Tim Casey says that the name of the game in the petroleum transportation industry is safety, and his company is winning.

K-Sea Transportation Partners doesn’t boast that its 64 barges and 44 tug boats have capacity to transport 3.5 million barrels of petroleum-based products. Nor does it brag about its five divisions that cover the East, West, and Gulf coasts of the United States and parts of Canada and South America. According to Tim Casey, president and CEO of the East Brunswick, NJ-based company, safety is the key selling point.

“The driver behind our growth has been our keen focus on providing customers with the safest, most efficient mode of transporting their goods,” said Casey, who has been heading up the operation since it got its start in 1999 when he partnered with Jefferies Capital Partners to purchase Eklof Marine Corp. In business since the 1950s, family-owned Eklof Marine Corp. owned and operated tugboats, tank barges, and small tankers in and around New York Harbor. Shortly thereafter, the company bought Maritrans’ Northeastern fleet, which consisted of eight tugboats and 10 barges. The move nearly doubled K-Sea’s size and was followed by the acquisition of a number of additional assets, which have doubled the size of the company again.

As the largest operator of coastal tank barges serving customers such as BP, ConnocoPhillips, and Exxon Mobil, K-Sea fully understands the need to keep its employees, equipment, and customers’ reputations safe. “We’re in the business of selling safety. Our customers do not want to see a drop of oil in the water because their names are at stake,” said Casey. The company is certified and audited by the American Bureau of Shipping, in compliance with the American Waterways Operators Responsible Carriers program and the International Safety Management Code.

In addition, K-Sea follows its own safety management system, a set of manuals outlining all processes related to safety, including reporting, documentation, and communication; vessel maintenance; employee training and certification; emergency response procedures; and the auditing process. The manuals also define each person’s responsibilities as they relate to the safe operation of the company’s vessels. “With these internally developed manuals in their hands, our employees know what to do in every situation,” Casey said. As an added precaution, the safety management system is reinforced by a full-time director of health, safety, and environment.

No substitute for safety
K-Sea consists of a corporate division in East Brunswick; a division run out of Norfolk, Va. that covers portions of the Delaware River and Chesapeake Bay; a division based in Staten Island that operates small tugboats and barges in and around New York Harbor; an Atlantic division, also out of Staten Island, which operates on the East Coast from the Gulf of Mexico to Canada; and Sea Coast Transportation, the company’s Pacific division that operates up and down the West Coast and Alaska. According to Casey, each division operates separately, but they are all subject to K-Sea’s safety management system, require the same training and certification, and leverage the company’s proprietary software system.

Annually, K-Sea holds seminars to educate employees on company policies and various safety procedures, but since its crew is dispersed throughout the country, training is often delivered by third parties at the local level. The company encourages employees to attend various training sessions and to obtain or upgrade their Coast Guard-issued licenses as often as possible by offering reimbursement. “Instead of us setting it up for them, we allow them to do it on their own time. It makes it much easier for both parties,” said Casey, adding that everyone—from the captain to the deck hands—needs to receive certification from the US Coast Guard before operating a vessel.

Because proper vessel maintenance is at the fore of K-Sea’s safety maintenance system, the company has developed its own computerized preventive and predictive maintenance system that tracks voyage repairs, spare parts, and inventory. Any crew member can report a damaged part—from a broken windshield wiper blade to an engine. The request is immediately entered into the system, and the captain is alerted as to when and how the repair will be made. “With more than 100 vessels, you can see how easy it would be for some of that information to get lost without a sophisticated tracking system,” said Casey.

The software, developed by inhouse programmers, allows engineers to see how long it has been since, say, one of the company’s generator engines was rebuilt. “We can then schedule maintenance to prevent equipment malfunctions.”

A similar system is currently being developed to keep track of personnel. Casey explained that in the past, finding a captain with the proper certification to handle certain jobs was a tedious task because the company operates boats of different sizes and classifications, each requiring its own license. But the new system will be able to do it in seconds. In addition, it will be a valuable tool to ensure all employees keep up with their training requirements.

Pushing ahead
When asked about the company’s future, the CEO pointed to the past. The majority of K-Sea’s growth occurred since it went public as a master limited partnership in 2004. A master limited partnership is an ownership structure that avoids double-taxation of profits, which not only allows K-Sea to better reward its shareholders, but also provides the company with adequate access to capital to continue growing. “Only a few public marine transportation companies compete against us. The others are privately owned corporations. We have an advantage in that our access to capital and the low cost of our capital allows us to grow at a faster rate,” said Casey.

As the company grows, it must meet standards set forth by the Oil Pollution Act of 1990, which was enacted after an Exxon tanker spilled 52 million gallons of oil in 1989 that affected nearly 1,200 miles of Alaskan coastline. The legislation requires all petroleum products carried over US waters be contained in double-hulled tankers by 2015. K-Sea began obtaining double-hulled ships in 1994, and today, almost 70% of its fleet is compliant. When the seven barges currently being built are completed this summer, that number will jump to almost 80%. “This puts us far ahead of our competition when it comes to achieving compliance with the legislation.”