October 2009 Fidley Watch: From the Publisher

Engagement 

Foss Maritime Company Vice President of Harbor Services Dave Hill opened our inaugural GreenPacific Conference by extolling all attendees to act as individuals, privately and publicly, to ensure that their companies act in an environmentally responsible manner. “Cargo will continue to move in and out of West Coast ports”, said Hill. “As those responsible for the physical movement of that cargo, it’s up to each one of us to determine how most responsibly to move it.”

From Hill’s opening comments, collaborative engagement developed as the theme for GreenPacific 2009, produced by Pacific Maritime Magazine in partnership with Foss Maritime Company. We need to work together as an industry to move that cargo responsibly.

State Lands Commission Marine Facilities Chief Gary Gregory first articulated the concept early during the first session: “Engage industry at the outset and they will solve the problem.”

Throughout the day, 100 conference attendees from industry, port agencies and engineering firms discussed the importance of engaging the entire spectrum of stakeholder groups when developing environmental policy, legislation …and regulatory application.

Western Petroleum Association’s Bob Poole and Herbert Engineering Chairman Keith Michel both commented on the misperception among many that the maritime industry is largely unregulated. “We’re among the most regulated industries in the nation,” said Michel, before embarking on a dizzying summary of the regulations affecting just the vessel owner.

Richard Cameron from the Port of Long Beach and Wayne Grotheer from the Port of Seattle gave an overview of their respective ports’ philosophy on responsible environmental stewardship, and discussed how they engage with regulators on behalf of industry when and where they can. The uniquely sensitive position in which public ports find themselves during regulatory review processes was not lost on the industry members in attendance. Environmental special interest groups are particularly adept at forcing public agencies to hear public comment ad nauseam, delaying and obfuscating what should be a much simpler and more straightforward attempt at balancing economic, community and environmental concerns fairly and equitably.

BNSF’s LaDonna DiCamillo and Aston+Bird’s Sharon Rubalcava described in detail the environmental review process and the difficulty of advancing responsible development in the current regulatory environment. The California State Lands Commission seemed the most collaborative of the regulatory agencies involved in the Environmental Impact Report (EIR) process. Ironically, the California State Lands Commission was also the only regulatory agency in attendance at GreenPacific 2009.

The conference was universally appreciated by those in attendance, but exit surveys revealed a common theme: Where were the regulators and environmental groups? Though we made a concerted effort to engage regulators and the environmental community our offers were declined. It was impressive that almost one hundred members of the maritime industry’s private sector responded actively to our GreenPacific initiative. It was disappointing that the regulatory community did not. We’ll continue our efforts to engage them in the conversation.

Peter Philips, Publisher

LA Council Agrees With Container Tax Delay

The Los Angeles City Council voted Wednesday to delay implementation of a per-container tax that was supposed to generate up to $1.4 billion for bridge, rail and road infrastructure within the city's port area and within the neighboring Port of Long Beach.

The vote confirms an identical decision by the Los Angeles Board of  Harbor Commissioners in July that postponed any collection of the tax until July 1, 2010.

Due to the structure of the Los Angeles city government, certain decisions made by the Harbor Commission must be affirmed by the City Council.

Officials at the adjacent Port of Long Beach decided in April to postpone any collection of the tax until at least July 1, 2010.

The two ports jointly approved the collection of the container tax in January 2008, with an original implementation date of Jan. 1, 2009. The tax, which would have varied between $6-per-TEU and $20-per-TEU and would have been imposed on all loaded inbound and outbound boxes, was supposed to be collected through 2015.

SoCal Ports' Legal Fees Mount in Truck Plan Defense

The Southern California ports of Long Beach and Los Angeles have spent nearly $10 million to defend legal action since 2007 against their jointly created Clean Truck Program.

The Port of Long Beach has paid out $2 million in legal fees to defend the CTP, and the two adjacent ports have split another $7.5 million in additional legal expenses.

The legal fees have arisen from two lawsuits, one filed by the American Trucking Associations against the ports' truck program in late 2008, and another brought against the ports by the Federal Maritime Commission. The ATA suit has been particularly lengthy and complicated, with three rounds of appearances in both Superior Court and the Ninth Circuit Court of Appeals over an injunction request against the program by the trucking group and other plaintiffs. The ATA eventually prevailed in most aspects of its case for an injunction against certain parts of the truck program. The ATA’s full suit against the ports begins in December. Earlier this year, and following the ATA prevailing at the Appeals Court level, the FMC dropped its case against the ports.

The truck program, which originally would have seen the ports pay to replace nearly 17,000 drayage trucks servicing the ports with cleaner burning models, was created in an effort to slash port-generated diesel emissions. The plan eventually evolved into a concessionaire and truck ban program paid for by a container tax, state and federal funds, and investment from the truckers themselves.

As implemented a year ago, the program requires truck operators to obtain port access licenses. It also banned all pre-1989 trucks from the ports and on Jan. 1, 2010 will expand the ban to include all trucks that do not meet 2004 model year engine criteria and newer emission standards or that are not equipped with verified emission control devices.

Longview Port Approves Repurchase of 35-Acre Parcel

The three-member governing board for the Port of Longview voted to repurchase 35 acres of port-area property for $3.15 million, albeit at a nearly 50 percent mark-up over what it sold the property for three years ago.

The port originally purchased the property for $50,000 an acre in 1996 as part of a larger 120-acre purchase from International Paper.

In 2006 Simpson Timber Co. bought the 35-acres from the port for $62,000 an acre with the intention of building a sawmill on the site. The lumber firm eventually decided not to build the sawmill and instead purchased an existing mill nearby in 2007. The port's repurchase price approved Tuesday figures out to $90,000 an acre, giving Simpson a $1 million profit on the property.

Port economic development officials said they are in talks to bring a new industrial tenant to the repurchased site.

Since 2007 the site had become embroiled in legal action after Simpson sold the property to a third party. A Superior Court Judge eventually rescinded the sale and ordered the property transferred back to Simpson this April, making way for the resale to the port.

Vancouver USA Port Approves 2010 Budget

The governing board of the Washington state Port of Vancouver on Tuesday approved a $56.2 million budget for 2010, shaving about $3 million of the previous years budget of $59.6 million.

Port officials cited the need to be conservative with the budget despite predictions of a global economic turnaround as early as next year by some experts. The Vancouver port, which deals almost exclusively with bulk and break-bulk commodities such as minerals, grains and automobiles, has been hit particularly hard by the global cargo slump.

While the 2010 budget is a sharp decline from the port's peak budget of $127.4 million in 2008, port officials said this merely reflected a drawing down of capital projects over the past several years.

The new budget still allocated about $23 million to continue work on the Terminal 5 rail loop, part of the $137 million West Vancouver Freight Access project designed to relieve freight train congestion through the port and the city.

Grays Harbor Port Approves Preliminary 2010 Budget

Officials for the Port of Grays Harbor in Washington State released a 2010 preliminary budget Tuesday, which predicts a 50 percent increase in vessel calls over the next year.

Based on port expectations of 63 vessel calls next year and an additional 30 barges, the new budget predicts total revenues climbing to $16.6 million versus operating, capital improvement and other expenses of $16.5 million.

In releasing the new budget, port officials cited new partnerships with Ag Processing Inc., Pasha Group shipments, and Westway Terminals liquid storage as foundational to the port's economic situation next year.

The new budget retains about $3.9 million in capital improvement projects, including the development of a research and development facility, a marine cargo yard rail expansion, and additional security improvements.

The port commissioners must submit a final budget to the county by Dec. 7.

Seattle Port to Close Overseas Offices

The Port of Seattle has announced that it will close its international office in Japan at the end of the month and effectively close other offices in China, Japan, Hong Kong, Singapore and South Korea.

American ports for decades have maintained overseas offices to lure business and lobby for routes, but Seattle port officials said that routing and shipping decisions are now being made in the shipping lines' American offices or by beneficial cargo owners located in the United States.

While the State of Washington is making similar moves in regard to foreign trade offices, the Port of Tacoma said it has no plans to cut overseas offices or contracts.

APL Takes Most Efficient Terminal Title in SoCal

A study of intermodal motor carrier has found that APL's Global Gateway South-Eagle Marine Services terminal at the Port of Los Angeles has the quickest truck turn times of 14 marine terminals surveyed at the adjacent ports of Long Beach and Los Angeles.

Conducted during a one-week period in August by the Harbor Truckers for a Sustainable Future--an advocacy and strategy coalition of IMCs– the study incorporated daily logs from drivers and global positioning satellite information from their trucks to build a picture of accurate turn-times at the terminals.

The APL terminal was named "Most Efficient Marine Terminal" by the study, finding that average turn times were about 50 minutes (using only the outside gate/queue, inside gate, and out gate total minutes). The terminal ranked first in the paper survey, and its rankings varied between number one and number two in the surveys using the GPS data.

“When truckers come through our gate, they are our customers and we’ve got to treat them well and get them back on the road quickly," said Nathaniel Seeds, Vice President of Operations in the Americas for APL, “so awards such as this one are a great source of satisfaction for APL.”

The study also found that the turn times on night gates at all terminals were approximately thirty minutes longer than the day shift. Trouble window transactions averaged approximately 30-plus minutes, per driver, to resolve. Turn times for both shifts throughout the 15 terminals ranged from less than one hour to several hours.

Representatives of the HTFSF group plan to meet with terminals directly to discuss the turn times and seeks ways to improve efficiency.

Former Mayor Joins San Diego Port Board

Former Chula Vista mayor Steve Padilla was sworn in last week as the newest member of the Port of San Diego's Board of Port Commissioners.

Padilla, mayor of Chula Vista from 2002 to 2006, replaces former port commissioner Mike Najera, who resigned in May. During his tenure as mayor, Chula Vista gained nationwide attention as the largest US city with an openly-elected gay mayor.

Prior to his term as mayor, Padilla was a two-term member of the Chula Vista City Council and the first Latino to win a seat at the city dais.

In addition to working with various environmental and social groups, Padilla has also served as a member of the California Coastal Commission.

A former police officer and detective, Padilla is now president of the public policy and land use consultancy firm the Aquarius Group, which he started in 2007.

The San Diego Port's seven-member commission sets policy and manages tenants along San Diego Bay's tidelands.