May 2015 Port Bureau News

Port Bureau May 2015

Greater Houston Port Bureau

News

The Port Bureau’s Vessel Movement Database: What’s Behind the Curtain?

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Port Bureau

News

Publisher/President CAPT Bill Diehl, USCG (Ret.), P.E. Editor Emily Mitchell Copy Editors Emily Mitchell Judith Schultz

24 Spotlight on

16 The Port Bureau’s Vessel Movement Database: What’s Behind the Curtain?

Shrader Engineering

3 Captain’s Corner

30 Houston Area

No Roar This Month, But…

Maritime Academies See Program Expansion, 139 Grads in 2015

6 Strict Emissions

32 GHCA Third Annual

Plan, Adapt, Execute

4 Port Watch

Limits Push Marine Shipping Industry Towards LNG 10 Bluewater and Brownwater Come Together in the Spirit of Cooperation

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Boat Tour

34 Commerce Club

April 9, 2015, featuring VADM C.D. Michel, Deputy Commandant for Operations, USCG Headquarters, Washington, D.C.

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

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Art Director Kyle Beam Writers Dave Cooley Emily Mitchell Judith Schultz Patrick Seeba Cover Photograph Lou Vest Port Bureau Staff Jeannie Angeli Al Cusick Megan Essenmacher Cristina Gomez Janette Molina Christine Schlenker 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 Plan, Adapt, Execute Walking into the YMCA the other day to do my Business Man’s workout (also known as “sitting in the sauna”), I noticed a t-shirt with the following phrase written across the front: “Plan, Adapt, Execute.” I liked the simplicity of it and thought that it sounded like something they would yell at you in the military. Anyway, as I started to really get into my workout, I began thinking about all of the initiatives the Port Bureau is currently working on and how this motto relates to them. More specifically, we are planning for the future, adapting to current conditions, and executing our member services more effectively.

Back in March, I told you that our Board of Directors was establishing two committees specifically dedicated to the biggest issues facing our ports: dredging and traffic congestion. To put it simply, no channel means no port, and if we do not maintain our ability to turn ships around quickly, we will lose too much business to other, more efficient ports out there in the global market.

From the first meeting of each committee, we have witnessed enthusiastic participation. Both groups spent over an hour and a half each talking about the challenges their companies are facing. It was interesting that the primary issue for both groups was related to time: permitting time and vessel turnaround time on the channel. At the second round of meetings,

Photo by Milka Silfverberg

both committees started to discuss the metrics and data sources needed to perform a better analysis of the issues.

Now that we have the committees off the ground, I would like to share with you a summary of each committee’s current focus.

The dredging committee recognized that the maritime industry needs more predictability in the dredging process. As such, one of the committee’s goals is to identify and disseminate actionable data so that industry is better able to plan.

Furthermore, the group wants to work more closely with industry and the Port of Houston Authority in order to build support for increased dredging funding, to return dredging permitting and sampling authority to the U.S. Army Corps of Engineers Galveston District, and to support the Port of Houston Authority’s push for more streamlined processes that facilitate the use of placement areas.

At the most recent traffic committee meeting, the group participated in a lively and spirited discussion about performance metrics that could be used to drive improvements. Following that, they talked about the numerous factors that affect transit times, from vessel size to the type of pier. In addition, the representatives from more than a dozen terminals discussed potential solutions, such as providing informational material on gangways for liquid terminals, performing investigations of similar waterways to see if we might be able to learn more about best practices, and developing information on layberthing so we have the ability to establish an information center for terminals and agencies.

As you can see, the committees are off to a great start. And that brings me back to the t-shirt I saw at the YMCA: By planning

CAPT Bill Diehl, USCG (Ret.) for the future together, talking about how we can adapt to changing conditions, and executing action items generated by the committees, we can drive future developments instead of being driven by them.

As I finished up my workout, I thought of one more concept we can add to that catchy t-shirt, and it is something that helps keep this busy port moving: communication. Without letting people know what you are doing, you cannot help yourself or others. Our committees are a good way to ensure that we are keeping the lines of communication open in the port.

So, if you are a Port Bureau member with an interest in issues related to dredging or traffic congestion, please give us a call and we will be glad to have you join us.

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Greater Houston Port Bureau | 3

© Christine Schlenker

PORT WATCH

No Roar This Month, But… Tom Marian, Buffalo Marine Service The tepid gains throughout Texas in the world of marine transportation mirrored the rather lackluster economic numbers for the nation. In fact, the month of March was that which the previous month was not, given that it was well below the typical 10% bump March usually brings. Nonetheless, the vessel arrival totals for the first quarter of 2015 exceeded those of 2014, reflecting a positive trend line for the year.

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March also brought another interesting trend: The positive numbers favored the western part of the Texas coastline. Hence, Brownsville saw a monthly uptick of 19%, yielding a year-todate rise of over 14%. Corpus Christi was not far behind with a 16% monthly gain,

pushing this year’s first quarter arrivals 7% beyond those of last year’s first quarter.

The export of crude derivatives continues to drive the solid gains.

To the east, Port Freeport posted this month’s biggest jump, with an increase of 42%; however, such a positive influx was

Texas Ports Deep Draft Vessel Arrivals Mar. 2015 Year-to-Date Percent Change

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Port of Houston Deep Draft Vessel Arrivals

port watch

Mar. 2015 vs. Mar. 2014

500

Mar. 2015 YTD (Total: 2,047) Mar. 2014 YTD (Total: 1,917)

0

nowhere near enough to emerge from a year-to-date deficit that currently stands at 19%. Finally, on the positive side of the ledger, Galveston posted a nearly 17% monthly gain and a concomitant 6% yearto-date increase. Yet, nearly all of the positive change was attributable to a 13fold surge in vessels bound for the local shipyard.

The deficit side of this month’s vessel arrival ledger centered on the larger ports.

Starting from the east, after a rather torrid February, Sabine was off by 3.4%. To date, it is a mere 0.5% above 2014’s first quarter.

Statistically, Texas City was flat on a month-to-month basis as one less vessel called upon the port (i.e., 1%). Needless to say, this did not help the year-to-date numbers, which are now 7% below last year’s.

Turning an eye towards the waterway that serves Texas City, tow activity beyond its dike was a scant 0.5% higher in March compared to February. Fortunately, 2015’s quarterly tow activity continues to solidly surpass that of 2014 – to the tune of 14%.

The Port of Houston’s monthly arrivals for March ended up at 20 fewer

vessels than February’s, a decrease of 3%.

On a category-by-category basis, energy clearly lagged behind all other vessel categories. Yet, given the unprecedented gains of February, this should not come as a surprise.

Chemical tankers and LPG vessels were off by 21% and 7%, respectively, despite the fact that the raw arrival numbers for March were in line with January’s totals.

While the monthly decline for LPG vessels dragged this vessel type into negative territory for the year, chemicals remain firmly above 2014’s totals on a year-to-date basis. Tankers, too, were down 10% for the month, which, in turn, slowed its year-todate performance to a mere 2% above last year.

Otherwise, there were some rather impressive influxes for the month vis-à-vis finished products and bulk commodities.

Specifically, the car carrier count was 50% higher than the previous month as the parade of automobiles descended upon the port. Bulk carrier arrivals also rose by 17% for the month, but the count remains flat for the year overall. Container ships had their best month of the quarter, as evidenced

by a 19% monthly gain, and general cargo posted a modest uptick of nearly 5%.

All in all, the ports of Texas combined to eke out a monthly gain just shy 3%, which was 1% below the year-to-date quarterly increases.

Holistically, the volume of commerce that steamed to and from the ports of the Lone Star State through the month of March was consistent with a positive yearly trajectory. On the other hand, February was an extraordinarily impressive month and it was certainly not sustainable. In some respects, it should not come as a surprise that March could not capitalize on the month’s three extra days by serving up gains in the neighborhood of 10% over February’s count. Thus, it stands to reason that March’s vessel arrival numbers would taper off rather than continue to escalate.

Does that mean that April will pick up where February left off ? If it does not, 2015 will most likely be a neutral year for vessel arrivals here in Texas. But if it does, the only thing preventing this year from leaving last year in the dust is the price of a barrel of crude oil. That is, has it really found its bottom?

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Greater Houston Port Bureau | 5

LNG bunkering

Strict Emissions Limits Push Marine Shipping Industry Towards LNG Emily Mitchell, GHPB With ever more stringent rules regulating fuel emissions hitting the marine shipping industry, vessel operators are starting to look closely at alternative fuel options and one in particular has caught the industry’s eye: liquefied natural gas (LNG).

Over the past decade, there have been steady developments in the LNG market, including a substantial increase in U.S. natural gas production, deployment of LNG-powered vessels, and construction of refueling and import/export infrastructure. The price of LNG has also fallen dramatically throughout this period, leading to a changing cost analysis compared to other energy sources both in Europe and here in the United States.

LNG is natural gas that is cooled to a liquid at -162 degrees Celsius and is used as an energy source for commercial and residential purposes. It is also a traded commodity. Fifteen years ago, domestic natural gas production was negligible and, in 2008, experts were estimating that the U.S. would be importing 20% of its gas needs by 2020. By 2010, the opposite was true: The U.S. Energy Information Administration (EIA) published an outlook that set U.S. natural gas reserves at their highest levels in 40 years and two years later the country was officially the world’s top gas producer. With this new reality, many chemical manufacturers have been switching their feedstock from oil to natural gas while the maritime industry has begun to seriously consider utilizing LNG as a marine fuel.

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LNG Vessel (Photo by Wikicommons) New Emissions Regulations Along with the reduced prices, a primary driver of this push for LNG as a marine fuel is the implementation of strict emissions regulations under the International Convention for the Prevention of Pollution from Ships (MARPOL) Annex VI (Regulations for the Prevention of Air Pollution from Ships), which were adopted in October 2008 and came into force in July 2010. According to the International Maritime Organization (IMO), there are 77 parties to MARPOL Annex VI and they represent almost 95% of global merchant shipping tonnage.

Annex VI imposes progressively more rigorous limits on emissions of sulfur oxide (SOx), nitrogen oxide (NOx), and particulate matter over the course of several years. The regulations apply globally, with more stringent rules applicable to certain Emission Control Areas (ECAs) in the

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Baltic Sea, the North Sea, North America, and the U.S. Caribbean Sea. As of January 1, 2015, ships moving through designated ECAs are required to use a marine fuel with a maximum sulfur content of 0.10%, down from the 1.00% in effect until December 31, 2014. Outside of designated ECAs, ships are allowed to use fuels with a maximum sulfur content of 3.50% until January 1, 2020, when it is expected to fall to 0.50%. The IMO is currently conducting a review regarding the availability of low-sulfur fuel and may defer this global cap to 2025.

Through these strict regulations, the IMO is pushing the industry towards cleaner fuel alternatives. Compliance with the rules can be accomplished through a variety of options, such as switching to a distilled fuel with existing machinery, installing an exhaust gas scrubber system, or utilizing an alternative fuel like natural gas and installing new machinery. Each

Greater Houston Port Bureau | 7

LNG bunkering has its advantages and disadvantages depending on each ship’s specific situation and operators must perform their own cost/benefit analysis in order to make the best choice for complying with MARPOL Annex VI. LNG as a Marine Fuel While natural gas has been used more for transport via road, it is becoming more popular as a marine fuel as well.

Not only does it have the advantage of lower emissions, exceeding most existing fuel standards, it currently costs less than marine gas oil and other low-sulfur fuels.

Several studies have estimated a price advantage of anywhere from 15% to 30% depending on the price differential. So while it takes approximately 1.7 gallons of LNG to produce the same energy as a gallon of diesel fuel, its overall cost and emissions advantages make it a promising option.

Until recently, LNG as a marine fuel has been used primarily to power LNG carriers as they move LNG to various global markets. However, small steps have been made elsewhere as the shipping industry makes inroads in this new fuel environment. For example, 29 LNG ships were in operation in 2012 with more slated for delivery in 2014, including LNG-powered general cargo ships and ro-ro vessels to be used in the Baltic and North Seas. Furthermore, Totem Ocean Trailer Express (TOTE) has committed to multiple LNG-powered container ships for use on North American routes.

Shipping lines like TOTE, whose vessels operate almost entirely within ECAs, are ideal candidates for LNG as a marine fuel. On the other hand, for those shippers operating more globally, with vessels entering the 200-mile ECA zone only after a long voyage, the choice to use LNG is not as clear-cut. Certain factors, such as access to refueling infrastructure at ports of call and the necessity to carry the LNG on board, must be taken into consideration.

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One development that has arisen to meet this challenge is the dual-fuel engine, which can run on either LNG or distillates. This type of engine can switch between gas and fuel oil automatically, helping to solve the problem of a limited gas supply. Operators can switch to LNG while operating within the ECAs and can take advantage of LNG infrastructure and prices where available.

According to Lloyd’s Register, some of the main indicators of an expanding LNG marine fuel market are investment in bunkering operations, development of commercial bunker barge designs, and increased dialogue surrounding LNG as a fuel amongst the brownwater fleet.

The agency sees New York, Houston, San Francisco, and Los Angeles as the principal ports for developing LNG as a marine fuel because they fulfill at least two of the following conditions: (1) the port is a known bunkering port, (2) it is looking at its potential as an LNG bunkering site, (3) a supply of LNG is located within 50 miles, and (4) it is located along a main deep sea trade route.

Infrastructure At this time, however, the infrastructure for LNG must be built out if it is to take hold as a primary marine fuel option. Until recently, the U.S. was heavily dependent on natural gas imports and, as mentioned above, this was only expected to increase.

Therefore, the infrastructure that was planned and built centered on LNG import terminals along the coasts. With the shale revolution, the calculation changed and these terminals have become underutilized.

Vessels cannot necessarily bunker directly from the import terminals, so an entire supply chain must be developed for LNG bunkering operations, including barges, bunker stations, and storage tanks. The ships themselves must also be converted to LNG. All of these infrastructure requirements could add significantly to the cost of using LNG as a

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marine fuel, erasing at least part, if not all, of the cost advantage.

It is difficult to determine how quickly the infrastructure can be developed, or how much it will ultimately cost. However, as the early adopters switch to LNG and LNG bunkering infrastructure is built, the use of this alternative fuel will become more widespread and further investment and development should occur.

Bunkering Options There are multiple LNG bunkering options depending on the types of vessels and the specific operating conditions at the bunkering location. Stakeholders can choose from methods including truckto-ship, shore-to-ship, ship-to-ship, and portable tank transfer.

Truck-to-Ship: The most common LNG bunkering method so far, LNG is transferred from a truck’s storage tank to a vessel moored to the dock. Transfer occurs on a pier or wharf through a flexible hose.

Typically, the truck can hold about 13,000 gallons of LNG and transfer takes around an hour. While this method provides substantial flexibility, the amount of LNG that can be transferred is limited to smaller amounts.

Shore-to-Ship: LNG is transferred to a vessel moored at the dock from a fixed storage tank on land. This method provides the capacity to move greater volumes than with the truck-to-ship option; however, it is not nearly as flexible since it requires a fixed location.

Ship-to-Ship: The most common option for bunkering traditional fuel, a barge comes alongside a vessel to transfer fuel.

Ship-to-ship bunkering can occur either at port or at sea. This option provides the greatest flexibility regarding location as well as volume and transfer rate. On the other hand, ship-to-ship bunkering involves additional risks such as rough sea conditions, vessel collisions, and higher operational costs.

Portable Tank Transfer: Portable storage tanks are loaded on and off a vessel for

LNG bunkering refueling. A standard tank can hold up to 13,000 gallons of LNG. This method allows for some flexibility in volume depending on the number of tanks involved and the tanks themselves are highly transportable.

However, the tank and vessel designs must be compatible in order for this to be a viable option.

Which option to utilize depends on the types of vessels involved, the operating conditions at the location, and other portspecific issues. Ports that have a high number of calls from larger vessels may be better suited for shore-to-ship or shipto-ship bunkering. Those ports that tend to service smaller vessels might be more suited for the truck-to-ship or portable tank options. These decisions are still being researched and analyzed by the industry, and it is possible that a single port will have multiple bunkering options.

Regulatory Issues The use of LNG as a marine fuel is a relatively new concept in the U.S. and the necessary regulations are still being developed by international, federal, and local agencies, including the U.S. Coast Guard. At the moment, regulations vary widely by location.

This means that there is a significant regulatory gap with regard to LNG bunkering and infrastructure. Uniform standards that create a consistent and predictable regulatory framework addressing the design, manufacturing, and operation of LNG-powered ships, as well as the risks associated with the carriage, storage, handling, and transfer of LNG, are necessary. Clear guidelines will provide vessel operators and other stakeholders a much clearer path forward towards establishing LNG as an essential marine fuel.

Conclusion As progressively more stringent emissions limits come into force, the maritime shipping industry will be required to find the best and most cost effective options to meet their obligations.

Utilizing liquefied natural gas as a marine fuel is only one of those options, but one that is becoming increasingly popular due to a variety of factors. Time will tell just how popular LNG bunkering becomes as

a regulatory framework is established and infrastructure is developed. But for now, it is an exciting prospect for the industry and the Port of Houston.

ò

Greater Houston Port Bureau | 9

Bluewater/brownwater

Bluewater and Brownwater Come Together in Spirit of Cooperation Patrick Seeba, GHPB

In late March, over fifty vessel operators met at the Houston Pilots’ offices to continue a dialogue that captures the experiences and know-how of both the bluewater (deep draft) and brownwater (tug/barge) operators on the Houston Ship Channel. The maritime professionals who participated represent over 1,000 years of licensed Houston Ship Channel operational experience. These individuals, who have each spent up to 50 years plying the waterway, focused the discussion on speeds of travel, traffic management, vessel spacing, and improving communication.

The Port of Houston is the most heavily trafficked waterway in the United States. Captain Steve Nerheim, USN (Ret.) and the Director of U.S. Coast Guard Houston-Galveston’s Vessel Traffic Service, reported that, in 2014, 22,866 deep draft ships competed with 130,744 tug/tow movements. At the same time, 119,460 other vessels, such as ferries and law enforcement boats, plied the narrow Houston-Galveston waterways.

During that period, there were 253 incidents on the channel, including 179 vessel casualties, 30 groundings, 7 collisions, and 5 allisions. While each incident is something that all involved parties seriously scrutinize, channel stakeholders must consistently work together to improve best practices. They do this through a variety of means, from informal conversations to formal studies and investigations.

During March’s two day forum, both bluewater and brownwater operators

10 | May 2015

shared their experiences with each other, often realizing that they see the same issues from different perspectives. When it comes to traffic management and vessel spacing, conditions on the waterway play an important role in how vessels operate.

While the Houston Ship Channel is in some places as wide as 500 feet with two 200-foot barge lanes, brownwater operators pointed out that some barges have drafts as high as 11.5 feet and that barge drafts are only increasing. With increased draft, tow wheels and rudders, which require clearance in order to maintain steerage, are less effective. In addition, the suction forces created by passing situations may take a

greater toll on vessels operating so close to the bottom of the lane.

Upon hearing this point, several bluewater operators in the room expressed a sense of understanding. Upon realizing the difficulties faced by pushboat operators, one pilot said, “Now we know why we occasionally see barges running in the main channel.” Charlie Jenkins, a representative from the Port of Houston Authority, mentioned that the Port Authority, as the non-federal sponsor of the Houston Ship Channel, has already set up meetings with the U.S. Army Corps of Engineers to look at the possibility of dredging the channel’s barge lanes to 16 or 18 feet. This multi-

Above Photos: Attendees at the Houston Pilots’ two-day discussion about bluewater and brownwater vessel movements.

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bluewater/brownwater year initiative is intended to ensure that the lanes, established to reduce risk on the channel, are utilized to their full capacity.

The participants discussed specific case studies, and the first one they analyzed involved a vessel leaving Texas City that came upon a passing situation with a tow near the end of the Texas City Dike. Once the ship approached the end of the Dike, the tow could not overcome the suction created by the two vessels passing and a collision occurred. The ensuing discussion touched on water levels, navigation equipment, procedures for evasion, and speed adjustments during the transit.

According to the NTSB, the main cause of the incident was the effect of speed and suction forces at that location: A 15,000ton vessel leaves a hole, literally evacuating 150,000 tons of water, and that volume only grows as the vessel performs evasive maneuvers.

As the conversations progressed, both

groups of operators shared important details about their daily work and addressed misconceptions along the way. “At one point, we were discussing the ways that the operators can have two totally different views of the same transit,” the Houston Pilots’ Port Agent CAPT JJ Plunkett, USCG (Ret.), mentioned. “So, we put up a photo on the screen showing the view from the bridge, and immediately one of the brownwater guys in the room asked, ‘Wait, how can you even see us?’ Which was a great way to start comparing perspectives.”

As another example, brownwater captains explained how their crews perform a detailed pre-voyage checklist to catalog the current state of a vessel. On the other hand, while bluewater pilots are not considered part of the crew on the ships they move and do not have the same level of information, the Houston Pilots’ dispatch system, HarborLights, catalogs ships of concern based on information gleaned from

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bluewater/brownwater previous voyages. This means that the pilot can see where a vessel has had previous issues and make the necessary inquiries in order to ensure that a deficiency has been corrected before transiting the channel.

The group went on to discuss at great length the training pipelines, requirements, and practices involved in both the bluewater and brownwater industries. Of particular concern to the brownwater operators were certain company policies and advertisements promising newly educated but inexperienced personnel the ability to obtain their master’s certification within a year. A tug captain from Higman Marine noted, “We’re starting with steersmen who don’t know what they’re looking at. They may have a few years of study, but we have to take what they know from a book and transform that into knowledge that they can use safely on the channel.”

As a counterpoint, the Houston Pilots spoke about their training pipeline and the three years that it takes a deputy pilot to take the next step and become a full pilot.

There were several deputy pilots in the room, and they shared their experiences that included the process of learning the channel, adapting their already extensive seafaring experience to the narrow Houston waterways, and training alongside full pilots on an exhaustive and comprehensive training schedule.

During the second day of discussions, Captain Hugh Guidry stood in front of the group to play back navigation data from a near-miss that occurred along the channel during a period of fog. “We’ve all had near-misses,” the captain told the group, “so this is a great opportunity to learn and avoid putting good people in bad situations in the future.” The case study showed what sorts of confusion could occur, even between experienced seafarers.

While the presentation did not mention any companies by name, a representative from the pushboat operator involved in the near-miss was in the room and stood up to explain how the barge company dealt with the occurrence.

“We’re not talking about a new hire; this was an experienced wheelman at the helm who didn’t perform the way we thought he needed to,” this person began. “After this incident, we sent him to the simulator and not only trained on the particular scenario so that we could avoid it in the future, but assessed his confidence level before his next hitch so that we knew that he was ready to get back on the channel.”

As the two day forum came to a conclusion, Captain Mike Pizzatola, who has been a licensed pilot since 1967, summed up the conference rather adroitly: “In this room are all people who’ve met before – whether they knew it or not. We see each other on the channel every day, and the discussions we’ve had here, the sharing we’ve had here, has exceeded our wildest expectations. You can be sure that we’re going to do this again, and build upon the relationships and the ideas that we’ve developed.”

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Greater Houston Coffee Association Annual Luncheon October 7, 2015 11:30am - 1:00pm Brady’s Landing Restaurant 8505 Cypress St. Houston, TX 77012 Please contact Cristina Gomez if you are interested in sponsoring a table: cgomez@txgulf.org / 713-678-4300 Greater Houston Coffee Association 111 East Loop North Houston, TX 77029 713-678-4300 www.greaterhoustoncoffeeassociation.org

12 | May 2015

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Greater Houston Port Bureau | 13

BARGING AHEAD ever so politely.

B

Buffalo Marine Service, Inc.

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2015 Commerce Club Luncheons May 14, 2015 Capt. Tim Downs General Manager - Shipping & Maritime - Americas Shell (US) Trading Company Captain Tim Downs is the General Manager of Shipping & Maritime for the U.S. for Shell Trading. After twenty years at sea, he has been a leader at Shell in the fields of Safety, Quality Assurance, Fleet Management, and Marine Management since 1994. His responsibilities include overseeing the Projects, Maritime Operations, Domestic Chartering, and Vessel Quality Assurance teams for Shell Shipping & Maritime-Americas.

Current Sponsors:

Upcoming Luncheons: June 11, 2015.................................................................................Jennifer Carpenter, Executive Vice President, American Waterways Operators (AWO) Current Sponsors: Buffalo Marine Service, Houston Pilots, Port of Houston Authority, Richardson Companies, Suderman & Young Towing Company, West Gulf Maritime Association

The Commerce Club Luncheon Series by the Greater Houston Port Bureau brings together Houston-area maritime professionals to network and to learn from regional and national speakers. Join us every second Thursday from 11:30 am to 1:00 pm at Brady’s Landing in Houston. Advanced individual tickets are $30 for members or $40 for non-members ($5 surcharge for seats paid at the door). Sponsorship tables of 8 are available for $750. To register, please call 713-678-4300 or email cgomez@txgulf.org.

Commerce Club Luncheons held at: Brady’s Landing 8505 Cypress Street Houston, TX 77012 713-923-9489

Greater Houston Port Bureau 713-678-4300 info@txgulf.org www.txgulf.org

VVessel Movements

The Port Bureau’s Vessel Movement Database: What’s Behind the Curtain?

Dave Cooley, GHPB Over the years, the Greater Houston Port Bureau has had the opportunity to establish and develop critical relationships with a variety of stakeholders in the maritime industry along the Gulf Coast.

Through these relationships, and as part of our role as the local Marine Exchange, the Port Bureau collects, analyzes, and publishes data on ship arrivals for the ports in Texas.

Overview This assessment of vessel movements offers an analysis of the number of deep draft freight vessels that arrived at Houston during each of the last four years.

Also included is a sample of the analytical techniques that can be applied to evaluate other types of information related to ship movements.

The types of ships calling at the Houston port range from large oil tankers to smaller heavy lift and general purpose vessels, and include bulkers, containerships, chemical tankers, LPG carriers, general cargo ships, car carriers, reefers, and cruise ships. While the growth in the number of vessels arriving at Houston has generally trended up over the years, this growth has decelerated over the last three years.

Beginning in 2012 and continuing through 2014, the number of vessels arriving in Houston each year has remained relatively constant at around 8,000 ships.

Figure 1 displays Houston ship arrivals for the years 2009 through 2014, sorted by the type of ship.

In order to gain some insight into the possible direction future shipping activity at the port will take, whether this trend moves up, down, or neutral, one can construct a trend indicator that compares vessel arrivals for 2014 to the average vessel

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arrivals counts of the previous three years, 2011 through 2013. Figure 2 illustrates this trend and shows significant declines in tank ship arrivals. This is essentially offset by a rise in the number of bulk carriers

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arriving at the port, resulting in a relatively stable number of vessel arrivals over the four-year period, or about 8,000 ships each year.

Vessel Movements

Analysis of Vessel Arrivals In order to facilitate analysis, the ship types have been grouped into four categories: bulk and break bulk, containerships, tank ships, and passenger ships and pilot-moved tugs and barges.

Each will be addressed in turn.

Bulk and Break Bulk Bulk Carriers – The number of bulk carriers arriving at Houston grew steadily each year, with vessel arrivals increasing from 700 ships in 2011 to 1,022 ships in 2014, which represents a 46% increase.

This was the one of two ship types that displayed consistent growth throughout the period.

General Purpose Ships – Over the four year period, vessel arrivals for the general cargo ship category rose from 903 ships in 2011 to 995 ships in 2014; however, during this period, general cargo ship arrivals peaked at 1,019 ships in 2013. The net change over the period was an increase of 92 ships, or 10.2%.

Pure Car Carriers – Arrivals of pure car carriers showed a slight growth of 8 ships, which translates to a 7.7% cumulative gain over the four years. However, this figure peaked in 2012 at 140 vessel arrivals and steadily declined to 119 ships and 112 ships in 2013 and 2014, respectively.

Reefers – Reefer activity, which dropped from 3 arrivals in 2011 to zero in 2013, is currently dormant.

Ro-Ro – The number of roll on-roll off vessels arriving at the port is also in decline, dropping from about 50 ships in 2011 and 2012 to 29 ships in 2013 and 12 ships today.

Other – Vessel arrivals for ships categorized as “other,” including military vessels and other ships, declined from 23 in 2011 to 4 in 2014.

Containerships Containerships – Containerships arriving at Houston were comparatively stable over the last four years, with a relatively consistent 1,000 ships per year from 2011 through 2014. Although the number of vessel arrivals fell about 7% between 2011 and 2013, from 1,037 ships to 966 ships, containership arrivals rebounded in 2014 to 1,102 ships. This is essentially a return to the same level of ship arrivals the port saw in 2012. The net change over the four year period was a slight decrease of 25 ships, or about 2%.

Tank Ships Chemical Tankers – The chemical tanker category showed a very robust spurt of growth in 2012, rising from 924 ships in 2011 to 1,613 ships in 2012 – a 74.6% increase. Arrivals then remained somewhat flat at 1,624 ships for 2013. In 2014, chemical tanker arrivals dropped to 1,320 vessels, translating to an 18.7% annual decline. Over the four year period, the number of chemical tankers arriving at Houston increased by a robust 41%.

LPG Carriers – LPG carriers, the second ship type to show a steady increase each year, grew from 391 ships arriving at Houston in 2011 to 619 ships in 2014.

This reflects a positive change of 228 LPG carriers, or a 58.3% cumulative increase, from 2011 through 2014.

Oil Tankers – Oil tankers displayed a precipitous drop from 2011 to 2012, declining by 684 ships, or 23.9%. Beginning in 2012, tanker traffic at Houston has

Greater Houston Port Bureau | 17

Vessel Movements

18 | May 2015

www.txgulf.org

Vessel Movements

been relatively stable at around 2,800 ship arrivals for each of the three remaining years of the study period. As a result, the cumulative change in oil tankers arriving at Houston has currently been arrested at a 20.7% decline.

Passenger Ships and Pilot-Moved Tugs and Barges Passenger Ships and Pilot-Moved Tugs and Barges – Vessel arrivals for pilot-moved tug and barge operations were relatively steady at around 400 ships a year. During 2013, passenger ships began calling again at the Bayport Cruise Terminal with 9 cruise ships arrivals during the inaugural year and rising to 38 ships in 2014.

Four-Year Vessel Arrival Comparison Figures 3 and 4 (page 17) provide a side-by-side comparison of how each vessel category’s arrival numbers changed from 2011 to 2014, as well as its market share. The increase in the number of vessel arrivals in the bulk and break bulk category, along with the overall growth of both chemical tankers and LPG carriers,

is readily apparent when comparing these two charts. They also illustrate the decline in tanker arrivals.

Analysis of Vessel Arrivals by Terminal Based on the data utilized for this analysis, the Houston port has 47 terminals with a total of 147 docks, wharves, and piers. Figure 5 (previous page) displays Houston vessel arrivals from 2011 through

2014 sorted by terminal. The data shows a total of about 9,700 ships moving to terminals on an annual basis, a number that includes approximately 1,700 intra-port shifts. This translates to around 26 ships per day, or an average of one ship for every mile of the Houston Ship Channel from Bayport to the Turning Basin.

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Vessel Movements By limiting the selection of terminals to those that see more than 300 vessel calls a year, the number of terminals is reduced from 47 to 13. An analysis of these select terminals confirms the Houston port’s status as an oil port: Ten of the 13 terminals handle oil in one form or another. The remaining three are the container terminals at Barbours Cut and Bayport, and wharves at the City Docks that are utilized for bulk and break bulk activities.

The terminal complex with the most vessel arrivals is the City Docks, with the number of ship calls ranging from just below 800 in 2011 to over 1,100 in 2014.

When looking at all 47 terminals, and including vessel arrivals and intra-port shifts, an average of approximately 220 ships arrive at each terminal every year from 2011 to 2014. For the 13 terminals selected pursuant to the criteria above, an average of about 500 ships call on each terminal every year.

In order to take a look at the trend in terminal activity, Figure 6 (page 18) compares the average of terminal vessel calls for 2011 through 2013 to the number of terminal vessel calls in 2014. Confirming previous results related to vessel arrivals, the terminals experiencing a reduction in vessel calls are predominantly those terminals handling oil and oil-related products. Those undergoing an increase in vessel calls are primarily those terminals handling bulk and break bulk products.

As a final point regarding vessel arrivals by terminal, it is important to note that, from time to time, a vessel may find itself in need of a layberth in order to complete minor repairs, await berth availability at another terminal, or find safe harbor from inclement weather. This analysis does not consider any layberth activity and, as such, actual terminal business for some of Houston’s terminals may be slightly overstated in the data.

Analysis of Vessel Shifts Generally speaking, and not surprisingly, the distribution of vessel shifts by type of ship tracks with the distribution of vessel arrivals by type of ship. There

are two exceptions: Containerships, which do not shift, and chemical carriers. Vessels in the latter category shift at a much higher rate than their proportion of vessel arrivals as they move from terminal to

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Vessel Movements

terminal in pursuit of a full load of cargo.

Containerships represent about 13% of the number of ships arriving, but their portion of shifts hovers between 1% and 2%. Conversely, chemical carriers comprise about 15% to 20% of the vessel arrivals, but between 20% and 33% of intra-port shifts.

Figure 7 (page 19) displays intra-port shifts in Houston by type of ship.

Analyzing vessel shifts by terminal, the most readily apparent factor is that the terminals with the most shifts tend to be related to the movement of chemical tankers. That is, the terminals with a large number of vessel shifts are also the terminals involved in providing the parcel cargos necessary for chemical ships to complete the loading rotation, since it is rare that a chemical ship will load a full cargo at one terminal. Figure 8 shows the number of vessel shifts

22 | May 2015

by terminal for 2011 through 2014.

Analysis of Vessel Draft Ignoring the weight of ballast a ship may be carrying in order to maintain trim, buoyancy, or vessel integrity, a comparison of each individual ship’s draft upon arrival

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to its draft on departure empirically suggests that Houston is generally an export-oriented port. The data suggest that a greater number of ships depart on drafts at or above 40 feet than the number

Vessel Movements vessel shifts by vessel type, size, and terminal, or perhaps a comparison of transit time during fog season to the transit time during other times of the year. One could also attempt to follow a vessel from arrival, through shifts, and to departure. Additionally, a similar set of analyses could be completed for the other ports in Texas.

Finally, future analysis could include developing a generalized relationship between the cargo being moved and the ship type, which would provide interesting insight as to the activity at the port as well as offer information towards offering a projection of ship activity.

Each contact with vessel activity of any kind increases our collective knowledge and lends credence to why the Greater Houston Port Bureau is the centralized point of information for the port. Stop by and talk with us!

of ships arriving on drafts at or above 40 feet.

Analysis of Transit Time Finally, the vessel movement database includes data for calculating the transit time of a vessel from the Sea Buoy to each terminal in the order of navigation.

Empirical assessments of these data raise additional questions. For example, how do factors such as the size of the ship in relation to the dimensions of the berthing facility, berthing “side to,” weather during transit, traffic during transit, water depth, and waiting tugs potentially affect transit time? These and other questions may be answered through further evaluation of the data compiled regarding transit time.

Conclusion This analysis of vessel movements in the Houston port provides a collection of very interesting information and suggests a number of opportunities for further analysis. Ensuing analytical possibilities might include a more detailed analysis of

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spotlight

Spotlight on Shrader Engineering Emily Mitchell, GHPB Shrader Engineering is not your typical engineering firm and the company has spent the past two decades striving to live up to that reputation. From a small father-son operation in 1994 to almost 30 employees today, Shrader Engineering has proven itself more than capable of evolving with the industry and taking on challenging, once in a lifetime projects.

By the early 1990s, current president Craig Shrader had taken a break from college to run his own business. At the time, he was working on developing two separate products: kiteboarding kites and a product similar to the CamelBak hydration pack. When Igloo passed on the latter, Craig said, “Okay, I guess I’ll make kites.”

With some college roomates, almost on a whim, he started a company called Frontier here in Houston.

Along with a few other companies located on the West Coast, Frontier helped pioneer a lot of the technology in the kite industry in the late 1980s and early 1990s.

Craig even learned to sew so he could apply his engineering training in building the kiteboarding airfoils. His company would grow to employ about 20 people with multiple large accounts and a 2,000 square foot warehouse and factory just down the street from where Shrader Engineering is currently located.

Unfortunately, the kite-making industry underwent substantial changes and a lot of the companies were bought out.

Located in Houston instead of San Diego, Frontier was “kind of like the step child” and missed out on this shift. Craig decided that it was time to go back to school and finish his degree in electrical engineering at the University of Houston. When he and his father, Chal Shrader, decided to launch Shrader Engineering in 1994, Craig was still in school. Attending classes at night and running an engineering company by day, Craig says that “it was an interesting

24 | May 2015

experience because I was applying every day what I was learning.” He participated in co-op programs with some of his UH professors, assisting the professors and helping the students by showing them the real world application of the concepts they were studying.

In 1994, Craig and Chal were both working for a civil engineering firm, with the two of them basically forming the entire electrical engineering department.

One day, Chal approached Craig and, as Craig retells it, “He basically came into my office and said, ‘Are you ready to go?’”

The two had never discussed the possibility of starting their own company prior to this day, but both knew it was the right time. They submitted their resignations, cashed out their retirement plans, and used that money to fund the newly established Shrader Engineering.

When they first started out, the company consisted solely of the two Shraders and they worked primarily on water/wastewater for the first few years.

But the company continued to grow and, by the turn of the century, it was ready to expand and diversify, even opening an office in Amman, Jordan, for a time. While that office was closed after a couple years, by 2000 the Shraders realized they needed to differentiate past just water/wastewater.

With such a narrow focus, the company would directly feel any fluctuation in the market. Therefore, Shrader Engineering searched for new opportunities and 2000 was “the year that I focused on getting maritime facilities as a potential client, and the Port of Houston in particular.”

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One of Shrader Engineering’s senior engineers had previously worked for the Port of Houston Authority and still had contacts in the engineering department. The company was awarded a very small project at the port. But Shrader Engineering had its foot in the door and this “dinky project” led to another project, which led to another project, and the company has continued to grow into ever larger opportunities at the port. As Craig says, “We continued to really stick in there and learn about the maritime industry, the container terminals, and other port facilities.” Fourteen years later, through hard work, superior service, and simply learning about the client and its needs, Craig can say that he really understands the Port of Houston. Shrader Engineering now has “a footprint on every terminal.”

When asked about his favorite or most interesting projects his company has seen, he settles on the security and protection program for the Houston Ship Channel Security District, if only for the sheer size of the project and the number of stakeholders included: “Being involved with Harris County, the Houston Ship Channel Security District, the sheriff ’s department, the MTSA facilities up and down the ship channel…That in itself was exciting.”

Pressed further, Craig explained the type of project his company tends to seek out. Shrader Engineering is looking for that once in a lifetime opportunity. These are the projects in which the company may not have any experience, but there might be only one chance to go after it.

Spotlight For example, about 15 years ago Shrader Engineering worked on the instrumentation controls and processes for a glass plant in Fresno, Texas. This plant would turn glass frit into foamed glass blocks to be used to clean grill tops and there was only one other plant like it in the United States, which was located in the northeast. The project was definitely a once in a lifetime opportunity for the engineers at Shrader. “We had never done a glass plant before,” Craig notes, “but we understood the fundamentals of the science and engineering behind it.” He elaborates, “It’s one of those projects where you can say you’re only going to do it once, but you had the tools to do it and weren’t afraid of taking on that challenge.”

And a challenge is something from which Shrader Engineering certainly does not shy away; instead, the company specifically seeks it out. Craig mentions a recent project for the city of Sugarland that involved developing a license plate recognition (LPR) program. As Craig

Craig Shrader, President

explains, “We had never done LPR before and it was tough to get them to believe in us.” The team presented examples of their work to the city council, but had to answer with a simple “no” when one council member, an engineer, asked Craig point blank whether he had ever worked on any LPR programs before.

Despite the lack of experience in this specific area, Shrader Engineering was chosen to do the work and Craig describes it as one of the company’s most successful projects to date. He credits this to the rigorous mindset of the engineers involved.

They used drone helicopters to take pictures of every intersection, analyzed the geometry and orientation of the cameras, and created hundreds of pages of technical specifications, eventually leading to read rates of greater than 96% for both proofs of concept.

For Craig, the first step for these challenging and unique projects is to convince someone that the company is capable of delivering results even if it has

not performed the exact same work before.

He says that “even if you do not have direct experience, you know everything else about it and you understand the technology, what we call the ‘engineered approach.’”

What is critical is finding the base of expertise for each project. According to Craig, one of the common threads in all the markets with which Shrader Engineering is involved is that they all have power distribution, instrumentation controls, communications, and technology.

The company specializes in these areas and applies that expertise on uniquely challenging projects that support some sort of critical infrastructure. Within this framework, “We always look for the most challenging projects that challenge us as engineers and really challenge the boundaries of how to do something unique.”

When asked if this focus could be traced back to his kite-making roots, Craig responds that “they’re kind of the same thing – trying to be on the cutting edge of what you’re doing, trying to create something that’s not the normal.” Craig does not want Shrader Engineering to be satisfied with the ordinary, everyday engineering work. For Craig, running Frontier in his early career gave him a lot of practical experience running a company, what he calls an “on the street MBA.” He has brought what he learned there through to Shrader Engineering. His experience manufacturing kites taught him “how to develop an entire mission statement, an identity of exactly who we were going to be and what our goals were going to be.

And we let those goals continue to morph as the industry led us through different things.”

Those values have helped Shrader Engineering go from a two-person shop without email to a company with 27 employees working on large, challenging, and sophisticated engineering projects in just 20 years. Shrader even manages its own data center in-house. The transformation is ongoing, as the company continues to redefine its identity in the engineering field so it does not stagnate and become simply

Greater Houston Port Bureau | 25

spotlight another engineering firm interchangeable with all the others.

As such, the company has a specific vision for its corporate culture and the type of people it seeks out for the team. While management used to lean heavily on an engineer’s resume – his or her education, internships, work experience, etc. – the company learned over time that checking boxes off a list does not guarantee the best fit. Now, Craig looks for someone with a certain “vibe.” He is looking to establish a “level of camaraderie that’s beyond just the 8 to 5.” That way, when it comes down to the wire, the team can pool its resources together and get the job done.

Craig works hard towards building a corporate culture that is a little different than the normal engineering firm. Shrader Engineering focuses on providing as many amenities as possible to help the employees along in their work, such as a fullystocked kitchen paid for by the company, a wellness program that includes a free gym membership, and extracurricular activities like the Warrior Dash and iFly indoor skydiving.

He traces the roots of this initiative to the company’s push to diversify in 2000: “As we realized we needed to diversify, it became clear that we wanted to be not just your normal engineering firm – the old green carpet, the old partitions, and not really caring about their employees.” At Shrader Engineering, the office environment is for the employees, not the clients.

Thanks to this philosophy, Shrader Engineering has seen its attrition rates fall from the 30% to 50% that is standard at any engineering firm to just a handful of people here or there. When the company moved to its current location in 2008, Craig decided to throw out every desk and every chair and start over with a brand new corporate culture, and he finds that the employees tend to stick around. Shrader’s senior designer was the first employee hired in 1994 and she is still with the company. So is Shrader’s second hire, who is now the accounting manager 20 years later. Craig set out to create an environment in which people want to stay and seems to have accomplished just that.

26 | May 2015

Cameras on the Houston Ship Channel are an integral part of the Shrader-designed Harris County HSC Surveillance System In Shrader Engineering’s field, the company is generally just one member of a team working on a project, and the internal structure reflects this framework to an extent. Each engineer at Shrader has his or her own area of expertise, but Craig makes sure that everyone has the ability to cross over: “We try to have everyone cycle through so that they are basically multi-disciplined within their discipline.”

Underlying these efforts is what Craig refers to as the “doer-seller model,” in which one cannot sell what he or she does not do. For his team at Shrader, cycling the members through the various areas of expertise helps to ensure that everyone not only knows what the company is doing as a whole, but can also do it themselves.

Over the course of Shrader

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Engineering’s 20-year history, the company has become known for delivering guaranteed quality and it has a distinictive reputation: “They’re always right; they’re kind of expensive.” For Shrader, though, being right and on time, while setting high standards for the industry, is a point of pride. Even more important for this firm is setting itself apart and resisting commoditization in such a competitive industry. Shrader Engineering will continue to grow and increase its footprint while tackling those uniquely challenging, once in a lifetime projects, and it is those projects that make all of the hard work worthwhile. According to Craig, “I won’t say it’s the most profitable profession, but it’s extremely rewarding and it’s very challenging.”

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The Greater Houston Port Bureau Presents 86th Annual Maritime Dinner Honoring the 2015 Maritime Company of the Year

Event Details Saturday, August 22, 2015

Reception, Dinner & Silent Auction 5:30 pm - Cocktails 7:00 pm - Dinner 8:00 pm - Presentation Bayou City Event Center 9401 Knight Road, Houston, Texas

For registration and information: (713) 678-4300 or dinnerinfo@txgulf.org Tables at the event are arranged in order of sponsorship level and registration date, so sign up soon for the best seats!

Table Sponsorships Queen of the Fleet Sponsor $15,000

Media - Premium billing with logo on all print and electronic media, including: the Port Bureau News monthly magazine, website, email announcements, and event video On site - One table (10 seats) near the honoree, valet passes, premium billing in sponsor presentation, half page ad in auction catalog

Admiral Sponsor $5,000

Media - Logo on all print and electronic media, including: the Port Bureau News monthly magazine, website, email announcements, and event video On site - One table (10 seats), valet passes, premium billing in sponsor presentation, quarter page ad in auction catalog

Commodore Sponsor $3,000 Media - Company name on all print and electronic media, including: the Port Bureau News monthly magazine, website, email announcements and event video On site - One table (10 seats), valet passes, eighth page ad in auction catalog, logo in sponsor presentation

Captain Sponsor $2,500 Media - Company name on all print and electronic media, including: the Port Bureau News monthly magazine, website, email announcements, & event video On site - One table (10 seats), valet passes, logo in sponsor presentation

Honored for significant contributions to Houston area education, communities, workforce development and industry expansion Key supporter of 2014 Houston Ship Channel Centennial celebrations

About the 86th Annual Maritime Dinner

The Dinner welcomed 600 guests in 2014 Advertising materials are distributed to over 7,000 maritime professionals per month during the eightmonth campaign.

Most guests are senior executives in maritime and energy related companies and high-level public officials.

Proceeds go in part to supporting the Port Bureau’s maritime advocacy efforts.

About the Greater Houston Port Bureau

The Port Bureau is a 501 c(6) non-profit trade organization established in 1929 to support the Houston maritime community and currently represents over 190 member companies.

The Port of Houston is the largest port in America by tonnage.

The Port Bureau supports 4 core advocacy and community issues: harbor maintenance & dredging, port efficiency, maritime awareness & education, and maritime security.

Event & Silent Auction Sponsorships All sponsorship levels include company name recognition based on contribution level in printed and electronic materials and signage near the sponsored auction item or event. Silent auction sponsorship levels can be achieved with in-kind or monetary donations. Event sponsorships are monetary donations.

Silent Auction Premier .........$2,000 Platinum ........$1,000 Gold ............... $500 Silver .............. $250 Bronze............. $100

Event Sponsorships Photos (1)....... $2,500 Valet (1)..........Sold!!

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Join Our Sponsors Today www.txgulf.org/annualdinner.php (713) 678-4300 Current 2015 Maritime Dinner Sponsors Queen of the Fleet

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Commodore

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Houston Mooring Co. Inchcape Shipping Services Kinder Morgan KPI Bridge Oil Manchester Terminal Moran Gulf Shipping Odfjell Schröder Marine Service

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Maritime Education

Houston Area Maritime Academies See Program Expansion, 139 Grads in 2015 Judith Schultz, GHPB A fresh crew is ready to set sail as the Port of Houston Partners in Maritime Education (PHPME) schools wind up an academic year that charted new courses in the ocean business trades. Participating high schools with Maritime Academies programs from four area school districts – Houston, Galena Park, La Porte, and Pasadena – graduated 139 aspiring mariners this spring, and they are eager to put their newly acquired nautical knowhow to work.

High school Maritime Academies students participated in first time ventures this year, such as a 5-day passenger vessel sailing aboard the Carnival Triumph in February. The budding mariners learned how a vessel operates and got a feel for life at sea. The early college high school model of education steered many students into obtaining high school diplomas and their maritime certificates from area community colleges simultaneously at spring graduations.

The PHPME effort has helped create two- and four-year maritime degree programs and training courses at higher education institutions for the high school program graduates to continue their maritime studies.

Texas Southern University (TSU) has graduated 28 students with a Bachelor of Science in Maritime Transportation Management and Security since the degree program’s inception in 2010.

Houston Community College (HCC) prepares students for careers in maritime and logistics industries through their Associate of Applied Science degree program and certificate programs in Global Supply Chain and Logistics Management.

To date, the college has trained and certified

30 | May 2015

Pasadena ISD Maritime Academies students participate in a week-long sailing aboard the Carnival Triumph. (Photo by Cecil Gray, Pasadena ISD Maritime instructor) over 500 industry employees.

San Jacinto College continues to provide U.S. Coast Guard training for both incumbent and beginning mariners. The first class preparing for new Maritime Transportation associate degrees will graduate 11 candidates at the end of this summer. The college also broke ground on their new Maritime Training Center in October 2014. The facility is located in the Bayport Terminal, and the school anticipates hosting the first classes in the training center in January 2016.

Established in 2009, the mission of the Maritime Academies in the PHPME is to expose high school students to career opportunities available to them in the maritime industry. The PHPME initiative has received national acclaim for its focus

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on maritime education and recruiting a new generation into the maritime community.

It was recognized as a 2015 Harvard Ash Center Bright Idea in Government earlier this year as a partnership “on the forefront of innovative action.”

The PHPME is moving full steam ahead in its mission to ready a workforce for the next era on the maritime highway.

The Greater Houston Port Bureau salutes all of the 2015 maritime graduates and commends all of the educators and partners who are making the program a success. For more information on the PHPME program or to participate, contact Gilda Ramirez, Managing Director, Small Business and Maritime Education, Port of Houston Authority, at 713-670-2590 or gramirez@ poha.com.

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Greater Houston Port Bureau | 31

GHCA Boat Tour

The Greater Houston Coffee Association’s Third Annual Boat Tour Emily Mitchell, GHPB On Thursday, April 23, the Greater Houston Coffee Association (GHCA) hosted its third annual dinner tour aboard the M/V Sam Houston, courtesy of the Port of Houston Authority. Over 50 guests from the coffee, maritime, and transportation industries attended the dinner tour to network with their peers while taking in the beautiful evening views of the Houston Ship Channel.

Formed in 2001, the Greater Houston Coffee Association promotes and protects

regional coffee trade through trade development initiatives, public outreach and networking, and advocacy for the industry. GHCA, in conjunction with the Port of Houston Authority, started offering this complimentary event in 2013 to provide GHCA members and port users the opportunity to promote port business in a fun and educational setting.

Once again, this event was extremely popular, with all of the spots filled within an hour of announcing it to the public.

Clockwise from top left: Blake Locke and guest; GHCA President Maria Echeverry, GHPB President Bill Diehl and Betty Russo, Office of the Governor; Al Hernadez and Bill Banta 32 | May 2015 www.txgulf.org

The Greater Houston Coffee Association will be hosting its annual luncheon on Wednesday, October 7, 2015, at Brady’s Landing Restaurant, in conjunction with the Commerce Club luncheon series. If you are interested in sponsoring a table or would like more information about the luncheon and GHCA, please contact Cristina Gomez at cgomez@txgulf.org or 713-678-4800.

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Greater Houston Port Bureau | 33

Commerce Club

Commerce Club April 2015

Featuring VADM C.D. Michel, Deputy Commandant for Operations, USCG Headquarters, Washington, D.C. Judith Schultz, GHPB Houston port region professionals mixed and mingled at Brady’s Landing Restaurant on Thursday, April 9, for the Greater Houston Port Bureau’s Commerce Club luncheon. Guest speaker VADM C.D. Michel, the Deputy Commandant for Operations at the U.S. Coast Guard (USCG) Headquarters in Washington, D.C., spoke about the USCG Western Hemisphere Strategy, a leading component of the new Joint Task Force initiative at the Department of Homeland Security (DHS).

VADM Michel discussed the Western Hemisphere Strategy in light of the trends in, and threats to, maritime security presented by transnational criminal organizations (TNCOs) and other groups.

Attendees were encouraged to consider the implications of the Western Hemisphere Strategy to their business.

“Your lives are buffeted by TNCOs,” VADM Michel said, delineating the maritime threat picture on a map of the upper western hemisphere. “Houston is a hub for criminal organizations,” he stated.

“Eight out of ten of the most violent groups are our (geographical) neighbors.”

In order to diminish dangers and protect the flow of commerce, the Department of Homeland Security has launched three Joint Task Forces to create a “unity of effort” between DHS, the U.S. Coast Guard, and U.S. Customs and Border Protection. As a part of the Joint Task Force plans, the USCG Western Hemisphere Strategy will focus on combating criminal networks, securing borders, and safeguarding commerce. To accomplish these strategic priorities, efforts will center on interrupting “threat streams” as near to their source as possible in order

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VADM Michel addresses attendees at the April 9th Commerce Club luncheon to dismantle these criminal networks’ core.

It represents a very different approach from VADM Michel’s early days in the USCG when a simple, patrol-style strategy was the chief method of arresting criminal activity. Today, sophisticated intelligence gathering protocols provide the blueprint for protecting the nation’s waterways.

VADM Michel estimated that 95% of the work relies on intelligence conventions.

All efforts are balanced, however, against the U.S. Coast Guard’s mission to support maritime commerce and trade. “We take that balance very seriously,” Michel stipulated, and he emphasized that best practices and support from the maritime community are amongst the greatest sources of help for USCG efforts.

“A trusted shipper is a win-win for everyone in moving goods,” he declared.

VADM Michel concluded his presentation with a segment on an “alldomain awareness” concept that includes

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maritime cybersecurity as a domain, which proved to be a unique opportunity for Port Bureau members and guests. The Commerce Club was the first industry group to hear about the thought-provoking efforts by the Joint Task Forces to examine these areas of concern related to cybersecurity.

More information about the DHS Southern Border and Approaches Campaign Plan and the Joint Task Forces can be found in the April edition of Port Bureau News, available in print or online at www.txgulf.org/news/index.php.

Ed. Note: The next Commerce Club luncheon will be held on Thursday, May 14, 2015, and will feature Capt. Tim Downs, General Manager of Shipping & Maritime – Americas, Shell Trading (US) Company.

Individual seats and table sponsorships are available. Sign up by visiting www.txgulf.org/ commerceclub.php or calling 713-678-4300.

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Commerce club

Clockwise from top left: VADM Michel and Commerce Club Attendee; Crowd at April 9th Commerce Club; Jürgen Schröder and George Pontikos; Tom Marian, Tim Studdert, and Rick Freed

Thank you to our table sponsors

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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.

ŠLou Vest