Port Houston 2016 Annual Report

2016 ANNUAL REPORT

2.2 MIL TEU 2.23 MIL TONS STEEL 34.8 MIL TONS CARGO HANDLED

1.175 MIL JOBS 265 BIL STATEWIDE ECONOMIC IMPACT $289 MIL TOTAL REVENUE

CONTENTS Message from the Chairman..................4 The Port Commission............................8 Message from the Executive Director....10 Financial Highlights..............................14 Financial Information............................16 Operational Performance.....................18 Health, Safety, Security and Emergency Management (HSSE).........20 Government Relations.........................24 Environmental Stewardship..................28 Community Outreach..........................30 Recognition of Service ........................33 About Port Houston............................34

2016

“Our continued infrastructure investments include the Houston Ship Channel, our terminal channels, our container terminals and other targeted projects. We strategically identify and fund capital projects that provide the greatest return on investment that serves the growing demand of our customers � .

CHAIRMAN JANIECE LONGORIA

MESSAGE FROM PORT CHAIRMAN JANIECE LONGORIA Port Houston – The Premier Gateway for International Commerce Port Houston is recognized as the International Port of Texas and continues to be the premier gateway for international commerce because of our extraordinary people and our focus on targeted capital investments, continued modernization of container terminal infrastructure, channel improvements and strategic initiatives. These items were highlights of 2016.

The greater Port of Houston, which includes Port Houston’s eight public

THE LEGACY CONTINUES THROUGH FOCUS ON STRATEGIC

terminals, along with more than 150 privately owned industrial terminals, ranks

INITIATIVES

first in the nation in foreign waterborne tonnage, first in U.S. import tonnage, first

In order to continue this legacy of service to our region and state, we focus

in U.S. export tonnage, second in total tonnage and continues to be recognized

on our mission to move the world and drive regional prosperity, and our vision

as the nation’s leading breakbulk port.

to be America’s distribution hub for the next generation. Throughout 2016, Port Houston continued to implement the strategic plan approved by the

Port Houston and the industry along the Houston Ship Channel continue to

Commission to drive success through our commitment to our mission, vision

drive growth and are essential to the nation’s energy and economic security. As

and core values. To do this, we honor and support our four strategic goals of

host to the nation’s largest petrochemical complex, the Houston Ship Channel

infrastructure, growth, people and stewardship to maintain our place as the

provides a significant share of the refined petrochemical products that fuel our

port of choice for Gulf Coast commerce.

nation, and exports of petrochemical products and resins continue to drive growth in exports from our terminals, making us a leading port for exports.

INFRASTRUCTURE - THE BACKBONE OF OUR PROSPERITY

With a national economic impact of $617.5 billion, and a statewide impact of

Our continued infrastructure investments include the Houston Ship Channel,

$265 billion, it is no wonder that we are responsible for 16 percent of the state’s

our terminal channels, our container terminals and other targeted projects.

annual gross domestic product. And as a leading job creator for our region,

We strategically identify and fund capital projects that provide the greatest

we are responsible for 1,174.567 jobs, which continue to grow year over year.

return on investment that serves the growing demand of our customers.

4 n MESSAGE FROM THE CHAIRMAN

THE PORT IS RESPONSIBLE FOR

1.2 MILLION JOBS ANNUALLY IN THE STATE OF TEXAS.

PORT HOUSTON n 5

As the lifeblood of our maritime commerce, the Houston Ship Channel continues

Panama Canal locks. The deepening of the terminal channel at Barbours Cut

to be an important focus for investment. Working in steady partnership with

and at Bayport have been completed. We are now working with the U.S.

stakeholders along the ship channel, Port Houston leadership and staff play

Army Corps of Engineers to modify the flare (the entrance to the Bayport

a significant role in ensuring that international commerce continues to flow

Channel from the main Houston Ship Channel) for enhanced navigability and

freely through this 52-mile channel, the busiest in the country.

safety for larger ships that transit the channel.

As the local sponsor of the Houston Ship Channel, Port Houston is working

Our container terminals and our other facilities also require continued targeted

with the U.S. Army Corps of Engineers to fund a new mega-study intended

investment. Enhancements and upgrades to our first container terminal

to review competitive opportunities and return on investment for the channel

constructed in 1977, Barbours Cut, are ongoing to gain increased efficiency,

improvements that include deepening, widening and other navigation safety

facilitate larger vessels and nearly double the container-handling capacity of

features beyond the current authorized dimensions. As the non-federal

this terminal in its existing footprint. The year 2016 marked the first full year

partner, we are investing in this study to assure that important elements are

of operation for the four new Super Post-Panamax wharf cranes at Barbours

considered, including maintaining competitive strength and the clear return

Cut and three additional wharf cranes are scheduled for delivery in 2017.

on investment provided by infrastructure supporting Port Houston.

We also continue to build out our newer Bayport Container Terminal, where Of course, maintaining the federal channels serving our port will continue to

additional container yard and wharf expansion projects are underway to

be an important focus. As the local sponsor of the channel, we work closely

facilitate a rapidly growing demand in container trade. Three new ship-

with the U.S. Army Corps of Engineers to facilitate navigation and commerce.

to-shore cranes for the terminal were under construction in 2016 and are

While maintenance dredging is the federal government’s obligation, the

slated to be delivered in early 2018. Capital improvements to achieve the

allocation of federal funds for maintenance dredging has fallen short of the

infrastructure needs at Barbours Cut and Bayport terminals combined total

amount needed to maintain the channel at its authorized depth of 45 feet and

more than $600 million over the next five year period.

width of 530 feet.

Roughly $100 million is collected every year in federal Harbor Maintenance Tax from channel users, based on the value of imported cargo. Those tax revenues are deposited in the Harbor Maintenance Trust Fund intended

WE ALSO CONTINUE TO MASTER PLAN OUR FACILITIES, TO ASSURE THAT WE STAY AHEAD OF DEMAND AND DEPLOY PROJECTS AND INNOVATION THAT WILL MAINTAIN OUR ROLE AS THE LEADING GULF COAST PORT AND THE PREMIER GATEWAY FOR INTERNATIONAL COMMERCE.

for maintenance dredging of federal navigational waterways. The federal appropriations for the Houston Ship Channel average nearly $30 million

GROWTH – THINKING BOTH INSIDE AND OUTSIDE THE BOX

annually, which falls short of the $50-$60 million needed to adequately

Container volumes at Port Houston increased by two percent in 2016

maintain the channel. Continuing to advocate for federal funds for channel

compared to 2015, to nearly 2.2 million TEUs. And continuing this good

maintenance continues to be a high priority for Port Houston.

news, container volume has increased by 16 percent for the first 6 months of 2017 as compared to the same time period in 2016. And we successfully

Our terminal channels have also been deepened to match the Houston Ship

retained container cargo that was diverted from other ports during the prior

Channel to maintain opportunity to receive deeper draft vessels calling on

year and have increased our volume across most of our trade lanes.

Port Houston terminals following the recent upgrade and expansion of the

6 n MESSAGE FROM THE CHAIRMAN

Our petrochemical industry customers drive rapidly growing exports through the manufacture of resins that are exported from Port Houston to destinations around the world for the manufacture of consumer goods.

We have attracted a third weekly liner service from East Asia, which began in the summer of 2016, increasing business through the Panama Canal. This joint venture between Maersk and Mediterranean Shipping Company, joining the existing weekly services of CMA CGM and COSCO, significantly improves Houston’s position in the East Asia container import and export market.

As another example, wind power imports have increased 31percent through June 2017 as compared to 2016.

Additionally, we successfully repurposed the former cruise terminal at Bayport into a revenue generating facility for the import and processing of automobiles, with operator Auto Warehousing Company accepting the first shipment of Fiat Chrysler vehicles in late 2016.

We have also expanded our use of submerged lands in and around our facilities for among other uses, barge fleeting, which has enhanced waterway safety and has reduced congestion on the waterway.

OUR PEOPLE DRIVE OUR MISSION AND VISION Our mission cannot be achieved without the women and men at Port Houston who work to keep our operations running smoothly, efficiently and safely.

Our executive team has assembled a world-class staff to run the day-to-day operations of Port Houston.

CONTAINER VOLUME INCREASED TO NEARLY

2.2 MILLION TWENTY-FOOT EQUIVALENT UNITS IN 2016

Our Executive Director, Roger Guenther, continues to engage our staff to be the best in the nation and to serve our interests and those of our community and region for the greater good. A thoughtful leadership development program is anticipated to come on line by the end of the year. Our staff has also implemented a Project Development Protocol to ensure that all projects at Port Houston are scoped, resourced and examined under the same general criteria to assure process alignment.

PORT HOUSTON n 7

FIRST PORT TO BE RECOGNIZED AS AN

ISO 4001 ENVIRONMENTAL LEADER

8 n MESSAGE FROM THE CHAIRMAN

Our people also donate their time and resources to many community

diversity and the Houston-Galveston Area Council presented Port Houston

endeavors sponsored by notable organizations including the Galveston

with the Excellence Award for our Small Business Development and Maritime

Bay Foundation (oyster reef restoration), the Greater East End Chamber

Education programs. We continue to invest in maritime education to prepare

of Commerce, Buffalo Bayou Partnership and the Texas Commission for

the next generation for the growing career opportunities in maritime fields.

Environmental Quality (Trash Bash), among many others.

Through partnerships with local high schools, junior colleges and four-year colleges, students are introduced to promising maritime careers that in turn

STEWARDSHIP INCLUDES SAFETY, SECURITY, ENVIRONMENT,

provide a qualified future workforce for our growing maritime industry needs.

& EDUCATION Our stewardship continues to be a high priority for Port Houston. We are

WORKING TOGETHER FOR THE FUTURE

proud of our safety culture and our commitment to environmental quality. As

Partnership is essential to our continued success, and we work in alignment

the first port to be recognized as an environmental leader under ISO 14001,

with our elected leaders, our labor, our federal partners, community

we are also completing our internal review of our compliance with ISO safety

stakeholders and You, to assure that our region remains economically

standard ISO 45001. We continue to be an environmental leader among

competitive while assuring environmental sustainability. We are deeply

ports, and have developed an environmental leadership strategy, which is

committed to our core mission to Move the World and Drive Regional

underway and on target for our goals.

Prosperity, and your continued support of Port Houston will assure that we maintain our competitive advantage. With your partnership, we will continue

We constantly review and upgrade our physical security and work with the

to be the Gulf Coast port of choice, the International Port of Texas and the

U.S. Coast Guard, Department of Homeland Security, Customs and Border

premier gateway for international commerce.

Protection and private industry partners to assure that we remain ahead

of ever evolving threats. And we are also updating our information and cyber security for compliance with the National Institute of Standards and Technology to complement our physical security.

Janiece Longoria, Chairman

OUR CHAIRMAN’S CITIZENS ADVISORY COUNCIL EDUCATES AND INFORMS OUR COMMUNITY PARTNERS ON TOPICS RELEVANT TO THE IMPORTANT RELATIONSHIP BETWEEN PORT HOUSTON AND ITS SURROUNDING COMMUNITIES TO ASSURE THAT WE ARE RESPONSIVE TO COMMUNITY CONCERNS AND SENSITIVE TO COMMUNITY IMPACTS FROM OUR OPERATIONS. And our Small Business Outreach and Small Business Development Program has remained highly engaged with our local communities, promoting and spreading business opportunity more broadly. The advancement of this effort has been recognized as a model program since its inception in 2002. Most recently, the City of Houston has recognized Port Houston as a champion of

PORT HOUSTON n 9

THE PORT COMMISSION OF PORT HOUSTON JANIECE M. LONGORIA Chairman

JOHN D. KENNEDY Port Commissioner

Ms. Longoria is an honors graduate of

John D. Kennedy retired as a Colonel in

the University of Texas, and received her

the U.S. Army after 30 years of military

J.D. from the University of Texas School

service focusing on logistics, leadership

of Law in 1979.

and management. Following that career he served a decade as City Manager of

On January 8, 2013, she was unanimously

the City of Nassau Bay, Texas.

appointed by the City of Houston and Harris County as Chairman of the Port,

Mr. Kennedy was appointed to the Port

the leading economic engine for the greater Houston region. She is the first

Commission by Harris County Commissioners Court in December 2012. He

woman to hold this position in the 100-year history of the Port of Houston.

is Chairman of the Procurement and Small Business Development Task Force and serves on the Governance Committee.

At the port, she serves as chairman on the Port Commission’s Audit Committee, and serves on the Governance Committee and Pension and

DEAN E. CORGEY Port Commissioner

Benefits Committee.

Dean E. Corgey has 40 years of maritime experience, including work as

She is on the board of two public companies, CenterPoint Energy, Inc. and

a merchant mariner. An elected union

Superior Energy Services, Inc., both based in Houston.

official, he serves as a vice president of the Texas AFL-CIO, on the West Gulf

She is member of the University of the Texas System Board of Regents, having

Ports Council of the AFL-CIO Maritime

previously served as Vice Chairman, and is a former board member of UTIMCO.

Trades Department and on the executive board of the Harris County AFL-CIO. He

She has been active in many non-profit organizations, and has served on the

is a member of the National Defense Transportation Association, American

Board of Directors and the executive committee of the Board of Visitors of the

Maritime Partnership and the Navy League of the United States.

UT MD Anderson Cancer Center. She currently serves on the board of directors of the University of Texas Law School Foundation, the Greater Houston

Mr. Corgey was appointed to the Port Commission by the Houston City

Partnership and the Texas Medical Center, among others. She has received

Council in January 2013. He serves on the Pension and Benefits Committee.

numerous honors and recognitions for her community and board service, including the Distinguished Alumnus Award for the University of Texas, the 2008 Sandra Day O’Connor Award For Board Excellence, the Female Executive of the Year Award from the Houston Hispanic Chamber of Commerce (2010) and has been recognized as a “breakthrough woman” and inducted into the Hall of Fame by the Greater Houston Women’s Chamber of Commerce.

10 n THE PORT COMMISSION

CLYDE FITZGERALD Port Commissioner

STEPHEN H. DONCARLOS Port Commissioner

Clyde Fitzgerald is a 58-year veteran of

Stephen H. DonCarlos has served as

the Houston waterfront. He is the former

Mayor of the City of Baytown since

president of the South Atlantic and

May 2006, and is an attorney with the

Gulf Coast District of the International

firm of Reid, Strickland & Gillette, L.L.P.

Longshoremen’s Association, having

Mr. DonCarlos served as chair of the

stepped down from the top post in mid-

Harris County Hospital District and

2015 after serving 13 years. Today, he

Texas Medical Center, currently is on

is a member of the Executive Council.

the Board of Directors of the Baytown Chamber of Commerce, and is a member of the East Harris County Bar

Mr. Fitzgerald was appointed to the Port Commission by Harris County

Association, the Board of Directors of the Texas Medical Center and the

Commissioners Court in June 2013. He is Chairman of the Pension and

Houston Bar Association.

Benefits Committee and serves on the Audit Committee.

Mr. DonCarlos was appointed by the Harris County Mayors’ and Councils

THELDON R. BRANCH, III Port Commissioner

Association as Port Commissioner in September of 2013. He is Chairman of

Theldon R. Branch, III is the Chairman

the Governance Committee.

and Chief Executive Officer of The Branch Companies, a privately held Houston-

ROY D. MEASE Port Commissioner

based holding company that oversees

Roy D. Mease is a lawyer with a private

investments in real estate, financial

practice in Pasadena, and was a member

assets, the automotive industry and

of the Pasadena City Council for eight

construction. He is also the managing

years.

partner and member of the Executive

Pasadena Second Century Corporation,

Committee of Dufry Houston and Branch/McGowen Ventures and holds the

which is the city’s economic development

Economic Development Finance Professional certification.

entity.

He served as chairman of the

Mr. Branch was appointed to the Port Commission in September of 2013 and

The City of Pasadena appointed Mr. Mease to the Port Commission in

represents the City of Houston. He serves on the Procurement and Small

September of 2013. He serves on the Governance Committee.

Business Development Task Force and the Audit Committee.

PORT HOUSTON n 11

MESSAGE FROM EXECUTIVE DIRECTOR ROGER GUENTHER Each year comes with its own set of opportunities to meet the challenges of changes in our industry. And through the guidance of the Port Commission, the commitment of our employees, and partnership with our customers and stakeholders, Port Houston stepped up in prominence as the “International Port of Texas” through a major rebranding effort.

Through strategic preparation for rapidly growing trade through the busiest

FOCUS ON PEOPLE

waterway in the country, we continue to provide value for our customers and

Our focus on people in 2016 included the completion of Internal

community, driving economic activity for our region, state and nation. As a

Communications and Employee Engagement surveys. That was done with

result, 2016 was another solid year for Port Houston.

a participation rate from our staff higher than 50 percent. This feedback is critical to our organization to make us better.

Total tonnage through Port Houston facilities was 34.8 million tons for 2016, only slightly less than the all-time record set just a year earlier. Total revenue for

We have initiated leadership development training for the senior management

the year was $289 million and was only off marginally compared to the prior

team during the past year, while making sure we were also focused on entry-

year. And through close monitoring of spending, we were able to generate net

level employees as well by completing another successful internship program.

cash flow of $120 million for 2016, all of which is reinvested in our ongoing infrastructure necessary to support the growth of our port. We continuously

We had 24 different “huddle” events where employees and leadership met to

evaluate and make strategic investments in our capital infrastructure to stay

share and exchange ideas and updates on Port Houston activities. We also

ahead of the cargo demand for the near and long term.

created and communicated an employee compliance training matrix.

Throughout 2017 – and beyond – the focus of our staff will continue to be on

FOCUS ON GROWTH

four primary strategic areas: investing in people and organizing for success;

Our focus on growth was highlighted in 2016 by our container trade, which

growing and diversifying the business base; providing and facilitating

increased by 2 percent over a very robust 2015 and increased the annual

infrastructure to meet demand; and sustaining the business for the long term.

volume to nearly 2.2 million twenty-foot-equivalent units. Although organic

12 n MESSAGE FROM THE EXECUTIVE DIRECTOR

TOTAL TONNAGE THROUGH PORT HOUSTON WAS

34.8 MILLION TONS FOR THE YEAR OF 2016

PORT HOUSTON n 13

BECAUSE CONNECTIONS ARE CRITICAL

RAIL & ROAD PROJECTS MOVED FORWARD IN 2016

14 n MESSAGE FROM THE EXECUTIVE DIRECTOR

growth across all import and export markets remains solid, the container

and with the railroads to move projects forward, including at the Broadway

trade with East Asia through the Panama Canal continues to evolve rapidly as

DoubleTrack rail line. TXDOT funded the Peninsula Road project that will

we added our third weekly service to that region in mid-2016.

debottleneck one of the busiest truck avenues near the port.

Our operations team, including the outstanding labor we hire every day,

FOCUS ON STEWARDSHIP

supported this growth seamlessly while handling more than 30,000 trucks

Our stewardship and outreach to our community was outstanding in 2016.

per week on average, and maintaining our ship to shore cranes that operated

We continue to be a leader. We were recertified as ISO 14001 to help manage

more than 39,000 hours at a reliability of more than 99 percent. And even with

our environmental responsibilities, and we also were awarded the 2016

continued demand, our vessel productivity and truck turnaround times at our

Guardian of the Bay distinction by the Galveston Bay Foundation.

terminals remained at the highest of industry standards.

Additionally, our Small Business Development Program in 2016 continued

FOCUS ON INFRASTRUCTURE

to flourish. The program was developed in 2002 to reach out to the small

Our continued investment in infrastructure is critical for capturing continued

businesses of the greater region surrounding Houston with the purpose of

economic activity for our region, and 2016 saw numerous achievements in

creating opportunities. This was done by creating an aggressive participation

keeping us competitive.

goal for the prime contractors and suppliers to utilize small businesses, with a goal of 35 percent of eligible contracts awarded to small businesses. Since

AT BAYPORT, WE STARTED CONSTRUCTION OF WHARF 2, COMPLETED YARD 6, AND ADDED BERMS AND FREIGHT STATION ROAD. AT THE TURNING BASIN, WE UPDATED MULTIPLE STRUCTURES AND INITIATED A COMPREHENSIVE FACILITIES INSPECTION AND CONDITION ASSESSMENT PROGRAM.

the program has been in place, that 35 percent goal has been exceeded year after year, resulting in almost half a billion dollars being awarded.

Finally, our Maritime Education program is thriving. We now have more than 1,200 students participating in programs in five local high schools. And a total

Our Houston Ship Channel efforts continue to work in cooperation with the

of 12 students received $1000 scholarships from the Partners in Maritime

U.S. Army Corps of Engineers – we launched the Ship Channel Mega-Study

Education Program.

and completed new construction on our way to 45 feet depth.

The community also benefitted from the 2016 M/V Sam Houston Outreach Our contract for deepening and widening Barbours Cut and Bayport Channels

as 26,295 passengers boarded the M/V Sam Houston to take a trip along the

is essentially complete and we look forward to commencement of the Bayport

Houston Ship Channel.

flare project and completion of that by the Corps in 2017, providing a safer, navigable waterway in that area, and the ability to accommodate larger ships

In summary, let me just say I am proud of our staff for the things that they were

to serve our terminals.

able to achieve in 2016, working with our partners and stakeholders.

And because connecting inland remains a critical need for moving cargo, we negotiated with the Texas Department of Transportation, Harris County

Roger Guenther, Executive Director

PORT HOUSTON n 15

PORT HOUSTON: THE INTERNATIONAL PORT OF TEXAS

SOLID RESULTS AND VITAL MOVES HIGHLIGHTED 2016 With continued steady growth in containers in 2016, Port Houston recorded

close monitoring of spending, Port Houston was able to generate net cash

some solid financial results for the year. The two million mark for twenty-foot-

flow of $120 million for 2016, all of which was reinvested in the infrastructure

equivalent-units, a container measure, was surpassed for the second year in

necessary to support the growth of the port.

a row, hitting a new record of nearly 2.2 million TEUs. These were very solid results in spite of the impact of a soft breakbulk market

TOTAL TONNAGE THROUGH PORT HOUSTON WAS 34.8 MILLION IN 2016.

STEEL IMPORTS, WHICH ARE HIGHLY CYCLICAL, WERE DOWN FOR THE YEAR AS PROJECTED BY PORT OFFICIALS, BUT BOTH CONTAINER VOLUME AND BULK PRODUCTS RECORDED POSITIVE GAINS. AND THE PORT’S PUBLIC FACILITIES CONTINUED TO EXPAND IN 2016.

that was experienced across the nation due to an equally soft energy market.

The positive results are a credit to the leadership of the Port Commission and the dedication of the staff and all of our partners to remain successful and competitive.

FTZ #84 CONTINUES TO GROW EXPORTING A BRAND

The year ended on a strong note for Port Houston’s FTZ program in particular,

The new Port Houston brand was unveiled late in the year and was

with six new private and public sites joining FTZ #84 just in December alone.

immediately hailed as a winner. With a tagline as “The International Port of

A total of 13 sites were added in 2016.

Texas”, the brand aimed to capture the port’s undisputed leadership role on the U.S. Gulf of Mexico and its position as the busiest port in the country. The

The December showing led to a 15 percent increase in the total number

Port Commission embraced that important marketing decision, which was an

of sites and a 28 percent increase in the zone for all of 2016. It marked the

essential aspect of Port Houston’s strategic plan, which was approved just

highest volume of new members in the program’s history.

a year earlier.

More companies are realizing the advantage of the foreign trade zone program The modern new brand features red, white and blue to reflect the port’s vision

for both imports and exports and are looking for ways to keep and create jobs

as “America’s Distribution Hub for the Next Generation,” along with the bow

and business in the United States. The FTZ program is one of the leading

of a ship, which reflects the port’s mission “To Move the World and Drive

programs in accomplishing these goals. Foreign Trade Zone and Economic

Regional Prosperity.” The accompanying Lone Star reflects “The International

Development Manager Shane Williams in 2016 was named to the National

Port of Texas” and the pride associated with Texas.

Association of Foreign Trade Zones Board.

FINANCIAL STABILITY

New sites in 2016 in FTZ #84 included Noble Drilling, Kobelco, Floor and

Although the previous year was a record year, total revenue for 2016 was

Décor, Sun Packing, VoPak, Intercontinental Terminals and Industrial

$289 million, which was only off minimally compared to 2015. And through

Terminals. Other sites are Palletized Trucking, Pro Agility, Coastal Cargo Care Terminals, Vantage Drilling, Men’s Wearhouse and Trendsetter.

16 n FINANCIAL HIGHLIGHTS

Texas is an inventory tax state, so goods can qualify for the additional reduced inventory tax benefit on top of all the federal duty savings. FTZ #84 is comprised of various storage facilities and manufacturing sites located in Harris County, Fort Bend County, Waller County and Brazos County.

New service to Port Houston in 2016 included the first regular direct container and roll on/roll off service between Houston and West Africa, which was launched by Grimaldi Lines at the Barbours Cut Container Terminal.

Additionally, Maersk Line and Mediterranean Shipping Co. (MSC) joined forces in 2016 to operate a new container service between the United States and Asia, calling first at Port Houston. MSC called the new service the Lone Star Express, operating between the U.S. Gulf of Mexico and Asia.

Other notable achievements:

84

6 NEW SITES JOINED FTZ #84 FOR A TOTAL

13 FTZ SITES ADDED IN 2016

FOR THE 42ND CONSECUTIVE YEAR, THE PORT IN 2016 RECEIVED THE GOVERNMENT FINANCE OFFICERS ASSOCIATION CERTIFICATE FOR EXCELLENCE IN FINANCIAL REPORTING. THIS AWARD IS CONSIDERED THE HIGHEST FORM OF RECOGNITION WHEN IT COMES TO GOVERNMENT ACCOUNTING AND FINANCIAL REPORTING. And for the fifth straight year, the Texas Comptroller Gold Platinum Circle Leadership award was presented to Port Houston. That award is presented to government agencies that have the most open and accessible reporting.

Both awards are important and significant for Port Houston.

A condensed look at Port Authority’s 2016 financial performance is available on pages 16 and 17 of this report.

PORT HOUSTON n 17

PORT OF HOUSTON AUTHORITY

CONDENSED STATEMENTS OF FINANCIAL POSITION AS OF DECEMBER 31, 2016, 2015, 2014

Port of Houston Port of Authority HoustonCondensed Authority Condensed StatementsStatements of Net Position of Net Position As of December As of 31, December 2016, 2015 31, 2016, and 2014 2015 and 2014

2016 Assets: Assets: Current andCurrent other assets and other assets Capital assets Capital assets Total assetsTotal assets

(in thousands) (in thousands) 2016 2015 20152014

2014

$516,594 $516,594 $536,544 $536,544 $490,755 $490,755 1,611,496 1,611,496 1,505,636 1,505,636 1,480,184 1,480,184 $2,128,090$2,128,090 $2,042,180$2,042,180 $1,970,939$1,970,939

Liabilities: Liabilities: Current liabilities Current liabilities Long-term Long-term debt (including debtcurrent (including portion) current portion) Other non-current Other non-current liabilities liabilities

78,693 697,123 75,029

78,693 44,605 697,123 717,632 75,029 60,593

44,605 41,263 717,632 736,745 60,593 58,994

41,263 736,745 58,994

Total liabilities Total liabilities

850,845

850,845 822,830

822,830 837,002

837,002

Net position: Net position: Net investment in capital assets Net investment in capital assets Restricted assets Restricted assets UnrestrictedUnrestricted assets assets

919,177 45,705 312,363

919,177 794,075 45,705 41,853 312,363 383,422

794,075 749,755 41,853 43,290 383,422 340,892

749,755 43,290 340,892

Total net position Total net position Total liabilities Total and liabilities net position and net position

18 n FINANCIAL INFORMATION

1,277,245 1,277,245 1,219,350 1,219,350 1,133,937 1,133,937 $2,128,090$2,128,090 $2,042,180$2,042,180 $1,970,939$1,970,939

Port of Houston AuthorityPort Condensed of Houston Statements Authority Condensed of Net Position Statements of Net Position For the years ended December For the 31, years 2016, ended 2015 December and 2014 31, 2016, 2015 and 2014

Operating revenues Operating expenses

Operating revenues Operating expenses

Operating income

Operating income

2016

(in thousands) (in thousands) 2015 2016 2014 2015

2014

$290,226 265,103

$293,736 $290,226 $263,897 $293,736 225,928 265,103 216,901 225,928

$263,897 216,901

25,123

67,808

25,123 46,996

67,808

46,996

Net nonoperating revenues Net nonoperating revenues Net nonoperating revenues Netrelated nonoperating to property revenues taxesrelated to property taxes

7,402 22,917

697 16,792

7,402 5,520 22,917 17,075

697 16,792

5,520 17,075

Income before capital contributions Income before capital contributions

55,442

85,297

55,442 69,591

85,297

69,591

Capital contributions from Capital federal contributions agencies from federal agencies

2,453

116

2,453 2,370

116

2,370

Change in net position Change in net position

$57,895

$85,413 $57,895 $71,961 $85,413

$71,961

$155,448 49,043 -234,822 14,864

$119,795 42,241 -136,244 -10,583

$155,448 $107,281 49,043 53,988 -234,822 -149,109 14,864 -3,018

$119,795 42,241 -136,244 -10,583

$107,281 53,988 -149,109 -3,018

Net (decrease) increase in Net cash (decrease) and cash increase equivalents in cash and cash equivalents

-15,467

15,209

-15,467 9,142

15,209

9,142

Balances at beginning ofBalances year at beginning of year

70,972

55,763

70,972 46,621

55,763

46,621

$70,972 $55,505 $55,763 $70,972

$55,763

Condensed Statements Condensed of Cash Flows Statements of Cash Flows Cash provided by operating activities Cash provided by operating activities Cash provided by noncapital Cashfinancing providedactivities by noncapital financing activities Cash used in capital andCash related used financing in capital activities and related financing activities Cash used in investing activities Cash used in investing activities

Balances at end of year Balances at end of year

$55,505

*2014 was restated in connection with the implementation of Governmental Accounting Standards Board Statement No. 68.

PORT HOUSTON n 19

OPERATIONAL PERFORMANCE Operations were strong and steady for Port Houston in 2016. For the second

automobiles. The terminal is operated by Auto Warehousing Co. of Tacoma.

year in a row, the two million TEU mark was surpassed. Total tonnage was

The first ship to deliver automobiles there, the M/V Grande Sierra Leone, which

34.8 million for the year.

is operated by a partnership between Grimaldi line and Euro-Mediterranean, arrived Nov. 30. The automotive warehouse operation represents new

Port Houston’s operations team, working in coordination with organized labor,

business for Port Houston.

seamlessly supported the ongoing growth at the port’s container terminals and other facilities in 2016. Concurrently, the port was averaging more than

At the Turning Basin, multiple structures were updated and the port initiated a

30,000 trucks a week at the container terminals while maintaining ship-to-

comprehensive facilities inspection and condition assessment program.

shore cranes that operated more than 39,000 hours, with a reliability rate that topped more than 99 percent.

Working in cooperation with the U.S. Army Corps of Engineers, the Houston Ship Channel Mega-Study was launched to look at ways of even further

IT WAS THE FIRST FULL YEAR OF OPERATION FOR THE FOUR NEW SUPER POST-PANAMAX CRANES AT BARBOURS CUT, WHERE THEY BEGAN OPERATING IN LATE 2015. AND THREE MORE SHIP-TO-SHORE CRANES FOR BARBOURS CUT WERE UNDER CONSTRUCTION IN 2016 AS WORK CONTINUED ON MODERNIZING THE NEARLY 40-YEAR-OLD TERMINAL.

improving the waterway.

The contract for deepening and widening Barbours Cut and Bayport Channels was essentially completed in 2016 and executives were looking forward to commencement of the Bayport flare project and completion of that project by the Corps.

Even with continued demand, Port Houston’s vessel productivity and truck turnaround times at its terminals remained at the highest of industry standards.

The focus on connecting inland remained a high priority. Port Houston

Port Houston’s infrastructure is critical in order to capture continued economic

negotiated with the Texas Department of Transportation, Harris County and

activity for our region. The year 2016 saw numerous achievements in keeping

the railroads to move projects forward at the Broadway DoubleTrack rail line,

us competitive. At Bayport, construction of Wharf 2 began and Container

and the Texas Department of Transportation funded the Peninsula Road

Yard 6 was completed and berms and Freight Station Road were added.

project that will debottleneck one of the busiest truck avenues near the Port.

Also at Bayport, operations began at a new auto processing terminal, which opened as a result of the cruise facility being repurposed for import

20 n OPERATIONAL PERFORMANCE

THE PORT SUPPORTS NEARLY

2.6 BILLION

$

IN STATEWIDE ECONOMIC ACTIVITY

PORT HOUSTON n 21

EMERGENCY MANAGEMENT HANDLED

928 CALLS FOR ASSISTANCE IN 2016

22 n HEALTH, SAFETY, SECURITY AND EMERGENCY MANAGEMENT

HEALTH, SAFETY, SECURITY AND EMERGENCY MANAGEMENT There was no shortage of noteworthy events involving the Health, Safety,

when it comes to total vessel movements, the ability to keep the port secure

Security and Emergency Management division (HSSE) in 2016.

requires constant diligence by Port Houston emergency personnel.

Sgt. Dwight Gaines of the Port Police department was en route to the Bayport

Port Houston is certified ISO 28000. That designation is an international

Container Terminal Sept. 16 when he came upon a car crash on State

standard that sets stringent requirements for a security management

Highway 225 just after midnight. He immediately stopped to help. With the

system (SMS), incorporating all aspects of business management. The initial

assistance of several bystanders, they managed to get the driver of one of the

certification in 2008 was earned after a three-year process of developing the

vehicles out before it was fully engulfed by fire, saving his life.The department

system specifically for perimeter security operations at both the Barbours Cut

awarded Gaines a Life Saving Bar.

and Bayport container terminals. The port’s Manchester liquid bulk terminal was added in 2009. Port Houston was recertified in 2014 and a fourth

Earlier that same month on Sept. 5, a crude oil tanker fire erupted onboard

terminal, the Turning Basin, was added, ensuring the ISO 28000 certification

the M/T Aframax River after it sustained damage and began leaking crude oil

being extended through 2017.

into the upper Houston Ship Channel. A crew from the port fire department headed by Assistant Chief Glenn Hood and Senior Capt. Kirk Beverung

HSSE operates by the divisional mission statement of “Safely Secure People

raced to the scene and extinguished the blaze, saving nearby vessels and

and Commerce,” with a primary focus on supporting all other divisions in

docks. Captain of the Port, Peter Martin, (U.S. Coast Guard) praised the port

public safety elements. Each department within the division continued to refine

firefighters for their actions and diligence in responding to that incident.

their roles and effectiveness in 2016. These efforts included the completion of a safety perception survey that showed major improvements in safety

THE PORT OF HOUSTON FIRE DEPARTMENT WAS AWARDED THE U.S. COAST GUARD MERITORIOUS PUBLIC SERVICE AWARD AT A SPECIAL CEREMONY CONDUCTED DURING THE LONE STAR HARBOR SAFETY COMMITTEE MEETING AT THE HOUSTON PILOTS’ FACILITY.

across the organization, the deployment of an emergency alert system for all

The firemen, two Houston Pilots and two G&H Towing representatives were

Additionally, more than $3,000 was raised by HSSE staff to purchase gifts

presented the award by Rear Adm. Dave Callahan, the Coast Guard’s 8th

and a holiday meal for residents of a local assisted-living facility as part of the

District commander, in recognition for their “prompt and effective response to

Police Department’s “Silver Santa” initiative, which dates back as a tradition

prevent a major marine casualty.”

since 2009.

employees, several awards and recognitions for the Fire Department both in HAZMAT response and Emergency Medical Servicesand the continuation of “no deficiencies noted” by the U.S. Coast Guard during security inspections.

As they say, it’s all in a day’s work for both the police and fire crews at Port Houston (see accompanying chart, page 22) As the nation’s busiest port

PORT HOUSTON n 23

2016 HSSE STATISTICS AN AVERAGE WEEK IN HSSE

• 3,707 Credentialing visitors at TB (15 a day)

• Fire Department responds to 5 HAZMAT calls, 4 EMS calls, and 1 fire

• Maintained C-TPAT and ISO 28000 certifications

• Fire Department inspects 110 fire hydrants, 287 fire extinguishers, and 5 buildings • Security randomly screens 5,146 vehicles and randomly verifies 494

EMERGENCY MANAGEMENT DEPARTMENT

TWIC cards

• The Dispatch Center:

• Safety conducts 27 audits, holds 31 hours of contact training, and does

o Received 48,298 calls for service (134 a day, slight increase)

6 incident investigations for process improvement

o Entered 6,880 vessel arrivals/departures/shifts at terminals (19 a day,

• Police Department responds to 742 calls or events, issuing 33 safety

slight decrease)

citations, and making 2 arrests

o Processed 1,732 gate requests and direct discharge requests (5 a day,

• Credentialing assists 75 people face-to-face with access requirements

slight decrease)

• The Emergency Management Dispatch Center handles 928 calls for

o Distributed, collected, cleaned and sorted 6,111 wristbands for Ro-Ro

assist, records 132 vessel movements, and processes 33 late gate requests

operations (17 a day, slight decrease) • 122 Port Alert notifications sent

FIRE DEPARTMENT

• 933 open records requests (3 a day)

• 581 total calls (down 10% from 2015)

• EOC activations for AFRAMAX RIVER fire and Apache helicopter crash

• 42% HAZMAT (245) • 34% EMS (196 – 156 PHA/30 mutual aid)

SAFETY DEPARTMENT

• 10% Fires (60 – 10 marine/29 land/21 mutual aid)

• Facilitated over 1,400 safety audits

• 14% “Other” i.e. Inspections, Fire Alarms, and Area Checks (80)

• Conducted 299 incident investigations

• Inspected 455 fire hydrants every month

• Conducted over 1,600 training contact hours

• Inspected 1,300 fire extinguishers every month

• Lost Time Incident Frequency Rate

• 250 building Inspections of port-owned facilities, each building done at

o US Maritime Alliance (East and Gulf Coast Ports) = 4.45

least annually

o PHA = 1.12 (or 1/3 of the industry average)

• 100 pre-fire plans completed for waterside facilities along ship channel

• Conducted the DuPont Safety Perception Survey with a 98% response rate

• Initial Certification Training - Structural Fire - 468 hours, Marine Fire - 90

• Implemented Turning Basin Truck Compliance Program

hours, HAZMAT Tech - 80 hours, Instructor I - 48 hours, Fire Officer I - 60 hours, Driver Operator - 60 hours, USCG Masters License - 360 days of

POLICE DEPARTMENT

sea time and class, EMT - 208 hours

• 38,505 incidents recorded (steady with 2015)

• Annual Texas Commission on Fire Protection C.E. Hours - 34 hours per person

• Average 106 incident responses per day (steady with 2015)

• Annual Texas Department of Health EMT C.E. Hours - 12 hours per person

• 123 arrests made, vast majority for outstanding warrants • Top activities:

SECURITY DEPARTMENT

o Area Check (21,595)

• Security randomly screened 267,631 vehicles (1,074 per workday which

o Vessel Movement (4,929)

means on average over 7,000 vehicles a day enter our facilities)

o Traffic Control (2,949)

• Five annual USCG Inspections, 7 unannounced USCG spot-checks (no NOVs)

o Courtesy Transport (2,232)

• One Internal FSP audit, one Internal SMS audit, one External SMS audit

o Open/Close Gate or Door (1,847)

• 25,692 TWIC cards randomly verified (103 per workday)/37 discovered revoked

o Safety Violations (1,710)

24 n HEALTH, SAFETY, SECURITY AND EMERGENCY MANAGEMENT

PORT HOUSTON n 25

GOVERNMENT PARTNERSHIPS ARE KEY AT PORT HOUSTON Facilitating international commerce along the Houston Ship Channel and generating jobs are major aspects of Port Houston’s overall mission. Port executives regularly engage with federal, state and local officials on port-related policies ranging from dredging, freight mobility, transportation and infrastructure to environmental regulation, port security and international trade.

26 n GOVERNMENT RELATIONS

Port Houston’s Government Relations department acts as the liaison between the Port Authority and its local, state and federal government stakeholders. The department’s functions include informing and educating elected officials and regulatory agencies on issues that affect the port by hosting briefings and tours, as well as responding to a myriad of requests.

PORT HOUSTON n 27

IT IS ALL ABOUT RELATIONSHIPS

Roger Guenther, who provided him and several members of his staff with an

Port Houston values its relationships with its partners and stakeholders.

overview of the Port of Houston.

Numerous local, state and federal governmental entities are port stakeholders.

The members of the Port Commission are appointed by local jurisdictions; the

The senator also was given an update regarding the Houston Ship Channel

State of Texas authorized the creation of the Port Authority as a navigation

from Channel Development Director, Mark Vincent, and on state policy

district and granted certain property to it; and the federal government partners

priorities by Government Relations Director Spencer Chambers.

with the Port Authority in some of its most important projects, including the maintenance of the Houston Ship Channel.

The port hosted State Rep. Larry Gonzales for a briefing June 30. Rep. Gonzales represents Williamson County, in House District 52. He is a 17-year

Visits to Port Houston by elected and appointed officials are common. In

resident of his district and a seasoned veteran of the Texas Legislature, serving

January of 2016, the head of the Small Business Administration, Maria

as a senior staff appointee of members of the House of Representatives, the

Contreras-Sweet, visited and told port executives that the SBA is working

Lieutenant Governor and the Attorney General during nine regular legislative

on behalf of business owners to expand their access to capital. The SBA

sessions, before his election.

guarantees loans for small businesses.

Gonzales, chairman of the House Appropriations Subcommittee, which Administrator Contreras-Sweet lauded the commitment by Port Houston

allocates funding to the Texas Department of Transportation, Texas

executives to the port’s Small Business Development Program, which

Commission on Environmental Quality, Texas Railroad Commission and many

was outlined by Port Commission Chairman Janiece Longoria and Port

other state agencies. He was also recently named chairman of the Texas

Commissioner John D. Kennedy, along with Executive Director Roger

Sunset Commission.

Guenther and key staff. The goal of the program is to award 35 percent of eligible contracts to small business, but the port has regularly exceeded that

SENATOR TOURS BAYPORT

goal, awarding small business with 42 percent of eligible contracting dollars.

U.S. Sen. Ted Cruz visited the Port Authority’s Bayport Container Terminal August 23 for a briefing and tour of the Port of Houston. Elected in 2012 to

Since it began in 2002, about $434 million in contract expenditures have

serve as one of the two senators representing Texas, Sen. Cruz sits on several

been made to small businesses. Those contracts have been important in

important committees, including the Committee on Commerce, Science and

helping small businesses succeed and expand.

Transportation.

STATE LEGISLATORS VISIT PORT FOR BRIEFING

During Cruz’ visit to the port, Commissioners Dean Corgey and Stephen

Several public officials met with port leadership in 2016 on a key number of

DonCarlos, Executive Director Roger Guenther and other leadership

issues facing ports.

provided an overview of the Port of Houston and discussed the many federal partnerships and policies that are critical to maritime commerce along the

Sen. Robert Nichols, chairman of the Senate Transportation Committee,

Houston Ship Channel. In particular, the executives highlighted the importance

visited and toured the Bayport Container Terminal in the spring. Nichols

of dredging and improving the ship channel as well as the need for adequate

was welcomed by Chairman Janiece Longoria and Executive Director

infrastructure on land to facilitate the efficient movement of goods.

28 n GOVERNMENT RELATIONS

DREDGING FUNDING: A TOP LEGISLATIVE PRIORITY Top U.S. Army Corps of Engineers (USACE) officials met with Port of Houston Authority channel development experts Aug. 24 to discuss a range of important issues.

The meeting with Major General Donald E. Jackson, Jr., Deputy Commanding General for Civil and Emergency Operations, and Brig. General David C. Hill, Commander and Division Engineer for the Southwest Division, was an opportunity for the Corps’ leadership and the port to discuss the Houston Ship Channel’s importance to the nation -- as well as its needs and challenges.

AS THE LOCAL SPONSOR OF THE HOUSTON SHIP CHANNEL, WE WORK CLOSELY WITH THE CORPS OF ENGINEERS. PORT HOUSTON IS ONE OF THE LEADING DEEP-DRAFT PORTS IN THE COUNTRY, WITH MORE THAN 150 PRIVATE FACILITIES IN THE PORT’S 25-MILE COMPLEX. The port frequently hosts various international delegations and is involved with government agencies focused on ports at the state and federal level such as Texas Ports Association and American Association of Port Authorities.

Small Business Administrator Maria Contreras-Sweet (second from left) lauded the Small Business Development Program during a 2016 visit.

PORT HOUSTON n 29

ENVIRONMENTAL STEWARDSHIP Port Houston is committed to conducting port operations using a systematic approach to environmental management in order to protect and preserve the natural environment. We strive to be the recognized maritime industry leader in environmental stewardship through air and water quality, land management, stewardship and marsh restoration.

Port Houston’s nationally recognized and award-winning dedication to ensuring that business and the environment can co-exist successfully is often held up as the model for others to emulate. The port also collaboratively works with partners such as the Galveston Bay Foundation to preserve and protect Galveston Bay, home of the Houston Ship Channel.

PORT HOUSTON HAS BEEN AWARDED

6.7 MILLION

$

IN GRANTS FROM THE EPA

30 n ENVIRONMENTAL STEWARDSHIP

GUARDIAN OF THE BAY AWARD

as a systematic framework to manage the immediate and long-term

The Galveston Bay Foundation honored the port with the Guardian of the Bay

environmental impact of an organization’s products, services and processes.

Award at its annual luncheon Sept. 27.

GIVING BACK TO THE BAY Accepting the award on behalf of the port was Commissioner Stephen

The port and the Galveston Bay Foundation (GBF) recently partnered to

DonCarlos, Port Authority Environmental Affairs Director Leah Oberlin and

restore vital oyster reef habitat in part the bay. This volunteer event was held

Channel Development Project Manager David Casebeer.

on July 16 at the Sweetwater Preserve on Galveston Island, and assisted with the construction of new reef along 2,000 feet of shoreline. The Sweetwater

The port’s environmental stewardship efforts occur throughout the year through

Lake Oyster Bar Breakwater, created during this event, was constructed

community outreach and events, which is one of the organization’s primary

entirely by port volunteers.

goals from the 2014 adopted strategic plan. The Environmental Affairs team also does extensive outreach and volunteerism that are aimed at benefitting Galveston Bay. The port also reuses dredged material through dredging projects in order to restore marine habitat and aquatic life. The port is creating 3,100 acres of marsh, constructing bird islands and developing offshore beneficial use berms for fisheries habitat.

As part of the port’s environmental policy, stewardship and pollution prevention are incorporated into all business decisions and practices.

EXCELLENCE: MEETING ISO COMPLIANCE Port Houston is the first port in the world to attain the newest international standard for port environmental management systems, meeting a stringent new set of criteria in the process ranging from the following requirements:

• Waste Minimization

• Energy Efficiency

• Storm Water Pollution Clean-up Program

• LEED Standards

• Dredged Material Area Management

AS PART OF OUR CONTINUED DEVOTION TO BE AN ENVIRONMENTAL LEADER, THE “GIVE BACK TO THE BAY” EVENT, ALSO KNOWN AS “BAYDAY,” WAS CREATED TO ENGAGE PORT TEAM MEMBERS IN STEWARDSHIP EFFORTS THAT BENEFIT GALVESTON BAY, HOME TO PART OF THE HOUSTON SHIP CHANNEL, OUR REGION’S LARGEST ECONOMIC DRIVER. DRAYAGE TRUCK PROGRAM SUPPORT The port welcomed environmental, trucking and transportation professionals for the Texas Commission on Environmental Quality (TCEQ) Drayage Truck Program grant workshop in October.

The TCEQ Drayage Truck Incentive Program was designed to provide incentives for the replacement of vehicles operating at various seaports and Class I rail yards in nonattainment areas of Texas, including the Port of Houston.

Owned or leased vehicles, non-road yard trucks and other cargo handling equipment are eligible to be replaced through the program. Up to $4.7 million in reimbursement grants are available to applicants. The grants help the Texas region better improve air quality by offering these incentives.

Port Houston has partnered with Houston-Galveston Area Council and the

Known as ISO 14001:2015, the new standard requires significant organizational changes before the designation can be awarded, and steps already have been

Environmental Defense Fund in the Port Drayage Truck Bridge Loan Program for these efforts.

taken by port environmental department officials to meet those goals.

The port has been awarded $6.7 million in grants from the Environmental The ISO 14001 Environment Management System (EMS) standard is an internationally recognized environmental management standard that was put in place in 1996. Open to any company or agency, the program is described

Protection Agency during the past seven years and more than $2.2 million in TCEQ grants since its program began in 2002. Port Houston has a solid track record of securing state and local grant opportunities for air emission reductions.

PORT HOUSTON n 31

COMMUNITY RELATIONS VALUED AT PORT HOUSTON Port Houston stakeholders include the communities surrounding the Houston

BEACH CLEANUP PROGRAM

Ship Channel. In 2013, the Chairman’s Citizens Advisory Council was created

The port was proud to partner with the Galveston Bay Foundation and the

to provide an open line of communication between the Port Commission and

Texas General Land Office for the statewide Adopt-A-Beach cleanup event.

communities in and around the Port of Houston. The council in 2016 continued

Port employees cleaned Morgan’s Point beaches, joining 60-plus other

its important work, providing community input for a litany of activities.

community members from local businesses and surrounding communities.

The port is committed to being a responsible neighbor and community

The Texas Adopt-A-Beach program, which began in 1986, is an all-volunteer

member in the region, and maintaining that commitment is an important part

effort dedicated to preserving and protecting Texas beaches. The program’s

of our success as a port.

success is credited to dedicated volunteer coordinators, coastal community leaders, sponsors and citizens.

OYSTER REEF RESTORATION PROJECT Port Houston partnered with the Galveston Bay Foundation in July for an

Through a cooperative team effort, volunteers were able to clean up nearly a

Oyster Reef Restoration project at the Sweetwater Preserve on Galveston

half-mile of beach shoreline, filling a dumpster’s worth of debris. Additionally,

Island and assisted with construction of reef along 2,000 feet of shoreline.

participants collected several dozen bags of recyclables such as bottles, aluminum cans and plastic bags that otherwise would end up in Galveston Bay.

AS PART OF THE PORT’S COMMITMENT TO CONTINUE TO BE AN ENVIRONMENTAL LEADER, THE “GIVE BACK TO THE BAY” DAY WAS FOUNDED. THE ANNUAL EVENT ALLOWS EMPLOYEES AND THEIR FAMILIES TO BE STEWARDS OF GALVESTON BAY, THE HOME OF THE HOUSTON SHIP CHANNEL, A REGIONAL ECONOMIC DRIVER.

“PARK TO PORT” BIKE RIDE The port also participated at the third annual “Park to Port” Bike Ride Oct. 15.

Riders started in Hermann Park by Bill Coats Bridge, heading east through the recently rehabilitated Bayou Greenway trail on Brays Bayou, ending up at the Port of Houston. More than 1,000 people participated.

More than 40 employees volunteered to create a vital habitat for new oysters and to improve water quality. Oysters act as a natural filtration system by

Crowds celebrated the bikers’ arrival during the turnaround event sponsored by

filtering silt and contaminants from the water.

Port Houston at Brady’s Landing with food, music, games and a fireboat show.

A single oyster can filter up to 50 gallons of water daily. By providing young

Port employees volunteered to pass out snacks to riders. Proceeds from

oysters with a hard surface such as recycled shells on which to settle and

the ride benefit the Hermann Park Conservatory, a nonprofit organization

grow, constructed oyster reefs will promote better water quality in Galveston

responsible for maintaining and improving the parks system.

Bay for years.

32 n COMMUNITY RELATIONS

ASSISTED WITH CONSTRUCTION OF REEF ON

2,000 FEET

OF SHORELINE ON GALVESTON ISLAND

PORT HOUSTON n 33

PADDLING THE BAYOU FOR A CAUSE

Training Campus in Bayport. A total of 275 middle and high school students

Port employees also joined dozens of fellow canoe and kayak enthusiasts

from the surrounding Houston area attended the half-day program.

for the inaugural Greens Bayou Regatta, a 7.5-mile paddle race held in October. The event combined recreation, stewardship and education on one

The expo featured presentations by mariners on the topics of towboats,

of Houston’s most beautiful and secluded waterways, Greens Bayou.

harbor tugs, barges, shipping forklifts, dredging, survey vessels and maritime salvage equipment.

Paddlers, both novices and seasoned veterans, listened to opening remarks from Houston Mayor Sylvester Turner near the launch site at Brock Park.

SMALL BUSINESS DEVELOPMENT STRONG In addition to the industry forums, the port’s Small Business team actively

ENCOURAGING STUDENTS ON JUNIOR ACHIEVEMENT DAY

partners and sponsors outreach workshops, expos and one-on-one develop-

Employees volunteered at Port Houston Elementary’s Junior Achievement

ment sessions.

Day Dec. 15. The educational partnership utilizes members of the port community to help children understand the relationship between what they

The semi-annual Port University course, a staff-driven initiative to help

learn in school and their successful participation in society, while encouraging

promote the Small Business Program, provides insight into the procurement

and inspiring them to achieve their highest potential.

process at the port.

Junior Achievement’s “JA Day” allows companies to interact with students

2016 was also a year of awards for the Small Business Education and Outreach

and deliver a grade-specific curriculum over the course of a school day.

department. Port Houston’s Small Business and Maritime Education programs

Students learn the basic concepts of business, economics and how their

received the Our Great Region Excellence Award from the Houston-Galveston

education is significant to the workplace. The lesson contains fun activities

Area Council (H-GAC) Dec. 2. The award is the highest level of recognition

that help students understand new concepts and the roles businesses play

from the organization, which covers 13 surrounding counties, including Harris

in their communities.

County. H-GAC is the regional organization through which local governments consider issues and cooperate in solving area-wide problems.

MARITIME EDUCATION PROGRAM THRIVING We also invest in maritime education to meet our future workforce needs to assure that we are America’s distribution hub for the next generation and to prepare the next generation for the growing maritime career opportunities.

THE SMALL BUSINESS TEAM WAS HONORED WITH THE COMMUNITY PARTNER OF THE YEAR AWARD, PRESENTED BY HOUSTON MAYOR SYLVESTER TURNER, FOR ITS PROTÉGÉ MENTORING PROGRAM WITH HOUSTON METRO AND HOUSTON ISD.

Through partnerships with local high schools, four-year colleges and junior colleges, students have the opportunity to participate in programs preparing

Port Houston’s interagency mentor protégé program, in collaboration with the

them for maritime careers.

City of Houston, Houston First Corporation, Houston ISD, Houston Community College, and Houston METRO aims to help small businesses become more

The port’s Maritime Education Department supported the 2016 Youth

self-sustaining by fostering long-term relationships between contractors and

Maritime and Logistics Expo April 16 at San Jacinto College’s new Maritime

Port Houston certified small businesses, as well as businesses registered with partnering agencies.

34 n COMMUNITY RELATIONS

RECOGNITION OF SERVICE Port Houston sincerely appreciates the hard work and dedication of the following employees for their many years of service: Susan J. Burrows • M/V Sam Houston • 8 Years Anita A. Hayes • Executive • 7 Years Charles E. Jefferson • Northside TB • 17 Years Glen H. Lewis Jr. • TB Maintenance • 8 Years Jerry D. McDonald • BCT Maintenance • 20 Years Michael E. Older • Fire • 36 Years Jerry L. Tobias • Fire • 29 Years Eric S. Vining • BCT Maintenance • 20 Years Kenneth G. Wilcox • BCT Maintenance • 13 Years

PORT HOUSTON n 35

ABOUT

ABOUT PORT HOUSTON Port Houston is an economic engine that produces jobs and economic prosperity for the local and state economy. We are the proud sponsor of the Houston Ship Channel, and we facilitate and accommodate commerce and navigation. Port Houston strives to be America’s Hub for the Next Generation and we are ready for bigger things to come.

EDITORIAL STAFF: STAN SWIGART Director Marketing and External Communications BILL HENSEL Manager External Communications LACI THERIOT Digital Content Marketing Specialist DESIGN: JOHN MANLOVE MARKETING & COMMUNICATIONS PHOTOGRAPHY: CHRIS KUHLMAN CK Productions DAVID BRAY David Bray Photography ©2017 Port Houston All rights reserved

36 n ABOUT PORT HOUSTON

111 EAST LOOP NORTH HOUSTON, TX 77029 P.O. BOX 2562 HOUSTON, TX 77252-2562 713.670.2400 FAX: 713.670.2429 WWW.PORTHOUSTON.COM