CB&I’s Swanson sees logistics gaining importance in early stages of projects

With a decreasing number of available projects and tightening schedules, logistics is playing an increasingly vital early role for worldwide energy industry technology and infrastructure provider CB&I, according to Jake Swanson. Swanson, as director of global logistics for the Engineering and Construction Group of The Woodlands, Texas-based, New York Stock Exchange-listed company, is meeting challenges by deploying his experience with breakbulk/project carriers and learning from the U.S. Merchant Marine Academy and the University of Houston’s MBA program. Little wonder Swanson advises those entering the project arena to take advantage of all opportunities, including assignments involving travel. Swanson, a former tennis team captain at Kings Point, shares his business insights and some personal glimpses in an interview with the American Journal of Transportation. How important is logistics to CB&I, and what innovative approaches are you employing to meet challenges? It’s becoming more and more important. We are getting engaged and involved in projects at a much earlier stage than even three or four years ago. They see the value to our group and how we can help come up with solutions and develop strategies on projects. So you’ll see us involved in pre-FEED [preliminary front-end engineering design] study phases, when you’re designing and preparing the early proposal. Before, they would never include logistics in that. And here, within the last three or four years, we’ve gotten a lot more engaged in helping develop project strategies. This helps us, once we move into the proposal and early stages of a project, to have a good understanding how much cargo we’re talking about, how much material we’re talking about, and where it’s coming from. That allows us to develop strategic contracts and partnerships with transportation service providers. We try to set those up at the beginning of a project. We can leverage the market a little bit better, and it allows us to be more cost-effective and have better contracts put in place. For example? We try to set up COAs – or contracts of affreightment – with ocean carriers. Like on the Cameron and Freeport [liquefied natural gas facilities] project, we were able to identify early on that we were going to have a lot of cargo coming out of Korea and a lot of steel coming out of China and the Middle East, and it allowed us to go out into the charter market with the breakbulk and project carriers and develop project-long agreements that were beneficial to the project. What impacts are you feeling from current energy industry trends and how are you responding? There just are fewer projects available. That impacts how we staff. We are careful about our growth, because we don’t want to be in a situation where all of a sudden there’s a cliff and we have to let a lot of people go. So we try to stretch those in our group and get the most out of them. Other trends we’ve noticed include that project schedules are getting tighter. The project owners – the oil majors – understand the current market conditions, and they’re able to leverage us. So we have to be that much more careful in our planning, because there’s less room for error, from a scheduling standpoint and also just from a margin standpoint. How has your background with breakbulk/project carriers, including Intermarine and Beluga Chartering, prior to joining CB&I in 2011 served you in your present position? It’s helped me and our group to understand how logistics service providers think and the challenges they deal with. My background is primarily in the ocean carrier market, but there’s a lot of spillover into the other modes of transportation, and we’ve added people in our group who come from trucking or another service provider background. It’s helped us to come at contracts from a more commercial perspective in coming up with our solutions. The other aspect of it is just the relationships you have when you come from that side of the table. Knowing a lot of people from that side allows you to work together in a better working relationship. Has having been an active merchant mariner yourself – graduating from the U.S. Merchant Marine Academy at Kings Point with a bachelor’s in logistics and intermodal transportation – and also having earned an MBA from the University of Houston further helped you to better understand the issues you deal with in your work for a company with some $10 billion in annual revenue? Kings Point is very focused on the shipping and ocean carrier industry. Having that experience in my background helps me understand the operations, the nuts and bolts of transportation. The MBA obviously deals more with business management and finance, corporate situations and soft skills. Those are important things when you work with a big company like CB&I that doesn’t only do shipping. They’re involved in all sides of the business, a huge organization. That background helps in leading a department within a big organization. What advice would you have for a young person interested in getting into project cargo logistics? I would say take any opportunity that you get. Say yes to assignments when they come at you and even seek them. The other thing I would recommend is don’t be afraid to travel. I’ve seen with younger people that they’re scared to leave the country or some other diverse place when they have a project. But I’d say to take those opportunities, because you’ll learn so much from them. I’ve had the opportunity to do a lot of travel, and I’ve always enjoyed that. Any particular place you’ve been that you’ve thought you’d want to go back to, maybe with your wife? Multiple places. Most recently, we had a big project in Colombia, and I had the opportunity to go there quite a bit. And then I did take my wife there last year, and we had a really great time. Do you ever get any time for tennis these days, as I see you were a member of the tennis team at Kings Point, and what other outside activities help you to relieve stress? I played on the varsity [tennis] team at Kings Point. In fact, I was the captain there for a couple years. I try to play at least once a week. I play in a competitive tennis league in the North Houston suburban area where I live. I do enjoy it. I wish I could play more, but you only have so much time. As a family, we enjoy traveling to the [Texas] Hill Country. I have three children, ages 11, 9 and 5, and they’re very active in sports. On weekends, my wife [of 12 years], Kelly, and I enjoy going to watch their games.