Page 36: of Maritime Logistics Professional Magazine (Q1 2014)

The Energy Edition: Exploration, Production & Transportation

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CROWLEY MARITIME CORPORATION business opportunity. Take for example Crowley’s recent energy sector venture: the transport of crude oil coming from the shale oil (and gas) revolution in the U.S.

Crowley has been a steady customer for several U.S. shipyards, making signifi cant investments in new tonnage for the Jones Act trade, including the construction of its state-of-the-art tug fl eet, ATBs and double hull equipment as well as a recent historic order for a series of new Con-

Ros with VT Halter (see related story, page 38). But it is the shale oil and gas development that has come as per- haps the biggest surprise, and is a direct result of Crow- ley’s close relationship to its oil major customers to know their needs in regards to transport. “I think my dad and his management team found very unique designs of equipment, built a whole bunch and then they went and found opportunities,” Crowley said. “We’ve taken a different tack in our recent newbuilding program, with costs being a lot higher than they were in the 1970s. We have to take a hard look at new technolo- gies and the effi ciencies they offer in terms of crewing and fuel. We have to look at the deployment of more spe- cialized assets that have specifi c purposes instead of a more general vessel that can do a lot of things OK. You have to better understand your customer needs to know their requirements, instead of just going out and building something. Moving more toward partnering with our cus- tomers, understanding their needs and building a piece of equipment that fi ts those requirements.”

The rapid development of the shale oil and gas business in the U.S. is a great example of a private company such as Crowley acting almost immediately to fi ll a void in the market, creating an interesting business opportunity while fulfi lling a client need. “We embarked on a newbuild program with our ATBs to replace the single hull tonnage that was being phased out, and we felt that we were an early mover into the ATB space, building out a fl eet of 17 vessels,” Crowley said. “So we were pretty in tune with what our customer base needed in terms of transportation, across the oil majors.

None of them saw this coming. We didn’t see this coming.

When it happened we were in a fortunate situation where we were able to conclude a deal very quickly,” to acquire a pair of tankers, Florida and Pennsylvania, built by Aker


In a matter of weeks Crowley had commandeered a deal for the tanker to enter a business – the transport of U.S. crude – that previously was completely off of the compa- ny’s radar. With the two tankers under the Crowley colors, it expanded quickly and committed to four more tankers, and Crowley said that there could be even more orders in the future.

Quotable Crowley

Thomas B. Crowley, Jr., Chairman and CEO,

Crowley Maritime Corporation, on:

The cyclical nature of this business: “The challenge in our business is nothing moves very fast. We can certainly see things coming, but trying to get out of the way is a bit more challenging.”

The shale oil and gas revolution: “We were pretty in tune with what our customer base needed in terms of transportation, across the oil majors. None of them saw this (the amount of oil from U.S. shale) coming. We didn’t see this coming.”

Safety & Training: “When you face tough economic times, a lot of people want to jump to cost cutting and saving. But you can’t send mixed messages to your team. You can’t demand performance then take away their tools. The perfect example is our safety performance. While it has cost us a lot, it has saved us a lot.”

Evolving Environmental Regulation “I think our industry has to take a more proactive role in cleaning our- selves up, instead of simply defending ourselves and trying to say it’s not that bad. It is going to be expensive and the cost of transportation is going to increase, but I think the world understands that.” (Continued on page 40) 36 I Maritime Professional I 1Q 2014

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Maritime Logistics Professional magazine is published six times annually.