01-January-February Page 1 to 18

JANUARY/FEBRUARY
OF
6
8
9
HOUSTON
1999
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
New York
650 SycamoreAvenue, Suite 23
Bohemia, NY 11716
Phone: 516-244-3677
Fax: 516-244-3757
South America
Torre Centuria, Local #2
PB, Suite 916
Av. Venezuela,Urb. El Rosal
Caracas 1060 Venezuela
Phone: 58-2-976-7063or 58-1-421-5615
Fax: 58-2-976-7063
Monterrey
Av. SanPedro #801 Nte.
Local #27
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Phone: 528-335-7341
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Phone: 525-251 3622
Fax: 525-596-7909
WE’RE
BACK!
Thank you to the manyreaders whoasked about the publication and whenit
might return. It is goodto knowthat you found it a valuable resource for informationabout our industry.
With this issue, we return with a whole new approach. The magazinewill be
published six times a year. Althoughit will be published less frequently than
before, we intend to remainas informative and useful to you as possible.
In order to be topical and interesting, we need your support. This is your magazine and we are alwaysinterested 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 wouldlike 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
involvedin 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
reproduction or use of any original materials, provided credit is
given to the Port of Houston Authority. Additional information,
addresschanges,extra copies, or advertising specifications maybe
obtained by writing to the Port of HoustonMagazine.
The Port of HoustonMagazineis published by the Port of Houston
Authority, RO. Box 2562, Houston, Texas 77252-2562, and is
distributed free to maritime,industrial and transportationinterests in
the UnitedStates and foreign countries.
Port of Houston web pa!je
www.portofhouston.com
ExecutiveOffice
Port of HoustonAuthority
111 East LoopNorth
P.O.Box2562
Houston,TX77252-2562
Phone:713-670-2400
Fax: 713-670-2429
www.portofhouston.com
PORT OF
HOUSTON
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PORT
0 E HOUSTON
",,,IAG,~,ZIIN
E 5
THE 1990s
HAVE BEEN A
DECADE OF PROSPERITY
RECORD-BREAKING
AND
6ROWTH
FOR THE PORT OF HOUSTON
AUTHORITY.
Y EAR
EN DS
THE YEAR 1998
PROVED NO DIFFERENT.
0 rl
NOTE
H IGH
A comparison of tonnage statistics
for
January through October 1997 and 1998
showsastonishing increases especially in the
breakbulk cargo and bulk cargo categories.
CHALLENGES
Suchrobust numberscontribute to a 13.9 percent overall growth rate for Port Authority
operations.
By year end, the number of TEUs(20foot equivalent units) crept ever closer to the
COME
WITH
one million mark, even though the annual
increase is modestcomparedto other aspects
of the Port Authority’s performance.Clearly,
capacity for handlingadditional containers is
THE
NEW
YEAR
being exhausted and the need to develop the
newBayport Terminal strengthens daily.
Imported steel
reached new highs,
althoughthe 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 HoustonPublic Grain Elevator
NumberTwowent through the roof due to record harvests 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
Congressional
development.
"Keeping
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 authorization bill has been delayed each of the last two times it
has been up for consideration, thus jeopardizing important infrastructure projects.
In his new role as Chairman of the Board of the
AmericanAssociation of Port Authorities, Mr. Kornegay
is making both the Water Resources DevelopmentAct
Port of Houston
AuthorityTonnage
January
December
1997
1998
Change
Breakbulk
Cargo
4,550,819
6,008,380
+ 32%
7,612i664
8,1~,794
+ 7%
22,6210149
25,839,755
+14%
Import
Steel
2,549,727
4,023,726
+58%
Grain
Products
( HPGE#2)
388,328
1,247,257
+221%
47,367
65,449
+ 38%
and replacement of the Harbor MaintenanceTax top priorities for 1999.
As with industry everywhere, shipping lines are
changing the way they do business and trying new ways
Container
Cargo
to improve their financial bottomlines. To that end,
alliances
are being formed around the world among
steamship lines, especially container lines, to work
together to negotiate prices.
"All of the companiesare fighting for the samebusiness and same trade routes," explained Mr. Kornegay.
Total
More
Specifically
"There are more ships than there is cargo. By working
together, the shippinglines can adjust the supplyof ships
and keep prices from falling."
Other highlights of 1998 include the long-awaited
start of the HoustonShip Channelwidening and deepening project and the great success of the first cruise line
Autos
(units)
out of Houston. ,,~
PORT
OF
HOUSTON
MAGAZINE
7
8
PORT
OF
HOUSTON
MAGAZINE
B
MUCH
P
NEEDED
he containerized cargo business at
rT-
the Port of Houston Authority’s
ROOM
0
FOR
B
PORT
from Barbours Cut is $800 million.
GROWTH
build a new container complex.
has reached capacity
The Port of Houston Authority has
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
new fully
cargo
Port of Galveston’s Easy End container
Bayport. The complex wc, uld be buih
terminal ,just
on 935 acres of land. The Port Authority
facilities
is good -- ahnost too good.
handled
Authority facilities
by Port
of Houston
has doubled.
The Port of Houston’s Barbours Cut
Container Terminal handles 80 percent of
The facility
T
leased the
to handle overflow from
Barbours Cut.
intermodal
lerminal
at
already owns five miles of the land fl-om
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
Texas ports and more than hall" of the
pace with the demands of containerized
between
containers crossing the Gulf of Mexico.
cargo customers,
With a location so near Barbours Cut,
Each yem; the economic impact to Texas
tomers clamoring for facility
much less
new cus-
Shore Acres and Seabrook.
space, is to
contitllted
PORT
County
OF
HOUSTON
oit He.vt po£,d
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 HoustonAuthority. "The
cruise lines will expandinto the Houstonmarketas well.
The master
master plan includes improvedaccess to the site for vehicles,
trains and ships. By incorporating these intermodal elements
during the initial planning, Bayportwill benefit fromefficient
Bayport
container
and safe traffic flows and operations."
The master plan for Bayport includes seven container
includes
seven
terminals
as a cruise
for
as
complex.
terminals as well as a cruise complex. Developmentof 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,
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
Houstonsince 1997. These cruises pump$3 million into the
to cost $1.2 billion.
Norwegian Cruise Lines has been operating
10
well
plan
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 numerousbuildings. A bond election in November
1999will ask for $380
million to build Phase Oneof Bayport.
Asa part of the pre-permit process, the Port Authority
shared this plan with the community
and 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
Texaswill continue to grow, somethingthat greatly benefits all of the community,"concluded Mr. Kornegay.
PORT
OF
HOUSTON
MAGAZINE
11
epenlng G w, enlng
THE HOUSTONVSHIP
shipping
finally
importantly, safety will be enhanced by
the Channel to 45 feet is what we need
reducing the chances of collisions
now and into the future
the nation’s
top-ranking
port of
entry for foreign cargo. The fiveyear $508 million project will increase
More
and
to keep the
Port of Houston competitive with other
oil spills."
Once completed,
the project
will
major ports."
Larry Russell, Marine Superintendent
the depth of the Houston Ship Channel
increase the earning capacity of ships
from 40 to 45 feet and the width from
using the Port of Houston. Every inch
tbr Equiva Trading Company, a joint
400 to 530 feet.
of draft
venture
"This long-awaited
enable today’s
directly
part
expansion will
larger
vessels
to go
to terminal rather than unload
of their
cargo in the Gulf of
Mexico,"
stated
Executive
Director
Tom Kornegay,
of the
Port of
Houston Authority. "This will add up to
more business for the Port and all the
12
using the Port.
lease with the Port Authority. Deepening
t only took 30 years, but work has
begun to deepen and widen
lines
CHANNEL
PORT
OF
HOUSTON
MAGAZINE
gained enhances the revenue
between
Shell,
Texaco and
generated. "This project will allow us to
Saudi Aramco, agrees but stresses safety
bring in on a regular
over
basis
our SL44
profits.
"The deepening
and
class ships, which are much bigger and
widening of the Channel has definite
faster,
economic advantages,
carry more and can offer better
service to commercial entities
region,"
explained
in this
Rick Couch, Port
Manager for Sea-Land Service, Inc.
"Sea-Land just
signed
a 30-year
but more impor-
tantly the project enhances safety."
"The Channel
volume of traffic.
has a tremendous
By gaining
roomto operate - even a little
more
more room
- 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 industry is the extensive environmental
restoration
and maintenance project
incorporated in the plan. The awardwinning design calls for the dredged
material to be used in restoring an
unprecedented 4,250 acres of marsh
and wetlands.
An eight-acre
bird
nesting island will be constructed and
the wildlife habitat on Goat Island will
Port of HoustonAuthority Chairman
NedS. Holmesand Acting Assist~,nt Secretary
for Civil Works
of the U.S. Corpsof Engineers
Dr. JohnH. Zirschkysig~ the Project
CooperativeAgreement
for the HoustonShip Channeldeepeningand wideningproject. Lookingon are (standing left to right): SenatorsPhi/Gramm
and KayBailey
be restored. Recreational boat access
channels
are also
planned
Hutchison, CongressmanKen Bentsen, Congresswoman
Sheila Jackson Lee,
and
Congressman
Chet Edwards,ColonelEric R. Potts, FormerCommander
of the U.S.
maintenanceof all of the sites for 45
ArmyCorpsof Engineers,Galveston
District, andJohnP. D’Aniello, DeputyDirector
years is included.
of Civil Works,Corpsof Engineers,Washington.
Completion is
scheduledlk)r 2005.
Pilots.
"Wehave an excellent safety
record and the Port is still growingand
Contracts
Let and
Work Begins
As work begins, the great challenge
making money. The widening and deep-
ship and 100,000 barge movements
annually, this will be no easy task.
of Galveston.
"Our greatest task is finding waysto
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
er and deeper vessels safely and help
disruptions,"
is to keep regular Channeltraffic mov- keep the Port’s competitive edge with
ing and uninterrupted. With some6,400
Port of HoustonAuthorily and the Port
other ports in the U.S."
There are nine dredging contracts for
the wideningand deepeningproject. The
"There is a very fine line between cost of the deepening and widening
economicsand safety," points out Tom project is being shared by the federal
Phelps, Presiding Officer of the Houston governmentand the local sponsors, the
said Mr. Kornegay. "We
havespent countless hours with our partners
at the U.S. Army Corps of
Engineers, the HoustonPilots, and the
Coast Guard carefully
planning for
this project.
"It is almost like choreographinga
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
TABLE
us," Mr. Kornegayconcluded.
Anunusualfeature of the overall workin the HoustonShip Channelis the removal
Your input and ideas are
of the Baytown
Tunnel.It is a TexasDepartment
of Transportationeffort that is going
needed for
the
Port
on in the midst of the deepeningand wideningproject. Awardedto Williams Brothers
Houston
in July 1998, such a project has never been undertaken.
time to time, we will be con-
Magazine.
of
From
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.
The second section was 264 feet in length and weighed6800tons. In December1998
it was madepartially buoyantand tied alongside the staging area for demolition.
A good way to keep up with the deepening and wideningproject is to visit the
U.S.
Army Corps of Engineers,
Galveston
District
homepage at
topics for future issues. We
would like
to hold one in
March. It’ll
just take a couple
hoursof your time to kick around
someideas with your maritime
www.swg.usace.army.mil
on the internet.
colleagues.
If youwouldlike to participate, please let us know by
ThePortof Houston
is the
ThePortof
is home
to the
nation’slargest
petrochemical
complex
valuedat
$15billion.
eighthlargestport in the world.
ThePortof
Houston
is first in
foreigntonnage
in
the UnitedStates.
ThePortof Houston
is second
in
theUnitedStatesin total tonnage
handled
eachyear.
Official
Su
¯ Largest Inven
¯ 40 Offices
¯ Iridium
Rentals,
Call
1
or
14
PORT
OF
HOUSTON
calling 713/670-2644or by fax
MAGAZINE
t
Becomes
First Customer
ForHouston’s
EastEndContainer
T~rminat
he alliance betweenChina
Ocean Shipping Company,
Yangming
MarineTransport
Corp. and KawasakiKisen
Kaisha, Ltd. ("K" Line) announced new
trans-Atlantic service between northern
Europeand the U.S. Gulf which includes
the Port of Houstonat the newly leased
East Endcontainer terminal in Galveston.
On the heels of the landmarkagreement enabling the Port of Houston
Authority’s lease of the Port of
Galveston’s East Endterminal, "K" Line
unveiled its plans to deploy five extra
vessels that carry 2,000 20-foot containers on this South Atlantic itinerary. The
port rotation for the service is Antwerp,
The "K" Line becomesthe first customer for the 36-acre container terminal
which includes two docks, four cranes
and other equipment. The Port of
HoustonAuthority sought the lease with
the East Endterminal is available if the
Houston Ship Channel is closed due to
tog or other incidents and container traffic mustbe diverted.
"Thisis truly a historic point tbr both
our Ports," said Ned S. Holmes,
Chairman of the Port of Houston
Authority. "Houston’spresent facilities
are at capacity for container traffic, and
Galvestonhas the facility and location to
help fill our immediateneeds. It’s a win-
Galvestonin order to use the facility for
overflow traffic from Barbours Cut
win for both our cities," addedHolmes.
"This lease represents the first coop-
erative effort betweenour Ports," stated
Container Terminal,the busiest container John W.Ford, Chairmanof the Board of
terminal on the U.S. Gulf of Mexico.
Trustees of the Port of Galveston."I hope
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 annuThe 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 lowerdue to
Director of the Port of HoustonAuthority.
the necessary upgrade of Galveston
"’Theyunderstandthe marketpotential 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
departing from the Port of Houston on luxury cruises has
doubledin size.
Norwegian Cruise Lines (NCL) became the only major
ties that showcasethe best of Texas and the Caribbeanduring
this one-of-a-kind Texaribbeancruise," he noted.
NCLis expecting 78,000 passengers on 52 ship calls to
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,
Mexico, Roatan in the BayIslands, Honduras.
On December 13, 1998, NCL’s modern, 1,518-guest,
The cruise market out of Houstonis heightened by the fact
that passengers from the West and Midwestcan save an entire
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,
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
Houston has
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 maidenTexaribbeanvoyage.
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
guests will enjoy a variety of themenights and special activi-
The NorwegianSea entered service in 1988. She has a 700’
length, 93’ breadth, 22’ draft, a speed of 20 knots, and a
PORT
OF
HOUSTON
MAGAZINE
17
630-member crew. Somewhatlike 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,
and 178 slot machines. The ship also has a library,
dice, poker
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
each port of call.
of Texas-sized
varieties
The Texaribbean itinerary
T-bone steaks
features
a menu
and Mexican hors d’oeuvres.
of hot sauces, and a wide selection
at
70
of Mexican beers and
Texas wines.
Themecruises are also highlighted. Sports Afloat is scheduled
following each national championship and includes players representing 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 performers 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 NorwegianStar generated more than $3 million per month of direct economic impact
for Houston. That number will certainly
passengers doubles in 1999.
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double as the number of