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Crowley Maritime’s Headquarters in Jacksonville Fights Through the Recession (2009)

As printed in the Florida Times-Union, September 20, 2009

By David Bauerlein

Big, black Crowley Maritime barges being loaded at the Talleyrand port are an everyday sight for drivers going across the Mathews Bridge near downtown Jacksonville.

The corporate headquarters for Crowley Maritime sits in a less conspicuous spot — a multistory office building owned by Crowley in the Regency Square mall area.

From that building, Crowley executives oversee the corporation’s 4,300 employees working on the East Coast and West Coast, Alaska, the Gulf of Mexico, Central America, and the Caribbean.

“Jacksonville is kind of the hub of everything,” said Chief Executive Officer Tom Crowley Jr., the third generation of the Crowley family to run the business. “That really is the central point to Crowley. There’s a lot of support that the team provides there to people all over the world.”

The recession has dealt a blow to maritime business around the globe. Faced with a plunge in consumer spending, there is less cargo being shipped. Crowley has felt the squeeze, too, but the company is banking on picking up business from shipping petroleum and providing maritime services for offshore drilling.

“The fact that we invested heavily in energy, I think that certainly has been a much more stable line of business for us,” Crowley said. “We’re getting nervous that oil prices aren’t going back up. If they don’t, that will continue to put pressure on the exploration efforts in the coming years. But it’s where our diversification really helps over time because all our businesses aren’t going in the same direction and impacted by the same things.”

Crowley Maritime employs about 1,200 people in the Jacksonville area, representing roughly one-fourth of the company’s employees. It is among the nation’s biggest privately owned companies, according to Forbes magazine’s annual rankings. In 2008, Crowley ranked at 298th on the list with annual revenue of $1.62 billion. (Jacksonville-based Gate Petroleum clocked in at No. 338.) The Forbes report was based on 2007 revenue for Crowley. In 2008, the company tallied $1.96 billion in revenue.

Most of the Crowley’s upper level of management works out of the Jacksonville corporate office, but there is a notable exception — Tom Crowley himself.

He bases his home office in Oakland, Calif., the same area where his grandfather founded the company in 1892 by purchasing a rowboat for supplying ships anchored in the San Francisco Bay. Crowley visits Jacksonville, but it’s just one of many places he travels for face-to-face meetings with employees and customers.

“My office is my laptop and a cell phone,” he said. “As long as I have a hotel room with an Internet connection, I can pretty much exist anywhere.”

Crowley, 42, has been at the helm for 15 years. He was just 27 when he became chief executive officer after his father died.

“We have a very strong group of people who held things together,” he said. “It allowed me to step back and say how do I see this company going forward and what kind of things do I want to change.”

The company has six lines of business — cargo shipping in Puerto Rico/Caribbean market, cargo shipping to Latin America, transport of petroleum products and other energy-related activities, logistics to help companies manage their supply chains, marine services such as salvage and towing, and technical assistance for ship management and construction.

Crowley said there aren’t levels of management between him and each line of business. It’s a “flat” structure that enables him to work closely with each business and its customers, but he doesn’t have to be involved in the day-to-day running of the businesses. He said he concentrates on long-term strategy and building a collaborative culture for employees.

“When I started out, I spent a lot of time going over the budget and numbers and looking at the financial aspects of the company,” he said. “I began to realize those discussions didn’t add much value. Most of the time when you’re looking at numbers, you’re reporting the past and it’s difficult to influence the past. The biggest change I’ve made is to try and flip that around and look into the future.”

Crowley Maritime’s current investment is geared toward bulking up its business that serves the petroleum industry. Crowley’s roots shipping petroleum date back to the 1930s in California. The West Coast operation later expanded to Alaska. More recently, Crowley Maritime has pushed into the Gulf of Mexico using vessels that carry petroleum and flat-deck barges that haul structures for deepwater exploration and production.

On the cargo side, Crowley has faced a years-long slump in the Puerto Rico market, which entered a deep recession even before the United States did. That connection is what originally brought the company to Jacksonville in 1974 as a port for shipments to Puerto Rico.

Jacksonville’s status as the corporate headquarters evolved over the past 20 years. The consolidation began by shifting operations from New Jersey and Miami to Jacksonville. Then the consolidation brought in employees from Seattle and Oakland. Crowley said Jacksonville was located centrally to where the company did business. Also, the company already owned the building, and Jacksonville’s lower cost of living made it easier to relocate employees here. Jacksonville officially became the corporate headquarters in 2007.

While that low-cost dynamic favored Jacksonville in the past, it could be different in the future. Crowley Maritime has been shifting some corporate functions to Central America.

“You certainly don’t want to spread things out too far,” Crowley said. “Jacksonville has been the beneficiary of a lot of consolidations the company did throughout the U.S. Right now, we are transferring some functions to El Salvador and other Central American countries. We really look at that as keeping it in the family. We’re transferring those functions to other Crowley offices with Crowley employees. For us, it’s not only a cost-reduction move, but it’s also an investment in the countries we’re so reliant on [for business].”

He said he doesn’t know whether his 11-year-old son or 9-year-old daughter will someday become the fourth-generation Crowley to run the company.

“You think about it right out of the gate,” he said. But he said in his own case, his father never pressured him to join the family business and that’s “the only right way to do it.”

“There was no point in time when he ever told me he expected me to take over the company or that I needed to do something,” he said. “He taught through example. He would put me in situations where he knew I would be in a position to learn, but he never preached about it.”

He said his father and grandfather never retired from their work as executives. His father died at 79.

“I’m 42 and I don’t see an end in sight,” Crowley said. “I don’t know that I will stick it out that long. That’s a long way away, and all the more reason that you want to have a great team of people who can support you.”