Portside Magazine - Winter 2010 by Ports of Indiana

www.portsofindiana.com

A Ports of Indiana Publication · Winter 2010

YEAR IN REVIEW Shipments hit 15-year high at Mount Vernon port

iNSiDe tHiS iSSUe: 3 ports – 2 waterways – 1 man: CGB’s Gary Hosack has had a colorful career at all three of Indiana’s ports, pg. 6 Evansville Western Railway grows business by keeping things personal, pg. 7 HWY H2O connects the world to the Midwest, pg. 10

Tie-in to business resources.

“1SI helped tie us into the tax credits, tax abatement programs and workforce training grants we needed to expand our business at the Port of Indiana-Jeffersonville.” Chuck Moore, President, Eagle Steel Products, Inc.

on completion of $3 million expansion at the company’s 270,000 square foot riverfront facility in Jeffersonville.

Want some help in taking your business to the next level?

Contact Kathleen Crowley at kathleenc@1si.org or call 812-945-0266

www.1si.org

The Port of Indiana-Jeﬀersonville not only has year-round waterborne access to world markets via the Ohio and Mississippi Rivers, it also connects to I-64, I-65 and I-71 via I-265, is served by CSX and Louisville-Indiana rail service and is less than 15 miles from both Louisville International Airport and Clark Regional Airport.

tABLe oF coNteNtS FROM THE CEO 2009: A year in review ...................................................................................................... 4

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 PORTS OF INDIANA CONTACT INFORMATION

Rich Cooper, Chief Executive Officer (317) 232-9200; rcooper@portsofindiana.com Matt Smolek, Port Director - Jeffersonville (812) 283-9662; msmolek@portsofindiana.com Phil Wilzbacher, Port Director - Mount Vernon (812) 833-2166; pwilzbacher@portsofindiana.com Peter Laman, Port Director - Burns Harbor (219) 787-5101; plaman@portsofindiana.com Jody Peacock, Director of Corporate Affairs (317) 233-6225; jpeacock@portsofindiana.com David Haniford, General Counsel (317) 232-9204; dhaniford@portsofindiana.com Tony Walker, Controller (317) 233-6227; twalker@portsofindiana.com Liz Folkerts, Communications Specialist (317) 232-9205; lfolkerts@portsofindiana.com

NEWS & NOTES ........................................................................................................ 5 Threat of Asian Carp in Great Lakes stirs debate Markland Lock reopening scheduled for March In Memoriam 3 ports – 2 waterways – 1 man: CGB’s Gary Hosack has had a colorful career at all three of Indiana’s ports ........ 6 Evansville Western Railway grows business by keeping things personal ............... 7 FROM THE BOARD ROOM .......................................................................................... 8 Commission approves $10.5 million for dock work at Burns Harbor ENVIRO•FOCUS Federal Marine Terminals charting a course for “greener” seas ............................... 9 PORT REPORTS Burns Harbor: HWY H2O connects the world to the Midwest .................................. 10 Mount Vernon: Shipments hit 15-year high in 2009 .................................................... 11 Jeffersonville: OmniSource recycles scrap steel from port companies .................. 12

John Hughes, Engineering Director (219) 787-8045; jhughes@portsofindiana.com

FOREIGN TRADE ZONES Ports of Indiana makes FTZ history ........................................................................ 13

Warren Fasone, Security Manager (219) 787-5056; wfasone@portsofindiana.com

Ports of Indiana Directory ...................................................................................... 14

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www.portsofindiana.com · Winter 2010 3

FROM THE CEO

2009: A Year in Review

Shipments increase despite challenging economy Last year was one of those years we’ll long remember, but unfortunately not necessarily for all the right reasons. It was one of the most diﬃcult business environments anyone can remember. But thanks to innovative and determined port companies and plenty of hard work, the Ports of Indiana finished the year with slight increases in tonnage over 2008. The Port of Indiana-Mount Vernon led the way, with a nearly 20 percent gain over last year due to increases in coal, steel and grain shipments.

Rich Cooper

Chief Executive Oﬃcer, Ports of Indiana

In Mount Vernon, the port had its highest annual tonnage in 15 years and third highest total since opening in 1976. Coal, the port’s largest cargo, was up 32 percent over 2008. Steel tonnage was up six times 2008’s total thanks to a combined eﬀort between the port and Consolidated Terminals and Logistics Co. in developing new steel business. Overall, the Ports of Indiana ended the year nearly 7 percent ahead of 2008 in tonnage and finished the year with its highest shipping volume for a quarter since 2006. The two largest cargoes to move through Indiana’s three ports – grain and coal – had significant increases. Twenty-seven percent more coal and coke passed through the Burns Harbor and Mount Vernon ports in 2009 than 2008 and grain was up across the board; 15 percent ahead of last year. Salt was also up considerably at all three ports – a 53 percent increase over the previous year. The Port of Indiana-Jeﬀersonville finished the year with 1.4 million tons, roughly the same as its 2008 total. Salt imports were the highest ever for the port. Shipments were up by 62 percent due to the restocking of supplies wiped out by the previous harsh winter. More than 50 percent of the cargo that moves through the port is grain, which increased 18 percent from the previous year. At Burns Harbor, grain shipments were six times the 2008 total. As salt prices decreased by almost half, the tons moving through the port increased by 42 percent.

The Port of Indiana-Burns Harbor handled two shipments of wind turbines in 2009. Each blade measured 132-feet long by 10-feet high by 6-feet wide.

In Memoriam: Commissioners and port staﬀ extend their heartfelt sympathy to Commissioner Marvin Ferguson and family on the recent passing of his daughter Joni Lee Ferguson. She was born May 2, 1956, in Beech Grove, Ind. She was a 1976 graduate of the University of Indianapolis nursing program, and she loved the water. She was a competitive swimmer in her childhood and later became a certified scuba driver. Services were held Jan. 12 in Indianapolis.

4 · Winter 2010 PORTSIDE MAGAZINE

While the numbers say a lot, bright spots for our organization went beyond tonnage figures. The Burns Harbor port showed its innovation and expertise in handling unusual project cargoes as wind turbines and a giant cancer-fighting cyclotron were moved across its docks in 2009. At the Port of Indiana-Mount Vernon, rail storage was doubled with the addition of three new storage tracks. In Jeﬀersonville, we welcomed Matt Smolek as the new port director and in his short time he’s brought new energy and new ideas to grow our business. Recently, we have had more inquiries from businesses considering our ports and this is encouraging. It appears our economy may be ready to turn the corner. The Ports of Indiana weathered the storm with some of Indiana’s finest companies and together, with our worldclass business partners, look forward to the opportunities in front of us in 2010.

NeWS & NoteS

Threat of Asian Carp in Great Lakes stirs debate Asian Carp have been moving up the Mississippi River system for decades. Currently, there are electric barriers on the Chicago Sanitary and Ship Canal to prevent the fish from migrating into Lake Michigan. No carp – dead or alive – have been found north of the barriers in Romeoville, Ill., but recently traces of carp DNA were found between the barriers and Lake Michigan. This discovery prompted some groups to call for closing of the shipping locks connecting the Great Lakes to the Mississippi River system, which would stop all barge shipments between the two waterways and deal a devastating blow to the already struggling regional economies. Known for their voracious appetites, Asian Carp were originally brought to the U.S. in the 1970s to help prevent algae buildup. There is concern the carp would overrun native species if they reach Lake Michigan, disrupting the fishing industry. Michigan’s attorney general filed a lawsuit in December against Illinois and the U.S. Army Corps of Engineers to immediately and temporarily close the canal. The U.S. Supreme Court denied the request to take immediate action in January. Federal legislation is also being proposed to close the locks. The canal moves millions of tons of cargo each year. Between 1990 and 2009, the Port of Indiana-Burns Harbor handled 439 barges that moved through the Chicago-area locks, with a business revenue impact of more than $351 million. The American Waterway Operators and Waterways Council Inc. released a statement in January that said, “The regional economy would be devastated if the Chicago-area locks were closed. Millions of tons of critical commodities, such as coal for utilities, petroleum for heating homes and fueling vehicles and airplanes, and road salt, currently move through the Chicago-area locks, and thousands of American jobs depend on regional waterborne commerce. Closing the locks will also strike a blow to regional air quality because commodities will be shifted onto trucks and rail, which are much less fuel-eﬃcient than barge transportation.” Built in 1900, the canal was meant to prevent pollution in Lake Michigan by reversing the flow of the Chicago River. It was named a “Monument of the Millennium” by the American Society of Civil Engineers in 2001. Experts have stated that closing the canal could cause regional flooding in Chicago and northwest Indiana. Steve Fisher, executive director for the American Great Lakes Ports Assoc., sent a letter to the U.S. Army Corps of Engineers voicing strong opposition to the closure of Chicago’s navigation infrastructure because of its importance to regional economies. He also pointed out there are four other non-navigable waterways connecting to Lake Michigan that are not regulated. “While non-native carp present a unique challenge to resource managers, we urge the federal government to resist the hysteria surrounding this issue and move cautiously and thoughtfully to address this problem,” Fisher said. “Construction of electronic barriers on the Chicago Sanitary and Ship Canal are an important eﬀort to protect the Great Lakes. We urge the Corps to prioritize and fund additional solutions that protect the Great Lakes while also maintaining navigation.”

Between 1990 and 2009, 439 barges moving to or from the Port of Indiana-Burns Harbor went through the Chicago-area locks.

Ports employees celebrate milestones

Four Ports of Indiana employees reached significant anniversaries with the company in 2009. Brian Seig, operations manager at the Port of Indiana-Jeﬀersonville, started at the company in 1989. Regina Alexander, Executive Assistant, celebrated 10 years. Randy Kennedy, operations manager at the Port of Indiana-Mount Vernon, and Bonnie Underwood, administrative assistant at the Jeﬀersonville port, each marked five years.

Brian Seig 20 years

Regina Alexander 10 years

Randy Kennedy Bonnie Underwood 5 years 5 years

Markland Lock reopening scheduled for March

According the U.S. Army Corps of Engineers, the main chamber at Markland Locks and Dam on the Ohio River will reopen in March if repairs continue on course. Located near Louisville, Ky., the lock has been closed since Sept. 27 when a gate collapsed. Since then, the 600-foot auxiliary lock, which is half the size of the main chamber, has been handling all river traﬃc. Approximately 1,200 vessels have moved through the locks since its closure. “A lot of progress has been made and commerce continues to move on the river,” said Gene Dowell, the locks and dam operations manager for the U.S. Army Corps of Engineers’ Louisville District. “The entire team has been working really hard to ensure the auxiliary lock stays open and to repair the gate leaves.” The Markland Board of Investigation found the lock failure was caused by a valve malfunction that allowed water to flow into the lock chamber while the gates were closing. The gates were not completely sealed and diﬀerences in water pressure forced the gates past the closed position, which ultimately caused the failure. Since the gate leaves were damaged in the failure, the Corps says welders and repair crews have worked two 10-hour shifts 13 of every 14 days to complete the structural repairs. “If the river continues to run low, we plan to finish the work, rehang the gates and return the lock chamber to service by March 1,” said Louisville District Commander Col. Keith Landry. www.portsofindiana.com · Winter 2010 5

(Clockwise from left) The Port of Indiana-Jeﬀersonville, the Port of Indiana-Burns Harbor circa 1983 (Photo courtesy of Gary Hosack) and the Port of Indiana-Mount Vernon.

3 Ports · 2 Waterways · 1 Man CGB terminal manager Gary Hosack has worked at all three of Indiana’s ports. He moved to the Port of Indiana-Jeﬀersonville late last year.

CGB’s Gary Hosack has had a colorful career at all three of Indiana’s ports Gary Hosack’s career in the grain industry and logistics has taken him many places: Illinois, Virginia, Louisiana, Kentucky... and all three of Indiana’s ports. Hosack recently completed the Ports of Indiana trilogy when he became the manager of Consolidated Grain and Barge (CGB) at the Port of Indiana-Jeﬀersonville in October of 2009. Hosack also worked for CGB at the Mount Vernon port and with Cargill at the Port of Indiana-Burns Harbor. “To the best of our knowledge, Gary is the first person we know of who has worked at all three of our ports,” said Ports of Indiana CEO Rich Cooper. Hosack first began his career with Cargill in 1974 at its Chesapeake, Va., facility. He moved around to various Cargill facilities, landing at the Port of Indiana-Burns Harbor as plant manager in 1983. The facility just opened a few years before and one of Hosack’s projects was to add winches on the dock. One of his most memorable moments came during a February storm in 1984. “After we loaded two barges, we checked the weather and a storm was coming in straight out of the north,” Hosack said. “The storm kept coming closer and closer. We began calling any tug service, including Great Lakes Towing which usually came to pick up the big ships. Even the Coast Guard. No one could help us out. We had 15 foot swells inside the port walls.” According to Hosack, waves were so high that instead of crashing into the port’s breakwall, they rolled right over it. Winds were up to 70 mph and the overspray from the waves was freezing on land, creating an ice slick. “Two other guys and I tried to keep the barges tied, but as they rode the waves, the lines would snap,” Hosack said. “We would have 6 · Winter 2010 PORTSIDE MAGAZINE

to crawl on our bellies 40 or 50 feet because it literally was a sheet of ice. I lay on my stomach and the boys held my ankles so I could lasso the cleats. We went through 70 or 80 lines that day.” Throughout the day, the barge companies kept bringing them more ropes. Hosack and his coworkers put on new lines every 45 minutes from 6 a.m. one morning to 1 a.m. the next day. “By 1 a.m. that morning, the last barge broke away,” Hosack said. “The lids came off, they took on water and down they went.” Hosack began working with CGB in 2004. In 2008, he became the regional operations manager at Mount Vernon where he found an old buddy from his Cargill days – Phil Wilzbacher, who had since became port director at the Port of Indiana-Mount Vernon. “I first met Gary in the mid-1980s when we both were with Cargill,” said Wilzbacher. “Over time and transfers, we were off in different directions, but after 20 years, our paths crossed again. It’s been my pleasure to have the opportunity to work with him again. Gary’s still a take charge, make a decision and get the work done type but with an ability to have some fun while doing business.” During his time in Mount Vernon, Hosack was involved in the addition of a grain loading conveyor, 651,000 bushel grain bin and about 6,000 feet of rail track to the port’s infrastructure. “Having now worked in all three of Indiana’s ports the thing that stands out most in my mind is the working partnership between the companies, the port personnel and the companies’ staff,” Hosack said. “They work together for the common goal of increasing business opportunities and improving the facility, and often working for solutions to do both.”

EVANSVILLE WESTERN RAILWAY GROWS business by keeping things personal In a time when many businesses were struggling to stay on track, Evansville Western Railway broke the trends by keeping things simple: emphasize customer service and invest in infrastructure. The strategy paid oﬀ. Business grew by 13 percent in 2008 and last year the railway was recognized by CSX for the highest carload growth out of the 220 short-line railways that connect to CSX. While carloads declined across the industry in 2009, Evansville Western’s numbers fell nearly 10 to 20 percent less than the industry average. The Evansville Western Railway is a full-service railroad operating on 125 miles of rail between Evansville, Ind., and Okawville, Ill. Evansville Western is headquartered and managed from Mount Vernon, Ind., which is its main terminal for origin and destination of trains. The Port of Indiana-Mount Vernon is served by the railroad, with 7-day-aweek switching service available to all port tenants. In 2009, the railroad moved 30,000 railcars through the port. Evansville Western oﬀers Class I interchanges with Union Pacific, BNSF and CSX and has potential interchanges with Canadian National and Norfolk Southern. “The Ports of Indiana view the Evansville Western not just as a vital service provider but a crucial business partner,” said Phil Wilzbacher, port director at the Port of Indiana-Mount Vernon. “In 2009, 4.58 million tons moved through the port – seventy-five percent of this tonnage involved rail. We have a very cooperative working relationship.” When setting out to grow its business, Evansville Western looked to companies that

were already customers. The focus on customer service allowed the railroad to increase shipments in the coal and grain industries through existing customer channels. “The people make a diﬀerence,” said Larry Davis, vice president of marketing and sales at Evansville Western. “Customer service has to do with the willingness of the employees to go the extra mile and do the right thing. There is an entrepreneurial spirit here. I believe that attitude permeates the entire organization top to bottom.”

Evansville Western Railway is a full-service railroad operating on 125 miles of rail between Evansville, Ind., and Okawville, Ill. Photos courtesy of Evansville Western Railway and Brian Wiggins.

Another element of Evansville Western’s service is real-time event reporting. Each locomotive has an on-board computer where the train crew enters data. The data is transmitted wirelessly to the company’s host computers and put on the website: www.evwr.com. “The information is immediately available in our system for billing, inventory control and status checks, and on the website,” Davis said. “From the website, customers can inquire about car locations,

view their railcar inventory, request switch movements and bill cars, not unlike shopping on the internet.” The company expects further growth in 2010. Abengoa Bioenergy recently opened an ethanol plant east of Mount Vernon and shipped its first cars via the railroad in November. Evansville Western also expects to open a connection to a new coal mine later this year. The business has 41 employees, most who live in Posey County. “It is a small company,” Davis said. “Employees live there, work there. I liken small railroads to boutique shops. Both are small, local and dedicated to customer service. Both want to better the community.” Since its inception in 2005, Evansville Western Railway has invested $18.5 million in track, structures and equipment to provide safe and eﬃcient service, but also with future growth in mind. “We needed to spend money to get the railroad up to speed,” Davis said. “It was sorely needed.” Some of Evansville Western’s current capital improvement projects include additional sidetracks which will lighten congestion. The company is also reinforcing bridges and track structure. This will increase the track’s weight limit from 263,000 pounds to 286,000 pounds across the majority of its track. Currently, 286,000-pound track is only available from Evansville to Woodlawn, Ill. “We are investing in the future,” Davis said. “This railroad is in an area that is very attractive to industrial development. If we succeed, that area succeeds. If the port can grow, we can grow. We want to be ready.”

www.portsofindiana.com · Winter 2010 7

Ken Kaczmarek

Greg Gibson

Marvin Ferguson

Ramon Arredondo

David Fagan

H.C. “Bud” Farmer

Phil McCauley

Jay Potesta

Commission approves $10.5 million for dock work at Burns Harbor INDIANAPOLIS – The Ports of Indiana commission approved contracts for one of the largest infrastructure projects in recent history at its December meeting. Two contracts totaling $10.5 million were awarded for dock work at the Port of Indiana-Burns Harbor. Albin Carlson & Co. of Addison, Ill., was awarded a $6.8 million contract to repair 260 feet of dockwall and reconstruct an additional 1,600 feet on the west harbor arm of the port. The bid also includes placing stone on the harbor bottom of the entire 1,860 foot span. L.B. Foster Co., of Oak Brook, Ill., was awarded a contract for the purchase of steel sheet piling used in the dockwall repair. Both contracts were awarded to the lowest bidders. A contract was approved with Martin Associates for a comprehensive economic impact study of Indiana’s three ports. The Ports of Indiana conduct an economic impact study every four to six years. Martin Associates has developed more than 250 studies for ports throughout the U.S. and Canada. The commission ratified a utility agreement between the U.S. Steel Corp., Northern Indiana Public Service Co. and the Ports of Indiana involving the 57-acre tract of available land at the Port of Indiana-Burns Harbor.

The Ports of Indiana 2010 operating budget and the annual audit were also approved at the meeting. Crowe Horwath will perform the audit, which it has done since 1993.

In December, the Ports of Indiana commission awarded $10.5 million in contracts for repair and reconstruction of the west arm dockwall at the Port of Indiana-Burns Harbor.

Commission officers elected; Gibson new vice-chair Oﬃcers for 2010 were elected at the Ports of Indiana commission meeting in December. Ken Kaczmarek was re-elected as chairman. Greg Gibson was elected vice-chairman after Marvin Ferguson stepped down from the position. Ferguson had served as secretary treasurer, vice-chairman and chairman over the past 14 years. Jay Potesta and Ports of Indiana Controller Tony Walker retained the positions of secretary/treasurer and assistant secretary. Ken Kaczmarek was appointed to the commission by Gov. Mitch Daniels in 2005 and has served as chairman of the commission since February 2006. A South Bend native, he is a partner with Elliott & Associates, an investment firm in Bloomington. Kaczmarek holds a bachelor’s degree in accounting and a M.B.A. from Indiana University. He is a certified public accountant and a member of the American Institute of Certified Public Accountants and the Indiana CPA Society. Kaczmarek played football at Indiana University and was an All-American on the Hoosiers’ 1968 Rose Bowl team, ranked fourth in the nation. In his last game at Bloomington, he caused a fumble near the goal line in the final seconds to secure Indiana’s victory over Purdue University and seal their Rose Bowl bid. He is married to Linda Whitlow Kaczmarek and they have three children. Greg Gibson was first appointed to the Ports of Indiana commission by Gov. Mitch Daniels in 2006. A resident of Terre Haute, Ind., Gibson has owned and developed several privately held companies which were later sold to publicly owned companies located throughout the United States. He 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. Gibson has a bachelor’s degree in civil engineering from Rose Hulman Institute of Technology and serves on the board of trustees of Rose Hulman. He also currently serves on the board

8 · Winter 2010 PORTSIDE MAGAZINE

of directors for First Financial Bank and its holding company First Financial Corp. He is involved in several charitable organizations including the Methodist Health Foundation, the Bird-Gibson Sports Center, Hospice of the Wabash Valley and the Vigo County Convention and Visitors Bureau. Jay K. Potesta was elected secretary/treasurer for the Ports of Indiana commission in 2005 and serves as a special advisor to the board. Potesta was previously a commissioner for the Ports of Indiana and he currently serves as business manager and financial secretary for Sheet Metal Workers Local Union No. 20. A native of Northwest Indiana, he has a bachelor’s degree in music education from VanderCook College and an associate’s degree in labor studies from Indiana University. Now a resident of Indianapolis, he and his wife Pamela have two children and two grandchildren. Potesta is a vice president of the Indiana State Building Trades Council and the Indiana State AFL-CIO. He is president of the Great Lakes States Council of Sheet Metal Workers. Potesta serves as trustee or on the board of many organizations, including the Statewide Health & Welfare Fund and the Statewide Joint Apprenticeship and Training Trust. He is a Master Mason and a Shriner with the Orak Shrine in Michigan City. “The governor has appointed some of Indiana’s best and experienced business leaders to our board,” Ports of Indiana CEO Rich Cooper said. “Ken and Jay have served in leadership roles on our board for several years now and re-election by their peers validates the outstanding job they’ve been doing. Marvin’s experience as a steel executive and CEO carried over in his role as chair and vicechairman of our board. Greg hit the ground running as soon as he joined us and we are lucky to have someone of his caliber to follow Marvin Ferguson as vice-chairman.”

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.

Enviro•Focus Federal Marine Terminals charting a course for “greener” seas Port stevedore launches plan to reduce emissions and prevent pollution Federal Marine Terminals is working to make the blue seas “greener”.... environmentally-speaking, of course. Federal Marine Terminals (FMT) recently announced a new environmental policy that outlines methods to reduce the environmental impact of moving cargoes. The company has served as the stevedore at the Port of Indiana-Burns Harbor since 1999, and its parent company, Fednav, is the largest international shipper on the Great Lakes. While environmentally-conscientious actions are not new to FMT, this is the first time it has been spelled out in a firm and formal policy, which can be viewed online at www.fmtcargo.com. “We believe in it,” said Michel Tosini, executive vice president of FMT. “It is part of the philosophy of the company. We are committed to reducing our environmental footprint.” According to Tosini, newly-purchased equipment is required to have the latest emission technology in an eﬀort to minimize greenhouse gases. Older equipment is being retro-fitted or retired. These upgrades will continue as new technologies are developed. “Our fleet in Burns Harbor is as clean as it can get,” Tosini said. “We’ve already installed catalytic muﬄers to our folk lifts that reduce emissions. We are using equipment that has the latest technology.” A “no-idling” policy has also been enacted in FMT terminals.

Federal Marine Terminals (FMT) operates 10 terminals across the Great Lakes and Eastern Seaboard, including one at the Port of Indiana-Burns Harbor. With over four decades of experience operating stevedoring facilities, FMT is an industry leader handling breakbulk, bulk, containerized, project and general cargos. www.fmtcargo.com

This applies to the company’s equipment as well as trucks loading cargo at FMT’s facilities. “We have signs at the terminals stating ‘No idling’ and we actively enforce this,” Tosini said. “The policy may be considered a pain, but it is required at our terminals.” Each FMT terminal also has a spill management plan designed to avoid runoﬀ of hazardous material into nearby waterways. Machinery is washed in a containment area with a wash pad and is refueled in a designated area. FMT has also been working to reduce dust emissions by keeping outside bulk cargoes covered or spraying them with a fine mist as needed. Handling will even stop if it is deemed too windy. “Waterborne shipping is the most environmentally-friendly mode of transportation and it’s important to have sound operating policies so we can keep it that way,” said Peter Laman, port director at the Port of Indiana-Burns Harbor. “FMT has set the standard for being an environmental steward on the Great Lakes.”

Main Terminal & General Office… 4600 East 15th Avenue · Gary, Indiana 46403

219-938-7020 · 800-426-1827 · Fax: 219-938-6866

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115 Steel Dr., Portage, IN 46368 219-787-9280 Fax: 219-787-8511 Located at The Port of Indiana · Burns International Harbor

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www.portsofindiana.com · Winter 2010 9

(Right) The St. Lawrence Seaway, referred to as HWY H2O, extends 2,340 miles from the Atlantic Ocean to its western point at Duluth, Minn. Image courtesy of the St. Lawrence Seaway Management Corp.

PORT REPORT Peter Laman Port Director

PORT OF INDIANA – BURNS HARBOR

Highway H2O connects the world to the Midwest PORTAGE, Ind. - HWY H2O is not your typical highway, but it moves cargo just the same. It is made up of the St. Lawrence River, the St. Lawrence Seaway and the Great Lakes and links the Midwest to the outside world. While more than 300 million tons of cargo travel the “highway” each year, it is currently only at 50 percent of its capacity. The HWY H2O organization helps develop its global connection with representatives working to promote the highway’s benefits in Europe and China. As with any HWY H2O representative, the overseas reps’ tasks include promoting the facilities, working with seaway stakeholders and building strategic alliances. HWY H2O’s China representative is Naran Andreyev. An American, Andreyev spent most of his life in New Jersey, but Shanghai is now home. London native Alan Taylor is the European representative. “On a day-to-day basis, I am available to field inquiries and queries from potentially new and existing customers and with up to a seven-hour time difference between continental Europe and some of the port partners, a European office can be a distinct advantage,” Taylor said. According to Taylor, other benefits to his location just outside of London are that he can arrange and attend meetings throughout Europe more quickly and less expensively than other HWY H2O staff. He also keeps up on changing European Union and local state legislation and so he can lobby when necessary. While Taylor is the sole HWY H2O rep in Europe, Andreyev works with the staff of Logistics Plus China. He is the managing director of the freight forwarder and logistics provider. The business acts as the Asia corporate office for HWY H2O. “I have a staff of nine in Shanghai, two in Shenzhen and two in Kazakhstan,” Andreyev said. “This diversity really helps us as together we speak seven different languages and represent the cultures of Asia, the Americas and Europe.” The location does have its challenges. According to Andreyev, 10 · Winter 2010 PORTSIDE MAGAZINE

his staﬀ still works everyday to educate Asia on the benefits of the St. Lawrence Seaway. “The biggest challenge so far has been to help people to see the world as a global environment,” Andreyev said. “In essence, we are showing them the viability of a system 8,000-plus miles away and localizing the value of this system to them. Like people everywhere around the globe, their focus is usually based on tangibility or what is directly in front of them.” For Taylor, people involved in the shipping industry are familiar with the Seaway system, but it is often overlooked. He says it is a matter of getting people outside of their comfort zone. “Companies with limited shipping experience and seeking to ship products to or from North America will not normally know too much about the system at all and would therefore traditionally gravitate towards the large East Coast or U.S. Gulf ports,” said Taylor. “Educating them is of paramount importance.” To learn more about HWY H2O, visit www.hwyh2o.com Contact Peter Laman at (219) 787-5101; plaman@portsofindiana.com

HWY H2O overseas representatives Naran Andreyev (left) and Alan Taylor speak at the 2009 HWY H2O Conference at Toronto. Photo courtesy of the St. Lawrence Seaway Management Corp.

PORT REPORT Phil Wilzbacher Port Director

(Above) The Port of Indiana-Mount Vernon handled six times more steel in 2009 than the previous year.

PORT OF INDIANA – MOUNT VERNON

Shipments hit 15-year high in 2009 MOUNT VERNON, Ind. - The Port of Indiana-Mount Vernon shipped more cargo across its docks in 2009 than any other year since 1994. The Ohio River port handled about 4.6 million tons in 2009, a 20-percent increase over the previous year and the thirdhighest total since the port opened in 1976. The increase was driven by a 32-percent increase in coal shipments but there were also significant increases in grain and steel. For the fourth consecutive year, Consolidated Grain & Barge has reported an increase in business for the company’s soybean processing facility at the port. During 2009, CGB completed replacement of key processing equipment that further improved the plant’s eﬃciency. In 2009, steel shipments were six times the previous year’s total. The increase was a result of an alliance between Consolidated Terminals and Logistics Co. and the Ports of Indiana. CTLC operates the port’s 58,000-square-foot overhead crane terminal, and the two organizations jointly market the facility to attract new business.

(Above) Kenco Logistic Services, which operates the Mead Johnson Nutrition facility at the Port of Indiana-Mount Vernon, celebrates its 60th anniversary in 2010. Founded in Chattanooga, Tenn., with one facility, the company now owns over 100.

Kenco celebrates 60 years in business

Kenco Logistic Services, which operates the Mead Johnson Nutrition facility at the port, celebrates its 60th anniversary this year. Founded in 1950 in Chattanooga, Tenn., the company is now one of the nation’s leading third-party logistics providers with over 200 clients. The 600,000 square-foot facility at the port was built in 1999 and serves as a distribution center for the Mead Johnson Nutrition plant in Evansville, Ind. The facility employs 127 people and moves more than 30 truckloads daily. The company was started by brothers-in-law Jim Kennedy, Jr., and Sam Smartt, Sr., with one 100,000 square-foot facility. Today Kenco owns over 100 facilities with more than 25-million square feet in 32 states and Canada. The business has stayed in the family, with the founders’ son and nephew, Jim Kennedy III, at the helm as an owner and chairman. Coal Shipments increased by 32 percent at the Port of Indiana-Mount Vernon last year.

Contact Phil Wilzbacher at (812) 838-4382; pwilzbacher@portsofindiana.com

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(Right) OmniSource, which operates out of the SDI facility at the port, recycles scrap steel.

PORT REPORT Matt Smolek Port Director

PORT OF INDIANA – JEFFERSONVILLE

OmniSource recycles scrap steel from port companies JEFFERSONVILLE, Ind. - The Port of Indiana-Jeﬀersonville really is a one-stop steel shop. With more than a dozen companies providing a range of complementary steel processing and handling services, there is bound to be plenty of scrap. You may not see its signs all over the port, but OmniSource is almost omnipresent when it comes to steel recycling at the Port of Indiana-Jeﬀersonville. OmniSource Corp. is one of North America’s largest processors and distributors of scrap and secondary metals. It is a wholly-owned subsidiary of port company Steel Dynamics Inc. (SDI) and operates out of the SDI location at the port. Founded in Fort Wayne, Ind., more than 65 years ago, OmniSource has more than 70 locations in the U.S. and Canada – including 22 throughout Indiana. Scrap metal recycling is big business. According to OmniSource, it is estimated to be a $20 billion industry in the U.S., with metal recyclers handling roughly 120 million tons of materials each year. The manufacturing and construction industries create scrap metal as a by-product. Scrap metal processors take this by-product and recycle it into new raw materials. It is cheaper than mining new materials, more environmentally-friendly and can be reused numerous times. OmniSource recycles almost all of the steel scrap generated at the port. It collects the material and sends it by rail to one of SDI’s processing facilities. Company-wide, OmniSource handled 5.6 million tons of recycled steel in 2008. Along with OmniSource and SDI, seven other port companies either create scrap, process steel or use steel-derived scrap iron in their manufacturing process.

New Face at SDI

Jordan Breiner became the new plant manager at Steel Dynamics in November. He has been with Steel Dynamics for 13 years and prior to that he worked for Jordan Breiner National Steel. Most recently he was the Steel Dynamics casting manager of SDI’s Flat Roll Division in Butler, Ind. Breiner enjoys cycling and he and his wife Julie will be relocating to the Jeﬀersonville area in the near future. 12 · Winter 2010 PORTSIDE MAGAZINE

CGB handled 26.6 million bushels of grain of at the Port of IndianaJeﬀersonville in 2009.

International demand drives increase in CGB grain shipments

In 2009, Consolidated Grain and Barge (CGB) handled 26.6 million bushels of grain – its highest total since 2006. According to Gary Hosack, manager of the Jeﬀersonville CGB facility, the reason for this successful year is the shifting worldwide supply and demand for agricultural products. The U.S. had more grain volume due to larger crops than many other countries. The low shipping rates, due to the economic downturn, also kept grain moving. CGB is a grain and bulk commodities stevedore which also provides an array of services for farmers, including financing, risk management, buying, storing, selling and shipping of grain. The company has more than With 70 locations throughout the middle section of the country, including the ports in Jeﬀersonville and Mount Vernon. Contact Matt Smolek at (812) 283-9662; msmolek@portsofindiana.com

(Right) Port of Indiana-Burns Harbor general cargo stevedore Federal Marine Terminals (FMT) takes advantage of the port’s FTZ status in handling steel-related projects.

David Haniford General Counsel

Jody Peacock Director of Corporate Affairs

Ports of Indiana makes FTZ history The Ports of Indiana is the first foreign-trade zone (FTZ) grantee in the nation to file more than one application for the new Alternative Site Framework (ASF) designation. As an FTZ grantee, our organization is submitting ASF applications for each of our three FTZs to the U.S. Foreign Trade Zones Board. We are one of only six organizations in the nation to act as grantee for multiple FTZs and one of only three to manage three – the most handled by one grantee. FTZs are restricted access areas that, while on U.S. soil, are considered outside of U.S. Customs and Border Patrol territory. This status allows companies within an FTZ to delay or reduce the amount paid in customs duties. This program, started in 1934, allows U.S. companies to be more cost-competitive with those located in other countries. The ASF designation makes it easier for companies to join an FTZ. Once each zone’s ASF application is approved, companies can be added to the FTZ in as little as 30 days. This process can take a year for traditional FTZs. With ASF designation, a multi-county service area is established, made up of specific counties that meet adjacency requirements to current FTZs. Out of the more than 250 FTZs nationwide, roughly 15 ASF applications have been submitted, but there are many more in the works.

FTZs provide a formula for success in international business Have you ever wondered if being part of an FTZ would benefit your company? There are several formulas to find out. The Ports of Indiana can help a business determine its FTZ savings potential by completing an FTZ financial savings analysis worksheet. The worksheet includes formulas to determine the FTZ savings toward your cash flow, in duties, reduced fees and more. Here are three examples from the FTZ worksheet. The “Widget Co.’s” average on-hand imported merchandise inventory is $25,000,000 and the average customs duty rate for its

product is 6 percent. Borrowing the money to pay the customs duty would cost the Widget Co. 5 percent per year in interest. But if the product remained in an FTZ for a full year, the Widget Co. could postpone the payment and calculate its savings in interest expenses as follows: $25,000,000 x 6% x 5% = $75,000 In another example, out of the Widget Co.’s $100 million in annual imports of foreign parts and materials, 3 percent becomes scrap ($3 million). In an FTZ, companies could avoid paying customs duties (6 percent in this example) on any material that is destroyed or damaged during processing. The company’s annual FTZ savings on this scrap material could be: $3,000,000 x 6% = $180,000. In a third example, qualified companies in an FTZ are only required to submit one customs entry on imported and exported materials per week, as opposed to individual or daily customs entries required of companies not in an FTZ. Not only will this weekly entry greatly reduce paperwork, it will save the Widget Co. in customs broker fees. Currently, the Widget Co. files about 20 customs entries per week, or 1,040 per year. Its customs broker entry fee is $125 per entry, which costs the company $130,000 annually. In an FTZ, the company would only have to file a weekly customs entry, or 52 per year. This takes its annual custom broker fee down to $6,500, saving the company $123,500 a year. With these three equations, it appears the Widget Co. could save $378,500 in one year by participating in an FTZ. If you would like to receive a copy of the formula worksheet to determine the potential FTZ financial savings for your business, please contact lfolkerts@portsofindiana.com or go to www.portsofindiana.com/ftzworksheet.

Contact Jody Peacock at (317) 233-6225; jpeacock@portsofindiana.com Contact David Haniford at (317) 232-9204; dhaniford@portsofindiana.com

www.portsofindiana.com · Winter 2010 13

150 W. Market St., Suite 100, Indianapolis, IN 46204 (317) 232-9200 / fx (317) 232-0137 / info@portsofindiana.com www.portsofindiana.com www.indianalogistics.com PORT OF INDIANA BURNS HARBOR 6625 S. Boundary Drive Portage, IN 46368 219-787-8638 ADS Logistics Roll & Hold Division 725 George Nelson Drive Portage, IN 46368 219-787-5015 Transportation, warehousing, inventory mgmt.

Great Lakes Towing Co. 1800 Terminal Tower, 50 Public Sq. Cleveland, OH 44113 216-621-4854 Tugboat, towing, barge services

Aqua-Land Communications Inc. 60 Stagecoach Road Portage, IN 46368 219-762-1541 Communications provider

Hoosier Healthcare Northwest 6615 S. Boundary Drive Portage, IN 46368 219-787-8662 Occupational healthcare facility

ArcelorMittal Burns Harbor 250 W. U.S. Highway 12 Burns Harbor, IN 46304 219-787-2120 Steel mill Behr Iron & Steel 6735 Waterway Drive Portage, IN 46368 219-787-1020 Scrap bailing operation Beta Steel Corp. 6500 S. Boundary Drive Portage, IN 46368 219-787-8200 Hot-rolled steel processing Calumite Co. 900 George Nelson Drive Portage, IN 46368 219-787-5045 Calumite processing Cargill Inc. 6640 Ship Drive Portage, IN 46368 219-787-9461 Grain handling and ag products Carmeuse Lime and Stone 165 Steel Road Portage, IN 46368 219-787-9190 Limestone processing Central Coil Processing 501 George Nelson Drive Portage, IN 46368 219-787-5000 Steel processing Federal Marine Terminals Inc. 415 Salmon Drive Portage, IN 46368 219-787-1017 Stevedoring and trucking Feralloy Midwest Portage 6755 Waterway Drive Portage, IN 46368 219-787-9698 Steel processing Feralloy Processing Co. 600 George Nelson Drive Portage, IN 46368 219-787-8773 Steel processing Frick Services 800 Sun Drive Portage, IN 46368 219-787-9475 Dry/liquid bulk storage/distribution