MarEx Interview: John Hourihan, Crowley Maritime Corporation

By Audra Kincaid

Tell us about your background.

Hourihan: I have been employed at Crowley for close to 28 years. During the 1990s I worked in Europe for four years and then was transferred back to Jacksonville, Florida where I held various positions. About ten years ago I was involved with starting up the logistics division for the company.

Crowley has been serving Puerto Rico since the early 1970s with deck barges and tugs. What led you to invest in LNG-powered ConRo ships?

Hourihan: Crowley has actually been operating in Puerto Rico for more than 60 years. The deck barge transportation mode was efficient, but it was time to modernize our assets. We considered a number of options, and LNG-powered vessels were more of a long-term solution for the trade. What Crowley calls the ConRo (combination container/roll-on, roll-off) ships with Lo-Lo (lift-on/lift-off) capabilities cuts our operating time in the trade by half. It takes fourteen days from Jacksonville to Puerto Rico and back. With the ConRo ships the roundtrip service is only seven days, and there is much more cargo capacity.

The use of LNG takes into consideration future environmental regulations governing the types of fuels permitted in that trade. With U.S. air emission issues and MARPOL Annex VI regulating sulfur, LNG-powered vessels deal with regulatory requirements out front of any implementation dates.

Public perception about Puerto Rico is that imports are raw materials while exports are finished products back to the U.S. Does the imbalance of good-paying cargoes make the LNG ships a good investment?

Hourihan: Well, that statement needs to be clarified. U.S. exports to Puerto Rico are not a raw materials trade. While that is an accurate description of most Latin American trades and mainly Central America, Puerto Rico does not have a huge manufacturing and production capacity. It is essentially a consumer market, including food and furniture and so forth.   

Port operations are much different for barges versus ships in terms of cargo handling. Are the benefits overwhelming enough for an investment in ConRo ships?

Hourihan: You nailed it right out the gate. In fact, it is twice as fast to handle cargoes from a ship compared to the current barge operation. But it is a much different operation as well. The lift off-on operation, what we call Lo-Lo, will absolutely increase efficiencies and allow us to turn around much faster than the Ro-Ro service of barges.

Is Crowley concerned about the availability of LNG for the new ships?

Hourihan: Actually, we are not concerned because of the growing interest worldwide in LNG as a fuel, and long-term forecasts are positive. Crowley intends to build LNG bunker barges in the near future as well as a fleet of LNG-fueled vessels. So short-term sourcing is not a major concern.

Any plans for ports where LNG will be available, or will there be multiple ports?

Hourihan: Jacksonville is most likely the fueling point for the trade. Currently, there is no consideration to use Puerto Rico’s ports for those logistics.

How many tug-and-barge sets are there in the service, and how many ConRo ships will it take to replace them?

Hourihan: Today, Crowley has a total of eight barge sets working the Puerto Rican trade, six of which sail from Jacksonville and two from Pennsauken, New Jersey. There are three sailings a week from Jacksonville with six tug-and-barge units and two sets out of New Jersey for a weekly service. The two LNG ConRos will replace the units in Jacksonville by 2017.

Crowley is not just a vessel-operating company but an integrated logistics company as well.

Hourihan: Yes, not only in Puerto Rico but in Central America as well. We offer a full suite of value-added services including transport, custom brokerage, warehouse , trucking, airfreight support or whatever service is needed to complete the logistics for cargo movement. We also maintain warehouses on the U.S. eastern seaboard as well as in Puerto Rico and provide freight consolidation throughout the system.  

Will the new ConRo ships impact mariner jobs, and will the technology require a new training regime?

Hourihan: Vessel manpower tends to be larger than a tug-and-barge crew. The difference here is that there will be fewer ConRos than deck barge units. Now, from the shoreside aspect, we will require more labor to support the Lo-Lo cargo-handling. In terms of mariner training, there are different license requirements for tug personnel versus deep sea vessel certifications and licenses.

Will Crowley change its berthing facilities in Puerto Rico to accommodate the new vessels?

Hourihan: Yes, Crowley currently operates a seventy-five acre facility in Port San Juan under a long-term lease with the Puerto Rico Port Authority. The current facility was designed to manage tug-and-barge operations, but it is going to be dredged and reconstructed to have shoreside cranes for vessel stevedoring services. The renovation of the San Juan terminal will take place over the next few years and be ready for the first ConRo vessel’s arrival in 2017.

Any final comments for our readers?

Hourihan: Besides being committed to the Puerto Rican market, the investment of building environmentally friendly LNG vessels is about Crowley’s next chapter in supporting the island nation. Certainly` there are challenges in every trade in which vessel operators work, but we envision the future and the future is now. – MarEx

Audra Kincaid is a MarEx correspondent. John Hourihan is the Senior Vice President & General Manager of Puerto Rico & Caribbean Liner Services at Crowley Maritime Corporation.