Monday, December 21, 2009

Happy Holidays from PMM Online

As we close out the end of 2009, the PMM Online team would like to offer you our sincere appreciation for making the first three months of the PMM e-newsletter such a success.

Your response to the e-newsletter has been overwhelming and we look forward to providing you the news and information you need throughout 2010.

Today, Dec. 22, will be the final update for 2009, but not to worry, we will kick off a new and exciting year of PMM Online starting Jan. 5, 2010.

Thank you again from the whole PMM Online team for an amazing 2009 and please accept our most sincere wishes for a joyous holiday season.

CMA CGM Secures $500M Credit Line

Struggling French ocean carrier CMA CGM, which has warned of possible bankruptcy if it cannot quickly restructure its finances, has reached an agreement with financial partners to obtain a $500 million credit line at the start of the New Year.

Part of the credit deal includes the ouster of founder Jacques Saadé as CEO, though he would remain with the firm, if approved by shareholders, as the chair of a new Board of Directors. CMA CGM, the world's third largest ocean carrier, has been attempting to restructure $5.6 billion in debt and raise new operating capital.

The credit line, said CMA CMG officials, would give the firm enough breathing room to “to pursue the current talks regarding its debt restructuring and a capital increase planned for the 2nd half of 2010 with the arrival of new investors.”

In addition, the financial agreement is “expected to facilitate ongoing discussions” with Korean shipyards regarding possible cancellation or postponement of ships on order by CMA CGM. The carrier said Monday that it has indeed canceled at least 15 of the 45 vessels it has on order. And while another 15 vessel orders are likely to be deferred for the time being, the carrier said it still planned to take delivery on the largest of the vessels it has on order.

CMA CGM officials have called for an emergency shareholders meeting for December 23 to vote on changes to the firm's legal structure, including the creation of a Board of Directors with Saadé at the helm. Shareholders will be asked to include members of the current supervisory board, Pierre Bellon and Tristan Vieljeux, on the Board of Directors, as well as new independent members Denis Ranque and Christian Garin.

“Following the approval of the reinforced organization, Jacques Saadé will propose to the Board the appointment of Philippe Soulié as Chief Executive Officer,” the firm said in a statement released Friday. “Furthermore, Farid Salem, Rodolphe Saadé and Jean-Yves Schapiro should be appointed as Chief Operating Officers.

APL to Cold Iron Oakland Terminal, Vessels

Shipping and logistics firm APL is teaming up with the Bay Area Air Quality Management District on an $11 million project to cut ocean-going vessel emissions near the Port of Oakland.

Nearly $5 million of the project will come from air quality grants and will go toward retrofitting the APL terminal at the Oakland port and the carrier's vessels that call there, to use dockside electric power.

Ocean-going vessels generate a large percentage of their pollution per visit while sitting idling at the dock and running generators to provide maintenance power. Dockside power, sometimes called ship-to-shore power or cold ironing, allows the vessels to plug into the shoreside power grid and shut down the on-ship generators, dramatically reducing in-port emissions.

Cold ironing their terminal and vessels at Oakland will, according to APL, cut more than 50,000 pounds of nitrogen oxide emissions– a leading component of smog– from ships berthed in Oakland and 1,500 pounds of particulate matter– often seen as smokestack soot– annually.

When completed late next year, the cold-ironing portion of the program will see APL become the first terminal and carrier at the Oakland port to cold iron.
The state of California is planning to make cold ironing of ocean-going vessels mandatory by 2014.

“Diesel emissions from port operations have a serious health impact in the West Oakland community,” said Jack Broadbent, Executive Officer of the Bay Area Air Quality Management District. “APL is getting a head start to reduce emissions well before the state deadline.”

While APL will pick up the majority of the $11 million price tag, $2.8 million in grant money from the state Goods Movement Bond Program will be used to electrify berths at Global Gateway Central, the recently expanded and upgraded APL terminal at the Port of Oakland. An additional $2 million grant from the state Carl Moyer Memorial Air Quality Standards Attainment Program will be used to retrofit the first three APL container ships for cold ironing.

YRC Faces Final Countdown, Position 'Dire'

Transportation firm YRC Worldwide is in the final countdown to restructure it troubled finances and analysts are growing pessimistic that the firm will survive into the new year.

The struggling firm, the nation's largest less-than-truckload carrier and parent to such names as Roadway and Yellow, announced Friday that it is extending the deadline for a debt-for-equity offering to Dec. 23. It is the third time this month the firm has reset the deadline.

YRC, which faces a $19 million debt payment and loss of access to a more than $100 million revolving credit line as of Jan. 1, 2010, has been offering shares of the firm to bondholders in exchange for improved debt terms.

Officials for YRC have said that the firm might have only days left before its liquidity becomes “unsustainable” and would have to contemplate bankruptcy “or worse,” if it has to make the New Year's debt payment and loses access to the revolving credit line.

The firm, which set an original deadline of Dec. 7 for the needed $537 million debt-to-equity swap, said it has thus far fallen far short of the mark. The swap, according to YRC, is the key component of financial restructuring plan the firm says is vital to its continued existence.

“We believe that the odds of YRC filing for bankruptcy and exiting the industry have gone up considerably,” said industry analyst Ed Wolfe in a report to investors issued Friday. Calling YRC's position “dire,” Wolfe recommended buying up shares of YRC rivals.

“The jig may be up,” for YRC, wrote Wolfe.

TOTE Names Parrott as New President

Jones Act carrier Totem Ocean Trailer Express has named John Parrott as president of the firm, replacing outgoing president Bill Deaver, who had been serving in the president's role since early 2002.

Parrott, who has served as vice president of TOTE's commercial division since 2006, rejoined TOTE in 2002 as the Alaska general manager after an earlier stint wit the firm in the late 1990s.

TOTE, which is privately owned by the American Shipping Group holding company, operates Jones Act roll-on/roll-off cargo vessels between the ports of Tacoma, Wash., and Anchorage, Alaska. The ASG family of businesses comprises the blue water domestic and military support shipping businesses of Saltchuk Resources. These businesses include TOTE, Sea Star Line, and Interocean American Shipping.

Deaver's departure is the second major staff loss for the ASG family in less than a month. ASG chair and CEO Bob Magee, a 23-year veteran of the firm, passed away on Nov. 30.

Special Feature: Mariner Training - New Technology Demands Maritime Education Reforms

By: Captain Samuel R. Pecota and Captain James J. Buckley, PhD (As seen in the December issue of Pacific Maritime Magazine)

(Photo: California Maritime Academy's Simulation Center has helped determine that overall team performance when using ECDIS was much better than without ECDIS. Photo courtesy of CMA.) Philips Publishing Group File Photo

The maritime industry has witnessed a sea change in the last two decades, the likes of which has never been seen. Modern commercial vessels are larger, faster, and more technologically advanced in nearly every respect but particularly in their navigation, collision avoidance, and communications equipment. Maritime academy graduates should be better prepared today than they were twenty or thirty years ago since the worldwide adoption of the International Maritime Organization’s Standards for Training Certification and Watchkeeping (STCW) in 1978, which sets mandated international training standards that include theoretical and practical training with the latest available navigation, communication, and collision-avoidance equipment. One could reasonably conclude then that with the tremendous technological improvements on ships and their equipment and the implementation of standardized training procedures that the incidents of groundings and collisions should be declining. Unfortunately, according to most recent statistics this is not the case. In terms of efficiency, waterborne transportation has made tremendous strides since the middle of the 20th century; in terms of safety, perhaps less so. Why is this?

The causes for the continued unacceptable number of accidents are varied and complex, as any accident report by the National Transportation Safety Board will show. However, for the sake of this article we will argue that, from a maritime education perspective, there are four fundamental reasons: 1) the STCW pedagogical requirements for learning each piece of equipment separately is no longer appropriate; 2) the standard maritime educational pedagogy of separate classes for each subject is obsolete; 3) increased experiential learning in a controlled interactive environment (simulation) is needed due to the characteristics of today’s maritime student; and 4) marine navigation equipment manufacturers’ belief that they are improving their product, and by inference, navigational safety, by adding ever more features is incorrect.

Typically, new navigation equipment has been introduced into the world’s merchant fleets well ahead of the development of any sort of formal training regimens for that new equipment. The dangerous implications of such a lack of training had been amply demonstrated fifty years ago when radar first began to be introduced in the commercial marine industry and the so-called “radar-assisted collision” became all too common. It took the maritime community almost ten years to recognize the problem and begin formal radar training for mariners at dedicated professional schools. Even today, the IMO will recognize a new technology belatedly and develop a model course for training mariners in the proper use of that technology years after its introduction and widespread use. The subsequent STCW training requirements generally follow a common pedagogy: first, provide instruction in the general operational theory of the equipment; second, demonstrate the operational use of the equipment; third, explain how to interpret the display of the equipment’s output; and fourth, assess the learner’s competence in using the equipment. This training process is reminiscent of the nineteenth century classroom and does not teach the mate how to incorporate the new technology into the bridge team, or for that matter, how to utilize the new equipment with the other bridge equipment efficiently as an integral component of bridge resource management.

For decades, maritime training institutions have followed their own training pedagogy that was heavily grounded in teacher-centric lectures that methodically advanced the students through each of the skills in a series of stand-alone classes. Often the instruction was based almost exclusively on such explicit learning techniques with little emphasis on instructor guided implicit learning. Back then, students were assumed to be linear thinkers and not very technologically savvy; but modern students are very comfortable using quite sophisticated telecommunication and computer gaming technologies. Today’s students are often more comfortable in these virtual environments than their instructors. Nevertheless it is the responsibility of maritime instructors to take advantage of their student’s strengths in order to ensure their educational success.

The new technology equipment that is found on ships today has been developed by manufacturers who develop their products with some level of input from industry. It seems as though they believe that improving the technologies, whether it is navigation or communications equipment, means adding more “bells and whistles” when, in reality, they should be more concerned with improving equipment utility. When design simplicity was neglected or ignored, the resulting equipment proved difficult to use and often provided little or no decision-making support. The navigator on the bridge of a modern, high-speed vessel cannot tolerate information overload.

We do not make these four points lightly. Over the past two years we have completed several research projects at the California Maritime Academy using our new (2008) Simulation Center. The results of these research projects provide the foundation for our beliefs. Our initial research, which investigated methods to incorporate advanced navigation technology into the bridge team, was an important first step in understanding the complexities of integrating ECDIS into bridge team management. The results suggested that participant perceptions of their overall team performance when using ECDIS were much better than when they were without ECDIS. This was expected and did not surprise us. However, the quantitative data did not show a strong positive correlation between use of ECDIS and overall team performance. In essence, the use of ECDIS did not help their performance as much as they thought. One reason for this, and perhaps the most important discovery to come out of these experiments, was that the participants’ implementation of ECDIS was uneven at best, detrimental at worst. There seemed to be a uniform lack of protocol or method in the participants’ utilization of this relatively new navigational device. This somewhat surprising result first led us to the conclusion that existing navigational training programs were inadequate and in need of a total revision as related above. Continued research (fall 2008) involving student recognition of rules-of-the-road situations suggested that using observational learning techniques and bridge simulators in professional courses that traditionally have not used these methods provided a unique opportunity to take advantage of, and maximize, both explicit and implicit learning.

The overarching observation from all of the studies conducted to date is that each participant defines how they use the technologies available to them. As researchers, it was surprising to us just how different these uses could be. In many cases the navigation system technology was used completely inappropriately but the circumstances were such that nothing untoward happened. Clearly, better understanding of a systems approach to bridge resource management would help to further both training and research.
The IMO has recently coined the term eNavigation, to represent a conceptual schema of a fully integrated navigation and communication system that will provide a basis for all future vessel operations. Regrettably, we believe that the eNavigation concept, as presently proposed by the IMO, is too broad and poorly defined. In order to determine if eNavigation can serve to clarify the present somewhat confused marine navigation environment, it is necessary to have a definition that is narrowed sufficiently to allow researchers to study its implications and make conclusions based on clearly defined objectives. A firm and agreed upon definition for eNavigation will also allow the marine electronics industry to develop quality equipment and best practices for its use. This process need not be done using the trial-and-error method that seems to be the norm now. A better approach is to understand the system, define the parameters, then develop and test the proper navigation systems of the future.

In the spring of 2010, the Marine Transportation Department at the California Maritime Academy will be offering for the first time an experimental navigation course entitled NAU 395 eNavigation. The course will explore ways of constructing the integrated navigation courses of the future, introduce undergraduates to research methodology, and assist the Jeppesen Company in the development of a new navigation system known as NGIS (Next Generation Integrated System). Research and development of NGIS will be carried out in one or more of Cal Maritime’s three full mission or eight part-task simulators. We will be working closely with researchers from Jeppesen to design simulation experiments that will put the NGIS prototype to the test and hopefully find proper directions for its future development into a fully functioning navigation system. If this type of collaborative research between a navigation equipment manufacturer and a maritime university proves mutually beneficial to both parties, it is not unreasonable to expect that such cooperation could continue well into the future. Should that be the case, the perceived backwardness by industry of the typical maritime university in the United States could be reversed.

The world of marine navigation has undergone a tremendous transformation in the last twenty years. The sextant has given way to the electronic chart and the seaman’s eye has been supplemented by the Automatic Identification System (AIS). Perhaps even greater changes are just over the horizon when embryonic systems like NGIS become fully developed and operational throughout the world’s merchant fleets. It is imperative that maritime education keep pace with, or better yet lead in, these developments. We no longer have the luxury of allowing maritime universities and professional schools to lag twenty or thirty years behind in the training of future merchant officers. If we continue to expect the newly minted third mate to make up for an outmoded maritime education through a sort of frantic crash course in on-the-job training the moment he or she steps aboard that first vessel, the ‘crash’ may involve more than just the training. Given the size of today’s vessels and their potential to cause devastating environmental disasters after a seemingly minor navigational error, such a cavalier approach to maritime education must not be allowed to continue.

In conclusion, we would like to make the following recommendations:

To Maritime Educators:
  • Accept that traditional training methods are obsolete and no longer serve today’s (and tomorrow’s) maritime students well.
  • Understand that the maritime student of today is very comfortable with electronic technology and the virtual world. Take advantage of this fact in your teaching.
  • Introduce more simulation into the maritime navigational curriculum.
  • Introduce simulation earlier in the maritime navigational curriculum.
  • Recognize that paper charts should only be used as training aids.
  • Establish an integrated, not piecemeal approach to marine navigational education and training.
  • Get involved in the continued development of new navigation systems through active collaboration, where possible, with equipment manufacturers.
  • Stay current with the developing trends in marine navigation thinking, especially the movement toward eNavigation.
  • Look for ways of taking advantage of implicit learning opportunities in maritime training especially during simulation training.

To Currently Sailing Professional Mariners:
  • Dispense with the notion that use of new navigation systems like ECDIS is somehow “cheating” and younger mates aren’t “real” mariners.
  • Get used to the impending demise of the paper chart.
  • Stay current with the rapidly evolving marine electronic navigation world even if it means going back to school more often than you would like.
  • Recognize that the bridge of the commercial vessel of the future will become increasingly similar to the cockpit of an aircraft.

To Marine Navigation Equipment Manufacturers:
  • Remember, as you develop new navigational systems, that more is not necessarily better. Simplify your systems to make them more usable to the mariner.
  • Take advantage of the expertise of maritime educators, particularly at maritime universities with advanced simulation facilities, to help you develop your new equipment to be of the best possible design for the mariner of the future, not only for the “old timers” already out there.

Captain James J. Buckley, Ph.D., CTL

Jim Buckley graduated from the California Maritime Academy with a B.S. in Nautical Science, from Golden Gate University with an MBA, and from Capella University with a PhD in organization and management. In addition to holding an unlimited Master’s license, he has first class pilotage for San Francisco Bay and is certified in transportation and logistics (CTL) by the American Society of Transportation and Logistics. He is author of the book The Business of Shipping (8th Ed.) and numerous conference papers. Currently he serves as the Associate Dean for Simulation at the California Maritime Academy and has been active in research involving pedagogical approaches to teaching with advanced technologies.

Captain Samuel R. Pecota, M.A.

Sam Pecota, a 1980 graduate of the United States Merchant Marine Academy at Kings Point, NY, spent twenty years at sea, predominantly in the hopper dredging industry. He served as master of the hopper dredge Stuyvesant from 1989-2000 before joining the faculty at the California Maritime Academy in 2001. He received an M.A. in Transportation Management from American Military University in 2005. He is author of the textbook Radar Observer Manual (6th Ed., 2006) and has co-authored several conference papers with Captain Buckley. He is presently an Associate Professor and Chair of the Department of Marine Transportation at CMA.

Thursday, December 17, 2009

Pasha In Grays Harbor Port Deal With Chrysler

Huntington Beach, Calif.-based logistics firm Pasha Group announced that it has secured Chrysler Group LLC as a new customer at the Washington state Port of Grays Harbor.

Chrysler will use Pasha's Terminal 4 auto facility to support the carmaker's export vehicle requirements from the Pacific Northwest to Asia. The first vessel under the deal is set to arrive at Terminal 4 on Jan. 24, 2010.

Financial details and terms of the deal were not released.

Grays Harbor, a deep-water port located directly on the Pacific Coast, has direct Union Pacific Railroad on-dock connections that will be used by Chrysler.

LA, LB and Tacoma Box Numbers Down, Seattle Up

The two major ports in California and one of the two major ports in Washington state have reported declines in total containers handled during November, with only the Port of Seattle reporting positive growth.

Total container traffic volume at the Port of Long Beach fell 19.6 percent to 448,151 TEUs in November compared to November 2008. Loaded inbound container volume dropped 14.7 percent for the month, while loaded outbound box volume grew 4 percent. For the first 11 months of the year, the port handled 4,600,360 TEUs, off 24.1 percent from the same period last year.

At the neighboring Port of Los Angeles, total box volume fell to 580,206 TEUs for November, off 12 percent from the same month last year. Loaded inbound box volume fell 11.8 percent for the month, while loaded outbound box volume turned in a sizable 17.8 percent increase over the year-ago period. For the January to November period, total box volume at the port was reported as 6,186,004 TEUs, off 15.1 percent from the same period in 2008.

In Puget Sound, the Port of Seattle turned in its fourth straight month of increased total box volume, reporting 152,593 TEUs handled in November--a 15.1 percent increase compared to November of 2008. The port also reported loaded inbound box volume grew a whopping 34.4 and loaded outbound box volume rose 27.1 percent compared to the year-ago period. Despite the increases, and similar numbers over the past several months, the port remains in the negative for the year. During the first 11 months of the year, the Seattle port handled 1,437,953 TEUs, a decline of 9.7 percent compared to the January to November period in 2008.

In opposition to the positive news from Seattle, the nearby Port of Tacoma turned in its eleventh straight month of negative growth for the year. Tacoma handled 117,884 TEUs in November, an 18 percent drop from the total box volume reported in November 2008. Loaded inbound container volume dropped 27 percent and loaded outbound container volume fell 13.7 percent for the month. For the year to date, the port's total box volume is 1,429,295 TEUs, off 16.7 percent compared to the first 11 months of last year.

Horizon Lines Axes Exec Perks

As part of an ongoing cost-cutting program, Charlotte, NC-based Jones Act carrier Horizon Lines plans to eliminate corporate perks for the firm's four top executives.

The Compensation Committee of the Horizon Board of Directors approved the move on Wednesday as part of a company-wide effort to eliminate perquisites at all levels.

“We believe the perquisite elimination for executive officers is consistent with emerging best practices in corporate governance,” said Chuck Raymond, Chairman, President and Chief Executive Officer. “In this ongoing challenging business environment, we as senior managers must continue to set new standards that support the organization as it strives for increased efficiencies and customer service excellence.”

According to a Horizon statement, the eliminated perks include, but are not limited to, country club memberships, automobile allowances and tax “gross-up” payments made to reimburse an executive officer for individual income tax incurred with respect to a perquisite.

Horizon plans to increase the base salaries of the four executives as of Jan. 1, 2010 to partially offset the eliminated perks. However, said the firm, no adjustments will be made to the salaries to compensate for tax "gross-up" payments.

In addition to Raymond, the executive targeted by the move include Michael T. Avara, senior vice president and CFO; John V. Keenan, president and COO; and Brian W. Taylor, president and COO of Horizon Logistics Holdings.

Like many carriers, Horizon has been struggling through the global economic downturn. The carrier reported third quarter revenues of $308 million, a 12.6 percent slide from the year ago period and profits of $8.4 million, a 24.3 percent decline from the third quarter of 2008.

City Council Ends Discussion of Taking More Long Beach Port Money

The Long Beach City Council on Tuesday voted 7-2 to table further discussion of a city charter amendment that would increase the Port of Long Beach's annual transfer of profits to the city's coffers.

The amendment effort, the latest in a unsuccessful string of such attempts over the past several years, sought to increase the amount of port profits transferred to the city from the current 10 percent limit to either 15 percent or 20 percent. Approved in the 1980s, the 10 percent transfer is not automatic and must be requested by City Hall, which the city never did until it was hit with economic woes in the early 1990s. Since then, the city has requested the funds each year. Last year, the port transferred $16 million to the city under the rule.

Port officials, local business groups, and a large coalition of shipping industry trade groups vehemently opposed the increase of the port transfer.

City Council proponents of the plan had been hoping to have the increase language moved to a council committee that oversees ballot initiatives. As part of the city charter, any change to the port transfer would have to be voted on by the citizens of Long Beach. Tuesday's council vote, however, did not send the item to the council committee and based on election schedules, the item, if passed through the council in the future, would not be eligible for a ballot until 2011.

Special Feature: The State of the Port Environment

By: T.L. Garrett (As seen in the December issue of Pacific Maritime Magazine)

For many years now ports have been the target of extensive criticism regarding their environmental impacts. They were generally characterized as the largest and least regulated sources of pollution. In many ways the criticism was accurate, but it was a reflection of the lack of regulatory focus on Port sources. Let’s be honest, it took the International Maritime Organization (IMO) well over a decade to develop the first air quality standards for vessels. Those standards were limited to reflect the emission levels of existing vessels and marine fuels, hardly technology forcing. EPA took even longer to regulate vessels and when they did they adopted the same international standards and then limited them to US flagged vessels.

States, on the other hand, generally took the position that regulating vessels was outside their jurisdiction and relied on federal and international regulation to control those sources. Meanwhile Ports were experiencing incredible levels of growth, a doubling and tripling of “throughput” amidst these modest regulatory developments. Ocean-carriers were responding to that growth by ordering and deploying larger, faster vessels to serve the ever-increasing global demand for goods without any meaningful air quality requirements. In short, something had to give and the stage was set for dramatic changes.

Initially, pushing for change was incredibly difficult because of several factors: The lack of regulations, and more importantly, the lack of available technology to reduce emissions. Reliability, durability, efficiency, and economies of scale were the primary drivers for vessel engine design, not emission control. These goals are not exclusive of each other; indeed the platform, the diesel engine, was already meeting the major objectives by being the most efficient engine available resulting in lower energy consumption compared to any other form of transportation engine. But that is not enough if public health and green house gas goals are to be achieved.

Enter the era of voluntary measures. Recognizing that change was coming and having a desire to minimize the need for regulations terminal operators and ocean-carriers initiated voluntary programs and participated in those created by port authorities. Tugboat repowers and purchase of alternative fuel yard tractors began in the late 1990’s under the Carl Moyer diesel replacement incentive program in California. This was quickly followed by the Voluntary Ship Speed Reduction Program in Southern California that began in 2001. The Port of Los Angeles then initiated a voluntary retrofit program in 2002 that resulted in more than 1,200 cargo handling equipment pieces being equipped with diesel oxidation catalysts. The first contracts were signed only days after the California Air Resources Board (CARB) certified the equipment. Meanwhile, the Pacific Northwest ports worked with customers and others to produce a comprehensive emissions inventory and strategy that targeted goals and voluntary efforts including many of the same things (retrofits, cleaner fuel use, shore power, etc.). Combined with the innovative use of emulsified diesel fuel, a technology that has now been left behind, these initial steps ensured that growth at the ports could continue while actually reducing overall emissions.

As early as 2002, ships began using low-sulfur distillate fuel in auxiliary generators. And the first shore-power project to shut down auxiliary generators and connect to the electrical grid was a voluntary industry effort. Other ocean-carriers began experimenting with advanced injector technologies, electronically controlled engines, on-board fuel emulsification systems, waste heat recovery systems, on-board emission scrubbers, exhaust gas recirculation, selective catalytic reduction, alternative fuels, and renewable biofuels. The list continues to grow. These new engine technologies, combined with existing highly efficient engines are combined in larger vessels resulting in greater economies of scale to move increasing volumes of cargo even more efficiently.

These developments have not gone unnoticed by the regulators. Beginning in 2005, frustrated with the lack of national and international regulations to reduce emissions from goods movement sources, CARB initiated the first of a series of regulations to reduce emissions from cargo handling equipment, workboats, trucks, and vessels. All of these state regulations took the examples of successful voluntary incentive programs and made them mandatory requirements. For the most part these regulations have gone forward without opposition, and in some cases with the support of the sectors being regulated. These included the use of ultra-low sulfur fuel in advance of federal requirements, the retrofit and replacement of cargo handling equipment, the accelerated turnover of the drayage truck fleet, the repowering of workboats, and the requirement to connect vessels to grid-based shore power.

Where the industry has been in opposition has not been about the goals or even the methods to reduce emissions, it has been about the perceived abuse of authority or the avocation of specified technologies or fuels based on politics rather than science. The Pacific Merchant Shipping Association successfully challenged the CARB Auxiliary Fuel regulation on the basis that the state did not have authority to regulate vessels under the Clean Air Act without first getting authorization from the US EPA – which if CARB had pursued, would have created a defacto uniform national standard once the waiver was approved. Our current challenge to the Low-Sulfur Fuel regulation is about the authority to regulate vessels beyond the traditional three nautical mile limit under federal law. At the same time the industry has fully supported the approved and recently amended stringent regulations of the International Maritime Organization (IMO) and the establishment of a US/Canada Emission Control Area. The IMO regulations require the use of the same low-sulfur marine fuels as the CARB regulation, at a much greater distance from shore, 200 nautical miles (nm) versus 24 nm, and the requirement for future vessel engines to be 80 percent cleaner than those in use today. Not only will the implementation of these international requirements result in greater emission reductions than the CARB regulation, although three years later, they will also provide a much needed uniform regulatory scheme for all ports without placing a specific port at a competitive disadvantage.

With the increasing recognition of climate change the industry is already responding to the need to further reduce their carbon footprint. Although vessels are already by far the most efficient way to move the world’s goods, ocean-carriers have already recognized that the highly efficient engines and economies of scale are not enough. They have begun using better hull coatings to reduce drag, advanced propeller designs to improve efficiency, and futuristic hull designs. Technology is also being used to improve voyage planning to avoid adverse weather conditions and allow for optimized speed management that balances just-in-time delivery with minimal use of energy. Some companies are now deploying vessels with solar panel arrays, wind assist, hybrid diesel-electric propulsion, and even fuel cells. Dockside there is development of alternative fuel generators and stack-gas emission treatment systems that could be used where grid-based infrastructure does not exist.

This is just the beginning of the innovations to reduce the carbon and emission footprint of the industry. All of this development has occurred within the last decade and regulations are only now going into effect. Nonetheless, the ports of Los Angeles and Long Beach already have seen dramatic improvements as a result of these initial efforts. The most recent inventory completed for 2008 showed greater than a 30 percent reduction in diesel particulates and for sulfur oxides compared with the 2005 inventory. These emission reductions occurred even though cargo volume increased. Looking towards the future the same inventories showed even greater reductions in emissions per TEU between 23 to 35 percent for criteria pollutants when compared to 2005, demonstrating that efficiencies in cargo movement continue to improve. Further evidence of this was a decrease in green house gases from the previous levels. In the Pacific Northwest the ports are working with their customers to implement low sulfur fuel use at the dock, retrofits and cleaner fuel use for cargo handling equipment, shore power for cruise and more rapid phase out of older trucks and terminal equipment.

With all of the effort that is being expended and the new regulatory era on the horizon it seems clear that the maritime industry will continue to improve as the most efficient mode of transportation that is also increasingly environmentally friendly. Maybe it is time for a little more praise and a little less criticism.

PMSA represents the shipping lines and terminal operators that move approximately ninety percent of the containerized cargo on the West Coast of the United States. Mr. Garrett’s focus is primarily on air quality regulatory and legislative issues at all levels of government. He has extensive experience in reviewing air quality technical reports, regulations, and legislation, and providing input on behalf of PMSA members. Prior to PMSA he was an Environmental Supervisor for the Port of Los Angeles in charge of the Air Resources Section.

Tuesday, December 15, 2009

Port of LB Tideland Transfer Funds Threatened by City

Three Long Beach City Council members have recommended changing the City Charter to increase the annual transfer from the Port of Long Beach. The Long Beach City Council will consider the increase today at 5 p.m.

Currently, the Port of Long Beach transfers 10 percent of its net revenue to the City of Long Beach on an annual basis. The port also provides additional funding for various city projects ranging from financing of the city’s convention center to providing a financial backstop to the city aquarium.

The Port of Long Beach is the only port that annually transfers money to their City government. According to the Port of Long Beach’s FY10 budget materials, the Port has invested more than $790 million into the City of Long Beach since 1990. That equates to approximately $41.5 million per year on average.

Maritime industry advocates are concerned that increasing the Port’s financial obligation to the city will erode the Port of Long Beach’s competitive position among other West Coast ports.

Port of Long Beach industry advocates urge those concerned about decreases in the Port’s operating funds to attend this evening’s meeting and/or contact Long Beach City Council members and urge them to protect the current status quo.

King County Approves Rail Corridor Funds

Washington State’s King County Council approved an ordinance Monday clearing the way for up to $26.5 million to be spent on the purchase of portions of an abandoned rail corridor that runs through Renton, Bellevue, Kirkland, Woodinville and Redmond.

The move comes shortly on the heels of a similar move by the Sound Transit board of directors authorizing the expenditure of up to $14 million for just over a mile of the corridor that runs through Bellevue. The board also authorized negotiations to purchase an easement along a longer stretch of the corridor for possible future use as a commuter train corridor.

The City of Redmond could wind up paying close to $9 million for the portion of the corridor that runs through its borders. In addition, the Cascade Water Alliance and Puget Sound Energy are looking to purchase utility easements along the corridor.

The tracks and easements being sought by King County, Sound Transit and other local entities are part of a larger 42-mile Renton-to-Snohomish rail corridor abandoned by BNSF Railway. The Port of Seattle is in the process of buying the entire rail corridor and plans to negotiate with the local agencies for the rights to certain local stretches. The Port purchase is expected to close on Thursday. For its part, the Port plans to maintain freight service on the corridor north of Woodinville.

Vancouver USA Commissioner Proposes Board Expansion

The Washington state Port of Vancouver's port commissioner Jerry Oliver has suggested increasing the three-member governing board to five members, citing public meeting rules that forbid any two commissioners from having private conversations about board business.

Oliver's idea to change the 97-year-old make up of the board, however, does not appear to be gaining many supporters.

Port Executive Director Larry Paulson told The Columbian that adding more commissioners would certainly cost the port more money at a time when port officials are trying to keep costs down. The three commissioners, which are elected for six-year terms and receive wages, benefits and travel expenses, cost the port collectively about $36,000 a year.

Former port commissioner Arch Miller, who thinks the smaller commission works better, also told the paper that new commissioners would add extra costs because the new board members would likely need additional support staff.

Current commissioner Nancy Baker told the paper that she does not share Oliver's concerns about communications. She said such a proposal raises numerous questions that would need to be answered, such as the potential costs of expanding the commission and what might happen to the port district boundaries.

Current commissioner Brian Wolfe said he doesn't think the three-member board is the best way to govern, and told the paper that he would have to see some costs analysis before moving forward.

On Oliver's motion, port staff were directed to prepare a report on the topic before the January commission meeting.

If the proposal does move through the commission, it would still have to be approved by the voters.

Los Angeles Port Approves 2010 Economic Relief Package For Tenants

The five-member governing board for the Port of Los Angeles has approved $25.7 million in discounts, rate cuts and reduced rent for its tenants in 2010, citing a desire to help port tenants remain competitive and prevent diversions to other ports in tough economic times.

Nearly $20 million of the 2010 package will go toward an economic relief program that will provide each customer with a one-time credit in the amount of 6 percent of revenue paid in the 2007/2008 fiscal year, set to be paid out in the first six months of 2010.

The new package also includes an empty container rate reduction if the tenant's empty container numbers surpass 20 percent of total container volume for the terminal.

The final component of the 2010 package is a 50 percent reduction of the single wharfage rate for trans-shipped merchandise.

Port of Los Angeles tenants include APM Terminals, China Shipping Holding, Eagle Marine Services, Evergreen America, TraPac, Yang Ming Line, and Yusen Terminals, Inc.

The 2010 savings and incentive package mirrors a $14.8 million package the port put into effect earlier this year which included a 10 percent discount to customers on every intermodal container moving through tenant terminals, an incentive for eligible ocean common carriers which record an increase in the amount of intermodal containers moved through their terminals compared to the previous fiscal year, and a 50 percent rate reduction on up to six acres of space assignments. All of the 2009 package components expire on December 31,2009.

SoCal Ports Pick UP EPA Award For Truck Program

The end-of-the-year award season is upon us and the ports of Long Beach and Los Angeles have picked up a big one.

The US Environmental Protection Agency on Monday awarded the agency's 2009 Environmental Justice Achievement Award to the adjacent ports for their jointly-developed-but-separately-implemented Clean Truck Program.

The CTP, which seeks to cut ports-servicing truck pollution by 80 by 2012 by banning certain model year trucks is several stages, will by the Jan. 1, 2010 implementation of the second CTP ban, be nearly two years ahead of schedule, according to the ports.

The first ban, implemented in October 2008, banned all pre-1989 trucks from servicing the ports and the impending Jan. 1, 2010 ban will do the same to all pre-1994 trucks and all 1994-2003 models without retrofit pollution control devices. A final ban in 2012 would eliminate all pre-2007 model year trucks from entering the ports.

The first ban eliminated more than 2,200 trucks from the more than 19,000 pre-CTP ports-servicing truck fleet, while the Jan. 1, 2010 ban is expected to ban another 8,000 trucks.

The EPA called the CTP "the largest, most aggressive air quality program at any port complex in the world." In bestowing the award, the EPA cited the ports "aggressive" outreach to both the community and stakeholders, including the development of the Clean Air Action Plan Stakeholder Group, which includes environmental and community-based organizations.

Although cited as a positive step by the EPA, the stakeholders group, which met in the early development stages of the truck program, was highly criticized by members at the time as not offering real public input into the plan.

The Port of Los Angeles version of the CTP remains mired in litigation, with portions of the program currently under injunction by a federal court. The port will face off in federal court against the American Trucking Associations early next year to determine if the injuncted portions of the Los Angeles-version of the truck program will be permanently stuck down. Officials at the neighboring Long Beach port reached and agreement with the ATA in October and have since been removed from the ongoing litigation.

Hapag-Lloyd's Revenue Off Nearly 30 Percent

German ocean carrier Hapag-Lloyd reported $986 million operating loss in the first nine months of 2009, citing massive declines in cargo volumes and dwindling ocean freight rates.

Revenue for the carrier, Germany's largest, shrank by 29 percent during the first nine months of the year, ending at $4.8 billion compared to $6.7 billion in the same period a year ago.

German tourism group TUI, which owns a 43.3 percent stake in Hapag-Lloyd, said that the losses were expected to continue through the end of the current financial year. Other major investors predicted that the losses would continue through 2010.

TUI provided Hapag-Lloyd with a $1 billion infusion of financial aid in October, and the carrier also received loan guarantees worth $1.8 billion from the German federal government and the City of Hamburg.

In related news, TUI's largest shareholder, John Fredriksen, failed in his third attempt to gain a seat on the TUI Board of Directors.

PMSA to Challenge CARB Low-Sulfur Vessel Fuel Rule Again

A leading shipping industry trade group will again challenge a California Air Resources Board requirement that ocean-going vessels use low-sulfur fuel within 24-miles of the California coast.

The Pacific Maritime Shipping Association, which represents roughly 90 percent of the shipping lines and terminal operators on the West Coast, filed the challenge to the state rule in the US Court of Appeals for the 9th Circuit.

In 2008, CARB issued a rule attempting to achieve the same 24-mile-from-the-coast boundary for low-sulfur fuel use, but after only months of being in effect a PMSA legal challenge resulted in the rule being struck down by the court. However, the PMSA encouraged its members to continue using the low-sulfur fuel, which the majority did. Following the legal setback, CARB reworked the rule to avoid conflict with the previous legal ruling and reissued it.

Just as in the previous case, the PMSA argues that the state is still attempting to regulate international trade and has overstepped its legal authority. Previous legal rulings have determined that state authority only extends to the 3-mile-from-the-coast boundary and beyond this is under federal jurisdiction.

The PMSA believes that more effective standards for international vessels– which are governed by international treaties– should be developed at the national and international level.

The appeals court plans to take written testimony from both sides before issuing a ruling some time next year.

Pacer Chair/CEO Abruptly Resigns

Logistics service provider Pacer International has announced that chairman and CEO Michael Uremovich will retire, effective at the close of business Tuesday. No reason was given for the departure.

Daniel Avramovich, who has served as the Concord, California-based firm's COO since June, will succeed Uremovich as CEO. Avramovich will also be appointed as a director and chairman of the Pacer board of directors.

“Dan Avramovich has not only proven to be an effective leader for Pacer, he has a clear vision and plan for Pacer’s future that has been embraced by our board of directors and leadership team,” said the outgoing Uremovich in a release.

Uremovich was appointed chairman and CEO of Pacer in November 2003, with executive responsibility for all Pacer International business units. He joined Pacer as Vice Chairman in October of 2003 after serving as a consultant to the company for several years. Immediately prior to joining Pacer, he was a principal owner of Manalytics International, a San Francisco-based consulting firm. He served as Vice President of Marketing for Southern Pacific Transportation and President of TSSI, SP's logistics operating company during the early to mid-1990s.

During the 1980s, Mr. Uremovich held a number of senior executive positions at American President Companies in both domestic and international operations, including Senior Vice President Marketing, Vice President Pricing, and Vice President Strategic Planning. In his consulting career, he has been the Managing Director of the Worldwide Transportation practice for Coopers & Lybrand LLC, and a Principal at Booz Allen and Hamilton.

The incoming Avramovich joined Pacer in 2008 after more than 25 years of senior leadership with some of the transportation and logistics industry experts, including most recently Kansas City Southern and Exel Logistics.

Fidley Watch: Political Science

(As seen in the December issue of Pacific Maritime Magazine)

The Dog Ate My Data
As the old adage says, bad decisions make good stories. According to a recent story in the London Sunday Times, Scientists at the University of East Anglia (UEA) have admitted throwing away much of the raw temperature data on which their predictions of global warming are based.

According to the Times, the data were gathered from weather stations around the world and then adjusted to take account of variables in the way they were collected. The revised figures were kept, but the originals were dumped to save space when the Climate Research Unit (CRU) moved to a new building.

The revelation comes shortly after a hacker exposed more than 3,000 emails and documents from computers at the University of East Anglia’s Climate Research Unit (CRU) in the UK. The CRU is the data repository for much of the world’s climate research and is a major source for the judgments reached by the UN’s climate reports. The emails, widely disseminated on the web, show the “science” behind the theory of ‘anthropomorphic (man-made) global warming’ (AGW) on which the world is basing its environmental policies. Some excerpts:

“Can you delete any emails you may have had with Keith re AR4? Keith will do likewise.”
“…try and change the Received date! Don’t give those skeptics something to amuse themselves with.”
“If they ever hear there is a Freedom of Information Act now in the UK, I think I’ll delete the file rather than send to anyone.”
“This is the sort of “dirty laundry” one doesn’t want to fall into the hands of those who might potentially try to distort things...”

A reputable scientist should be ready to stand behind his data, not fudge it or throw it away if it doesn’t fit is pre-conceived notion.

Waiting to Exhale

Washington State House Bill 2815, that passed in 2008, requires the owners or operators of large fleets of vehicles and large stationary sources of greenhouse gases to start reporting their emissions in 2010.

The first reporting period will be for 2009 emissions, and emitters whose 2009 emissions meet the reporting thresholds must report their emissions to the Department of Ecology by Oct. 31, 2010.

The rule will apply to owners or operators of sites or fleets of non-road mobile sources that produce more than 10,000 metric tons (MT) of CO2, or fleets of on-road motor vehicles that produce more than 2,500 MT CO2 per year.

The State bases its science on Intergovernmental Panel on Climate Change (IPCC) reports. The IPCC get their data from the CRU, mentioned above, whose data has been cast under suspicion by the release of the offending emails and the discovery that much of the raw data on which the scientific community has based its global warming theories was discarded. Seth Preston, Ecology communications manager, says he hasn’t heard of any change in the Bill since the aforementioned emails were made public.

The proposed 129-page rule can be found here:

Some portions of the proposed rule:

If a marine vessel’s arrival and departure points are both inside the waters of the state, then the owner or operator must assign greenhouse gas emissions to Washington State.

“Fugitive emissions” means emissions, which could not reasonably pass through a stack, chimney, vent, or other functionally equivalent opening.

And of course, the most important part of the rule:

An inventory of greenhouse gas emissions will support the legislature’s intent to limit and reduce emissions of greenhouse gases consistent with the emissions reductions requirements established in RCW 70.235.020.

The bill was sponsored by 32 Democrats and one lone Republican. As an exercise, I calculated the carbon emissions (respired, mind you, not ‘fugitive’) likely to come from State Employees.

A human emits roughly 510 lbs. of CO2 per year. Washington State has 63,566 employees in the executive branch, producing 31,512,390 lbs. or 14,294 metric tons of CO2 per year- more than enough to qualify as either a site or mobile source. Add the Legislative Branch (729) and the judicial Branch (606) and the CO2 emissions pass 15,000 metric tons.

Will the State be hiring more staff to calculate staff emissions?

Robert P. Magee, Jr.

One of my first interviews as new managing editor of Pacific Maritime Magazine was with Robert P. Magee, Jr., then President and CEO of Totem Ocean Trailer Express, for a story on the company’s 25th anniversary. I found him to be very engaging and generous with his time, and in the years that followed, I was impressed that a man who was running such a large company always seemed to have time to chat, answer questions or give advice. It was with sadness that I learned late last month that Bob had lost his struggle with cancer.

Bob is survived by his wife, Marie, two grown daughters, and thousands of friends in the commercial maritime community.

Chris Philips, Managing Editor

Thursday, December 10, 2009

Obama Names Matsuda to Head MarAd

The White House has announced that President Obama will promote David Matsuda to the top executive slot at the Maritime Administration. Matsuda has been serving as the Acting Administrator of the Maritime Administration since he was appointed as Deputy Maritime Administrator on July 28.

The Maritime Administration, or MarAd, is the agency within the US Department of Transportation dealing with waterborne transportation. It is charged with promoting the use of waterborne transportation and its seamless integration with other segments of the transportation system. It is also tasked with securing the viability of the US Merchant Marine.

Prior to joining MarAd, Matsuda served as the US DOT’s Acting Assistant Secretary for Transportation Policy from March thru July. Prior to that, Matsuda spent seven years on Capitol Hill. While working in the US Senate he was engaged in the formulation and debate of most major federal transportation legislation as senior counsel and primary transportation advisor to US Senator Frank R. Lautenberg of New Jersey.

In 2002, Matsuda was named a Georgetown University Government Affairs Institute Fellow serving on the staff of the US Senate Committee on Commerce, Science and Transportation. From 1998 to 2002, he worked as an attorney with the safety law division of the U.S. DOT’s Federal Railroad Administration.

Vancouver USA Lures New Mega-Bulk Customer

The Washington state Port of Vancouver, which has made a name for itself as a handler of mega-bulk cargo, has been selected as the new port of entry for an unnamed South Korean manufacturer that ships oil refinery components to the Alberta oil works in Canada.

The port expects to sign a final agreement with the Korean firm by the end of the first quarter 2010 with shipments to begin short thereafter. Citing confidentiality due to the lack of final contract signatures, the port has refused to name the Korean firm, the number of annual shipments the deal could bring to Vancouver, and the possible revenues to be generated.

During the summer, the Korean firm quietly shipped one of the 156-ton oil refinery components through the port as a test. The module was easily handled by the port's two mobile cranes, which are more well know for offloading windmill turbines and components. The port's two mobile cranes are the largest of their type in North America and each is capable of lifting the equivalent weight of two space shuttles, or about 140 metric tons.

The deal comes as good news to the port, which although continuing to move fair amounts of mega-bulk cargo, has suffered otherwise at the hands of the global recession like all the West Coast ports. Total annual cargo tonnage moving through the port this year is expected to fall to pre-2006 levels.

What is Vancouver’s gain, however, is a loss for an unnamed Gulf port. The Korean manufacturer has been shipping the oil refinery components through a Texas port and then trucking the massive cargo to Alberta.

Long Beach Port IT Head Wins Top Award

The head information technology executive at the Port of Long Beach has been awarded the 2009 Best of California Award for Leadership in Management of Information Technology from the Center for Digital Government.

Doug Albrecht, Director of Information Management for the City of Long Beach Harbor Department, was among six recipients of the annual award selected by state and local government IT leaders throughout California.

The Port of Long Beach, the second busiest container port in the Western Hemisphere, is managed and operated by the 400-plus staff members of the City of Long Beach Harbor Department.

In honoring Albrecht, the CDG cited several recent projects implemented by the port's Information Management division, including the development of state-of-the-art IT architecture for the port's new Security Command and Control Center, the recently opened headquarters for the port's internal security forces that also serves as a regional security center for various federal and local agencies.

Prior to joining the Harbor Department 20 years ago, Albrecht spent 14 years in the private sector, developing records-keeping software.

Vancouver USA Port Renews Trimac Lease

The Washington state Port of Vancouver has renegotiated a new five year lease with long-time tenant Trimac Panel Products. The plywood products manufacturing firm, headquartered in Portland, Oregon, has been a tenant at the port for 20 years.

The new five year lease will be based on the firm's gross sales revenue per quarter, a deal worked out with the port to alleviate some financial pressure on the firm, which as a producer of high-end laminated and liquid finished panels for construction customers around the world, was stung hard by the collapse of the global housing markets.

Under the new deal with the port, Trimac will pay $31,000 per month, according to the The Columbian newspaper, with the amount rising to $3 million per quarter if sales increase.

Monday, December 7, 2009

Feds Plan to Extend 100 Percent Box Scan Deadline to 2014

The federal government plans to extend the deadline for reaching 100 percent scanning of containers at foreign ports being loaded on United States-bound vessels, citing funding and technology limitations.

US Department of Homeland Security Secretary Janet Napolitano told a US Senate panel last week that due to these limitations, the scanning deadline called for in a 2007 law that sought to close potential homeland security loopholes following the Sept. 11. 2001 terrorist attacks could not be met.

“In order to implement the 100 percent scanning requirement by the 2012 deadline, DHS would need significant resources for greater manpower and technology, technologies that do not currently exist, and the redesign of many ports,” Napolitano told members of the Senate Commerce, Science and Transportation Committee on Wednesday.

While Napolitano did not offer specifics as to the extensions, a Government Accounting Office report issued the same day said that the government will offer a blanket extension through July 2014 to all foreign ports.

In 2007 Congress passed and President George Bush signed the 9/11 Recommendations Implementation Act, which adopted about 80 percent of the security recommendations made by the Congressional 9/11 Commission. Included in these was a recommendation to provide 100 percent scanning by July 2012 of all US-bound containers before being loaded aboard vessels at foreign ports. The law, however, provided criteria by which the DHS Secretary could grant two-year extensions for ports that could not meet the deadline, including technology limitations, incompatible port facilities and marked disruptions to the flow of cargo.

The GAO report found that the potential to disrupt the flow of trade and limitations of existing scanning technology would apply to all foreign ports and thus warrant the blanket deadline extension.

Napolitano told the Senate panel that a $100 million Customs and Border Protection pilot scanning program at five foreign ports found that port configuration problems were prevalent and presented difficulties to achieving 100 percent scanning. Problems with the efficacy of the high-tech equipment in a marine environment were also noted.
The secretary also told the panel that total DHS bill for 100 percent scanning at 700 foreign ports, not including those costs borne by foreign governments or ports, could reach nearly $17 billion, or about $8 million for each of the 2,100 trade lanes servicing the US.

“Installing equipment and placing personnel at all of these ports– even the tiny ones– would strain government resources without a guarantee of results,” Napolitano told the senators. The CBP pilot program, according to the GAO report, was able to achieve no greater than 86 percent scanning of container headed to the US, despite the relatively small size of three of the ports in the program. At the two large ports in the program, Hong Kong and Busan, South Korea– where scanning was only implemented at one terminal and one gate– scanning configurations could not sustain more scanning levels of more than 5 percent.

Napolitano, who did not say when her agency would officially seek the 2014 extensions, also left the door open for resetting the deadline to an earlier date if technology breakthroughs were developed.

Senators on the panel, some staunch supporters of the original 2007 law and 2012 deadline, appeared sympathetic to the problems expressed by the secretary.

"I have my questions about whether that's doable," panel chair Sen. John D. Rockefeller, D-W.Va, said of the 2012 deadline. "That does not mean that we should not continue to strengthen our security protocols to prevent high-risk cargo from entering this country, whether by land, sea or air."

Israel Corp CEO Named Chair of Zim Board

The Board of Directors of Zim Integrated Shipping Services has appointed Nir Gilad to serve as Chairman of the Zim board, according to a notification to the Tel Aviv Stock Exchange by Zim parent firm Israel Corporation Ltd.

Gilad, an accountant and former budget minister for the Israeli government and current CEO of Israel Corp., succeeds Idan Ofer who is stepping down at the end of his five-year term as chairman. Ofer's family remain the largest shareholders of Israel Corp., with Ofer himself owning 3.9 percent of the firm's stock, Ofer Holdings owning 2.9 percent and the Ofer family-controlled Millennium Investments Elad owning 46.9 percent.

Gilad takes the helm of Zim's board less than two weeks after the shipping firm reported a third quarter loss of $208 million and a month after Zim shareholders approved a restructuring plan that includes raising $450 million in cash by selling stock rights in the firm.

CTSA to Raise Bunker Charge Jan. 1

Members of the Canada Transpacific Stabilization Agreement, which include ocean carriers APL, COSCO Container Lines, Evergreen, Hapag-Lloyd, Hyundai Merchant Marine, “K” Line, NYK Line, OOCL, Yang Ming and Zim Integrated Shipping Services, said last week that they will raise their bunker surcharge effective Jan. 1, 2010.

For cargo moving through the Canadian West Coast ports, the group's Bunker Surcharge/Fuel Recovery Charge will increase $32 per 20-foot container to $278, $40 per 40-foot container to $348, $46 per 40-foot high-cube container to $392, and $50 per 45-foot container to $440.

Rates will also increase for East Coast traffic, with the group's Bunker Surcharge/Fuel Recovery Charge increasing $61 per 20-foot container to $551, $76 per 40-foot container to $689, $85 per 40-foot high-cube container to $775, and $96 per 45-foot container to $872.

The CTSA members said they will continue to monitor fuel prices and notify customers of any further adjustments. The group last adjusted the Bunker Surcharge/Fuel Recovery Charge in October of this year.

Obama Nominates Khouri for FMC Seat

President Obama intends to nominate attorney Michael A. Khouri, a 35-year veteran of the maritime industry, to a seat on the five-member board of the Federal Maritime Commission.

If confirmed by Congress, Khouri will fill one of two vacant seats on the Commission board and become the second person named as a FMC commissioner by Obama. Two Bush appointees are still serving terms on the panel.

Most recently Khouri served as a private attorney with the Louisville, Ky.-based law firm of Pedley & Gordinier. Prior to this he spent 23 years with Jeffersonville, Ind.-based American Commercial Lines, where he rose to serve as general counsel and senior vice-president. ACL is a barge and shipbuilding firm that services the Gulf Coast and Mississippi River watershed. Previously Khouri served as president and CEO of Memphis, Tenn.-based MERS/Economy Boat, a fuel and supply chandler.

Khouri, who began his maritime career as a deckhand in the 1970s, has also served on the boards of two influential maritime industry trade and lobbying groups– the American Waterways Operators Association and the Waterways Council Inc.

The FMC Board currently consists of Obama-appointee and chair Richard Lidinsky, Jr., and Bush appointees Joeseph Brennan and Rebecca Dye.

Special Feature: Small Tug for a Big Job

By: Hugh Ware (As seen in the December issue of Pacific Maritime Magazine) Photo: Philips Publishing Group File Photo

There is an amazing collection of tug smarts that reside just north of the US/Canada border in British Columbia. An example is the hydrogen-electric hybrid tug that Mark Mulligan’s Capilano Maritime Design Ltd is developing with Seaspan International Ltd., DC Maritime Technologies Inc. and Ballard Power Systems (see Pacific Maritime Magazine, August 2009). Another set of tug smarts resides in the brain of Vancouver-based, innovative tug-designer A.G. “Al” McIlwain, whose simple but cleverly innovative tugs are popular in both British Columbia and New Zealand and Australia. And don’t forget Vancouver’s Robert Allan Ltd., possibly the world’s leading tug designer, and Ladysmith’s Ron Burchett, the knowledgeable and creative maker of radio-controlled model tugs.

While it may look like a toy, the latest concept tug out of British Columbia is the brainchild of Burchett and Robert Allan. They call it the BRAtt (Burchett Robert Allan training tug), and it’s no toy; it is a real, commercial-grade tug but at a quarter-scale version of a Robert Allan Ltd. -designed tug.

At just under the 26-foot length that requires a license to operate, road-truckable and with 8,000+ pounds of bollard pull, this little vessel has the heft and grunt to perform useful work such as dead-tug movement, barge assist, yarding, or acting as a line or boom boat. But, in spite of its obvious usefulness as a general-purpose workboat, the BRAtt is primarily designed to be a tool for training new Z-drive tug operators.

So why a dedicated training tug? The answer is simple: there is a need. Many tugs are being built worldwide, most use stern-mounted azimuthing drives and operators must be found for these new additions to tug fleets, as many tug skippers are approaching retirement.

What is the best way to train operators required for all these new ASDs? On-the-job training is the traditional method. By and large, it has worked but it may take years before an all-round competence is achieved. Training can be a hit-and-miss procedure—intermittent lessons as opportunities become available. Results are highly variable and utterly dependent on the patience and teaching abilities of whoever does the training. Hang around the wheelhouse long enough and maybe a deckhand or mate can learn to drive an ASD safely to the full potential of the tug but can he, and his employer, afford to wait that long?

Radio-controlled models hold promise as training tools, but here the operator is not part of the tug. He can only control a remote object floating in a pond and the tug moves and reacts unnaturally fast. And a pond is just a small pond. Driving a radio-controlled tug is fun and it can teach useful lessons. It’s a good starting point, but the training is not particularly realistic. Burchett knows this all too well. Although he has presented papers at international conferences advocating the use of RC models for training tug masters, now he advocates the BRAtt as the next step in the training regime.

Another training method, computer simulation, varies tremendously in cost and quality. At one end are the inexpensive PC-based computer “games” such as ShipSim™ that, in the words of one reviewer, enable an operator to do some “ship-handling with the benefit of a reset button.” Such games provide remarkable recreations of many harbors and multiple ship types, control of what is happening and different views of the action. But everything happens on a computer monitor or TV screen and control of the simulated vessel is largely a function of agile fingers and thumbs.

At the other extreme are the elaborate simulators that cost millions. Extremely realistic, some simulators have well-equipped “bridges” with 360° views and may even replicate the pitch and roll of a ship well enough to make some people seasick. Again, simulators can provide a useful introduction to ship handling and can be excellent for developing strategies for handling large ships in confined harbours, but can a simulation duplicate the thump and vibration of a tug coming alongside another vessel in the wash from its bow?

A real tug is undoubtedly the ideal training tool. Training will be utterly realistic but it will also be costly in operating and personnel costs and lost opportunities for revenue-creating work. The consequences of operating errors in full scale can also be huge. On the other hand, a BRAtt is a real tug with much of the heft and feel of a much-larger brother (dimensions are 25’ 7” length overall, 11’ 10”beam and 4’ 9” draft) and it is far cheaper to acquire (about US$750,000 with a full training suite to record operator actions and tug reactions for operator training feedback) and relatively inexpensive to operate.

Best of all, a BRAtt is thoroughly equipped and performs realistically in all ASD modes including indirect towing and escort operations. On the bow are a staple and a hydraulic hawser winch with 165 feet of braided polyester line and hydraulic braking, and there is a cruciform towing post aft. The wheelhouse has a full suite of electronics including AIS and radar and below deck is a pair of John Deere or Cummins engines providing up to a total of 400 hp to time-tested, British Columbia-built Olympic azimuthing drives under the tug’s stern. (Schottel also makes azimuthing drives in this lower-horsepower range.) And, as mentioned above, the bollard pull is a very useful 8,000+ pounds.

Can you see and try a BRAtt right now? No, it is still in the concept stage but the design is essentially finalized and production engineering is underway. Perhaps surprisingly to some, construction will be all-aluminum (as has become the custom for most workboats built in British Columbia) and BRAtts will be built by Adrenalin Marine Ltd. , which (conveniently for international customers) has plants in both Vancouver, BC and in Ferndale, WA. Burchett and Allan have active enquiries from several fleet owners who will have to find sizable numbers of trained ASD operators in the near future. International operator training facilities have expressed interest in using the BRAtt as a step between the simulator and full size tug training as they pursue this growing market for operator training.

The basic BRAtt, of course, lends itself to further design variations or to the exploration of environment-friendly power sources at lower costs than with a full-scale tug. A hybrid BRAtt using lithium-ion batteries and hydrogen-fuel cells are being actively developed. The presently available 150 kW Ballard fuel cells are an excellent fit for the BRAtt .

The time may come when many tug fleets will have to have a BRAtt at the end of the company dock, ready to do what it does best—teaching ASD operators.

Thursday, December 3, 2009

Long Beach Port: Truck Program To Meet Emission Goals Two Years Early

A Port of Long Beach program to cut port-servicing diesel truck emissions by 80 percent is set to meet its original goal two years ahead of schedule, according to port officials.

Port Executive Director Richard Steinke told the Long Beach City Council on Tuesday that a second ban on certain model year trucks– set to take effect Jan. 1, 2010– will remove an additional 8,000 older trucks from the port drayage service and push the port truck program over the 80 percent emission reduction goal.

The first ban, which took effect at the start of the truck plan on Oct. 1, 2008, barred more than 2,200 pre-1989 model year trucks in the port-servicing fleet from entering the ports. The impending Jan. 1, 2010 ban will bar all pre-1994 trucks from port service as well as all 1994-2003 models that have not been retrofit with pollution control devices.

"Beginning on New Year's Day, Jan. 1, 2010, 8,000 more dirty trucks will be banned forever from working at the port and polluting our air," Steinke told the Council.

Although Steinke's comments seemed to indicate that the 8,000 trucks will be removed directly by the ban, a port news release issued Tuesday appeared to break down the number differently, stating that "Most of the aging big-rigs are already gone, replaced by 5,600 newer, safer and cleaner trucks," with another 2,400 newer trucks already on order and merely awaiting delivery.

The port news release also stated that by Jan. 1, 2010, 90 percent of the trucks providing drayage service to the port would be 2007 model year trucks or newer.

Steinke congratulated the trucking industry for picking up the cost of this ahead-of-schedule transition "on its own dime." The port, for its part, has helped finance "several hundred" newer trucks, according to Stienke, 81 percent of which are alternative fueled vehicles.

While little public documentation exists to support the port claims, the port has completed an air inventory report that details air quality measurements that covers at least a portion of the first year of the truck program. The report is set to be released by the port, perhaps within the month, following an ongoing review of the document by the California Air Resources Board.

Port officials have also indicated that given the apparent success of meeting the truck program goals two years ahead of schedule, new and even more stringent targets for emissions reductions are under consideration and could be amended to the port's clean air plans in the near future.

A truck plan with similar air quality goals was also adopted by the neighboring Port of Los Angeles, but has been hampered by litigation from the trucking industry over several non-environmental points such as language requiring truck drivers to operate only as employees of trucking firms. Long Beach, which never included employee-only language in its plan, settled with the American Trucking Associations in October over the remaining non-environmental issues and has since been removed by a federal judge from the litigation.