Thursday, August 26, 2010

Seattle Port CEO Praised for Leadership, Refuses Salary Increase

Port of Seattle CEO Tay Yoshitani, one of the nation's highest paid port executives, declined a 4 percent salary raise on Tuesday despite receiving a glowing performance evaluation from port commissioners.

In the evaluation, port commissioners praised Yoshitani's work over the past year and credited his "extraordinary leadership" with helping the port weather the global economic downturn. The port has recorded significant double-digit container volume increases for each month of this year. The performance review also praised various Yoshitani efforts during the last year, including: cutting port expenses in 2009 by more than 11 percent, maintaining the port's strong credit ratings, and the recruitment of three new container shipping lines to the port.

The five-member port commission voted to accept the performance evaluation with four 'yes' votes. Though a separate vote was required to give Yoshitani a raise, Commissioner John Creighton abstained from the vote on accepting the evaluation citing his concern about increasing Yoshitani's salary.

Following the acceptance of the evaluation, port commissioners had been expected to vote on a 2 percent raise and a 2 percent lump sum payment for Yoshitani. Citing the still fragile state of the economy, Yoshitani requested that the vote be pulled – a move agreed to by the port commissioners.

The collective 4 percent raise would have boosted Yoshitani's annual salary to just over $340,000 a year. Yoshitani's last raise, in 2008, boosted his annual salary to $334,000 a year, with additional annual compensation of more than $30,000 a year. When Yoshitani was hired in 2007 at a salary of $325,000, the American Association of Port Authorities found that he was the highest paid port executive in the nation.

Yoshitani currently makes more than both the $167,000-a-year Washington state governor and the $159,000-a-year mayor of Seattle.

By comparison, the executive directors of the nation's two busiest container ports of Los Angeles and Long Beach, each boasting more than triple the annual container volume of Seattle, each earn nearly identical annual salaries of about $300,000. As of 2009, Seattle was the eighth busiest container port in the nation.

Longview Port Breaks Ground on New Steel Pipe Plant

Port of Longview and local officials ceremoniously broke ground last week on a $9 million pipe fabrication facility at the port that will bring in hundreds of local construction jobs, and when complete, provide up to 65 full-time positions and hundreds of thousands of dollars in annual port and local government revenue.

In late June, the port signed a 12-year 15-acre lease with contractor IDM Longview. The contractor plans to build a 156,000-square-foot manufacturing facility and sub-lease it to New Jersey-based steel manufacturer Skyline Steel. The port also signed a lease with Skyline for 20 adjacent acres to be used for storage and parking. Skyline is a subsidiary of Luxembourg-based steel manufacturing giant ArcelorMittal.

The plant, which will manufacture large spiral-welded and straight-seam steel pipes mainly for the construction industry, is expected to be complete and open for operations by February.

IDM has already begun site preparation and expects to hire several hundred workers from over a dozen trades during the construction.

Because the port lease contains a buy-back clause that could lead to the port authority eventually owning the pipe factory, IDM will be required to pay prevailing, or union, wages during the construction of the facility – whether or not they hire union workers.

When the plant is fully operational, Skyline expects to have up to 65 full-time employees on staff.

Port officials estimate that the plant will bring in about $400,000 in lease payments to the port and $100,000 a year in local property tax.

The pipe facility, when complete, will be the third steel-manufacturing facility at the port.


On Tuesday, PMM Online misstated the action taken by the Port of Long Beach Board of Harbor Commissioners in regards to financial support for the city's Municipal Band. The article should have stated, "The governing board for the Port of Long Beach postponed a vote on a $50,000 grant to help keep the 101-year-old Long Beach Municipal Band afloat during the 2010-2011 fiscal year, but agreed to revisit approval of the band grant at a future date."

Feds Move for 3-Mile California Coastal Ban on Vessel Sewage Dumping

Federal environmental regulators on Wednesday announced a new rule, that if approved, will prohibit cargo and cruise vessels from dumping sewage within three miles of California's coastline.

Under the proposed United States Environmental Protection Agency rule, vessels of greater than 300 tons would be prohibited from releasing treated or untreated sewage within three miles of the state's coast and within state inland waterways.

Currently, under California state law, vessels can discharge treated sewage as needed if the holding capacity of the vessel's on-board sewage holding system has been reached.

Part of the need for the new rules stems from the lack of a cohesive state regulatory scheme covering near-shore dumping.

Under the federal Clean Water Act, states may request the EPA to establish vessel sewage no-discharge zones if necessary to protect and restore water quality. In 2006, following passage of three state statutes designed to reduce the effects of vessel discharges to its waters, the State of California asked the EPA to establish the sewage discharge ban.

The United States Environmental Protection Agency estimates that the new rule, which could take effect as early as Jan. 1, 2011, could prevent up to 20 million gallons of sewage per year from being released along the California coast. According to the EPA, the new rule would create the largest "No Discharge Zone" in the U.S. Enforcement of the new rule will fall to the U.S. Coast Guard.

The proposed rule will now face a 60-day public review period.

Tuesday, August 24, 2010

Long Beach Port to Crack Down on Drayoffs

Port-servicing trucking firms at the Port of Long Beach who illegally try to game port environmental rules will soon find their wallets getting hit hard.

Port officials plan to crack down on truckers involved in the practice of using Clean Truck Program-compliant trucks to pick up containers at the ports and then switching the loaded chassis to older more polluting tractors at a nearby off-port location. Known as "drayoff," the activity violates the rules of the port's Clean Trucks Programs.

While illegal under the port truck programs, port security officers and other law enforcement agencies will now be aggressively looking for violators. Trucking firms found engaging in the activity will be subject to fines between $150 and $250 per violation, as well as possible revocation of their port access license.

Under the port's Clean Trucks Program which took effect in 2008, older trucks were banned from servicing the port facilities, however, many of these older trucks remain in service outside the ports. Using the drayoff technique allows trucking firms to move a greater number of containers with fewer clean trucks, which according to the port, defeats the emission-cutting concept of the Clean Truck Program and puts fully-compliant truck firms at a disadvantage.

Port security officers and other law enforcement agencies will now begin frequenting known back streets and other less-trafficked areas just outside the port boundaries where drayoffs are known to take place. Port officials believe that the actual number of violators is probably low.

Seattle Port to Vote on CEO Raise

The Port of Seattle, the nation's eighth busiest container port, may soon boast the highest paid port chief executive in the United States.

The port's governing commission will vote Tuesday on a 2 percent raise and a 2 percent lump sum payment for port CEO Tay Yoshitani, who joined the port in 2007 in the wake of a compensation scandal surrounding the departure of previous port CEO Mic Dinsmore.

The port authority, which also oversees the operations of Sea-Tac International Airport, is partially funded by taxpayer property taxes.

If approved, the raise would make Yoshitani one of the highest paid port chief executive in the nation. When Yoshitani joined the port at an annual salary of $325,000, he was, like his predecessor Dinsmore, the highest paid port executive in the nation according to a survey at the time by the American Association of Port Authorities.

Yoshitani's last raise, in 2008, boosted his annual salary to $334,000 a year, with additional annual compensation of more than $30,000 a year.

The raise and lump sum payment being considered by the port commission would boost Yoshitani's annual salary to just over $340,000 a year, with a lump sum payment of just over $6,000. Ironically, the raise, if approved, would boost Yoshitani's pay past the $339,000 a year being earned by previous CEO Dinsmore on his departure.

Yoshitani already makes more than both the Washington state governor and Seattle's mayor – who earn roughly $167,000 a year and $159,000 a year, respectively.

By comparison, the executive directors of the nation's two busiest container ports of Los Angeles and Long Beach, each boasting more than triple the annual container volume of Seattle, each earn nearly identical annual salaries of about $300,000.

The non-profit group Puget Sound SAGE (Seattle Alliance for Good Jobs and Housing for Everyone) is opposing the raise, arguing that Yoshitani should not be receiving additional compensation while other port employees have faced cuts and layoffs in the past year. Over the past year, the port has cut more than 100 employees and imposed furloughs on non-union employees to cut costs.

COSCO Busan Pilot Freed From Custody

The pilot who was at the helm of the COSCO Busan when the container vessel struck the Oakland Bay Bridge in November 2007 and leaked more than 53,000 gallons of diesel oil into San Francisco Bay, has been released from custody after serving a 10-month sentence.

John Cota was released on Aug. 16 after serving four months in a minimum-security facility in Arizona, five months in a San Francisco halfway house and a month under home confinement.

Cota, who faced numerous federal charges in the wake of the Busan allision and subsequent fuel oil leak that killed thousands of birds, closed dozens of beaches and affected local commercial fishing, eventually pleaded guilty to two misdemeanor charges related to illegal dumping and killing of federally-protected birds. Under the plea agreement, federal prosecutors dropped more serious charges that Cota lied to US Coast Guard officials about his medical condition.

As part of his 2009 sentence, Cota will now face a year of supervised release under which he will be restricted from leaving the state.

A National Transportation Safety Board review of the incident concluded that Cota's use of a wide variety of prescriptions drugs led to an impaired condition that resulted in the Busan's allision with the bridge in heavy fog.

The Coast Guard pulled Cota's pilot's license shortly after the Busan incident and Cota formally resigned as a pilot in 2008.

Long Beach Port Tapped For Muni Band Support

The governing board for the Port of Long Beach has approved a $50,000 grant to help keep the 101-year-old Long Beach Municipal Band afloat during the 2010-2011 fiscal year.

Long Beach City Hall, which had been providing more than $430,000 a year to support the professional musical group's 39 concerts a year in the city, had been looking at drastically cutting city budget funds for the band as a cost-cutting measure. The Long Beach City Council, now moving into the final steps of finalizing the city budget, is grappling with a projected $18 million budget shortfall in FY2011.
Public outrage at the cuts have led the City Council to seek previously untapped funding sources, such as the port, which is operated by city's semi-autonomous Harbor Department.

The Municipal Band funding is just the latest in a recent spate of incidents where the cash-strapped City Hall has turned to the port either for direct funding of city projects and programs, or offset funding through the city's Tidelands Fund. Under state law, port funds can only be used for specific uses that benefit the citizens of the entire state, and then only in the traditional tidelands area of the city. The city charter provides for the transfer of 10 percent of the port's annual profits to the city Tidelands Fund--though these funds must still be used in accordance with state law. The city typically uses these tidelands funds to offset general fund expenses such as police and fire service in the tidelands areas.

Millions of dollars in port funds have also been tapped in recent years to pay for such things as new fire stations in the port area, support of the financially-embattled Aquarium of the Pacific and the renovation of a local lagoon. City Hall is also planning to use more than $9.5 million in port funds to pay for a project to re-build aging seawalls that protect the exclusive Naples area of the city.
Port officials have estimated that the port has directly and indirectly provided more than $150 million for community projects over the past 15 years.

A City Council-supported proposition headed to voters in November would, if approved, reformulate the way the annual port transfer to the Tidelands Fund is calculated. The change would increase the amount of port funds headed to the Tidelands Funds by about 15 percent each year. This year, the port transfer was $12.4 million.

Southern Yards Face Oil Spill Fallout

By Jim Shaw

Southern shipyards had been looking at a slow but steady recovery from the recession just before the Deepwater Horizon disaster hit but the future is now in doubt. Although there will be considerable maintenance and repair work to tackle once the skimming and salvage fleet comes in, the long-term outlook for Gulf yards has been dimmed by the drilling moratorium. Although revisions to this legislation are expected to soften the blow, some drilling equipment has already been removed or detoured away from the Gulf and several yards are now looking at a substantial decline in customer base.

Nevertheless, government work in the shape of US Navy, Coast Guard, NOAA and Corps of Engineers contracts is providing a good backlog for some established builders while the commercial tug and barge sector, serving the inter-coastal waterway and inland rivers systems, remains healthy. There are also a few export orders being won for small specialist vessels, especially in the military sector, and several owners, including McAllister and Seabulk, are considering further orders for ship-assist and escort tugs.

Changes at Mobile
Among well known Gulf Coast yards the former Bender yard at Mobile, Alabama is now operating as Signal Ship Repair following its purchase by Signal International while Atlantic Marine’s operation at Mobile, as well as its yard at Mosspoint, Mississippi, has been acquired by BAE Systems. BAE is a large defense contractor but Signal, which also has yards in Mississippi and Texas, specializes in commercial offshore work and thus may be substantially impacted by the Deepwater Horizon development. BAE reported sales of $36.2 billion last year and has indicated it will use the former Atlantic Marine facilities to “enhance its ability to serve customers in the naval support and upgrade sector.”

The British company already operates a number of other domestic yards, including facilities at San Diego and San Francisco, after it purchased United States Marine Repair in 2005. Besides changes being made to the former Bender and Atlantic yards at Mobile, Austal USA, an Australian firm, has been expanding its Mobile facility, which now features a state-of-the-art 396,000 square foot module manufacturing facility, a 106,000 square foot assembly bay and a 21,000 square foot administration center. The company started at Mobile less than ten years ago with a 33,500 square foot bay and a doublewide trailer used for office space.

Military Work
In the military sector Austal has perhaps one of the brighter futures among Gulf Coast yards as it has entered into a $1.6 billion agreement with the Defense Department to build up to 10 Joint High Speed Vessels (JHSVs), with the lead craft already under construction and funding for two further vessels recently awarded. Austal was selected as prime contractor to design and build the first JHSV in late 2008 with options for nine additional vessels. The 103-meter-long, 43-knot shallow draft transports will be used to provide rapid intra-theater movement of personnel, equipment and supplies while also being capable of carrying out humanitarian relief operations.

Austal, which has built several commercial high-speed ferries, is currently working with partner General Dynamics to complete the Littoral Combat Ship USS Coronado (LCS-4) after commissioning of the first vessel in its trimaran series, USS Independence (LCS-2), earlier this year. However, the Alabama company has since decided to part ways with General Dynamics for remaining bids in this program and will instead bid as lead contractor for what could be as many as 10 of the craft over the next four years.

The break with General Dynamics is expected to give Austal a lower cost structure, although it will still contract with an arm of General Dynamics to design and test specific JHSV systems, such as computers and weapons, for future vessels.

Bollinger Cutters
Another Gulf Coast builder with a sizable military contract is Bollinger, which has been awarded a contract option for approximately $141 million to begin production on three 154-foot Sentinel-class Fast Response Cutters (FRC) for the Coast Guard as a follow-on to an earlier contact of $88 million for the lead boat of the series. The first of the high-technology vessels is expected to be delivered in the third quarter of fiscal year 2011 for home porting in Miami, Florida.

The Sentinel contract could be worth up to $1.5 billion for Bollinger if all options for 34 cutters are exercised, and even more if the Coast Guard goes forward with its long-range plans to eventually have 58 Sentinels built. The new cutters will have a flank speed of 28 knots and the capability to perform independently for a minimum of five days at sea. They will be used to replace the Coast Guard’s aging 110-foot Island-class patrol boats.

Crowley Tugs
In the commercial sector, Bollinger is working with Seattle’s Jensen Maritime on final design work for two 10,880-horsepower ocean-going tugs it will be building for Jensen’s parent company Crowley Maritime Corporation.

To be christened Ocean Wave and Ocean Wind, the twin 144-foot by 46-foot vessels will employ dual controllable pitch propellers (CPP) fitted in nozzles to give a minimum bollard pull of 150 metric tons and a range of approximately 12,600 nautical miles. Jensen’s design work includes vessel arrangements, hull and deckhouse lines, structural design, equipment foundations design and stability while Bollinger is handling systems design and the production lofting effort. The boats are to be built at Bollinger’s Marine Fabricators yard at Amelia, Louisiana, with the first vessel scheduled for delivery late next year.

Scheduled a little further out are three 290-foot, 140,000-cubic foot sludge carriers wanted by New York’s Department of Environmental Protection for delivery in June 2012, October 2012 and February 2013 under an $84 million contract signed in January.

ATB Construction
Earlier this year Bollinger’s Algiers and Amelia facilities worked together to redeliver the double hull asphalt Barge B. No. 235 and 6,140-horsepower tug J. George Betz to New York’s Bouchard Transportation as an Articulated Tug/Barge (ATB) set. The Amelia facility was employed to install an Intercon connection system to the 483-foot by 80-foot, 133,000 barrel (BBL) capacity barge and upgrade its ballast system while the Algiers yard installed an Intercon connection system to the 127-foot by 37-foot tug and upgraded its electronics systems.

Prior to this project Bollinger Marine Fabricators had delivered the 55,000-bbl tank barge M-6000 to Midstream Fuel Service, a wholly owned subsidiary of Martin Resource Management Corporation. The 350-foot by 70-foot barge was built with ten cargo compartments served by two separate pumping systems and was fitted with a Bludworth Cook Marine ATB Flexible Connection System. This allows it to be teamed with Martin’s tug La Force, which Bollinger fitted with a Bludworth/Cook system and raised pilot house at its Texas City operation.

The new ATB is being employed in the clean products trade in the Gulf of Mexico.

VT Halter
Also building ATBs on the Gulf is VT Halter Marine which delivered the 10,728-horsepower tug Achievement and barge 650-8 to Crowley Maritime Corporation in March for employment by Marathon Oil Corporation. This is the eighth of ten 185,000-bbl ATBs being built for Crowley, with the final units to be delivered before the end of next year. They will be joined by three larger 330,000-bbl ATBs, the barge units of which are being built by Halter, before the end of 2012.

Halter has also been completing two 350,000-barrel ATB barges for New York-based Overseas Shipholding Group (OSG) that had been started by the failed Bender yard. OSG has since awarded Halter contracts covering the construction of two 8,000 horsepower ATB tugs, with delivery scheduled for the second and third quarters of next year. The tugs will measure 42.8 meters by 11.6 meters and will have all the necessary capabilities to operate in full ocean service.

New Research Ships
VT Halter’s Moss Point, Mississippi yard, which completed the tug Achievement, also finished up the 208.6-foot by 42.9-foot fisheries survey vessel Bell M. Shimada (FSV-6) for the National Oceanic and Atmospheric Administration (NOAA) earlier this year. The 2,479-metric-ton displacement ship, now stationed on the West Coast, has a range of 12,000 nautical miles at 12 knots and an endurance of 40 days. Its delivery cleared the ways for the construction of an enhanced version of a T-AGS 60 Class oceanographic survey vessel for the US Navy.

This ship, to be designated T-AGS 66, will measure 107.6 meters by 17.68 meters and will have accommodation for 67 persons. For research purposes it will be fitted with an 18-foot by 18-foot moon pool for the launch and retrieval of scientific underwater craft. To be built under an $87 million contract awarded last year, the oceanographic ship is due for delivery in 2013.

Missile Tracker
In June, Halter’s Pascagoula yard saw the christening of USNS Howard O. Lorenzen (T-AGM-25), a 534-foot (163m) by 88-foot (27m) Missile Range Instrumentation Ship due for completion by December. The 13,696-full-displacement-ton vessel will replace the aging USNS Observation Island (T-AGM-23) and is being fitted with a Cobra Judy Replacement radar system.

USNS Observation Island, one of the Navy’s oldest vessels, was built in 1953 as a Mariner class merchant ship and was converted into a fleet ballistic missile test ship in 1956. It has most recently been operated as a missile range instrumentation vessel for the Navy by the Military Sealift Command. Its replacement will be operated by a crew of 88 and will host embarked military and civilian technicians as well as mariners from other US government agencies involved in the monitoring of missile launches.

Eastern Shipbuilding
At Panama City, Florida the Eastern Shipbuilding Group is finishing up the second of two Robert Allan-designed 140-foot by 36-foot fireboats it has been building for the City of New York. The first, Three Forty Three, named in honor of the 343 firefighters who lost their lives at the World Trade Center on September 11, 2001, was turned over at the start of this year while the second will be delivered within the next few weeks.

Both are state-of-the-art vessels that are capable of pumping 50,000 gallons of water per minute, which gives them the greatest pumping capacity of any fireboat in the world. A speed of 18 knots is provided by four MTU main engines per vessel, each producing 2,000 horsepower. The boat’s pilot houses offer a 360 degree field of view and provide a command and control area where chief officers can monitor and direct firefighting operations with the aid of remote cameras and high-technology communications gear.

Ferry for Fundy
Another government contract being handled by Eastern, but destined for export, is an 85.5-meter by 18.5-meter auto/passenger ferry being built for Canada’s province of New Brunswick. Upon completion in May of next year the 82-vehicle capacity ferry will replace an existing 44-year-old ferry to provide service to Canada’s Grand Manan, White Head and Deer Islands in the Bay of Fundy.

Eastern has also won a contract to build six 292-foot by 64-foot Offshore Support Vessels (OSVs) for New Orleans-based Harvey Gulf International. Each of the diesel/electric newbuildings will be propelled by four Cummins QSK60M diesel generators rated at 1825KW providing power to Schottel Z-drive units. The new boats will have 11,000 square feet of clear deck space aft and will be capable of carrying 19,500 bbls of liquid mud, 14,350 cubic feet of dry bulk and 1,700 bbls of methanol.

Delivery of the first boat is scheduled for the third quarter of next year with the remaining units to follow at five-month intervals. They will follow a 260-foot by 60-foot DP2 OSV, the 8,000 horsepower Harvey Carrier, which was turned over to Harvey by Eastern in June as part of an earlier three-boat order.

Colle Maritime Escort Tugs
At Gulfport, Mississippi Trinity Yachts’ subsidiary Trinity Offshore has been contracted to build two of Robert Allen’s RAstar 3100 terminal support/escort tugs for Colle Maritime Company, a joint venture between Signet Maritime Corporation and Colle Towing Company. Allen’s RAstar class has demonstrated vastly improved escort performance and sea-keeping capability in comparison to more conventional tug hull shapes, with tests indicating that the RAstar hull will give roll motion reductions of at least 50 percent and roll acceleration reductions of at least 60 percent.

The new Colle tugs will measure 30.5 meters by 12.2 meters and will be powered by Caterpillar Model C175-16 diesels, each rated at 2,550 kW (3,417 BHP) at 1,800 rpm. The dual mains will drive a pair of Rolls-Royce model US 255 Z-drives turning 2,800 mm OD controllable pitch propellers for 80 tons bollard pull ahead and more than 75 tons astern. Upon delivery they will be used to provide marine support services to Angola LNG Supply Services (ALSS) facility at Pascagoula, Mississippi.

Consolidation Ahead?
Among the Gulf coast’s two biggest yards, Northrop Grumman’s Ingalls and Avondale facilities, there may some consolidation ahead as the Navy cuts back on its ship ordering. The Ingalls yard, despite quality and infrastructure problems, has considerable work on its books for both the US Navy and Coast Guard, but Avondale, which has specialized in LPD 17-class amphibious ships, has only four more of these vessels to complete. Although both yards are looking at the Navy’s Littoral Combat Ships (LCS) program for possible future work, there is growing speculation that the Avondale yard could be sold or closed if Navy building requirements continue to shrink.

Now 72-years-old, the Avondale site suffers from being situated on the banks of Mississippi River where it is split by a flood control levee. The levee separates the yard’s fabrication shops from the river, meaning that large ship blocks must be moved up a narrow ramp or hoisted over the height of the dike before they can be placed on a hull. Once larger blocks become the norm in ship construction the levee is expected to constrict production.

In June, the sixth Avondale-built LPD 17 class ship, San Diego (LPD 22), was christened, and is due to be delivered to the Navy next year, while the Pascagoula yard expects to deliver the Aegis guided missile destroyer Gravely (DDG 107), its latest newbuilding, to the Navy within the next few weeks.