Port Houston Navigator - Summer 2017

NAVIGATOR

SUMMER 2017

A MILESTONE YEAR

BARBOUR’S CUT CELEBRATES 40TH ANNIVERSARY

CENTERING ON DISTRIBUTION

PORT ATTRACTS KEY FACILITIES

IKEA PRODUCTS MOVING THROUGH PORT HOUSTON NEW DISTRIBUTION CENTER OPEN

ALSO: NEW CAPTAIN OF THE PORT KEVIN ODDIT • GULF COAST SHIPPING CONFERENCE LT. GEN. TODD SEMONITE OF CORPS OF ENGINEERS VISITS PORT • STEEL HEATING BACK UP AT PORT HOUSTON

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NAVIGATOR 7.17

A MESSAGE FROM EXECUTIVE DIRECTOR ROGER GUENTHER

THE MANIFEST PORT HOUSTON’S NEWS HIGHLIGHTS CENTERING ON DISTRIBUTION THE PORT IS KEY DRAW FOR CENTERS

HIGHEST NUMBER OF CONTAINER LIFTS EVER AT PORT TERMINALS NEW DISTRIBUTION CENTER IKEA PRODUCTS MOVING ACROSS PORT DOCKS

STEEL HEATING BACK UP AT PORT HOUSTON

IN THIS ISSUE

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NEW CAPTAIN OF THE PORT HITS THE WATER RUNNING

THE GULF COAST ADVANTAGE PORT HOUSTON HOSTS 2ND ANNUAL JOC GULF SHIPPING CONFERENCE

U.S. ARMY CORPS OF ENGINEERS LIEUTENANT GENERAL VISITS PORT

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FEATURE STORY: THE MILESTONE YEAR CONTINUES BARBOUR’S CUT CONTAINER TERMINAL CELEBRATES 40TH ANNIVERSARY

DID YOU KNOW? INTERESTING FACTS ABOUT PORT HOUSTON SPOTLIGHT ON SMALL BUSINESS PHOTOGRAPHER HIGHLIGHTS PORT PROJECTS

DID YOU SEE THE SHIP ON THE COVER?

The 8,000-TEU MSC Toronto called at the Bayport Container Terminal in late June and is scheduled to become a regular part of the carrier’s rotation. The MSC Toronto is one of larger ships on the TA-6/MEDGULF service.

The arrival of the Toronto is indicative of the continued increase in vessel sizes that are being seen at Port Houston container terminals, where everything is in place to accommodate these larger vessels and increased containerized cargo.

Port Houston recently passed the one million container TEU mark, putting the biggest container port on the U.S. Gulf of Mexico on track to surpass the two million TEU mark for a third straight year.

PORT HOUSTON NAVIGATOR’S EDITORIAL STAFF:

EXECUTIVE OFFICE JANIECE LONGORIA Chairman

JOHN D. KENNEDY Commissioner

111 East Loop North, P.O. Box 2562, Houston, TX 77252-2562 Phone: 713-670-2400 Fax: 713-670-2429 Executive Director ROGER D. GUENTHER

Chief Legal Officer ERIK A. ERIKSSON

Chief Operating Officer THOMAS J. HEIDT

Chief Port Infrastructure Officer RICHARD BYRNES

Chief Commercial Officer RICKY W. KUNZ

Chief Port Operations Officer JEFF DAVIS

Chief Financial Officer TIM FINLEY

Chief Audit Officer MAXINE BUCKLES

Chief HSSE Officer MARCUS WOODRING

Chief People Officer JESSICA SHAVER

Chief Information Officer CHARLES THOMPSON

Harris County Auditor BARBARA J. SCHOTT

DEAN E. CORGEY Commissioner

Harris County Treasurer ORLANDO SANCHEZ

FIELD OFFICES

Stan Swigart, director, marketing and external communications | Bill Hensel, manager, external communications | Laci Theriot, digital content marketing specialist | David Bray, photographer | Chris Kuhlman, photographer | John Manlove Marketing & Communications, design and layout.

This publication is not copyrighted and permission is given for the reproduction or use of any original materials, provided credit is given to Port Houston. Additional information, address changes, extra copies, or advertising specifications may be obtained by writing to the Port Houston Navigator.

The Port Houston Navigator is published

by Port Houston, P.O. Box 2562, Houston, Texas 77252-2562, and is distributed free to maritime, industrial and transportation interests in the United States and foreign countries.

CENTRAL & SOUTH AMERICA (excluding Brazil)

CLYDE FITZGERALD Commissioner

ARTURO GAMEZ Central & South America Representative Port of Houston Authority Avenida Aquilino De La Guardia y Calle 47 Ocean Business Plaza Building, Mezzanine Panama, Republic of Panama Tel.: +(507) 340-0205 Fax: +(281) 754-4647 Houston Access (713) 491-4607 Email: agamez@poha.com

STEPHEN H. DONCARLOS Commissioner

ROY D. MEASE Commissioner

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Introducing PORT HOUSTON DIRECT a higher degree of service and stability for importers and exporters. Port Houston works with BCOs to overcome logistics and service issues and our Port Houston Direct team can be contacted directly by BCOs for an immediate response.

• More Reliable • All Water Service

• Less Congestion • More Accessible

• More Stable • Less Complicated

BRAZIL THELDON R. BRANCH, III Commissioner

BCO’S PREFER H2O

Call or visit us online to learn more about Port Houston, The International Port of Texas.

JOHN C. CUTTINO Brazil Representative Port of Houston Authority Av. Paulista, 2300-Andar Pilotis Sao Paulo, SP Brazil, CEP: 01310-300 Tel.: +55 (11) 3280-5755 Fax: +55 (11) 2847-4550 Houston Access (832) 239-5076 Email: jcuttino@poha.com

ASIA MATTHEW SOLOMAN Port of Houston Authority c/o Ben Line Agencies Email: kua.msoloman@benline.com.my Tel: +60 3 7947 7333 Mobile: +84 903 943 886 Head Office 200 Cantonment Road, #13-05 Southpoint, 089763 Singapore Tel.: +65 6420 9013 Fax: +65 6224 0163

For advertising opportunities contact Bill Hensel at 713-670-2893

Visit Port Houston online at www.PortHouston.com

PortHouston.com • 713-670-2400

“Port Houston continues to perform well operationally, handling more than 16 million tons of cargo for the year, an increase of 12 percent compared to last year.”

ROGER THAT

A MESSAGE FROM EXECUTIVE DIRECTOR

ROGER GUENTHER

Often we only highlight investment going into facilities that are owned by Port Houston. However, tremendous investments are also being made in the Houston Ship Channel region by the private sector, which increase economic activity. A significant amount of capital assets are being developed by industry that produce commodities exported around the world. There are also significant increases in commercial distribution centers that attract imported retail goods internationally. This growth in investment drives cargo through public and private facilities, creating prosperity and jobs in our region.

For example, the Port Commission recently approved the permit for docks to be constructed, as well as leases for barge fleeting facilities that the private sector is investing in to create growth opportunities in our channel region.

Those developments are in addition to the tremendous activity taking place at our own facilities. Port Houston continues to perform well operationally, handling more than 16 million tons of cargo for the year, an increase of 12 percent compared to last year.

A majority of this increase is due to our total container volumes being up 15 percent. In fact we passed the one million TEU mark in May already. This increase is being driven by loaded containers, which were up by 17 percent compared to the same period of time last year.

In June, we had a vessel with the highest number of containers for one vessel call in our history. A total of 4,198 containers were lifted on or off of the COSCO Boston. Being successful in attracting larger vessels such as this one is made possible through partnerships with customers, stevedores and labor, working together efficiently at Port Houston.

Port Houston’s increasing cash flows have been the result of organic growth as we continue to naturally expand, combined with new all-water services choosing Houston as their home.

With this growth and the anticipated demand for resin exports beginning later this year and increased demand for imports into Houston, we must continuously assess our capital infrastructure needs for the future, both near and long term.

To keep Port Houston the premier port on the Gulf Coast, our staff routinely evaluates our cargo projections, terminal capacity, additional infrastructure needs and financing alternatives. An example includes the recent approval by our Port Commission for the purchase of nine new rubber tired gantry cranes to handle the continued growth of container volume.

So between what the private sector is doing to expand business in the region and what Port Houston is doing with our own facilities, together we will ensure the port remains a strong and vibrant force and valuable economic engine for the future.

And lastly, we are pleased to report that this month the U.S. Army Corps of Engineers completed its maintenance dredging at Bayport, which opens that facility for 45 foot draft vessels. Bayport joins Barbours Cut in taking full advantage of the Houston Ship channel depth.

I particularly would like to thank our dedicated staff members for their hard work staying ahead of our future needs and making sure we follow our Vision: “To be America’s distribution hub for the next generation.”

And, we continue to see a steady uptick in steel trade compared to last year, with a total of 1.4 million tons through May.

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TEXAS LEGISLATURE PASSES PORT- RELATED LEGISLATION The Texas Legislature passed several measures impacting ports during its 85th Regular Session, which concluded May 29.

THE MANIFEST PORT HOUSTON NEWS AND HIGHLIGHTS

The session began with a report from the Texas Select Committee on Ports, created by Lt. Gov. Dan Patrick and chaired by Sen. Brandon Creighton, recommending that the state support channel improvement efforts in Texas.

House Speaker Joe Straus also created a new committee to examine port issues – the House Select Committee Texas Ports, Innovation and Infrastructure. The vice chair on that panel is Rep. Dennis Paul, who represents the Port of Houston region.

Patrick initiated Senate Bill (SB) 28, which was filed by Creighton and Rep. Joe Deshotel and was passed, creating a state revolving loan program to assist state navigation districts with their share of federal channel improvement projects. State appropriators allocated a total of $40 million ($20 million per year in the state’s two-year budget) to the Texas Department of Transportation for port freight mobility projects.

Creighton and Rep. Mary Ann Perez sponsored SB 1395, aimed at modernizing state navigation districts statutes and assisting them with their day-to-day operations and processes, and the bill passed. SB 1864, which pertains specifically to Port Houston, was sponsored by Sen. Larry Taylor and Perez and its passage updated the port’s governing statutes, including a clarification of its role in providing on-water fire protection along the entire length of the Houston Ship Channel.

Other port-related legislation included SB 1524 by Sen. Robert Nichols and Rep. Gennie Morrison, which passed and created a new state heavy-haul permit for shipping containers that also includes truck safety equipment requirements and funding for local governments to assist with implementation.

During the session, legislators highlighted the importance of Texas ports, noting they sustain more than 1.2 million jobs in the state and generate $265 billion in annual economic impact to Texas. They also pointed out the ongoing growth in maritime commerce, which they said is critical for the economic health of the state.

PORT HOUSTON WINS AMERICAN MARKETING ASSOCIATION CRYSTAL AWARDS Port Houston’s Marketing and External Communications team won two American Marketing Association Crystal Awards at the association’s 31st Annual Crystal Awards Gala May 11.

The Crystal Awards is Houston’s largest marketing event and recognizes the best marketing in a wide variety of categories.

The Port Houston team took home two awards in the branding category: Branding/Rebranding and Logo Design.

Port Chairman Janiece Longoria publicly recognized Stan Swigart, Rina Lawrence, Bill Hensel, Laci Theriot and Fatima De Leon during a Port Commission meeting May 24. The team collaborated with John Manlove Marketing and Communications, a local marketing and advertising agency, on the port’s rebranding project in 2016.

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PORT HOLDS ECONOMIC DEVELOPMENT WORKSHOP Port Houston’s FTZ and Economic Development department hosted 35 local economic development professionals for a workshop June 14. The workshop included a roundtable discussion, briefing and tour of the Bayport Container Terminal.

The event was designed for the port to engage with economic entities and stakeholders about their community development needs serving the Houston port region.

Port Houston FTZ Program and Economic Development Manager Shane Williams and Economic Analyst Jordan Frisby provided presentations and updates.

INTERNATIONAL ARCHITECTURE STUDENTS VISIT PORT

At Bayport and Barbours Cut, Port Houston has a total of 17 weekly direct container services from all over the world.

Port Houston welcomed 24 guests from around the world for an overview and tour of the port June 14. The guests all were interning or working at global landscape architecture firm, SWA Group.

“Our goal is to help these communities get started on these growing expansion projects,” Frisby noted. “Houston and surrounding areas are great for building distribution centers and manufacturing for both importing and exporting. We have significant room for growth.”

SWA’s Summer Student Program is designed to further an understanding of the port’s relationship to the region and develop future creative and economically viable project proposals.

Major retailers such as Rooms-To-Go, IKEA, Home Depot and Walmart all have distribution centers in the Houston area.

“We have ample capacity at our container terminals for planned growth,” said Williams. “We have seen a 15 percent increase in our container volume performance since 2016.”

provided an overview of the port’s history. Director of Channel Development Mark Vincent discussed the Houston Ship Channel and Chief Infrastructure Officer Rich Byrnes reviewed the port’s future plans and opportunities, noting that the port trades with more than 100 countries.

City of Houston Council Member David Robinson accompanied the group and Port Chairman Janiece Longoria and Port Houston staff provided presentations.

Port Houston handles a variety of diverse cargoes from automobiles to containers. “Every city has a strategy, and we are a trade hub, focusing on investments needed to facilitate commerce and our connections to the community,” said Byrnes. “Here in Houston, we have history of innovation and have to continually be thinking ahead.”

Chairman Longoria outlined the port’s complex of diverse facilities and capabilities and Chief Legal Officer Erik Eriksson

SWA is a landscape architecture, urban design and planning firm, with a network of seven studios worldwide.

SUMMER INTERNS COME ONBOARD PORT HOSTS HARRIS COUNTY MAYORS AND COUNCILS ASSOCIATION

This year’s summer intern class is made up of 15 undergraduate students from universities in Texas and beyond who will spend 12 weeks learning and working at the port.

Port Houston and Port Commissioners Stephen DonCarlos and Roy Mease recently hosted mayors, council members and administrators from 29 cities in the greater Houston area for an educational tour along the Houston Ship Channel.

These cities make up the Harris County Mayors and Councils Association. Commissioner DonCarlos represents these cities on the Port Commission, as this group is one of the bodies responsible for appointing a member to the Port Commission.

Two different tours were held to accommodate the group.

One was conducted June 15 for the cities along the Houston Ship Channel on the east side of Harris County, and the other was held June 17 for the cities on the west side of Harris County.

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Commissioners DonCarlos and Mease welcomed city leaders and provided an update on port activities and projects as participants traveled from the Battleship Texas, under the Fred Hartman Bridge and down to the Barbours Cut Container Terminal.

“This is a great networking event for our local city leaders and Port Houston,” said Community Relations Manager Leslie Herbst. “We value our partnership with all the HCMCA representatives, and we appreciate the opportunity to showcase the Port of Houston and its importance to the entire region.”

The internship program is designed to allow students to apply, evaluate and test and integrate academic knowledge and theoretical concepts in a work setting, as well as gain experience to prepare for life after college.

The 2017 intern class will receive waterside, terminal and crane tours throughout the program, which includes a port research project.

The interns will be supporting various departments: Container and General Cargo Operations, Human Resources, Internal Audit, Media Relations, Emergency Management, Security, Project and Construction Management, Financial Accounting,

THE MANIFEST

Facility Planning, Environmental Affairs, Asset Management, Channel Development and Information Technology.

“As the program continues to build and grow, we will expect more from our students,” said Alia O’Neill, Port Houston human resources generalist. “The goal of the program is to develop and expand these students’ knowledge about themselves and their abilities, goals and career interests.”

THE MANIFEST spotlights news briefs exclusively from Port Houston, its customers, trading partners, and community stakeholders. Submit information in the form of a letter or press release via e-mail to bhensel@poha.com or via fax 713-670-2564. Publication is not guaranteed and the magazine staff reserves the right to edit submissions for content and style.

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AN INNOVATIVE IDEA WITH HOUSTON A KEY PLAYER The era of container shipping began in 1956 when the world’s first container ship, the Ideal X, sailed from New York to the Port of Houston. But it took a full 21 years for the new shipping method to take hold and trigger the development of the Barbours Cut facility. This brought an entire new line of business and a variety of transportation services to the port.

THE MILESTONE YEAR CONTINUES:

BARBOURS CUT

CONTAINER TERMINAL

Celebrates 40th Anniversary This spring, Port Houston recognized the 40th anniversary of the Barbours Cut Container Terminal.

Since the opening of this facility, the port has grown to handle about 70 percent of all of the container activity In the U.S. Gulf of Mexico and has become one of the world’s busiest ports by cargo tonnage.

But it didn’t happen overnight.

The beginning of the Barbours Cut Container Terminal dates back to a Port Commission meeting in August of 1970, when Chairman Fentress Bracewell announced the decision to build a marine terminal that would only handle containerized cargo. Although it is an industry standard today, it was considered a radical idea at the time.

Bracewell ultimately became the longest-serving chairman of the Port Commission, and Barbours Cut carries his name in recognition of his foresight that the shipping industry would embrace the new trend of carrying cargo in containers.

WHERE DID ALL THE CRANES COME FROM? Prior to its development as a container terminal, Barbours Cut was simply the home of two marinas and three barge terminals and was maintained at a depth of 12 feet below mean low tide (MLT).

While the Port of Houston previously handled breakbulk and project cargo primarily, a new era was being introduced at the port.

COMMEMORATING BARBOURS CUT A formal dedication ceremony took place at Morgan’s Point in April of 1977, during the Biennial Conference of the International Association of Ports and Harbors, which was hosted by the port. There, a plaque to dedicate the facility was unveiled.

A time capsule was also deposited and sealed by the Port Commission, and was reopened in 2007 during the thirtieth anniversary of the terminal. That capsule contained old newspapers, photographs, stamps and letters predicting what the future of ports would look like. Little did the officials know how much of an impact that the facility would have on the greater Houston port region, but they believed in the potential of this major investment.

“Barbours Cut was something that we needed, but it could only be sustained with the patronage of the steamship companies,” said Bracewell. Sea-Land, which was founded by Malcolm McLean, who brought the first container ship to Houston, was the first customer at the terminal a year later.

HISTORY IN THE MAKING During the dedication ceremony, Port Executive Director George Altvater noted that the Barbours Cut terminal represented the future of Houston

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shipping – a transition of expanding the port’s operations from being solely at the Turning Basin and city docks to new land 25 miles down the Houston Ship Channel. It was more than just a big move for the port – it was a new challenge.

“What lies ahead is truly impossible for us to visualize,” Altvater said in his letter that was included in the time capsule. “ We can only speculate. We are here today thoroughly excited and enthused about the future prospects of our port’s growth and our community’s growth.” Lt. General John W. Morris, Chief of Engineers for the U.S. Army Corps of Engineers provided a speech at the dedication. “I would be remiss if I did not specifically congratulate the Port of Houston Authority for not only this modern terminal, but also for its dynamic leadership in the development of the Port of Houston,” said Morris. The port had been working with the U.S. Army Corps of Engineers for several decades on the ongoing dredging and navigation improvements along the Houston Ship Channel.

BUILDING FORWARD Today, Port Houston is expanding and renovating the Barbours Cut Container Terminal through a $1.4 billion modernization program to support Houston trade.

The Barbours Cut Container Terminal now has nine weekly vessel calls, 10,000 weekly truck moves, 42 RTGs and 14 ship-to-shore cranes, with three more scheduled for delivery later this year. In 2016, the terminal channel was deepened to 45 feet to match the depth of the federal Houston Ship Channel to accommodate larger ships at the port.

The port completed a new master plan in 2015, which included the redevelopment of docks and upgrading cranes, all infrastructure investments to keep up with the current and future demand of container imports and exports. Projects such as the Barbours Cut Wharf 1 and Wharf 2 upgrades are critical.

THEN AND NOW As the port business grows, so does Houston. Today, Barbours Cut remains one of the premier container handling facilities along the Gulf Coast. After 40 years of business, this exciting milestone means much more – it’s a special time to reflect on the port’s most influential achievements and successes. 40 years strong is an understatement.

Happy Anniversary, Barbours Cut!

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The master plan for Kaoten Natie’s new logistics terminal in Baytown called for a cavernous 10 million square feet of warehouse space and 3,000 rail spots. With the initial phase now open, the vast and modern new structure signals the impending surge of plastic resins.

Those resins, the byproduct of the crude oil refining process, are tied to the estimated $50 billion in plant expansions that have been underway along the Houston Ship Channel in recent years. Global logistics service provider Kaoten Natie, along with others, have been preparing for the increase for some time.

Largely, the port itself is the draw for distribution centers. A longtime significant economic engine for the region with a statewide and national reach, the port is anchored by the ship channel, an industrial waterway more than a century old that is home to some of the biggest companies in the world that make up the nation’s largest petrochemical complex. Having a distribution center near the port, which is experiencing organic growth in addition to the anticipated growth in resin export, makes sense.

The southeast submarket, which includes the port, was responsible for 34 percent of absorption gains and 23 percent of total leasing activity in

CENTERING ON DISTRIBUTION

THE PORT: A KEY DRAW FOR DISTRIBUTION CENTERS The production of resins alone will trigger 22 billion pounds per year more than is produced today, leading to an additional 400,000 more container loads, packaged in 40 million more feet of warehouses, according to IMS Worldwide.

Handling the product will be companies like global plastics distribution company Ravago Americas, which currently is putting in a distribution center at Cedar Port Industrial Park, the largest master-planned rail-served and barge-served industrial park in the nation.

Yet companies manufacturing the resins, much of which will be exported across Port Houston’s docks for use making consumer goods overseas, aren’t the only ones boosting exports and increasing business. Port Houston’s container terminals are seeing increasing amounts of cargo coming across the docks that aren’t necessarily connected to petrochemicals.

RESINS NOT ONLY GAME IN TOWN Numerous new large distribution centers throughout the region that are expected to rely on many other types of cargo moving have recently opened or broken ground. IKEA has opened a large facility and other companies are working on facilities.

Houston-based realty firm NAI Partners noted in a report released in June that Port Houston has been bustling as container handling activity has been increasing of late.

“Port Houston continues to thrive, handling nearly 13 million tons of cargo for the year, an increase of 9 percent over last year,” NAI said in its report. “Total container volumes have also grown by 12 percent.”

Given the growth, Port Houston’s leadership has focused intently on infrastructure improvements in recent years, including both landside and waterside improvements. New super post-Panamax wharf cranes are in place at the Barbours Cut Container Terminal, with more scheduled for delivery later this year. And similar cranes are under construction and scheduled for delivery early next year at the Bayport Container Terminal.

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Houston, according to NAI. That is considerably higher than any other sector in the region.

The major move-ins contributing to the quarterly gains include 495,462 square feet of space taken by IKEA in Cedar Port; more than 660,000 square feet of space occupied at Ameriport Industrial Park; and 145,376 square feet of space absorbed at Eastport 8 on Interstate 10, the realty firm found.

JLL Research made a similar finding, saying the southeast area continues to be one of Houston’s most active industrial submarkets because of its proximity to the Port of Houston and because of the petrochemical boom.

“Currently the port-area submarket is doing well, as evidenced by its low vacancy rate of 4.7 percent,” said John Talhelm, senior vice president in the firm’s Industrial Services group. “Activity from prospective tenants ranges from packaging companies to durable goods and retail. Recent activity indicates large deals are still active and there is high demand for rail-served space at this time. As more product is brought in through the port, the balance between newly delivered warehouse space and absorption will be maintained.”

“The new plastic resins manufacturers coming on line in 2018 will increase demand for packaging capacity and will likely have a positive impact on the warehouse market,” Talhelm added. “Logistics-oriented cross dock distribution centers will also do well as more e-commerce related products arrive at the port from numerous overseas shippers.”

The region around Port Houston is “almost single-handedly responsible” for the overall positive absorption in the Houston industrial real estate market, and remains at center stage in the region due to petrochemicals and trade activity, according to NAI. Demand is especially high for properties that have rail-served distribution space near the port, the firm noted in a report issued in the first quarter of 2017.

Shippers are attracted to the port in part because of the quality of its infrastructure and its innovation and customer service. State-of-the-art truck gates are in use at terminals to increase the efficiency of the supply chain and to reduce truck turn times and emissions.

Almost a dozen big-box retailers are looking for space exceeding 500,000 square feet currently, according to NAI.

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NEW DISTRIBUTION CENTER

IKEA PRODUCTS MOVING ACROSS PORT DOCKS Home furnishings retail giant IKEA cited two primary reasons for selecting Baytown for a new distribution center: the fact that Houston is one of the largest cities in the United States and the proximity to the Port of Houston.

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The new IKEA facility, which employs 200 people or “co-workers,” just opened in April of this year and began distributing products to stores. Products are distributed to the company’s stores in Houston, Round Rock, Dallas, Memphis and Merriam, Kansas.

Plans call for the Baytown facility to also serve as a customer

FUTURE GROWTH

FOCUSED ON THE ENVIRONMENT

The company said in a white paper submitted to Oregon’s

distribution center, fulfilling online orders for people in New

The big Scandinavian retail chain measures its store

IKEA says it does its part to achieve that goal by packaging

Department of Environmental Quality in 2015 that it has

Mexico, Oklahoma, Texas, Arkansas, Mississippi and

distribution business by cubic meters and is forecasting it

products smartly and then having customers assemble the

achieved a 15 percent increase in transport efficiency since

Louisiana, an area covering about 600,000 miles. That

will handle 649,000 cubic meters, or more than 2.1 million

products themselves. What the environmentally friendly

changing its entire supply chain from wood to corrugated

business is slated to happen sometime in 2018.

square feet, at the Baytown center in 2018. For its customer

company calls the “IKEA Concept” is achieved by combining

pallets in 2012. IKEA also says it has saved an estimated $1

distribution business, the company projects it will handle

function, quality, design and value, always with the goal of

billion since implementing its corrugated pallet program and

Although the newest distribution center to serve its stores

25,000 to 30,000 “order lines” per week after it begins

sustainability.

reduced carbon emissions by 300,000 metric tons.

has been opened for only a few months, IKEA executives are

operating next year.

Sustainable development was defined in the United Nation’s

In the shipping industry, opinions vary widely regarding the

1987 Report of the World Commission on Environment and

use of wooden versus corrugated pallets.

pleased with how the company’s goods have been moving across Port Houston’s docks so far.

“And we are anticipating growth,” Todd said.

Development as meeting the needs of the present without

“We have had great success in pulling the needed containers very quickly,” Distribution Manager Alex Todd said. “I have worked with other ports in the past and it appears as though we are off to a great start!”

In handling its products in its distribution centers, IKEA works

compromising the well-being of future generations.

With nearly 1,000 suppliers in 50 countries, IKEA globally transports products to its stores through regional distribution

with unitized loads, meaning there is no hand stacking. Many consumer and industrial products are done that way, which

Along those lines, IKEA in 2012 launched its “Handling

centers. The Baytown facility, which is located in the Cedar

can make handling, storage and distribution more efficient.

Material No Wood” campaign to replace wood pallets with

Port Industrial Park, is the first on the U.S. Gulf Coast for

corrugated cardboard pallets throughout its worldwide

IKEA, which operates two centers on the West Coast and

Founded in Sweden in 1943 primarily as a mail-order sales

supply chain. The company says the effort has resulted in

three on the East Coast.

business, the name IKEA combines the initials of its founder,

fewer trucks on the road because lighter pallets are being

That appears to bode well for the expansion plans IKEA has

Ingvar Kamprad, with the first letters from the farm and village

used – the company says they are 80 percent lighter --

Todd, who hails from the West Coast, said he has discovered

for additional stores that will be served by Baytown center.

where he grew up, Elmtaryd and Agunnaryd. The company

meaning the end result is lower CO2 emissions. IKEA has

people in the Houston area are “genuine” and local workers

The planned expansions include a store opening in Grand

today says its aim is “to help more people live a better life at

mandated use of corrugated pallets by more than 2,000

are ready and able to tackle problems that arise.

Prairie this year and stores in Fort Worth and San Antonio

home.”

global suppliers, although wood pallets are used to haul the

in 2019.

products that customers consume.

“I have found the city to offer a lot of diversity, talent at all levels and a general can-do attitude when faced with challenges,” the California native said.

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>>>

4198 container lifts were logged between June 14 and June 16

HIGHEST NUMBER OF CONTAINER LIFTS EVER AT TERMINALS A record number of container lifts was recorded in June at Port Houston after the M/V COSCO Boston worked at the Barbours Cut Container Terminal.

The Asian trade lane is the fastest-growing trade lane for Port Houston and is responsible for making up 26 percent of total trade as of 2016.

The Cosco Boston is part of Cosco’s Asian GME service that calls weekly at Port Houston. With ILA labor employed by stevedoring firm Cooper/Ports America working around the clock, a total of 4,198 container lifts, or 7,000 TEUs, were moved on and off the ship between the evening of June 14 and the morning of June 16, according to Chief Port Operations Officer Jeff Davis.

Port Houston container volumes are up by 16 percent for the year through May, an increase of 12 percent compared to the same period in 2016. The increase is being driven by loaded containers, which are up by 17 percent, according to Executive Director Roger Guenther.

The Boston’s lift count barely topped a Maersk vessel that worked at the Bayport Container Terminal earlier this year.

“The capital investments that Port Houston has made and continues to make to accommodate larger ships and higher volumes at its container terminals are paying dividends. Volume in the Asian trade lane continues to grow,” Davis said. “That’s good for Port Houston and the region.”

Port Houston actually surpassed the 1 million mark for twentyfoot-equivalent units (TEUs) in May and it is projected that Port Houston will ultimately handle 2.4 million TEUs in 2017.

Four new cranes began operating at the Barbours Cut terminal in late 2015, with three more slated for delivery there in September.

Three additional ship-to-shore cranes for Bayport are under construction now and are expected to be delivered early next year.

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Convention PasadenaPasadena Convention Center Center 7902 W Fairmont Pkwy 7902 W Fairmont Pkwy Pasadena,Pasadena, TX 77505TXth77505st

Wednesday & Thursday, September 20th & 21st

Pasadena Convention Center 7902 W Fairmont Pkwy th th st st Wednesday&& Thursday,September September2020 Wednesday Thursday, && 2121 Pasadena, TX 77505 st to Thank You toCenter our current sponsors: Pasadena Convention Center Thank our current sponsors: Wednesday & Thursday, September 20th & 21You Pasadena Pasadena Convention Convention Center Thank You to our current sponsors: 7902 W Fairmont Pkwy 7902 7902 WW Fairmont Fairmont Pkwy Pkwy Presenting Sponsor Presenting Sponsor Pasadena Convention Center Pasadena, TX 77505 Presenting Sponsor Pasadena, Pasadena, TX TX 77505 77505

7902 W Fairmont Pkwy Thank You to our current sponsors: Thank Thank You You to to ourour current current sponsors: sponsors: th & Pasadena, TX 77505 Wednesday & Thursday, September 20

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Reception Reception Sponsor Thank You toSponsor our current sponsors:

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STEEL HEATING BACK UP AT PORT HOUSTON ADVANCING ASSETS

Despite a less active oil and gas economy and a gradual pickup in drilling activity may be on the horizon as Port Houston has been experiencing an uptick in steel the first half of the year. Steel is the largest breakbulk commodity in the Houston region.

A variety of improvements were made at the port’s general purpose facilities in 2016 and the first half of this year. A total of 41 multipurpose wharves operate steel and other breakbulk cargo, keeping the Port Houston general cargo operations team busy.

The port has focused on capital improvement projects from dock maintenance to

IRON THAT!

yard space and open storage areas. Woodhouse, Old Manchester and the Turning

The U.S. is the top steel scrap supplier, and Houston is the largest steel import

Basin (City Docks) are among the terminals that the port has focused on heavily

region in the U.S., primarily due to the oil and gas industry in the Gulf. The single largest steel product imported is Oil Country Tubular Goods or “OCTG,” steel pipe used in drilling operations.

The American Institute for International Steel held its inaugural Steel Supply Chain Conference at the Houstonian Hotel May 19. The event provided expert analysis in key areas such as customs and trade compliance, shipping and logistics.

Port Houston Commissioner Theldon Branch III provided the keynote address at the event. “Steel and breakbulk cargo of all kinds are keenly important components

“Port Houston has been a leader in

the steel industry for many years and we truly value the partnerships that we have been able to develop.”

– Port Houston Commissioner Theldon Branch III

“Dredging is important for maintaining our drafts at the Turning Basin. We are looking to do some more dredging at the port’s city docks later this year,” said Jonathan Barra, vessel scheduler.

STEEL EXPERTS RESEARCH At a recent industry roundtable event held at the port, steel representatives provided their insights on the trade.

of our cargo mix,” said Branch. “Houston is basically a commercial window to the

“An uptrend in consumer confidence is due to improvements in auto manufacturing

world, in terms of both imports and exports.”

growth and other industries,” said John Foster, Chairman of AIIS and President of

MORE THAN JUST A TRADE

Kurt Orban Partners.

Branch noted that the port handled close to 10 million tons of total cargo and an

Foster noted that the U.S. oil rig count continues to improve from 2015 and 2016.

increase of steel imports of 11 percent. “That’s a good sign that we will see an

Total U.S. raw steel production was 86,892,000 tons last year.

increase from the 2.3 million tons of steel handled in 2016,” added Branch.

HOUSTON: AMERICA’S STEEL GATEWAY

Through May, Port Houston had recorded a total of 1.4 million tons, definitely

Port Houston is ranked number one in the nation for foreign waterborne tonnage

seeing an uptick, Executive Director Roger Guenther reported.

and is the largest breakbulk gateway in the U.S, with a major portion attributed

“We continue to see steady progress in steel trade compared to last year,”

to steel.

Guenther told the Port Commission during a recent meeting.

“Port Houston is grateful to have been the host port of AIIS’s first annual “SteelCON” - the Steel Institute’s new signature event, which was a success,” said John Moseley, senior director of trade development for Port Houston.

“International steel is an important industry that creates tens of thousands of jobs across our country, drives prosperity across a multitude of economic sectors and impacts the daily lives of people in the United States and around the world,” Moseley said.

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for future investment and growth.

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Port Houston invests nearly one billion dollars every five years on infrastructure to better serve the maritime industry.

Steel is one of the port’s strategic imported commodities. In addition to the oil and gas industry, steel is a major component used in construction, the structures of buildings, infrastructure, tools, ships, automobiles, machines and appliances.

Although the steel business has faced challenging times the last couple of years, Port Houston now is seeing positive growth.

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NEW CAPTAIN OF THE PORT

Hits the Water Running

During a meeting with the top leadership of Port Houston in early June, the new Captain of the Port, Capt. Kevin Oditt, was provided a comprehensive overview of Port Houston and the Houston Ship Channel.

In assuming duty as the commander of Coast Guard Sector

supporting senior Coast Guard Flag and Senior Executive Service

Houston-Galveston, Oditt is responsible for overseeing all ports

officers. As the Division Chief in the Office of Commercial Vessel

and waterways in the region, including the Houston Ship Channel,

Compliance he led a staff that created policy for the Coast Guard’s

as well as the Gulf Intracoastal Waterway. He replaced Capt. Peter

domestic vessel safety and security program nationwide.

Martin, who retired after 27 years of service.

Oditt graduated from the U.S. Coast Guard Academy in 1992 and Capt. Oditt’s Coast Guard Headquarters assignments include the

Capt. Oditt talks with Executive Director Roger Guenther, Commissioner John D. Kennedy and Director of Channel Development Mark Vincent

holds a bachelor of science degree in Electrical Engineering.

Oddit was briefed at the Executive Building by Chairman Janiece Longoria,

Office of Design and Engineering Standards, where he developed

Executive Director Roger Guenther and staff on issues from dredging to

national and international lifesaving and fire safety standards and was

He earned advanced degrees from the University of Michigan in

emergency operations to hurricane preparedness. Port Commissioners

part of the U.S. delegation to the International Maritime Organization.

Naval Architecture and Marine Engineering, and Manufacturing. He

Stephen DonCarlos and John D. Kennedy also participated in the briefing.

A tour of the Bayport Container Terminal followed.

also attended the Marine Corps War College where he earned a He also was involved in the stand-up of the Port Security Directorate

Masters in Strategic Studies.

where he was part of the Marine Transportation Security Act Oditt, who officially became Captain of the Port in April during a change

regulatory team and the development of the International Ship

of command ceremony, told Port Houston executives that he was

and Port Facility Security Code. He served as the Executive Staff

pleased to accept the assignment to Houston. He had been serving as

Chief for the Deputy Commandant for Operations responsible for

Oditt’s personal awards include the Meritorious Service Medal.

the chief of prevention at the Eighth Coast Guard District in New Orleans.

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THE GULF COAST ADVANTAGE:

PORT HOUSTON HOSTS 2ND ANNUAL

JOC GULF SHIPPING CONFERENCE

For the second year, Port Houston was the host port for the JOC Gulf Shipping Conference, a three-day industry forum organized by IHS Markit and JOC Events.

Approximately 360 beneficial cargo owners, carriers, shippers, freight forwarders, trucking representatives and ports along the Gulf Coast attended the event to discuss the latest market trends and solutions.

TODAY’S GULF COAST: AN EXPORTING FORCE

THE RISE OF IMPORTS

Port Houston Executive Director Roger Guenther provided welcome remarks

That didn’t happen without hard work and planning. And as demand

to the crowd. “This conference emphasizes the opportunities here in the

increased with the Panama Canal expansion and other logistics changes,

Gulf,” said Guenther. “Last year’s conference laid a solid foundation for us

various supply chains moved their cargo through the U.S. Gulf because of

to build on.”

faster, more reliable services.

Dr. Walter Kemmies, Managing Director of JLL Port Airports and Global

Houston has seen big retailers like IKEA, Best Buy, Conn’s and Rooms

Infrastructure provided the keynote address. “The Gulf Coast is the eminent

to Go expanding their operations and distribution. But exports are not

location for exports,” noted Kemmies, who added that Houston exports

the only thing pacing forward- Gulf imports are showing signs of growth

equipment to support and supply natural gas and energy. “The U.S. is still

because of increased population and manufacturing expansions.

a big fish in an increasingly large pond,” Kemmies said about exporting.

The top three U.S. exports include agriculture, capital goods and energy.

DELIVERING THE GOODS One of those importers is Igloo Corp. Patrick Poole, senior director of

IHS Markit provided an overview of the Gulf highlighting the region being

supply chain for Igloo, served on an imports panel that provided insights

on a roll in regards to container volumes and Houston as one of the

on cargo demand, port competition, challenges and opportunities for

fastest growing U.S. ports for containerized imports as well according to

imports in the Gulf.

PIERS data. “Gulf exports are forecasted to rise over the next two years with Houston contributing most to growth,” said Mario Moreno, senior

“The Port of Houston has given us the best experience with service,” said

economist for IHS Markit, Maritime and Trade.

Poole, who noted that the company had a 5-year transition, moving their

distribution hub to Houston. “The people at the port want to grow. It’s a

A resins shipping panel made up of freight and logistics exporters

good model. Houston is a very friendly centroid – a hidden gem.”

provided views on the anticipated resins boom with 13 new resins plants coming on line throughout the Gulf region by 2018. “Capacity expansion

PORT PERSPECTIVES

for resins will allow Houston to be an important gateway for this cargo,”

Container trade on the Gulf has been changing rapidly. Port container

said IHS Markit senior director for content, Peter Tirschwell. IHS Markit

leaders: The Port of New Orleans, Alabama State Port Authority and Port

expects resins on the Gulf Coast to double by 2020.

Houston discussed their outlook on shipping.

The conference concluded with an exclusive tour of Katoen Natie’s During the panel discussion, Executive Director Roger Guenther

Houston Polymers Terminal in La Porte, one of the largest resins

highlighted the port’s two container facilities at Bayport and Barbours Cut.

warehousing and packaging facilities in the region with 1.8 million square feet of warehousing space.

“Master planning is something that we continue to do on the container side,” said Guenther. “We want to be sure that we capitalize on this future

THE U.S. GULF: MORE THAN JUST AN ALTERNATE OPTION

growth. The container volumes that we’ve seen over the last few years

“The Gulf Coast is a diverse and accommodating route for transporting

have been phenomenal.”

cargo, and here in Houston, we are strategic about these commercial projects,” John Moseley, Port Houston senior director of trade development.

HOUSTON: EXPLORING NEW HORIZONS With three diverse weekly direct services from Asia, Houston has come

“This annual conference is an important platform to share industry

a long way. “What I like is that Houston is talking about the future,” said

knowledge and work together even though some of us might be

Paul Minor, vice president of logistics for Petco Animal Supplies. And yes,

competitors. It’s about working together to direct the future of the Gulf

Houston has been planning for infrastructure and supply chains for the

Coast in a positive manner.”

past several years in conjunction with the Panama Canal expansion and the ever-changing market.

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The event was held May 14-16 at the Marriott Marquis Hotel in downtown Houston.

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U.S. ARMY CORPS OF ENGINEERS LIEUTENANT GENERAL VISITS PORT

DID YOU KNOW?

Lt. General Todd Semonite was hosted by Port Houston for a briefing and tour

BEFORE THE PORT, ALAN SHEPARD HAD SOARED INTO SPACE

May 17. Semonite serves as the commanding general and chief of engineers for the U.S. Army Corps of Engineers. The Corps is a critical partner to the port because of its mission to maintain the Houston Ship Channel.

A former NASA astronaut who was the first American in

Wanting to do something special while on the moon,

spaced served on the Port Commission.

Shepard reportedly contacted a local country club pro in Houston, who connected the head of a six-iron to the shaft

Rear Admiral Alan B. Shepard, Jr., USN (Retired), was appointed a commissioner of the Port of Houston Authority in 1986. Shepard, who was appointed by the Houston City Council, filled the unexpired term of Archie Bennett, Jr., who had been appointed chairman of the Port Commission.

of a piece of rock-collecting equipment he was taking to the

Shepard became the first American to journey into space on

Shepard is the recipient of the Congressional Medal of

May 5, 1961, when the Freedom 7 spacecraft was lauched.

Honor (Space), two NASA distinguished service medals and

The suborbital flight, which lasted about 15 minutes and

the Navy Distinguished Flying Cross, as well as the highest

reached a height of 116 miles into the atmosphere, was

award of the Smithsonian Institution, the Langley Medal.

The Port of Houston Authority serves as local partner with the Corps in

considered a major triumph for NASA. The agency was

Shepard logged more than 216 hours in space and served

maintaining and growing the Houston Ship Channel. This vital waterway

established in 1958 to keep U.S. space efforts abreast of

as Chief of the Astronaut Office of NASA from 1963 until his

serves the manufacturers and employers at the Port of Houston who are

Soviet Union space achievements, such as the launch of

retirement from NASA and the U.S. Navy in 1974.

responsible for sustaining more than two million jobs and $617 billion in

Sputnik 1 in 1957.

The port is currently working with the Corps of Engineers on a $10 million dollar feasibility study for future improvements to the waterway.

Port Houston Chairman Janiece Longoria and Commissioner Clyde Fitzgerald welcomed the lieutenant general. Executive Director Roger Guenther provided an overview of the port highlighting its economic impact.

continues to grow,” said Guenther. “We’re really excited about what’s to come.”

The briefing was followed by a tour of the Shell Deer Park manufacturing site, a refinery and chemical plant on the ship channel that handles

Guenther noted that oil, gas, petrochemicals, breakbulk steel, and

more than 2,500 vessels each year. The tour continued aboard a Port

containers are the top economic drivers of the port.

Houston fireboat to allow viewing of other facilities along the channel, concluding at the Barbours Cut Container Terminal.

“The Corps is looking right now how to support the exports and imports of the nation of this particular port,” said Semonite.

economic activity for the nation.

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moon. Shepard covered the club with a sock so it wouldn’t be discovered prior to launch, according to PGA.com.

Few people in NASA knew of Shepard’s plan to hit golf balls on the lunar surface. He dropped two balls on the moon and hit them.

At the time of his appointment to the Port Commission,

“We’re proud of our relationship with the Corps. Houston is the largest

He made his second space flight in 1971 as commander of

Shepard was president of Houston-based Winward Co., a

exporting channel in the largest exporting state in the nation and it

Apollo 14, which was the third lunar landing mission.

Coors beer distributorship that he formed in 1976.

28 NAVIGATOR SUMMER 2017

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SMALL BUSINESS PHOTOGRAPHER HIGHLIGHTS PORT PROJECTS Tish Cowan, owner of Tish Cowan Photography, has been

What makes her artistry unique is that she works around

around the industrial scene for two decades. She began

large equipment - metals, steel and machinery - capturing

her career working at KBR, formerly known as Brown &

the full production of a project from start to finish.

Root, on civil engineering and construction projects.

“Learning more about these trades during my time at the With her infrastructure experience, she began her own

port is the high point about my work. I truly enjoy this

business in 1994, contracting with school districts,

industry,” she said.

nonprofit organizations and major event productions.

Some of her most notable projects and clients include the NCAA Final Four, World War II Museum Charity Gala, United Way, the City of Houston and Spring Branch Independent School District.

She was familiar with the port. “There is a lot of activity

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going on along the Houston Ship Channel. It’s amazing just to see the ships loading and unloading. The port has been a great resource for my career,” said Cowan.

Today, she supports contractors, project management and inspection teams on site by taking photos throughout projects such as Barbours Cut Container Terminal Wharfs 17 and 23 and the Care Terminal dock expansion and repairs. Most of her work is above the wharves focusing on the structures and technology.

“What I do is not your typical small business. I try to make every project look creative and interesting,” she noted.

Cowan is also active in the port’s small business program.

“I find the Capital Improvement Projects workshop to be very informative. It is a great outreach program to grow your company.”

Her role as a vendor at the port includes attending prebid meetings and helping track projects by photography as they progress. This involves researching job sites prior to shooting.

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