Big business: Shipbreaking rebounds at Port of Brownsville

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Jun. 6—Things were hard on the steel coast last year.

Like virtually every sector of the economy, the commodity metals market took a hit as a result of the COVID-19 pandemic, and metal recycling businesses like SteelCoast Company LLC at the Port of Brownsville were not spared. So says the firm's president, Mark Hodgson, who joined the company in December 2019 with a change in ownership and management.

"Under the new ownership, at the beginning of 2020 we had what we thought was a pretty solid game plan for the year," he said. "In March we wadded it up and threw it in the trash, and had to completely retool."

The ship-recycling company implemented a strict pandemic plan to protect its staff but also pared down operations until the market recovered, which it has. SteelCoast, owned by Callidus USA, is hiring and the future looks bright — barring any further pandemic outbreaks — with strong commodity pricing and plenty of opportunity for the industry and the port, Hodgson said.

"We've taken receipt of three very large projects in the last 60 days, one of them being an amphibious assault carrier," he said. "We've currently got 50 open positions here at SteelCoast and we're looking to get the folks in our community back to work."

The company, which has nearly 170 employees now, is looking for a variety of skills, including cutters, managers, abatement technicians and equipment operators, Hodgson said. In addition to the Navy carrier (the former USS Nassau, which arrived on April 30), the company has a U.S. Maritime Administration vessel, a private container ship and an offshore oil rig berthed along its 4,000 feet of Brownsville Ship Channel frontage, he said. SteelCoast's roughly 80-acre yard occupies the former site of Esco Marine, which filed for bankruptcy in 2015.

"We're always looking for additional projects to bring in," Hodgson said. "We've got capacity for seven vessels here at any given time in various states of remediation and deconstruction. But with the four we have here now, due to the sheer size of them, we're fairly full right now. We've got enough work at the property for the next 18 months as we sit today."

In April SteelCoast received the 2020 American Equity Underwriters Inc. Safety Award. AEU, a provider of workers' compensation for waterfront employers, presents the awards to top-performing members each year.

"We were up against 1,500 other marine companies throughout the United States," Hodgson said.

The award reflects the company's commitment to the safety of its team and environmentally responsible remediation practices, he said.

The award is "part of the success story that we're pretty proud of right now," Hodgson said. The other part of the story is how the company managed to navigate, and quickly and thoroughly rebound from, last year's pandemic-induced market doldrums.

In addition to its shipbreaking operation, SteelCoast plans to launch a feeder yard operation in August featuring a 4,500-horsepower vehicle shredder on 13.5 acres off F.M. 511, he said. And like the port's two other ship recyclers, All Star Metals and International Shipbreaking Limited/EMR, SteelCoast is vying for two very large recycling projects: the decommissioned USS Kitty Hawk and USS John F. Kennedy aircraft carriers, which very likely will end up in Brownsville for dismantling, since nowhere else in the country has the capacity for it, Hodgson said.

"Currently Brownsville is the ship recycling capital of the United States," he said. "It handles the lion's share of all of the gray ships from the U.S. Navy and the Maritime Administration. There's nobody else currently that has gone through the approval process for the Maritime Administration. That is all happening here in Brownsville."

The upshot is that ship recycling at the port has never been more active, with robust competition among recyclers but, in Hodgson's view, plenty to go around.

"I think there is solid competition," Hodgson said. "I think that what's on the horizon for dismantling over the next couple of years, there's going to be ample tonnage for all three operations out here."


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