M A G A Z / N E

the struggle for perfection...

what’s it worth to you?

YOUNG AND COMPANYContract Stevedores and Terminal Operators

P.O. Box 4445 2855 Mangum Road Houston, TX 77210Western Union Cable: YOUNGCO Telephone: (713) 688-7700 TWX: 910-881-1710

New Orleans ̄ Beaumon[ ̄ Galveston ̄ Orange ̄ Freeport ¯ Port Arthur

t

Our many satisfied andloyal customers know ofour harbor tug service inHouston and other Texasports.

Everybody deservesa chance to make it

on their own,Everybody.

We can please YOUR shipowners,shipmasters, pilots, and agents. Giveus the opportunity.

We offer the safety, know-how,promptness and dependability youneed.

1’he National Urban League is dedi(’ated to achievingequal opportunity for all. And you can help.Contact your local Urban League or write:

National Urban League500 East 62rid StreetNew York, N.Y. 10021

~A Pubhc Serwce

ITT TUGS are pleased to donate thisspace to tell others about something

besides our superior tug service.

INTRACOASTAL TOWING& TRANSPORTATION CORP

Houston ¯ Galveston ¯ Freeport ¯ Corpus Christi

Louisiana Gulf Shipyards

(S04)$2S.342SLOUISIANA GULF SHIpX&R©S INC

320 ~ACE ST~EETNEWoRLEANS LA 70~30 USA(504} 525 3425 T~LEX 6821204

TABLE OF CONTENTSPort Staff

Richard P. Leach, Ex~,utive Di ......James D. Pugh, Managing Director

J.R. Curtis, Director of Port Operations

Ted Waiters, Deputy Director of Port Operations

John Green, Deputy Director of Port Operations

W.D. Dunnahoe, Manager. Turning Basin Terminals

John Horan, Manager, Barbours Cut Terminal

W.E. Greet, Manager, Houston Public Elevator

Leslie J. Sanderfer, Manager, Bulk MaterialsHandling Plant

A.J.M. van de Ven, Manager, Maintenance Department

Claude Barth, Manager, Security Department

Armando S. Waterland, Director of Trade Devdopment

Leon Utterback, Eastern Sales Manager

Jack Wojewnik, Assistant Eastern Sales Manager

David W. Simpson, Western Representative

Misael Breton, Latin America Representative

Diana Payne, Marketing Analyst

Lee Vela, Communications Manager

Norman E. Hueni, Director of Engineering

Tom Kornegay, Chief Engineer

F. William Colburn, Director of AdministrationLinda Reese, ControllerAlton B. Landry, Manager, Personnel Department

Betty Garrett, Manager, Purchasing Department

A. Monroe BeaD, Manager, ReaJ Estate

James Eldridge, Manager, Management InformationServices

Algenita Scott Davis, CounselLouis F. Brown, Jr., Manager, Safety and Insurance

Department

Joe Scroggins, Jr., Director of Planning

Michael Scorcio, Director of Community Relations

Joe F. Flack, County Auditor

Executive Offices1519 Capitol Avenue, Houston, Texas 77002

P.O. Box 2562, Houston, Texas 77252Tel: (713) 226-2100 TWX: 910-881-5787

Terminal OfficesTurning Basin: (713) 670-2400Barbours Cur: (713) 470-1800

Bulk Plant Office3100 Penn City Road, Houston, Texas 77015

Tel: (713) 453-3531

Field Office60 East 42nd Street, New York 10165

Tel: (212) 867-2780

%Official Publication

~J i~7~ Port of Houston

~ut~o,,t~

Volume 28 Number 3 March 1985

4Railroad ConnectionsFive major rail systems connect Houston with Midwestand Western America.

9ViewpointAn editorial concerning delays of federal developmentprograms.

13FTZ SiteVolkswagen to operate a Foreign Trade Zonesite.

15New LineUnited States Line initiates hi-weekly service fromHouston to South America.

18Foreign TradeConference explores complicating factors of interna-tional trade.

DEPARTMENTS

HOUSTON HUMMER 11 PORT TIDINGS 23PHA PROGRESS 21 PORT SIDE 44

On The Cover: Rail connects Houston to America. (Photo courtesy of Southern Pacific)

Port Commissioners

F. Bracewell M.D. Perry H.J. Middleton R. Gonzales, Jr. A. Bennett, Jr.Chairman Commissioner Commissioner Commissioner Commissioner

THE PORT OF HOUSTON MAGAZINE (ISSN 0032-4825) is published monthly by the Port of Houston Authority and is distributed free maritime, industrial and transportation interests in the United States and foreign countries. ]’he magazine staff includes: Editor, Lee Vcla;Staff Photographer, Ray Carrington; Advertising Manager, Sheila Adams; and Production Assistant, Tina Tobias. This publication is notcopyrighted and permission is given fist the reproduction or use of any original material, provided credit is given to the Port of Housnm Addi-tional information, extra copies or advertising rates may be obtained by writing the POR~I OF HOUSTON MAGAZINE Second class postagepaid at Houston, Texas and at additional mailing offices Send address change to PORT OF HOUSTON MAGAZINE. PO. Box 2562,Houston. Texas 77252

Shipping and rail

work hand-in-handI n 1853, the first train in Texas made

its maiden run from Harrisburg onBuffalo Bayou to Stafford in Fort

Bend County. More than 60 years later,just a whistle’s blow from where thestate’s railroad industry was born, theHouston ship channel was opened as adeep-water port.

Today, the shipping and rail in-dustries work hand-in-hand.

Just as the Houston economy dependsheavily on the port’s shipping activities,it also relies on rail carriers to move com-modities to and from the ship channel.Without trains, the Houston Chamberof Commerce says, it would take fivemillion trucks to move the $50 billion incargo currently handled by rail. Trainsmove a mountain of goods--more thanone third of all commodities shipped na-tionwide-and they do it with an im-pressive fuel efficiency record. Accordingto a federal Railroad Administration con-sumption study, railroads move 36 per-cent of the nation’s freight, and use onlythree percent of the transportation in-dustry’s total fuel consumption to do it.By comparison, trucking companies use24 percent of the industry’s fuel to moveonly 25 percent of the goods.

In Houston, five major rail lines hand-le most of the freight. Two localrailroads provide switching services to theport as well as other industries andwarehouses around the city. Altogether,they maintain 29 railroad yards in theHouston area and have the ability tohandle 23,000 rail cars at once.

Of the big companies, SouthernPacific Transportation Company is thebusiest, pushing more freight and serv-ing more customers than all of the otherscombined, company spokesman TonyAleman says.

Southern Pacific sends about 350,000rail cars in and out of the Houston yards,with about 50 percent of the traffic mov-ing through the Strang yard, the firm’spetro-chemical facility in Baytown.

Petro-chemicals--particularly plas-

4

ili~ ~i~ i~!i~ ~i~ i~~ ~:~i~ ~

Five major rail linesservice Houston withcon nectionsthroughout the UnitedStates¯ The HoustonChamber of Com-merce estimates thatabout $50 billion incargo is currentlyhandled by rail.

tics--make up the majority of the com-pany’s outbound Houston shipments."More than half of our originatingrevenue comes from petro-chemicals,"Aleman said, "and 20 percent of that isfrom plastics."

On the inbound side, the companycarries a plethora of products toHouston. The list includes farm goods,groceries, steel, paper and pulp goods,corn sweetners, cotton, beer and wine, toname a few. From Houston, SouthernPacific offers extensive service to bothcoasts. Its own trains carry all of itsfreight to the west. By making connec-tions with other carriers, the line also ser-vices Seattle and points north intoCanada.

In addition to an extensive routingnetwork, Southern Pacific also provides

several unique services to shippers mov-ing cargo through Houston. Two priorityservice trains cut transit times almost inhalf. One of the trains runs fromHouston to Los Angeles and Oakland,California. The other travels fromHouston to St. Louis and back. Thepriority trains carry auto parts, cars,general commodities, perishable pro-ducts and other time sensitive goods,Aleman said.

The "landbridge" and the "mini-landbridge"--two services offeredSouthern Pacific and most of the otl.~_major rail lines--accentuate the marriagebetween water and rail transportation.

Both allow the shipper to expedite hiscargo by using partial overland transportrather than an all-water route. The mini-landbridge concept allows shippers to

avoid the Panama Canal on foreignhipments destined for U.S. inland

points, Aleman said. For example, ifcargo is coming from Europe, it might beunloaded at Houston then moved by railto West Coast points, he explained. Thisis instead of going by ship from Europeto the West Coast through the PanamaCanal. "You can save eight days by us-ing the rail," he said.

Landbridge is the same idea, but on alarger scale. It uses the continentalUnited States as a "bridge" between theOrient and Europe, Aleman said. "Ifyou’re sending cargo from the Far East toEurope, you can unload it on the WestCoast, send it to Houston by train, thensend it on to Europe," he said. "Or, ifyou’re coming from South America,Europe or Africa, you can unload it inHouston, put it on a train to the WestCoast, then send it by ship to the FarEast," he added. Both "landbridge"and "mini-landbridge" can save days intransit time, Aleman said.

Southern Pacific also offers the:print Train, a guaranteed overnight ser-

vice going to and coming from Dallas.Sprint is an intermodal train designedto compete with truck traffic currentlyoperating between Texas’ two majorcities, Aleman said. "They exclusivelyhandle trailers on flat cars. They’re off-loaded and customers pick them up anddeliver them to the local point," he said.

Southern Pacific also has customizedequipment to meet the specific needs ofport users. At the Barbours Cut Con-tainer Terminal, the company uses a con-tainer shipping system which saves spaceand energy, Aleman said. Five cars whichare articulated to function as one unit aredouble stacked to carry 10, 35-to-40 footcontainers. The units are 270 feetlong," Aleman said, and do the samework as five standard 89-foot-long piggyback flatcars totaling 445 feet inlength. The system means shorter trainswith heavier payloads, he said, whichresult in savings for the company and itscustomers.

f wo other train lines, Union Pacific

and Missouri Pacific--togetherknown as MoPac since their 1982 mer-ger-serve 22 states in the Midwest andNorthwest. Commodities toppingMOPAC’s list include coal, chemicals,and automobiles. The railroad also hauls

Petrochemicals, particularly plastics, make up alarge portion of outbound Houston shipments.

grain as well as a variety of otheragricultural products.

Bob Britz, who heads the Houstonregion’s intermodal sales force for UnionPacific, says his company moves most ofits Gulf Coast container traffic throughHouston. "Houston has more versatilityin moving container traffic than otherGulf ports," he explained. Having theoption of either moving the containersby rail to Barbours Cut or draying themby truck from railroad yards is a goodreason, he said.

Another line, the Missouri-Kansas-Texas Railroad, known locally as theKaty, makes connections with other car-riers from the Midwest to the Southeastand upper Midwest and the Northwest.

Grain is the line’s biggest commodity,said Garry Bradshaw, the head of theKaty’s Houston marketing operation. Headded however, that his company is cur-rently studying expedited servicethrough an intermodal train.

The Katy Railroad’s success has reliedon personalized service, Bradshaw said.That means the company’s marketingpeople respond quickly to customer’sneeds. Customizing services to suitindividual needs and handling everyshipment from point of origin todestination are some things the Katy of-fers, he said.

Burlington Northern Railroad--formedwhen Great Northern Pacific, Chicago-Burlington-Quincy and Fort World-Denver merged with the Frisco Rail-road- offers two main lines into Texasand expanded service to Oklahoma,Missouri and Arkansas.

The company carries coal to Houstonpower plants as well as cotton and wheatto the port.

The firm offers "hotshot" piggybacktrains from Houston to Portland andSeattle. Similar service from Houston toChicago provides special intermodal ser-vice on cargo moving through Houston.

The priority train from the Northwesttakes 96 hours to Seattle. The Chicagotrain takes 50 hours, companyspokesman Jack Martin said.

As part of a two-year decentralizationprocess, the railroad recently moved itsoperations from St. Paul to OverlandPark, Kansas. It maintains executive of-rices in St. Paul and in Fort Worth, Mar-tin said. Extended service was the reasonfor the move. "We’re looking to thegrowing sunbelt area to be closer to ship-pers," Martin said.

The fifth of the five major rail lines,

Santa Fe, currently serves 12 states,with runs from Chicago to San Francisco,Los Angeles and Houston. The two chiefcommodities shipped into Houston bythe line are grain and potash.

The company’s pending merger dealwith Southern Pacific is expected to savethe company millions in operating costswhile improving services, SouthernPacific’s Aleman said, with about $220million in reduced operation costs ex-pected each year. "These savings willresult largely from improved train opera-tions, better equipment utilization andmore efficient use of labor andfacilities," Aleman said.

(See Railroad, page 39)

Hopper rail cars carry commodities such aspotash to the Port of Houston’s Bulk MaterialsHandling Plant. Potash was the leading exportfrom the plant in 1984.

5

THE PICTURE OTHERWEST AFRICA CARRIERS

"T WANT YOU TO

Direct Service. Every Port. Every Sailing.Barber West Africa Line--the

leader in the industry--leaves allother carriers behind.

Because only BWAL makesdirect calls to all scheduled ports.

Without exception.Know what ship you’re on.And what shape you’re in.

Other carriers transship yourcargo.

BWAI’s AfriCarriers don’t.Which means the ship your

goods leave on is the ship yourgoods arrive on.

Because there’s no inter-mediate handling, your cargotravels faster. More securely, too.Whatever you ship, we canhandle.

Containers. Rolling stock.

Atlanta (404) 325 130~ Baltimore (301) 659~7900, Chicago (312) 938 2000, Houston (713) 863-2160, Los Angeles (213) Miami (305) 358 5621, Montreal (514) 871-3333, New Orleans (504) 529-3900, New York (212) 908-1443,London, England (01) 921 31 31, Paris, France (01) 723 78

Heavy lift cargo. Even reefers.Our Ro-Ro vessels can handlethem all.

Which means no matter whatkind of cargo you have, you’llalways get the same directservice picture.

And that’s definitely a pictureworth seeing.

barber

6

PACKAGED

/

Shippers Stevedoring fs more than just a cargotransfer company. Our private terminals offer securemarshalling yards, 50 acres of storage area, a warehousecapacity of 272,000 square feet and even custom cratingfacilities for all cargo export preparation. Versatility incargo transfer, whether directly from vessel to truck orrail (and vice-versa) also represents our full serviceoperation.

From oil rigs to containers to rolling stock, ShippersStevedoring can provide you with all of the dock servicesyour shipment requires. Complete control of your cargoat all stages through one single office- that’s a bonus andthat’s efficiency.

1606 Clinton DriveGalena Park, Texas 77547

(713) 672-8385

SHIPPERS STEVEOORING

Jacintoport(713) 452-4591

COMPANY

AN EDITORIAL BYRICHARD P. LEACH, EXECUTIVE DIRECTOR

PORT OF HOUSTON AUTHORITY

VIEWPOINThe system by which the nation’snavigation channels and harborsare maintained and improved is a

complete disaster that threatens the verylife of international trade. The federalgovernment’s system is a system that hasfailed to keep up with today’stechnology and must be changed if theUnited States is to be responsive to worldmarket conditions.

The American Association of PortAuthorities (AAPA) examined this issuein a recently released study, "TheRealities of Delay: A Review of the Pro-ject Development Cycles for FederalNavigation Channels in the UnitedStates." In response to the study, aJOURNAL OF COMMERCE editorialstated, "The inexcusably long delays ingetting federal action on improvements;n the nation’s harbor channels must bended. Indifference, lack of firm and

realistic policies have brought us to thepoint where these delays are measured indecades rather than years."

In the latter part of the ninteenth cen-tury, projects were requested, studied,authorized and started within two orthree years. Construction was completedwithin the same time span. As late as1958, the Port of Houston’s 40-footdredging project took only eight yearsfrom study authorization to completion.

Data supplied by the U.S. Corps ofEngineers illustrates just how lengthythe fifteen-step process by which thecountry’s navigation system is con-structed or improved has now become.This data divides projects into two basiccategories: deepdraft improvement pro-jects which are still under study or reviewby the Corps, and those projects whichhave been authorized by Congress butremain incomplete as of November 1,1984.

In the first category, 64 projects were’qentified as under study by the Corps or

various stages of review at the federallevel, of which the average elapsed timesince their inception was 15 years, fivemonths.

Twelve projects were identified in thesecond category; however, two were ex-cluded for lack of complete data. For the

remaining 10, the average elapsed timefrom the date of the initial congressionalstudy resolution, through October 1984,was 25 years, seven months.

Three port projects, one in California,one at a neighboring Texas port and oneat our own port, illustrate the delays in-herent in the process all too graphically.In the case of the Stockton Ship Chan-nel, Congress first authorized thefeasibility study in March, 1955. Con-struction was authorized in fiscal 1967,but work was delayed until recentlybecause Congress would not appropriatethe funds for construction. Completionis now expected in 1987, or 32 years fromthe date of the initial study resolution.

The Corpus Christi Harbor project of-fers a similar experiece. The initial studyresolution was approved in April 1960,with funding for the study madeavailable in fiscal 1961. Deepening theship channel from 40 to 50 feet was for-mally authorized in 1968, constructionbegan in 1972, but completion of theentire project is not expected beforemid-1987. Almost 28 years will haveelapsed since the initial study resolutioncame out of Congress. Costly increaseshave also resulted. When the project wasfirst authorized, construction wasestimated at approximately $20 million.Today, the project costs exceed $120million.

The Stockton and Corpus Christi pro-jects have been funded and are under-way, unlike our example of a project thatis still in the study phase. In 1968 we re-quested a project to deepen the HoustonShip Channel to 45 feet. Congress asked

for a feasibility study, the first step in theprocess, and a public hearing was heldon February 17, 1969. Today, some 16years later, the Corps is still studying theproject.

There are two fundamental problemswith the system. First, Congress has notprovided enough funds for the system towork in an orderly and expeditiousfashion and second, procedures used byfederal agencies, many mandated byCongress, are cumbersome and time con-suming. In fact, some agencies use thesystem to impede progress or to avoidmaking tough choices.

Solving the first problem has beenmade more difficult by the recentbudget crunch. Prior to this, the pro-blem was that navigation channel dredg-ing projects lacked sex appeal and wereignored while Congress attended topolitically more attractive programs. Inthe minds of many, Congress and thefederal government are not addressingthose problems which a governmentshould properly address.

There is support in Washington forlegislation to effectively end these testsof a port’s patience. However, there is noconsensus, either by the administrationor Congress, on the exact form of legisla-tion. Part of this indecision is a result ofthis administration’s and itspredecessor’s determination to eliminateor drastically reduce the historic federalresponsibility and to demand recoverythrough user fees, of all or part of thecosts of such works.

One of the proposed solutions, theimposition of user fees to provide neededfunds, has split the port community overthe methods by which the fees would belevied, collected and spent. Certainlyeveryone opposes users fees, but whenfaced with their inevitability, ports havesplit opinions since each option couldhave adverse effects upon various in-dustry segments.

Another solution, which ports havebacked, is to dedicate a portion of

(See Viewpoint, page 32)

DUTCHHARBOR

KETCHIKAN

PHIA

SAN FRANCISCO

JACKSONVILLE

LVESTON MIAMI

When it comes to comprehensive service, Kerr a bill of lading released in Anchorage, Dallas orSteamship Company, Inc,, has the edge over its Miami, we can do it, If you have a special cargocompetitors hands down. The professional person- handling problem in Boston, Baltimore or Britishnel staffing our extensive network of offices in the Columbia, we can solve it, If you have a sales leadmajor ports and hinterland market cities of North in Charleston, Chicago or Cranford, we can pursueAmerica are in constant communication to cut the it. No matter where you are, or what your problemred tape out of your cargo movements. If you need is, we’ve got you covered,

STEAMSHIP COMPANY, INC.

Steamship Agents, Terminal Operators, Stevedores

Suite 5130, One Shell SquareNew Orleans, La. 70139Telephone: (504) 566-0500TWX: 810-951-5030

American General Tower, Suite 15002727 Allen ParkwayHouston, Texas 77019Telephone: (713) 521-9600 ̄ TWX: 910-881-2753

PEOPLE THAT MAKE THE PORT OF t]OUSTON RUN

HOUSTONHUMMER

T he Port Terminal

Railroad Association(PTRA) is today

rated as the safest switchingterminal in the country.

In 1981, H.E. "Ed"Handley, Jr. became generalmanager of the 650-em-ployee association and madean accident prevention pro-gram his top priority. And ithas worked.

Since 1980, reported in-juries were reduced from 187to just four in 1983. "Lost-time days were cut from3,127 in 1980 to just 94in 1983. In 1981 and 1982,the PTRA displayed the most improvedsafety record in the nation. And since, ithas maintained the honor of being thesafest switching terminal in the country.

But Handley is not one to rest on hislaurels. "We have not let our past ac-complishments allow us to become com-placent," Handley said.

"We are presently participating withthe Southern Pacific (TransportationCo.) in a research demonstration project,funded in part by a grant provided bythe Federal Railroad Administration’sOffice of Safety," he explained.

"The project, entitled ’A Com-puterized Interactive Videodisc SafetyTraining Program’, will allow us, oncefully tested, to increase the extent andiuality of our training while minimizing

associated costs."Handley said 14 training modules,

each 20 minutes in duration, are beingdeveloped to take to the employees atthe work-site. Some of them will be bi-lingual and will cover such areas as

maintenance, ground service, engine ser-vice and hazardous materials.

PTRA is comprised of all railroads ser-ving Houston. It was formed in 1924 forthe purpose of providing an impartialswitching service and to maintain theeven flow of cargo at the Port ofHouston. Member lines include At-chison, Topeka and Santa Fe; BurlingtonNorthern Railroad; Missouri-Kansas andTexas Railroad; Southern PacificTransportation Co.; and Union PacificSystems. PTRA recently initiated serviceto the Port of Houston Authority’s Bar-bours Cut Container Terminal, pro-viding still another link for easy rail ac-cess to the ever-increasing container traf-fic at that terminal.

The association serves the Port ofHouston Authority’s public docks andapproximately 150 industries and main-tains 173 miles of track, including 32miles of mainlines, and handles approx-imately half a million cars annually.

Since Handley becamegeneral manager, the associa-tion’s annual maintenanceschedule has included install-ing 26,000 track ties and2,800 switch ties; laying56,000 linear feet of rail;unloading 330 cars of ballast;in addition to expandingtrack capacity and initiating adouble main-line project onthe north side of the shipchannel to improve grainhandling capabilities.

Handley said grainshipments represent 35 to 40percent of the total carshandled each year by the

association.Efficiency in handling rail cars has also

been an area Handley has pursuedvigorously since becoming generalmanager. In 1981, the Terminal Infor-mation Exchange System was im-plemented, providing a computerizedcar inventory control system. This systemeffectively ended delays caused by a lackof information, Handley said.

The various improvements Handleyhas overseen have resulted in a 22 per-cent increase in productivity since 1980.But again, the man in charge won’t letthe Port Terminal Railroad Associationrest on its laurels.

"As 1985 progresses, we retain a senseof confidence in our ability to providecompetitive rail service," Handley said."We intend to remain competitive and,in so doing, protect the best interests ofour member lines, employees and railcustomers by supplying the least cost,most efficient transportation servicepossible at the Port of Houston." ~J

11

Container Strength.Cooper/T. Smith keeps containerized cargo

shipments on the move to countries around the world.We supported the move to container shipping fromthe be~g. When you think container stevedoring,think strength.

C~Nr/T. Sn~thThink Cooper/T. Smith.~N6

440 Portway Plaza, 1717 E. Loop, Houston, Texas 77029713/672-5663. TWX 910 881-2614.

12

Volkswagen to operate foreign tradezone site at the Port of Houston

V olkswagen of America, Inc., hasentered into an agreement withthe Port of Houston Authority

to operate as a foreign trade zone site atits existing facility at the Turning BasinTerminal Center, according to RichardP. Leach, Port Authority executive direc-tor.

The agreement, signed in lateDecember of 1984, is expected to in--tease the company’s activity through

~e Port of Houston, which is alreadyreceiving about 20 percent of allVolkswagen’s imports. The auto com-pany, which leases in excess of 25 acresfrom the Port Authority, imported atotal of 41,027 units through the port in1984.

According to Robert Schueler, ForeignTrade Zone manager for Volkswagen,the Houston site, the first of its kind forVolkswagen, wilt be a testing site forfuture expansion. "We chose the Port ofHouston because of its unique ForeignTrade Zone (FTZ) and the volume of’business we conduct through the port."Volkswagen of America has been import-ing through the Port of Houston sincethe mid 1950s.

The Port of Houston Authorityestablished a Foreign Trade Zone in1983. The Houston FTZ is a "multi-site" zone meaning there is more thanone physical site that can be used to im-port, change or manipulate goods insome way for re-distribution abroadwithout paying Customs duties. Duties

: paid on commodities only if andwhen they officially leave the zone to bedistributed domestically. The FTZ hasdeclared 32 locations, many with existingfacilities in and around Houston, asForeign Trade Zone sites.

Volkswagen of America, Inc., has entered into an agreement with the Port of Houston Authority tooperate their existing facility as a Foreign Trade Zone site at the Port of Houston. Pictured here atthe signing are (from left): Walter D. Sherman, district director of U.S. Customs; Port Authority Ex-ecutive Director Richard P. Leach; Dale Ellery and Richard Muggs, both of Volkswagen.

Volkswagen will act as its own on-sitemanagement and will be responsible forreporting data to Customs. The companywill use its existing Alternative InventoryControl System (AICS), which is U.S.Customs approved. Volkswagen willoperate under Annex B of the CustomsAudit Inspection Program, which allowsfor the receipt and subsequent distribu-tion of vehicles without the usualCustoms documentation.

"With the establishment of this sitewe certainly anticipate an increase of ac-tivity through the Port of Houston,"Schueler said.

Volkswagen will be taking advantageof deferred U.S. Customs duties as amember of the zone, enabling the com-pany to improve cash flow. For the pastseven years the company has beenassumbling cars in a Westmoreland,Pennsylvania foreign trade zone. []

About 20 percent ofall Volkswagen im-ports come throughthe Port of Houston.In 1984, 41,027 unitswere importedthrough Houston. Thecompany leases about25 acres from thePort Authority.

13

Now... Evergreen’s Round-the-World Services, expanded Transpacific routes, and directservice between the U.S. and the Caribbean via Houston and New Orleans--all part ofEvergreen’s specially designed services for the world’s exporters and importers. Eastboundand Westbound Round-the-World routes link North America with the Far East, Europe, theMediterranean, Middle East, Central America and the Caribbean with a 1 O-day frequency.Pacific routes include direct calls at Los Angeles, San Francisco, Portland and Seattle.Evergreen has a service designed for your special shipping needs.., call us today.

EVERGREEN MARINE CORP.Houston (713) 552-7400 / New Orleans (504) 525-3737 / Dallas (214) 638-1641New York (212) 524-1400 / Los Angeles (213) 519-6800 / Chicago (312) 655-7300Baltimore (301) 576-1550 / Atlanta (404) 953-2626 / San Francisco (415) 781-2022

14

The arrival of the M/VAMERICAN ALTAIR marked the initiation of thenew service by United States Lines from Houston to South America.The vessel, with an overall length of 666 feet and a breadth of 75 feet

~d a 643 TEU capacity, completed 789 container moves while at thePort of Houston Authority’s Barbours Cut Container Terminal. Pictured

here at a ceremony to commemorate the vessel’s maiden voyage andthe initiation of the service, are (from left) PHA Director of Operations,J.R. Curtis, Captain Donald H. Hart, and Barbours Cut Container Ter-minal Manager, John Horan.

United States Lines initiatesservice to the Port of Houston

U nited States Lines, owned by McLean Industries, has

initiated a bi-weekly service to the Port of Houstonand the Eastern Coast of South America with the ar-

rival of the M/VAMERICAN ALTAIR at the Barbours CutContainer Terminal, according to Richard P. Leach, PortAuthority executive director.

The line recently purchased the Delta Line fleet and haspicked up much of the routes previously serviced by Delta.Instead of utilizing LASH-type vessels, the new U.S. Line ser-vice will be the first full containerized shipping service be-tween the U.S. Gulf of Mexico Coast and the East Coast ofSouth America. A similar service between the Atlantic Coastnd the South American East Coast will also be established.U.S. Lines has began the new service with ships formerly

operated by Moore-McCormack Line, also purchased by the

American shipping company.The service will utilize three vessels, the M~ VAMERICAN

ALTAIR, the M/V AMERICAN VEGA and the M/VAMERICAN ARGO. The M/V AMERICAN ALTAIR whichhas a 643 TEU capacity, completed 789 container moves atthe Barbours Cut Container Terminal. The M/VAMERICANVEGA has also made its maiden voyage to Houston and com-pleted 375 container moves.

The line’s ships all are equipped with container cranes andcontainer spreader bars which are necessary since some SouthAmerican ports do not have container cranes.

Ports of call in South America include Puerto Cabello andLa Guaira in Venezuela, Rio de Janeiro, Santos and RioGrande in Brazil, and Montevideo in Uruguay, in addition toBuenos Aires, Argentina. []

15

16

Port Stevedoringdoes it all witha personal touch¯ No job too small¯ Specializing in steel, project, heavy lift

cargos, containers, and general cargo¯ 80,000 pound fork lift capacity¯ Storage and trucking facilities available¯ Constant supervision¯ 200 Ton crane capacity

We, try hard to be the best.

~:7,tt ¯ 2315 McCarty Dr.Executive Office-’ ....~ "’ ; Houston, Texas 77029-3843

(713) 675-0017 ̄ TWX 910-881-5790

Dock Office ¯ 8123 Plummer St.Houston, Texas 77029 ̄ (713) 675-2378

dependent Contractors Serving Houston, Galveston and Freeport, Texas

THROUGH DIVERSITY

iilliItliii~iiii!lii!!!!

ii!iiiiii!ii~"ii!iiiiii~ii!!!i~

2190 N, Loop West ̄ Suite 401 ¯ Telephone: (713) 681-6885 ̄ Telex: 76-2534P.O. Box 448 ̄ Houston. TX 7701R ¯ Cables: Transocean

Conference addresses world business,

A merican companies, preoccupiedwith staying in business, arefacing an increase of complicat-

ing factors in the international marketand can be assisted by far-sighted portauthority involvement, according to Dr.John K. Ryans, Jr., professor ofmarketing and international business atKent State University.

Dr. Ryans, a widely published writerand author of 16 books, has presentednumerous programs for the World TradeInstitute in New York. He was in Hous-ton recently to conduct a professionalseminar on world business, banks andexport trading companies, a portion ofa two-day symposium sponsored by theUniversity of St. Thomas and the U.S.Department of Commerce.

Ryans depicted the Export TradingCompanies Act of 1982 as being enabl-ing legislation enacted to assist Americancompanies in competing with theJapanese in the international technologi-cal market. He said the legislation is at-tractive to many American companiesbecause of its favorable financing op-tions.

"Banks are reactors," Ryans said. "Bytheir very nature, they are reluctant totake a leading role."

Ryans believes it is imperative thatport authorities get into the exporttrading companies business.

"Because of many factors, most ofthem economic, many American busi-nesses are pre-occupied with merely stay-ing in business.

"Port authorities ought to take the

Dr. John K. Ryans, Jr.

leading role. They have the resources tocoordinate bank financing and develop apublic-private partnership. This wholeconcept is a port authority-grown con-cept. It was initiated by the PortAuthority of New York," Ryans said.

"This is just a natural extension of aport authority’s normal activities. A portauthority can serve as an informationsource, and can even help to join the ef-forts of various companies who naturallycomplement each other.

"But first, a port authority mustunderstand the survival mentality of thesmall businessman," Ryans said.

"The 1980’s will be tough, competi-tive years for international dollars. Thecompetition will be especially toughamong high-tech companies. Over-regu-lation by our own government could kill

us," he explained.Ryans said procedures are so slow cur-

rently in the biotech patent process thatby the time a patent is approved inAmerica, the company has already had itapproved and is in production in anothercountry.

He also said this decade will see fewer"hot markets" than in the past. "Fiveyears ago, six or seven countries affordedthe best short-to-medium term oppor-tunities for American producers. Today,we see maybe four moderately hotmarkets. ’ ’

The debt burden has forced manyforeign countries to reorder their interna-tional involvement, Ryans explained. T~

counteract that, he said, American com-panies must be able to offer more com-plete packages--’ ’from funding to facili-ty development, event to construction."

RYans said many current analyses ofThird World debt reduction are

misleading. "The 1984 figures don’t ac-curately reflect the situation as it reallyis. For example, Brazil and Mexico show-ed stunning economic progress in 1984.Brazil reported a $13 billion trade sur-plus, and Mexico made a major repay-ment of its debt principal. But, changesin export incentives, delay orders, lumppayments and other such manipulativetactics to make 1984 look good will make1985 look not nearly as good."

To counter the increasingly com-petitive export market, Ryans said manyU.S. companies are investing in foreigncountries. "The dollar buys more andgives a better return," he explained.

18

banks and export companiesHe listed several signals of this trend,

among them:othe U.S. balance of trade continues towe~tken daily;

oforeign direct investment flow into theUnited States is increasing--currentlyup 50% from 1982;

oold-line manufacturers, such as the ma-jor automakers, are among the billion-dollar importers into the U.S. ;

"practical U.S. consumers are turning toimports;

othe U.S. government is strictly enforc-ing export restrictions.

Ryans listed several suggestions forcompanies striving to survive in the in-ternational market and to open previous-ly unproductive markets. Among them:ore-manufacture to adapt your productto the particular needs of the country inwhich it’s being marketed. "Our oldtechnology is new technology in manycountries. To open new markets, pro-duce local what’s needed locally," hesuggested. For example, he said auto-makers could make profitable roadsin a country in which the economic con-ditions prohibited the purchase of newautomobiles by recapping tires, orrebuilding engine blocks. Another ex-ample: "Outdated computers here mayhave a market elsewhere," he pointedout.

oexport your expertise by selling yournew technological expertise to othercountries’ manufacturers. Ryans saidforeign governments would becooperative because such an endeavor

would stimulate the local economy anddevelop local suppliers.

ocounter-distribution: "This is not nowwidely done. It is based on the assump-tion that someone overseas has a com-plementary product--or even a com-petitive product--and the use of eachother’s distribution network," Ryansexplained. "This eliminates the costs ofoverseas start-up for production. Youmaintain control of your owntechnology and share the profits withyour foreign partner, and, of course,the same is conversely true. This issimply a short-cut which avoids manycosts and potential problems. Ofcourse, you have to have a distributionnetwork to offer which is sound, viable,effective and reaches your potentialforeign partner’s market."

outilize foreign free trade zones to savetariff money. "Right now Ireland has agreat Direct Investment Package andprovides access to the entire Europeancommunity," he said.

o"take advantage of legislation whichprovides tax advantages to produce inenterprise zones," Ryans recommend-ed.He said any company which is heavily

reliant on government assistance shouldre-evaluate that policy. "Over the nextfour years, we will see an increased em-phasis and heavy reliance on the privatesector," he predicted.

Another tip Ryans had for businessestrying to compete internationally was tomonitor the activities of the World

Bank. Whenever the World Bankdecides to fund a project, companiesneed to quickly learn the specifics of theproject to be competitive. Those com-panies must also have an effective earlywarning system to receive advance infor-mation on foreign government restric-tions and regulations to avoid makingcostly blunders.

"Congressmen can be helpful in pro-viding information on foreign govern-ment activities, trends, regulations, andpending new developments," Ryanspointed out.

"One thing many American busi-nesses don’t understand is that in inter-national circles, everything isnegotiable...even postal rates. Businessis important and most foreign govern-ments will bend if the deal is mutuallybeneficial," Ryans claimed.

The two-day professional conferencealso included informational semi-

nars on export trading companies andtheir relation to banks, and a "how-to"seminar on counter-trading, or "interna-tional horse trading."

The event was co-sponsored by the In-ternational Trade and Counter-tradeAssociation, a group of manufacturerswhich works cooperatively to learn moreabout countertrading and how to use itto increase exports.

More information on the associationmay be obtained by contacting Dr. IvanR. Vernon, Managing Director, c/oWorld Trade Education Center,Cleveland State University, Cleveland,Ohio 44115, phone (216) 687-3733.

19

20

THE LATEST WORD ON PORT AUTHORITYCONSTRUCTION PROJECTS AND BUSINESS PRACTICES

P H APROGRESS

Improvements at Warehouse 4A continue

M ore than $365,000 of improvements at Warehouse 4A,

one of the oldest structures in the Turning Basin area,are entering into a final phase.

Work on the structure, which is completely made of con-crete, began with the modification of four doors and the ad-dition of a truck ramp. "This modification was made to pro-vide easy access for 18-wheel trucks and thereby improvingloading and unloading time," Tom Kornegay, Port Authori-ty chief engineer, said. This phase of the renovation has beencompleted at a cost of about $100,000.

The next project for the structure is upgrading the~_ railroad loading dock. Erwin Construction will complete the

work at a cost of more than $15,000 and will greatly improvethe conditions of the dock.

The final phase of the renovations to the facility is its re-roofing which should be completed by August. Atlas Con-struction Company was awarded a contract in the amount of$247,447 for the work. "This structure will be used forstoring paper products such as newsprint. The re-roofingproject will ensure dry storage of these commodities,"Komegay said.

Amenities buildings at Turning Basin

and Barbours Cut plans approved

port Commission voted to approve plans for two amenitiesbuildings, one at the Barbours Cut Container Terminal

Berth No. 4 and the other at Turning Basin Center TerminalWharf No. 32.

Each building will consist of lunch room and restroomfacilities as well as space for a dock clerk. The Barbours Cutbuilding will also house a limited maintenance department,about one third of the building, and will provide on siteminor electrical repairs of mobile container handling yardcranes. "We feel this will greatly enhance our already low

~- downtime of equipment," Jack Horn, chief civil engineer,said.

The Barbours Cut Container Terminal reported a less-than-one percent equipment downtime in January.

Bids for the construction of two new buildings will bereceived by March 19 and is estimated at $215,000 for theBarbours Cut building and $123,000 for the Turning Basinbuilding.

Wharf No. 8 entering into final phase of renovations

Construction on Wharf No. 8, primarily used for heavylifts in the Turning Basin area, is entering into a

final phase.The wharf, which has been recently used for a lay berth,

will be repaved at a cost of about $500,000. The area to berepaved is about 1.4 acres and the project is expected to im-prove drainage in the area. The project is expected to be com-pleted by October.

Improvements already completed include the repair of thepipe piles and bulkheading and the installation of a newfender system. The old fender system of the wharf, one of theoldest in that area, was made of creosoted timber which wasreplaced by steel and timber structure. Access and itsplatform-type dock structure makes this dock ideal forunloading LASH barges and heavy lifts.

Replacement of rail car shakers at Bulk Plant

to improve turn-around time

I n conjunction with the renovations at the Port of Houston

Authority’s Bulk Materials Handling Plant, four newshaker hoists will be installed.

The replacement of the equipment, at a cost of about$80,000, is expected to improve turn-around time for rail carscoming into the facility. This project is part of total renova-tions at the plant which include the installation late last yearof a $4.7 million shiploading system.

Commissioners also approved entering into a professionalservice agreement with James H. Bridges, professionalengineer for the design and preparation of plans andspecifications for a new conveyor support system structure.The structure will be made of treated wood, which will with-stand corrosive material and will replace the existing steelstructure.

Turning Basin Maintenance facilities

to receive new electrical system

ptort Commissioners awarded a contract to Wolfenson Elec-tric, Inc., in the amount of $11,217 to construct an elec-

trical distribution system to the repair and maintenancefacilities at the Turning Basin Center Terminal.

The system, scheduled for completion in early May, willprovide uninterrupted service for the facility and thereforeaid in decreasing down time of equipment.

21

|

22