JANUARY/FEBRUARY 1999
OF HOUSTON
6
8
9 H. ThomasKornegay L ~ t ~P, i i ii , ’
George T. Williamson
John R Horan ,; :: [,~ ~, ! ~ ~’j r
Rosie Barrera :
James O. Eldridge i , ~ :
James B. Jackson i
John T. Scardasis
Ted G. Waiters
MarthaT. Williams
TommyJ. Tompkins , ~’ i:
Magazine Staff Editor - CaleenBurton-Allen Graphic Design - Limb & Associates Writer - Esther de Ipolyi & Associates Ad Sales/Production - Limb & Associates Photographer- Bruce Bennett Secretary- CynthiaSilva
FIELD OFFICES Monterrey Av. San Pedro #801 Nte. Local #27 Col. Fuentesdel Valle New York San Pedro G. Garcia, N.L 650 SycamoreAvenue, Suite 23 C.R 66220 Bohemia, NY 11716 Phone: 528-335-7341 Phone: 516-244-3677 Fax: 528-335-3641 Fax: 516-244-3757 Mexico City South America Bosques de Duraznos #69 Torre Centuria, Local #2 Desp. 1105 PB, Suite 916 Col. Bosquesde las Lomas Av. Venezuela,Urb. El Rosal Mexico, D.R Caracas 1060 Venezuela C.R 11700 Phone: 58-2-976-7063or 58-1-421-5615 Phone: 525-251 3622 Fax: 58-2-976-7063 Fax: 525-596-7909 WE’RE BACK!
Thank you to the manyreaders whoasked about the publication and whenit might return. It is good to knowthat you found it a valuable resource for infor- mation about our industry. With this issue, we return with a whole new approach. The magazinewill be published six times a year. Although it will be published less frequently than before, we intend to remain as informative and useful to you as possible. In order to be topical and interesting, we need your support. This is your maga- zine and we are always interested in your thoughts, ideas, and newsat your worksite. Youcan always reach us by fax at 713/670-2425 or by mail to RO. Box 2562, Houston, TX77252-2562. Wewill also be holding regular Readers RoundTable meetings where we can meet face-to-face to listen to your ideas and brainstorm about future magazine issues. Please let us knowif you would like to participate. Wewant to hold one early in 1999. This year promisesto be a critical one for the Port of Houstonand lhe maritime industry as a whole. The long-awaited wideningand deepeningproject is finally underway. While the results of this work will benefit all HoustonShip Channel users in the long run, it will add a newlevel of activity to an already very busy waterway. We’ll do our best to keep you informed and encourageyou to check the U.S. ArmyCorps of Engineers website (www.swg.usace.army.mil)for updates and progress reports. This year may also bring a replacement for the controversial Harbor MaintenanceTax. 1 encourageyou to learn about this vital maritimeissue and get involved in its resolution in Congress. Onceagain, let mestress that this magazineis only as goodas your input.
H. ThomasKornegay
ExecutiveDirector (’/
This publication is not copyrighted and permission is given for the Port of Houston web pa!je reproduction or use of any original materials, provided credit is www.portofhouston.com given to the Port of Houston Authority. Additional information, ExecutiveOffice addresschanges, extra copies, or advertising specifications maybe Port of HoustonAuthority obtained by writing to the Port of HoustonMagazine. 111 East LoopNorth P.O.Box 2562 The Port of HoustonMagazine is published by the Port of Houston Houston,TX 77252-2562 Authority, RO. Box 2562, Houston, Texas 77252-2562, and is Phone:713-670-2400 distributed free to maritime,industrial and transportationinterests in Fax: 713-670-2429 the United States and foreign countries. www.portofhouston.com
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PORT 0 E HOUSTON ",,,IAG,~,ZIIN E 5 THE 1990s HAVE BEEN A
DECADE OF PROSPERITY AND
RECORD-BREAKING 6ROWTH
FOR THE PORT OF HOUSTON
AUTHORITY. THE YEAR 1998
Y EAR EN DS 0 rl PROVED NO DIFFERENT.
A comparison of tonnage statistics for H IGH NOTE January through October 1997 and 1998 showsastonishing increases especially in the breakbulk cargo and bulk cargo categories. Such robust numberscontribute to a 13.9 per- CHALLENGES cent overall growth rate for Port Authority operations. By year end, the number of TEUs(20- foot equivalent units) crept ever closer to the COME WITH one million mark, even though the annual increase is modest comparedto other aspects of the Port Authority’s performance.Clearly, capacity for handling additional containers is THE NEW YEAR being exhausted and the need to develop the newBayport Terminal strengthens daily. Imported steel reached new highs, although the threat of anti-dumpingsuits will certainly depress these numbersin the future. Auto units climbed a dramatic 46 percent
PORTOF HOUSTON MAGAZINE while grain products at Houston Public Grain Elevator NumberTwo went through the roof due to record har- vests in the Midwest. "The global economyhas been good in 1998," stated Tom Kornegay, Executive Director of the Port Authority. "I amhoping that the current weaknessin the Latin American economy is just temporary and not developinginto a trend." Ted Thorjussen, President of the West Gulf Maritime Association, agrees stating, "It’s too early to tell what affect the ’Asian flu’ will have on Latin America." Other issues on the horizon involve how Congress funds water resource development. "Keeping Congressional passage of the Water Resources DevelopmentAct on track every other year is vital to keeping port development and dredging projects on schedule," emphasized Mr. Kornegay. This authoriza- tion bill has been delayed each of the last two times it has been up for consideration, thus jeopardizing impor- tant infrastructure projects. In his new role as Chairman of the Board of the Port of HoustonAuthority Tonnage AmericanAssociation of Port Authorities, Mr. Kornegay is making both the Water Resources Development Act January- December 1997 1998 Change and replacement of the Harbor MaintenanceTax top pri- Breakbulk orities for 1999. Cargo 4,550,819 6,008,380 + 32% As with industry everywhere, shipping lines are Container changing the way they do business and trying new ways Cargo 7,612i664 8,1~,794 + 7% to improve their financial bottomlines. To that end, alliances are being formed around the world among steamship lines, especially container lines, to work Total 22,6210149 25,839,755 +14% together to negotiate prices. More "All of the companiesare fighting for the samebusi- Specifically ness and same trade routes," explained Mr. Kornegay. ImportSteel 2,549,727 4,023,726 +58% "There are more ships than there is cargo. By working together, the shippinglines can adjust the supplyof ships and keep prices from falling." Grain Products Other highlights of 1998 include the long-awaited ( HP G E #2) 388,328 1,247,257 +221% start of the HoustonShip Channelwidening and deepen- ing project and the great success of the first cruise line Autos(units) 47,367 65,449 + 38% out of Houston. ,,~
PORT OF HOUSTON MAGAZINE 7 8 PORT OF HOUSTON MAGAZINE B P 0 B T
MUCH NEEDED ROOM FOR PORT GROWTH
he containerized cargo business at from Barbours Cut is $800 million. build a new container complex. rT- the Port of Houston Authority’s The facility has reached capacity The Port of Houston Authority has facilities is good -- ahnost too good. with no room left for expansion. In lhct, developed a conceptual master plan for a
Since 1992. the amount of containerized the Port Authority recently leased the new fully intermodal lerminal at cargo handled by Port of Houston Port of Galveston’s Easy End container Bayport. The complex wc, uld be buih
Authority facilities has doubled. terminal ,just to handle overflow from on 935 acres of land. The Port Authority
The Port of Houston’s Barbours Cut Barbours Cut. already owns five miles of the land fl-om
Container Terminal handles 80 percent of Despite such efforts, the only way Barbours Cut and about 30 miles flom all the containerized cargo movingthrough for the Port of Houston Authority to keep downtown Houston in Harris County
Texas ports and more than hall" of the pace with the demands of containerized between Shore Acres and Seabrook. containers crossing the Gulf of Mexico. cargo customers, much less new cus- With a location so near Barbours Cut, Each yem; the economic impact to Texas tomers clamoring for facility space, is to contitllted oit He.vt po£,d
PORT OF HOUSTON MAGAZINE customers can makeuse of the competitive rail and trucking local economy each month. Norwegian Cruise Lines has
lines and affordable ancillary services currently available. experienced such success with this route that it recently "At Bayport, we can create a state-of-the-art intermodal replaced its ship here with a newer one that has double the
facility from the very beginning," explained TomKornegay, capacity for passengers. Should these trends continue, other
Executive Director of the Port of Houston Authority. "The cruise lines will expandinto the Houstonmarket as well. master plan includes improvedaccess to the site for vehicles, The master plan for trains and ships. By incorporating these intermodal elements Bayport includes seven during the initial planning, Bayportwill benefit fromefficient container terminals as and safe traffic flows and operations." well as a cruise complex. The master plan for Bayport includes seven container
terminals as well as a cruise complex. Development of a Bayport’s master plan calls for an ultimate 15 to 20-year
permanent cruise terminal is contingent on a continuing build out that includes: 7,000 feet of berth, 720 acres of
market demandfor cruising from Houston. container yard, 30 buildings, 15 wharfcranes, 60 yard cranes, Norwegian Cruise Lines has been operating weekly intermodal rail yard holding up to six trains, and a 124-acre
cruises to Mexico and the Bay Islands of Honduras from Industrial DevelopmentArea. The overall project is expected Houston since 1997. These cruises pump$3 million into the to cost $1.2 billion.
10 PORT OF HOUSTONMAGAZINE Construction of Phase One maytake four to six years
to complete 2,600 feet of berth, 140 acres of container
yard, equipment, utilities, access improvements,a gate
complex, a container freight station, and numerousbuild-
ings. A bond election in November1999 will ask for $380
million to build Phase Oneof Bayport.
Asa part of the pre-permit process, the Port Authority
shared this plan with the communityand with its customers
during a series of meetings and workshops. "The Port
Authority requested an EnvironmentalImpact Statement to
makesure that every possible communityconcern would
be addressed," said Mr. Kornegay.
In October 1998, the Port Authority filed with the
U.S. ArmyCorps of Engineers for the necessary permits.
Issues that will be addressed during this procedure include: alternative site analysis, air quality, wetlands, water quality, wildlife, visual impacts, buffer zones, facility lighting, noise, traffic, and safety.
’~The Port Authority is committed to being a good neighbor both during the building of Bayport and in the long-term," assured Mr. Kornegay.
"Wearc workingclosely with our neighbors along the
Houston Ship Channel and environmental groups so we can accomplish our business goals while making sure
Galveston Bayis not adversely impacted."
"The Port of Houstonis one of the largest ports in the world, and a very important part of our local economy.
Bayport is the single most important project concerning the Port Authority’s ability to maintain our customerbase by growingto meet our customers’ increasing needs."
’qf the Port continues to grow, then Houston and
Texas will continue to grow, somethingthat greatly ben- efits all of the community,"concluded Mr. Kornegay.
PORT OF HOUSTON MAGAZINE 11 epenlng G w, enlng
THE HOUSTONVSHIP CHANNEL
t only took 30 years, but work has shipping lines using the Port. More lease with the Port Authority. Deepening
finally begun to deepen and widen importantly, safety will be enhanced by the Channel to 45 feet is what we need
the nation’s top-ranking port of reducing the chances of collisions and now and into the future to keep the
entry for foreign cargo. The five- oil spills." Port of Houston competitive with other
year $508 million project will increase Once completed, the project will major ports."
the depth of the Houston Ship Channel increase the earning capacity of ships Larry Russell, Marine Superintendent
from 40 to 45 feet and the width from using the Port of Houston. Every inch tbr Equiva Trading Company, a joint venture between Shell, Texaco and 400 to 530 feet. of draft gained enhances the revenue Saudi Aramco, agrees but stresses safety "This long-awaited expansion will generated. "This project will allow us to
enable today’s larger vessels to go bring in on a regular basis our SL44 over profits. "The deepening and widening of the Channel has definite directly to terminal rather than unload class ships, which are much bigger and economic advantages, but more impor- part of their cargo in the Gulf of faster, carry more and can offer better tantly the project enhances safety." Mexico," stated Tom Kornegay, service to commercial entities in this
Executive Director of the Port of region," explained Rick Couch, Port "The Channel has a tremendous
Houston Authority. "This will add up to Manager for Sea-Land Service, Inc. volume of traffic. By gaining more
more business for the Port and all the "Sea-Land just signed a 30-year room to operate - even a little more room
12 PORT OF HOUSTON MAGAZINE - it will be a lot safer than what we have now. Also, if deeper draft ships
and possibly those with wider beams can use the Channel, it mayreduce the number of ships and yet move the same amount of cargo," Mr. Russell reasoned.
What makes the deepening and widening project unique in the indus- try is the extensive environmental
restoration and maintenance project incorporated in the plan. The award- winning design calls for the dredged material to be used in restoring an unprecedented 4,250 acres of marsh and wetlands. An eight-acre bird Port of HoustonAuthority ChairmanNed S. Holmesand Acting Assist~,nt Secretary nesting island will be constructed and for Civil Worksof the U.S. Corpsof EngineersDr. JohnH. Zirschkysig~ the Project CooperativeAgreement for the HoustonShip Channeldeepening and wideningpro- the wildlife habitat on Goat Island will ject. Lookingon are (standing left to right): SenatorsPhi/Gramm and KayBailey be restored. Recreational boat access Hutchison, CongressmanKen Bentsen, CongresswomanSheila Jackson Lee, channels are also planned and CongressmanChet Edwards,Colonel Eric R. Potts, FormerCommander of the U.S. maintenanceof all of the sites for 45 ArmyCorps of Engineers,Galveston District, andJohn P. D’Aniello, DeputyDirector years is included. Completion is of Civil Works,Corps of Engineers,Washington. scheduledlk)r 2005. Pilots. "Wehave an excellent safety Port of Houston Authorily and the Port record and the Port is still growingand of Galveston. Contracts Let and making money. The widening and deep- "Our greatest task is finding waysto Work Begins ening project will not makeour job any ensure that the deepening and widening easier, but it will allow us to movelarg- work continues smoothly with minimal As work begins, the great challenge er and deeper vessels safely and help disruptions," said Mr. Kornegay. "We is to keep regular Channeltraffic mov- keep the Port’s competitive edge with have spent countless hours with our part- ing and uninterrupted. With some6,400 other ports in the U.S." ners at the U.S. Army Corps of ship and 100,000 barge movements There are nine dredging contracts for Engineers, the HoustonPilots, and the annually, this will be no easy task. the wideningand deepeningproject. The Coast Guard carefully planning for "There is a very fine line between cost of the deepening and widening this project. economics and safety," points out Tom project is being shared by the federal "It is almost like choreographing a Phelps, Presiding Officer of the Houston governmentand the local sponsors, the complexdance that is filled with many
~’Ollll}lll~.’~)...
PORT OF HOUSTON MAGAZINE 13 characters whomust all movesimultaneously and without impeding each other’s progress. However,it is a challenge we relish and are grateful to finally have before us," Mr. Kornegayconcluded. TABLE Anunusual feature of the overall workin the HoustonShip Channelis the removal Your input and ideas are of the BaytownTunnel. It is a Texas Departmentof Transportation effort that is going needed for the Port of
on in the midst of the deepeningand wideningproject. Awardedto Williams Brothers Houston Magazine. From
in July 1998, such a project has never been undertaken. time to time, we will be con- The first section of tunnel which was removedin November1998 was 15 feet in vening a Readers RoundTable
length, 38 feet in diameter and weighed125 tons. The HoustonShip Channelwas not discussion to brainstorm on closed, and there was no impact to vessel traffic as the section was hoisted ashore. topics for future issues. We The second section was 264 feet in length and weighed6800 tons. In December1998 would like to hold one in it was madepartially buoyantand tied alongside the staging area for demolition. March. It’ll just take a couple A good way to keep up with the deepening and wideningproject is to visit the hoursof your time to kick around U.S. Army Corps of Engineers, Galveston District homepage at someideas with your maritime www.swg.usace.army.milon the internet. colleagues. If youwould like to partici- pate, please let us know by ThePort of Houstonis the calling 713/670-2644or by fax ThePort of eighthlargest port in the world. is hometo the ThePort of Houstonis first in nation’slargest ThePort of Houstonis secondin petrochemical foreigntonnage in the UnitedStates. the UnitedStates in total tonnage complexvalued at t $15billion. handledeach year.
Official Su ¯ Largest Inven ¯ 40 Offices ¯ Iridium Rentals, Call 1 or
14 PORT OF HOUSTON MAGAZINE BecomesFirst CustomerFor Houston’sEast End Container T~rminat
he alliance betweenChina The "K" Line becomesthe first cus- the East Endterminal is available if the Ocean Shipping Company, tomer for the 36-acre container terminal Houston Ship Channel is closed due to YangmingMarine Transport which includes two docks, four cranes tog or other incidents and container traf- Corp. and KawasakiKisen and other equipment. The Port of fic mustbe diverted. Kaisha, Ltd. ("K" Line) announced new Houston Authority sought the lease with "This is truly a historic point tbr both trans-Atlantic service between northern our Ports," said Ned S. Holmes, Europe and the U.S. Gulf which includes Chairman of the Port of Houston the Port of Houstonat the newly leased Authority. "Houston’spresent facilities East Endcontainer terminal in Galveston. are at capacity for container traffic, and On the heels of the landmark agree- Galvestonhas the facility and location to ment enabling the Port of Houston help fill our immediateneeds. It’s a win- Authority’s lease of the Port of win for both our cities," added Holmes. Galveston’s East Endterminal, "K" Line Galvestonin order to use the facility for "This lease represents the first coop- unveiled its plans to deploy five extra overflow traffic from Barbours Cut erative effort betweenour Ports," stated vessels that carry 2,000 20-foot contain- Container Terminal,the busiest container John W. Ford, Chairmanof the Board of ers on this South Atlantic itinerary. The terminal on the U.S. Gulf of Mexico. Trustees of the Port of Galveston."I hope port rotation for the service is Antwerp, Oncethe facility is fully operational, this will lead to both Ports developinga Belgium; Felixstowe, England; Houston Port officials estimate that regional concept for marketingand a new Rotterdam, Bremerhaven, Germany; Le 50,000 to 60,000 TEUs (twenty-foot spirit of cooperation." Havre, France; Charleston, S.C.; Miami; equivalent units) could be handled annu- The 20-year lease, with four five-year NewOrleans; and Houston. ally in Galveston.In addition to alleviat- options, requires the Port of Houston "Weare proudof our successful nego- ing container congestionat BarboursCut, Authority to pay $500,000the first year tiations with the new’K’ Line alliance," and $1 million a year thereafter. The reported Tom Kornegay, Executive lease paymentin year one is lower due to Director of the Port of HoustonAuthority. the necessary upgrade of Galveston "’Theyunderstand the market potential of cranes which the Port of Houston trade in the U.S. Gulf and are anxiousto Authority has completed. The Port capitalize on it. This alliance is also Authority will upgrade two cranes first, impressed with Houston’sstrong network and as business develops, service the of rail and highway connections to remainingtwo cranes. ,,~ Mexicoand the West Coast."
PORT OF HOUSTON MAGAZINE 15 H 0
In a short period of time, the number of passengers ties that showcasethe best of Texas and the Caribbeanduring
departing from the Port of Houston on luxury cruises has this one-of-a-kind Texaribbeancruise," he noted.
doubledin size. NCLis expecting 78,000 passengers on 52 ship calls to
Norwegian Cruise Lines (NCL) became the only major Houstonin 1999. Morethan 50 percent of the Star’s passengers
cruise line sailing from Houstonin May1997 whenit launched camefrom Texas, followed by 15 percent from California with
weekly departures on the NorwegianStar. The 800-passenger the balance mainly from Arizona, Washington, Illinois
Star sailed on what quickly becamea very popular seven-day and Louisiana.
"Texaribbean" itinerary which includes Cancun and Cozumel, The cruise market out of Houstonis heightened by the fact
Mexico, Roatan in the BayIslands, Honduras. that passengers from the West and Midwestcan save an entire
On December 13, 1998, NCL’s modern, 1,518-guest, vacation day by departing from Houston rather than Miami.
42,000-ton NorwegianSea arrived from San Juan to replace the Between Continental and Southwest Airlines, Houston has
Star and continue the weekly Texaribbean cruises. The Sea’s 1,200 flights in the Friday to Mondaycruise time window.The
maidensail into the Port of Houston was celebrated with an destination possibilities also offer seasonedcruise passengers
on-board invitation-only reception and luncheon complete with newroutes to explore.
a presentation by Houston Mayor Lee P. Brownand special The more than $5 billion North Americancruise industry
tours of the ship by the news media. The NorwegianSea then expects 7 million passengers by the year 2000. More than
set sail on her maidenTexaribbean voyage. 160,000 Texans cruised in 1996 and some500,000 Houstonians
"NCLfirst pioneered cruising out of Houston in 1997, are expected to cruise from 1997-2002. With 30 million
and we are nowdelighted to offer our expandedpresence and people living within 500 miles of Houston, it is a natural new commitmentto this port with the debut of the NorwegianSea," marketplacefor cruises. said Art Sbarsky, Executive Vice President of NCL. "Our The NorwegianSea entered service in 1988. She has a 700’ guests will enjoy a variety of themenights and special activi- length, 93’ breadth, 22’ draft, a speed of 20 knots, and a
PORT OF HOUSTON MAGAZINE 17 630-member crew. Somewhat like a small city, she features four
dining areas ranging from formal to casual, a disco, a lounge with
full-scale productions of the Broadway show "Grease," six other
bars/lounges, and a casino complete with blackjack, dice, poker
and 178 slot machines. The ship also has a library, an ice cream
parlor, two outdoor pools and Jacuzzis, a health/physical fitness
spa, a children’s playroom, a shopping arcade, and a beauty shop.
NCLoffers regional menus for each destination that take
advantage of fresh produce and other commodities available at
each port of call. The Texaribbean itinerary features a menu
of Texas-sized T-bone steaks and Mexican hors d’oeuvres. 70
varieties of hot sauces, and a wide selection of Mexican beers and
Texas wines.
Themecruises are also highlighted. Sports Afloat is scheduled
following each national championship and includes players repre-
senting various professional teams who come aboard to participate
in autograph sessions, sports t iv a contests, player demonstrations,
coach talks and prize give-a-ways. The 1999 schedule is June 27
for hockey, July 25 for basketball, and November28 lk)r baseball.
In addition, the Norwegian Sea will set sail on a Rock Oldies
Cruise featuring music from the 1950s and "60s on August 8, and a
Country Music Cruise departing September 12 with actual name per-
formers as entertainment. The Tee Up Golf cruises sail year-round.
During these voyages, PGAgolf pros help conduct on-board golf
lessons and putting contests and assist with in-port golf activities.
During its time sailing out of Houston, the Norwegian Star gen-
erated more than $3 million per month of direct economic impact
for Houston. That number will certainly double as the number of
passengers doubles in 1999.
18 PORT OF HOUSTON MAGAZINE