its travel flexibility.

In the larval stage, zebra mussels float along passively. In the adult stage, zebra mussels securely attach themselves to recreational boats that then travel overland and launch in other lakes and streams, thus spreading the non-indigenous species to other bodies

28

w w w .t x g u l f. o r g J a n u a r y 2 0 1 6

of water.

Zebra mussels are most disruptive in two ways. First, they colonize and clog water supply pipes, thereby restricting water flow for systems such as cooling, firefighting, and hydroelectricity. The economic repercussions of this type of species invasion

can be devastating. Second, zebra mussel invasions can deplete food sources in aquatic ecosystems. Zebra mussels are filter feeders consuming microorganisms, and they do so at very fast rates. Eliminating that food source from the bottom of the food chain can be dangerous to the survival of native

Ballast Water Management species. The spread of the non-indigenous zebra mussels have greatly decreased the numbers of native mussels in Lakes St. Clair and Erie, species which now may be at risk for extinction.

Eurasian Ruffes

The Eurasian ruffe (Gymnocephalus cernuss) is another aquatic nuisance species that spread to the Great Lakes, Wisconsin, and Michigan, after first being discovered in the St. Louis River Estuary of the DuluthSuperior Harbor in 1986. Originally from southern Europe, the ruffe is also believed to

Offshore experts in the Gulf of Mexico Services in Mexico & U.S. Offshore support services: crew transfers, Towing, supply runs, Rig move.

Full Port Agency Ship Management & Consultancy Services.

Vessel Operations, Procurement and contract support, Project start-up support, Full project logistics management !

719 Sawdust Rd suite 117 The Woodlands Tx,77382 Tel.-(281) 419-5494, email.- ecasg@enterpriseshipping.net / tsm@enterpriseshipping.net

www.enterpriseshipping,net http://www.smsstellamaris.com/

www.sangillogistica.com

www.enterpriseshipping,net

have arrived in North America through the release of ballast water from foreign ships traveling to the Great Lakes.

The Eurasian ruffe, an extremely aggressive species of small spiny fish, produces 200,000 eggs in the first batch and 6,000 eggs in later batches. It is able to thrive in a number of different habitats where waters range from fresh to brackish and in water depths of 9 inches to 280 feet.

As a fierce competitor for food sources, it feeds on plankton, bottom-dwelling insect larvae, and sometimes fish eggs. One advantage that the ruffe has over native species is better eyesight in dark conditions, allowing it to consume more food and at a quicker rate. The ruffe is now considered a dominant species in Lake Superior and the St. Louis River Estuary, and native fish species are becoming compromised.

Early efforts to control the ruffe populations attempted to introduce predator species; however the predators preferred native fish. Current management strategies are centered more on regulating ballast water discharge, as well as focused programs for identifying, monitoring, and netting the ruffe.

Mitten Crabs Mitten crabs (Eriochir sinensis) from China were first sighted in San Francisco Bay in 1992 and are suspected of being purposely introduced to initiate a fishery.

Like other invasive species, the mitten crab is an ecological competitor that threatens the availability of food for native species.

Although the current geographic range of the mitten crab is limited to Northern California, it is expected to migrate northward toward the states of Oregon and Washington. In addition, mitten crabs have been found in Chesapeake Bay, Delaware Bay, and the Hudson River.

The Chinese mitten crab also poses various threats to humans. First, they can damage the nets of commercial fisheries and clog water pipes. Second, mitten crabs tend to burrow, which can adversely affect the

January 2016

w w w .t x g u l f. o r g

29

Ballast Water Management integrity of banks and levees. Lastly, they are a vector for the disease Asian lung fluke.

The ANS Task Force website shows additional species of concern, which can be viewed at: http://www.anstaskforce.gov/soc. php.

Shipping Activity:

Aquatic nuisance species found in the U.S. Clockwise from top: zebra mussels, an Eurasian ruffe, and a mitten crab. Images courtesy of (respectively): U.S. Fish and Wildlife Service; “Gymnocephalus cernuus in Pärnu River Estonia” by lifar, licensed under CC BY SA 3.0; “Chinese mitten crab” by Christian Fischer, licensed under CC BY SA 3.0.

THE HOUSTON PILOTS Silent Servants of Progress

www.houston-pilots.com 30

w w w .t x g u l f. o r g J a n u a r y 2 0 1 6

A key reason for this increased invasion of aquatic nuisance species is the dramatic increase in the worldwide seaborne trade. According to the United Nations Conference on Trade and Development (UNCTAD), between 1970 and 2014, world seaborne trade increased by 3.7 times from 2.6 billion metric tons to 9.8 billion metric tons. Nearly half of that increase has occurred since 2000.

Additionally, the world merchant fleet has grown 2.6 times since 1970; rising from 672 million metric tons to over 1,749 million metric tons in 2014. Bulk carriers followed by oil tankers have experienced the most prevalent growth, and both vessel types travel in ballast a significant portion of the time.

With regard to flag registration, ships flying flags from the Americas and Asia have shown the most growth, with Oceania rising somewhat significantly over the last few years. Countries in Africa and Europe continue to lose flag registrations.

U.S. Ballast Water Exchange or Treatment Regulations The U.S. Coast Guard and the EPA have issued specific regulations with regard to the discharge of ballast water within U.S. waters. While each has its nuisances, the regulations have generally been harmonized not only with each other, but also with the IMO Convention for the Control and Management of Ships’ Ballast Water and Sediments.

To summarize the regulations: the master, owner, operator, agent, or person in charge of a vessel equipped with ballast tanks operating in the waters of the United States must employ one of the following ballast water management methods:

Ballast Water Management • Install and operate an approved ballast water management system (BWMS); • Use only ballast water from a U.S. public water system; • Perform complete ballast water exchange in an area 200 nautical miles from any shore prior to discharging ballast water, unless the vessel is required to employ an approved BWMS; or • Discharge to a facility onshore or to another vessel for purposes of treatment, which ensures that any untreated ballast water is never discharged into waters of the United States.

This does not authorize the discharge of oil or noxious liquid substances (NLS) in a manner prohibited by United States or international laws or regulations. Ballast water carried in any tank containing a residue of oil, NLS, or any other pollutant must be discharged in accordance with applicable laws and regulations.

A manufacturer whose BWMS has been approved by a foreign administration pursuant to the standards set forth in the International Convention for the Control and Management of Ships’ Ballast Water and Sediments, 2004, may request in writing for U.S. authorities to make a determination that their BWMS is an alternate management system (AMS). These standards dictate the maximum quantities of organisms per volume of water that can remain in discharged ballast water.

The appeals panel left the EPA’s Vessel General Permit in place until the EPA produces a new one. As the panel set no deadline, it is uncertain as to when – or if – new regulation will be issued. The existing VGP expires in 2018, and the EPA must choose between revamping the VGP, asking the U.S. 2nd Circuit for a rehearing of the case, or seeking Supreme Court review of the 2nd Circuit’s decision. Whatever the course of action, significant challenges await for establishing U.S. environmental regulations that effectively yet pragmatically apply to the global shipping industry.

ò

January 2016

w w w .t x g u l f. o r g

31

commerce club

December 2015 Commerce Club Honoring Capt. Mike Morris Houston Pilots Judith Schultz, GHPB

T

he maritime community packed the Grand Ballroom at Brady’s Landing on December 10, 2015, to hear Captain Mike Morris reminisce over his several decades of service on the water.

Captain Morris delighted listeners with his heartfelt gratitude for the opportunities and support offered him throughout his career, his admiration for the cooperative spirit of the Houston Ship Channel community, and his lively descriptions of quirky mishaps both on and off the water, including a recent incident where he was run over by his own truck!

Humor was the thread woven through every story, evoking much mirth and nodding of heads in shared agreement with Captain Morris’ point of view. Captain Morris summed up his thoughts by sharing his list of reasons to retire now. On the list were such particulars as his wife, Marta Morris, receiving “two times as much husband for one third the pay;” “no more rush hour traffic from the north side of town;” and, the top reason: “I’m going to be a grandfather!” The latter announcement brought a spontaneous round of applause from the crowd and beaming faces at the Morris family table.

Top: Captain Mike Morris speaks at the December Commerce Club.

Bottom: The audience gives Captain Morris a standing ovation.

32

w w w .t x g u l f. o r g J a n u a r y 2 0 1 6

Texas Gulf Coast Gateway to the Midwest, Southwest and the Greater Galveston/Houston Region

Port of Galveston

AN EFFICIENT PART OF YOUR SUPPLY CHAIN • Served by Wallenius Wilhelmsen Logistics (WWL), American Roll On Roll Off Carrier (ARC), “K” Line Ro-Ro, Höegh Autoliners, Hyundai Glovis, Grimaldi Lines and Del Monte Fresh Produce / Network Shipping LTD • 30 Minutes to Open Sea

Roll-On / Roll-Off terminal - New vehicle imports

• Efficient Labor and Competitive Rates • Foreign Trade Zone No. 36 • Roll-On / Roll-Off, Break Bulk and Project Cargo Terminals • Direct Connection to BNSF Railway and Union Pacific Railroad • Immediate Access to the Interstate Highway System.

Imported wind turbine towers departing the port by rail

P.O. Box 328 • Galveston, TX 77553 Phone 409-766-6112 • Fax 409-766-6171 Website: www.portofgalveston.com

January 2016

w w w .t x g u l f. o r g

33

commerce club Pat Studdert, president of Buffalo Marine Service, Inc. and former high school football coach, presented Captain Morris a football, with his well-known instructions: “Don’t drop the football!” Studdert also recognized Captain Morris’ wife, Marta, for being the bedrock of her family and for her fantastic empanadas with a crystal shamrock “from ‘the Irishman’.”

CAPT Bill Diehl, president of the Greater Houston Port Bureau, commended Captain Morris for his dedication to excellence and his constant goal to “get it right” on the Ship Channel. On behalf of the Port Bureau, CAPT Diehl furnished him with a Yeti cooler for use in “going ashore.” The Port Bureau wishes every success and enjoyment to Captain Morris and his family for his retirement in the spring.

Editor’s Note: Hear David Arsenault, president and CEO, Hyundai Merchant Marine America and Hyundai America Shipping Agency, at the February Commerce Club at Brady’s Landing on February 11, 2016. Individual seats and table sponsorships are available. Sign up by vising www.txgulf.org/commerceclub.php or by calling (713) 678-4300.

ò

Clockwise from top: Capt. Morris accepts a Buffalo Ball from Pat Studdert, Buffalo Marine Service, Inc.; CAPT Bill Diehl offers Capt. Morris a Yeti cooler for enjoying shore-side activities; Capt. George Pontikos from Odfjell USA, Steve Nerheim from USCG VTS, Kris Nerheim, and Robert Hawn from WGMA chat before lunch; Capt. Bob Sheen and James McGregor from Ocean Shipholdings talk with Charles Flournoy, GHPB Chairmain of the Board (center).

Opposite: Over 300 attendees filled the Grand Ballroom at Brady’s Landing.

34

w w w .t x g u l f. o r g J a n u a r y 2 0 1 6

commerce club

Premier

Thank You to Our Table Sponsors

January 2016

w w w .t x g u l f. o r g

35

Greater Houston Port Bureau www.txgulf.org 111 East Loop North Houston, TX 77029 (713) 678-4300 A Publication of the Greater Houston Port Bureau The Port Bureau News magazine is a monthly publication of the Greater Houston Port Bureau, a member-driven non-profit dedicated to promoting the maritime community, providing vessel movement information, and offering members premier networking and advertising opportunities to drive business. The magazine is distributed to over 7,000 professionals in the Houston maritime community via U.S. mail and email. Advertising is available for members.