Story by Raina Clark, from the November 2010 edition of MarineNews
MarineNews spoke with Crowley Maritime Corporation executives for the company’s take on current markets and the outlook for the future.
“Due to the global economic downturn, Crowley has experienced a decline in business, specifically in liner container shipping,” said Tom Crowley Jr., Chairman of the board, President and Chief Executive Officer at Crowley Maritime Corporation. “The company, however, has been able to mitigate those declines by offering additional value-added services and more robust logistics and technical services solutions. Our ship management group has acquired additional business, with the company now managing American Roll-On Roll-Off’s (ARC) fleet of eight vessels in the company’s U.S. East Coast/North Europe and U.S. East and Gulf Coast/Middle East trade lanes and in late 2009, the company was contracted to handle the shipyard construction management and the overall vessel management, crewing and operation of American Petroleum Tankers’ five vessel fleet.”
Crowley provides transportation and logistics services in domestic and international markets through six operating lines of business: Puerto Rico/Caribbean Liner Services, Latin America Liner Services, Logistics Services, Petroleum Services, Marine Services and Technical Services. Crowley has a fleet of more than 210 vessels, consisting of RO/RO (roll on roll off) vessels, LO/LO (lift on lift off) vessels, tankers, tugs and barges. The company’s land-based facilities and equipment include terminals, warehouses, tank farms, office buildings, trucks, trailers, containers, chassis, cranes and other specialized vehicles.
“One emerging market we have targeted is the energy sector, where there is a trend to move resources offshore or to remote parts of the world. Crowley has expertise in this area and is focusing on providing customers with solutions that will safely get the job done. The other area we are focusing on is providing solutions that will improve the efficiency of our customers’ supply chains. This includes regions where we provide asset based solutions and globally where we are able to leverage our expertise.”
In regards to the offshore markets Crowley serves, John Ara, Vice President of Contract Services at Crowley, said, “Strategically we’ve been seeing the second half of 2010 and all of 2011 as being slow in the Gulf of Mexico. What we’re doing is focusing on shallow water work in Mexico, itself. We have three barges working the balance of this year and the first quarter of next.”
Ara said Crowley has an advantage because the company also owns tugs and can mobilize its barges and equipment worldwide to wherever the demand exists. “We’re looking globally during the slow time in the Gulf of Mexico. For an incremental cost we can mobilize our equipment around the world. A year and a half ago we saw that the Gulf of Mexico was going to slow down.”
There is some domestic activity, Ara said, but it is “more spot work” right now. Besides what offshore supply work Crowley has going on in the Gulf of Mexico, the company is positioning equipment in Australia and Russia, West Africa, Mexico and also looking at some work in Alaska for 2011 and 2012. Ara said there is huge growth potential in the Gulf of Mexico in 2013 through 2014 with major deepwater projects awaiting sanctioning. “Our whole fleet of new-builds barges will be working the gulf in those years,” he said.
“We have a positive outlook for 2011,” Tom Crowley said. “The company will continue to be focused in increasing value-added logistics and technical services solutions. Crowley will also take delivery of its first 330,000 barrel 750-series ATB and the Ocean Wave, a 10,880-horsepower tug that will further enhance the company’s ocean towing, salvage and offshore support capabilities.”
Tom Crowley also expressed concern that the Jones Act is under threat. “The Jones Act is the last real maritime policy our nation has and the recent attacks on the legislation threaten remaining American companies, mariners and shipyards,” he said. “We have continued investing in new U.S.-flag vessels that are designed, built and operated in the United States. The Crowley-owned vessels are state-of-the-art, with a focus on environmental stewardship, crew safety and comfort and serving customer requirements. The industry as a whole has spent more than $5 billion, just in the past decade, renewing key segments of the domestic fleet. Changing the rules now, after this investment has been made, would be completely unfair and unjust and would devastate the American shipbuilding industry. We are working hard to educate Congress and rally support from all those American companies that would be affected by such a legislative change.”