The Port of Galveston has generated more revenue in six months than predicted for the whole year, prompting officials to anticipate finishing 2018 with about $6 million in net income, which is good news for an operation that has struggled on razor-thin margins for years.
Harbormaster Brett Milutin’s work drawing in more lay vessels to the public docks is a big reason for the improvement, Port Director Rodger Rees said.
“Is this a typo showing that we are over $1 million in lay dockage?” said Ted O’Rourke, chairman of the port’s governing board, at Tuesday’s wharves board meeting. “That’s a fantastic job.”
Lay vessels are those visiting the port for unscheduled reasons, whether that is for repairs or changing crew members, Milutin said.
The revenue stream accounted for about $400,000 through the first six months of 2017 but increased to about $1.25 million in 2018, he said.
More vessels visit the port because officials have worked to accommodate them and make shippers aware they can always stop in Galveston instead of making their way up the Houston Ship Channel, Milutin said.
“The trick is to get the word out to the pilots, industry and agents,” Milutin said. “I let them know that if they call, I am responsive. I let them know that if I have an open pier, I will get them in.”
Milutin took over as harbormaster at the port in June 2017 after six years as an assistant harbormaster and 17 years total at the public docks, he said.
U.S. law defines a harbormaster as the person responsible for arranging ship movements within a port.
Some previous experience in sales combined with his on-the-job knowledge made the transition easier, but successfully increasing business at the port comes down to staying up-to-date with port happenings and keeping customers informed, Milutin said.
“The hard part is scheduling and maintaining everything,” Milutin said. “Nothing moves exactly like it’s supposed to. Keeping up with what’s happening is an hour-by-hour job.”
Milutin spends most of his time in his office in Cruise Terminal No. 1, keeping agents and mariners up-to-date on what is open in the port, he said.
“I’ll even call them first and say that I haven’t heard from them in a while,” Milutin said.
Milutin and his staff brought in 65 lay ships through June 2018, compared to 19 in the previous year, records show.
While that increase of about 242 percent is one of the steeper climbs, it follows a general upward trend at the Port of Galveston.
More than 430 total vessels have visited the port of Galveston through June, compared to 335 in the same period in 2017, according to port records.
“These are remarkable numbers,” wharves board Vice Chairman Albert Shannon said.
The business should help with the port’s bottom line, which has been a problem for years, officials said.
Officials in December trimmed 2018 revenue projections by more than $2 million after a hard 2017 called for cost-cutting and other measures to improve the port’s finances.
Port officials in December projected operating revenues of about $37.4 million in 2018 against operating expenditures of $37.2 million.
Officials at the time said the projections were conservative and influenced by the difficult 2017 fiscal year.
Port officials had projected $38.6 million in operating revenues for 2017 but made only about $36.5 million after setbacks including a downtick in cruise ship calls because of Hurricane Harvey, increased dredging costs and declining profits from several businesses, including the grain industry.
Galveston has the fourth-busiest U.S. cruise port. It’s a landlord port that generates much of its income from lease agreements with maritime tenants and fees related to ship calls.