Thursday, August 12, 2010

Panama Canal and Gulf State Port Authority Sign Partnership

The Panama Canal Authority has signed a first-ever partnership agreement with a Gulf State port authority as part of an effort to attract transpacific cargo to an all-water Asia-to-Gulf/East Coast route through an expanded canal which is set for completion in 2014.

Panama Canal Authority (PCA) Administrator/CEO Alberto Alemán Zubieta and Mississippi State Port Authority at Gulfport (MSPA) Executive Director/CEO Donald Allee announced the partnership by signing a five-year memorandum of understanding that will allow for joint marketing ventures, information sharing and technological exchange.

“Today’s MOU signing represents a great opportunity for Panama and Mississippi to build upon our existing offerings and trade relationship through a mutually beneficial alliance,” said PCA's Alemán Zubieta. “One of the primary tenets of the ACP is to continually look for creative approaches to boost trade flows and provide safe, reliable and efficient service to the international maritime community. This agreement is one way that we can help achieve this goal.”

The MSPA is an Enterprise Agency of the State of Mississippi and is responsible for the daily operations of the Port of Gulfport. Part of the mission of both the ACP and the Port is to further increase capacity and foster business development. In 2009, Panama was Mississippi ’s third largest trading partner, in terms of exports, after Canada and Mexico.

“For four decades, the Mississippi State Port Authority has focused on growth prospects in the Western Hemisphere, but the expanded Panama Canal will afford the Port of Gulfport new opportunities to be more competitive in shipping between North America and both Asia and the West Coast of South America,” said MSPA's Allee. “This agreement between the MSPA and the ACP will provide a framework for our two entities to work together to pursue new business opportunities that will result from an expanded Panama Canal.”

The Panama Canal is currently undergoing a $5.25 billion expansion project, which will double the waterway’s capacity and build a new lane of traffic through the construction of a new set of locks. Scheduled for completion in 2014, the expansion will allow more ships and the passage of longer and wider vessels through the Canal.
The canal is one of the major threats to West Coast discretionary cargo – that cargo which does not stay in West Coast port areas and heads mainly via rail to the Midwest or Eastern United States. In the Southern California ports of Long Beach and Los Angeles, nearly 50 percent of all cargo moving through the two ports each year is discretionary.

Vancouver USA Attracts Major Bulk Firm, Finalizes Steel Plant Deal

The Washington state Port of Vancouver has revealed that it is working on a deal with global mining firm BHP Billiton to develop a major new bulk export facility at the port.

The announcement came as Gov. Chris Gregoire visited the port on Wednesday and touted recent efforts by port officials to boost local jobs creation.

Port officials said a tentative agreement with the Melbourne, Australia-based BHP would see the development of a 30-acre to 40-acre potash fertilizer export facility at the port's 218-acre Terminal 5. The port, which has yet to determine the financial aspects of the plan, hopes to have the deal finalized and a lease agreement with BHP in place by early 2012. If completed as expected sometime in 2014, the facility would open in 2015, more than doubling the port's annual cargo tonnage.

During her visit, Gov. Gregoire also praised Tuesday's unanimous decision by the port's Board of Commissioners to sell 20 acres of port property to a Eugene, Ore.-based firm who wants to build a steel fabrication plant on the parcel.

The $5 million sale of surplus port property to private manufacturer Farwest Steel ran counter to normal port policy to lease port parcels, but commissioners said the economy outweighed such concerns. Farwest has said that the proposed plant would initially employ 100 workers with the potential to employ as many as 228 workers with an average salary of just over $40,000, plus benefits.

Farwest plans to spend between $20 million and $30 million to develop the plant.
Farwest officials said the firm 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. The proposed 300,000 square foot facility, which in addition to manufacturing would also include distribution and office space, could be built and operational by late 2011 or early 2012.

Under the terms of the deal, the port can purchase back the 20-acre parcel is Farwest does not begin construction of the plant within 12 months, maintain 100 workers at the facility, keep the property in industrial use, or halts activity on the site.

Los Angeles Port to Revisit Battleship Museum Plan

The last of three San Pedro neighborhood councils has unanimously voted to support a historical group's plan to bring the World War II battleship USS Iowa to the Port of Los Angeles.

The San Pedro Northwest Neighborhood Council voted Monday to support the USS Iowa plan being floated by the non-profit Pacific Battleship Center.

The Navy continues to maintain the vessel in an "on hold" status as part of a government program that donates vessels to museum groups.

The USS Iowa, which saw service in World War II, Korea, and served again as part of the US Navy's "big stick" policy from 1984 to 1989, is the last remaining battleship in the world that has not been permanently placed as a floating museum.

Earlier this year, port officials rejected PBC's proposal to bring the battleship to San Pedro because it could complicate and interfere with an ongoing development of the port's public waterfront area. The port also rejected seven port-area locations identified by PBC as possible berths for the nearly 900-foot-long warship.

Port officials at the time also determined that the Navy had essentially promised the battleship to group trying to locate it in Vallejo near San Francisco.

In May, the Navy determined that the Vallejo proposal fell short and reopened bids to obtain the USS Iowa.

Los Angeles port officials, who still express reservations about site and funding issues, said last week they would revisit the proposal and conduct a cost benefit analysis. The analysis is expected to take several months.

PBC in the past has pointed to the nearly $500 million economic boost the city of San Diego has experienced since the aircraft carrier USS Midway opened on the city's waterfront as a floating carrier and naval aviation museum in 2004.

Approval of a 10-year lease from the port is needed before PBC can submit an application to the Navy to receive the USS Iowa. The Navy deadline is November 24.

Washington State Names 10 Finalists in Export-Boosting Fund Competition

The Washington State Community Economic Revitalization Board, or CERB, has selected 10 finalist projects that will compete for $3 million in loans and grants as part of Gov. Christine Gregoire's state export initiative.

Each of the finalists will receive a formal Request for Proposal from the new Export Assistance Program, a key component of the state export-boosting plan that seeks to meet President Barack Obama's call to double national export levels in five years.
All 10 finalists were selected from a field of 31 applicants by a review panel of CERB members and experts in the promotion of state exports. CERB is looking to boost programs that can achieve substantial, profitable results.

Completed RFP's are due by Aug. 23, 2010 and CERB is expected to make a final determination by September 2010.

The 10 projects selected to submit a full proposal for further consideration are:

City of Bellevue – $157,000 – Asia Target Markets Trade Development: Trade Promotion Strategy for China, Korea, and Japan using Search Engine Optimization and Social Media Platforms;

City of Bellevue – $70,000 – Insights on India: Educational Materials and Case Studies on Culture, Communications, Management and Negotiations related to Doing Business from Washington State with Companies in India;

Clark College/Association of Washington Business Institute – $840,750 – Exports Zone Resource Center/Green Building Material Manufacturing Pilot Program;

Highline Community College – $413,360 – T.R.A.D.E. Training-Ready to Advance Development of Exports: A Business Export Readiness Model;

Port of Clarkston – $100,000 – Snake River Boat Builders Export Program;

Tacoma Community College – $298,857 – Technical Assistance with Global Exporting: Creation of a Professional-Level Instructional Certificate Program in Global Exporting;

University of Washington – $1,560,000 – Building Export Competence in Washington State Businesses;

Washington State University/Small Business Development Centers – $1,291,097 – SBDC New-to-Export Initiative;

Western Washington University – $585,726 – Jump Start Washington Exports (JustWaEx);

World Trade Center Tacoma/Tacoma Community College – $248,000 – Export China Initiative.

tags: Washington state, exports

Tuesday, August 10, 2010

NRF: National Retail Cargo Volumes Up 15% in 2010, Peak Month May Have Been July

Import cargo volumes at the nation's major retail container ports, which suffered through historic downturns last year, are expected to increase by 15 percent in 2010, according to a National Retail Federation report released Thursday.

“We aren’t back to where we were two years ago and consumers aren’t convinced that the recession is over quite yet, but 2010 is clearly going to finish better than last year,” said NRF Vice President for Supply Chain and Customs Policy Jonathan Gold in the trade group's monthly Global Port Tracker report. “In the meantime, retailers are monitoring demand very closely and hoping to see increases in employment and other areas that will boost consumer confidence. Cargo numbers this summer are showing unusually high percentage increases, but that appears to be an indication of shortages in shipping capacity earlier in the year rather than sales expectations.”

Compiled in conjunction with consulting and research firm Hackett Associates, the NRF monthly report also predicted that based on summer container volumes the traditional September/October peak shipping season could already be in full swing several months early.

“There are indications that the shipping season may have peaked earlier than normal as the rush to re-stock inventories earlier in the year intersects with a combination of increased shipping capacity, consumer confidence levels not seen since August 2009 and the slowing growth of consumer spending,” said Hackett Associates founder Ben Hackett said. “The traditional peak season may be melting away.”

The large double-digit increases in June and July, said the report, appear to be the result of backlogs built up due to the lack of shipping capacity earlier in the year after ship owners took vessels out of service during the recession and were slow to return them as the economy began to pick up. With many retailers appearing to bring merchandise in early to avoid any further bottlenecks, July is likely to be the peak shipping month for 2010 rather than the traditional rush of holiday season merchandise in October.

The Global Port Tracker monthly report covers the U.S. ports of Long Angeles/Long Beach, Oakland, Seattle and Tacoma on the West Coast; New York/New Jersey, Hampton Roads, Charleston and Savannah on the East Coast, and Houston on the Gulf Coast.

Crowley Takes Home Green Award From SoCal Ports

Crowley Maritime Corporation has been recognized by the ports of Long Beach and Los Angeles for the company's efforts to significantly reduce carbon emissions within the two Southern California ports.

Crowley officials were presented with the "Significant Early Action to Reduce Emissions Award" at the third annual San Pedro Bay Ports Clean Air Action Plan Air Quality luncheon held recently in Long Beach.

The Early Action Award is given to companies who have made great strides to reduce pollutant emissions at both ports. Nominations were reviewed by port officials, as well as representatives from several governmental agencies, including the South Coast Air Quality Management District, California Air Resources Board and the U.S. Environmental Protection Agency.

In naming the Jacksonville-based Crowley as this year's award winner, port officials cited the company's proactive initiative to conduct an extensive engine re-powering of its Harbor Class tugs that provide ship assist and tanker escort services in the Ports of Los Angeles and Long Beach.

"Over the past several years, the company has been involved in several emissions and energy-saving initiatives in this region, including the installation of shore-side power and four tug engine repowers," said Crowley's director of engineering Bill Metcalf, who accepted the award on behalf of the company. "Those initiatives will reduce carbon dioxide emissions by more than 486,180 pounds, particulate matter emissions by 3.24-tons and mono-nitrogen oxides by 109.52-tons this year alone."

The Crowley tugs Admiral, Leader, Scout and Master were reintroduced to the fleet earlier this year following the installation of Tier II compliant engines. The project was partially funded by the Port of Los Angeles Air Quality Mitigation Incentive Program. The Crowley upgrades were completed nearly three years ahead of a regulatory deadline mandating Tier II emissions compliance.

Crowley also began using a ship-to-shore power system last year for its Long Beach and Los Angeles tugboats. Previously, the tugs tied up at the dock needed to run their generators to provide electrical power. By pulling power from shore-side sources, the tug generators could be shut off while at dock, significantly reducing diesel emissions.

Long Beach Approves $1.1B Bridge Replacement

After more than a decade of planning, wishing and hoping, the governing board for the Port of Long Beach on Monday approved a $1.13 billion plan to replace the aging Gerald Desmond Bridge.

Described as one of the port-area's most critical infrastructure needs, the new bridge will be taller, wider and safer than the current bridge.

The 156-foot-tall Gerald Desmond Bridge, which is named after a former City official, links the port-area Terminal Island to Long Beach proper. The 40-year-old steel and concrete structure is a main egress point for trucks into the port. Upwards of 60,000 vehicles a day cross it's five-lane, 1,200-foot-long span over the port's main channel.

According to port officials, more than 15 percent of the nation's seaborne cargo moves over the bridge each year.

Port commissioners on Monday lauded the effort of port staff to get the project going before unanimously voting to approve the final environmental impact documents that were the last impediment to starting construction.

When opened in 1968, the Gerald Desmond Bridge was estimated to have a 50 year life span in terms of both capacity and engineering.

However, by the 1980s as containers volumes exploded at the port, and the adjacent Port of Los Angeles, the bridge became stretched well beyond its original capacity. It also began to deteriorate rapidly.

Concrete falls off the underside of the bridge at such a regular pace that port officials, first in 2001 and then again in 2004, were forced to install two nets, referred to by locals as a diaper, to catch the wayward missiles – some the size of baseballs.

In late-2003, the California Department of Transportation, or Caltrans, found the bridge to be in such poor shape that it rated the bridge in the agency's "to be replaced" category – the same rating given the Minneapolis roadway bridge which collapsed in 2007. Despite state and local officials’ claims the bridge remains safe for traffic, the Caltrans rating for the Gerald Desmond Bridge has fallen even further since 2003. A recent $1 million upgrade raised the Caltrans rating of the existing bridge's road deck from "critical condition" to "satisfactory," despite the ongoing issue of concrete falling from the underside.

The new bridge, which has yet to be given an official name though suggestions of keeping the same name have been floated, will be built just south of the current bridge. When the new bridge – which will feature a cable-stayed design – is completed, the old bridge will be demolished.

The new bridge would also feature three traffic lanes plus an emergency lane in both directions, compared to the two lanes in each direction on the existing bridge. The span of the new bridge would also offer a 200-foot mean high water level clearance underneath, as opposed to the 156-foot MHWL clearance of the existing bridge, to allow for the newest generation of cargo ships to pass underneath.

The replacement bridge will be funded by a combination of federal and state funds, with the port providing between 10 percent and 15 percent of the total cost in what port officials call "matching funds."

Of the total $1.13 billion in estimated costs for the replacement project, about $900 million from various sources have been earmarked, including: about $570 million from federal sources, $250 million in state funding, $29 million from Los Angeles County sources, and $55 million from port funds. According to port documents, just under $200 million in federal funds have yet to be identified.

Barring any legal actions against the project, preliminary work on the new bridge could begin within a few months, though an actual ground breaking on construction could be more than a year away. Construction is expected to take at least six years.

Los Angeles Port Email Warns Against Proposed Shipyard

The Port of Los Angeles, concerned about a proposed plan to build a ship repair facility at the port, sent out an email Monday to roughly 250 local, state and federal government officials criticizing the plan and making the argument that any further consideration of the proposal could seriously delay an Army Corps of Engineers channel deepening project and ongoing terminal development at the port.

Gambol Industries, Inc. has been working for more than a year to move forward with the $50 million plan to re-develop the shuttered South West Marine shipyard along the main channel of the port into a modern ship repair facility. The Long Beach-based firm, which claims it has a solid business plan that would create hundreds of jobs at the proposed facility, has faced stiff criticism from the port, shipping industry, and longshore unions.

The port email warned that the Gambol plan threatens to delay the port's Main Channel Deepening Project, a major navigation project by the port which would provide access for the largest of modern container vessel to areas deep within the port's channels. The MCDP is also key, according to the email, to an ongoing $350 million expansion and redevelopment of two port container terminals.

The main conflict with the MCDP is that the port has already identified the area of the abandoned South West Marine facility as the dumping area for the material to be dredged by the Army Corps.

"In the face of Gambol's proposal, the Army Corps has said they would shut down our project while a 24 to 36 month supplemental EIR/EIS is done," said the port email. "Staff of the California Coastal Commission has advised Gambol that the changes it has proposed to date to our contaminated sediment fill are not feasible or environmentally optimal. The Los Angeles Area Chamber of Commerce and ILWU also oppose Gambol's plan because it would delay our channel deepening project."

For it's part, Gambol has received the support of at least one key area politician – Los Angeles City Councilmember Janice Hahn. Daughter of famous City Councilmember Kenneth Hahn and brother of former Los Angeles Mayor James Hahn, Janice Hahn currently represents the port area. She also chairs the City Council's Trade, Commerce and Tourism Committee, which oversees the Port of Los Angeles, the Los Angeles International Airport and the city's Convention & Visitors Bureau.

Earlier this month, Hahn wrote an op-ed piece for the port-area Torrance Daily Breeze newspaper in which she supported the Gambol Industries proposal, citing the $50 million investment in the hard-hit port-area economy and the creation of hundreds of union jobs as main reasons for her support.

Another supporter of the Gambol plan is the Los Angeles County Economic Development Corp. (LAEDC), a local economic think-tank who was commissioned by Gambol to study their shipyard proposal. LAEDC found that the Gambol facility would be "a welcome addition to a city that has struggled to create employment opportunities for its growing population."

The LAEDC estimated that "When the [Gambol] shipyard reaches full capacity, it [could] generate total annual economic activity of over $219 million and sustain 2,040 full-time jobs in Los Angeles County with [payroll] earnings of $79 million."
The port argues in Monday's email that Gambol's business plan is "highly speculative" and in a play on the firm's name, a "gamble."

Port officials point to the fact that major shipyard employment in the United States has fallen precipitously in the past 30 years and that there is simply not enough work to support the Gambol facility.

"Nationwide, over 70 percent of shipbuilding revenue and over 75 percent of ship repair revenue comes from the U.S. Navy," the port wrote. "There is no such patron to fuel a rebirth of shipbuilding in the San Pedro Bay. In fact, other shipyards have announced layoffs and eliminations, including 560 jobs eliminated recently at NASSCO in San Diego."

The port's five-member governing board is expected to officially reject the Gambol plan at their Aug. 19 board meeting.

Arrow Launch Service Celebrates 20 Years

The year 2010 marks a 20 year business milestone for Jack and Terri Harmon, owners and operators of two busy and vibrant marine businesses – Arrow Launch Service, Inc. (ALS) a water taxi service in Puget Sound ports offering marine transportation to deep draft ships at anchor or underway; and Victoria Rapid Transit, Inc. (VRT) which provides foot passenger ferry service between Port Angeles, Washington and Victoria, British Columbia, Canada as well as service between Victoria and Friday Harbor on San Juan Island, Washington. Both companies are headquartered in Port Angeles.

The water taxi business has become a complicated and demanding 24-hour a day operation that requires having all the necessary resources. The state also tightly regulates the industry to make sure companies stay financially healthy, but within a limited profit margin to avoid taking advantage of customers.”

Today, Arrow Launch Services and its associated companies have more than 40 employees. In addition to administrative offices in Port Angeles, they maintain permanent moorage and storage facilities in Tacoma, Seattle and Anacortes. Along with the Victoria Express and Victoria Express II passenger ferries, Arrow’s fleet has a total of ten 40 to 65-foot vessels stationed throughout Puget Sound ports, including a 60-foot USCG-certified landing craft and two 40-foot by 15-foot flat-deck barges.

Shore-Based Services
Having to maintain a growing fleet spread throughout the region led to the establishment of a complementary company in Arrow Marine Services, a repair facility on land providing equipment and work space for sandblasting, painting, welding, fabrication and all types of marine mechanical, plumbing and electrical repair.

Having a staff of certified welders, electricians, and mechanics, as well as a land-based fleet of 10 trucks and related equipment, has enabled Arrow to provide other customers with a variety of mobile repair services 24 hours a day. They may range from towing and repairing broken down smaller pleasure boats or commercial vessels to responding to shipboard emergencies on a supertanker.

Ship supply and service has become an important part of Arrow’s business. One of the least desirable but necessary services is the removal of sewage from vessels that normally discharge their accumulations at sea. It is a messy and tightly regulated process because of the environmental issues involved. Arrow has found the best way to do it is to put a sewage truck on board a landing craft certified for sewage. They use trucks supplied by quality companies familiar with the marine industry and experienced in removing sewage from vessels at anchor.

Pacific Warehouse and Freight is yet another side of Harmon’s business, developed as a supplement to Arrow’s ship services. It’s a stevedoring warehousing division of the company that maintains storage facilities with up to 10,000 square feet each in Port Angeles, Tacoma/Seattle, Anacortes and Bellingham.

“Sometimes equipment or supplies show up before the ship receiving them enters port,” says Harmon. “In fact, we receive owner’s materials every day in every port. So we have facilities with a couple of forks at each one to unload and store it until the vessel gets here. Then we load the cylinder liners, paint, chemicals or whatever it is onto our boats, transport it out to the ship and stow it onboard.”

In addition, Arrow provides a procurement service for shipping companies having difficulty finding particular items of equipment. “For example, a ship owner called and said he couldn’t find through his normal vendors a specialty ice maker he needed,” recalls Harmon. “But our guys who deal with the local suppliers located the ice maker in five minutes. They had it aboard the ship before it sailed. Without someone to fill that kind of niche for them, the ship would have gone without it.”

According to Harmon, the various facets of his business are all fairly well balanced, with the water taxi business, the hauling of passengers and freight, and the warehousing being about equal in revenue.

“A report presented to the Port of Port Angeles several years ago showed that as ships get larger and cargoes become more consolidated, fewer ships will be coming into Puget Sound,” Harmon adds. “That is a concern for our water taxi and other ship services, and one of the reasons we are growing our ancillary businesses – repair, storage, and the ferries. The same study showed vessels under 300 gross tons and yachts are on the increase, so we want to capture some of that market.”

Harmon’s wife Terri, who maintains an active role in the administrative end of the business, says her husband has always been a hard worker, and his track record clearly demonstrates a drive to look for niche opportunities in the marine business and move into them. His company philosophy – “One call does it all – anytime, anywhere, any repair” – also indicates a service-oriented attitude that helped him succeed, even in uncertain times.

Victoria Rapid Transit, Inc. (VRT), the Harmons’ passenger-only ferry service, was born in 1990 using the 105-foot Victoria Express to provide as many as four round trips daily during seasonal summer sailings between Port Angeles, Washington and Victoria, British Columbia. In 2004, the 125-foot Victoria Express II was added to the mix, allowing the company to provide expanded service for passengers visiting Victoria, as well as to add service to Friday Harbor on San Juan Island.

During the 2010 sailing season, in recognition of its 20th anniversary, VRT is offering special reduced fare pricing to both Victoria and Friday Harbor as well as a 50 percent discount for active and retired military personnel.

With the increase in fuel prices and the newer engine technology available, VRT repowered the passenger ferries by replacing their older two-cycle 12-cylinder Detroit engines with new HE (High Efficiency) four-cycle six-cylinder Detroit/MTU engines. “The power upgrade was completed 100 per cent by our staff and vessel crew which affords our crews firsthand knowledge of how the components work together,” says Harmon. “The new technology will afford us more power, significantly improve fuel consumption and allow us to use bio-diesel. We have also completed installation of an electronics package upgrade on both vessels that overlays all systems onto one monitor, plus an online passenger reservation system.”

“The ferry service is a piece of the total operation,” says Harmon, “but one that faced difficult challenges in the post-911 days of proposed regulations of the Western Hemisphere Travel Initiative (WHTI) regarding identification for cross-border tourism.” To that end, the Harmons spent a good deal of time over a period of three years working with other international carriers from Washington State and around the country and with state and federal delegations in helping to craft workable rules in a timely fashion.

According to Harmon, the various facets of his business are all fairly well balanced, with the water taxi business, the hauling of passengers and freight, and the warehousing being about equal in revenue.

In April of this year, Jack Harmon announced the sale of the original Victoria Express vessel to the Port of Kingston. Both of the current vessels (Victoria Express and Victoria Express II) will remain in service for the 2010 Express sailing season. At the end of the season, the Victoria Express vessel will be transferred to the ownership of the Port of Kingston for use in foot passenger service between Kingston and Seattle. When asked about the future of the company, Harmon replied, “We’re excited about what the next 20 years has in store for our company. We plan on continuing our services from Port Angeles and are continuing to explore new and exciting ventures for our marine transportation companies.”