Thursday, July 15, 2010

"Cautiously Optimistic" NRF: Back-To-School Spending to Increase 10%

In welcome news to the shipping and supply chain industries, a survey of more than 9,000 American consumers has found that back-to-school shopping will increase this year by about 10.5 percent.

The annual survey, commissioned by the National Retail Federation and conducted in late June and early July by BIGresearch, found that families plan to spend on average a total of $606.40 on back-to-school clothes and supplies this season. This is up from $548.72 per family in 2009 and $594.24 in 2008. Total 2010 back-to-school spending for K-12 kids is estimated by the NRF to total $21.35 billion.

"We are encouraged by the fact that parents are eager to start their back to school shopping this year, but the industry still remains cautiously optimistic about recovery," said NRF President and CEO Matt Shay. "As the second half of the year gets under way, retailers will gauge their customers' spending appetites, which often serve as a bellwether for the all-important holiday season."

The back-to-school season typically produces a surge in container imports – second only to the winter holiday season – as shippers try to fill shelves in anticipation of shopper demands.

The survey of 9,009 consumers also found that the average college student's family will spend $616.13 on new apparel, furniture for dorms or apartments, school supplies and electronics. College students and their families spent only slightly more – $618.12 – in 2009. Total spending on back to college merchandise is expected to reach $33.77 billion.

The NRF estimates that combined K-12 and college spending for 2010 will reach $55.12 billion.

SoCal Ports See Massive Monthly Cargo Increases Compared to June 2009

The Southern California ports of Long Beach and Los Angeles continued to report impressive cargo traffic gains during June, marking more than six months of monthly increases that have seen traffic through the ports increase by more than a million TEUs compared to the first six months of 2009.

Total cargo volumes at Long Beach are up 19.8 percent for the January to June period and up 15 percent for the year-to-date at Los Angeles. These increases represent an additional 1,030,994 TEUs handled by the two ports during the first six months of the year compared to the same period in 2009. Between January and June, Long Beach has handled 2,794,587 TEUs and Los Angeles has handled 3,663,699 TEUs.

During June, the Port of Long Beach handled 520,100 TEUs, a 25.8 percent increase over June 2009. Port officials reported total loaded inbound box traffic for the month of June climbed 27 percent to 262,053 TEUs and total loaded outbound box traffic increased 1.8 percent to 116,112 TEUs, both compared to figures from June of last year.

Across San Pedro Bay, the Port of Los Angeles handled 526,446 TEUs in June, a 53 percent increase over traffic figures from June 2009. The port handled 371,888 loaded outbound TEUs, a 32.2 percent increase, and 154,558 loaded inbound TEUs during June, a 12.6 percent increase.

Seattle Port Approves $5M in Infrastructure Projects

Commissioners for the Port of Seattle have approved nearly $5 million in infrastructure projects, including terminal development and dredging projects.

The port's governing board also authorized port CEO Tay Yoshitani to develop a strategy for development of port facilities at Terminal 91.

The funding will be used for:
  • Replacement of four mooring dolphins on Harbor Island so that the facility can accommodate up to four 400-foot barges and generate additional port revenue;
  • Maintenance dredging for Terminals 5 and 18, ensuring adequate depth for navigation and cleaning the waterway by capping contaminated sediments;
  • Strategic plan for developing unused property around Terminal 91; and,
  • Granting permanent easements over port property to King County for reconstruction of the South Park Bridge.

Vancouver USA Port Completes Major Rail Project

The Washington state Port of Vancouver has completed a $14.6 million freight rail loop at the port, the final component of a $66 million Terminal 5 rail upgrade project and a key component of the port's larger West Vancouver Freight Access project.

The 35,000-foot rail loop and associated rail yards are located at the port’s recently developed Terminal 5 and will provide rail service for a variety of cargoes, including wind energy components. Burlington Northern Santa Fe Railway began using the new loop track at the end of June.

Port officials said the new rail loop will make the port more attractive to customers.

“The more competitive we are as a port, the more we’re able to retain existing tenants and customers, as well as attract new businesses to our region," port Executive Director Larry Paulson said.

The new rail loop allows unit trains up to 7,500 feet long to be handled within the port’s internal rail complex, reducing congestion in BNSF’s Vancouver rail yard and on BNSF’s main north/south and east/west rail lines. It is estimated that completion of the Terminal 5 Unit Train Improvement project will decrease congestion on the BNSF main lines by 25 percent and when completed, the larger $137 million WVFA project will further reduce rial congestion up to 40 percent.

Work began on the rail loop in November 2009 and was declared officially open by BNSF on June 29. Completed ahead of schedule and on budget, the rail loop marks the first major milestone under the West Vancouver Freight Access and Industrial Track Agreement, an agreement reached between the port and BNSF in 2008 that provides the overall blueprint and timeline for the WVFA project. The entire WVFA project is expected to be completed some time in 2017.

Tuesday, July 13, 2010

ILWU Clerical Workers Return to Work at SoCal Ports, Contract Talks Continue

Striking union clerical workers at the ports of Long Beach and Los Angeles returned to work Monday as stalled contract negotiation resumed between union officials and the group representing 14 shipping and terminal employers.

Officials representing about 900 members of the Office Clerical Unit of the International Longshore and Warehouse Union Local 63 gave no immediate reason for the end of pickets at four terminals in the Southern California port complex.

The OCU members, who handle paperwork and office support work for shipping and terminal facilities in the Southern California ports, walked off the job when their three-year contract expired July 1.

Negotiations between the OCU and the employers’ Harbor Employers Association had stalled as of Friday, with both sides reporting little progress during the strike.

A major item sought by OCU officials is new contract language preventing the outsourcing of OCU jobs and job eliminations through automation.

Employers are seeking flexibility in staffing during down times that they contend leave OCU members with little to do 20 percent of the time while still collecting full-time wages under the current contract.

The return to work by the OCU also comes just two days after union officials expanded picket lines at the ports to include a China Ocean Shipping Company terminal at the Port of Long Beach. OCU pickets had already been in place at the Hanjin terminal in Long Beach and the Port of Los Angeles’ Evergreen and Yang Ming terminals.

ILWU dockworkers, who operate under a separate labor agreement with the Pacific Maritime Association, have been blocked by an arbitrator from honoring the OCU strike.

Last week, arbitrator David Miller ruled for a second time since July 1 that the more than 10,000 Southern California ILWU dockers could not honor the OCU picket lines because the OCU strike was “non-bonafide” due to violations of good faith bargaining rules during negotiations.

In his first ruling on July 1, Miller ruled that the OCU had failed to abide by the definition of good faith bargaining in the current contract because it’s representatives were using “disingenuous actions to exert economic pressure upon the above named terminals to obtain unreasonable monetary concessions.”
During the 11 days of picketing, both ports reported little impact by the OCU strike on terminal operations.

San Diego Port Fires Lobbyist Over E-mails

The Unified Port of San Diego has fired port-contracted lobbyist Susan McCabe for penning e-mails described by the head of the port commission as being in “poor taste.”

In the e-mails, obtained by an anti-development activist group and published in the Los Angeles Times, McCabe described her efforts to convince California Coastal Commission board member Patrick Kruer to vote in favor of a $228 million redevelopment project along the downtown San Diego waterfront.

McCabe discusses “spoon feeding” information to Kruer as well as encouraging port officials to put pressure on Kruer through elected officials in Sacramento. Following the CCC rejection of the waterfront project, McCabe in another e-mail referred to the CCC board members who voted no on the project as “the toxic five.” Kruer recused himself from the CCC vote on the San Diego project.

In a letter of apology sent Friday to CCC board members, San Diego port commission chairman Robert Valderrama wrote that he was appalled by McCabe’s e-mails. Valderrama assured the CCC that McCabe’s replacement would treat the board members “with the respect and the decorum that all of you deserve.”

Beacon: Calif. Export/Import Up in May, Long Term Growth Questioned

California merchandise exports continued a seven-month streak of increases by climbing 25.7 percent in May compared to the same period in 2009, but still fell well short of export levels recorded in May 2008, according to an analysis by Beacon Economics of international trade data released July 13 by the United States Commerce Department.

State exporters shipped $11.9 billion in goods abroad during May, far surpassing the $9.5 billion in exports shipped to foreign markets in May 2009.

“While we should definitely celebrate a $2.4 billion increase in exports over last May, we still have a ways to go before reaching the levels of trade seen before the onset of the global economic and financial crisis,” said Jock O’Connell, International Trade Adviser for Beacon Economics.

O’Connell added that in inflation-adjusted terms, the state’s export trade during May was 7.3 percent below the value of exports reported in May 2008.

Exports of California manufactured products in May were up 25.5 from last May, while shipments of agricultural goods and other non-manufactured products increased 16.5 percent. O’Connell said that re-exports of previously imported items climbed 32.2 percent.

The increases in exports were seen at most of California’s trade gateways, with the Southern California port complex of Long Beach and Los Angeles reporting a 9.4 percent increase in loaded outbound containers over the year-ago period. Loaded outbound box traffic through the Port of Oakland was also up in May, with port officials reporting a 4.5 percent increase over May 2009.

The Commerce Department also reported that California’s merchandise import trade during May increased 29.9 percent over May 2009, climbing to a total reported value of $26.8 billion for the month.

O’Connell warned that despite the increased numbers, the long term outlook for sustained strong growth “is less encouraging now than it had been earlier in the year.”

He pointed to concerns that decisions coming out of the G-20 summit in Toronto seeking to shrink public sector spending will moderate foreign demand for California products through the end of the year.

“The deficit hawks have been gaining the upper-hand in charting fiscal policy in almost every major world economy,” O’Connell said. “As a result, no one is forecasting robust economic growth. Instead, there is a general sense that the tide is going out as we move into a period of slackening demand with the timidity of the private sector now being matched by the austerity of governments worldwide.”

Foss and Cruz Marine Introduce the King River Class: Built for the Extreme Challenges of the Arctic

Alaska-based Cruz Marine and Seattle-based Foss Maritime have teamed up to build the Dana Cruz, the first of a series of shallow-draft, ice-strengthened tugboats, known as the King River class, for service in Alaska.

The 92-foot by 36-foot boat will be operated by Foss in support of its operations in remote, shallow draft environments. At press time she’s headed north to support the summer ice-free construction season in Western Alaska and the North Slope.

Founded in 1979, by Dave and Dana Cruz, Cruz Construction, Inc. specializes in heavy civil construction projects in Alaska’s remote and difficult terrain.

The firm is involved in construction, remote logistics, and tundra transport services for major oil and gas companies on Alaska’s North Slope, as well as offering housing camps and support facilities at remote exploration sites.

In 2009 the company formed Cruz Marine LLC , to serve the Beaufort and Chukchi Seas off Alaska’s north coast and Western Alaska. Currently Cruz Marine’s floating equipment consists of a single tug and a barge. The 50-foot by 25-foot Grayling is a shallow-draft boat tailor made to operate in the rivers of north western Alaska. With a 3.5-foot draft, the boat can push the company’s 150-foot by 50-foot by 8 foot draft ramp deck barge Innnoko wherever it’s needed.

As demand on the marine side of the business increased, the company started considering a more powerful boat.

“We were looking for a naval architect with extensive shallow river experience,” says Kevin Weiss, Director of Marine Operations at Cruz Marine. “We found AG McIlwain, who had designed some really good shallow-draft boats, and we liked his designs.”

At the same time, Foss Maritime was looking for a shallow draft vessel designed specifically for remote, extreme environments like the north slope of Alaska, the Canadian Arctic and the Russian far east.

“We know what we’re up against when we go North,” says Gary Faber, President and COO of Foss Maritime. “Bad weather and ice can limit the shipping season to fewer than 100 days – There’s no margin for error.”

Foss and Cruz struck a deal, and together they developed the Dana Cruz. Fred Wahl marine, in Reedsport Oregon was chosen to build the boat. Fred Wahl is known for sturdy fishing and workboats and has a reputation for high quality.

“Fred Wahl does really good work,” says Weis. “They never complained about change orders- they’d draw the changes in chalk right on the floor, and they’d be done that day.”

The new boat is on bareboat charter to Foss for three years, after which Cruz Marine will employ the boat in support of its Alaska construction projects.

“The Dana Cruz is our answer to the shallow-draft ports, the hazardous weather and the ice you encounter in spades working above the Arctic Circle,” says Faber.

In the meantime, Fred Wahl has started cutting steel and aluminum for the next boat in the series, Millie Cruz, named after the mother of company President Dave Cruz. The company also has a 200-foot ramp barge in the works.

Starting from a partially developed design package provided by Cruz Marine, Seattle’s Elliott Bay Design Group (EBDG) redesigned the hull structure to make the overall design more construction friendly and less expensive to build. In addition, the allowable deck load has been increased by 30 percent, the bow ramp design was redeveloped to accommodate a crawler crane, a stern anchor system has been added, with the hydraulic machinery replaced with electric machinery powered by an on-board generator. EBDG submitted the design package to Cruz Marine at key points during the development to ensure that their needs and preferences were addressed.

Cruz Marine will have the barge built to work with the Millie Cruz, which is slated for delivery in April of 2011.

The boat features a working draft of between three feet nine inches and five feet nine inches, allowing her to travel upriver to remote construction sites. The hull is designed and built to withstand contact with ice, while three low-emission Caterpillar EPA Tier 2 engines drive conventionally shafted propellers.

Convention stops there, however. Dana Cruz was designed to operate safely in extreme and unforgiving environments, and the boat boasts some unique features to help in that regard.

Operating in Alaska’s rivers presents “crazy challenges,” says Weiss. “Wheels are always getting bent or damaged.” Snags of big spruce logs below the surface and the rapidly changing water levels compete to damage a boat’s propellers. “When you’re a thousand miles from the closest shipyard, you have to be able to address problems on-site.” To address this, the new boat is fitted with “plugs” or “cabinets” allowing any of the triple screws to be changed “in the field”.

“It’s pretty simple really,” says Kevin Weiss. “The crew can ballast the boat forward and to the side, which exposes the outer wheels, and use the deck crane to pull the cover off the plug and change the wheel.”

Keeping in mind the boat will usually be pushing a 150- to 200-foot barge, Weiss says the bow is fitted with independent tackle winches that allow the operator to “jack-knife” around a bend in the river.

Other operational features include the centrifuges, supplied by Hutchison Hayes, that clean the potable water as well as the fuel on the boat. “We can draw water out of the river, send it through the centrifuge, run it through an osmosis filter and have clean drinking water,” says Weiss. The fuel centrifuge removes impurities from the main fuel storage tanks and sends the cleaned fuel to the 2,000-gallon day tank saving maintenance time and money on expensive fuel filters.

The boat’s closed system keel coolers offer the security to be able to operate in extremely shallow water. The fuel storage tanks are double-bottomed, offering an additional layer of safety and environmental protection. “The boat can sit on the bottom if need be,” says Weiss.

Big On Top
With less than 4 feet of laden draft, Dana Cruz doesn’t make much of a hole in the water, but the boat is big above the waterline, and offers accommodations for 10 crew.

“We wanted the tug to be as comfortable as possible for the crew,” says Weiss. “Western Alaska’s waters can be very rough and violent, especially in a small 50- to 70-foot tug. In order to accomplish this, we went the extra mile in construction and built it to take a pounding.”

Weiss says Dana Cruz is the only tug of its size to be issued an ABS Load Line for Oceans.

“I challenge you to find another tug in Alaska that has our shallow draft and an ABS Load Line,” he says. “Three-feet nine inches is hard to beat and meet ABS requirements for strength and durability. There are some landing craft in Alaska that have Load Lines, but they are not Tugs.”

Weiss says the Dana Cruz with her light draft would be very “Stiff” in heavy seas without some help. “To address this, we had ballast tanks built in to draft the vessel down to nearly 6 feet. This will add much comfort and ease and limber her up a bit.”

Crew quarters and accommodations on many Alaska tugs are very small and most only have one head. “We have three heads onboard so there will be no waiting for showers or bathroom breaks.”

Weiss says there are enough beds on board to provide adequate room for a larger crew, if needed, and the occasional guest or two. All staterooms have natural light as well, so if the power goes out, as long as it is daylight outside, a crew member will not be in the dark scrambling for a flashlight. This is the same for the engineroom.

“Not everyone agrees with this option,” says Weiss, “but I have lived on tugs long enough to know that bad things do happen and every second counts when you are scrambling to address an emergency or loss of power when you can see,” he says. “Batteries don’t always work in a flashlight when you want them to.”

Another benefit to the boat’s size is the copious amount of working area on deck.

“The smaller tugs have very limited space on the bow working area and the sides,” says Weiss. “We have very large open areas to walk around the house and not worry about getting lines snagged or fouled up.” Cruz Marine also specified a rubberized deck coating to reduce noise and add comfort when standing or walking. “You can drop a threaded fitting on deck and not worry about damaging the threads, says Weiss. “You can drop a wrench and you won’t wake up a sleeping crewmember.”

The extra deck space also provides room for a skiff large enough to handle real world situations in rough conditions. In this case that means a 12-man Zodiac Pro mounted on the Texas Deck and easily deployed with the Palfinger 12000M crane.

“Many of the skiffs you see on tugs aren’t rigid inflatables and they get pretty beat up working alongside a steel hulled tug or barge, Weiss says.

Other features of the new boat include holding tanks for sewage and oily water, fuel tanks separated from the hull with voids for an extra margin of safety, electric deck and towing winches to eliminate the possibility of a release of lubricants to the environment, hospital grade engine silencers, an aqua-drive anti-vibration system and Infrared navigation.

“It’s a pleasure working with Foss on this project,” says Weiss. “Our two companies bring decades of local Alaska knowledge to the table. We appreciate our Foss partnership because we know the value Foss places on innovation. Just look at the challenges Foss overcame 200 miles above the Arctic Circle at the Red Dog Mine. The Dana Cruz is designed with those same challenges in mind.”