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.