Portside Magazine - Spring 2007 by Ports of Indiana

www.portsofindiana.com

A Ports of Indiana Publication · Spring 2007

ol’ Man river

Art Bayer keeps rollin’ on the river

INsIDE THIs IssuE: Another billion dollar year, pg. 4 New faces join Ports of Indiana team, pg. 5 Foreign Trade: Easy as FTZ, pg. 16 PORTS OF INDIANA 150 W. Market St., Ste 100 Indianapolis, IN 46204

PRSRT STD US POSTAGE PD MUNCIE, IN PERMIT 860

A lake vessel docks in the East Harbor of Port of Indiana-Burns Harbor/Portage while unloading iron ore at Mittal Steel.

Table of Contents 4

5 150 W. Market St., Ste. 100, Indianapolis, IN 46204 (317) 232-9200 / fx (317) 232-0137 / info@portsofindiana.com www.portsofindiana.com www.indianalogistics.com

From the Executive Director: Another billion dollar year!

New faces join Ports of Indiana Team

· Arredondo, Gibson bring valuable experience to Port Commission · Jeffersonville welcomes new director

‘Art’ History

Art Bayer reflects on recent sale of Mount Vernon Barge and his history on the river

PORT REPORTS

Brian Nutter, Port Director - Jeffersonville (812) 283-9662; bnutter@portsofindiana.com

10 11 12

Phil Wilzbacher, Port Director - Mount Vernon (812) 833-2166; pwilzbacher@portsofindiana.com

Enviro•Focus

Ports of Indiana Contact Information

Rich Cooper, Executive Director (317) 232-9200; rcooper@portsofindiana.com

Mark Hoenke, Operations Manager - Burns Harbor/Portage (219) 787-8638; mhoenke@portsofindiana.com Jody Peacock, Director of Corporate Affairs (317) 233-6225; jpeacock@portsofindiana.com David Haniford, General Counsel (317) 232-9204; dhaniford@portsofindiana.com Kerry Nicholas, Chief Financial Officer (317) 233-6227; knicholas@portsofindiana.com Donna Borgerding, Marketing/Special Projects (317) 232-9205; dborgerding@portsofindiana.com John Hughes, Engineering Director (219) 787-8045; jhughes@portsofindiana.com Warren Fasone, Security Manager (219) 787-5056; wfasone@portsofindiana.com

Subscribe to Portside!

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Mount Vernon: Banner year for Mount Vernon...Again! Jeffersonville: Building for a bright future

Burns Harbor/Portage: Farewell to a friend and a record year

· EPA awards $200,000 grant to upgrade locomotives at Jeffersonville port · Introduction of aquatic-nuisance species remains priority concern for ports

News & Notes

· Stemler enjoys transition from Port Commission to House of Representatives · Educators visit Eagle Steel to learn about job market · Feralloy Corp. receives continuing education award · 2007 Calendar of Events

Port Commission approves $788,000 in port improvements

Five agreements set with new or expanding companies

Foreign Trade: Easy as FTZ

Ports of Indiana Directory

A Little Offshore: What’s in a name?

www.portsofindiana.com · Spring 2007

FROM THE EXECUTIVE DIRECTOR

Another billion dollar year! Ports bring more than cargo to Indiana economy

“Indiana has ports?!” That’s a phrase we hear all too often from people outside the maritime industry. People don’t always realize the value of waterways to Indiana’s economy. Indiana ranks 14th in the nation for waterborne shipping, ahead of many coastal states. Often people in Canada and the Netherlands know more about Indiana’s ports than many Hoosiers. Not only do our ports provide jobs for thousands of Indiana workers, but they also serve as gateways to the world for Indiana companies. These businesses can connect to global markets through our ports. More than 100 ships transit the Great Lakes every year to call on the Port of Indiana-Burns Harbor/Portage bringing materials to Indiana companies or taking grain to foreign lands. Even though ships cannot travel on the Ohio and Mississippi rivers, our river ports also serve as important international connections by carrying those same cargoes by barge to and from New Orleans where they are transloaded with ocean-going ships for distribution around the world. In fact, more cargo moves on the Ohio River than the Panama Canal.

Rich Cooper

Executive Director, Ports of Indiana

“In 2006, the Ports of Indiana handled an all-time high $1.89 billion of cargo.”

In 2006, the Ports of Indiana handled an all-time high $1.89 billion of cargo. This was a 23-percent increase from 2005, which had been the previous 36-year high. The 2006 total included $955 million of steel shipments, a 45 percent increase from the previous year. The Ports of Indiana also surpassed $1 billion in cargo shipments for the third consecutive year – the only three years this has been accomplished since Indiana’s first port opened in 1970. All three of Indiana’s ports on Lake Michigan and the Ohio River set individual records for total shipments in 2006. Our ports have flourished as a result of partnering with premier businesses who have established themselves as leaders in their respective industries. These ports function as a partnership. Our management team is focused on working with our industry partners to create an environment that will allow these companies to compete and expand their businesses in today’s global economy. Looking ahead, we expect 2007 to be another good year at the Ports of Indiana. While it will be hard to match the record shipping totals for 2006, especially in steel cargoes, all indications show continued moderate growth in most bulk commodities, and we’re off to a good start!

4 · Spring 2007 PORTSIDE MAGAZINE

New faces join Ports of Indiana team Arredondo, Gibson bring valuable experience to Indiana Port Commission PorT INDIANAPOLIS – Behind every good organization, you can bet there is a first-rate board of directors. That is definitely the case at the Ports of Indiana. The Ports of Indiana is governed by a seven-member bipartisan commission that is appointed by the governor. Members serve staggered four-year terms and generally represent a range of communities from around the state. Because the Ports of Indiana operates in such a specialized and fast-paced business environment, having board members with a diverse background of industry experience allows the organization to be more effective in responding to customer needs.

CoMMIssIon MeMBers

• Kenneth Kaczmarek Bloomington • Marvin Ferguson, Indianapolis • H. C. “Bud” Farmer Evansville • Carolyn Hartley Valparaiso • Ramon Arredondo East Chicago • Gregory Gibson Terre Haute • Secretary/Treasurer Jay Potesta Indianapolis

“Currently we could not ask for a better group of business professionals to guide our ports,” said Rich Cooper, executive director for the Ports of Indiana. “Our board is comprised of professionals that have had personal and business experiences that prove invaluable to our staff and customers. They provide oversight and policy direction to our staff and are equally sensitive to the needs of our customers.” Ramon Arredondo, of East Chicago, Ind., and Gregory Gibson, of Terre Haute, Ind., are the newest board members appointed by Gov. Mitch Daniels. “Ray and Greg have a wealth of experience and expertise in key areas that will contribute to the future growth of our business,” Cooper said. “They will make an already outstanding board even better.”

Ramon Arredondo

Arredondo was born the ninth child out of a family of 10 in East Chicago. He earned both his bachelor’s degree in criminal justice and a master’s degree in public policy at the University of Central Florida. Arredondo has local and federal government experience working as the district director for Congressman Peter J. Visclosky, and as an administrator/systems analyst for federal, state and county governments. Arredondo also has an extensive background in law enforcement and was responsible for gathering monies to establish one of the first domestic abuse shelters in the nation as well as overseeing the installation of the first computerized criminal justice information system in Indiana. Arredondo and his wife Patricia have two children and eight grandchildren. Greg Gibson, a life long resident of Terre Haute, holds a bachelor’s degree in civil engineering from the Rose-Hulman Institute of Technology. Over the past 20 years, Gibson has established

himself as a business leader in the development and operation of waste management companies. Gibson has served on the Indiana Judicial Commission, which is responsible for the nomination of judiciary candidates for the Indiana Supreme Court and the Indiana Court of Appeals. He also maintains a good working relationship with the Indiana Department of Environmental Management as a result of his knowledge in the waste management industry. Gibson and his wife Amy are the parents of two children, Jack and Lucy.

Gregory Gibson

Jeffersonville welcomes new director

JEFFERSONVILLE, Ind. – Brian Nutter joined the Ports of Indiana in January as director of the Port of Indiana-Jeffersonville. As former executive director for the Maine Port Authority, Nutter oversaw statewide maritime development programs, longrange planning, financial management and negotiating public-private partnerships. “Brian will be a great addition to our team,” said Rich Cooper, executive director for the Ports of Indiana. “He brings a wealth of experience in the port industry and has shown a great understanding of how to work with Brian Nutter port companies to help them grow their businesses.” The Port of Indiana-Jeffersonville has been one of the fastest growing ports in the country. It has added 20 new tenant companies since 1993 and is within a one-day drive of more than two-thirds of the U.S. market. The port set records in 2006 handling $588 million in cargo and more than 1.9 million tons. When asked if there were differences between the ports in Maine and Jeffersonville, Nutter gave a chuckle and stated “all three of Maine’s public ports put together total the size of the Jeffersonville port.” Nutter is an eight-year veteran of the U.S. Marine Corps and holds a bachelor’s degree in business management and a master’s degree in business administration. Prior to joining the Maine Port Authority, Nutter worked for BC&D Executive Services as a transportation/ business consultant and served as the port director for the Eastport Port Authority in Eastport, Maine. “I am extremely excited about this opportunity,” Nutter said. “The world-class businesses located at the port, the character of the community, and the support for new economic development were primary factors in making the decision to come here. I look forward to being part of the team that has made this port so successful. With a continued cooperative approach, I know we can build on the past success and achieve even greater things in the years to come.” Nutter, his wife Darcy and two of their children - Crystal and Elijah - will be relocating to Jeffersonville in the near future. The Nutters have three other children - Shawn, Joshua and Benjamin - that reside in California, Tennessee and Maine, respectively. www.portsofindiana.com · Spring 2007 5

‘Art’ History Art Bayer reﬂects on recent sale of Mount Vernon Barge and his history on the river

By Erik Hromadka, for the Ports of Indiana MOUNT VERNON, Ind. – The Ohio River has always held a special allure for Art “Junior” Bayer, who was born in 1925 in Mount Vernon. Growing up in a small river town at the southwestern tip of Indiana, Bayer has kept a watchful eye on everything that has happened on the waterway. As a child, that meant rolling logs down the river banks and hanging onto them as he and his friends kicked their way out into the water to watch passing steamboats. “I was fascinated by the river,” Bayer said. “I always had been.” Today, Bayer fondly reflects back over his career helping barge traffic move safely up and down the river. From the creation of the Mount Vernon Barge Co. in 1962 to his efforts to create the state’s second port in his hometown, Bayer has been active both as a public supporter of the river and as a hands-on owner working behind-thescenes to make sure river traffic ran smoothly. “Art has been a constant supporter of Mount Vernon business and this port,” said Phil Wilzbacher, port director for the Port of Indiana-Mount Vernon. “He is a major reason why the port was built here in the first place. His company has provided a wide-range of valuable services to port customers for decades.” After 44 years at the helm, Bayer sold his company at the end of 2006 to TPG Mount Vernon Marine, a stevedoring, warehousing and trucking company based in Indianapolis. 6 · Spring 2007 PORTSIDE MAGAZINE

“Over the years, I’ve developed a close friendship and admiration for Art, and I really feel privileged that he has allowed us to make this acquisition,” said TPG President Don Miller. “Art asked me when he’d have to give up his office and I told him that when the rigor mortis set in we’d make that move. We plan on Art being a valuable source of guidance and counsel for many years to come.” The company’s new name is TPG Mount Vernon Marine LLC, but it will continue to do business as Mount Vernon Barge Service. Bayer is still working from the headquarters, a converted blue barge that provides an excellent view of its various tugboats and operations for unloading, cleaning, repairing and storing river barges. Although he’s turned the reigns over to new ownership, Bayer’s heart will always be on the river. “Art has spent almost 50 years developing a highly respected business on the Ohio River,” Miller said. “If you ask people in Pittsburgh about him, they will tell you he is known up and down the Ohio and Mississippi rivers as a man of integrity.” Bayer’s knowledge and perspective on the river provide an invaluable asset to the company and anyone wanting the history of the river. He expects the river will continue to grow in importance as a transportation asset since it provides the lowest costs to shippers and it is the safest, most environmentally friendly form of transportation. However, he notes that advances in technology have reduced the number of jobs aboard each vessel. It has also made it more difficult to find qualified river pilots and crew, many of who are also following the childhood dream of working on the river.

Top: The 200-foot-long dry dock has been operated by Mount Vernon Barge Service since 1973. Bottom Left: The ‘A.W. Bayer’ tugboat carries a crew along the Ohio River near Mount Vernon.

Working on the river Bayer started working on the river at age 16 and earned his Seaman’s Certificate as a tankerman who could handle petroleum products. A few years later, he was drafted for World War II and shipped off to Europe where he served with Gen. George Patton’s Third Army. After the war ended, Bayer returned to Mount Vernon and worked for oil companies that maintained significant barge operations along the Ohio River. Bayer had an entrepreneurial spirit and once considered starting his own trucking business. “I bought a dump truck,” he recalls. “But talk about a mistake, I almost starved to death.” He returned to work on the docks until 1962, when Bayer left a job with Texaco and decided to strike out on his own by providing cleaning services for barge operators. He joined forces with brothers Jim and George Nesbitt and started the Mount Vernon Barge Cleaning Service. However, shortly after its incorporation, Bayer and the brothers parted ways and even though the operation was tiny, he was forced to re-mortgage his house to buy out their interest in the company. “I had a half interest in nothing and they had a quarter interest,” he joked.

The early years weren’t easy, but Bayer and his wife Marty were committed to making the family business work. That led to the purchase of the company’s first boat in 1964, which Bayer communicated with from an office in the basement of his home using AM radio and a television antenna. As Mount Vernon Barge Co. grew, it provided additional harbor services for the port, adding midstream switching to its cleaning and repair operations. This allowed towboats moving up to 30 barges at a time to break off certain barges from their tows for navigating through locks and dams. The towboat could take 15 barges through a lock while Mount Vernon Barge’s boat guided the rest through and placed them back in the tow. Bayer takes pride in the company’s dry dock, a massive structure that measures 200 feet by 52 feet and has a 1,100-ton capacity. Bayer modified a huge bulk cargo barge to make the dry dock in 1973. It operates by opening sea valves to sink the dock so a barge can be floated in and then lifted as water is pumped out and the dry dock rises to the surface. When it was completed, the dry dock was hailed as one of the best within a hundred miles of southern Indiana. In 1974, Bayer formed a fleeting service that provided a safe place for barges to be stored while waiting for loading or unloading. The service, which operates much like a railroad switching yard, is a vital part of inland waterway commerce. Bayer grew the fleeting service, adding the first radar system on the Ohio River to monitor barges. Today, Mount Vernon Barge Co. has secure fleeting for up to 450 barges. (Continued on next page) www.portsofindiana.com · Spring 2007 7

The company also provides stevedoring services for dry bulk cargo, using three 100-ton cranes to load and unload cargoes such as grain, coal and fertilizer shipped through the Mount Vernon port. As the company expanded over the years, Bayer added a variety of boats named after family members, including the “Marty B” named for his wife, the “Jeffrey Lynn” after his son and daughter, and later the “Ni-Me-He” after grandchildren Nichole, Megan and Heather.

Keeping the river safe In addition to providing routine switching, fleeting, stevedoring, cleaning and repair services, Mount Vernon Barge Co. also plays an important role in keeping the river safe. That means being on-call 24 hours a day for emergency repairs or to respond to accidents. Bayer recalls getting an interesting call for help in 1972 because “the river’s on fire!” Two barges loaded with gasoline broke loose from a towboat and crashed into the Cannelton Locks and Dam. The deadly accident claimed two lives and caused millions of dollars in damage. The fire burned for more than a week. Mount Vernon Barge assisted with salvage efforts to remove the remaining gasoline before freeing the barge, which required using controlled explosives instead of standard cutting torches to avoid hidden gas pockets and the danger of the barge breaking apart while workers were on board. In 1981, the United States Coast Guard recognized Bayer’s company for its work during another fuel barge accident that led

to a major fire on a remote location of the river near Alton, Ind. The accident occurred in winter so Bayer and his team worked in freezing temperatures with firefighters from surrounding communities to put out the fire. The Coast Guard presented Bayer with a Certificate of Merit that stated: “The expertise, leadership and professionalism exhibited by the personnel of Mount Vernon Barge Service, especially Mr. A. W. Bayer, Jr., during the ten-day period contributed to the resolution of this crisis without injury or loss of life. Their untiring and unselfish actions reflect great credit upon themselves as an organization.” The dangerous nature of work on the river hit home for Bayer when the company had an explosion in 1982 and a tragic crane accident in 1984 that claimed the life of Bayer’s only son, Jeff. Although the loss was a huge blow to the family and its business, Bayer never gave up, something the Mount Vernon Chamber of Commerce recognized in naming Bayer as ‘Citizen of the Millennium.’ Marty and Art’s daughter Diana and her husband Stan Billman also worked in the family business for many years. And not only has the family been successful in business, but according to Art, they also hit the jackpot in grandchildren with four granddaughters that have always held a very special place in their hearts – Jeff’s daughter Jennifer and Diana’s three girls Nichole, Megan and Heather. Sadly, the Bayer family experienced a major loss last year as Marty, Art’s wife of 59 years, died after an extended illness. “They started the company together and Marty worked there for many years,” said Karen Hazlett, a port employee for the past 31 years and friend of the Bayer family for even longer. “My dad worked

Thank you

Junior Bayer

for your 35+ years of service to the Port of Indiana - Mt. Vernon and a lifetime of service to your country!

M T . V ERNON B ARGE S ERVICE a division of TPG Mt. Vernon Marine, LLC

· Spring 2007 PORTSIDE MAGAZINE

a Transmodal Performance Group Company

for them for a longtime. I remember stories Marty would tell about starting the business and how they would eat just peanut butter and jelly sandwiches to save money.” Both Art and Marty were very active and always engaged in their community. While in her mid-70s, Marty even went parasailing on a community group trip in Cancun, Mexico. “Marty was one of a kind,” Hazlett said. “She was a strong-willed lady and she had a great sense of humor. She was by Art’s side all the time. They were very giving people and they were very supportive of this community and the port.”

Supporting the port When the state leaders were considering a location for Indiana’s second port, Bayer was an active supporter for a Mount Vernon location. He dedicated considerable time to the lobbying effort that brought state legislators and officials to southwest Indiana. Bayer even provided river tours on a ferry boat to show the various river terminals and outline a vision to develop 700 acres as an economic hub of southwestern Indiana. State leaders were sold on the idea and development of the port started in 1970, with a major fertilizer plant building five storage facilities in 1976 and the Mount Vernon Barge Co. becoming the first service tenant in 1977. The company has been a vital part of the port ever since. Over the years, Bayer provided a full range of barge and stevedoring services for port customers. He also helped to increase major grain and coal operations that send Indiana exports down the Ohio and

Mississippi rivers to New Orleans where cargo is transloaded to ships for distribution all over the world. As the port grew, so has Mount Vernon Barge. In 1977, the port handled 157,000 tons of cargo. In 2006, the total was 4 million tons. In fact, the port set a new record last year with $482 million in total shipments, which included major increases from 2005 in cement, steel, minerals, coal and grain. In addition to the traditional cargoes, Bayer has also witnessed some unusual things traveling on the river. One of the strangest loads Bayer recalls was a shipment of giant turbines that were being transported to a dam construction project. Another was a small ship with a foreign crew that navigated the river to pick up a nuclear reactor. Normally tugboats and barges are the only freight traffic on the river, so a ship was a real oddity. While he has been active in supporting the port and its activities, Bayer has also been a leader in the Mount Vernon community where he served on various boards and associations. He supported a project called “Always a River” that involved transforming a barge into an educational exhibit that told the story of the Ohio River’s history, culture and industry. He has also been involved in many community service projects and always enjoys providing hospitality and entertainment on his boats to individuals and groups. Bayer is extremely grateful to be able to make his living and spend his life on the river. Some might even say he’s got river water in his veins. “It’s all I ever did and all that I ever wanted to do,” he said.

www.portsofindiana.com · Spring 2007

PORT REPORT Phil Wilzbacher Port Director

Left: A tugboat pushes a barge past CGB’s grain elevator at the Port of Indiana-Mount Vernon. Right: Cargo ‘super sacks’ are lifted from a barge at the Mount Vernon port’s Crane Terminal.

PORT OF INDIANA – MOUNT VERNON

Banner year for Mount Vernon...Again! Over the last three years, tonnage through the Port of IndianaMount Vernon has grown an impressive 73 percent. This is an exceptional accomplishment and I would like to recognize where the credit is due – to the industries that make up the tenant base of the port: Barretts Minerals, CEMEX (Kosmos Cement), Consolidated Grain & Barge, Consolidated Terminals & Logistics Co., Mount Vernon Barge Service, Mount Vernon Transfer Terminal (Alliance Coal), Royster-Clark (Agrium) and Tri-County Agronomics. Life would be considerably easier if our business opportunities were all long-term contracts that allowed us to project operating plans over several years, guarantee the purchase/sales prices, control freight rates and eliminate the uncontrollable factors such as weather. From the perspective of our own businesses, we don’t often have this luxury, but look what has been achieved. In 2006, the upward trend continued as cargo shipments increased 6 percent over 2005 with port tonnage surpassing 4 million tons, the highest volume since 1998. There were significant increases in shipments of cement (+31%), steel (+30%), coal (+7%) and grain products (+4%).

Aventine arrives!

The year was “one for the record” in other ways as well. During August, Gov. Mitch Daniels came to town to participate in the announcement that the state’s largest ethanol plant will be built at our port. Aventine Renewable Energy will construct a $400 million facility with capacity to produce 220 million gallons of ethanol per year, with construction getting underway this summer. This project represents the largest single investment in the port’s history. Aventine is ranked as one of the top two ethanol companies in the nation, with production facilities in Illinois and Nebraska. We are extremely pleased that Aventine has selected Mount Vernon as the home for its new plant.

Changing of the guard at Mount Vernon Barge

Included in this edition of Portside, you will find an article on Art Bayer and the company - Mount Vernon Barge Service - that he and 10 · Spring 2007 PORTSIDE MAGAZINE

his family started and operated for the past 44 years. The company has grown into a prominent inland river business with operations involving harbor services, barge fleeting, barge cleaning/repair and bulk stevedoring. I believe that it is important to note that Art was a member of the group instrumental in convincing state leaders that Indiana’s second public port should be located in Mount Vernon. In December 2006, the Bayer family sold Mount Vernon Barge Service to TPG Mount Vernon Marine. The sale does not mean that Art is retiring. He will remain involved in an advisory role with the new owners, but it certainly marks a major change in one of the mainstays of our port. We would like to thank Art for his commitment to the growth and development of the port, and we’re happy that we can continue to rely on his support in the future. To Art and his family, our best wishes.

Riding the rails with Evansville Western

Use of the word “port” most commonly brings to mind a maritime operation that handles cargo by ship or barge. This is just one transportation aspect of the port. Other modes of transportation, rail and truck, are equally crucial in providing intermodal logistics and a port serves as the connection for them all. At the beginning of 2006, Evansville Western Railroad assumed operations of the CSX railroad’s St. Louis subdivision – 124 miles of trackage running between Evansville, Ind., and Okawville, Ill. The line has a significant base of rail shippers including industries located within the Port of Indiana-Mount Vernon. In 2006, over 18,000 railcars moved through the port and to add a little trivia, since the port began operating in the mid-1970’s, more than 575,000 railcars have crossed its tracks. Congratulations to the Evansville Western for completing its first year of operation. We’re looking forward to continuing our successful partnership for many years to come. Contact Phil Wilzbacher at (812) 833-2166; pwilzbacher@portsofindiana.com

PORT REPORT Brian Nutter Port Director

Left: A worker at Eagle Steel Products works with a steel coil that will likely be sent to an automotive or appliance manufacturer. Right: U.S. Congressman Barron Hill (left) visits Steel Dynamics Inc. with Plant Manager Jeff Baumann (middle) and Port Director Brian Nutter.

PORT OF INDIANA – JEFFERSONVILLE

Building for a bright future Well it’s been almost three months since I became the Jeffersonville port director and I have to admit I am enjoying it more all the time. And that’s not just because the weather is so much warmer in southern Indiana than my previous stomping grounds in Maine – although I am making the most of the change. When I was interviewing for the position of port director, I spent a lot of time researching the port, the area and the business climate. What I saw was impressive but I don’t think it could have prepared me for the warm reception and welcoming attitude I have encountered from the Ports of Indiana team, our port companies and our business partners here in the Jeffersonville area. I have learned a lot in the past couple months and look forward to continuing that process as I come to understand more about each port business and what we can do to support their efforts. As you will note from our 2006 recaps, this port had a great year and I feel confident we can set new records in years to come.

Looking back at 2006 In 2006, the Port of Indiana-Jeffersonville shipped an all-time high 1.9 million tons to finish 14 percent ahead of the previous year. There were major increases in fertilizer (+55%), steel (+28%), salt (+25%) and grain (+8%). Stevedoring operations at Consolidated Grain & Barge, Kinder-Morgan and Eagle Steel all posted banner years for cargo moving across the docks. Many companies also reported significant increases in rail shipments as the port handled 20,495 rail cars in 2006, a 22 percent growth over 2005.

Building for the future Keeping business moving is a primary function of the port, and maintaining our extensive infrastructure to meet the needs of our growing industries is always a challenge. We are investing more than

$600,000 in upgrades to the piers and mooring structures along the waterfront. New security fencing is being installed along the undeveloped property on the west side of the port complex and contracts have been awarded for the $466,000 repaving project on the south end of Port Road, which will complement the work done last year on the northern section. This summer, we will also begin a $500,000 first phase of rail expansions to provide service along the south side of Utica Pike. All of these projects, totaling over $1.7 million in port investments, demonstrate our commitment to maintain and develop infrastructure that will keep us ahead of the curve and help our business partners grow here at the port.

SDI and Kasle prepare for growth While many port businesses were very successful in 2006, a few of our partners made major investments into future growth. Steel Dynamics Inc. (SDI) began construction on a $45 million expansion project that will introduce a new paint line to complement its highly successful galvanizing operation. This will allow SDI to provide more options to customers and offer a more diversified product line for overall business development. Kasle Metal Processing is taking a new approach to its traditional production process. While news reports have related concerns over the future of Ford plants in Kentucky, which are major customers of Kasle, the Jeffersonville company has been working to improve its position with not just Ford but other auto manufacturers as well. New advanced software technology has helped Kasle improve its production line efficiency by 13 percent, a success that was featured in the March edition of Fabricator Magazine. Contact Brian Nutter at (812) 282-2096; bnutter@portsofindiana.com

www.portsofindiana.com · Spring 2007 11

PORT OF INDIANA – BURNS HARBOR/PORTAGE

Farewell to a friend and a record year By Jody Peacock, Director of Corporate Affairs, Ports of Indiana After more than four years with the port, Stephen Mosher has stepped down as port director for the Port of Indiana-Burns Harbor/Portage. Mosher has accepted a position as general manager of U.S. operations for North American Stevedoring Co. and his last day with the Ports of Indiana was March 30. “Steve has provided exceptional leadership in his time as port director,” said Rich Cooper, executive director for the Ports of Indiana. “We will miss Steve and thank him for the wonderful job he’s done for us. We wish him and his family the very best in their new venture.” The port set several shipping records in recent years, but Mosher counts the major investment made by port companies as the most significant events during his tenure. “I will certainly miss working with the great group of business partners located at the port,” Mosher said. “And you could not ask A Federal Marine Terminal crane to be part of a better team than the Ports of unloads steel coils from the Federal Indiana. This organization has achieved great Mackinac at the Port of Indianathings by applying a sound business approach Burns Harbor/Portage. to all aspects of port operations. Our customers have great confidence in this approach and, Stephen Mosher Signiﬁcant events from 2006 as a result, these businesses have made major In addition to record shipping totals, the port had several other investments into long-term growth and expansion at our ports.” significant events in 2006. Companies that have made major investments into building or • The Ports of Indiana announced it will co-sponsor a new IMAX expanding operations at the port in recent years include Beta Steel, film on the Great Lakes, scheduled for international release in Feralloy Corp., Indiana Pickling & Processing, Frick Services, 2008. The 40-minute film will follow several interlocking stories, Federal Marine Terminals, O-N Minerals, London Metals Exchange, including that of maritime commerce and ships that move cargo Behr Iron & Steel, Hoosier Healthcare Northwest, Aqualand Com- throughout the lakes. • Industry, environmental groups and port officials joined forces munications and Metro International. to support the Indiana General Assembly’s approval of House “This port’s future is very bright,” Cooper said. “We have a tremendous Concurrent Resolution No. 35 sending a clear message to the U.S. Congress: “move quickly to enact federal legislation to establish a group of companies located here and an excellent staff that will help strong ballast water regulatory program.” make sure things run smoothly until we have a new port director in • In May, a high-tech ship called the Federal Welland made its first place in the near future.” visit to the port carrying a prototype OceanSaver® ballast treatment system. The system is part of a proactive effort by the ship’s owner New records in 2006 Fednav, Ports of Indiana and other Great Lakes ports to develop In 2006, the Port of Indiana-Burns Harbor/Portage set a new new technologies for combating nuisance organisms that can cause record with $820 million in total shipments, up 21 percent from the damage to native environments all around the world. previous year. It also set a new mark for steel shipments, which were • Ports of Indiana joined industry and government leaders in up 57 percent from 2005. Sharing boundaries with two of the largest Duluth to announce the launch of the “Great Lakes Initiative” – a steel mills in the country, this port handles a wide range of steel- $3.5 million research center designed to specifically focus on derelated cargoes including about 15 percent of all U.S. steel trade with veloping the technology necessary to prevent the introduction of aquatic nuisance species into the Great Lakes by ocean-going ships. Europe. By volume, the Lake Michigan port surpassed its 2005 • Retired Coast Guard Cutter Acacia finds a temporary home tonnage for all cargoes by 19 percent with 2.7 million tons at the port while the American Academy of Industry makes plans crossing its docks last year. There were also shipping increases in to turn the boat into a floating museum in downtown Chicago. asphalt oil (+335%), calcium chloride (+73%), coke (+47%), grain The Acacia is the last of 37 Coast Guard seagoing buoy tenders to be decommissioned. Info: www.aai-acacia.org (+22%) and fertilizer (+15%), as well as new sugar shipments. 12 · Spring 2007 PORTSIDE MAGAZINE

E n v i r o •F o c u s

Environmental issues are very important to the Ports of Indiana. As a port authority, the Ports of Indiana has the dual responsibility of protecting and enhancing our environment while building infrastructure that facilitates economic development. Waterborne transportation is the most efficient and environmentally friendly mode of hauling cargo, but there are many aspects of port operations and intermodal shipping that the Ports of Indiana will continue to monitor and work to improve for the benefit of our communities.

EPA awards $200,000 grant to upgrade locomotives at Jeffersonville port MG Rail, Ports of Indiana, IDEM secure funds via Clean Ports USA program

MG Rail, the Ports of Indiana and the Indiana Department of Environmental Management recently secured a $200,000 grant through the Clean Ports USA program to upgrade locomotives at the Port of Indiana-Jeffersonville. Administered by the U.S. Environmental Protection Agency, Clean Ports USA is an incentive-based, voluntary program designed to reduce emissions from existing diesel engines and non-road equipment at ports. This project was funded through the EPA’s Region 5 Midwest Clean Diesel Initiative. “The public-private partnership is beneficial for southern Indiana’s environment and economy,” said Tom Easterly, IDEM commissioner. “Reducing emissions from locomotive diesel engines is an emerging part of Indiana’s diesel emission reduction initiative. The Jeffersonville port will benefit because they will conserve fuel and reduce fuel costs.” MG Rail operates four diesel locomotives at the port, moving cars between trains, port companies and barges on the Ohio River. Under this project, auxiliary power will be retrofitted onto locomotives to reduce their emissions and a new non-diesel powered locomotive will be built that will be able to haul greater numbers of railcars at one time. “MG Rail is excited to participate in this program working as partners with IDEM and the Ports of Indiana to help improve air quality in our area,” said Carl Skaggs, manager of MG Rail. “The project also allows us to continue to meet the growing needs of industries in the port without increasing our rail fleet.” MG Rail provided an in-kind match to the grant and its parent company – Consolidated Grain & Barge Co. – is also considering using a cleaner diesel fuel for all vehicles in its fleet to further reduce emissions.

Introduction of aquatic-nuisance species remains priority concern for ports

The introduction of non-native species is a priority concern for the public port industry. Introducing non-native species can disturb a vulnerable marine environment, causing economic damage as well as environmental harm. Species introduction can occur in many ways, including the intentional or accidental release of

non-indigenous species and the hull fouling of marine vessels. Aquatic nuisance species also may be transmitted via the ballast water carried by commercial shipping vessels. As trade volumes grow, the role of ballast water in species transmission must be addressed. Ninety-nine percent of all U.S. overseas cargo is moved by commercial shipping vessels, and cargo volumes are expected to double by the year 2020. As commercial vessels transit from port to port, loading and unloading cargo, they use ballast water to ensure their own stability and the safety of their operations. Discharging ballast water in or near a port community may lead to the introduction of nuisance species. Meeting the challenge of species introduction through ballast water is an international issue – not a state, regional or national one. While certain regions of the United States have focused on the impacts of nuisance species, the transmission of organisms through ballast water is an issue of international concern. All waters that are used for commercial shipping may be subject to ballast water discharge and, therefore, at risk for non-native species introduction. While some species have spread rapidly or caused a significant economic impact in specific areas of the country, non-native species are of concern to the world. Ballast water treatment standards and management efforts need to be consistent internationally. Because transmission of non-native species by ballast water is an international challenge, it demands an international solution. The International Maritime Organization (IMO) has set treatment standards and phase-in requirements in its convention on ballast water. The United States needs to become party to this treaty and enact laws that establish a ballast water treatment standard consistent with the treaty. Ballast water laws enacted at the state or local level simply create a patchwork of regulations where gaps will always exist. Congress should direct the U.S. Coast Guard to set forth regulations that are the supreme laws governing ballast water in the United States. As the federal agency charged with protecting both the nation’s environmental and economic interests in ports and waterways and along the coastline, the Coast Guard should be the supreme federal authority on this issue. While litigation in U.S. District Court has focused on the regulation of ballast water discharges by the U.S. Environmental Protection Agency under the Clean Water Act, Congress should clarify that the Coast Guard is the lead federal agency on ballast water management and that its regulations are the supreme federal laws. www.portsofindiana.com · Spring 2007 1

news & notes Stemler enjoys transition from Port Commission to Indiana House of Representatives JEFFERSONVILLE, Ind. – After nine years as a member of the Indiana Port Commission, Steven Stemler is serving the state in a new role this year as a member of the Indiana House of Representatives. “We are extremely happy Steve is able to continue to serve the state in such a vital role,”said Rich Cooper, executive director for the Ports of Indiana. “Our legislature will now be the beneficiary of the life and professional experiences that Steve brought to our organization.” In his first legislative session, the Jeffersonville Stephen Stemler democrat has severed on several House committees, including Ways and Means in which he has been heavily involved in negotiations on a new state budget, property tax relief and other issues with financial implications on the state. “I have found the experience of serving in the Indiana General Assembly everything that I expected, and much more,” Stemler said. “There is no greater honor than being selected to represent the interests of the people who live in your community, and I take that responsibility seriously.” In announcing Stemler’s selection to Ways and Means, House Speaker Pat Bauer (D-South Bend) said, “In a long session of the legislature, practically everything that happens revolves around the new state budget, which is the one item that lawmakers must pass. I believe Steve Stemler will bring a fresh perspective to that budget debate, one gained from the experiences he has had as a parent, business owner and leader on economic development issues.”

Educators visit Eagle Steel to learn about job market JEFFERSONVILLE, Ind. – Thirty-four high school teachers and administrators from Clark and Floyd counties made a special visit to Eagle Steel at the Port of Indiana-Jeffersonville earlier this year. The group was learning about the current job market and the qualities employers look for when they hire a new employee. They left the port understanding that attendance, good work ethic and basic math skills are core qualities employers are looking for. The group also visited two other companies outside the port: Key Electronics and Amatrol. They were surprised to learn about the strong need for workers in modern manufacturing after hearing for years about an apparent decline in this sector.

Feralloy Corp. receives continuing education award PORTAGE, Ind. – Feralloy Corp., a steel processing company located at the Port of Indiana-Burns Harbor/Portage, was recently presented with the Education & Literacy Award for its extensive participation in the worker training program taking place at the port. Awarded by the Center for Workforce Innovations, this honor recognizes a company that has made a positive contribution by supporting and providing continuing education and workforce training for its employees. Feralloy processes, pickles and rolls steel coils with over 300 employees at its port facility. Currently many of its employees are going through the 21st Century Workplace Skills Certificate program taking place at the Port of Indiana Training Center. Training includes basic welding, computer certification and basic English. Feralloy employees who enroll in these various courses are paid for their time off to attend.

The Port of Indiana Training Center offers “Oxy Burning” welding classes.

Classes being offered at the port training center in 2007 include Basic Electricity, Basic Hydraulics, Motor & Motor Controls, Computer Literacy, Oxy Burning and English as a Second Language. More info: www.innovativeworkforce.com

Stemler also serves as vice chairman of the House Agriculture and Rural Development Committee and is a member of the Natural Resources and Small Business & Economic Development committees. “My goals for this session,” Stemler said, “have been to improve funding for education and health care, reduce property taxes and continue to create an environment where Hoosiers can get good-paying jobs. I also recognize the importance of the state’s three ports to Indiana’s economic future, and I will continue to work to see that they get the support they deserve.” Stemler has also worked extensively on legislation that will help entice developers to bring tourist attractions to Indiana, as well as a proposal to study the effectiveness of methadone clinics in the state. 14 · Spring 2007 PORTSIDE MAGAZINE

2007 CALENDAR OF EVENTS

For more information, visit www.portsofindiana.com

2007 Industry Events

April 16-18 April 19-20 May 14-16 May 20-21 June 13-15 June 20-22 July 18-20 Sept. 26-27 Sept. 30-Oct. 4 Oct. 28-30 Nov. 7-9 Nov. 10-13 Nov. 10-14

4th Annual Short Sea Shipping Conference - Orlando, FL AAPA Port Directors Seminar - San Francisco, CA Great Lakes Commission Meeting - Indianapolis, IN NAFTZ Spring Conference - Atlanta, GA AAPA Public Relations Seminar - Cape Canaveral, FL AAPA Commissioners Seminar - Palm Beach, FL AAPA Security Seminar - Boston, MA Indiana Logistics Summit - Marriott Indianapolis Downtown AAPA Annual Convention - Norfolk, VA Breakbulk Conference - New Orleans, LA National Waterways Conference - Mobile, AL IANA Intermodal Expo & Annual Membership Mtg. - Atlanta, GA National Industrial Transportation League - Atlanta, GA

Port Commission approves $788,000 in improvements Five agreements set with new or expanding companies INDIANAPOLIS – During its February meeting in Indianapolis, the Ports of Indiana commission approved agreements with five companies that are locating or expanding operations at Indiana’s three ports and awarded more than $788,000 in contracts for capital improvements at the ports. The commission, which is the board of directors for the Ports of Indiana, approved agreements for two companies to locate at the Port of Indiana-Burns Harbor/Portage. The board welcomed new tenant Metro International to the vacant Great Lakes Processing facility at the port. Metro International, a warehousing and distribution company for London Metal Exchange commodities, needed a new facility to replace its New Orleans warehouse that was destroyed by Hurricane Katrina. Also, a new five-year lease was approved for Walsh & Kelly, an asphalt and paving contractor, which has been located at the port since 1971. The company recently moved some operations outside the port, but due to increases in road construction from the state’s ‘Major Moves’ program, it decided to keep its port facility open. For the Port of Indiana-Jeffersonville, the board granted Steel Dynamics Inc. temporary use of 6 acres for construction related activities during its $45 million expansion project.

At the Port of Indiana-Mount Vernon, Heritage Petroleum was granted an option to lease 24 acres for the potential construction of a bio-diesel facility and Barretts Minerals Inc. received a first right of refusal to lease 8 acres for possible future expansions. The board also awarded contracts for major capital improvements, which included $251,000 in dock work on berths 4 and 4a at Burns Harbor, $476,000 in paving on Port Road and Grain Road in Jeffersonville and $61,607 in additional improvements to the grain loading dock at Jeffersonville. Since this was the first meeting of the year, the board elected new officers who included: Ken Kaczmarek, chairman; Marvin Ferguson, vice chairman; Jay Potesta, secretary treasurer; and Kerry Nicholas, assistant secretary to the commission.

Port Commission Meetings

For more information, visit www.portsofindiana.com

Feb. 22 - Indianapolis April 19 - Mount Vernon June 14 - Jeffersonville

One Southern Indiana, the economic development and business advocacy association for Clark and Floyd Counties, invites you to Southern Indiana! We are home to the Port of Indiana-Jeffersonville, the newest of Indiana’s three ports. The 962-acre Port of Indiana-Jeffersonville offers a complete network of trafﬁc routes and onsite services that offer companies a number of competitive advantages! As part of the Louisville, KY-IN metropolitan area, Southern Indiana offers the charm of small town living with the advantages of a thriving metropolis!

One Southern Indiana the chamber

One Vision, One Voice for Economic Development

Aug. 16 - Burns Harbor/Portage Oct. 18 - Indianapolis Dec. 20 - Indianapolis

• Located at the “Crossroads of America”, we offer unparalleled interstate access that allows businesses to reach two-thirds of the US market within a one-day’s drive • Facility provides 12-month barge access to world markets via the Inland Waterway system and the Gulf of Mexico • Competitive rail service to shippers throughout the nation by way of CSX and the Louisville and Indiana Railroad Company (providing interchanges with 7 Class-One railroads) • Louisville International Airport (UPS Hub) and the Clark Regional Airport

812-945-0266 • www.1si.org 4100 Charlestown Rd., New Albany, IN 47150 www.portsofindiana.com · Spring 2007 15

Auto assembly plants are the largest users of foreign-trade zones in Indiana.

David Haniford General Counsel Donna Borgerding Marketing Special Projects

Foreign Trade: Easy as FTZ Ports of Indiana foreign-trade zones encourage international commerce

former Indiana Army ammunition plant. Eagle Steel is located within FTZ #170 and operates a steel processing facility.

In 1934, the United States Congress enacted laws and regulations establishing the procedure for creating foreign-trade zones (FTZs). The stated purpose of FTZs is to expedite and encourage foreign commerce. This purpose is accomplished by treating, for the purposes of tariff laws and custom procedures, the zone as being outside the territory of the United States. A company may bring foreign and domestic merchandise into FTZs for storage, assembly or manufacturing, without being subject to the formal customs entry procedures, or the payment of customs duties or taxes. When the merchandise enters an FTZ, duties may be eliminated if the goods are exported from the United States or postponed until the merchandise actually enters U.S. commerce.

FTZ #177 was also approved in 1991 and is located at the Port of Indiana-Mount Vernon. This FTZ has four sites: site #1 contains 40 acres within the port; site #2 is operated by Central Warehouse in Evansville, Ind.; site #3 is operated by Morton Avenue Warehouse Inc. in Evansville, Ind.; and site #4 is located at the Evansville Regional Airport, Evansville, Ind.

Early in the existence of the Ports of Indiana, the Indiana legislature determined the Ports to be the right organization to establish, operate and maintain FTZs within the state. The Foreign-Trade Zone Board, an independent agency housed within the U.S. Department of Commerce, granted the Ports of Indiana the authority to operate general purpose zones at each of its three port locations. FTZ #152 was approved in 1988 and is located at the Port of Indiana-Burns Harbor/Portage. It consists of three sites: site #1 is located within the Great Lakes Industrial Center, Gary, Ind.; site #2 has 441 acres within the port; and site #3 is located at the Gary Regional Airport, Lake County, Ind. Companies located in FTZ #152 are Beta Steel Corp. and Federal Marine Terminals Inc. The Ports of Indiana is also in the process of obtaining FTZ activation for a new company located at the port which is a third party logistics provider specializing in the handling and storage of non-ferrous metals traded on the London Metal Exchange. FTZ #170 was approved in 1991 and is located at the Port of Indiana-Jeffersonville. It consists of three sites: site #1 contains 993 acres within the port; site #2 is located at the Clark County Airport; and site #3 consists of 10,000 acres located within the 16 · Spring 2007 PORTSIDE MAGAZINE

In addition to the three general purpose zones which serve multiple companies and activities, the Ports of Indiana also assists in the creation of subzones. Foreign-trade subzones are typically designated for an individual company’s manufacturing operations. Over the years, the Ports of Indiana has sponsored subzones around the state for the following companies: Caterpillar Inc., Lafayette; BP Products North America Inc, Whiting; Lexmark International Inc., Seymour; Mead Johnson & Co., Evansville and Mount Vernon; Toyota Motor Manufacturing - Indiana Inc., Princeton; and Pfizer Inc., Terre Haute. The ability to operate and establish FTZs is one of several unique ways in which the Ports of Indiana can assist economic development in the state of Indiana. In 2006, $20 billion of goods moved through Ports of Indiana FTZs using the hands and skills of the more than 6,400 Hoosiers employed within the zones.

Ports of Indiana Foreign-Trade Zone Contacts:

Donna Borgerding, Marketing-Special Projects (317) 232-9205; dborgerding@portsofindiana.com

David Haniford, General Counsel (317) 232-9204; dhaniford@portsofindiana.com

150 W. Market St., Ste. 100, Indianapolis, IN 46204 (317) 232-9200 / fx (317) 232-0137 / info@portsofindiana.com www.portsofindiana.com www.indianalogistics.com