Newly christened Centerline moves forward in post-Harley eraApr 30, 2020 02:07 PM
Casey Conley photo
Centerline Logistics, formerly Harley Marine Services, has about 100 tugboats and barges in its nationwide fleet. Above, the 4,000-hp tug C.E. tows the tank barge Professor Karen Ann Brown in Washington’s Elliott Bay in February. The tug retains its former Harley Marine livery for the time being.
After years of debt-fueled growth and rapid expansion into new markets, followed most recently by a very public breakup with its founder, the company formerly known as Harley Marine Services is getting back to its roots.
Over the past 18 months, the Seattle-based firm with more than 700 employees has shifted its focus to three core areas: supplying bunker fuel, transporting petroleum products, and ship-assist services in busy California ports. The bunkering and terminal transport businesses date back to the late 1980s when the company launched.
Meanwhile, the firm rebranded as Centerline Logistics in January to reflect the new path forward. The new name follows management changes, resolution around the company’s ownership, and other steps to solidify the business and restore its reputation.
“Ultimately, for us it is a redemption story more than anything,” Matt Godden, Centerline’s president and chief executive, said in an interview from his office overlooking downtown Seattle and Harbor Island’s container terminals. “There was so much about the company being at its death knell or final stages, and everyone looking at it and thinking, ‘Oh, that thing’s a mess.’ It is quite the opposite.”
Matt Godden, left, Centerline’s president and chief executive, was chief operating officer at the company when Harley Franco, right, was fired as CEO in 2019. Godden acknowledges the values that Franco brought to the company, including philanthropy and a commitment to the environment.
Courtesy Centerline/Harley Marine Services
Godden readily admitted that the past couple of years have been challenging. They’ve been hard on him personally, hard on employees and hard on the company. Rampant rumors haven’t helped. Neither has the ongoing, and at times public, legal battle with Harley Franco, the founder of Harley Marine Services and its former CEO.
“Changing the name became more about being able to communicate that the company is here to stay, that this wasn’t the final chapter,” Godden said. “It is just the next chapter.”
Franco started Olympic Tug & Barge in 1987 with a single tugboat and barge, and in the early years the company focused on fuel transport and bunker services in the Pacific Northwest. Harley Marine Services formed in 1998 as a holding company for a series of acquisitions that expanded its reach within the maritime industry. The company later launched ship-assist services in numerous West Coast ports, established a brownwater unit, and expanded fuel services to the Gulf of Mexico and East Coast.
Harley Marine borrowed heavily to update its fleet of tugs and barges, most recently with a surge in new construction late in the past decade. Between Jan. 1, 2017, and June 1, 2018, the company took delivery of four articulated tug-barge (ATB) units and three ship-assist tugs, including Earl W. Redd, one of the first Tier 4 tractor tugs in the United States.
Earl W. Redd arrives at the headquarters of Harley Marine Services in Seattle in February 2017. The Tier 4 tractor tug, built by Diversified Marine, is among the most powerful in the Centerline fleet.
Courtesy Centerline/Harley Marine Services
Harley Marine later shuttered its Pacific Northwest ship-assist unit, eliminating about 10 positions, while other employees shifted to other units, Godden said. Foss Maritime and its subsidiaries now operate five former Harley Marine vessels, including Earl W. Redd, Rich Padden and Dr. Hank Kaplan. The company sold its brownwater equipment and left that market.
“When you have so much unnatural growth, it can catch up with you,” Godden said. “The company that exists now from a stability standpoint is very much what it would have been in the early 2000s (if) it was not adding new pieces of equipment, not trying to expand … not trying to open up too many things at once and just trying to focus on the core fundamentals of the business.”
These days, Godden said, Centerline is trying to excel in a few business areas rather than spreading itself too thin or pursuing growth at the expense of other units. For the foreseeable future, he expects the company will focus on its strengths. Historically, that includes bunkering, moving petroleum and docking ships, which it started doing in California in 1999.
That’s not to say the formerly growth-obsessed company is standing still. Centerline recently moved the tug Eagle and the barge Dugan Pearsall to Honolulu to supply bunkers, encroaching on turf that Kirby Corp. has dominated for a generation. Centerline is seeking bids to build two new 4,000-hp model-bow tugboats for bunker work, and it has leased two 2,600-hp pushboats to provide bunker in Houston and Galveston, Texas. A third will soon begin working in New Orleans.
“We don’t want to try and complicate things at this point,” Godden said, ruling out major expansions at least in the near term. “But at the same time, if there are things that we do well … that squarely fit with our (core focus), we will do that all day long.”
The 4,800-hp z-drive tug John Quigg sports Centerline’s new logo in the Port of Los Angeles.
The company also is actively working to win back business lost during its battle with Franco. The situation, well documented in the Seattle press and across the maritime industry, exploded into public view in mid-2018. Dueling lawsuits included allegations against Franco, Godden and the Australian financial services giant Macquarie Group. Godden at the time was chief operating officer of Harley Marine, while Macquarie was then and remains today a large equity partner in the company.
The company fired Franco in early 2019 after an extended period of public tension. Five lawsuits stemming from the internal dispute are still pending. Attempts to reach Franco for comment were not successful.
The company’s post-Franco ownership piece has been resolved for more than a year. Boxwood Merger, under the leadership of Stephen Kadenacy, former chief operating officer of AECOM, now controls the 53 percent stake that Franco formerly owned. Kadenacy joined Centerline’s board of directors in late 2019, and Godden considers him as an asset to the company.
With finance and management pieces in place, Harley Marine — and now Centerline — has tried to stay under the proverbial radar. It has continued its focus on safe, reliable operations, Godden said, while avoiding the public drama that befell the company in 2018 and 2019.
“We did not lose an oil customer or contract in 2019. That was really us going to (customers) in the beginning of the year and saying, ‘Hey, it is going to be OK, just hang in there,’” he said. “We have built up this trust with them that, even though the company has gone through this momentous change, the quality and the safety of the operations has not degraded.”
The Centerline lion is featured prominently on the company’s website, and internal communication about new business often includes the hashtag #FeedTheLion.
It’s impossible to know how the legal battle and related uncertainty has affected the company’s mariners. Centerline currently employs about 550 mariners, a figure that has held steady in recent years despite the public wrangling. Centerline currently has about 100 tugboats and barges in its fleet, and as of early March was hiring for about 20 positions.
The Harley Marine name continues to live on, for a little while longer, in several places — including the company’s gleaming, modern headquarters on Harbor Island. Several of its boats also retain the old livery, although that is starting to change. The new vessels will be orange and navy blue.
Centerline, a name with a distinct maritime connotation, emerged with help from a branding firm, as did the prominent lion logo that now adorns updated tugboats and other messaging. For a company some had written off as prey about to be gobbled up by another company, the lion’s status as an apex predator had special appeal. Within the company, communication announcing new business often ends with the hashtag #FeedTheLion.
Godden is quick to acknowledge Franco’s gifts as a businessman, and the approach and values he brought to the company — including philanthropy and a very public and genuine commitment to the environment. Godden said he also learned a lot from his former boss. But in an industry as prideful as towing, the Harley name itself started to mean different things to different people. It carried baggage that caused some people to think twice about the company.
“I am proud of Harley Marine Services. I am proud of my years there,” Godden said. “I still interchange the Harley Marine name and Centerline. But to me it is more about past versus future, and (the new name) is just to make sure the organization has an identity for the next step forward.”