Port Bureau December 2015
Greater Houston Port Bureau
News
Port Bureau Year in Review Houston Waterborne Foreign Trade Imports and Exports Coffee Waves
www.txgulf.org
Port Bureau
News 30
10
Publisher/President CAPT Bill Diehl, USCG (Ret.), P.E. Editor Christine Schlenker Copy Editors Christine Schlenker Judith Schultz
3 Captain’s Corner Zig Ziglar
4 Port Watch
The Slide Continues
6 Port Bureau Updates
10 U.S. Waterborne
Foreign Trade Imports and Exports
Part III of the Waterborne Trade Series
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20 Coffee Waves
Coffee Waves: What Are They and What Might They Become?
24 Trade Update
Waterborne Foreign Trade Statistics: Third Quarter of 2015
30 Year in Review 34 7th Annual
Captain’s Cup Golf Tournament Alliant Wins the Cup
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For information about the Port Bureau: Phone: (713) 678-4300 Email: info@txgulf.org For information about the Port Bureau News stories or advertising: Email: editor@txgulf.org
Captain's Corner Zig Ziglar
Like you, we are tying up our year end business at the Port Bureau, evaluating our performance, and setting new goals for the year ahead. As we do this, we frequently get into discussions on what is the best way for us to bolster our Port Bureau mission to support our member companies and the port region. Amidst these discussions, I thought of some powerful advice I unexpectedly received a few years back. It began in Las Vegas. I know that what happens in Vegas is supposed to stay in Vegas, but on this occasion something happened that I was glad to talk about back at home. That something was a motivational talk by Zig Ziglar. I didn’t actually set out to hear Zig speak. In fact, I’d never really heard much about him before the trip. My wife, Annette, had won a regional sales contest for her company, and the prize was a trip for her and her spouse (me) to Las Vegas for a motivational pep rally. I was all in and began dreaming about all the money I was going to rake in playing black jack and the hurting I was going to put on
the casinos. Luckily, Annette convinced me to join her at the pep rally by telling me there was free food and that I really did not need to pay attention to the speakers. As we walked through the casino, I could hear the siren’s call of slot machines beckoning me to riches, but I dutifully attended the session with Annette anyway. I’ve always been glad I did. The first few speakers did not do much for me. However, when Zig Ziglar took the stage, I sat up and watched in awe as he galvanized hundreds of people into taking action to achieve new goals. “You can have everything in life you want,” Zig told us, “if you will just help enough other people get what they want.” He firmly believed accomplishing objectives successfully stemmed from helping others reach their own goals. Zig’s life and career offered strong evidence that going out of your way to solve somebody else’s problems generated a synergy that ultimately opened new doors to achieving your own goals. I cannot think of a better description than this of the Port Bureau’s mission to
CAPT Bill Diehl, USCG (Ret.), P.E. synergize the maritime community for optimal prosperity. Helping our members succeed defines every task we undertake. From hosting our Commerce Club series of luncheons for education and networking to publishing our monthly news magazine with timely analysis reports and industry information, assisting our members is always front and center. And, just as Zig promised, it creates unparalleled opportunities for mutual business success. Zig also believed there was “plenty of room at the top – but not enough to sit down.” In other words, you never reached a place where you quit moving forward. Success was not a destination for Zig — it was the journey. The Port Bureau staff has adopted the same industrious philosophy. We are thankful for the record-breaking year we’ve had in event attendance and membership and for our growth as a maritime information hub. Just browse through our Year in Review on page 30! But we are equally excited about 2016. Opportunities are abundant to reach new milestones through helping our members benchmark new success. Thanks to all our members and the many folks who have helped us make things happen this year. We wish you all the joys of the season and look forward to helping you “get what you want” for your business in 2016.
ò Merry Christmas,
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© Christine Schlenker
PORT WATCH
The Slide Continues Tom Marian, Buffalo Marine Service
A three month slide never bodes well in the maritime commercial world. This is particularly true when the solid gains from the first half of the year become further imperiled by a softening trade picture. In fact, there are indications that the majority of Texas’ ports will see fewer vessel arrivals in 2015 than in the previous year. This is a bit disconcerting given that the typical September through October trade bounce never materialized following the April through May trade peak. In some instances the languishing arrival numbers are being driven by the marked downturn in drilling activity in the Texas shale gas fields while, in others, there is ever-growing caution with respect to large-scale projects that are propelled by an expanding economy. Whatever the reason, overall arrival activity fell 7% in October but clung to a 1.8% yearto-date gain. Ironically, the Texas port that retains the year-to-date lead – percentage-wise – experienced the most dramatic monthly plunge. Brownsville’s arrivals fell over 42%
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but the Chess Capitol of Texas is well above its 2014 arrivals. Specifically, to the tune of 24%. Not surprisingly, its neighbor to the north – the Port of Corpus Christi – was also off by 5% over the last month. This most recent decline has nearly taken the wind out of the port’s 2015 numbers
given that Corpus Christi is running a mere 0.4% above last year’s vessel arrival tally. The Port of Freeport may have had one of the better monthly performances, given its monthly arrivals only dropped off by 3%. Unfortunately, it has the dubious honor of possessing the largest year-to-date
Texas ports deep draft vessel arrivals up 1.8% year over year for October 2015 Brownsville, 23.7% Corpus Christi, 0.4%
Freeport, -9.9% Galveston, 5.8% Houston, 1.8% Port Lavaca, -3.9% Sabine, 7.8% Texas City, -5.0% Texas Total, 1.8%
Source: GHPB vessel movement database
port watch
Port of Houston deep draft vessel arrivals up 1.8% year over year for October 2015 2000
1500
Oct. 2015 YTD (Total: 7,053) Oct. 2014 YTD (Total: 6,930)
1000
500
0
Source: GHPB vessel movement database
percentage drop at 10%. The one bright spot for the month was located just west of the Louisiana-Texas border in the Port of Sabine. This port had a pronounced monthly gain of 8.5%. Sabine’s positive numbers as of late were tied to exports of LPG and the shipment of crude condensate to Canada. Currently, Sabine is outpacing 2014s arrival totals by 8% and looks to improve upon that as the year closes. Galveston is another port that still enjoys a healthier vessel call environment in 2015, despite its lowest monthly arrival count for the year reflecting an 8% wane. Fortunately, the bulk of Galveston’s vessel activity is centered around the public wharves which were off by less than 2% in October while the rest of the port complex averaged an 8% drop. Texas City also experienced a monthly nadir. Worse yet, it has not seen an increase in vessel arrivals since May. All told, the port is down over 8% for the month and 5% below 2014’s arrival figures. How goeth Houston? The state’s super port experienced the second-largest percentage loss with a double-digit downer
of 11%. It, too, posted its lowest monthly numbers for the year; thereby creeping closer to 2014’s performance with a paltry 1.8% improvement over that particular year’s total vessel count. In fact, the monthly losses were so pronounced that there was not a single category that finished in the black with the exception of a 1% gain for chemical tankers – a category that outpaces last year’s movements by nearly 20%. Other than that, there were several vessel types that were in the negatives for the month and the year. Bulk carriers widened its year-to-date fall to almost 14%, with a 16% monthly plunge during a month that was well below all previous months for the year. Tankers followed suit hitting a bottom of 196 arrivals for the month which, in turn, translated into a steep decline of 21% pulling the category into the red for the year. General cargo arrivals nearly matched the prior month’s account. Yet, this particular vessel type lags 9% below its prior year numbers. Car carriers were off by one for the month – essentially mirroring its 2014 arrival data. LPG movements did not see
a nadir in October, but its October count was 13% below that of September. The good news is that it remains 2015’s darling with a 24% year-to-date rise. Not even those thousands of barges brimming with petrochemical products could offer a silver lining as tows that crossed through the Houston Ship Channel also posted lows for the year. Granted, this should come as no surprise given the fact that oceangoing tows that called on the Port of Houston were down 14% over the month and 4% on an annualized basis. All in all, things were not rosy as Halloween heralded the end of a tepid month on the maritime trade front. It was as if the final year of the month was upon Texas ports, and the early winter weather replete with fog, tempestuous seas beyond the entrance jetties, and the post-holiday season buying binge hangover had all conspired to slow the pace of shipping over the course of October. Unfortunately, those realities still loom, and as the price of a barrel of oil slides, so do things off the coast of the Lone Star State.
ò
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port bureau updates
January 2016 Commerce Club RADM David R. Callahan, Commander, 8th District, U.S. Coast Guard RADM David R. Callahan, Commander, 8th District, U.S. Coast Guard, kicks off the new year’s first Commerce Club series of educational lunches on Thursday, January 14, 2016. RADM Callahan is headquartered in New Orleans and is responsible for U.S. Coast Guard operations spanning 26 states, including the Gulf of Mexico coastline from Florida to Mexico. He is a Coast Guard aviator with over 30 years of military and civil fixed and rotary wing flight experience. He commanded two Coast Guard Air Stations, to include Air Station New Orleans, and the Coast Guard Aviation Training Center in Mobile, LA, which in 2005 served as the aviation operations and maintenance hub for the entire Hurricane Katrina response. His command became the largest operational air station in U.S. Coast Guard history and played a key role in the Coast Guard’s rescue of over 30,000 people in Mississippi and Louisiana. Over the span of his career, RADM Callahan served in the Atlantic, Pacific, Great Lakes, and Gulf Coast theaters of operation including Alaska. He led Coast Guardsmen in executing all eleven of the Coast Guard’s statutory missions. A native of Littleton, Colorado, RADM Callahan graduated from the U.S. Coast Guard Academy in 1982 and holds a Bachelor of Science degree in Management, a Masters degree in National Security Studies, and is a 2005 distinguished graduate of the Air War College.
Port Bureau Upcoming Events Benefit from Membership Renewal
With 2016 just around the corner, it’s time to renew your Port Bureau membership. Take a look at these 5 ways membership benefits your business: 1. Community. Membership keeps you more involved with peers to encourage wider public support for Houston Ship Channel initiatives and adds your own forward-thinking input for industry success. 2. Referrals. A full-page profile in the GHPB print directory and online listings increase visibility to boost business referrals. Members receive free tariff posting on the GHPB website and can opt to accelerate outreach through additional premium advertising in the Membership Directory and the monthly Port Bureau News magazine. 3. Resources. Members keep informed through members-only information services, including vessel statistical reporting and print publications. 4. Research. Members get better at business by putting GHPB resources to work for them through custom research, data analysis, and grant-writing assistance. 5. Events. Members receive discounts for our monthly Commerce Club luncheon series and other events. Membership enhances company status at all GHPB-sponsored events. Let your Port Bureau membership keep you in the mix of 200+ companies and hundreds of industry professionals sharing your enthusiasm and commitment to advancing the common interests of the port region. Renew today!
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2016 Calendar of Events Register online at www.txgulf.org
January 14 - Commerce Club February 11 - Commerce Club March 10 - Commerce Club April 14 - Commerce Club May 12 - Commerce Club June 9 - Commerce Club July 14 - Commerce Club August 20 - Maritime Dinner September 8 - Commerce Club October 12 - Commerce Club in conjunction with the Greater Houston Coffee Association November 7 - Captain’s Cup
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Port Bureau updates
Port Bureau Executive Board Offers Comments on HCTRA Beltway 8 Toll Bridge Replacement Plans The Executive Board of the Greater Houston Port Bureau responded with comments to the U.S. Coast Guard (USCG) District Eight’s Public Notice (10-15), published on September 18, 2015, of a proposed replacement bridge along Beltway 8 by the Harris County Toll Road Authority (HCTRA). Plans under consideration call for removing the existing bridge – frequently referred to locally as the “Beltway 8 Toll Bridge” – that is the north-south transportation link between IH-10 and SH 225 and constructing a new bridge along that segment of the Sam Houston Tollway East corridor. The Executive Board directed their comments toward communication measures needed during temporary closures of the ship channel during demolition and construction; increasing the air draft of the new bridge to 215 feet to accommodate future shipping needs; an interest in learning more about road connection points between Beltway 8 and Highway 225 so as to understand appropriate accommodation for industry traffic; and, problems inherent in the schematics indicating the existing piers will be removed to two feet below the mudline. The Board’s comments also requested further information about the construction and demolition process, specifically as it pertains to the use of barge support vehicles or in-water equipment to consider the potential obstruction of commercial vessel movement. Through the comments, the Executive Board seeks to point out areas of concern for the port community as plans to improve or replace the Beltway 8 Toll Bridge are considered by all agencies. Comments are now closed for the USCG Public Notice (10-15), but the Notice can be read in full at the USCG website. If you’d like to talk over the proposed plans with the Port Bureau, call CAPT Bill Diehl at (713) 678-4300 or email at bdiehl@txgulf.org.
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Houston Waterborne Foreign Trade – Imports and Exports By: Dave Cooley, GHPB
Houston waterborne trade Article Highlights • The third installment of GHPB’s analysis of the trade of the U.S. and analyzes the different types of goods and commodities that either arrive or leave the Port of Houston. • All in all, the value (US$) of Houston’s total waterborne trade has increased, influenced mostly by the energy commodity and its related products, e.g. chemicals, fertilizers, plastic, and rubbers • Imports have fallen slightly in recent years, but the fall has been contracted by an increase in exports.
Introduction This is the third installment of the Port Bureau’s analysis of the waterborne trade of the U.S. and analyzes the different types of goods and commodities that either arrive or leave the Port of Houston aboard ocean-going vessels. Unless otherwise stated, the term “trade” in this analysis refers to waterborne foreign trade and “Port of Houston” refers to all public and private terminals in the Houston port region. First, Houston total trade is briefly compared to U.S. total trade, of which a complete analysis was presented in the November 2015 edition. Then, following the analysis in the previous installment of this series, the analysis of Houston trade provides an overview of the top commodity groups that comprise the total trade of the Houston the sum of imports and exports - for both value and tonnage. Next, the data set is evaluated from two perspectives: the mode of transportation and the direction of cargo movement. The first perspective organizes the data for total trade based on the mode of transport by separating trade into containerized and non-containerized (e.g., break bulk and bulk) cargos. The second view divides the data for total trade into the two constituent components – imports and exports – and shows the top commodity groups for each.
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Background As a reminder from the previous articles, data is from a database created by the U.S. Census Bureau that is sourced to international trade information captured by the U.S. Customs and Border Protection. Data is presented for both value (U.S. dollars) and weight (tons) for both imports and exports, which are all categorized according to the 99 two-digit codes of the Harmonized Tariff Schedule. To facilitate analysis of like goods and commodities, many of these 99 codes have been combined into 26 distinct yet overarching categories referred to as commodity groups, which is one of the key data sets utilized for this project. Ranking was determined based on the 11-year average of the applicable data set. All analysis will include a historical picture showing the evolution of each commodity group from 2003 through 2014.
Houston Trade Compared to the Total U.S. On average over the 11 year analysis period, the Port of Houston represents about 6% of the value of U.S. imports and about 10% of the value of U.S. exports. The percentage is higher from a tonnage viewpoint: Houston imports around 14% and exports around 12% of all of the U.S. tonnage. Combining imports and exports for total trade, the Port of Houston handles about 9% of U.S. total trade by value and about 11% of the related tonnage. If trade were equally distributed across all of the 187 ports in the database, each port would represent 0.5% of U.S. trade – Houston clearly surpasses that amount. When considering trade by commodity type, in general, Houston’s top four to five commodities represent a slightly larger proportion of Houston’s total trade, both by value and by tonnage, than for the U.S. as a whole. In other words, Houston’s trade is somewhat more concentrated in its key commodity areas than total U.S. trade is. The reader is invited to compare the results by section to the previous article to see the differences between Houston and U.S. trade.
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Houston waterborne trade
Right Middle: Table 1 - Houston Total Waterborne Foreign Trade by Value Houston Total Trade Value The value of Houston’s total trade grew from $50 billion in 2003 to $167 billion in 2014. While growing somewhat significantly during the early years of the decade, growth was interrupted during the Great Recession of 2008-2009, and the value of total trade dropped by $40 billion or 28%; the U.S. as a whole also dropped 28% during that time. The value of the Houston’s total trade recovered during the three years after the recession, reaching a zenith of $176 billion in 2012, exceeding its pre-recession level. Since that time, the value of total trade has dipped slightly to $168 billion, where it remained for both 2013 and 2014. Figure 1 displays a chart of the evolution of the Houston total trade by value over the last 11 years. The top five trade components comprise 87% of Houston’s average annual total trade from 2003 to 2014 and are shown by Table 1. The major contributor to Houston’s growth in value of total trade has been the energy commodity group, which rose from $15 billion in 2003 to a peak of $77 billion in 2011 and held steady at $75 billion in 2012. It then declined somewhat significantly at $7 billion a year for both 2013 and 2014, finishing in 2014 at $64 billion. The overall decline is due to the faster rates of decline in the quantity of imported crude oils outstripping the somewhat slower rate of increase in the quantity of exports of refined products. The increase in U.S. oil production has also influenced the increase in Houston’s chemical, fertilizers, plastics, and rubber commodity group, which grew from $11 billion in 2003 to $32 billion in 2014. Exports of organic chemicals increased from $4 billion in 2003 to over $12 billion in 2014, an increase of $8 billion over 11 years.
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Value of Houston total waterborne foreign trade by commodities Top 5 commodity categories represent about 87% of Houston's 11 -average total trade and 86% of 2014 total trade $180 Other Commodities $160 Dyes, Soaps, and Oils $140
Textiles and Apparel
$120 Value: Billions USD
Right Top: Figure 1
Foodstuffs
$100
Transportation Equipment
$80
Metals
$60
Boilers, Machinery, Motors, and Electronics
$40
Chemicals, Fertilizers, Plastics, and Rubber Energy
$20
$
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Source: GHPB analysis of U.S. Census Bureau data
Commodity Group
Avg. Annual 2014 Total Trade Avg. Annual Total Trade 2003-2014 % of Total (Billions USD) (Billions USD)
2014 % of Total
Houston Total Trade
$123
100%
$167
100%
Energy
$48
39%
$64
38%
Chemicals, Fertilizers, Plastics, and Rubber
$24
20%
$32
19%
Boilers, Machinery, Motors, and Electronics
$18
15%
$26
16%
Metals
$11
9%
$15
9%
Transportation Equipment
$5
4%
$7
4%
$107
87%
$144
86%
Total Top 5 Commodity Groups
Houston waterborne trade Tonnage of Houston total waterborne foreign trade by commodities
Left Top: Figure 2
Top 5 commodity categories represent 93% of Houston's total tonnage in 2014 and the 11 -year average
Left Middle: Table 2 - Houston Total Waterborne Foreign Trade by Tonnage
160
Left Bottom: Figure 3
140 Other Commodities
Tonnage: Millions Metric Tons
120
Ceramics and Glass Boilers, Machinery, Motors, and Electronics
100
Foodstuffs
80
Salt, Sulfur, Lime, and Ores 60
Grains and Milling Products
40
Metals
20
Chemicals, Fertilizers, Plastics, and Rubber Energy
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Source: GHPB analysis of U.S. Census Bureau data
Commodity Group
Avg. Annual Total Trade 2003-2014 (Millions MT)
Avg. Annual % of Total
2014 Total Trade (Millions MT)
2014 % of Total
Houston Total Trade
138
100%
148
100%
Energy
91
66%
93
63%
Chemicals, Fertilizers, Plastics, and Rubber
20
15%
22
15%
Metals
8
6%
11
7%
Grains and Milling Products
5
4%
7
5%
Salt, Sulfur, Lime, and Ores
4
3%
5
3%
129
93%
138
93%
Total Top 5 Commodity Groups
Houston total waterborne foreign trade by transportation mode: containers vs. bulk/break bulk Containerized cargo increase driven by chemicals, plastics, propane;
$140
140
$120
120
$100
100
$80
80
$60
60
$40
40
$20
20
$
2003
2004
2005
2006
2007
2008
Containerized Total Tonnage Containerized Total Value
2009
2010
2011
2012
2013
Tonnage: Million Metric Tons
Value: Billions USD
Bulk/break bulk declines on decreased crude oil imports
2014
Bulk/Break Bulk Total Tonnage Bulk/Break Bulk Total Value Source: GHPB analysis of U.S. Census Bureau data
Tonnage Houston recorded 112 million metric tons for total trade by tonnage in 2003. It experienced a nice burst of 10 million metric tons a year from 2003 through 2005. Total trade tonnage reached 135 million metric tons in 2005 and remained quite steady at that value through 2009. Post-Recession, Houston’s total trade tonnage rose to over 153 million metric tons by 2011 before stabilizing at 148 million metric tons from 2012 to 2014. The net difference between 2003 and 2014 was an increase of 36 million metric tons. See Figure 2. From 2003 to 2014, the top five tonnage components comprised 93% of Houston’s average annual total trade tonnage. See Table 2. Houston’s total trade tonnage for the energy and the chemicals, fertilizers, plastics and rubber commodity groups grew moderately between 2003 and 2014.This resulted from increased oil production that lowered the quantity of crude oil imports, raised the quantity of refined products exports, and provided cost-effective feedstock for chemicals. Houston Waterborne Foreign Trade – Mode of Transportation Goods shipped in containers are generally categorized as finished or semifinished products with higher value than raw materials often shipped as break bulk and bulk. Houston is the top port in the Gulf of Mexico for waterborne foreign trade for containerized and non-containerized (bulk and break bulk) goods by value. While Houston has traditionally been considered a bulk and break bulk port, the volume and value of containerized cargo has increased in recent years. The energy commodity group has declined both in value and tonnage as a result of lower crude price and import volumes, which has resulted in a decline
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Houston waterborne trade of bulk cargos. An overview of the tonnage and value of containerized versus bulk/break trade is depicted in Figure 3. Houston Waterborne Foreign Trade – Container Total Trade Value The value of Houston’s container total trade grew dramatically from $18 billion in 2003 to $60 billion in 2014 – a $42 billion change. Over the 11-year analysis period, the growth in the value of Houston’s container total trade is attributed to the expanding chemical manufacturing activity that increased by $12 billion and growth in machine parts that increased by $10 billion, reflecting about half of the total growth. The top five components comprised about 75% of Houston’s average annual containerized total trade from 2003 to 2014. See Table 3. Tonnage In 2003, Houston’s container total trade tonnage was 12 million metric tons and rose about 5 million metric tons over the following eight years. Houston’s container tonnage increased to 20 million metric tons for both 2012 and 2013, and then jumped to 25 million metric tons at the end of 2014. During 2014, the container shipment of propane surged by 4 million metric tons, accounting for 80% of the increase. In addition, the container total trade tonnage for the chemicals, fertilizers, plastics, and rubber commodity group doubled from 4 million metric tons in 2003 to over 8 million metric tons in 2014, supporting Houston’s position as a leading petrochemical port. From 2003 to 2014, the top five container tonnage components comprised 77% of Houston’s average annual containerized total trade tonnage. See Table 4. Houston Waterborne Foreign Trade – Bulk/Break Bulk Total Trade Value The value of Houston’s bulk and break bulk total trade rose from $30 billion in 2003 to $103 billion in 2008 and dropped $32 billion (or 31%) during the Great Recession.
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It recovered to a new high of $122 billion in both 2011 and 2012, and then dropped $8 billion in both 2013 and 2014 for final level of $107 billion at the end of 2014. The energy commodity group’s two-year loss of $14 billion accounted for 88% of the decline in the value of Houston’s bulk and break
bulk total trade, a function of the quantity of crude oil imports declining at a faster rate than the rising of the quantity of refined product exports. The top five components comprised 98% of Houston’s average annual bulk/break bulk total trade from 2003 to 2014, but
Top: Table 3 - Houston Total Containerized Trade by Value Bottom: Table 4 - Houston Total Containerized Trade by Tonnage
Commodity Group
Avg. Annual 2014 Container Total Avg. Annual Container Trade % of Total Total Trade 2003-2014 (Billions USD) (Billions USD)
2014 % of Total
Houston Total Trade
$39
100%
$60
100%
Chemicals, Fertilizers, Plastics, and Rubber
$12
31%
$17
28%
Boilers, Machinery, Motors, and Electronics
$9
23%
$14
23%
Metals
$3
8%
$5
8%
Foodstuffs
$3
8%
$5
8%
Energy
$2
5%
$5
8%
Total Top 5 Commodity Groups
$29
75%
45
75%
Avg. Annual Container Total Trade 2003-2014 (Millions MT)
Avg. Annual % of Total
2014 Container Total Trade (Millions MT)
2014 % of Total
Houston Total Trade
17
100%
25
100%
Chemicals, Fertilizers, Plastics, and Rubber
7
41%
9
36%
Energy
2
12%
6
24%
Foodstuffs
2
12%
2
8%
Metals
1
6%
2
8%
Ceramics and Glass
1
6%
1
4%
Total Top 5 Commodity Groups
13
77%
20
80%
Commodity Group
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Houston waterborne trade exhibited a slight decline to 95% in 2014. These commodities are shown by Table 5. Tonnage Houston’s bulk and break bulk total tonnage trade rose from 100 million metric tons in 2003 to over 135 million metric tons in 2011. From this peak, tonnage dropped to 127 million metric tons in 2012 and 2013, then again to the current level of 123 million metric tons in 2014. As with the drop in value, the primary contributor to this drop in tonnage is the energy commodity group where the quantity of crude oil imports declined at a faster rate that the rise of the quantity of refined product exports. The top five bulk and break bulk tonnage components comprised 98% of Houston’s average annual bulk/break bulk total trade tonnage from 2003 to 2014. See Table 6. Houston Imports Value Houston’s imports grew steadily from $27 billion in 2003 to $78 billion in 2008, until the onset of the Great Recession drove imports down by over $30 billion to a low of $48 billion in 2009. Houston’s imports recovered to $83 billion in 2012, dropped $11 billion during 2013 to $75 billion and remained at this level through 2014. The primary driver of Houston’s imports is the energy commodity group where declining crude oil imports dropped in value by about $10 billion over the last 3 years. The top four categories represented 83% of Houston’s total average annual imports. See Table 7. Tonnage The tonnage associated with the imports portion of Houston’s trade rose from 79 million metric tons in 2003 to a peak of 94 million metric tons in 2006. Over the next 8 years, Houston’s trade tonnage imports cascaded downward in a series of multi-year steps reaching 69 million metric tons at the end of 2014, a beginning-toend difference of 10 million metric tons. The main component is again the energy commodity group where crude oil imports
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Top: Table 5 - Houston Total Bulk/Break Bulk Trade by Value Bottom: Table 6 - Houston Total Bulk/Break Bulk Trade by Tonnage
Commodity Group
Avg. Annual Bulk/ 2014 Bulk/ Break Bulk Total Avg. Annual Break Bulk Trade % of Total Total Trade 2003-2014 (Billions USD) (Billions USD)
2014 % of Total
Houston Total Trade
$84
100%
$107
100%
Energy
$48
57%
$59
55%
Chemicals, Fertilizers, Plastics, and Rubber
$12
14%
$15
14%
Boilers, Machinery, Motors, and Electronics
$10
12%
$12
11%
Metals
$8
10%
$11
10%
Transportation Equipment
$4
5%
$5
5%
Total Top 5 Commodity Groups
$82
98%
$102
95%
Commodity Group
Avg. Annual Bulk/ 2014 Bulk/ Break Bulk Avg. Annual Break Bulk Total Trade % of Total Total Trade 2003-2014 (Millions MT) (Millions MT)
2014 % of Total
Houston Total Trade
121
100%
123
100%
Energy
90
74%
87
71%
Chemicals, Fertilizers, Plastics, and Rubber
13
11%
13
11%
Metals
6
5%
9
7%
Grains and Milling Products
5
5%
6
5%
Salt, Sulfur, Lime, and Ores
4
3%
4
3%
Total Top 5 Commodity Groups
118
98%
119
97%
declined by 16 million metric tons from a peak of about 50 million metric tons in the first 10 years to 34 million metric tons in 2014. The average annual tonnage for Houston’s top four import commodity groups was 77 million metric tons or 95% of
Houston’s average annual tonnage imports during the 11-year analysis period. See Table 8. Houston Exports Value Houston’s exports experienced phemomenonal growth from $22 billion in
Houston waterborne trade Right: Table 7 - Houston Waterborne Foreign Imports by Value Right Middle: Table 8 - Houston Waterborne Foreign Imports by Tonnage Right Bottom: Table 9 - Houston Waterborne Foreign Exports by Value 2003 to over $92 billion in 2014. This growth was quite steep both before and after the Great Recession until temporizing between 2011 and 2014 at a level aound $90 billion each year. The export of refined products grew $30 million over the 11 year period, a 43% increase, contributed significantly to this growth in Houston’s exports. The four top export commodity groups accounted for $52 billion or 82% of Houston’s average annual exports from 2003 to 2014. See Table 9. Tonnage Except for a slight dip in 2009, Houston’s export tonnage grew each year, from 33 million metric tons in 2003 to 78 million metric tons in 2014, for a total increase of 45 million metric tons. The key component of this growth was refined petroleum products that grew from 15 million metric tons in 2003 to 50 million metric tons in 2014. The four top commodity groups totaled 52 million metric tons or 91% of Houston’s average annual waterborne foreign export tonnage. Details are displayed by Table 10. Conclusion Houston has a number of unique characteristics that make it an ideal location for commerce: • The port has five refineries with a capacity of 1.3 million barrels daily that equates to 7.5% of total U.S. refining capacity and 25% of Texas refining capacity. (Statistics based on Energy Information Administration and Department of Energy data.) • It’s one of the largest petrochemical manufacturing areas in the world with 120 plants within the Port of Houston area. • A world class gas processing facility located at Mont Belvieu has the capacity to fractionate 1.6 million barrels of gas liquids a day.
Commodity Group
Avg. Annual Imports 2003-2014 (Billions USD)
Houston Total Imports
$61
100%
$75
100%
Energy
$31
50%
$30
40%
Metals
$9
15%
$12
16%
Chemicals, Fertilizers, Plastics, and Rubber
$6
10%
$9
12%
Boilers, Machinery, Motors, and Electronics
$5
8%
$8
11%
Total Top 4 Commodity Groups
$51
83%
$59
79%
Commodity Group
Avg. Annual Imports 20032014 (Millions MT)
Houston Total Imports
81
100%
69
100%
Energy
60
74%
42
61%
Metals
7
9%
10
14%
Chemicals, Fertilizers, Plastics, and Rubber
6
7%
7
10%
Salt, Sulfur, Lime, and Ores
4
5%
5
7%
Total Top 4 Commodity Groups
77
95%
64
92%
Commodity Group
Avg. Annual Exports 2003-2014 (Billions USD)
Houston Total Exports
$62
100%
$92
100%
Chemicals, Fertilizers, Plastics, and Rubber
$18
29%
$23
25%
Energy
$17
27%
$33
36%
Boilers, Machinery, Motors, and Electronics
$13
21%
$18
20%
Transportation Equipment
$3
5%
$3
3%
Total Top 4 Commodity Groups
$51
82%
$77
84%
Avg. Annual 2014 Imports % of Total (Billions USD)
Avg. Annual 2014 Imports % of Total (Millions MT)
Avg. Annual 2014 Exports % of Total (Billions USD)
December 2015
2014 % of Total
2014 % of Total
2014 % of Total
w w w .t x g u l f. o r g
17
Houston waterborne trade • Two container terminals handled over 25 million metric tons of containerized cargo in 1.9 million loaded and empty TEUs during 2014. (Data based on Port of Houston Authority trade statistics.) • Bulk/break bulk cargo during 2014 was 123 million metric tons. • Steel imports and exports totaled over 10 million metric tons. • The direct value of Houston’s total waterborne foreign trade in 2014 was $458 million a day and represented 9% of the total trade of the U.S. While oil is the commodity that drives the port, Houston also handles chemicals, machinery, metals, automobiles, and foodstuffs - the Port of Houston can do it all! Ed. Note: The fourth installment of this series will focus on the top ports in the U.S. Read it in the January 2016 Port Bureau News.
Commodity Group
Avg. Annual Exports 20032014 (Millions MT)
Houston Total Exports
56
100%
79
100%
Energy
31
55%
50
63%
Chemicals, Fertilizers, Plastics, and Rubber
14
25%
15
19%
Grains and Milling Products
5
9%
6
11%
Metals
1
2%
2
3%
Total Top 4 Commodity Groups
51
91%
73
96%
Avg. Annual 2014 Exports % of Total (Millions MT)
2014 % of Total
BE0005
ò
Table 10 - Houston Waterborne Foreign Imports by Tonnage
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Coffee Waves
Coffee Waves:
What are They and What Might They Become? Bridget McGee, GHPB
The term coffee wave is commonly attributed to Trish Rothgeb, owner, green coffee buyer, and roastmaster of Wrecking Ball Coffee Roasters, when she coined the term for an article in 2002. However, coffee waves have been rising and receding since the 1800s. Coffee waves are simply the trends that get picked up by coffee consumers and greatly influence the industry. Most coffee industry viewers would say that we are currently under the third wave, but new trends are being implemented every day and we may soon see a move into the fourth wave. What are the Waves? As with most long-lasting industries, the coffee industry responds to changes in technology and consumer preferences. The coffee waves represent significant evolutions in the coffee industry, in the same vein as the Industrial Revolution signifies the transition from hand production to machine-assisted manufacturing.The timeline generally agreed upon for the waves has been mid1800s to 1970s for the first wave, 1970s to 2000 for the second wave, and from the end of the second wave until now for the third. First Wave The first wave of coffee is characterized as the increased consumption and popularity of coffee in the mass market. Folgers and Maxwell House pushed that movement by
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producing cheap, ready-to-make coffee. The invention of vacuum packaging was another huge factor in making coffee a staple in American kitchens. Vacuum packaging is as much as it sounds: it sucks all of the air out of coffee tins (now bags) to keep the beans fresher for longer. Along with practical packaging, Americans needed machines to make home coffee-brewing easier. The Mr. Coffee® brewing machine was introduced in the early 1970s. It was the first drip coffee machine readily available to coffee consumers and soon replaced percolators as the favored in-home brewing appliance. This coffeemaking convenience led quickly to another, and instant coffee also gained in popularity among busy consumers. The process for instant coffee originated in the early 1900s from the system used to dehydrate tea leaves. Since it didn’t require any brewing equipment, it was ideal for soldier rations. By the late 1930s, Nestlé became the primary supplier of instant coffee, known as Nescafé, especially marketing it to soldiers in WWII. The modern American loved the easy and quick service that instant coffee brought about. Nevertheless, by the 1970s, consumers complained that coffee abundance was hurting coffee quality. Enter: the second coffee wave.
Second Wave As much as the first wave was about quick at-home brewing, the second wave was about creating a community of coffee consumers and improving the quality of coffee products. Beginning in the 1970s, coffee became more of an experience and conversation, rather than a quick boost to get through the day. This idea was implemented by the creation of more brick-and-mortar coffee shops to provide a sociable environment for coffee drinkers, most famously encapsulated by Starbucks. Starbucks is one of the most prevalent coffee chains across the world. The stores sought to offer more unique coffee variations, to answer the question -- “Why not just stay at home and make my own coffee?” -- and a cozy atmosphere to encourage the consumer to stick around and learn more about their coffee. However, as specialized coffee became more available through large, corporate coffee shops like Starbucks, people started to care more and more about how that coffee tastes and where it came from. As a response, small, local coffee shops focused on custom roasts and sustainable growing practices have opened, leading to the third wave. Third Wave Starting around 2000, the tide once again changed, and coffee consumers
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Coffee waves desired not just a sociable environment, but transparency of the coffee industry. In the current wave, consumers want to know what regions the beans come from, how they are roasted, and how sustainable the farming practices are. From this need for transparency came the designation of “fair trade coffee.” Fair trade coffee is the designation given companies that work almost directly with coffee farmers to promote better conditions for trading, more environmentally sustainable farming practices, and a prohibition of child labor. Included in environmental sustainability is the label “bird friendly.” Many birds’ habitats and migratory patterns have traditionally been disrupted by coffee farms; however, the trends of the third wave have encouraged growers to be conscious of their impact. A new technology that emerged during the third wave: single serve coffee pods. Originally created by Keurig, these small, completely enclosed coffee pods have swept the coffee industry. However, even though this is a machine invented during the third wave, its purpose fits better into the first wave, and indeed, such pods and brewers are just a more sophisticated version of drip coffee makers. The prevelance of these K-cups® are also a hallmark of the first wave’s intent to make coffee convenient and widely-accessible to consumers in their homes. Therefore, as much as it is a recent invention, the personality of the Keurig and K-cups® make them belong to the first wave. Fourth Wave As consumers’ tastes become even more refined, what could be the future of coffee? There is not a widely held consensus yet on what the fourth wave will entail or if we may already be in it. However, there have been some recent trends in the coffee world that do not completely fit the trends found in any of the previous waves. The most widely followed trend is an exploration of new brewing techniques, whether
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w w w .t x g u l f. o r g D e c e m b e r 2 0 1 5
revitalizing old ones or adopting techniques from other countries. First, a technique from another country: the French press, a small pitcher-like device, ideal for at-home brewing. This technique is not novel in the United States; however,
coffee shops started serving coffee brewed in a French press relatively recently. A revitalized method is the vacuum or siphon coffee maker made of two verticallystacked and connected chambers. In the top chamberare the coffee grounds, and water
Coffee waves is in the lower. As the water in the bottom is heated, the water is pushed between the two chambers, brewing the beans. This has become a common (and impressive looking) brewing process; there is even a coffee shop
in Houston that specializes in this brewing technique. “Nitro coffee” is a new brewing technique. This cold brewed coffee is combined with nitrogen and pulled into a pressurized tap, very similar to a beer tap in a bar. In fact,
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the coffee is poured out bubbly and is served in a tall glass, making it look almost exactly like a pint of beer. Along those lines, new technology may be a large factor in the new fourth wave in general, not just in brewing techniques. Designer hand-made espresso machines are a recent advancement in luxury coffee making. These computerized espresso machines come in various finishes and designs, making them both attractive and technologically sophisticated. In response to customers’ focus on flavor, the machine allows the barista to program specific water pressures and pouring times, even in midshot. Not only is the espresso shot itself getting more sophisticated, but the latte art on top of the beverage is getting an upgrade through 3D printing. 3D printing has been aggressively evolving in recent years, going from making small trinkets to human organs, so it is natural that it would find its way into the coffee world. There are several devices now that utilize 3D printing ink-jet mechanisms to print words or images onto a customer’s coffee. With some machines, the customer can even use an app on their smart phone to upload their own image to be printed. Where the fourth wave is heading, or if we’re in it now, is still up for speculation. However, no one can deny that coffee has changed drastically in the past century and a half. From mass-produced coffee that consumers make at home to cold brewed coffee that is poured out of a tap with your face printed on the top, the coffee industry will continue to amaze. Ed. Note: Bridget McGee has served a fall internship at the GHPB. She graduates this month from the University of Houston and will be moving on to new opportunities. We wish her much success!
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December 2015
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23
Trade update
Waterborne Foreign Trade Statistics: Third Quarter of 2015
Bridget McGee, GHPB
U.S. Trade Overview
Waterborne trade for both the U.S. and Houston has stayed relatively stable through the end of the third quarter, the most recent trade data available. From July to September, crude oil prices continued to fall dramatically, declining about 20% during that single quarter. At the national level, waterborne crude imports have fallen around 50% by value year-to-date September 2015, from $133.5 billion to $64.8 billion. Car and passenger vehicle imports continue to outrank crude oil based on import value; however, based on tonnage, crude oil beats cars by a very large margin. China continues to be the U.S.’s largest waterborne trading partner, even with its slowing economic growth. Through September, the U.S. exchanged almost $280 billion in goods with China, a 4% increase from last September. As far as imports are concerned, it is too early to see any increase in consumer purchases for the coming holiday season. Although the peak shipping season started in July last year, a report from JOC indicated that shippers expected it to be pushed back several Top U.S. ports by waterborne value, Q1 through Q3 2015, in billions USD months this year. 4
2 Newark, NJ
All Other Seaports $397.0B (33.4%)
$131.3B (11.1%)
5 Long Beach, CA $67.2B (5.7%)
3 Houston, TX
$107.8B (9.1%)
7 9 Tacoma, Norfolk-Newport WA News, VA $38.5B (3.2%) $54.6B (4.6%)
1 Los Angeles, CA $203.3B (17.1%)
6 Charleston, SC $61.3B (5.2%)
Savannah, GA $69.2B (5.8%)
8 Baltimore, MD $38.5B (3.2%)
10 New York, NY $36.3B (3.1%)
Top U.S. ports by waterborne tonnage, Q1 through Q3 2015, in million metric tons
1 Houston, TX
2 New Orleans,
114.7 MMT (12.1%)
LA 72.7 MMT (7.7%)
3 Los Angeles, CA 60.5 MMT (6.4%)
All Other Seaports 452.3 MMT (47.7%)
4 Gramercy, LA 44.5 MMT (4.7%)
Port of Houston Authority
Houston: America’s Distribution Center www.portof houston.com/map
5 Newark, NJ
40.8 MMT (4.3%)
9 Long 8 Corpus Beach, TX CA Christi, TX 36.9 MMT (3.9%) 30.5 34.2 MMT MMT (3.6%) (3.2%) 6 Port Arthur,
7
Norfolk-Newport News, VA 36.3 MMT (3.8%)
10 Mobile, AL 25.2 MMT (2.7%)
Source: GHPB analysis of U.S. Census Bureau data
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Trade Update
Texas Ports
Almost all the deep draft ports of Texas have seen trade decreases, mostly likely due to continually falling oil prices. However, because the Port of Houston imports and exports a greater diversity of cargos than the other Texas ports, it has not been hit nearly as hard. Year to date, Houston saw a 15% decrease in trade; in the next largest Texas port by tonnage, Port Arthur, trade fell by nearly 50%. Part of Houston’s resiliency may be due to diversion cargo. The Port of Los Angeles, the largest port by value in the U.S., had many traffic and labor problems earlier in the year, which led to some goods coming into Houston rather than LA. While some of the cargos have since returned to LA, part of the diversion cargo has persisted and may become a permanent fixture in Houston’s trade.
114,688,151 36,885,514 34,182,205 18,104,399 15,107,480 11,201,844 5,245,765 4,788,741 2,062,366 11,962
3.2% -9.8% 9.7% 4.6% 9.0% -7.1% -25.1% -0.3% 75.5% -
YTD Value % Change
YTD Tonnage (Metric Tons)
1 6 8 14 17 27 37 40 61 137
YTD Value (billions USD)
National Rank by Tonnage
Houston Port Arthur Corpus Christi Texas City Beaumont Freeport Galveston Port Lavaca Brownsville Orange
YTD Tonnage % Change
Texas Ports
Deep Draft Ports of Texas
$ 107.60 $ 13.22 $ 1.31 $ 8.78 $ 0.64 $ 4.81 $ 4.45 $ 0.75 $ 0.94 $ 0.09
-15.4% -48.5% -32.3% -35.2% -33.2% -34.4% -31.5% -26.0% 25.2% -
Source: GHPB analysis of U.S. Census Bureau data
December 2015
w w w .t x g u l f. o r g
25
Trade update
Houston Exports Rank
Commodities Total exports Oil (not from crude) Petroleum gases, other gaseous hydrocarbons Polyethylene Parts for heavy machinery Cyclic hydrocarbons Ethers, ether-alcohols, alcohol peroxides, etc. Taps, cocks & valves for pipes, etc. Crude oil Pumps for liquids acetic acids, ethyl acetates, etc.
1 2 3 4 5 6 7 8 9 10
YTD Value (USD) $ $ $ $ $ $ $ $ $ $ $
59,896,945,057 14,091,171,075 3,200,954,856 2,409,742,540 2,041,257,070 1,741,307,042 1,449,585,079 1,322,163,939 1,052,302,793 885,849,159 878,066,221
YTD Value % YTD Tonnage YTD Tonnage % Change (Metric Tons) Change -14.5% 64,929,967 10.7% -22.2% 26,229,762 30.9% -45.9% 10,283,122 16.3% 6.0% 4,214,557 -16.7% -24% 3,012,111 180.2% -30.8% 1,979,400 8.9% -13.2% 1,754,274 2.7% -1.1% 1,686,030 12.2% 48.7% 1,654,954 23.6% -2% 1,162,496 -61.2% 5.2% 1,127,644 6.1%
Total Houston exports have continued to decline in value, down year-to-date by 14.5%. However, the total tonnage Houston exported increased by 10.7%. Crude oil exports fared especially well, increasing by 48.7% in value and by 180.2% in tonnage. Almost all crude oil went to our neighbor in the north, Canada, and a small amount shipped to the Netherlands. The only commodity that has fallen as far as tonnage is concerned is heavy machinery parts, which fell by 32.9% September year-to-date.
Houston Imports Rank 1 2 3 4 5 6 7 8 9 10
Commodities Total imports Crude oil Oil (not from crude) Seamless iron & steel tubes, pipes, etc. Cars & motorized passenger vehicles Iron & steel tubes, pipes, etc. Cyclic hydrocarbons Taps, cocks & valves for pipes, etc. Imports of returned exports Vegetable extracts, saps, agar, etc. Aromatic mixtures for food & drink
YTD Value (USD) $ $ $ $ $ $ $ $ $ $ $
47,706,984,854 7,919,373,402 3,777,046,742 2,501,373,858 2,387,070,132 1,290,612,572 1,027,645,501 838,358,682 582,312,530 475,715,963 433,665,581
YTD Value % YTD Tonnage YTD Tonnage % Change (Metric Tons) Change -16.5% 49,758,184 -5.2% -57.4% 20,666,493 -20.1% -21.1% 7,783,133 31.2% -16.3% 1,708,931 46.0% 30.8% 1,635,693 1.7% -24.0% 1,577,497 -1.0% -31.5% 1,419,415 -23.6% 14.9% 1,409,677 -17.7% 10.7% 1,023,683 -8.4% -36.9% 650,890 -36.5% 38.6% 539,485 69.4%
Much of Houston’s imports remained consistent between the second and third quarter. Crude oil is still at the top, with 20.6 million metric tons. The import of cars and other passenger vehicles increased year to date by about 2%; however, the future import growth of that commodity is uncertain. The Port of Houston is one of Volkswagen’s U.S. import and storage ports, and whether or not the models moving through Houston are impacted by the recall is not published information. This, combined with the timing of the available trade data, which ends shortly after Volkswagen’s announcement to halt affected model sales, means that the impacts on Houston are not yet understood. The aforementioned supply chain bottleneck in LA shifted some new and lesser-seen cargos to Houston’s portfolio. This shift is perhaps most shockingly seen in the odiferous/aromatic mixtures for foods and beverages commodity category. Essentially, these are mixtures added in food or drink manufacturing which provide a flavor or a pleasant smell; some examples are vanilla, orange, or cherry. According to the September U.S. trade data, Los Angeles imported 1,383 metric tons less of aromatic mixtures, while Houston imported 1,315 metric tons more of the same commodity. These mixtures have a high dollar-per-ton value, so the increased cargo brought Houston’s total aromatic mixtures imports to $433.7 million, among the Port of Houston’s top ten commodities by value. Many of the other items that similarly moved from Los Angeles to Houston were foods, such as chilled or frozen pork, rice, and wine.
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w w w .t x g u l f. o r g D e c e m b e r 2 0 1 5
Sea & Shore
Ship & Store
www.odfjell.com
The Odfjell Group is a leading participant in the global market of seaborne transportation and storage of chemicals and other specialty bulk liquids. The Odfjell Tankers fleet of about 90 ships, trades globally and regionally. The Odfjell tank terminal division of 12 partially owned tank terminals is in a network with 12 other tank terminals partly owned by related parties. The terminals are all strategically located around the world, and with Odfjell Group headquarters in Bergen, Norway, the Company has more than 20 offices world wide.Odfjell has about 3,500 employees and annual gross revenue of about $1.2 billion.
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Trade update
5 1
9
7
2
4
6
10
3
8
Rank
Country
1 2 3 4 5 6 7 8 9 10
World Total Mexico China Brazil Germany Netherlands South Korea Colombia Venezuela Belgium Italy
YTD Value (USD) $ $ $ $ $ $ $ $ $ $ $
107,603,929,911 9,675,144,711 9,485,919,298 6,382,390,055 6,208,857,900 4,750,827,267 4,151,476,829 3,437,646,377 3,266,782,832 3,257,884,798 3,086,799,227
YTD Value % Change -15.4% -38.9% 41.8% -31.3% 7.3% -3.0% -19.4% -34.9% -8.9% 3.1% 2.9%
Trade Balance $ $ $ $ $ $ $ $ $ $ $
12,189,960,203 (425,358,837) (1,952,266,340) 1,834,426,031 (3,471,982,474) 2,808,413,637 (694,148,665) 1,159,459,771 2,334,936,120 1,738,502,400 (1,451,946,993)
YTD Tonnage (Metric Tons) 114,688,151 21,723,915 7,697,578 7,537,004 1,269,316 4,859,389 3,661,340 5,407,315 3,960,814 2,781,661 2,290,283
YTD Tonnage % Change 3.2% -2.7% 52.9% -21.5% 2.2% 41.5% -13.4% 0.8% 24.5% 34.3% 18.3%
Houston’s Trade Partners
By the end of September, Houston was still operating at a trade surplus of about $12.2 billion, even though the U.S. had a deficit of about $414.3 billion. However, even with a surplus that almost doubled from June to September, Houston trade is down by 15.4% by value compared to the same period last year. For this quarter, Mexico surpassed China as Houston’s top trade partner by about $189 million and about 14 million metric tons. This is mostly likely due to China’s recent economic decreases.
Looking Forward
The unknowns continue to be falling oil prices and China’s economy. However, even with uncertainty in China, exports to it and Asia as a whole have increased by 36% and 0.44%, respectively. While crude is essential to the world economy and is unlikely to fall out of the top ten for Houston imports anytime soon, low oil prices are still a driving force in the broader Houston economy. The Texas Workforce Commission reported 4,000 lost energy jobs September year-to-date, and as of the November Economy at a Glance update, the Greater Houston Partnership believes that number will be revised even lower. A key new factor to consider is the strength of Volkswagen’s imports through the end of the year, which will hinge on its ability to remedy the emissions issues and regain customer trust. Another, potentially positive, unknown is whether Houston will be able to hold on to the extra imports diverted from Los Angeles. When comparing containerized vessel values and tonnage, Los Angeles fell by about 7.9% and 3.3%, while Houston increased 5.5% and 7.4%, respectively. Maintaining those gains would be very beneficial for the future of the Port of Houston.
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Year in Review Synergy – the collaboration and interaction that makes us stronger as a community – has been the focus of the Port Bureau’s 2015 activities. Building on the careful work of previous years, we kept the momentum rolling in 2015 as the membership experience expanded to include wider support of maritime values and a variety of developments, events, and outreach efforts benefitting the port region. The spring of 2016 looks to welcome the long-awaited opening of the Panama Canal, and we believe it will be a season bursting with opportunities for the port community. We anticipate prosperous winds blowing for ocean-going business in Houston!
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Port Bureau Reports reach over 7,000 professionals in the maritime community. Business Development, Outreach, & Advocacy The Port Bureau staff diligently works for and with community partners to promote the value of the port industry. Our goal is to add new efforts each year to reach further out and encompass more opportunities to maximize global market share. In 2015, we met with international delegations from Colombia, United Kingdom, Mexico, Panama, South Korea, Vancouver, Germany, and the Netherlands. These meetings included port tours, discussions, and presentations of the unique values inherent to the Port of Houston’s maritime highway. CAPT Diehl spoke to over 30 groups this year to promote and advocate for the port region. His audiences ranged from real estate professionals to economists to potential port users. In addition, CAPT Diehl sits on the Texas Southern University Marine Transportation Security Board and the Houston International Seafarers Center Board. The Port Bureau started two successful committees to study traffic efficiencies and explore more dredging strategies for the future. The traffic efficiency group, chaired by Captain Tim Downs from Shell Trading (US) Company, spent several months creating metrics for port optimization on a variety of topics from detention to lay-by berth utilization. As the year ended, a working group dedicated to the optimization of chemical tanker movements made preparations to stand up a watch-center for information sharing between operators, terminals, and agencies on the channel. The dredging committee, chaired by David Weston, HDR, Engineering, started partnering with the Port of Houston Authority and the U.S. Army Corps of Engineers Galveston District to provide more effective communication to and between companies with dredging needs. The Port Bureau staff also participated in the Lone Star Harbor Safety Committee and its subcommittees, working with other industry stakeholders on safety issues.
Analysis Reports & Projects
The Port Bureau News magazine published a variety of reports authored by our analyst team during 2015. These reports are also available in an online archive on the Port Bureau’s website. The staff also contributed efforts to grant writing projects in 2015 and provided ongoing support for the GLASS (Global AIS on Space Station) grant project that was awarded in 2014. This project will investigate the potential benefits of vessel tracking via the International Space Station and initial analysis data should become available in 2016. The Marine Exchange, the foundation of our information hub commitment, tracks vessel movements in Texas ports. The Marine Exchange produced daily vessel movement reports, weekly estimated time of arrival reports, and monthly vessel statistical reports. The weekly
Port of Houston Authority leaders meet with UK Consul General Karen Bell and her staff after a Port Bureau Commerce Club. From left: Ron Farrow, PHA; Lauren George, British ConsulateGeneral Houston Office; Marcus Woodring, PHA; William Myers, British Consulate-General Houston Office; Roger Guenther, PHA; Consul General Bell; Spencer Chambers, PHA, Bill Diehl, Port Bureau.
Key Reports in 2015 • Oil, Commodities Markets, and Price - a Sequel • Oil Prices, Rig Counts, and Layoffs – Looking at the Effects of Falling Oil Prices on the Texas Oil Industry • Understanding the Vessel Transit Process • Crude Oil by Rail: What Goes Around, Comes Around • The Port Bureau’s Vessel Movement Database: What’s Behind the Curtain? • Brownwater Operators Rise to High Water Challenges • Foreign Trade Statistics – Houston Ranked First by Waterborne Tonnage for JanuaryApril 2015 • Houston Trade Partners • Spotlights on: PTRA, Texas Terminals, Dave Morrell and Harborlights, Tim Haas of Watco, Shrader Engineering, Manchester Terminal, Mark Vincent, and Charles Flournoy • Free Trade Agreements: What are the Transatlantic Trade & Investment Partnerships and the Trans-Pacific Partnership • Waterborne Foreign Trade Statistics Quarterly • U.S. Waterborne Foreign Trade: U.S. Imports and Exports and Houston Imports and Exports
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Most successful Maritime Dinner in Port Bureau history with 80 tables, almost 800 attendees. reports are available to member subscribers, while the monthly reports are distributed to all members at no charge. We also kept members apprised of channel conditions during the fog season and incidents through timely alerts and information updates.
Professional Development and Education Attendees at the CPE Certified Port Executive training program, hosted by the Port Bureau in the fall of 2015, received instruction in the transportation system as well the operations of port, vessels, and marine terminals. The Commerce Club series of educational luncheons offered guests access to informative speakers from the maritime, transportation, and petrochemical sectors. The Port Bureau also hosts luncheons in partnership with the Greater Houston Coffee Association and the Houston Ship Channel Security District. The 2015 speaker line-up included: • Keith Meyer, President & CEO, LNG America • Peter Fasullo, Principal/Founder, En*Vantage, Inc. • COL Richard Pannell, Army Corps of Engineers Galveston District • VADM C.D. Michel, Deputy Commandant for Operations, USCG • Capt. Tim Downs, General ManagerShipping & Maritime-Americas, Shell (US) Trading Company • Jennifer A. Carpenter, Executive Vice President, American Waterways Operators • Ed Bastian, Global Sales Director, BBC Chartering • Roger Guenther, Executive Director, Port of Houston Authority • Christi & Ragan Bond, Founders, Independence Coffee Company • CAPT Brian Penoyer, Sector Commander, USCG Sector Houston-Galveston • Capt. Mike Morris, Presiding Officer, Houston Pilots
generation, the dinner was a milestone event for the Port Bureau and our members. The Commerce Club luncheons built on its record-breaking success in 2014, gaining in attendance in 2015. The Port Bureau also assisted in planning and hosting an appreciation lunch in February to honor the U.S. Coast Guard and U.S. Custom and Border Protection for their invaluable work at the Port of Houston. The Captain’s Cup Golf Tournament teed-off once again at BraeBurn Country Club with team slots and sponsorships a sell-out for the seventh year in a row. The Greater Houston Coffee Association hosted cocktails and dinner for their members aboard the M/V Sam Houston for a sunset sail on the Houston Ship Channel in April. Coffee Association members also gained from an informative visit to the Atlantic Coffee Solutions facility, touring its large packaging and distribution system. The Houston Ship Channel Security District annual luncheon provided stakeholders and guests an informative update on the District’s work at the Houston Marriott South in November.
Looking Forward to 2016
The coming year is ripe with potential for the maritime community. The Port Bureau is committed to finding new and innovative ways to drive business development for our members and to support the advocacy missions necessary to support the Port of Houston and ship channel stakeholders as not just a global player, but a global leader. Whether your company is a longtime Port Bureau member, or you are discovering us for the first time, give us a call to make 2016 the year you get more informed, more involved, and better at business in the maritime community.
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Events
Port Bureau events offered abundant networking and business development opportunities. Our flagship event, the 86th Annual Maritime Dinner, attracted nearly 800 guests in 2015. Honoring ExxonMobil for its contributions to the Houston maritime community and its investment in education for the next
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Maritime professionals gathered for networking and knowledge at the Commerce Club luncheons.
Membership surpasses 200 companies for the first time signaling continuing growth. ABS Americas Limited
ABSG
AllTrans
Consulting, Inc. (ABS Consulting)
Port Services, Inc.
Water Shipping Co. LLP
Burleson
Inc.
Briggs
Caldwell
Cargill, Inc.
Marine
Terminals, LLC
CLM Towing, LLC
Engineering
Companies
Briggs
Coastal
Inc.
ExxonMobil
Mohn Houston Inc.
Incorporated
D'Onofrio
Baytown Refinery
Tompkins, Burr, and Smith
Innovations**
Marine Supply
General
Gulf
Bank
IBC
ICIS
Iv-INFRA
USA, LLC
Corporation
Inc.
Bank
Morris
Export Services
Nordic Tankers
Financial
Houston Authority Companies
Schröder
Americas, Inc.
Corp.
Company, Marine Division
JPMorgan
Liberum Consulting, Inc.
Chemical Tankers, Houston Mosaic
Mutual
Norton
Inc.
of Texas City
Rickmers-Linie
South
Stepp
Resources
Trustmark
Helicopters, Inc.
of Omaha Bank** Petroleum
Port
Port Terminal
RCS
(America) Inc.
Texas
Citizens Bank
RightShip**
National Bank
Bank
Fargo Bank
Royston
Southport
The
Ships Service
Wm
Marine Services
Morgan Terminals
LNG
Shipping
Gulf Shipping Agencies, New
Holdings (US) Inc
Port
of Harlingen
Ports
Regions
Century
Orion
R. W.
SAVAGE
Shipyard LP
Shrader Spliethoff
T. Parker
International Terminals, LTD.
Overseas, Inc.
World
Watco
Company
Host
Texas
Transmarine
Vopak
Westway Terminal
of
Richardson
(US) Company
Southwest
Port
America
Bank**
& T Marine Salvage, Inc.
Morris Enterprises
Intertek
Mediterranean
Dow Chemical Company
UTC
Gas Services,
Isabel-San Benito Navigation District
Shell Trading
Texas
Houston
Engineering, Inc.
Moran
Hedges LLP**
T
Marine
Intl. Ship Repair & Drydock, Inc.
Odfjell
Port
Agencies, Inc.
Gulf Maritime Association
Ship Supply/Wrist USA
Javeler
Rayzor Vickery & Williams L.L.P.
Marine
Department of Transportation
and Border Protection
Inert
Environmental & Marine**
of Galveston
Porter
& Young Towing Company
West
Wilhelmsen
World
Freeport
Port
Shamrock
ACTion Group Companies
U.S. Customs
Wells
Whitney
Texas
The
Monico, Inc.
Gulf
Harley
Corporation
Kinder
Lloyd
Group LLC dba Caisson Fabrication**
Maritime Services**
Suderman
Port
of Brownsville
Gas
International Insurance Services
Intergulf
Malin
Shipholdings, Inc.
Railroad Assoc.
Atlantic and Gulf Coast District- ILA
& Sullivan, P.C.
HUB
Frank
Galloway, Johnson,
Houston NASA Clear Lake**
Hilton
International LLC
Group
Nature
Ocean
Enviro-Tech
Shipping Services (USA)
Environmental Services
Building Companies, Inc.
Shirley, LLP
Enterprise
Sohn NA LLC
Industrial Terminals, LP
Houston, L.P.
McCarthy
End Chamber of
Lines
Heavy Lift Americas, Inc.
LLC
Jacintoport
LBC
Shipping
Fr. Meyer's
of Panama**
Dannenbaum
East
Executive
Company LLC
MacDonnell
Mills
Lilly International
Peninsula
Seaways
Texas Terminals, L.P.
Greensport Industrial Park
KPLER**
Freight Lines
Consulate
Empire Truck
Chase Bank, N.A. ( J.P. Morgan Securities LLC)
LyondellBasell
Channel
Clark
lnternational Seafarers Center, Inc.
Houston Terminal
Shipping Services
Inchcape
& Co, P.C.
Shipping (USA) Inc.
Marine
Houston
Cardinal
Marine & Industrial Supplies, Inc.
HANSA
Hellenic
Blue
Marine Service, Inc.
Shipping USA Ltd
Garner
Gulf
Intercontinental Terminals
Kistner Consultants Inc.
Marine Services Inc.
Engineering Co.
Mooring, LLC
Port
Raba
Engineering Inc.
Fuel Oil Terminal Co.
Bridge Oil New York
(Texas)
GAC
Wynne Sewell LLP
Winds International, Inc.
Chalos
Enterprise
Services Inc.
Marine LLC
Florida
Houston Partnership
Ship Repair, Inc.
Mansfield/Willacy County Navigation District
Smith & Co., Inc.
Targa
America, Inc.
Palletized Trucking
Marine Group**
Port
Houston
Houston
Mare
Milestone
Excargo
BB&T
Bettencourt
One Bank
Citibank
Security Systems, Inc.
Dowley
& H Towing Co.
Gardere
HDR
& Newman, Inc.
Manchester Terminal, LLC
MidSouth
Gulf
J.A.M. Distributing
KPI
G
Greater
& Marine Services, LLC
Lockwood, Andrews
America
City Pilots
Impex
L. Wortham & Son, L.P.
John
Kirby
Pilots
Inbesa
Integrity Terminal
LLC
Hazel
Depot
Buffalo
Bonded Warehouse
d'Amico
Products Partners, L.P.
Enterprise
Bank
Gulf Inc.
America Inc.
Alliance Houston Port Region
Protection Service, Inc.
Frost
GAL-TX
Houston
Ceres
Co.
Marine LLC
Capital
Inc.
American
Bet Marine Services
Bludworth
Cartage Company
Consolidated
Management Works
Economic
Equipment
Steamship Corp.**
Business Insurance Company
Mooring Co., Inc. Inc.
Fire
CNG
Stream Marine, Inc.
Services/Harley Marine Gulf
Houston
Resources Ltd. Co.
Freedom
International
Best
Rome LLP
Chipolbrok
AET
Bay-Houston Towing
& Gay Engineers, Inc.
Brown
Healthcare Services
Colliers
Houston Regional Medical Center
Envision
Logistics, Inc.
Blank
Canal
Coast, Inc.
of Texas
AECOM**
Commercial Lines**
American
Distribution Services, Inc., HUDD Transportation
Houston Ship Channel L.P. (formerly Oiltanking, LP)
Specialties Inc.
Bank
Bank
Bertling
Equipment
Central Chem
Cargo
Amegy
Marine, LTD
Callan
Stevedoring Co.
Damco
Danner’s
East
& Veselka Co.
Logistics and Consulting, Inc.
Axiom**
International Inc.
Blades
Cargoways, LLC
Chaparral
Cooper/T. Smith
Commerce
& Company
Biehl
Group, Inc.
Berard Transportation
Branch Banking and Trust Company Tax Advisors LLC
Alphamar-IMW
Argosy Transportation
Shipping & Chartering
ACM
Navigation
Companies-
Westwind
Chandlering International Inc.
** New members welcomed in 2015
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Captain's Cup
The 7th Annual Captain’s Cup Golf Tournament Alliant Wins the Cup Judith Schultz, GHPB The weekend wind and rain couldn’t keep the sun – or the avid golfers – from coming out for the Port Bureau’s sold out 7th Annual Captain’s Cup Golf Tournament hosted on November 2, 2015. The mild, sunny weather prevailed as the four-player shambles teed-off on BraeBurn Country Club’s beautiful, if slightly soggy, rolling green. The BraeBurn course lived up to its well-earned reputation as a superior place to play as teams competed throughout the afternoon. Presenting Sponsor BB&T Branch Banking and Trust Company sponsored a special gift for all of the golfers – Yeti coolers! Alliant won first place gross score with players Tim Studdert, Tara Battles, Jason Ellis, and Sean Wagner. Alliant’s commemorative plaque will be featured in the Port Bureau’s offices until the 2016 winner claims the spot. First place net went to the Rickmers-Linie team of Bill Wode, Jode Shupe, Rob Silsbee, and Dave Morgan. Additional team wins went to: • Second place gross: Briggs & Veselka Co. ( Jamie Sylvester, Andy Kuntz, Cliff Walston, and Kevin Harris) • Second place net: Danner’s Inc. (Brad Maxcey, Jeremy Rose, Doug Maxcey, and Mark Pippen) • Third place net: Coating Systems & Supply ( Jarret Phillips, Jeff Speck, Craig Lagrone, and John Ravenberg) The Captain’s Cup tournament featured several contests for closest-to-the-pin, holein-one, and longest drive. While capturing the $10,000 hole-in-one prize remained
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Captain’s Cup first place gross team, Alliant, of Tim Studdert, Tara Battles, Jason Ellis, and Sean Wagner elusive, Rickmer-Linie’s Jode Shupe came just a foot away. The longest drive was claimed by Jeremy Rose and closest-to-thepin winners were Rick Bates, Cliff Walston, and Bob McHugh. The Port Bureau extends hearty congratulations to the Captain’s Cup winners and thanks all the players for a great day of sport. In addition to our generous sponsors, we would also like to thank the Golf Committee for their hard work: Tim Studdert (Shamrock Marine), Dallas Hall (BB&T Branch Banking and Trust Company), Brad Maxcey (Danner’s Inc.), and Jamie Sylvester (Briggs & Veselka Co.).
The Captain’s Cup has sold out quickly every year. If you or your company are interested in participating in the 2016 tournament, please send an email to golfinfo@txgulf.org to receive updates.
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Near hole-in-one by Rickmers-Linie
captain's cup
Clockwise from top left: Dallas Hall and volunteers from BB&T with the Yeti Coolers given to the players; Chris Robblee of Vopak receives his cooler before the tournament; Players gather at their carts listening to instructions and readying to play; a putt is sunk on the practice range before the event.
The 7th Annual Captain’s Cup Golf Tournament PRESENTED BY
Thank you to all of our sponsors!!!
DINNER SPONSOR
BEVERAGE CART
LUNCH SPONSOR
LONGEST DRIVE
DINNER BAR
CLOSEST TO THE PIN
HOLE-IN-ONE PRACTICE RANGE PUTTING GREEN
Alliant Alpha Mar IMW Amegy Bank Berard Transportation Blank Rome LLP CLM Towing Coating Systems Danner’s Inc.
HOLE SPONSORS
ExxonMobil Frost Bank Houston Mooring Co. Houston Pilots Hydra US Laborde Products Manchester Terminal Odfjell Terminals
Port of Houston Authority Port Terminal Railroad Association Rio Marine, Inc. Team Services Texas Mooring Texas Terminals Toucan Transportation Watco Companies
December 2015
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Greater Houston Port Bureau www.txgulf.org 111 East Loop North Houston, TX 77029 (713) 678-4300 A Publication of the Greater Houston Port Bureau The Port Bureau News magazine is a monthly publication of the Greater Houston Port Bureau, a member-driven non-profit dedicated to promoting the maritime community, providing vessel movement information, and offering members premier networking and advertising opportunities to drive business. The magazine is distributed to over 7,000 professionals in the Houston maritime community via U.S. mail and email. Advertising is available for members.