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Port Bureau News February 2011

Education What Does Industry Get Out of It? Maritime Education in India

Spotlight on Jim Black President—Moran Gulf Shipping Agencies

The M/V San Brooklyn: Buffalo Marine’s newest Towboat works the Houston Ship Channel

Captain’s Corner

Education: An Ornament in Prosperity, and a Refuge Through Adversity

When I was stationed in Panama, once in a while I’d get the opportunity to interact with some of my children’s friends. Watching them play in the street or chatter amongst themselves, it struck me— the kids were switching between languages. Some of the seven and eight year olds spoke three or four languages, but even more astonishing is that they thought very little of it. That made a tremendous impression on me. As an adult, I was struggling to improve my Spanish, but to the children, it was as natural as kicking a ball or climbing a fence. Thinking about it further, this is emblematic of any type of education. The younger you start, the more experience contributes to building a more productive, versatile and accomplished individual. Maybe none of those kids will become linguists, but I’m certain that the ability to think in different languages helps them approach problems in their workplace differently to this day. Education is the key. Victor Hugo once said “He who opens a school door closes a prison.” I’ll go further than that and say that an educated workforce is one that’s going to constantly be able to meet the demands of industry and move us towards the future. Universities are not the only place to receive an education. In Vocational programs—at the high school and college levels—have great value by ensuring that workers have skills that can immediately be used by the workplace. We’re lucky in Houston to have a leg up on other cities. Because of active community involvement and industry partnering with our institutions of higher learning, we have programs that are starting to provide a road map, showing kids that industries like ours offer challenge and reward.

Port Bureau Staff Bill Diehl Jeannie Angeli Al Cusick Cristina Gomez Janette Molina Patrick Seeba

Board of Directors *Tom Marian—Chairman *Dennis Hansell—1st Vice Chair. *Mike Drieu—2nd Vice Chair. *John Taylor—Secretary /Treas. *Robert H. Blades *Alec Dreyer *Charles H. Flournoy *Capt. Steve Conway *Capt. John G. Peterlin III *Richard Russell *Steve Stewart *Nathan Wesely Jim Black Ken Burnett Jan Crittenden Celeste Harris Jason Hayley Kevin Hickey Guy W. Hitt Charlie Jenkins Shareen Larmond Kathy Murray Jerry Nagel Vinny Pilegge Nolan Richardson Lloyd Schwing Earl Smith Tim Studdert Lawrence Waldron Armando Waterland Don Welch *Denotes Executive Committee Members

Ask any elementary school child about his or her dream job, and you get a wide range of answers: astronaut, doctor, lawyer, professional athlete, actor, and pop star. One problem that industry is already beginning to face is that few children say “I want to work in the port or sail the seas.” Terminal operations or ship husbandry are often only thought of if someone in the family works on the docks. The key to changing this is by starting young. I’m proud to sit on the advisory board for the Texas Southern University Maritime Transportation Management & Security Program. You’ll read on the next few pages about how programs like these are teaching kids real skills that they’ll use every day on the job. The TSU program currently has 33 students enrolled in its first class, of which 23 received either full or partial scholarships worth at least $8,000. The pro-

gram is designed for graduates to leave and pursue careers as port security officers, freight specialists, maritime transportation planners, environmental compliance coordinators, and other jobs in the industry. TSU is aligning itself with the Houston Community College and the Houston Independent School District to inform kids and if they want, let them move into a pipeline that’ll focus their studies starting at a young age and develop their skills as they enter the workforce. Correspondingly, the maritime high schools are reaching out and touching students to develop their interest and help them see the value in reaching for a job in the maritime industry. With 350 students between Jack Yates and Stephen F. Austin’s programs and additional students at La Porte high school, school districts across the region are taking note and beginning to look into developing more maritime programs. Industry members are contributing to this growth in a myriad of ways– for example, Rickmers-Linie has an adopt-a-ship program where students will follow a Rickmers ship around the globe learning about it, and when she calls on Houston, the students get to go on board and actually see what they’ve been studying. This kind of program is what can spur a student to study and enter our industry. -B. Diehl, GHPB

What Does Industry Get in Return?

“It all boils down to my ability to add value”

Like many purchasing decisions, knowing how each product is manufactured and processed helps the business owner plan and develop. Though not strictly a purchasing decision, oftentimes the largest expense regularly incurred by a business is its people. Personnel salary, training, and development generally occupy a major percentage of operating costs, which is why successful companies invest such huge sums of money in retaining quality workers. As far as education is concerned, Houston is better situated than most cities by having regional schools that possess a multitude of specifically developed programs that balance vocational education with pure academia. So what do you really get when you hire a college graduate who studied logistics, supply chain, cargo movement, and project management? When I leave the office, most days I drive up I-45 and head to the University of Houston. U of H has several programs focusing on logistics and the supply chain, and I’m fortunate to be a full time student in the undergraduate logistics program and the graduate program focusing on project management. The combination of work experience and academia is a powerful tool in a young person’s arsenal, and I often find myself better able to understand one because of the other. I’m not alone. When I look around, the classroom is filled with individuals who are trying to bring new perspective to their employment by harvesting the fruits of our regional educational opportunities. 70% of the 2000 students in the College of Technology are juniors and seniors with an average age of 26. This is an older and more experienced demographic than is normal in a college environment. A classic example was a schoolmate, Gerren Henry. A former enlisted soldier, Gerren worked at a freight forwarder through his college career, developed an interest in procurement and now upon graduation is looking to take the experience he gained at the office, the academic perspective and breadth gained at the University, and put that to use. “The biggest thing I took away from my time at school was that it all boils down to adding value. That’s what got me so excited about procurement—the choices you make give you the opportunity to create value for your company by either lowering expenses or generating revenue.” At all Texas universities, each undergraduate student must undergo a basic post-secondary education—this fills most of the first two years of school and ensures that graduates have solid foundations in math and science, the ability to write coherently, and exposure to the humanities. In addition, students studying Supply Chain & Logistics begin their focused study into technology . Classes in professional communication, economics, calculus and computer applications balance academic theory with practical knowledge that can be immediately applied in the workplace. Usually beginning in the third year of school, students begin delving into the specific courses that will have a direct impact on their future career. One of the most prolific advantages of the UH program is the mixture of professors—as a student, about half of my professors came into the classroom as I did—having left the office after a full day’s work. This meant that professors taught academic lessons interspersed with practical advice on how to apply concepts to the marketplace. For example, a class on Transportation Economics and Policy, taught by a freight forwarder responsible for Houston operations of a company with more than 250 offices worldwide, focused on the necessary of students to understand the powers and paperwork associated with

regulatory agencies—the Coast Guard, Customs and Border Protection, and the Internal Revenue Service. Every week, during a class on Logistics Processes, a different speaker came in to explain to students how their facet of industry worked and how they managed relationships between vendors, suppliers, customers, and their own internal processes. With speakers ranging from executives at BP and the Texas Medical Center to lawyers and deep water drilling operations experts, we had the opportunity to ask about how the frameworks we learned about actually functioned in the real world. “Pick their brains” said our professor, “Once you get out of here, information is usually a company’s most valuable commodity.” As the degree program winds down, classes become more focused on developing skills useful to prospective employers while constantly imparting a mandate to analyze and improve. A class in Inventory and Materials Handling for example, required students to visit warehouse and distribution facilities and familiarize themselves with the entire process of moving cargo. The capstone course, called simply “Practicum in Logistics” is facilitated by Program Manager Dan Cassler. The first day of the course, he told us the objective: “During your years here, you’ve learned how to talk the talk. For this class, we’ll see if you can walk: go out and find a company. Tell them what you’re doing, and convince them to let you work with them. Then figure out what kind of help they want and deliver it to them. At the end, I’m not going to grade you based on what you tell me. I’m going to listen to the employer and see if he’s satisfied that you’ve delivered a workable solution.” As the semester went on, we each worked in small teams with companies to improve their processes, and several months later, Justin, Michael, Dylan and I were standing in front of our client, explaining how we’d taken his warehouse paperless. At the graduate level, the school’s intensity is ratcheted up a notch. Dr. Gary Richardson, program manager and associate professor, explains why in one of his classes: “When you leave here, you will eventually be called on to work in or lead a project for your organization. The UH Technology Project Management program is designed to teach you to deal with this complex aspect of organization activity. In this role you will interface with a wide variety of management and users who are relying on you to deliver the desired outcome. We strongly feel that the background obtained in the program will provide our graduates with the skills necessary to be successful in these endeavors.” In the graduate program, students spend time analyzing risk management plans, learning how to develop and follow through with project plans, and fit your role into complex

and developing organizational structures. The University programs are supported by the local community. As a student, I toured warehouses owned by companies like Gulf Winds International, and got the opportunity to ask specific questions about operations—this meant that my classmates and I could not only learn about how things operate, but take those lessons into an environment where operators could show us factors that don’t necessarily come across in the classroom. At Port Freeport, the Trade Development team not only explained how their business model worked, but then took us on a tour through the facilities to see how cargo flows across the docks. Hand in hand with these support programs, the University encourages students to get out and learn by becoming a part of the community. Students are encouraged daily by faculty and staff to seek internships all over the region, gaining work experience with carriers, distributors, and other facets of the transportation industry. For students working or about to graduate, instructors encourage attendance and participation in local trade groups and meetings so that they can interact with the larger regional industry and network with transportation professionals. The University of Houston is currently pursuing Tier One status. Recently, the Carnegie Foundation for the Advancement of Teaching placed UH in its top category for research universities. While the school is rightly proud of this achievement, and the labs at the University are pursing groundbreaking research into a variety of subjects, in industry, the most visible product of a school is the graduate. Because of the enthusiasm, interest, and dedication of my classmates and my colleagues, I’m proud to be a graduate of the University of Houston, and productive member of the Houston maritime community. –P. Seeba

Maritime Education in India

A Visit to the Samundra Institute of Maritime Studies

Since becoming an independent nation in 1947, the Republic of India has seen its share of turmoil and triumph, however one fact cannot be ignored: with the world’s second largest population, seventh largest land area, and over 4,500 miles of coastline, India is one of the fastest growing major economies in the world. A 2009 GDP growth of 7.5% belies an increase of over 165% since 1990, ranking second in the world only to China. In the Houston region, India is the 20th largest trading partner responsible for over $2.6 billion of direct trade including a trade surplus of over $600 million. With growth and development in mind, Indian business leaders are looking towards education. Kapil Sibal, India’s Minister of Human Resource Development decreed that: “My vision is that within this decade every Indian will have access to quality and affordable education... Indian education of future will thus be dynamic, vigorous, bold and functional, serving the needs of not only the Indian society but the global community.” In the hills outside of Mumbai, the Samundra Institute of Maritime Studies is beginning to turn this vision into a reality. Here, over fifty acres of cutting age development form a campus where at any given time, 400 cadets are preparing for a career at sea. The campus provides maritime training driven by the vocational requirements of sailors who will depend on the skills they learn here for their professions and, at sea, their very lives. In the classrooms, students learn basic maritime theory and the academic principles behind their endeavors. Much as officers and enlisted men in the US Navy must qualify with every system they will come in contact with, cadets at Samundra have to not only be able to use the technology and machines working in the engine rooms and bridges of seagoing vessels, but take them apart and put it back together again. Standing at a massive electronic board as would be found in an engine room, cadets listen to a lecture about how the machinery is used, while behind the board, another class is focused on maintenance and repair work of each valve, circuit, and switch. “When you’re at sea, you cannot pull into a shipyard for a malfunctioning piece of equipment—the engineers aboard our ships need to be able to know their vessels inside and out so they may diagnose and repair the vessels without sacrificing safety concerns or operational requirements.” notes one instructor. The focus of a cadet’s experience at Samundra is learning how every component of a seagoing vessel works. Inside a 27,000 square foot workshop, stations are set up so students can see how systems aboard ship are set up. A steering column, much like one found aboard an airplane or passenger vehicle, sits on a table. As a student turns the wheel, he can see the gears working underneath the table leading to a rudder a few feet in front of him. This ensures that each student has a working knowledge of how his actions affect pieces of machinery found elsewhere on board. As students progress from one station to the next, they are further developing their mental model of how a ship fits together. Walking around the campus, the most striking construction is not one of

the long academic classrooms or even the massive workship, but the 20,000 DWT vessel raised on stilts just next to a massive manmade lake. A working lifeboat launch allows cadets to practice evacuation and safety drills, and the vessel includes every piece of equipment found in a seagoing vessel’s engine room including a working main engine, mounted on a separate suspension system. Once the cadets are familiar with the machinery on board, they are tasked with solving problems and operating a real ship. Since the vessels components all work and are tied together just as though she were sailing at sea, cadets get the hands-on experience necessary to learn their craft—training that pays dividends once they get aboard a ship with cargo destined for a foreign port and waiting customers. The school also focuses on honing each student’s skill, even after many years. Classes for engineers and masters are punctuated with foreign experts—a recent class brought experts from Great Britain, the United States and Singapore to teach classes on MARPOL regulations, casualty response, and international corporate expectations of ship management. Detailed programs in cargo handling and operations are mixed with high level discussions of teamwork and behavior-based safety. The leadership at Samundra also understands the necessity of international acceptance and compliance, so they have gained ISO certification (9001:2000), and a plethora of environmental achievement and quality assurance awards. The Samundra Institute is an example of an institution dedicated to vocational training at the universal level. This level of training and education is what the maritime industry needs to ensure that the next generation of mariners are ready to sail the seas. –P. Seeba, GHPB

Port Watch

Tom Marian—Buffalo Marine Service In 2010 nearly 15,000 ships called on Texas ports – an increase of 11.4% over 2009. 68% of those vessels steamed into Galveston Bay bound for the ports of Galveston, Texas City or Houston. The port of Houston received the lion’s share of those vessels accounting for 47% of the State’s entire volume of deep water arrivals. All told, 2010 was a welcome respite from the doldrums of 2009. The port of Galveston saw the most impressive gains of the year with a 52% increase and ended the year with a 13% increase over the month of November. Energy appeared to be a dominant feature in the rebound as the energy-centric ports of Texas City and Sabine registered nearly identical annual increases of 22%. Albeit Texas City posted identical month-to-month numbers while Sabine saw 13% more vessel arrivals in December as compared to November.

The Port of Houston experienced a modest gain of 2% over November’s vessel arrival count and finished the year with an annual gain of nearly 8%. There were some interesting month-to-month figures as the year came to end. Specifically, the private docks which comprise the vast majority of the vessel arrival numbers – approximately 70% - were down 1% for the month. Conversely, the public dock vessel numbers were up 11% with general cargo leading the pack. In fact, this category was up 20% in December for the entire port. Another December trend was that the majority of the storage facilities along the Houston Ship Channel were down – a not unusual event given end-of-yeartax considerations associated with bulk tank farm inventories. Nonetheless, for the year, most of the terminals that handle crude and chemicals saw ship arrival gains in the range of 9 to nearly 30%. This should not come as a surprise as December’s tank vessel arrivals was just 2 shy of August’s high of 317 – a 3.5% increase from November. Judging by preliminary reports for January vessel movements, it is likely the upward trend will continue into the Spring as crude prices remain strong and natural gas prices continue to firm. Hopefully, trade activity for Texas ports will reflect a modest return to those heady trade days prior to the onset of the Great Recession. -Tom Marian, Buffalo Marine Service

Spotlight on Jim Black

President—Moran Gulf Shipping Agencies

“There’s a lot of responsibility involved as a shipping agent—it’s a 24-7 job and a single mistake that holds up a vessel can be worth tens of thousands of dollars.” Moran-Gulf Shipping Agencies is a family owned company, and Jim Black knows how important his people are. “This is a hard profession—maybe the only way to characterize it is predictably unpredictable.” Born in Fall River, MA, Jim grew up in New England with his three brothers and sister. Upon completion of his studies in Business Administration at the University of Massachusetts-Dartmouth, Jim joined the Moran Organization in 1974. Working closely under the tutelage of his brother, F. Robert Black, he began his career as a boarding agent gaining experience in handling a full range of commercial cargos. His expertise was further enhanced within the transportation industry through assignment with J. F. Moran Company where Jim learned the intricacies of import/export documentation, negotiating letters of credit and the expeditious movement of international freight. In 1977, the Treasury Department issued Jim his Customhouse Brokers License. When the Moran Organization made its first expansion beyond its traditional New England hub, Jim Black moved to Houston to manage the newly-incorporated Moran-Thibodeaux Shipping Agencies. Throughout the next decade the operation in the U. S. Gulf experienced dramatic growth. In 1985 the company began doing business as Moran-Gulf Shipping Agencies and by then had opened offices in Port Arthur, Corpus Christi, Galveston, New Orleans, and Fort Lauderdale while attending more than 1,000 vessel arrivals on an annual basis with Jim as its President and Chief Operating Officer. “I’ve seen a lot of ships in the last forty years—probably the most complex are passenger ships. They come into port, offload the passengers, have six or seven hours to restock, get all the maintenance done, and get ready to load everyone back up. Plus, the cargo talks. That’s a little different than an oil tanker”. In 1986, Jim and his brother Mike acquired full ownership of the Moran Shipping Agency Organization from their brother Bob. Since that acquisition, the company has continued it’s remarkable growth , and today, Moran is the largest independently-owned steamship agency in North America handling over 5,000 port calls annually. “We handle a lot of ships. At the same time, the one thing that I keep reminding my people to do is to pick up the phone and talk directly to our clients.” Reflecting over the years, Jim notes “You didn’t used to be able to communicate so easily, but emails, texts and instant messages are no substitute for personal contact.” During his career Jim has enjoyed active affiliations and positions of leadership with many associations and organizations including: Propeller Club of the U.S., World Trade Association, Traffic Club, Association of Ship Brokers and Agents, American Petroleum Institute, Greater Houston Port Bureau, Houston Chamber of Commerce, Sabine Users Coalition, Houston chapter of PORTS, Petroleum Tankship Institute, The Houston Club, West Gulf Maritime Association, National Customhouse Brokers and Freight Forwarders Association, The Houstonian, The Woodlands CC and St. Pius X High School. Jim resides in The Woodlands with his wife Beth and has 2 sons, Andrew and Adam. In his free time, he is an avid sportsman, playing golf and rooting for the Red Sox, Astros, Celtics, Rockets, Texans and Patriots. Established in 1937, Moran Shipping Agencies, Inc. provides a total agency solution in North America with 20 companyowned offices directly serving over 100 ports. As an ISO9001-2008 company, Moran clients receive the highest quality of agency service and care throughout the organization. The company is also an industry leader in steamship agency IT, Voyage Accounting, and Port Security services, providing online AMS services, ENOA/D submissions/compliance, extranet Hub Agency services, and fully-integrated and customized communications and accounting services (including secure access to the Company’s database enabling clients to review historical documents and current information on all voyage accounts).

The M/V San Brooklyn

Mariners Aboard Buffalo Marine’s Newest Towboat Work the Channel On January 14th, Father Thomas Rafferty and Ms. Brooklyn Studdert christened the M/V San Brooklyn, a state of the art towboat whose streamlined hull design, hydrodynamic propeller system, and low-emissions engines promise to help Buffalo Marine continue to serve the Houston maritime community as a leading provider of bunker fuel to deep -draft vessels. The San Brooklyn was built by Sneed Shipbuilding for Shamrock Marine and features Cummins engines and propellers by Baumann Propellers. As members of the local maritime community toured her freshly painted decks, representatives from the companies involved in her design and building showed how the building of a new vessel is a collaborative effort spearheaded by a common goal. Several days later, the crew was already hard at work, delivering fuel to the Beluga Festival as she sat alongside the dock at Texas Terminals.

Working two weeks on, one week off, the mariners aboard San Brooklyn balance a demanding, potentially hazardous job with a consummate professionalism. With a normal crew of five, the bunker barges spend all day flitting in and around the ship channel bringing fuel to the deep draft vessels that call on Houston. “This is my home” said relief captain Ralph Castillo “I mean, I spend more time on her than I do at my house—so that means I take care of her. Everything from making sure she runs smoothly to keeping the furniture clean.” The San Brooklyn and her kin push one of Buffalo’s 28 tank barges alongside each ship, then begin the process of connecting the two vessels. Though the transaction—confirming the tonnage to be delivered, flow rate, etc— is handled face to face at a meeting, the vessel being fueled has the responsibility to make the connections on their end. This means that the tankermen have to communicate with their counterparts aboard ship who often speak little English. Unsurprisingly, one of the documents brought on board and reviewed before the transfer begins is a hand-signal guide. Making sure that both sides understand hand-signals means that if a problem crops up, it can be dealt with quickly, efficiently, and without causing a spill or larger issue. On the barge decks, a large sign proclaims “No Spills” a constant reminder to the crew of the need for vigilance and care. Back at the main office, computer programs track every hour of engine time so that scheduled maintenance will be taken care of without having to rely on guesswork. Kirk Savage, Buffalo’s Houston Port Captain is responsible for ensuring that all of the tank barges and towboats are kept running smoothly. Answering calls from their crews and the Buffalo main office, he goes from vessel to vessel, bringing gear for the crews and making sure that repairs and maintenance are a constant process. Asked about the San Brooklyn crew’s pride and dedication, he responded simply: “This isn’t just their livelihood on the line here—this is their lives. If something in your house doesn’t work, it might be inconvenient or embarrassing. But if their engines cut out or something else on that boat doesn’t work, and they’re in the middle of the channel? That’s a matter of life and death.” -P. Seeba, GHPB

(Top Left) - Walk Kleczkowski, Randy Stiefel, and Tom Schroeter, Port of Houston Authority. (Second Left) - Angus Hanes, PHA, Tom Kornegay (Middle Left) Daniel Saucedo, NACC, Warner Welch, Sector Houston-Galveston VTS, Jim Robinson, and Greg Paquette, NACC (Fourth Left) - Jimmy Jamison, PHA and CAPT Marcus Woodring, USCG (Bottom Left) Members network before the program begins (Top-Right) - Members eat and talk before the program begins (Second-Right) - Jerry Nagel, Rickmers-Linie, and Jürgen Schröder, Schröder Marine talk as USCG officers speak with Jim Guidry, Guidry News Service. (Right) - Captain Steve Conway, Houston Pilots Association addresses the assembled industry (Bottom-Right) Attendees network before the program begins

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GHPB Members Advertise in the Port Bureau News

Upcoming Events at the Port Bureau March 10

Commerce Club Luncheon Brady’s Landing Restaurant David P. Russell, President Rowan Drilling Company

April 27-May 1

Specialized Coffee Association of America Exposition George R. Brown Convention Center

June 6-9

Joint Harbor Safety & AMSC Conference Hilton of the Americas Hotel & Conference Center

August 20

82nd Annual Maritime Celebration & Silent Auction Houstonian Hotel Captain’s Cup Golf Tournament

November 7

Reaching 3000+ Professionals in the Houston Port Region, contact the Port Bureau at (713) 678 4300, or to arrange for either 1/6 page, 1/2 page, full page, or back cover advertisements.

GREATER HOUSTON PORT BUREAU 111 East Loop North Houston, TX 77029 713.678.4300 ph 713.678.4839 fax

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