Port Houston Navigator Magazine - Winter 2017

NAVIGATOR

WINTER 2017

PORT HOUSTON 2018 OUTLOOK

MORE GROWTH

PORT TRADE VALUE TOPS IN U.S. ALSO: ACADEMY SPORTS AND OUTDOOR CONTINUES EXPANSION • HOUSTON SHIP CHANNEL MEGA-STUDY THE POWER OF BRANDING • STATE OF THE PORT • TRADE AND TRANSPORTATION CONFERENCE

OneBahri

www.bahri.sa

Pioneering and integrated transport solutions

12.17 NAVIGATOR 24 6 26 8 28 16 30 20 22 33 34 IN THIS ISSUE

A MESSAGE FROM EXECUTIVE DIRECTOR ROGER GUENTHER

FOCUSING ON EDUCATION HELPS BUILD THE WORKFORCE

THE MANIFEST PORT HOUSTON’S NEWS HIGHLIGHTS

HOUSTON SHIP CHANNEL MEGA-STUDY MOVING AHEAD

VALUE OF TRADE AT AT PORT OF HOUSTON TOPS IN U.S. THE INTERNATIONAL PORT OF TEXAS MEANS BUSINESS THE POWER OF BRANDING

PORT CHAIRMAN FOCUSES ON GROWTH 2017 STATE OF THE PORT

CONTANDA TERMINALS PLANS NEW FACILITY ON HOUSTON SHIP CHANNEL WEATHER OR NOT ACADEMY AND ITS CARGO CONTINUE TO GROW

DID YOU KNOW? INTERESTING FACTS ABOUT PORT HOUSTON SPOTLIGHT ON SMALL BUSINESS BRYANT INDUSTRIAL SERVICES

14

FEATURE STORY: PORT HOUSTON 2018 OUTLOOK: MORE GROWTH

PORT HOUSTON NAVIGATOR’S EDITORIAL STAFF:

EXECUTIVE OFFICE JANIECE LONGORIA Chairman

JOHN D. KENNEDY Commissioner

DEAN E. CORGEY 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 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

BRAZIL THELDON R. BRANCH, III Commissioner

JOHN C. CUTTINO Brazil Representative Port of Houston Authority Rua Candelaria, 9 - Sala 413 Rio de Janeiro - RJ 20091-904 Tel. +55 (21) 2283 9956 Cel. +55 (21) 98822 4125 USA +1 (832) 239 5076 Email: jcuttino@poha.com

ASIA STEPHEN H. DONCARLOS Commissioner

ROY D. MEASE Commissioner

4

| NAVIGATOR WINTER 2017

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

BCO’S PREFER H2O 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 • Less Congestion • More Stable

• All Water Service • More Accessible • Less Complicated

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

PortHouston.com • 713-670-2400

ROGER THAT A MESSAGE FROM EXECUTIVE DIRECTOR

“As we wrap up 2017 and put a bow on yet another successful year of activity through Port Houston facilities, we look forward to continuing that positive momentum into 2018.”

6

| NAVIGATOR WINTER 2017

ROGER GUENTHER

It is expected that the New Year will bring several new growth opportunities, including the surge of plastic resins that will be manufactured in our region and shipped across our docks around the world.

This surge was originally expected to materialize this year, but the impact of Hurricane Harvey on the region caused delays in petrochemical expansion projects that were underway.

But we continue to grow. Through November, our terminals have handled nearly 35 million tons of cargo versus 32 million tons for the same time period last year. This is a 9 percent increase over 2016.

The main drivers for this growth include containers and steel imports. Container activity remains solid, with an increase of 12 percent year-over-year. Steel volumes continue to trend upward, totaling 3.4 million tons, which is up 57 percent over last year. We will wind up 2017 being ahead of what is considered an “average” year.

As might be expected, our financial results through November are solidly in line as well with the operational performance of our Port facilities.

All of this was done in spite of some challenges presented to us as Harvey interrupted our business a few months ago. As has been noted, we recovered quickly and remained on track toward a successful 2017.

And to follow up, back in September, the Port Commission gave us the authority to address the needs of our customers by mitigating some tariff import storage charges due to the impact of Harvey. This process concluded as of Dec. 1.

The Port Commission also recently approved a $275 million Capital Plan for 2018 that will allow us to continue to develop and improve our public terminals to meet the demands of growth and expansion. Many of those investments, about 70 percent, is earmarked for further improvements at the Bayport and Barbours Cut Container Terminals. Funding also will be used for improvements at the Turning Basin Terminal and for Bayport railroad development.

I can tell you that Port Houston is well positioned for the future cargo demand, having strategically planned for the coming growth.

We are READY for a successful and prosperous 2018!

We should pass the 2.4 million TEU mark port wide by the end of year – another record volume for Port Houston.

Keep in mind that it was only two short years ago that we eclipsed the 2 million TEU mark at our port.

NAVIGATOR WINTER 2017

|7

MANIFEST PORT HOUSTON NEWS AND HIGHLIGHTS

8

| NAVIGATOR WINTER 2017

infrastructure and to propose solutions to address those needs and keep ports competitive.

Port Houston leadership and staff discussed the port’s role and operations and provided an overview of the greater Port of Houston, highlighting its economic impact to the state.

Chairman Janiece Longoria noted that the port’s container traffic is growing every year. A total of 63 percent of Port Houston’s cargo is containerized, with East Asia cargo making up 37 percent of containerized imports at Port Houston container terminals.

TEXAS HOUSE SELECT COMMITTEE VISITS PORT HOUSTON Port Houston welcomed the House Select Committee on Texas Ports, Innovation and Infrastructure to the Bayport Container Terminal Nov. 1.

Created early in 2017 by Texas House Speaker Joe Straus, the committee is responsible for reviewing state policies and discussing long-term challenges facing Texas ports and

Executive Director Roger Guenther noted that technologies are all about creating a more efficient port for its users.

Port Houston Channel Development Director Mark Vincent gave a presentation about Houston Ship Channel development activities, while Chief Port Infrastructure Officer Rich Byrnes discussed transportation, logistics and freight mobility.

The visit concluded with a container yard tour of both Bayport and Barbours Cut terminals.

HARRIS COUNTY INTERNATIONAL TRADE AND TRANSPORTATION CONFERENCE HIGHLIGHTS HOUSTON INFRASTRUCTURE AND ECONOMY Port Houston staff participated at the 2017 Harris County International Trade and Transportation Conference at NRG Park Oct. 31.

Executive Director Roger Guenther served on a port panel and Hurricane Harvey supply chain panel, while Chief Port Operations Officer Jeff Davis discussed port operations during a resin exports and packaging session.

The annual conference brings together representatives connected to the transportation industry to learn about the latest challenges, technologies and trends affecting their businesses.

Harris County and its surrounding region is known as a gateway to North America and a center for global commerce.

“What is important is how freight gets to where it needs to go.

Freight drives the Texas economy,” said Harris County Judge Ed Emmett, who also officially welcomed the attendees.

During the port panel with Port Houston, Port Freeport, the Port of Corpus Christi and the Port of Beaumont, moderator Curtis Spencer, president of IMS Worldwide, Inc. said, “These Texas ports will be a return on investment for exports.”

A total of 25 percent of the nation’s gasoline and diesel is produced in the Houston region, noted Guenther.

ExxonMobil and other refineries along the Houston Ship Channel are expanding capacity for an increased demand of plastic resins and petroleum-based products. “Each supplier is working to develop a supply chain model that fits its unique needs,” said Perry Padden, Americas Logistics and Distribution Manager for ExxonMobil Chemical Company.

“I think that the Port of Houston is taking some great steps,” added Brian Fielkow, Jetco Companies representative on port operations and planning for future resins.

Houston is the largest export port in the nation.

NAVIGATOR WINTER 2017

|9

PORT HOUSTON CELEBRATES THE SEASON OF THANKS WITH THANKSGIVING PROJECT Port Houston helped spread the holiday spirit by preparing and packaging Thanksgiving meals for 22 families at the Houston International Seafarers’ Center. Families included both local community members and Port Houston staff affected by Hurricane Harvey.

Port Houston employees participated in the project by donating funds to buy and cook turkeys, cooking side dishes and desserts and/or volunteering to help package and deliver meal kits on Thanksgiving morning.

Each of the 22 families received a 15 lb. turkey, mashed potatoes, green beans, stuffing, cranberry sauce, rolls, gravy and pie. Also included in each package, were tablecloths, utensils wrapped with festive fall bows and personalized cards, created by some of the

littlest volunteers, as many employees brought their children to help.

This project was part of Port Houston’s strategic community outreach efforts. “We wanted to do something different and special this year, as the storm impacted many Houstonians, including some of our own,” said Garret Berg, assistant manager of community relations and events for Port Houston.

“Together, we fried 22 turkeys, coordinated the preparation of 132 side dishes and packed up full meals to feed 126 people. All of this was done with the help of over 50 volunteers and countless others who donated money to the project,” added Berg.

“Our efforts allowed many families and friends the opportunity to come together and share a nice, enjoyable holiday meal on Thanksgiving Day.”

DONATIONS FROM HOUSTON SHIPPED TO PUERTO RICO RECENTLY Containers filled with drinking water, mops, brooms, nonperishable foods, toiletries, battery-powered electronics and other items were shipped from Houston to Puerto Rico in an effort to provide vital supplies for people affected by Hurricane Maria this October.

The Seafarers International Union secured the containers and organized with other local unions and the City of Houston Mayor’s Office to collect the materials to donate to Puerto Rican communities. Port Houston paid the shipping costs.

The shipment included important goods such as a dozen generators, medical supplies, wheelchairs and different types of tubing.

“It was a collaborative effort between government, industry and labor,” said Port Commissioner Dean Corgey, who is also vice president of the Seafarers International Union for the Gulf Coast region.

Hurricane Maria was one of the stronger hurricane events of 2017 in the Caribbean, a Category 5 storm. For weeks after

|

10 NAVIGATOR WINTER 2017

Maria’s landfall, most of the island’s population suffered from flooding and lack of resources, enduring a slow relief process.

The supplies were shipped on the National Glory, a U.S.-flagged vessel owned and operated by National Shipping of America, LLC.

PORT HOUSTON: THE “BACKPACK BUDDIES” Port Houston’s latest community event took place at the Houston Food Bank Oct. 18, with teams working together to benefit the Backpack Buddy program.

In the aftermath of Hurricane Harvey, the program’s focus has been on preparing special disaster backpacks, which are designed to assist students and families who were deeply affected by the storm.

More than 50 port employees teamed up to volunteer their time and efforts to create nearly 3,500 bags with supplies and hygiene products to assist underprivileged students in nearby schools.

The Houston Food Bank’s Backpack Buddy program works in partnership with participating schools, school districts and other community partners to ensure that the food and personal items are distributed to school children every Friday to take home over the weekend.

“Port Houston appreciates the opportunity to assist our fellow Houstonians in need and is proud to partner with a great organization like the Houston Food Bank to take part in their Backpack Buddy program,” said Leslie Herbst, community relations director for Port Houston.

Port Houston is committed to supporting outreach programs that contribute to the well-being of the greater Houston port region.

HOUSTON PILOTS ANNOUNCE NEW PRESIDING OFFICER The Houston Pilots Association announced the election of officers for the year of 2018. The new presiding Officer is Capt. Mark Mitchem.

Mitchem is a 1982 graduate of the U.S. Merchant Marine Academy at Kings Point. After 14 years at sea working for Del Monte and Marine Transport Lines in worldwide trade, he joined the Houston Pilots in 1996.

Captains Greg Brown and Robert Roberts were selected as members of the Executive Committee.

The organization also christened two new pilot boats at a ceremony Oct. 21. The twin-hull boats, HOUSTON and BAYOU, are set to replace earlier boats, which are now 25 years old.

“These boats are incredibly stable in rough seas,” said Capt.

Robert Shearon, 2017 presiding officer for the Houston Pilots in an article by the Houston Chronicle. “They are a very safe and efficient platform for our pilots to embark and disembark on ships.”

The Pilots are responsible for guiding vessels into the Houston Ship Channel in a safe, navigable manner.

NAVIGATOR WINTER 2017

| 11

RECORD NUMBER OF PASSENGERS ON SAM HOUSTON BOAT TOUR IN SUMMER Port Houston welcomed over 7,700 passengers from May through August 2017 on the M/V Sam Houston Boat Tour, an extraordinarily high number of riders for a summer season.

The free public tour provides a unique opportunity for guests to experience first-hand, one of the region’s greatest economic contributors.

“Although tours are popular throughout the year, summer is certainly our busiest season,” said Doug Mims, senior captain for the Sam Houston. “Camp groups, families, and community organizations are often looking for fun and educational activities, and our tour along the Houston Ship Channel provides that opportunity to many.”

“The tour allows Houstonians of all ages and travelers from around the world a chance to learn the history of the port, the channel and its contribution to our region,” Herbst said. “We’re proud to showcase the importance of our port to over 30,000 passengers a year.”

Editor’s note: The Sam Houston vessel was out of commission for a couple of months due to the impact of silting from Hurricane Harvey in August 2017. It resumed its operations and tours in December.

Named after the legendary military commander who led the fight for Texas independence from Mexico and later statehood, the M/V Sam Houston has been operating as Port Houston’s public tour vessel since its inaugural voyage on July 30, 1958.

Port Houston staff is diligently working to further improve the tour and its operations from logistics and infrastructure to hospitality and environmental stewardship, noted Leslie Herbst, director of community relations and events for Port Houston.

|

MANIFEST

12 NAVIGATOR WINTER 2017

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.

A MERRY “SILVER SANTA” CHRISTMAS Port Police and Security Departments Support Housing Community During Holiday Season The Port Houston Police and Security departments volunteered at two local housing facilities, New Hope Housing at Brays Crossing and Jacinto City Healthcare in Houston, bringing Christmas cheer to more than 140 residents Dec. 20. They provided blankets and tupperware to the Houstonians while entertaining them with holiday music, snacks and games.

The Silver Santa project idea came about three years ago when Port Police Chief Mark Smith was visiting his mother at an assisted living facility where she stayed. “It was sad to see that not many seniors are remembered in nursing homes, especially during the Christmas season. I wanted the Police Department to do something for our local seniors, so I came up with the Silver Santa project,” said Smith.

“This year, I decided to expand into other areas of our local community, so we reached out to New Hope Housing.”

This year, the Port Houston Police and Security departments raised more than $2,000 towards the Silver Santa project through donations and various fundraisers. The project requires several months of planning led by a steering committee of port police and security personnel.

New Hope Housing’s mission is to provide life-stabilizing, affordable, permanent housing with support services for people who live on very limited incomes. The organization strives to be an enduring institution serving Houston’s most vulnerable citizens.

In addition, Port Houston’s police team distributed 10 bikes Dec. 13 to students at De Zavala Elementary for exemplary school attendance.

The port’s Police department also participated in several other outreach opportunities this year, including “National Night Out,” “National Coffee with a Cop Day” and Red Ribbon Week.

It makes people believe differently.

With Trustmark as your true financial partner, you can expect expert advice, tools and technology to help manage your business’s finances—freeing you to turn your great idea into a lasting mark.

WHAT’S THE MARK OF A GREAT IDEA?

People you trust. Advice that works.

Member FDIC

trustmark.com

People you trust.

Advice that works.

From Kiplinger's Personal Finance, May © 2017 The Kiplinger Washington Editors. All rights reserved. Used by permission and protected by the Copyright Laws of the United States. The printing, copying, redistribution, or retransmission of this Content without express written permission is prohibited.

NAVIGATOR WINTER 2017

| 13

PORT HOUSTON 2018 OUTLOOK:

MORE GROWT

Port Houston is projecting a strong 2018, as container volumes continue to expand at Texas’ largest port and work continues on beefing up infrastructure to support the increased cargo moves.

Port Houston is the seventh-largest container port in the United States but is the fastestgrowing port among the top 10 container ports, according to data from PIERS. Projections point to continued growth in coming years.

Revenue at Port Houston is projected to increase by 9 percent in 2018, fueled largely by growth in containers moving across the docks, projections in the 2018 budget approved by the Port Commission in November show. The anticipated revenue is compared to the 2017 mid-year forecast.

The forecast for the amount of twenty-foot-equivalent units (TEUs) also is 9 percent. Export loads are expected to be 15.5 percent higher, and import loads 3 percent higher. It is anticipated empty container units will increase by 5.8 percent.

Much of the growth is tied to an anticipated increase in the production of resins as a result of the expansion of petrochemical facilities along the Houston Ship Channel. The majority of those resins are expected to move across Port Houston’s docks as exports. The surge in exports, which initially was expected to begin in 2017, was delayed somewhat due to Hurricane Harvey’s impact on the petrochemical facilities.

ROBUST CAPITAL PLAN

A $275 million capital plan is a big part of Port Houston’s budget and is focused primarily on container terminal development. That’s an increase of nearly $200 million from 2017. Most of that money, about 70 percent, is earmarked for further improvements at the Bayport and

|

14 NAVIGATOR WINTER 2017

Barbours Cut Container Terminals. Funding also will be used for improvements at the Turning Basin Terminal and for Bayport railroad development.

Port Houston surpassed handling two million twenty-foot-equivalent units (TEUs) in October, Port Houston Executive Director Roger Guenther announced during the budget workshop. That milestone was achieved despite interruptions caused by Hurricane Harvey. The two million TEU mark was first reached by the port in 2015. Port Houston expects to finish 2017 in excess of 2.4 million TEUs.

TH

Worldwide, container throughput increased by an

estimated 6.7 percent during the first half of 2017, a

survey of 250 ports by Alphaliner showed. Alphaliner

said it expected that growth to continue for the

rest of the year. That forecast and outlook closely

matched findings of Drewry Shipping, an independent maritime research consultancy.

But Port Houston’s growth is surging by double digits. In September alone, for example, container activity was up 22 percent.

GROWTH AT TURNING BASIN TOO At the Turning Basin Terminal, modest growth of 1 percent is anticipated, with steel expected to be up by 3 percent and other general cargoes up 1 percent in 2018.

Overall at Port Houston’s facilities, from a personnel standpoint, plans call for a total of 21 new positions to be funded in 2018, with the majority of them being in operations. Those positions are mainly to help handle the growth in cargo volumes.

Port Houston’s cash flow for 2018 is expected to increase by 6 percent in 2018. Net operating income is expected to be up 14 percent. Liquidity projections show sufficient resources to fund capital plans through 2019.

PORT HOUSTON REINVESTS Cash generated through Port Houston’s operations is reinvested strategically to address the current and estimated future needs of our customers. Port Houston, as the local sponsor for the Houston Ship Channel, also makes capital investments for the dredging of its terminals and dredge placement areas.

Three new super post-Panamax cranes have just been delivered to Barbours Cut and are slated to come on line in during the first part of 2018. Additional cranes for Bayport have been under construction and are scheduled for delivery in 2018.

Spending to meet strategic plan objectives is expected to increase in 2018. Among the primary objectives for the year are marine structure assessment, terminal development studies and cybersecurity investment.

|

NAVIGATOR WINTER 2017 15

VALUE OF TRADE AT

PORT HOUSTON TOPS IN U.S.

|

16 NAVIGATOR WINTER 2017

The value of trade attributed to the Port of Houston has increased by more than $6.1 billion in 2017, by far the highest of any port in the United States, according to data compiled by the U.S. Census Bureau.

The showing is not unusual, given that the overall port is a key economic engine not just for the region and state, but is a vital part of the national economy as well.

The data shows strong growth in exports, which was analyzed in a report done for Forbes. The top five exports at the Port of Houston include gasoline and other refined petroleum products, which rose more than 27 percent compared to last year, hitting $14.7 billion. LNG or petroleum-based gases rose 47.73 percent, to more than $6.4 billion. Plastics rose 2.6 percent reaching a value of more than $2.5 billion. Oil increased 137.5 percent, to more than $2 billion, followed by ethers and related exports, which increased 13.3 percent to a value of $1.7 billion.

PORT HOUSTON CONTAINERS ADD TO STRONG SHOWING The data includes trade through Port Houston’s facilities. Port Houston realizes much of its revenue through its container activity, and container activity remained solid through November, with an increase of 12% year-over-year. Executive Director Roger Guenther noted recently that he anticipates Port Houston will surpass the 2.4 million twenty-foot-equivalent unit (TEU) mark by the end of the year, which will be a record.

“Keep in mind that it was only two short years ago that we eclipsed the two million TEU mark at our port,” Guenther said. He made the remarks during the regular meeting of the Port Commission in December.

Houston is the fastest-growing of the top 10 container ports in the U.S., based on PIERS data.

|

NAVIGATOR WINTER 2017 17

Port Houston’s economic activity helps maintain Texas as the nation’s top exporting state. The greater Port of Houston consists of nearly 200 facilities along the 25-mile-long complex of diversified public and private facilities located along the Houston Ship Channel. That includes Port Houston’s facilities.

In addition to the exports, imports of virtually all kinds also are strong, according to the census bureau statistics.

They show Port Houston imports have increased $8.21 billion in 2017. Oil rose 19.4 percent compared to last year, to $7.82 billion. Additionally, gasoline and other refined petroleum products rose more than 21 percent to $3.9 billion. Although personal motor vehicle imports fell 5.9 percent to $2.37 billion, seamless iron tubes and pipes rose 98.5 percent to $1.81 billion and iron and steel pipes and tubing rose 280 percent to $1.53 billion.

Forbes noted that eight of the 10 ports with the greatest increase in the value of their exports this year can tie the gains to rebounding prices in the energy sector and the chemical industry. Four of them are in Texas.

Other major U.S. ports also showed increases, just not as much as the Port of Houston. Take the Port of Los Angeles, which showed export values increasing by more than $2.5 billion. While that is significant, it is far less than the Port of Houston’s $6.1 billion in exports.

|

18 NAVIGATOR WINTER 2017

PORT HOUSTON DIRECT Shippers eyeing the U.S. Gulf of Mexico can take advantage of Port Houston Direct, which offers a higher degree of service – and stability – for both importer and exporters. Port Houston works with beneficial cargo owners (BCOs) to support their supply chains. Port Houston’s team can provide immediate access and resources for shipping.

Port Houston Direct is a logical shipping solution for all-water services, with the region’s freight and rail network, petrochemical industry and variety of consumer markets.

Shippers eager to access the heartland of America are well aware of Port Houston’s central location on the U.S. Gulf of Mexico. Known for its stellar labor relations, Port Houston operates its own terminals and continues to develop and enhance key infrastructure.

For example, three new ship-to-shore cranes have just been built and delivered to the Barbours Cut Container Terminal, while three other super post-Panamax cranes are under construction and scheduled to be delivered to the Bayport Container Terminal in 2018.

DISTRIBUTION CENTERS REMAIN A BIG DRAW As growth continues on a strong path, the port has become a key draw for distribution centers and is largely responsible for a strong Houston industrial real estate market.

According to NAI Partners, Real Capital Analytics reports year-to-date industrial sales volume in the Houston area at $1.3 billion, resulting in a year-over-year change of 107%.

It said a recent example of assurance in the market was the acquisition of Fairway Park Business Center, a five-building 135,571-sq.-ft. industrial warehouse park by Brennan Investment Group. The center was acquired from Sealy Corp.

Additionally, Northwest Logistics Center, a 411,442-sq.-ft. distribution center on a 26acre site Texas 290 and Beltway 8 has begun construction. The project is scheduled to be completed in June 2018, NAI reported.

Also, IKEA’s second 500,000 sq. ft. rail-served warehouse in Cedar Port Industrial Park is set to open in 2018. One warehouse in the park opened in 2017.

In other activity, RealtyNewsReport reported in late December that Avera Companies, a Houston-based commercial real estate development, construction and investment firm has acquired 369 acres from PPG Industries on the southeast side of the Houston region.

The site, which is bordered by Spencer Highway to the north and Fairmont Parkway to the south, “is not far from two key shipping facilities,” citing Port Houston’s Barbours Cut Container Terminal and Bayport Container Terminal.

|

NAVIGATOR WINTER 2017 19

The International Port of Texas Means Business

THE POW

When Port Houston Executive Director Roger Guenther traveled to

Pressing on, Guenther asked him what else he noticed about the

China recently, a person he was with was admiring his colorful lapel

logo and the agent responded that he had noticed the colors – red,

pin. It sports the logo introduced in 2016 during the port’s rebranding.

white and blue. They align with the port’s vision.

“I said, what do you see, and he said, I see a ship, the bow of a

He pointed out that the man, who at the time was not familiar with

ship,” Guenther recalled.

the rebranding, had focused in on the three major elements of the new brand.

The executive director then asked him what else he saw in the logo and the man, an agent working on behalf of Port Houston, told him

“It was pretty impressive,” Guenther said. “I slid the lapel pin off

he saw a star. He asked what the star symbolized and Guenther told

and handed it to him. He was tickled to have our pin; I asked him

him Texas, which is known as the Lone Star State.

to wear it when he was working with our customers.”

“We are the International Port of Texas,” he told him, using Port Houston’s new tagline.

Guenther and the port’s trade development department went to China in October during the Journal of Commerce’s TPM Asia Conference in Shenzhen.

|

20 NAVIGATOR WINTER 2017

WER OF

Port Houston rebranded in November of 2016. Key elements in

The encounter in China highlights what executives at Port Houston were

the logo were derived from the port’s history, culture and current

hoping for when they introduced the new brand, noted Stan Swigart,

strategic plan. The colors represent the port’s vision to be America’s

Port Houston’s director of marketing and external communications.

distribution hub for the next generation and the ship signifies the port’s mission to move the world and drive regional prosperity. The

“When we started this branding process, we wanted our customers

star denotes the port’s tagline, the International Port of Texas, and

overseas and nationally to quickly connect and associate the logo

the pride and associations that belong to the state.

with us,” Swigart said. “We are Houston’s port. It’s more than just marketing – it’s about developing a strong brand identity and

Port Houston has three weekly all-water services connecting East

positioning ourselves for future growth.”

Asia to Houston via the Panama Canal. TPM Asia is an annual conference presented by JOC Events covering shipping, port and market trends of Asia commerce and trade lanes. China is one of the fastest growing trading partners for Port Houston.

|

NAVIGATOR WINTER 2017 21

Port Chairman Highlights Growth at

2017 STATE OF THE PORT

Port Chairman Janiece Longoria provided the annual “State of the Port” address at the Greater Houston Partnership’s event Nov. 16. Longoria discussed with port stakeholders, partners and public officials how Hurricane Harvey disrupted the Texas Gulf Coast and the Houston Ship Channel.

She noted that after Hurricane Harvey, the port’s container terminals rebounded quickly, working 26 vessels after ramping up port operations.

The port was only closed for a week, but working on the silting and shoaling from the major flood event remains a top priority for Port Houston leadership.

As the nation’s largest port in foreign waterborne tonnage, Port Houston remains an economic driving force for the Houston region, the state of Texas, and the nation. What does the future look like for this critical asset?

The port continues to work with the federal government, partners and stakeholders to ensure that the maximum funding available is provided for dredging and navigational projects. The main reason for this is growth and demand– larger vessels are calling to the port with higher volumes of cargo, and there is an estimated $50 billion in petrochemical plant expansions along the Houston Ship Channel. Additionally, inbound consumer goods are growing.

“The channel is integral to our nation’s energy security and quality of life as host to the largest petrochemical complex in the United States, producing fuels and making possible thousands of industrial and consumer products,” said Longoria.

“In our role as the local sponsor of the Houston Ship Channel, we are constantly working with the U.S. Army Corps of Engineers to improve the channel that serves more than 190 public and private facilities, supporting $265 billion of state economic activity annually,” said Longoria.

The event included a conversational fireside chat moderated by Chief Executive Officer and Director of Enterprise Products Partners Jim Teague.

|

CHANNEL DREDGING: A TOP PRIORITY

22 NAVIGATOR WINTER 2017

She noted that Port Houston has been investing in its infrastructure and assets. Earlier this year, three new super post-Panamax cranes were delivered to the Barbours Cut Container Terminal, which are part of a $700 million improvement plan. Additional cranes are being constructed for Bayport and should be delivered in 2018.

Along with that, the port has implemented expanded gate hours at the Bayport Container Terminal and repurposed its former cruise terminal to an automobile processing facility operated by a third party.

TRADE, INVESTMENTS AND BEYOND

In regard to trade matters, the port’s container operations continue to expand.

The expansion of the Panama Canal continues to facilitate our growth on the Trans-Pacific trade and allows for larger vessels to call at Port Houston, she noted. International trade has helped fuel growth and prosperity in the Houston area for more than 100 years and the port will continue to be an economic engine far into the future.

Trans-Pacific trade is the fastest growing trade lane for Port Houston.

East Asia represents 37 percent of containerized imports at Port Houston container terminals.

One fact is certain. The Houston Ship Channel is still the busiest and most productive waterway in the nation. Every year, the channel hosts more than 9,000 vessel calls and 200,000 barge movements.

Longoria remarked that the port is working on a major feasibility study to identify needed improvements along the channel. “There exists tremendous capacity in the system. With that said, we have to assure that capacity is unleashed through needed improvements,� reported Longoria.

The event was held at the Royal Sonesta Hotel in the Galleria.

NAVIGATOR WINTER 2017

| 23

Focusing on Education

Helps Build the Workforce.

Commitment to education is key to Port Houston, from inside the classroom to the workplace and beyond. On an ongoing basis, Port Houston strives to increase public awareness with students in the community regarding the port and its role in the regional and national economy.

The port has invested significantly in maritime education programs with solid partners to assure students have the opportunity to access maritime-based education and future employment opportunities in the industry. In recent years, Port Houston has committed almost $5 million dollars to the Port of Houston Partners in Maritime Education Program.

MARITIME EDUCATION PROGRAM STRONG The Port of Houston Partners in Maritime Education Program has a primary focus to encourage area students to pursue career opportunities in the maritime transportation or affiliated fields, including logistics, freight, security and environment.

The benefits of the program include dual credit availability, experiences, internships, college scholarship opportunities and admission to forums presented by experts in the maritime industry.

Through the port’s partnerships with local high schools, four-year colleges and junior colleges, the port has had a significant impact on growing maritime career opportunities in the Houston region, providing over $19,500 in maritime education scholarships in 2016 alone. More than 100 students graduated from the Port of Houston Maritime Partners Program this year.

“Port Houston’s commitment also includes hosting recruitment and graduation dinners for six local high schools,” said Gilda Ramirez, senior director of maritime education at Port Houston. The port also conducts recruitment efforts at the middle school level.

Port Houston is also hosting an apprenticeship program through TransPORTS, an organization that helps companies start and register apprenticeship programs in the transportation, maritime and logistics industries. The program will be available for internal port employees, but is being considered for other groups.

COMMUNITY-DRIVEN PROJECTS But that’s not all. The port’s community involvement with education is stronger than ever, with port staff participating in over 25 career days at local middle and elementary school campuses.

One example of that outreach is Junior Achievement Day. More than 25 employees volunteered Dec. 7 at Port Houston Elementary, a Houston Independent School District facility located near the Turning Basin Terminal.

This educational partnership features members of the community helping students understand the relationship between what they learn in school and their successful participation in society, while also encouraging them to achieve their highest potential.

|

24 NAVIGATOR WINTER 2017

Junior Achievement Day allows companies and organizations to interact with students and deliver grade-specific information and activities throughout a single designated school day. The students learn the basic concepts of business and economics and how their education is significant in the workplace.

Port Houston staff also recently participated at Buffalo Bayou Partnership’s “KBR Kids Day” event at Guadalupe Plaza Park Oct. 7. KBR Kids Day is one of the partnership’s signature events with thousands of children and families attending every year. Guests enjoyed activity stations, entertainment, food and games. Port Houston had a tabletop display of the Houston Ship Channel with which visitors engaged throughout the morning.

PORT INTERNSHIP PROGRAM POPULAR Beyond the community, Port Houston has been actively growing its internal programs for the benefit of its employees. The port’s summer internship program has evolved into an academic asset for professional development.

The 12-week program gives students a full scope of how a successful institution like the port works.

“An internship at Port Houston is the most sought-after among Maritime Administration students; it is seen as a place where you will learn everything you need for your career,” said Addie Hilliard, who interned in the port’s Emergency Management department this past summer.

The port’s internship program is designed to expand students’ awareness of the world beyond the campus through exposure to a variety of careers, disciplines, life styles and environments. The program includes activities and benefits such port tours, personal enhancement opportunities, mentorships and a group project.

Port Houston has even offered several full-time and part-time positions to interns who have performed well during the program. “We want our interns to leave here with a knowledge base and an experience that will benefit them in their future endeavors,” said Alia O’Neill, human resources business partner at Port Houston.

The greater Port of Houston is a primary economic driver for the region, state and nation. As more students continue to acquire additional knowledge and skills and apply them in the maritime industry, this investment in education will assure that the port will remain a strong economic force in the future.

NAVIGATOR WINTER 2017

| 25

Houston Ship Channel

Mega-Study

Moving Port Houston is partnering with the U.S. Army Corps of Engineers on a mega-study evaluating the feasibility to modify the Houston Ship Channel, including widening and deepening of the waterway and other improvements.

The four-year, $10 million study, which traditionally would take 10 years of planning and work, is expected to be completed by the end of 2019. The Corps, which is leading the study, has chosen a tentative plan from a list of alternatives to address specific areas of the channel to improve navigation.

The process is being conducted through the Corps’ SMART planning guidance, emphasizing risk-based decision making. That process is expected to save time and money.

The federal study minimizes impacts to the environment while balancing economic and engineering impacts to ensure a successful and safely implemented project.

The channel was divided into six segments in the tentative plan for a more effective study and was made available for public comment in the early fall. The proposed plan will then be refined by the Corps and signed by the Chief of Engineers before being forwarded to Congress for authorization.

|

26 NAVIGATOR WINTER 2017

Ahead

“There are a lot of opportunities here, and the interactions with our stakeholders and partners have been positive,” Port Houston Channel Development Project Manager Richard Ruchhoeft said. “The port is fully engaged with the study as the non-federal sponsor of the waterway.”

As the local sponsor for the Houston Ship Channel, Port Houston makes capital investments for the dredging of port-operated terminals and dredge placement areas for the benefit of the greater good of the Houston port region.

Port Houston’s study goal is to incorporate improvements that will benefit every user of the Houston Ship Channel system. The key elements of the study are widening and deepening upstream of the Beltway 8 bridge to accommodate larger ships, and the deepening of the Turning Basin area, which will be the first channel improvements there since the early 1950’s.

|

NAVIGATOR WINTER 2017 27

Contanda Terminals Plans New Facility on Houston Ship Channel

|

28 NAVIGATOR WINTER 2017

Contanda Terminals, LLC, a provider of bulk liquid storage and logistics services in North America, finalized a multi-year commercial agreement with the Port of Houston Authority for 339 acres of prime deep-water access property located on the Houston Ship Channel. This project provides Contanda the opportunity to increase its overall storage capacity by up to 20 million barrels, with the initial phase expected to be operational in the second half of 2020.

Contanda has a strategic business objective to double its overall terminal storage capacity over the next five years while expanding into the bulk petrochemical and hydrocarbon terminal markets. This project, along with other projects around the country, will position Contanda to achieve or exceed its strategic goals.

Contanda is currently working through the permitting process with an anticipated groundbreaking in the first half of 2019. The overall project is expected to employ 500 to 800 contract positions and 60 to 80 permanent positions, bringing more jobs to Houston.

“This agreement with the port solidifies our long-term commitment to grow with the Port of Houston and the Houston Ship Channel,” said G.R. (“Jerry”) Cardillo, President and CEO of Contanda. “We firmly believe in the Port of Houston, its capabilities and the opportunities that it presents to our customers and shareholders. We look forward to further developing one of the largest ports in the world.”

Contanda’s state-of-the-art automated terminal facility will be built in phases to provide customers access to onsite processing, multiple ship and barge docks, and convenient tank truck and railcar accessibility.

Contanda currently operates four other bulk terminals on the U.S. Gulf Coast.

“This positive development fits in well within our strategic growth plan objective to grow and diversify our business base,” said Port Chairman Janiece Longoria. “In addition, this partnership with Contanda helps us optimize and leverage our real estate assets, while helping the company meet its own strategic objectives.”

|

NAVIGATOR WINTER 2017 29

Weather or not,

ACADEMY AND IT’S CARGO CONTINUE TO GROW. After Hurricane Harvey hit, Academy Sports + Outdoors transformed its Houston area headquarters into a command center and shelter for thousands of first responders.

The Katy-based retailer, which moves a considerable

and assist, engage with and ensure these individuals were

amount of cargo across the Port of Houston’s docks, has

comfortable on our Katy campus,” said Academy Sports

more stores in Texas than any other state. Academy’s

+ Outdoors President and Chief Executive Officer, J.K.

cargo ranges from athletic gear and equipment to camping

Symancyk. “The least we could do was provide supplies

supplies and clothing.

to keep them safe and give them a warm, dry place to rest, recharge and refuel.”

And while Academy has long focused on logistics, a different kind of logistics came into play after its

HITTING CLOSE TO HOME

headquarters 35 miles outside of Houston was made

The greater Houston area is home to approximately 5,400

into a base of operations for rescuers and others during

of Academy’s 23,000+ team members, which took on

the storm. The retailer provided food, dry clothes, office

special meaning due to the severe weather.

space, rescue boats and equipment to more than 1,100 first responders, which included 700 U.S. Army soldiers

“In addition to first responders, we also supported

who sought shelter at the facility.

several of our team members and their families

“These first responders were making the ultimate sacrifice by risking their lives to save others during Harvey and our Academy team members were more than willing to step in

|

30 NAVIGATOR WINTER 2017

by providing shelter at our headquarters and more than $1 million in direct financial assistance to meet immediate needs,” said Symancyk.

FUTURE OUTLOOK From a business standpoint, the retail chain continues to expand. In Texas alone, in addition to a new location in Spring. Academy opened stores in Rockwall and Weatherford, Texas, placing more than 100 stores in the Lone Star State. Academy has also opened stores in a host of other states, including North Carolina, Kansas and Kentucky. With the opening of each the stores come the creation of approximately 100 new jobs in the local community.

Because the majority of the retailer’s stores are in Texas, Port Houston plays a big role when it comes to moving Academy’s goods across docks. The company moves roughly 10,000 twenty-foot equivalent units (TEUS) of cargo through the port.

Continued on page 32

NAVIGATOR WINTER 2017

| 31

Weather or not,

ACADEMY AND IT’S CARGO CONTINUE TO GROW.

The company, which has $4.7 billion in sales annually, now

Academy has changed significantly through the years.

has more than 240 stores in 16 states, with approximately

The very first Academy store opened as a tire shop in San

23,000 team members throughout the South, Southeast,

Antonio, Texas in 1938. It turned into a military surplus

and Midwest.

store that then began offering sports and outdoors equipment, and ultimately evolved into the Academy

“We have a really positive partnership with Port

Sports + Outdoors of today.

Houston,” said Symancyk. “The port is always suggesting new ways to improve our experience and expedite the flow of goods to our distribution center, which we greatly appreciate here at Academy Sports and Outdoors.”

|

32 NAVIGATOR WINTER 2017

In 2011, Academy was acquired by KKR, a leading global investment firm. The company also launched academy.com as a full e-Commerce retail site.

DID YOU KNOW?

PORT HOUSTON GIVES BACK WITH “SHOEBOXES FOR SEAFARERS” PROJECT Did you know that St. Nicholas is the patron saint of seafarers, as

seaman. Although the Port Houston team plays a small part

well as of children? Port Houston is proud to continue a tradition

in these larger efforts, we know our contributions help make

of spreading holiday cheer by providing small gifts to visiting

this season special for those seafarers who are away from

seafarers through the “Shoeboxes for Seafarers” program. The

their families during the holidays,” said Leslie Herbst, director

program, which has been running for more than 40 years, is

of community relations and events for Port Houston.

organized by the Houston International Seafarers’ Center.

The Houston International Seafarers’ Center serves as a This holiday season, Port Houston packaged and delivered

home away from home for the men and women that travel

more than 60 wrapped shoeboxes to the Center, after

aboard ocean-going vessels. The center’s new restaurant at

collecting money, shoeboxes and items for the project.

the Port of Houston Turning Basin is expected to open in January 2018.

Each box included daily personal products such as soap, a pair of socks, shampoo and a toothbrush, as well as fun items like a deck of cards, sunglasses and candy. Additionally, each box contained a special holiday greeting created by Port Houston team members.

“Every year, the Seafarers’ Center hands out more than 10,000 shoeboxes, packed and wrapped by churches and community groups all over the Houston area, to visiting

NAVIGATOR WINTER 2017

| 33

BRYANT INDUSTRIAL SERVICES: RESTORING PORT HOUSTON’S WHARVES “If it can be measured, it can be improved upon,” says

“I love the Port of Houston. I find it fascinating as

Daniel Bryant, president and owner of Bryant Industrial

the port has always put emphasis on small business

Services, Inc., a project management company.

and environmental efforts. I enjoy working with the

Headquartered in Brownsville, the firm is committed

construction managers and staff – they are very helpful

to professionalism, customer service and safety.

and good people,” noted Ursul.

SPOTLIGHT

ON SMALL BUSINESS

Having been in business since 2005, Bryant Industrial Services has completed numerous projects throughout Texas and Louisiana. The company of nearly 50 employees opened up its second office in Texas City because of the marine services they offer, serving several ports around the Texas Gulf Coast. “The ports were the main reason we established the additional building property close to Houston,” said Project Manager Victoria Ursul.

Some of its most recent Port Houston projects include the annual maintenance and repairs for fender sections of the Barbours Cut Container Terminal wharves, which is a terminal-wide infrastructure project. This work is saving the port money because the port does not have to rebuild the entire dock structure. This also gives the wharf a longer life span.

Additionally, Bryant Industrial Services recently installed larger cleats and poured new concrete slab at the Turning Basin docks as well as replace safety nets, fencing and wood timber parts.

The company is also in the energy and community sector, with a resumé of civil works projects that range from building public and city parks, boardwalks and splash pads. Open to opportunities, growth and investment, the company also has experience in the oilfield sector market. Outside of these industries, Mr. Bryant owns a second tourism business.

“Our employees feel like they are valued and can help support strategic business decisions. It’s a challenging environment, but we believe in high standards and excellence with every project,” added Ursul.

|

34 NAVIGATOR WINTER 2017

INTEGRATED TRANSPORT & LOGISTICS SOLUTIONS From general/steel cargo vessel stevedoring, freighthandling, trucking, storage (incl FTZ) to steel on barge and COB (Container on Barge) transport services & intermodal trucking, we have you covered. Locations: Port Houston, Greensport, Baytown and Mobile, Alabama.

HOUSTON, TEXAS

Stevedoring, Steel Storage/Warehousing (including FTZ) & Trucking: Kelly, Chance or Steve@richardsoncompanies.com Intermodal Trucking: Howard@richardsoncompanies.com; Jason@richardsoncompanies.com COB (Container on Barge) Service: Rainerl@richardsoncompanies.com; krish@richardsoncompanies.com Port Houston TBT: 713-673-1110 (also for COB Service) • Greensport: 713-455-8802

MOBILE, ALABAMA

Stevedoring, Steel Storage/Warehousing & Trucking Mike@richardsoncompanies.com • 251-432-0081

www.RichardsonCompanies.com Stevedoring and Freighthanding • Barge Transport Services • Foreign Trade Zones • Warehouse and Outdoor Storage • Trucking Steel by Rail Handling Services • Green Transport Barge Terminal Facility (Partnered with JR Intermodal) Barge Terminal Facilities and Storage (Baytown)

PO Box 2562 • Houston, Texas 77252-2562

PRSRT STD US Postage PAID Houston, TX Permit #1395

WE ARE THE INTERNATIONAL PORT OF TEXAS! We are responsible for over 1.2 million Texas jobs and with our new super post-Panamax, ship-to-shore cranes, we can accommodate the next generation of container vessels that now transit the Panama Canal. The new cranes are just a portion of the $700 million modernization project that further establishes Port Houston as the leading port on the Gulf Coast.

PortHouston.com • 713-670-2400