Port Bureau News June 2011
www.txgulf.org
Spotlight on Father Rivers Patout Chaplain—Houston International Seafarer’s Center
The Houston International Seafarers Center Ministries in Motion
Port Bureau Staff Bill Diehl Jeannie Angeli Al Cusick Jonathan Edwards Cristina Gomez Janette Molina Patrick Seeba Josh Whitehead
Board of Directors *Tom Marian—Chairman *Dennis Hansell—1st Vice Chair. *Mike Drieu—2nd Vice Chair. *John Taylor—Secretary /Treas. *Robert H. Blades *Alec Dreyer *Charles H. Flournoy *Capt. Steve Conway *Capt. John G. Peterlin III *Capt. Richard Russell *Steve Stewart *Nathan Wesely Jim Black Ken Burnett Jan Crittenden Celeste Harris Jason Hayley Kevin Hickey Guy W. Hitt Charlie Jenkins Shareen Larmond Kathy Murray Jerry Nagel Vinny Pilegge Nolan Richardson Lloyd Schwing Earl Smith Tim Studdert Lawrence Waldron Armando Waterland Don Welch *Denotes Executive Committee Members
Stevedores relax at the Seafarers Center on their lunch break. Advertise in the Port Bureau News 1 Month
6 Months
Full Year
1/6th Page
$100
$550
$960
Half Page
$250
$900
$1,500
Full Page
$500
$1,500
$2250
Membership (Calendar Year)
$600
Advertisement cost includes 10 hard copies of each issue for distribution. Port Bureau Membership required for advertising in the Port Bureau News.
Bringing a Ship Into the United States from Europe? Applications for inspection of non-U.S. flagged vessels in the USCG Activities Europe zone can be made on-line at http://www.uscg.mil/acteur/ nonusrequest.asp. Please note that in order to schedule this inspection the Coast Guard will require evidence that the vessel has a firm commitment and is scheduled to discharge or load cargo in the United States. Particulars, including which port and when, will be required with the application for inspection. Applicants requesting an overseas Certificate of Compliance inspection must remit payment of two fees including the $4,585 Overseas Inspection Fee and the $1,100 Foreign Tank Ship Fee. Proof that these fees have been paid will be required for the Coast Guard to accommodate your request. Due to a busy schedule the Rotterdam Office will not be able to accommodate all requests, please provide sufficient lead time and, when possible, provide more than one proposed inspection date. If you have any additional questions, please do not hesitate to ask. Please copy acteurinspections@uscg.mil on all future correspondence.
WHE N IS YOU R SHIP COMI NG IN? Anybody can throw numbers at you, but no one else can tell you what they mean. When thousands of dollars hang in the balance, accuracy isn’t a luxury - it’s a necessity. Other organizations can offer you AIS tracking systems that show you where the vessel is or was as a dot on a screen. But your vessels and your business are more than that to you and they’re more than that to us. With a dot on the screen, you still have to guess when your vessel will arrive, but with HarborLights, you’ll know. Developed by Dave Morrell of Mare Librum Consulting, HarborLights, is the only program fed by Houston Pilots dispatch information— the most timely and accurate information on the Houston Ship Channel.
Take the Guesswork Out of Your Business Nobody else can tell you where your vessel is going—don’t just see the present, see the future with HarborLights.
Where’s Your Information Coming From? HarborLights vessel movement information is updated in real-time by the Houston Pilot dispatch center.
Don’t bet your success on guesswork, use HarborLights to take your business to the next level. Contact us at the Greater Houston Port Bureau for subscription information.
Greater Houston Port Bureau
Greater Houston Port Bureau—111 East Loop North—Houston, TX—77029
713.678.4300
WWW.TXGULF.ORG
Upcoming Events June 6-9
Joint Harbor Safety & AMSC Conference Hilton of the Americas Hotel & Conference Center
July 14
Commerce Club Luncheon Brady’s Landing Restaurant Alec Dreyer, CEO, Port of Houston Authority
August 20
82nd Annual Maritime Dinner Houstonian Hotel
August 30
Maritime Steel and Petrochemical Outlook Conference Pasadena Convention Center
September 8
Commerce Club Luncheon Brady’s Landing Restaurant Mayor Annise Parker, City of Houston
October 1
Houston International Seafarer’s Center Gala Houston Marriott South
November 7
Captain’s Cup Golf Tournament Brae Burn Country Club
GHPB Members Advertise in the Port Bureau News Reaching 3,500+ Professionals in the Houston Port Region, contact the Port Bureau at (713) 678 4300, or pseeba@txgulf.org to arrange for either 1/6 page, 1/2 page, full page, or back cover advertisements.
GREATER HOUSTON PORT BUREAU 111 East Loop North Houston, TX 77029 713.678.4300 ph 713.678.4839 fax www.txgulf.org
Captain’s Corner
Meat for the Hungry, Drink for the Thirsty: Hospitality Ashore
This week, I have family in town for my daughter Rachel’s graduation from high school, so we are all about hospitality for our guests. Recently, I heard Pat Studdert from Buffalo Marine Service speak at a Port of Houston Authority board meeting about how in this business, we’re all family and all on the same team. Pat spoke, like only an former football coach can, about how the rising tide carries us all and that in order to achieve true success, we have to keep rowing together because if we are constantly at each others throats, we’ll expend more energy fighting than we will growing our businesses. In the Coast Guard, we used to call this type of community spirit competitive cooperation, and no matter how you say it, the reason that we have such a successful port region is because of the continuing partnerships, cooperation, and community spirit that allows us to work together efficiently. Forty years ago, the Port of Houston was a less welcoming place for seafarers whose ships tied up far from the city center, and had to walk a long way to the restaurant and bar enclaves that existed in Galena Park and the East End. In the 70’s, a group of ministers and business people, to serve the hard working sailors that keep our port afloat, put together the Seafarer’s Center, and for decades, conditions along the waterfront have been improving. You’ll read more about the Houston International Seafarer’s Center later in the magazine, but I also wanted to recognize the Galveston Seafarer’s Center which has been serving the Ports of Galveston and Texas City for years. Since 9/11, our hospitality to our seafaring guests has taken a step backwards in the name of security. While I certainly understand security, locking down the port is not a very effective approach to protecting business interests. The mariners who are coming and going from our ports—if we keep them confined on board ship, are they really going to be supportive of doing business with us later as they elevate themselves in their respective corporations? Before arriving here, the Department of Homeland Security screens seafarers. Think about it: if they meet the requirements that allow anyone landing at an international airport to walk into the country, we need to let them come ashore and make Houston as welcoming a place for them as we do for each other. Allowing seafarers access to our region will boost the local economy as they spend money in shops our community, and more importantly, it will ensure that we are doing our part for the men and women who spend months at sea to bring us the goods we buy, sell, and trade. –B. Diehl, GHPB
Addressing Seafarer Access
The Area Maritime Security Committee and USCG Sector Houston-Galveston
In late 2009, the Area Maritime Security Committee, a group of regulators, facility operators, and government personnel tasked with assessing security risks and determining appropriate risk mitigation strategies, created the Facility Security Working Group. This group focuses on addressing key issues of regulatory, education, and access issues with a focus on seafarer’s rights, access, and facility access control. In January, the working group presented a report to the AMSC with recommendations developed on their efforts. One recommendation included in the report includes endorsing a non-facility-specific basic TWIC escort training for non-facility employees. Implementation of this program would reduce the training burden on facilities by including basic training during the TWIC enrollment process, encourage reciprocity agreements between facilities, and create an opportunity for individuals to receive basic TWIC escort training through an online computer training module. The working group also identified several access issues that need to be addressed in the region such as addressing the existing wide variance in terminal gate list policies. The over 100+ facilities in the region each have different procedures and requirements for access, many of which do not necessarily allow for short-notice changes. This issue is exacerbated by rigid policies, a lack of dialog, and an inability to speak to facility security personnel when issues arise. While Port Chaplain access has greatly improved over the last few years, serious issues still remain. Currently shore access restrictions, drastically increased since 2001, mean that sailors have a more difficult time leaving the ship to go anywhere at all. Before the restrictions, a customs official was able to go aboard the vessel, inspect the crew’s documentation, and then issue a blanket visa. In recent years however, sailors have to submit individual visa requests and ships often have to submit the names and paperwork of each individual sailor to every terminal before they arrive. This creates a great deal of extra paperwork that many sailors are unable to complete and so are not allowed to leave the ship. “One of the most galling problems that we have is right here at City Dock 23” exclaims Father Patout of the Houston International Seafarers Center, pointing out the windows of the Seafarer’s restaurant down to a dock where stevedores are unloading steel pipe. “An American citizen—a sailor with a TWIC card—can’t walk from that dock up here to the Center, less than 200 yards away. That’s something that needs to be addressed quickly.” Private terminals and the Port Authority often require sailors to be escorted by someone who has taken an escort class at each individual facility. The classes are short, free and open to those who need to have access, but a sailor aboard ship isn’t able to take the class ahead of time even if he knows about it, so often has to rely on escort services which charge fees. Some terminals have made steps to assist seafarers, but the programs still need tweaking: a large refinery along the channel has ensured that an internal bus route can take seafarers from a bus station to the outside gates where trailers have couches, tvs and phone books that the sailors can use as they wait for taxis or other transportation, however walking from the dock to the bus station requires authorized escort—an effective block for seafarers wanting to go ashore. In recent years, access has improved for seafarers, but there is still a long way to go. “The only way we can address issues are when we know about them” says Commander Rob Smith, Chief of the Prevention Department for USCG Sector Houston-Galveston; “we’ve been seeing a steady decrease in the number of complaints and issues in the region, but the only way we know what’s wrong is when someone brings it up. If you’re a seafarer or worker with an access issue, let me know, let someone on the committee know, because then we can start to work on the problem.” -P. Seeba, GHPB Have an access problem or an issue with the terminal? Let us know at the Greater Houston Port Bureau (access@txgulf.org), and we will route the concern to the proper authority.
The Houston International Seafarer’s Center Ministries in Motion
Where are the Centers? Serving the men and women arriving and working the Houston docks for over 40 years, the Houston International Seafarers Center provides everything from a bar to a church to the hard working men and women of the sea. In 1968, a group of Catholic and Protestant priests and ministers decided to combine their resources to provide for the needy with the East End ministry. A few months later, a ship captain appeared and asked “How can Houston have such a large port, but provide nothing for seafarers?” Before the Center, in their off-duty hours, seafarers often walked miles to reach the bars and restaurants of Harrisburg, Navigation, and Clinton drive and crime—usually violence committed against the visitors—was high including at least one murder every year.
Howard T. Tellepsen Center 9250 High Level Road—Just above Upper Level Wharf 23 in the Turning Basin Lou Lawler Center 1700 East Barbour’s Cut Boulevard, directly across the street from the Port of Houston Barbour’s Cut Office Building
Describing the founding of the Center, Father Rivers Patout remarked “My prejudice was—why would sailors want a priest to tell them not to drink and read playboy?” But after years of working with the sailors, he reflected “See, that’s the stereotype, but in reality, the sailor is a hard working individual who loves his family, and they all need a peaceful place to come ashore and relax, socialize, reflect—sure, maybe have a drink—but a place to do it all without getting rolled or taken advantage of.” Starting the center on the second floor of the St. Vincent de Paul building on 67th and Harrisburg, the first night, sailors walked miles to reach the center and spend a few hours. Around the same time, a Belgian captain named Alberd Liedst had gathered businessmen from the community to start their own ministry including bringing each ship a case of beer at Christmas. Liedst had a promise from the Port of Houston Authority for a tract of land and the two groups got together for a meeting about how to combine their efforts. As businesspeople, chaplains, and ecclesiastical representatives sat around the table, the Bishop representing the Catholic Archdiocese
Galveston-Houston looked at them and volunteered to donate $50,000. This donation got the ball rolling and soon the center had support from the Episcopalian, Methodist, and Presbyterian churches as well. Howard Tellepsen promised that he would provide whatever funding the churches weren’t able to, and the Port of Houston commission made good on their commitment to donate land, so in 1973, the Seafarers Center opened in the turning basin complete with swimming pool, soccer field, and amenities for the seafarers. The Seafarers Center facilities include a chapel, group meeting and gathering rooms, a grill and restaurant, convenience store, basketball courts, exercise equipment and pool, communications center (including phone cards for sale, telephones, and free wireless internet) piano, book/magazine exchange and a bar. In addition to the facilities, the ecumenical staff routinely visits ships to minister to sailors who cannot leave the vessels. For all the benefits of the Seafarers Center, the volume of sailors coming through has decreased in recent years. Twenty years ago, ships routinely took up to two weeks to unload, affording sailors an opportunity to visit recreational facilities and relax when they weren’t working. With vessel turnaround times drastically shorter, the centers have seen utilization dropping. Father Patout speaks of the difficulties of coming ashore as a modern seafarer: “Last night, we had 26 seafarers here at the Tellepsen Center—I remember going back twenty years ago, we could have as many as 200 people packed in this room, drinking and talking and playing games.” With fewer sailors able to leave the ships, the ministers and staff of the Seafarers Center have to redouble their efforts by visiting the ships and terminals along the channel. In addition to operating the vans that bring sailors from the docks to the two Centers, “We bring them mobile phones, shuttle them to the post office or to the mall, and help them when emergencies come up and they need to make arrangements back in their
(upper-left) - Tom Marian, Buffalo Marine Service presents outgoing Captain of the Port Marcus Woodring with a gift of appreciation. (upper-center) Sherry Wyntjes and Colleen Smith, Buffalo Marine Service (upper-right) RADM Roy Nash, Commander 8th USCG District VADM Robert Parker, USCG Commander Atlantic Area, and Bill Diehl, GHPB (upper-center-right) Denise Schaefer, Odfjell, Lloyd Schwing, Marine Healthcare Systems, Earl Smith, Inchcape Shipping, Celeste Harris, St. Joseph’s Medical Center, Robert Hawn, Inchcape Shipping, and Andrea Flynn, MHS (mid-low right) Niels Lyngso, WGMA, and Dennis Hansell, Suderman & Young Towing (lowerright) C.A. Rousser, The Rousser Companies (bottom-right) The Commerce Club crowd eats before the open discussion with VADM Parker (bottomleft) Bill Beyland, Jorge Loredo, Joe Burkett, Peter Wurschy, and Arthur Ross, Texas Terminals (lower-left) VADM Parker, Patrick Seeba, GHPB (mid-low left) Al Durel and James Nash, Port Freeport, and Jason Hayley, Port of Texas City (middle-left) Representatives of Buffalo Marine run the chow line at the May Commerce Club. (midupper left) Kevin Hickey, Houston Fuel Oil leads as Capt. John Taylor, BP, VADM Parker, and Jay Guerrero, Office of Senator John Cornyn bring up the rear at the buffet.
home country for family.” With more time necessary tom meet seafarers at their vessels, the staff is out and about every day of the year. One of the ways the Seafarers Center generates revenue for operations is their yearly Maritime Gala—this year the event is co-chaired by Tom Marian and Neils Aalund, and honors a person who has made substantial contributions to the industry. On October 1st 2011, they will honor Congressman Gene Green with a big-band extravaganza at the Houston Marriott South including reception, silent auction, live music and dancing. “More than ever, the Houston International Seafarers Center is playing a key role in the lives of the more than 100,000 men and women that call the Houston port complex each year.” says Captain Rich Russell, Vice President of Operations for AET, Inc. and Chairman of the Board for the Seafarers Center. As a former mariner himself, Captain Russell makes a point to draw attention to the hard work done by sailors and is dedicated to the issues such as shore access. “More than simply offering a friendly place to go relax, the HISC carries weight when dealing with the difficult issue of Seafarer access. We advocate for a system that both allow these folks to go ashore and one that give the terminals the security levels they need in these times of heightened protectiveness. We most recently participated on numerous phone conference calls with NMSAC which had been tasked by the USCG to provide guidance on the Seafarer Access language in their recent Authorization Bill. With the support of the Port of Houston Authority, Ship Owners, local maritime organizations and private citizens, we will continue to minister to the needs of the Seafarers we are dedicated to serving. “ -P. Seeba, GHPB
Mid-Day Getaway Full-Service Restaurant at the Seafarer’s Center in the Turning Basin With a dearth of opportunities for quick tasty food along the waterfront, the restaurant located in the Houston International Seafarers Center provides an opportunity for seamen, dockworkers and the community alike to share a meal in an easyto-access environment that allows them to eat a relaxing meal and get back to the job without a long drive or time away. Located just across from Port Bureau member Richardson Stevedoring and Logistics and City Dock 23, no additional identification or credentialing is necessary to access the Center—a driver’s license will get you through the Port Authority checkpoints quickly and easily. At the Seafarers Center Restaurant, the staff is efficient and colorful and will go the extra mile to see you satisfied: “You come to us, we’ll serve it up hot and we’ll serve it up right” says Jerri Parker.
Spotlight on Father Rivers Patout
Chaplain—Houston International Seafarer’s Center
“One of my big memories—- as a seafaring chaplain, I have a front-row seat to see how the world is changing, and it’s fascinating to learn how much cultures can change but people are often quite the same.” “I remember when we used to go on the old Soviet ships—back then, the commissars ruled—one of the stories I remember fondly was going on a ship to which I was bringing Christmas boxes. A grizzled old commissar met us at the dock, looked me over with a mistrustful eye, so I said “I have brought New Year’s presents” and he looked me over again, and growled “Nyet!” The Captain and the crew were anxiously hoping they’d get something, but he grumbled and said “We cannot do this, we cannot accept. We have nothing to give you in return.” so I thought about it and said “Well, I can have a drink of vodka—that’ll do.” and the Captain said “We don’t have vodka, but we just came from Cuba and we have rum…” so we went up to the Captain’s office and toasted the Russian seafarers and the American seafarers, and after a little while, he said “Okay. You may bring the gift”, and so I said “Nyet! I don’t have the gift, I have one for everyone on the ship!” and eventually I convinced him to let me bring gifts for everyone aboard. Well, as we were heading back down the gangplank to leave, the Captain looked both ways, made sure the commissar was out of ear shot, and with a grin whispered, “Merrrrrrrrrrrrrry Christmas!” Father Rivers Patout has been described as a greeter, counselor and advocate for the 50,000+ seafarers who pass through the Port of Houston every year. With family roots in Patoutville, LA, Rivers was born in Galveston, grew up in Navasota and upon graduation from high school, went to the University of Notre Dame. In 1960, he received his degree with every intention to become a lawyer. But upon reflection, he decided to go to Seminary and went to St. Mary’s in Houston, studying to become a priest and in 1967 was ordained into the Catholic church. After serving at a few parishes in the Archdiocese of Galveston-Houston, Father Patout was instrumental in founding the Houston International Seafarers Center in 1968. With permission from the Church to become the full-time chaplain at the Port of Houston granted in 1972, Father Patout has spent the years since then tending to the men and women of the sea through the Houston International Seafarer’s Center. A dedicated force in the port campaigning for seafarer rights, access, and ensuring that their basic needs are met, Father Patout has stood toe-to-toe with most terminals, operators, and owners working in Houston at some point during his career. “The type of injustice and problems that we had when I started—we had some really terrible conditions on some of these ships. I’d board a ship where not a single bathroom or toilet worked, where the crew had to sleep on the deck, and well, the Romanians who made $30/month were afraid to complain because this was a good job. Now that the Coast Guard is using a point system, they see if the ships have good conditions aboard, have salaries paid—ships that go to other ports around the world, maybe no one cares, but those types of ships can’t come here anymore, and since they want to come here, it means that we’ve seen some pretty substantial improvements. We still have some ships that’re bad—we’ve had a couple recently, but that’s something that we can work on, that’s something we can help fix, and I’m delighted to say that it’s not nearly as bad as it used to be.”
How to Survive a Customs Audit “We’re From the Government and We’re Here to Help” John P. Donohue, Partner, Thorp Reed & Armstrong, LLP No one need tell the American international trade community how drastically the world changed after September 11, 2001. Cargo and border security went from being a factor for consideration to the driving force behind the administration of the Bureau of Customs and Border Protection, which, before that date, did not even have border protection as an agency mission. Prior to the attacks, the process for enforcing the law related to the assessment of duties on commercial cargo was fairly uniform throughout the land. If an import specialist (the Customs Officer charged with determining duties due on commercial shipments) had questions, he or she pursued them directly with the importer, and resolved them fairly quickly. If an import specialist believed that an importer’s motives were more sinister or if the suspected problems were more systemic, the matter was referred to the Customs Office of Investigations which had experienced Special Agents, with both criminal and civil jurisdictional responsibilities, who could investigate suspicions and either allay the concerns of the import specialist or cause enforcement actions to be pursued. In the middle of all of this was some exercise of judgment on whether an importer was acting legally; was legitimate but had become careless; or was involved in a criminal undertaking. But the Post 9-11 structural shift to cargo security created two significant deficiencies in the traditional commercial operations mission of Customs. First, there was a de-emphasis of the experienced import specialist who understood commercial operations in favor of the cargo inspectional staff. In a sentence, Customs became less concerned about whether duties were paid on the cargo entering the United States and far more concerned about whether the cargo would blow up in our faces. Second, the experienced special agents, whose training taught them to distinguish the honest but inexperienced importer from the criminal violator, were moved from trade enforcement to cargo security and a full generation of seasoned investigators has been lost. Customs has endeavored to fill the gap in commercial enforcement by emphasizing the role of the customs auditors, and more importers are now getting the knock on the door, not by the agent with the gun, but by the auditor with a laptop. Importers are not hearing “you are under investigation.” They are hearing “you are under audit.”
So what is a customs audit, and how does one respond? There are two types of audits – the Customs “Quick Response Audit” and the “Focused Assessment.” In the Quick Response Audit, Customs will be directed to resolve a single issue, generally raised by an import specialist. ABC Corporation is importing duty free petroleum products from the Virgin Islands. The auditor will be asked to verify that the cargo is actually produced in and exported from the Virgin Islands. A careful review by the audit staff of the commercial documents, both in the United States and the Virgin Islands, will likely resolve the matter. The Focused Assessment is a broader analysis of the general compliance levels of the importer, and, wisely, in the ordinary course Customs limits these audits to the larger companies, because even the Regulatory Audit staff is limited. As its name suggests, the Focused Assessment “focuses” on those areas of the importers’ business that likely pose compli-
ance risks to Customs. And Customs will generally choose three or four target areas on which to concentrate. For example, if an importer is buying goods that are under an antidumping order, Customs will almost always select as one of its focus areas the proper payment and assessment of antidumping duties. If an importer buys exclusively from a related foreign affiliate, Customs will undertake to examine the related party transfer pricing to ensure that the export price is not manipulated to reduce customs duty liability. In this area Customs has become far more sophisticated and is asking detailed questions related to pricing that had heretofore been reserved only to IRS agents. Here the Customs concern is probably misplaced. With rates of duty at historic lows (the average rate of duty on imported merchandise is now at about 1.8% ad valorem) importers simply have very little to gain with such price manipulation, and the adverse tax consequences of such a manipulation far outweigh the minimal customs advantages. In the end, virtually any CFO will tell his customs lawyer that such an endeavor would never be worth the risk. For companies that have large and varied product lines (the Wal-Marts, Home Depots and Costcos of the world) Customs will audit to determine if there are processes in place to properly classify (i.e. determine the rate of duty) on imported goods. Customs has published a list of “trade priorities” which, for Focused Assessment purposes, would probably entail:
Antidumping and countervailing duty payments – are the special assessments to alleviate unfair international trade practices actually being paid? Import safety – are goods meeting required safety and testing standards? Intellectual property – is the importer buying genuine or counterfeit merchandise? Revenue collection – are the goods properly valued and if, duty preference claims are made, are they valid and supportable? Textiles – are goods actually coming from the country where they are reported to be from?
John Donohue heads the International Law practice group at Thorp Reed & Armstrong in Philadelphia. He has over 35 years practicing international trade law and has spent 20 years as an adjunct professor of International Trade Law at the Seaton Hall University School of Law. John can be contacted at 215-640-8540 or jdonohue@thorpreed.com. Reprinted courtesy of the Maritime Exchange for the Delaware River & Bay.
How Does One Prepare for an Audit? Customs audits are like trips to the dentist. They are bearable, but never fun. The company that wishes to successfully complete an audit will probably take several steps. A. Ask yourself, “What would Customs consider a likely area of inquiry for my company?” For example, if you import goods from any country for which the United States extends trade agreement preferences, and those preferences are invoked at the time of entry, assume that Customs will test your right to those preferences. B. Create a compliance plan well in advance and adhere to it. Since the entire purpose of a Focused Assessment is to test compliance with the law, and to satisfy Customs that all duties are being paid, a good compliance plan positions the company well to survive the audit. C. If you find compliance errors, report them to Customs promptly. The Customs law, like most bodies of law, strongly favors the company which voluntarily discloses errors, and leaves fewer areas of potential irregularity to uncover during the audit. D. Check the government work. If the purpose of an audit is for the government to check the routines of the importer, it is entirely appropriate, if Customs alleges a violation or underpayment of duties, to examine the Customs findings and methodologies. No one enjoys the notion of a federal regulator looking over his or her shoulder. But a well done Customs audit, with a reasonable auditor, working with and an open-minded importer, need not cause catastrophe. Planning is everything.
Port Watch
Port Policies Promote Profits and Provide Promise Tom Marian, Buffalo Marine Service
After March’s impressive vessel arrival numbers, it is not surprising that April experienced an appreciable drop in commerce. Indeed, with the exception of Brownsville, every major port in Texas saw a decline in vessel numbers. In retrospect, this was not unexpected given that constant linear growth is not sustainable. So shall we call April a breather? Perhaps the best way to assess the first third of 2011 is to compare it against last year. Many ports were forced to take a hard look at their business models during the course of the 200910 consumption implosion. Houston, in particular, dedicated considerable efforts to streamlining processes, assessing organic costs and identifying long term growth opportunities. Such efforts took discipline and commitment as many difficult budget decisions had to be balanced against potential investment returns. Now that the national economy has supposedly “crossed the Rubicon” was the effort worth it? Apparently! In a mere 3% growth environment, the Port of Houston’s ship arrivals are 13% higher than the first four months of 2010 - even though vessel movements have fallen off by over 12.5% from last month. Granted, Houston is the only Port in the region to experience such robust growth since last year but Galveston, Sabine and Texas City have all posted 3% gains this year despite a 26%, 10% and 1% decrease in vessel arrivals from March to April. Yet, the composite Texas port numbers are running 5.5% over last year meaning Corpus Christi and Freeport are dragging down the average with respective losses at 19% and 3% against last year. No doubt, the fact that April registered more than a quarter fewer vessel arrivals (25%) than March added to the year-to-year negative change for those 2 ports. Houston’s “long approach” to commerce is also apparent in the type of vessels that have been calling on the port. While chemical tankers, container ships and tankers saw vessel arrival decreases that nearly mirrored the month’s overall percentage drops (i.e., 11.5%, 14% and 14.4% by respective category); car carriers, Roro vessels and, most importantly, general cargo vessel arrivals for April matched or exceeded March’s numbers. Another way to view the various vessel trends is via the Houston Ship Channel tow movements. Thus far, 2011 is running 3.7% over 2010. This is consistent with the national economic numbers and makes sense since tows are the workhorses that transport those commodities that are integral to consumer goods (e.g., chemicals, fuel, construction materials). Collectively, the ships from overseas and tows ranging from the upper reaches of the Mississippi are inexorably drawn to the port engine that Houston has fine-tuned to accommodate such trade on a just-in-time basis. As usual, it remains to be seen how solid the 2011 growth will be as there is always a chance that the summer trade doldrums of 2010 could return due to lackluster consumption, overseas malaise or yet more natural disasters. Rest assured, if such a worst case scenario were to unfold, the Port Houston’s revamped business model will permit those businesses that rely upon Houston Ship Channel trade to weather the storm and soften any impact to the regional economy. –Tom Marian, Buffalo Marine Service