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Thursday, May 20, 2010

Oakland Port: Third Straight Month of TEU Gains

The California Bay Area Port of Oakland saw a third month of total container volume increases during April, with outbound and inbound loaded containers also climbing.

Port officials reported handling 186,317 TEUs during April, a 10.3 percent climb compared to the same year-ago period. It was the third straight month of double-digit percentage increases for total volume at the port.

Total loaded inbound box volume for April also increased 14.1 percent, ending April with 62,734 TEUs moved – again the third straight month of total loaded inbound double-digit increases.

Port officials have seen plus-minus fluctuations in loaded outbound box volumes since the start of the year and April was no different. The port handled 80,620 loaded outbound TEUs for the month, a 0.5 percent increase over April of 2009.

Overall, total box volume at the port remains up 9.1 percent for the year, compared to the first four months of 2009.

Steel Firm to Locate at Vancouver USA Port

The Washington state Port of Vancouver announced Wednesday that it plans to sell 22 acres of port property to Farwest Steel Corporation, a deal that could see the development of a major steel processing and distribution facility on the site and bring more than 225 industrial jobs to the area.

Under the terms of the deal, the Eugene, Oregon-based Farwest would pay the port just under $5.1 million for the parcel and spend between $20 million and $30 million to develop the facility. Farwest plans to take advantage of the port's rail access and the new facility, when completed, is expected to receive 200 to 300 rail cars a year.

Washington Gov. Christine Gregoire congratulated the port commission on attracting what she described as a new significant employer in Southwest Washington.

“The residents of Clark County have been looking for hopeful signs that the economy is improving,” the Governor said. “Farwest brings family-wage jobs to Clark County, where the unemployment rate is highest in the state, and these jobs are needed most.”

The 54-year-old Farwest, which claims to be one of the leading distributors, processors and fabricators of steel products in the Northwest, currently operates facilities in California, Idaho, Utah and Washington. Officials from the firm said they hope to consolidate some of Farwest's existing operations in Vancouver.

“We have been looking long and hard throughout the region for a location that best suits our ability to grow and efficiently deliver quality products to our customers,” said Patrick Eagen, president and CEO of Farwest. “The port had industrial land ready to build, with the right river, road and rail connections – this is the best choice for us.”

According to Farwest officials, approximately 100 jobs will be relocated to the port, with future plans to add an additional 125. Farwest officials project that the average wage of workers at the Vancouver facility will be $40,000 a year.

The port's governing board plans to declare the 22-acre parcel as surplus – a move that will require a public hearing prior to any sale. Port officials said the port commission is considering strict terms for the sale, including a minimum job requirement at the new facility and a repurchase clause in the event Farwest defaults on delivering projected jobs.

The port commission has set Tuesday, June 8 at 9:30 a.m. for the date of the public meeting where two items will be considered: the move to surplus the port parcel and the sale agreement to Farwest.

Seattle Box Volumes Up

The Port of Seattle continues to lead West Coast ports’ return to pre-crash levels, with April seeing one of the highest monthly box totals at the port since 2008. At the same time, the nearby Port of Tacoma continued its downward slide in monthly volumes that has continued unabated since July 2008.

Seattle port officials report that more than 166,869 TEUs were handled at Seattle facilities in April, an impressive 57 percent increase over the same period last year and higher than any single month at the port in the more than 18 months.

Seattle's total loaded inbound box volume also spiked dramatically in April, up 70 percent to 64,650 TEUs. Port officials reported that total loaded outbound volume also jumped upward 55.6 percent compared to the year-ago period, with 44,370 TEUs handled.

Total box volume at Seattle remains up 40.5 percent for the calendar year, compared to the same January to April period in 2009.

As an almost persistent mirror to the successes at Seattle, the Port of Tacoma in April again registered a drop in total monthly container volume – the 20th straight month of total box volume decline at the port.

Tacoma officials reported that a total of 107,370 TEUs were moved during April, a 15.5 percent drop over April of 2009. Total loaded inbound box volume also fell at Tacoma during April to 30,517 TEUs, a 15.4 percent decline from the year-ago period and total loaded outbound volume slipped 24.8 percent to end the month at 25,228 TEUs.

For the calendar year, Tacoma is down 14.9 percent compared to the January to April period in 2009.

Canadian West Coast Ports Continue Box Traffic Increases

Further strengthening the arguments that a recovery is under way in trans-Pacific trade, the two major Canadian West Coast container ports both continued to report increased monthly traffic volumes in April.

Port Metro Vancouver in British Columbia handled a total of 724,434 TEUs in April, an 8 percent increase over April 2009. Port officials also reported that total loaded inbound box volume in April climbed 17 percent compared to April 2009, with 359,408 TEUs moved. The port also handled a total of 260,121 loaded outbound TEUs in April, a 3 percent increase over the year-ago period.

Port Metro Vancouver includes the ports of Vancouver B.C., Frasier River, and North Frasier River.

To the North, the Port of Prince Rupert reported total box volume for April of 26,611 TEUs, a 50.7 percent increase over April 2009.

Prince Rupert officials also reported total loaded inbound box volume of 15,998 TEUs for April, a 48.8 percent increase over the same period last year, and total loaded outbound box volume of 10,614 TEUs, a 53.7 percent increase over April 2009.

Tuesday, May 18, 2010

Treasury Sec. Geithner to Visit Tacoma Port, Boeing Plant

United States Treasury Secretary Timothy Geithner will visit the Puget Sound-area Tuesday in an effort to gauge first-hand the roll Washington state plays in the national economy.

Geithner will begin with a tour of the Renton Boeing Plant where he is set to meet with factory management and workers, as well as representatives from local small businesses that are part of the Boeing supply chain.

The Secretary also plans to join Washington State Governor Christine Gregoire for a tour of the Port of Tacoma, where he will hold a press conference talking about the importance of exports to the US economic growth. The Obama Administration has made it a goal to double US exports in the next five years.

While in town, Geithner also plans to meet privately with Washington state community bankers and attend the Microsoft CEO summit.

APL Awarded New Oakland Port Award for 2009 Volume

Singapore-based ocean carrier APL has been awarded the Port of Oakland's inaugural award for a carrier moving the most cargo through the port in a single year.

Port Executive Director Omar Benjamin presented the “Highest Volume Carrier 2009” award to APL officials during a May 12 ceremony.

Benjamin cited APL's tremendous volume growth at the port during 2009, during which the carrier handled 244,249 TEUs – a 30 percent increase over the carrier's 2008 volume through Oakland. APL's total volume represented just under 12 percent of the port's total container volume for 2009.

Benjamin praised APL as an important port partner and said that the carrier's numbers were even more remarkable given the severe economic conditions facing the shipping industry last year.

APL, which calls at five West Coast ports including Los Angeles, Oakland, Seattle, Tacoma, and Vancouver, B.C., operates out of an 80-acre terminal at Oakland.

ATA Lawsuit Against LA Port Truck Plan in Hands of Judge

The more-than-two-year court battle between the Port of Los Angeles and the American Trucking Associations over details of a port-designed drayage fleet modernization program is now in the hands of a federal judge.

The port and the ATA filed final arguments in the court case Friday following nearly two weeks of testimony in early May before Superior Court Judge Christina Snyder. A final ruling on the case is expected within the next several weeks.

While the port truck plan began in 2007 as an effort to modernize the more than 19,000-vehicle-strong drayage fleet serving both the Long Beach and Los Angeles ports, the ATA has argued that the Los Angeles plan includes components that violate federal interstate commerce laws. While not opposed to the clean-air portions of the truck plan, the ATA sued in late 2007 to stop implementation of the non-environmental aspects of the plan, including a component that would force trucking firms servicing the ports to hire only per-hour employee drivers and bar per-load independent owner-operators which make up more than 80 percent of the local drayage drivers.

The two ports implemented their truck program on October 1, 2008, albeit without the non-environmental components being litigated by the ATA.

At the heart of the ATA lawsuit, which originally included the Port of Long Beach, is whether the two local port authorities have the power to set regulations that supersede federal interstate commerce laws. Long Beach port officials, which never included the employee-only mandate in their version of the truck plan, eventually modified their plan to remove most of the non-environmental components and reached a court-approved settlement with the ATA to be removed from the lawsuit.

The ATA, which represents more than 37,000 trucking firms nationwide, eventually won a court injunction against the Los Angeles truck program that blocked most of the non-environmental components from being implemented.

Since the implementation of the truck program, which used a progressive ban on older trucks which removed the majority of the gross-polluters from the local drayage fleet, both ports claim that the environmental goals of the program – a nearly 80 percent drop in diesel truck emissions – are on track to be met well ahead of schedule.

Los Angeles official want Judge Snyder to allow full implementation of its truck plan, including the non-environmental components, while the ATA is seeking to have the non-environmental components permanently enjoined.

New Member for Vancouver BC Port Authority

The Canadian government today announced the appointment of Eugene Kwan to a three-year term on the 11-member board of directors of the government port authority that oversees the Canadian ports of Vancouver, Frasier River and North Frasier River.

Kwan, whose appointment to the Vancouver Fraser Port Authority was announced by Canadian Transport Minister John Baird, currently serves as the president and chief executive officer of Agincourt Capital Corporation and senior counsel to Stikeman Elliott LLP, an international business law firm based in Canada. Kwan previously served as a senior executive with Hutchison Whampoa Group. Prior to joining Hutchison, he served as a partner and managing director of Stikeman Elliott where he was in charge of the firm's Hong Kong office.

Kwan, who holds a law degree from the University of British Columbia, is also president of the Fraser Valley Wineries Association and a director of the VGH & UBC Hospital Foundation.

The Vancouver Fraser Port Authority, one of seventeen Canadian federal government entities set up to run the county's ports, markets itself as Port Metro Vancouver.

Federal Court Strikes Down Massachusetts Tanker Laws

May 2010, by Craig H. Allen

Craig H. AllenOn March 31, 2010, the US District Court for the District of Massachusetts struck down portions of the Massachusetts Oil Spill Prevention Act (MOSPA), which were enacted by the state legislature following a 2003 oil spill from the tank barge Bouchard No. 120 into Buzzards Bay. The MOSPA provisions at issue sought to prescribe compulsory escort tug requirements for certain tank vessels transiting Buzzards Bay and manning requirements for tugs towing such vessels. The federal court held that the compulsory state provisions were preempted by Coast Guard regulations promulgated after the spill.

The court’s decision in United States v. Commonwealth of Massachusetts spans some 60 pages, including two lengthy reports and recommendations by a magistrate judge assigned to the case. The case arose from a preemption challenge to the Massachusetts law brought in 2005 by the United States government, which was later joined by the American Waterways Operators (AWO). In the case’s first appearance, the district court ruled against Massachusetts; however, the district court decision was vacated on appeal to the U.S. Court of Appeals for the First Circuit in 2007. The most recent decision came down in response to the appeals court order remanding the case to the district court for further consideration.

In the 2010 decision, the district judge found that on August 30, 2007, the Coast Guard exercised its authority under the 1972 Ports and Waterways Safety Act to promulgate regulations (now codified in 33 C.F.R. § 165.100) that, in the court’s characterization, left “no ambiguity regarding the intention to preempt MOSPA.” In so ruling, the district judge adopted the magistrate judge’s conclusion that “federal regulations have no less preemptive effect than federal statutes, and agency regulations may preempt state regulation expressly or by implication.” Applying the Supremacy Clause of the US Constitution, the court held that the Coast Guard’s regulations were within the agency’s congressionally delegated authority and that they expressly preempted the conflicting MOSPA requirements. The magistrate judge’s opinion went even further, finding that the MOSPA provisions were also invalid because they created an impermissible conflict between federal and state law.

The court’s ruling did not disturb the state’s 24-hour notification provision for single- and double-hulled tank vessels carrying 6,000 barrels or more of oil intending to operate in Buzzards Bay. Although notification is technically voluntary, a barge owner who fails to provide the advance notice is subject to three times the fines that would otherwise apply in the event of an oil spill. A similar penalty applies to owners of double-hulled tankers who do not take a state pilot while transiting those waters (Coast Guard regulations only require pilots on single-hulled tankers). In addition, shortly before the district court issued its decision on the preemption challenge, Massachusetts Governor Deval Patrick announced that the Commonwealth was implementing a “state-sponsored” tug escort service for double-hull tank vessels operating in Buzzards Bay and the Cape Cod Canal. Such double-hull barges are not required to have escorts under the Coast Guard regulations. The state-provided escort tug – provided at no direct cost to the escorted vessel – will be funded by a five-cent tax on every barrel of oil delivered to the state. These reporting, pilotage and escort measures are the subject to a new challenge brought by the AWO on April 7, 2010, on the grounds that they constitute an impermissible indirect regulation of vessel manning and operation.

Although the court ruled in favor of the Coast Guard on the preemption question and enjoined Massachusetts from enforcing the MOSPA provisions, the district judge criticized the Coast Guard for its failure to prepare an environmental impact statement (EIS) or environmental assessment (EA) before promulgating the new rules, or to provide a “meaningful explanation” for declining to do so. In the end, however, the court determined that, even if the Coast Guard erred in its decision not to prepare an EIS or EA, the omission was ultimately harmless because the required impact analysis was conducted as part of the agency’s rulemaking process.

The Massachusetts district court decision did not break new ground on maritime preemption law. Indeed, it closely followed two earlier US Supreme Court decisions striking down Washington state tanker laws (Ray v. ARCO, decided in 1978, and United States v. Locke, a unanimous decision in 2000). What may be surprising for some is the Obama administration’s decision to continue to assert regulatory preemption in a case first filed against a state more than five years ago.

A May 20, 2009 “memorandum” by President Obama to the heads of executive departments and agencies imposed new restrictions on federal agencies regarding any decision to include preemption provisions in their regulations. Although the president’s memorandum was issued nearly two years after the Coast Guard regulations at issue in the Massachusetts case, the president had directed all agencies to review any preemption statements they issued before the memorandum was released, to ensure those statements comply with the new policy. At the same time, the Obama administration’s Ocean Policy Task Force has come out in favor of a “spatial” planning approach for ocean and coastal waters that rejects what the Task Force calls “top-down” planning and is likely to enhance the state’s maritime regulatory role. Nevertheless, those who might have hoped that federal agency preemption would no longer be an issue for state lawmakers and maritime regulatory agencies might do well to study this decision.

Craig H. Allen is the Judson Falknor Professor of Law and of Marine Affairs at the University of Washington. He is a fellow in the Royal Institute of Navigation and the Nautical Institute and an academic member of the US Maritime Law Association.