Tom Kornegay tells Liz French how flexing influential muscles helps strengthen the company’s stewardship.

Somewhere between a government entity and an independent business lies the Port of Houston Authority (PHA). By expanding into foreign regions, focusing on the environment, and promoting small business, PHA has been an economic catalyst for the Port of Houston since the opening of the Houston Ship Channel 90 years ago.

Houston has the largest port in the US in terms of foreign tonnage, second largest in total tonnage, and ranks as the sixth largest port in the world. In 2003, more than 6,000 vessels carrying more than 190 million tons of cargo were recorded in the port, which is located on the Houston Ship Channel, a 25-mile stretch that is home to 200 public and private industrial companies.

PHA is a fusion of a government agency with an independent business. The PHA sponsors the Houston Ship Channel, operates the fire boats, and owns and leases the public wharves along the channel. Eighty-five percent of the tonnage that goes through the port is handled by privately owned businesses, while the PHA handles about 15%.

“It is hard for people to understand who we are and what we do because we are neither a non-profit nor a for-profit business. A self-supporting government agency is an interesting concept, and I believe we are on the right track to becoming one,” said Tom Kornegay, executive director.

Keeping up with the standards imposed by government agencies, small businesses, and sister ports isn’t easy, but as Kornegay noted, a straightforward and honest approach makes the operation run smoothly. “I tell people what we can realistically do and never make a promise we can’t keep,” he said.

This philosophy is particularly important when dealing with political issues. Employing a governmental relations team and consultants to keep representatives and other officials informed about PHA’s activities creates tight relationships between the port and state and federal governments. The FBI, US Coast Guard, US Customs and Border Protection Service, US Army Corps of Engineers, Beneficial Uses Group, and other government agencies work closely with the port on projects such as safety and environmental initiatives.

Reduce, recycle, reuse
Where most companies think of technology from an IT standpoint, PHA thinks of the “containerization” process. By placing cargo in standard boxes and strategically positioning them on ships via cranes, the port can process more cargo using fewer docks.

“It has completely changed the way we do business and the efficiency with which we do it,” Kornegay said. “It has made things much faster, safer, and more secure. In the old days, they used to spill, break, and drop things—[containerization] in itself has almost eliminated the environmental issues.”

The nation’s barometer
Since the Houston Ship Channel opened in 1914, PHA has grown into an economic powerhouse. Today, nearly 287,500 jobs are directly and indirectly related to business activities along the ship channel, creating an estimated $649 million in state and local tax revenues.

The port affects the economy on the national level as well. “The port is like a barometer of the local and national economy. We are the first to suffer if there is a downturn and the last to recover in an upswing,” Kornegay said. Less buying of goods means less exporting and importing to and from foreign countries, which results in decreased business for PHA and other port-related businesses along the ship channel.

At present, PHA is working on its latest expansion project, the Bayport Container and Cruise Terminal. Almost filled to capacity, the current terminal at Barbour’s Cut is no longer adequate enough for the large amounts of cargo the port processes. “We are trying to fit eight pounds of potatoes into a five pound bag,” said Kornegay. “We are struggling to keep up until we can get the new terminal built.”