Executive Achievement: Rodger Rees, Port Director, Galveston Wharves

Tell us about yourself – your background and education.  
 
I graduated from East Tennessee State University with a Bachelor of Science degree in accounting. I also hold public accountant and port executive certifications. I have more than 25 years in executive management including founder and CEO of two successful financial services companies.  
 
Wow! How did you get into the port business? 
 
I began my maritime career as Deputy Executive Director and Chief Financial Officer of the Canaveral Port Authority in Cape Canaveral, Florida.

What’s it like running a port? Is it different from other kinds of businesses? 
 
Running a port is the most interesting and exciting job I can imagine. It encompasses all the aspects of a typical multimillion-dollar business including business development, financial, personnel and operational details. Layered on top of that are the challenges of running a dynamic port that moved almost five million tons of cargo in 2021 and typically hosts more than one million cruise passengers a year. I also enjoy working with our various stakeholders – port tenants, business partners and the Galveston community itself. No two days are the same in this job, that’s for sure!
 
The Port of Galveston has a long and colorful history, dating back to its founding in 1825 – before Texas even became a state. Tell our readers about that.  
 
Spanning almost two centuries, the Port of Galveston has a fascinating history filled with colorful characters, naval battles and resilience. Stephen F. Austin, early Texas settler and a founding father of the Republic of Texas, described it as “the best natural port that I have seen” when he visited in 1821. At Austin’s urging, the Mexican government designated it as a provisional port and customs entry point in 1825. The port played a vital commercial and military role in the Texas Republic’s battle for independence from Mexico and during the U.S. Civil War. 
 
By the 1870s, the Port of Galveston was a major U.S. commercial center with far-reaching maritime and rail connections. This fact helped Galveston win $6.2 million in federal funding in 1890 to become a deepwater port. By 1899, it was the world’s foremost cotton port. In 1900, the port and city were ravaged by a hurricane that remains the worst natural disaster in U.S. history. The port and community recovered to become a major center for maritime, tourism, medical research and higher education.  

Who owns the port, and how is it governed? 
 
While owned by the city of Galveston since 1940, the port is a self-sustaining entity that generates and reinvests revenues to maintain its assets and grow its business. The port is managed by the Galveston Wharves Board of Trustees, which is appointed by the Galveston City Council.  

Are Galveston Wharves and the Port of Galveston the same thing? 
 
Thanks for the opportunity to clarify. Our official name is the Galveston Wharves, and we’re located at the Port of Galveston. When referring to our business, it’s the Galveston Wharves. When referring to our location, it’s the Port of Galveston.

Okay, got it! “The Port of Everything” is Galveston’s catchy tagline. Tell us about the port’s diverse businesses and the importance of each.  
 
We truly are “The Port of Everything” with cruise, cargo and commercial business lines. We rank 46th among U.S. cargo ports and are the fourth most popular U.S. cruise homeport. The restaurants, hotel and attractions in our leased commercial corridor offer visitors a front-row seat to our waterfront operations adjacent to Galveston’s historic downtown.
 
How important is the cruise business to the port? 
 
Our cruise business is a major revenue source for the port and an economic engine for the region. After a one-and-a-half-year suspension due to COVID, the cruise business began operating safely and sustainably again in mid-2021. This was great news for the port because the cruise business typically generates about 65 percent of our annual revenue. We use net revenues to fund critically needed maintenance and capital improvement projects prioritized in our Master Plan. It was also great news for cruise fans and the thousands of people working in cruise-related jobs.

Last August we broke ground on the port’s third cruise terminal – a $125 million, 161,000-square-foot building with 1,800 parking spaces. Royal Caribbean’s Allure of the Seas will begin sailing from the new terminal at Pier 10 when it opens this fall.

For 2022 we’re estimating 320 cruise ship calls and a record 1.25 million passengers.

The cargo side of the business has continued to grow despite COVID. How have you managed to achieve that and what parts of the cargo business are growing the fastest? 

Our cargo business has continued to grow thanks to the great work of our staff and port partners including tenants, stevedoring companies and longshoremen. We ended 2021 with almost five million tons, the highest since 2016. We saw growth in almost all types of cargo – bulk liquids, bulk fertilizer, wind and general cargo, and roll-on/roll-off cargos including new cars. More tonnage means more jobs for union workers, ship pilots, stevedores, truck drivers and others who move these cargos. 

Improvements to our West Port Cargo Complex and a new, privately operated cargo laydown yard also contributed to our growth. This year we expect to bring in larger grain ships when the U.S. Army Corps of Engineers completes maintenance dredging to bring the Galveston Ship Channel to its maximum permitted depth of 47 feet.    

Does the port export more than it imports, or vice versa? 
 
Roughly 75 percent of cargo tonnage is imported. It includes fresh produce from Guatemala, fertilizer from Qatar and Nigeria, Class 1 containers from Chile and Brazil, and wind components from Italy, Denmark, Indonesia, South Korea and Spain. Roll-on/roll-off cargo includes BMWs from Belgium, Germany and the U.K. Most of our export tonnage is grain destined for China, Egypt and Turkey, as well as cattle heading to Pakistan. 

You mentioned earlier that the port has a Master Plan. Tell us about that. 
 
Yes, Galveston Wharves follows a 20-Year Strategic Master Plan adopted by the Board of Trustees in 2019 as a roadmap to maximize assets and grow its business through major investments in maintenance and capital projects. For the next five years the plan includes an interior roadway to improve traffic flow, expanding the port’s cruise infrastructure, improvements to the West Port Cargo Complex, new cargo infrastructure on Pelican Island and major infrastructure repairs.

We’ve been reading your biweekly update columns on the port’s website, and they are really good – entertaining and informative! How did you come up with the idea and what has been their impact? 
 
I began writing the Port Director’s columns for our local daily newspaper a few years ago to inform the Galveston community about the port and its activities. I’m pleasantly surprised to see that the columns have a much broader readership.
 
We note that the port, among its many advantages, benefits from a Foreign Trade Zone (FTZ). Explain for us how an FTZ works and how it boosts business at the port. 
 
The Port of Galveston is the grantee for FTZ-36 encompassing all of Galveston County. The port, along with private corporations, takes advantage of the deferring of customs duties while continuing to import goods and materials for manufacturing or services, thereby creating employment opportunities and allowing businesses to focus on capital investments rather than initial fees. 
 
We also saw that Galveston became the second Texas port to be certified by Green Marine, a voluntary environmental program for the maritime industry. Tell us about that. 
 
Guided by Green Marine, the port staff is researching, planning and implementing several environmental programs designed to minimize the port’s carbon footprint. From improving air quality to reducing waste, we’re identifying impactful ways to make long-term changes to improve the environment. Shore power, renewable energy and LNG fuel bunkering for ships are just a few of the initiatives we’re working on with our port partners. Also, the new Royal Caribbean cruise terminal is designed to meet LEED (Leadership in Energy and Environmental Design) certification standards. To be LEED-certified, the building must meet a global set of health, efficiency and sustainability standards.

Impressive! What’s your biggest challenge right now? 
 
The biggest challenge is self-funding our Master Plan with operational revenues and state and federal grants.  

As a CPA, we’re sure you’re up to the challenge! Any final thoughts for our readers?  
 
Galveston Wharves is making phenomenal progress thanks to the vision, dedication and hard work of its Board of Trustees and staff. Our Board is made up of civic leaders who believe in the port’s potential and have established an ambitious, long-term vision with the port’s first Master Plan as the roadmap for sustained growth. 
 
To achieve that vision, our small but mighty staff goes above and beyond every day. Not only have they safely navigated our business through the pandemic, but they continuously look for ways to improve and grow it: Green Marine, our robust employee safety program and voluntary state accreditation for our police department are just some of the examples of the best practices driven by our employees. – MarEx 
 
Jack O’Connell is the magazine’s Senior Editor.