Doherty takes the Helm at Maritrans

By Regina P. Ciardiello. managing editor

For the past 75 years, Maritrans has maintained a high level of customer satisfaction due to its constant vigilance regarding safety and performance. In order to instill and maintain these efforts, the company has always been quick to pursue individuals who can maintain this level of excellence.

Most recently with Phil Doherty, who took over the head post at the Tampa, Fla.-based company this past April I, 2003.

No April Fool's joke here, as Doherty, who credits his passion and commitment to Maritrans and the offshore industry, has big plans for the tug and tanker company - the fate of which now lies within his hands.

— By Regina P. Ciardiello. managing editor While Maritrans' business platform may have begun on its 75-year traditions, the company has never balked at the opportunity to embrace new technology. Before the company's newly-appointed CEO. Phil Doherty had even thought about joining Maritrans, the company, which had been led by former CEO Stephen Van Dyck, was well on its way to the distinction of being a premier owner of tank barges and tugs. It was Van Dyck, whom Doherty hails as his "mentor," who for the past 28 years with Maritrans, worked to revolutionize the company.

With the passing of the Oil Pollution Act (OPA 90), the tank barge industry found many owners sweating the fact that vessels would have to be decommissioned, forcing them to scrap single hull fleets and invest millions in new double hull units. Maritrans had a strategy though to overcome this dilemma. The company, which already had constructed its barges in the 1970s and 1980s "to exceed requirements," developed a plan that was both economical and efficient - refit the existing barge fleet for approximately one-half the price of ordering a new vessel.

The company, whose headquarters were based in Philadelphia, Pa. at that time, called upon Tampa Bay Shipbuilding & Repair Co., Tampa. Fla., to perform the first-ever double hull refit on its Maritrans 192. Made possible by advances in CAD/CAM technology, the single hull Ocean 192 was rebuilt at Tampa Bay with an internal double hull to comply with the OPA 90 requirements. Since then, Maritrans has contacted Tampa Bay for work on several of its barges, specifically the Maritrans 244, which was completed in 2000, the 252 finished in January 2002, and the 254 completed in November 2002. According to Doherty, Maritrans expects an additional vessel, Ocean States to enter Tampa Bay's repair yard sometime during Q3 for yet another refit job. Using Maritrans' patented double hull manufacturing process, which involves modular internal hull sections fabricated with computer-aided design, the company will refit this vessel with a 30.000 bbl mid body to comply with OPA 90 double hull requirements.

Making the Grade In selecting their replacement, executives knew that Van Dyck's shoes would be hard to till, but also came to the conclusion that the new candidate for chairman and CEO had to be someone with drive, vision, ambition and industry know-how — hence, their selection of Doherty. And Van Dyck could not have been happier to pass the torch on to his new successor, who will be able to maintain the leadership and intelligent strategies that Van Dyck established throughout his tenure.

According to the former CEO, who will continue to advise Maritrans' executive team when it comes to execution of strategies, Doherty is poised to lead the company into even higher rungs of success.

There will be no sleepless nights experienced by those who were proactive in the decision to hire Doherty — because he has the ability to further Maritrans' corporate strategy.

Doherty, who holds both B.A. and M.A. degrees in Chemistry from Tufts University, spent 12 years in various capacities within the environmental industry — on both the managerial and technical sides. Realizing that he had a "knack" for the managerial aspect of the business, he decided to pursue an M.B.A. in finance from the University of Pennsylvania. Following the completion of his degree, he was hired by Computer Command and Control Company as its director of business development. The company, which was simply known as 4C's, created logistics tools and software for financial and economic purposes. Ironically 4C's biggest customer was Maritrans, who went on to acquire its management science group in 1997, the same year that Doherty was brought onboard as director of finance. Embracing his new position, Doherty "took the bull by the horns" and was promoted to V.P.

of the company's Corporate Group where he was instrumental in the strategic planning and sale of Maritrans' five barges and three tugboats to Baltimore, Md.-based Vane Bros., as well as the transaction of 10 barges and eight tugboats that were sold to K-Sea Transportation in Staten Island, N.Y. Both agreements, which were signed at the end of 1999, were a result of a decline in demand for single hull equipment.

According to Doherty, this coupled with the overtonnaged Northeast market, would enable Maritrans to not only focus on its successful double hull program, but on furthering its Gulf Coast trade as well — a market that has experienced a high level of growth in recent years. The beginning of the new millennium brought about more change for Maritrans when the company decided that it would move its corporate headquarters from the Philadelphia waterfront to Tampa, Fla. While its main business functions are performed out of Tampa, Maritrans still keeps a location in the Philadelphia area to maintain its lightering fleet.

Subsequent to the successful outcome of these divestments, Maritrans has continued to maintain a healthy, profitable fleet. The company, which currently owns and operates 11 super barges ranging in size from 175,000 to 380,000 barrels (six of which are already double-hulled); and four tankers (two single, two dou- ble hulled) ranging from 242,000 to 265.000 barrels, provides a healthy offering for its customers (both potential and current). With its lightering focus remaining in the Philadelphia location serving the Delaware Bay, Maritrans has grown with its Gulf of Mexico runs of refined petroleum products, which can easily be conducted from the Tampa, Fla. location.

The Long and Short of It It would seem that Doherty would not have to incur many changes when assuming his new post, for it would appear that the term "if it ain't broke, don't fix it," would fit in suitably here. Why change a company, that has always been able to maintain a healthy bottom line in a down economy, had divested interests that were not producing, and has had a solid relationship with a reputable Gulf of Mexico shipyard, who is working to cost-effectively rebuild its single-hulled tank barges? According to Doherty, it's the customers who further Maritrans' desire to excel. "The hallmarks of Maritrans' strategy is to be known as a premium company in the oil transportation business," he said.

"Our employees and customer satisfaction drive profitability." Before being appointed to his current position this past January. Doherty was elected by Maritrans as the company's president in 2001. working with Van Dyck and the executive team to instill some of the strategies that he plans to implement as chairman and CEO.

During his discussion with MR/EN via conference call from his Tampa, Fla. office, Doherty mentioned that the company had just celebrated its 75th anniversary — a milestone — which he hopes to contend for another 75 years. Just how will he accomplish this? The answer, according to Doherty is to continue to effectively supply reliable transportation solutions for customers while providing them with profitable returns.

He also touched on the company's so far successful double hull rebuild program, another cost-effective measure that has allowed the company to save its dollars.

Is a newbuild program out of the question for the near future of Maritrans?

According to Doherty, both he and the executive team will continue to examine potential newbuild possibilities, but at the moment its not something in the immediate future. While to some this decision may not portray Maritrans as "aggressive" or "risky" the absence of the latter has actually provided an increase of the former.

By avoiding risky business decisions, Maritrans has enabled its stature as an aggressive player in the tug and barge industry. By using simple business sense and just knowing when to walk away from a deal that doesn't seem attractive, the company reaps its risk reward via financial discipline and analytical rigor, according to Doherty. Keeping capital structure at a comfortable spot that has allowed to Maritrans to thrive — even during years when the market was down. "Maritrans, even on down years, always had a cash flow." Doherty said. "Simply because we don't ever bite off more than we can chew." In the short term, Doherty and his team will stick with the "bread and butter" of Maritrans — the customers and employees. Doherty will also continue to improve Maritrans' already stellar safety record in an industry where there is little margin for error. He furthered that the company's dedication to providing a safe, efficient operation (on all fronts), demonstrates its desire to provide a high level of customer service, as well as maintaining an environmentally friendly workplace. One way that Maritrans has been able to uphold its high standards is by staying ahead of the industry and working with both its vessel crews and shoreside staff to maintain its motto of "Not one drop of cargo gets into the water." This motto, which was established by Doherty's predecessor. Van Dyck.

earned Maritrans the prestigious Benkert Award for Environmental Excellence distributed by the U.S.

Coast Guard. Garnering first place in 1998. the company won again in 2002. this time coming in third behind Sea River and Marathon Ashland. According to Doherty. of the more than seven billion gallons of petroleum that Maritrans moved in 2002. only less than two gallons were spilled — or .0002 gallons for every billion carried.

Not only has Maritrans taken the initiative to maintain its environmental diligence, but also the industry as a whole has joined in on this effort, and according to Doherty has come a long way since the days of the Valdez when the numbers (as per AWO's recent testimony on Capital Hill) were as high as 14 gallons spilled for every million carried. "The industry has come a long way...we're much more diligent about safe operations and reducing the amount of cargo being spilled." Doherty said. "Maritrans is on the leading edge of that by staying ahead of industry curve and expectations of both regulators and customers. We work to exceed these requirements, not just meet them." He continued: "This is not an industry where you can be complacent. You will fall behind if you don't go beyond what was instilled (in terms of safety and regulations) one year ago."

Maritime Reporter Magazine, page 8,  Apr 2003

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