Stevedoring Services of America Inc. History

Address:

1131 Southwest Klickitat Way
Seattle, Washington 98134
U.S.A.

Telephone: (206) 623-0304
Fax: (206) 623-0179

Website: www.ssofa.com

Private Company
Incorporated: 1949 as Bellingham Stevedoring Company
Employees: 7,500
Sales: $850 million (1998 est.)
NAIC: 48832 Marine Cargo Handling

Company Perspectives:

Few transportation service companies in the world extend as far and wide as Stevedoring Services of America and its affiliates (SSA). SSA is committed to developing sound management, practical ideas and talented people for cargo handling services worldwide. We share these valuable resources through a vast global network of employees, customers and suppliers that link our diverse operations.

Company History:

One of the largest stevedoring companies in the world, Stevedoring Services of America Inc. (SSA) provides the traditional services of a stevedore--loading and unloading ship cargo--and provides intermodal cargo-handling services, that is, transferring vessel-borne cargo to railroads and trucks, domestically and abroad. SSA is regarded as one of the first in the industry to expand beyond the traditional activities of a stevedore and develop itself into a full-service, cargo-handling company capable of warehousing cargo and moving cargo from ships to a variety of land-based transportation vehicles. The company's stevedoring operations started in the Pacific Northwest, expanded throughout the United States in later years, and spread internationally at a vigorous pace during the 1990s. Owned by the Smith and Hemingway families, SSA has been an aggressive acquirer during the 1990s as the stevedoring industry has consolidated. Operating at 150 locations worldwide, SSA handles every type of cargo and serves every major ocean carrier. By the end of the 1990s, SSA ranked as the 263rd largest private company in the United States, as calculated by Forbes magazine.

Pacific Northwest Origins

The corporate roots of SSA stretch back to 1880, but the company traces its origins to the year the Smith/Hemingway families started their legacy. In 1949 Fred R. Smith, the patriarch of the two families who would own and operate SSA for the remainder of the 20th century, formed Bellingham Stevedoring Company. A small, local stevedoring company based north of Seattle, Washington, Bellingham Stevedoring represented the foundation SSA was built on. Stevedoring companies traditionally coordinated the loading and unloading of ships, providing the equipment and serving as a labor broker at ports of call. Bellingham Stevedoring, in the 35 years separating its founding and the adoption of the SSA name, methodically expanded its operations on the West Coast. In 1952, Fred Smith made the first step outside Bellingham Bay by investing in a company called Southeast Stevedoring, which established the company's presence in Alaska. Two years later, Bellingham Stevedoring pushed south, acquiring Seattle Stevedoring from American Hawaiian Steamship Company. Henceforth known as Seattle Stevedoring, the Smith/Hemingway-controlled enterprise bolstered its presence in Washington State during the early 1960s, purchasing small stevedoring companies in the Puget Sound region. Between 1960 and 1963, the company acquired Everett Stevedoring Company, Olympia Stevedoring Company, and Twin Harbor Stevedoring Company, and established cargo-handling facilities at the Port of Tacoma and the Port of Port Angeles. Twenty years later, after completing further acquisitions, Seattle Stevedoring completed its expansion along the coastline. Between 1982 and 1983, the company acquired Brady Hamilton and Crescent Wharf and Warehouse, acquisitions that expanded services to all ports in Oregon and California. One year after this southward sweep, the company changed its name to Stevedoring Services of America.

Diversification Begins in the 1980s

Shortly after the name change, SSA reached a turning point in its history. From its founding to the 1980s, the company had evolved from a small stevedoring firm with a local focus to one of the largest regional stevedoring companies in the western United States. A more profound evolutional step awaited in the decade ahead, as the company not only continued to widen its geographic scope but also diversified beyond the traditional parameters defining a stevedoring firm. Historically, stevedores had served as the go-between for shippers and land-based transporters, providing the equipment and personnel--generally longshoremen&mdashø facilitate the transfer of goods from sea to land. As such, traditional stevedores were labor-brokers who operated port facilities, a description SSA sought to broaden. SSA led the way toward the development of a new, more sophisticated breed of stevedores by shaping itself into a full-service, cargo-handling company. SSA, in the years ahead, provided computerized cargo-tracking information, among other services, and it developed into an intermodal cargo handler. Intermodal cargo referred to cargo encased in containers that was moved via different modes of transportation, such as sea, truck, and rail, without being removed from its containers. SSA also led the way toward another industrywide trend: expansion through acquisition. The stevedoring industry, particularly during the 1990s, began to consolidate as larger stevedores acquired their smaller counterparts. Large shipping companies were beginning to develop their own stevedore operations, forcing the stevedore industry to respond by realizing the economies of scale engendered by consolidation. On both fronts--diversification and geographic expansion--SSA excelled, creating the dominant stevedoring company in the United States.

Although SSA had devoted itself to methodical expansion from the start of the Smith/Hemingway era, geographic growth began to occur at a decidedly more vigorous pace by the end of the 1980s. First, however, the company began to develop into a more comprehensive cargo handler, beginning its significant diversification under the management of F.D. "Ricky" Smith. Smith served as president from 1979 to 1991, before being promoted to chairman and chief executive officer, titles he would hold throughout the 1990s. Smith's promotion to the company's two most powerful posts in 1991 made room for the promotion of Jon Hemingway to president, the third generation of the Hemingway family to assume the office. Under the stewardship of these two individuals, SSA greatly increased its stature within the stevedoring industry.

In 1987, SSA established its first intermodal operations, joining Intermodal Management Services, Inc. to create Pacific Rail Services. Pacific Rail Services, organized as SSA's intermodal division, managed rail ramp operations, coordinating the transfer of containerized cargo from ship to train. Two years later, the company began its expansion drive, building on its formidable presence on the West Coast. SSA acquired Overseas Terminal Company, making it the largest stevedore and terminal operator in southern California. Also in 1989, the company completed its first eastward foray, acquiring Carolina Stevedoring, which operated in Charlestown, South Carolina; Savannah, Georgia; and Jacksonville, Florida. In the years ahead, SSA's presence in the South Atlantic region would rival its dominant position on the West Coast.

Entering the 1990s, SSA was ready to build on the momentum established during the late 1980s and continue to diversify and expand, achieving nearly all its progress in both areas through acquisitions. The company ranked as one of the largest stevedoring companies in the United States by the early 1990s, strongly positioned on the West Coast and in the South Atlantic region. SSA operated more than a dozen shipping terminals that handled containerized cargo and other commodities, such as import steel, meal, fruit, export forest products, and agricultural goods. The company also stevedored various types of commercial and military cargo vessels that docked at SSA-operated terminals and facilities operated by other concerns. SSA's two subsidiaries were Pacific Rail Services, the company's intermodal division, and Crescent Warehouse, which ranked as one of California's largest operators of public marine storehouses.

In 1992 SSA renewed its expansion campaign, establishing operations on the East Coast. The company acquired a 50 percent interest in Delaware River Stevedores and started operations in Pennsylvania and New Jersey through a partnership with International Terminal Operating Company, Inc. The year's biggest acquisition was the purchase of Southeast Atlantic Cargo Operators (SEACO), a southeastern U.S. cargo handler with operations in Wilmington, Delaware; Charlestown, South Carolina; Savannah, Georgia; and Jacksonville, Florida. SEACO's addition to SSA's operations entrenched the company's position at ports first entered through the 1989 acquisition of Carolina Stevedoring. The push eastward, as perceived by the company, was a strategic necessity. "In every maritime industry, consolidation is what's happening now," noted SSA's vice-president in May 1992. "We just believe that we must expand to remain in the stevedoring business," he explained. The era of acquire or be acquired had begun, and SSA was intent on being the most active practitioner of the industrywide trend toward consolidation.

International Expansion in the 1990s

As SSA bolstered its domestic presence by expanding east, the company also looked overseas for growth. By mid-1992, the company was evaluating opportunities related to operating railyards or inland container depots in Malaysia and Thailand and had submitted bids for consulting work in Australia, Costa Rica, and Panama. Before the end of the year, SSA achieved progress in Thailand, winning a five-year contract commissioned by the State Railway of Thailand to operate the country's new container port 65 miles outside of Bangkok. More than any of its competition, industry observers claimed, SSA was concentrating on developing new technologies, including on-dock rail and electronic cargo tracking, while leading the industry in expanding domestically and internationally. Referring to SSA's investment in electronic data exchange systems that tracked cargo, Hemingway remarked, "We're moving information just as much as we're moving cargo these days." The time when SSA could hope to succeed by solely serving as a labor broker was past. The 1990s required stevedores to provide more than their traditional services, and SSA, despite its lengthy ties to the past, was demonstrating an eager willingness to change with the times.

Although SSA steadfastly refused to divulge financial information, outside sources estimated the company was generating approximately $500 million in revenue during the early 1990s, making the company the largest stevedoring firm in the United States. SSA moved quickly toward the $1-billion-in-sales mark during the mid- and late 1990s by acquiring stevedores and other cargo-handling companies, particularly overseas. The company started its five-year contract in Thailand in June 1993, by which time several Central American countries had contracted with SSA to help them modernize their port operations. SSA's consulting services and its information services, which used computers to track cargo movement and to clear cargo through customs, were examples of the diversified range of marketable skills the company was benefiting from to succeed during the 1990s. In 1993, SSA also acquired New Zealand Stevedoring Company Limited, the largest stevedoring company in New Zealand, and, through a joint venture, began handling cargo throughout southern Africa.

By the end of 1994, SSA's resolute expansion in the midst of a consolidating industry was earning the company accolades from outside observers. A professor of port and marine transportation management at the University of Washington, in a December 1994 Puget Sound Business Journal article, referred to SSA as "probably the most significant success story in the independent stevedoring industry," praise that stemmed from the company's managerial acumen and its growing role as a worldwide stevedoring expert. Through a joint venture in Vietnam with Saigon Port, SSA began operating a trucking company and chassis leasing and repair operation, another example of the company's intermodal breadth. SSA also assisted the Chinese port of Tianjin design a container port, port development assistance that the company had also provided in India and Pakistan. SSA's most significant project in 1994 was a joint venture with Motores Internacionales S.A. to build and operate a container terminal near the city of Colon on the east end of the Panama Canal. The 16-month project cost $220 million, resulting in the Manzanillo International Terminal, regarded as one of the most efficient port facilities in the world. SSA dredged the channel, designed, financed, built, and marketed the terminal, and trained Panamanian employees for its operation.

Although SSA's international expansion was driven, in part, by diminishing opportunities to expand domestically, the company continued to find valuable acquisition candidates in the United States. In 1995, SSA purchased a large stevedoring firm named Ryan-Walsh, Inc., based in Mobile, Alabama. Specializing in handling forest products, Ryan-Walsh operated in 26 ports, maintaining a strong presence around the Gulf of Mexico, one of the few domestic regions SSA had yet to penetrate. Hemingway noted the importance of the Ryan-Walsh acquisition, remarking that it was "a very big thing for us ... it really now makes us a nationwide company," before adding, "Our expansion in the United States is still a high priority."

Despite Hemingway's assurance that domestic expansion remained an important objective for the company, the bulk of SSA's activity during the latter half of the 1990s occurred on the international front. In 1995, the company formed a joint venture with Transportacion Maritima Mexcana, S.A. de C.V. to market and operate a container terminal in Manzanillo, Mexico. In 1996, the company acquired a 31 percent interest in Lotus Joint Venture Company, Ltd., a Vietnamese concern created to develop and operate a container terminal and warehousing operation in Saigon. In 1997, the company formed a joint venture named International Seaports as an organized entity to pursue its port development work in India and other Asian countries. The following year, SSA teamed with Orient Maritime Limited to develop and operate a terminal facility in Chittagong, Bangladesh.

As SSA prepared for the 21st century, the pattern of international expansion established during the 1990s was expected to continue. Overseas markets offered the greatest opportunities for growth, and SSA, with operations spanning the globe, stood well-positioned to take advantage of those opportunities as they emerged. Domestically, the company was expected to continue to develop its intermodal capabilities, such as the company's 1997 deal with Union Pacific. SSA's subsidiary Rail Terminal Services acquired the stock of Union Pacific Motor Freight from the Union Pacific railroad, which, under a ten-year contract, gave SSA control over 18 rail ramps across the country. With domestic expansion pointed in this direction, and the company's commitment to international expansion, SSA promised to be a leading stevedore in the century ahead.

Principal Subsidiaries: Ryan-Walsh, Inc.; Rail Terminal Services; Manzanillo International Terminal, Panama S.A.; Greystones Cargo Systems (South Africa); International Seaports Private Ltd. (India); Southern Cross Stevedoring (New Zealand).

Stevedoring Services of America Inc. History

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Company History:

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