A recent series of efforts by Long Beach City Hall officials to tap the Port of Long Beach to cover declining city revenues could have serious long-term financial implications for the port, including: threatening the port's exceptionally positive bond credit rating; impacting the port's timely investment in infrastructure; raising the specter of increased cargo diversions; and, creating concerns regarding the autonomy of the port from city politics.
The Port of Long Beach, the second busiest container port in the Western Hemisphere, is owned by the state of California but operated by a nearly autonomous City of Long Beach department in trust for all the citizens of the state.
Long Beach operates as a landlord port, receiving no taxpayer funds and generating revenue primarily from leases of marine facilities to private firms and docking fees on vessels calling at the port.
Port revenues are prohibited by law from being used by the city for General Fund purposes, however, port revenues can be utilized through a special city fund for mainly maritime-, navigation-, and recreation-related expenses within the coastal tideland areas of the city. The city in turn can then offset General Fund expenses that would have been expended in the tidelands by utilizing the port funds.
City Budget Woes
The city of Long Beach, like many cities in California, is currently facing serious financial problems primarily related to increasing personnel-related costs and declining revenues from such sources as property taxes. Last month, city officials were forced to cut more than $18.5 million to achieve a mandated structurally-balanced city budget for fiscal year 2011.
Projections indicate that the city faces even further budget problems in coming years.
City officials, desperate to find new sources of revenue, have begun turning to the vastly profitable port, already a sizable revenue stream for City Hall.
In the past 20 years the port has paid City Hall nearly $440 million in either direct transfers or in payments for city services. This is an average of $22 million a year, or roughly 20 percent of the port's average annual profits.
Despite this apparent steady stream of port revenue to City Hall, city officials in the past 12 months have launched several efforts to divert even more funds from the port.
Port Oil Revenues
Late last year, city officials signed a deal with a major oil firm that essentially cut the port out of any revenue from future oil wells developed on port-owned oil property. Under the deal with Occidental Petroleum, revenues from future oil production will now be split between City Hall and Occidental. The deal is estimated to shift up to $15 million a year from port coffers to City Hall.
While the deal does not impact current wells generating revenue for the port, City Hall officials have also targeted these existing wells in a November ballot measure that proposes changes to port-related language in the Long Beach city charter.
Measure D, drafted by Mayor Bob Foster and several City Council members, seeks to turn over control of all port-controlled oil property and revenues to City Hall. The measure also seeks to change the way an annual port-to-city transfer of port profits is formulated.
Foster has argued that the oil-related portion of the ballot measure is meant to clarify charter language and is not an attempt to take more money from the port.
However, a study conducted by port staff prior to the announcement of the ballot measure estimated that the port expected to make $120 million in oil revenues from existing wells between 2010 and 2014. This would mean, if Measure D is approved by voters, that an average of $24 million a year will be diverted from the port to City Hall coffers.
Port-to-City Transfer
The ballot measure was crafted after port officials rejected City Hall's request to change the way port staff formulate the port's net profits. The annual transfer is currently limited by the city charter to 10 percent of the port's annual net profit--based on the port's annual audited financials.
The transfer portion of the ballot measure seeks to change the transfer formula from 10 percent of port net profit to 5 percent of port gross earnings. The average transfer over the past 10 years has been $11.7 million per year.
Despite no analysis being conducted to determine the future financial impacts of the measure, Foster has maintained that the fiscal impact to the port will be minor. He has repeatedly stated that the Measure D change in the charter is an effort to simplify the calculation of the transfer and is not about increasing the amount of the transfer.
However, based on the net and gross revenues of the port over the past ten years, the city stands to receive an average of $3 million more per year under the "5 percent of gross" formulation proposed in the ballot measure.
The port has also been tapped by City Hall to cover the debt service of the city's financially flagging Aquarium of the Pacific. This year the port paid nearly $3 million to cover the aquarium debt. In previous years, the amount has been even higher. Based on the financial situation of the city and the aquarium, it is likely that the port will have to cover the aquarium debt in the future as well.
Bottom Line
These four efforts alone have the potential, based on the various estimates of each revenue stream, to divert more than $45 million a year from the port to the city. Adding in the port's average $22 million a year in either direct transfers or payments for city services, and the port could be looking at sending roughly $67 million a year in revenue, or nearly 58 percent of its average annual profits, to City Hall.
In addition, City Hall is turning to the port more and more frequently for small items. This year alone the port was asked to offer up tens of thousands of dollars to support such city services as the municipal band and the Fourth of July fireworks show. These are in addition to the dozens of city events like the Long Beach Grand Prix and the Long Beach Seafest that the port is routinely asked to sponsor.
While the port can potentially sustain these diversions of revenue in the short term, the growing rapidity and size of the diversions has the potential for long-term problems.
Port Bond Rating
One area is in the port's bond rating. The port currently enjoys very positive bond ratings from each of the major bond rating agencies.
This rating assess the credit worthiness of a business entity's debt issues and serves almost the same function as a credit rating or FICO score does for individuals.
On a basic level, a high bond credit rating allows an entity like the Port of Long Beach, to obtain easier access to credit and at better terms. The opposite effect results from a lower bond rating.
Just like Equifax or TransUnion generate credit ratings for individuals, so to do a group of ratings agencies issue bond ratings for businesses and municipal entities like the port. In the case of bond ratings, the "big three" ratings firms are Fitch, Moody's and Standard & Poors.
In their evaluations of the port, each of these agencies cites similar specific port strengths that could be impacted by the continued diversion of port revenues.
Port Development
One of these strengths is the port's infrastructure, including, as detailed in a March 2010 Moody's report, "state-of-the-art facilities, including mega terminals and good road and rail connections."
In order to maintain this infrastructure the port has to invest sizable amounts of money. For example, the port's cost for the recently started Middle Harbor Project, which will rehabilitate and reconfigure several smaller terminals into one larger and more efficient mega terminal, is expected to be $751 million over ten years.
An increase in the amount of port revenues headed to City Hall could not only delay such port projects but could cause the port to re-evaluate which projects are deemed a priority. This in turn could cause a re-evaluation of the port's bond rating by the ratings agencies.
At least $1.2 billion of the port's 10-year $4.7 billion capital development project is expected to come from issuing debt. Any change in the port's bond rating would add significant cost to obtaining this debt. Based on the findings of a recent study by the non-profit Civil Federation on the cost of bond rating downgrades to the state of Illinois, the port could face more than $120 million in additional payments on the $1.2 billion in planned debt if the port's bond rating slips just one level.
Cargo Diversions
The rating agencies have also cited any increase in cargo diversions from the port as a potential risk to the port's rating.
The shifting of port revenue to City Hall could result in such diversion, if the port were forced to increase service fees or even implement a container fee to cover the loss of revenues to City Hall.
And it would not take much of an increase to force shippers to look elsewhere, according to a recent a recent analysis done by the Southern California Association of Governments, or SCAG. This group, the largest regional planning group in the nation, is mandated by the federal government to research and draw up plans for transportation, growth management, hazardous waste management, and air quality for the Southern California region.
The SCAG analysis, which looked at the impact of container fees on Southern California port traffic, found that a $100 fee per container would drive away 10 percent of the port's total imports in the short term and 23 percent over the long term. A $200 per-container fee would drive 19 percent of the port's total imports away over the short term and nearly 43 percent over the long term.
In other words, a $200 per-container fee would, over the long term, eliminate all the traffic gains made by the port in the past 15 years of growth. Even the $100 per-container fee's short term impacts would return the port to the same levels experienced during the height of the economic downturn in late 2008 and early 2009.
Loss of Autonomy
The City of Long Beach Harbor Department, which operates the port, was set up under the city charter to be nearly autonomous from the day-to-day politics of City Hall. In fact, City Hall only has several ways to directly impact the operation of the port: the mayor and City Council appoint the five members of the port commission; the City Council must approve the port's annual budget; the Mayor has line-item veto power over the port budget; and, the City Council can remove a sitting port commissioner under specific circumstances. Beyond these actions, City Hall has very little control over port staff beyond the application of political pressure on port officials.
In the past, all three rating agencies have cited the port's autonomy from City Hall politics as a distinct strength enjoyed by the port that figures into the port's strong ratings.
However, Foster has made it clear in recent days that while the port should be kept at "arm's-length," the port has a fiduciary responsibility to the city in addition to its trust responsibility to the state.
While this opinion runs counter to numerous legal decisions by the state Supreme Court stretching back to the early days of the port, the mayor and city staff have become more aggressive in the past year on imposing the will of City Hall on the port.
Examples of this include the development of the oil deal with Occidental. During the negotiations, City Hall officials sided with Occidental over the valuation of the port oil property and attempted to pressure port officials who disagreed to go along with the valuation. City Hall also led port officials to believe that the port would still be receiving the revenues from any future oil development. Port officials were notified shortly before the deal was signed that City Hall had unilaterally decided that the city, and not the port, would be receiving any revenue generated under the deal.
Another example was the recent dressing down of port officials at an Aug. 3 public council meeting by the mayor. After two port commissioners rose to question the timing of Measure D and the fact that no financial impact study was done, Foster and nearly all of the council members slammed the two commissioners for not cooperating with City Hall on the transfer timing issue, despite initial assertions by the City Auditor that the port had been very cooperative. The mayor and council repeatedly stated during the meeting that the "us-versus-them culture" of the port needed to change.
The most recent example was the recent veto of a $60 million item in the port budget by the mayor. Foster intimated that the line item, for the removal of a port maintenance yard sitting in the path of an impending bridge replacement project, was a way for the port to move forward with a decade-old plan to build a new port administration building--despite several assurances by port officials prior to the veto that the administration building was no longer moving forward. Foster told port officials that the port could seek approval for the funds from the council as a budget amendment, thus placing the council in the position of approving the funds for the port project instead of the port commission.
Gag Order
While none of the bond rating agencies have suggested that any change in the port's bond ratings are being considered, all three agencies have said that they are watching the moves by City Hall closely.
For their part, port officials have said that the port can handle the current financial demands placed upon them by City Hall. In fact. in some cases, such as the municipal band and fireworks show, the port has offered to pay voluntarily.
However, it is unknown how port officials feel about Measure D and its potential impacts. Shortly after the Aug. 3 council meeting where the two port commissioners were dressed down, the City Attorney's office forwarded a memo to the port admonishing port staff from publicly discussing the ballot measure. The memo, which cited state fair election laws, even warned port staff of possible criminal penalties.
Due mainly to the public dressing down and the warning memo, no opposing view to Measure D will appear on the ballot--only the pro-measure argument drafted by City Hall. When a prominent trade group tried to compose an opposing argument in the several days provided to craft an argument before the ballot deadline, the group found many people in the industry that were opposed to the measure but none that would be willing to sign on to the argument.
Thursday, October 7, 2010
Los Angeles Port Begin Collecting $2,500 Truck Firm Fee
The Port of Los Angeles has begun charging a one-time $2,500 fee to each trucking firm wishing to do business within the port.
The fee is part of an access-licensing component of the port's so called "Clean Truck Plan."
In April 2009, at the request of the American Trucking Associations, a federal judge enjoined most of the components of the access-licensing scheme.
After a trial earlier this year, the same judge ruled Sept. 10 that the scheme could proceed and lifted the injunction. The ruling, which covers the access license scheme and other portions of the truck plan, is currently being appealed by the ATA to the California Ninth Circuit Court of Appeals.
Under the regulations imposed by the port under the truck plan, the more than 900 trucking firms servicing the port must have a signed access license agreement with the port and meet all of the port criteria contained within it. These port-defined criteria include such requirements as details of the truck firm's financial capabilities, use of employee drivers according to a port phase-in schedule, a detailed off-street parking plan and truck maintenance plans.
The $2,500 fee is in addition to an annual $100 per truck fee that the port began collecting in February.
The fee is part of an access-licensing component of the port's so called "Clean Truck Plan."
In April 2009, at the request of the American Trucking Associations, a federal judge enjoined most of the components of the access-licensing scheme.
After a trial earlier this year, the same judge ruled Sept. 10 that the scheme could proceed and lifted the injunction. The ruling, which covers the access license scheme and other portions of the truck plan, is currently being appealed by the ATA to the California Ninth Circuit Court of Appeals.
Under the regulations imposed by the port under the truck plan, the more than 900 trucking firms servicing the port must have a signed access license agreement with the port and meet all of the port criteria contained within it. These port-defined criteria include such requirements as details of the truck firm's financial capabilities, use of employee drivers according to a port phase-in schedule, a detailed off-street parking plan and truck maintenance plans.
The $2,500 fee is in addition to an annual $100 per truck fee that the port began collecting in February.
SoCal Ports Postpone Vote On New Green Goals
The governing boards for the ports of Los Angeles and Long Beach on Wednesday postponed a vote that would tighten the goals of the ports' jointly developed environmental programs.
Port officials said the delay was to offer the public more time to review the proposed updates to the ports' Clean Air Action Plan, an omnibus document detailing the two ports' varied programs aimed at reducing ports-generated pollution.
The update to the CAAP has been spurred by the rapid attainment of many of the goals set down when the document was crafted in 2006. One program contained in the CAAP, which targeted truck-generated diesel air pollution, reached the original CAAP emission reduction goals nearly two years ahead of schedule, due in large part to a rapid implementation of a more than $600 million turnover of the current drayage fleet by the trucking industry.
Port officials, who hope to vote on the CAAP update sometime in November, also said that the vote delay would afford the two ports additional time "to clarify the document for industry and other stakeholders." In a statement, the ports specifically mention that staff from the two ports staff plans to sit down with rail industry representatives to discuss the CAAP update's proposed measures on long haul locomotives, possibly to seek an equivalent alternative.
Port officials said the delay was to offer the public more time to review the proposed updates to the ports' Clean Air Action Plan, an omnibus document detailing the two ports' varied programs aimed at reducing ports-generated pollution.
The update to the CAAP has been spurred by the rapid attainment of many of the goals set down when the document was crafted in 2006. One program contained in the CAAP, which targeted truck-generated diesel air pollution, reached the original CAAP emission reduction goals nearly two years ahead of schedule, due in large part to a rapid implementation of a more than $600 million turnover of the current drayage fleet by the trucking industry.
Port officials, who hope to vote on the CAAP update sometime in November, also said that the vote delay would afford the two ports additional time "to clarify the document for industry and other stakeholders." In a statement, the ports specifically mention that staff from the two ports staff plans to sit down with rail industry representatives to discuss the CAAP update's proposed measures on long haul locomotives, possibly to seek an equivalent alternative.
Bellingham Port Names New Top Exec
After a nearly 15-month wait and at least one failed round of candidates, the Port of Bellingham has selected a new top executive.
The port commission on Tuesday selected Charles Sheldon, a 20-year veteran of the Port of Seattle, to be the port's new executive director. The 63-year-old Sheldon is currently serving as a special projects coordinator for the Seattle port's executive team.
Bellingham commissioners praised Sheldon's long track record with Seattle and his experience with large development projects such as the third runway project at Seattle-Tacoma International Airport.
Sheldon, who beat out two other finalists, will reportedly be paid in the middle of the advertised range for the position of $125,000 to $135,000.
Earlier this year, the port announced five finalists for the executive director position after whittling down a pool of more than 110 applicants. Shortly before a round of public meetings to introduce the candidates, two of the five finalists removed their names from contention. Port officials then decided they wanted additional candidates beyond the three remaining finalists. Although the three individuals were asked to keep their names in contention, each withdrew his name shortly after the port decision to expand the candidate pool.
Sheldon was part of a second pool of three candidates pulled from the original applicant pool.
Port Facilities Director Fred Seeger has served as the port's interim executive director since the resignation of former port top executive Jim Darling in June 2009.
The port commission on Tuesday selected Charles Sheldon, a 20-year veteran of the Port of Seattle, to be the port's new executive director. The 63-year-old Sheldon is currently serving as a special projects coordinator for the Seattle port's executive team.
Bellingham commissioners praised Sheldon's long track record with Seattle and his experience with large development projects such as the third runway project at Seattle-Tacoma International Airport.
Sheldon, who beat out two other finalists, will reportedly be paid in the middle of the advertised range for the position of $125,000 to $135,000.
Earlier this year, the port announced five finalists for the executive director position after whittling down a pool of more than 110 applicants. Shortly before a round of public meetings to introduce the candidates, two of the five finalists removed their names from contention. Port officials then decided they wanted additional candidates beyond the three remaining finalists. Although the three individuals were asked to keep their names in contention, each withdrew his name shortly after the port decision to expand the candidate pool.
Sheldon was part of a second pool of three candidates pulled from the original applicant pool.
Port Facilities Director Fred Seeger has served as the port's interim executive director since the resignation of former port top executive Jim Darling in June 2009.
Tuesday, October 5, 2010
FIDLEY WATCH - Sending Business East
Chris Philips, Managing Editor
Recently National Public Radio reported on the work being done by East Coast ports to accommodate the flood of larger container ships that will be sailing through the new Panama Canal locks. The Port of Virginia, in Norfolk, is already deep enough to take the large ships. Virginia’s unemployment rate has hovered around 7 percent for the last year, more than two points below the national average.
NPR notes that Robert Morris, Senior Director of External Affairs for the Georgia Ports Authority says the Port of Savannah spent $40 million and more than a decade on environmental impact studies to dredge the Savannah River. Mr. Morris says, “…the completion of the Panama Canal is really the biggest game changer in the maritime business for the East Coast since the invention of the container, and East Coast ports are getting ready for that.”
Georgia’s unemployment has fluctuated between 10.2 and 10.8.
When the dredging is done, Morris says, Savannah will be uniquely positioned to unload and ship cargo to the Gulf States and Midwest. The Port of Virginia will be ready to supply Chicago and other heartland cities after its own massive project, enlarging 28 railroad tunnels for double-stacked trains.
Meanwhile, West Coast ports or their governing bodies continue to discourage business. Last month at the port of Los Angeles (California’s unemployment figures hit 13.2 percent in January and were rising past 12.2 percent at press time), governing board approved new trucking regulations that will phase out independent owner-operator drayage drivers by the end of 2013 in lieu of per-hour employee drivers. The regulations, supported by the Teamsters, are expected to make it easier for the union to organize what until now have been independent drivers.
The new employee-only mandate could affect more than 6,000 port-servicing drivers that are currently independent owner-operators. Portions of the truck plan implemented since 2008 resulted in more than 10,000 drivers leaving the port drayage service and the shuttering of hundreds of local mostly small trucking firms.
The result will most likely be higher drayage rates for vessels calling at Los Angeles.
The new three-year phase-in schedule approved Monday calls for 20 percent of all gate calls at the port to be handled by employee drivers by the end of 2011, 66 percent by the end of 2012 and 100 percent by the end of 2013, just in time for the opening of the new Panama locks. The Mayor of Oakland, Ron Dellums, is working with organized labor on a similar plan.
While the Port of Long Beach plan doesn’t contain the employee mandate, the port has its own problems. In November, Long Beach voters will decide on Proposition D, an amendment to the City Charter designed to give City Hall a bigger share of Port of Long Beach revenues. The two-part measure would change the formula for fund transfers from the port to a trust that pays for harbor improvements and change the language in the city charter to clarify the city’s jurisdiction over oil properties at the port.
The result would be a loss of port revenue estimated in the hundreds of millions of dollars over a ten-year period- money that would be used develop infrastructure and provide port services, at a time when competition from other ports continues to grow (see page 6, for a story about new container service between Asia and the Port of Manzanillo, Mexico).
While East Coast ports are preparing to welcome Asian cargo, the West Coast seems to be inviting it to leave. Do the mayors and city councils of the West Coast port cities understand the consequences of their actions, or will they blame other factors when carriers start bypassing unwelcoming West Coast ports for greener pastures?
Recently National Public Radio reported on the work being done by East Coast ports to accommodate the flood of larger container ships that will be sailing through the new Panama Canal locks. The Port of Virginia, in Norfolk, is already deep enough to take the large ships. Virginia’s unemployment rate has hovered around 7 percent for the last year, more than two points below the national average.
NPR notes that Robert Morris, Senior Director of External Affairs for the Georgia Ports Authority says the Port of Savannah spent $40 million and more than a decade on environmental impact studies to dredge the Savannah River. Mr. Morris says, “…the completion of the Panama Canal is really the biggest game changer in the maritime business for the East Coast since the invention of the container, and East Coast ports are getting ready for that.”
Georgia’s unemployment has fluctuated between 10.2 and 10.8.
When the dredging is done, Morris says, Savannah will be uniquely positioned to unload and ship cargo to the Gulf States and Midwest. The Port of Virginia will be ready to supply Chicago and other heartland cities after its own massive project, enlarging 28 railroad tunnels for double-stacked trains.
Meanwhile, West Coast ports or their governing bodies continue to discourage business. Last month at the port of Los Angeles (California’s unemployment figures hit 13.2 percent in January and were rising past 12.2 percent at press time), governing board approved new trucking regulations that will phase out independent owner-operator drayage drivers by the end of 2013 in lieu of per-hour employee drivers. The regulations, supported by the Teamsters, are expected to make it easier for the union to organize what until now have been independent drivers.
The new employee-only mandate could affect more than 6,000 port-servicing drivers that are currently independent owner-operators. Portions of the truck plan implemented since 2008 resulted in more than 10,000 drivers leaving the port drayage service and the shuttering of hundreds of local mostly small trucking firms.
The result will most likely be higher drayage rates for vessels calling at Los Angeles.
The new three-year phase-in schedule approved Monday calls for 20 percent of all gate calls at the port to be handled by employee drivers by the end of 2011, 66 percent by the end of 2012 and 100 percent by the end of 2013, just in time for the opening of the new Panama locks. The Mayor of Oakland, Ron Dellums, is working with organized labor on a similar plan.
While the Port of Long Beach plan doesn’t contain the employee mandate, the port has its own problems. In November, Long Beach voters will decide on Proposition D, an amendment to the City Charter designed to give City Hall a bigger share of Port of Long Beach revenues. The two-part measure would change the formula for fund transfers from the port to a trust that pays for harbor improvements and change the language in the city charter to clarify the city’s jurisdiction over oil properties at the port.
The result would be a loss of port revenue estimated in the hundreds of millions of dollars over a ten-year period- money that would be used develop infrastructure and provide port services, at a time when competition from other ports continues to grow (see page 6, for a story about new container service between Asia and the Port of Manzanillo, Mexico).
While East Coast ports are preparing to welcome Asian cargo, the West Coast seems to be inviting it to leave. Do the mayors and city councils of the West Coast port cities understand the consequences of their actions, or will they blame other factors when carriers start bypassing unwelcoming West Coast ports for greener pastures?
Fidley Watch: Sending Business East
Recently National Public Radio reported on the work being done by East Coast ports to accommodate the flood of larger container ships that will be sailing through the new Panama Canal locks. The Port of Virginia, in Norfolk, is already deep enough to take the large ships. Virginia’s unemployment rate has hovered around 7 percent for the last year, more than two points below the national average.
NPR notes that Robert Morris, Senior Director of External Affairs for the Georgia Ports Authority says the Port of Savannah spent $40 million and more than a decade on environmental impact studies to dredge the Savannah River. Mr. Morris says, “…the completion of the Panama Canal is really the biggest game changer in the maritime business for the East Coast since the invention of the container, and East Coast ports are getting ready for that.”
Georgia’s unemployment has fluctuated between 10.2 and 10.8.
When the dredging is done, Morris says, Savannah will be uniquely positioned to unload and ship cargo to the Gulf States and Midwest. The Port of Virginia will be ready to supply Chicago and other heartland cities after its own massive project, enlarging 28 railroad tunnels for double-stacked trains.
Meanwhile, West Coast ports or their governing bodies continue to discourage business. Last month at the port of Los Angeles (California’s unemployment figures hit 13.2 percent in January and were rising past 12.2 percent at press time), governing board approved new trucking regulations that will phase out independent owner-operator drayage drivers by the end of 2013 in lieu of per-hour employee drivers. The regulations, supported by the Teamsters, are expected to make it easier for the union to organize what until now have been independent drivers.
The new employee-only mandate could affect more than 6,000 port-servicing drivers that are currently independent owner-operators. Portions of the truck plan implemented since 2008 resulted in more than 10,000 drivers leaving the port drayage service and the shuttering of hundreds of local mostly small trucking firms.
The result will most likely be higher drayage rates for vessels calling at Los Angeles.
The new three-year phase-in schedule approved Monday calls for 20 percent of all gate calls at the port to be handled by employee drivers by the end of 2011, 66 percent by the end of 2012 and 100 percent by the end of 2013, just in time for the opening of the new Panama locks. The Mayor of Oakland, Ron Dellums, is working with organized labor on a similar plan.
While the Port of Long Beach plan doesn’t contain the employee mandate, the port has its own problems. In November, Long Beach voters will decide on Proposition D, an amendment to the City Charter designed to give City Hall a bigger share of Port of Long Beach revenues. The two-part measure would change the formula for fund transfers from the port to a trust that pays for harbor improvements and change the language in the city charter to clarify the city’s jurisdiction over oil properties at the port.
The result would be a loss of port revenue estimated in the hundreds of millions of dollars over a ten-year period- money that would be used develop infrastructure and provide port services, at a time when competition from other ports continues to grow (see page 6, for a story about new container service between Asia and the Port of Manzanillo, Mexico).
While East Coast ports are preparing to welcome Asian cargo, the West Coast seems to be inviting it to leave. Do the mayors and city councils of the West Coast port cities understand the consequences of their actions, or will they blame other factors when carriers start bypassing unwelcoming West Coast ports for greener pastures?
NPR notes that Robert Morris, Senior Director of External Affairs for the Georgia Ports Authority says the Port of Savannah spent $40 million and more than a decade on environmental impact studies to dredge the Savannah River. Mr. Morris says, “…the completion of the Panama Canal is really the biggest game changer in the maritime business for the East Coast since the invention of the container, and East Coast ports are getting ready for that.”
Georgia’s unemployment has fluctuated between 10.2 and 10.8.
When the dredging is done, Morris says, Savannah will be uniquely positioned to unload and ship cargo to the Gulf States and Midwest. The Port of Virginia will be ready to supply Chicago and other heartland cities after its own massive project, enlarging 28 railroad tunnels for double-stacked trains.
Meanwhile, West Coast ports or their governing bodies continue to discourage business. Last month at the port of Los Angeles (California’s unemployment figures hit 13.2 percent in January and were rising past 12.2 percent at press time), governing board approved new trucking regulations that will phase out independent owner-operator drayage drivers by the end of 2013 in lieu of per-hour employee drivers. The regulations, supported by the Teamsters, are expected to make it easier for the union to organize what until now have been independent drivers.
The new employee-only mandate could affect more than 6,000 port-servicing drivers that are currently independent owner-operators. Portions of the truck plan implemented since 2008 resulted in more than 10,000 drivers leaving the port drayage service and the shuttering of hundreds of local mostly small trucking firms.
The result will most likely be higher drayage rates for vessels calling at Los Angeles.
The new three-year phase-in schedule approved Monday calls for 20 percent of all gate calls at the port to be handled by employee drivers by the end of 2011, 66 percent by the end of 2012 and 100 percent by the end of 2013, just in time for the opening of the new Panama locks. The Mayor of Oakland, Ron Dellums, is working with organized labor on a similar plan.
While the Port of Long Beach plan doesn’t contain the employee mandate, the port has its own problems. In November, Long Beach voters will decide on Proposition D, an amendment to the City Charter designed to give City Hall a bigger share of Port of Long Beach revenues. The two-part measure would change the formula for fund transfers from the port to a trust that pays for harbor improvements and change the language in the city charter to clarify the city’s jurisdiction over oil properties at the port.
The result would be a loss of port revenue estimated in the hundreds of millions of dollars over a ten-year period- money that would be used develop infrastructure and provide port services, at a time when competition from other ports continues to grow (see page 6, for a story about new container service between Asia and the Port of Manzanillo, Mexico).
While East Coast ports are preparing to welcome Asian cargo, the West Coast seems to be inviting it to leave. Do the mayors and city councils of the West Coast port cities understand the consequences of their actions, or will they blame other factors when carriers start bypassing unwelcoming West Coast ports for greener pastures?
Mayor Appoints Docker Activist to Los Angeles Port Board
Mayor Villaraigosa has appointed local union activist and longtime docker David Arian to the Los Angeles Board of Harbor Commissioners.
Arian, a native of San Pedro, began his career as a longshoreman in 1965 and remained an active member of the International Longshore & Warehouse Union for 44 years until his retirement in 2009. In 1991, he was elected to a term as International President of the ILWU.
In 2006, Mayor Villaraigosa asked him to sit on the joint port advisory for the Port of Los Angeles and Long Beach’s Clean Air Action Plan.
Describing himself in the past as a "militant union advocate," Arian has been an active member of the San Pedro community for decades working with organizations like the Toberman Settlement House, the Harbor Interfaith Shelter, and the San Pedro Boys & Girls Club.
He has also served for nearly a decade as president of the Harry Bridges Institute, a San Pedro-based non-profit dedicated to the memory and legacy of ILWU founder Harry Bridges.
Arian still faces a confirmation vote by the Los Angeles City Council. If confirmed, Arian will fill a seat vacated suddenly by Commissioner Joseph Radisich in mid-September. Radisich, also a long-time ILWU member, was the second departure from the port board in a roughly two-month period. Harbor Commission Vice President Jerilyn Lopez-Mendoza left the port board in July to pursue a new private sector job and in early September, Villaraigosa appointed his former chief of staff Robin Kramer to fill Lopez-Mendoza's vacant seat.
Arian, a native of San Pedro, began his career as a longshoreman in 1965 and remained an active member of the International Longshore & Warehouse Union for 44 years until his retirement in 2009. In 1991, he was elected to a term as International President of the ILWU.
In 2006, Mayor Villaraigosa asked him to sit on the joint port advisory for the Port of Los Angeles and Long Beach’s Clean Air Action Plan.
Describing himself in the past as a "militant union advocate," Arian has been an active member of the San Pedro community for decades working with organizations like the Toberman Settlement House, the Harbor Interfaith Shelter, and the San Pedro Boys & Girls Club.
He has also served for nearly a decade as president of the Harry Bridges Institute, a San Pedro-based non-profit dedicated to the memory and legacy of ILWU founder Harry Bridges.
Arian still faces a confirmation vote by the Los Angeles City Council. If confirmed, Arian will fill a seat vacated suddenly by Commissioner Joseph Radisich in mid-September. Radisich, also a long-time ILWU member, was the second departure from the port board in a roughly two-month period. Harbor Commission Vice President Jerilyn Lopez-Mendoza left the port board in July to pursue a new private sector job and in early September, Villaraigosa appointed his former chief of staff Robin Kramer to fill Lopez-Mendoza's vacant seat.
Los Angeles Port Offers Tariff Cuts for Imported "Green" Cars
The Port of Los Angeles will be the world's first major port to offer a reduced tariff for imported zero-emission vehicles, under a plan approved last week by the port's governing board.
The plan, if approved by Los Angeles City Council, will offer zero-emission automakers moving their goods through the Los Angeles port a 15 percent tariff reduction.
While applying to all automakers, the move is targeted at Chinese manufacturer BYD Auto Company Limited. Los Angeles City Hall has been trying to persuade the electric and hybrid automaker to use the Port of Los Angeles as its primary United States shipping gateway. In May, BYD announced that it would locate its North American headquarters in Los Angeles.
The work with BYD is part of a City Hall effort to remake Los Angeles as the "electric car capitol" of the US.
According to port officials, the “Zero Emission Vehicle Tariff Measure” is the first of its kind in the maritime industry and is available to any automobile manufacturer who imports through the Port of Los Angeles. The 15 percent tariff reduction takes effect upon approval by the Los Angeles City Council.
The plan, if approved by Los Angeles City Council, will offer zero-emission automakers moving their goods through the Los Angeles port a 15 percent tariff reduction.
While applying to all automakers, the move is targeted at Chinese manufacturer BYD Auto Company Limited. Los Angeles City Hall has been trying to persuade the electric and hybrid automaker to use the Port of Los Angeles as its primary United States shipping gateway. In May, BYD announced that it would locate its North American headquarters in Los Angeles.
The work with BYD is part of a City Hall effort to remake Los Angeles as the "electric car capitol" of the US.
According to port officials, the “Zero Emission Vehicle Tariff Measure” is the first of its kind in the maritime industry and is available to any automobile manufacturer who imports through the Port of Los Angeles. The 15 percent tariff reduction takes effect upon approval by the Los Angeles City Council.
Vancouver USA Port Cargo Faces Overland Trouble
The arrival Sunday at the Washington-state Port of Vancouver may be the easiest part of the journey for nine giant pieces of oil production equipment bound for the Kearl Oil Sands in Canada.
The oil modules, each costing more than $1 million, are part of a total of 207 such modules that are being manufactured in South Korea, transported via cargo ship to Vancouver and then set for transport to the Canadian production site.
Officials at the port have spent several years establishing Vancouver as one of the premier West Coast maritime gateways for oversized cargoes such as the oil modules.
The oil module transportation plan calls for the Imperial Oil/ExxonMobil Canada-owned modules to be moved via barge from Vancouver to the Port of Lewiston in Idaho. From Lewiston the modules will be transferred to trucks for the overland trip through the mountains of Idaho and western Montana to the production site in Canada.
The 207 modules will be sent along in 15 smaller loads spread out between now and next June.
However, Idaho officials have refused permits for the overland transport of several similar ConocoPhillips pieces of equipment and the case reached the Idaho Supreme Court on Friday. A decision is expected within the next four weeks.
The oil modules will have to wait at Lewiston until the permit case is decided. In addition, the Montana Department of Transportation has said it will not decide on whether to issue permits to allow the oil modules to move through Montana until the Idaho court rules on the permit cases.
Public concerns about the oil module transport plan have also raised public concern in Idaho and Montana. Opponents of the oil module plan have said they fear major traffic delays, potential damage to roads and bridges, and possible impact to scenic and cultural resources along the proposed route.
Imperial Oil/ExxonMobil Canada, speaking to the Missoulian newspaper, would not say if the firm has a contingency plan if the overland transport permits are denied.
An Imperial Oil/ExxonMobil Canada spokesperson told the paper that the oil firm is "confident in the process" and the firm's intent is to move the oil modules along the proposed route.
Linwood Laughy of Kooskia, Idaho, one of the plaintiffs in the ConocoPhillips permit case in Idaho, told the paper that Imperial Oil/ExxonMobil's insistence on moving forward is disappointing but no surprise.
"With no decision from the Idaho Supreme Court regarding transportation permits and growing resistance to the mega-loads in Idaho and Montana, the arrival of the first giant Imperial Oil modules at the Port of Vancouver underscores Imperial Oil's arrogance," Laughy told the newspaper via e-mail. "As they told an angry audience in Kooskia on June 29th, ‘We have no plan B.'"
The oil modules, each costing more than $1 million, are part of a total of 207 such modules that are being manufactured in South Korea, transported via cargo ship to Vancouver and then set for transport to the Canadian production site.
Officials at the port have spent several years establishing Vancouver as one of the premier West Coast maritime gateways for oversized cargoes such as the oil modules.
The oil module transportation plan calls for the Imperial Oil/ExxonMobil Canada-owned modules to be moved via barge from Vancouver to the Port of Lewiston in Idaho. From Lewiston the modules will be transferred to trucks for the overland trip through the mountains of Idaho and western Montana to the production site in Canada.
The 207 modules will be sent along in 15 smaller loads spread out between now and next June.
However, Idaho officials have refused permits for the overland transport of several similar ConocoPhillips pieces of equipment and the case reached the Idaho Supreme Court on Friday. A decision is expected within the next four weeks.
The oil modules will have to wait at Lewiston until the permit case is decided. In addition, the Montana Department of Transportation has said it will not decide on whether to issue permits to allow the oil modules to move through Montana until the Idaho court rules on the permit cases.
Public concerns about the oil module transport plan have also raised public concern in Idaho and Montana. Opponents of the oil module plan have said they fear major traffic delays, potential damage to roads and bridges, and possible impact to scenic and cultural resources along the proposed route.
Imperial Oil/ExxonMobil Canada, speaking to the Missoulian newspaper, would not say if the firm has a contingency plan if the overland transport permits are denied.
An Imperial Oil/ExxonMobil Canada spokesperson told the paper that the oil firm is "confident in the process" and the firm's intent is to move the oil modules along the proposed route.
Linwood Laughy of Kooskia, Idaho, one of the plaintiffs in the ConocoPhillips permit case in Idaho, told the paper that Imperial Oil/ExxonMobil's insistence on moving forward is disappointing but no surprise.
"With no decision from the Idaho Supreme Court regarding transportation permits and growing resistance to the mega-loads in Idaho and Montana, the arrival of the first giant Imperial Oil modules at the Port of Vancouver underscores Imperial Oil's arrogance," Laughy told the newspaper via e-mail. "As they told an angry audience in Kooskia on June 29th, ‘We have no plan B.'"
Hyundai Joins Carriers Phasing Out Port Chassis
The number of ocean carriers announcing plans to stop providing container chassis at United States ports continues to grow.
Hyundai Merchant Marine announced last week that it will begin phasing out chassis at six gateway locations as of Nov. 1 and will expand the phase-out to the rest of the nation next year.
Hyundai joins a slew of other carriers – including Atlantic Container Line, CMA CGM, Cosco, Evergreen Marine, NYK Line, and Orient Overseas Container Line – that have announced this year they will phase out container chassis at US ports and other inland locations.
The Nov. 1 round of Hyundai's phase-out plan will affect Baltimore, Md., Buffalo, N.Y., Harrisburg, Pa., Miami, Fla., Philadelphia, Pa., and Worcester, Mass.
Hyundai Merchant Marine announced last week that it will begin phasing out chassis at six gateway locations as of Nov. 1 and will expand the phase-out to the rest of the nation next year.
Hyundai joins a slew of other carriers – including Atlantic Container Line, CMA CGM, Cosco, Evergreen Marine, NYK Line, and Orient Overseas Container Line – that have announced this year they will phase out container chassis at US ports and other inland locations.
The Nov. 1 round of Hyundai's phase-out plan will affect Baltimore, Md., Buffalo, N.Y., Harrisburg, Pa., Miami, Fla., Philadelphia, Pa., and Worcester, Mass.
Friday, October 1, 2010
Quality Refrigeration - 60 Years of Cool
Jack Appelt started in the refrigeration business riding along with his Uncle Dave in his uncle’s Ford Model T service truck. His uncle, Dave Shannon, was a refrigeration technician for Frigidaire in the early part of the 20th century, and those trips with his uncle inspired Appelt to begin a career in refrigeration and air conditioning. In the late 1940s and early 1950s the world was rebuilding from the war, and the Port of Los Angeles was filled with ships calling between the West Coast and Asia. Those ships needed equipment for the preservation of perishables in transit, including galley foodstuffs and cargo, and to air condition the quarters of passengers and crew.
Jack Appelt recognized the need for a specialized marine refrigeration service company in Los Angeles Harbor. In 1950 he used his experience in refrigeration to form Quality Refrigeration to serve the booming cargo ship market as well as the commercial fishing fleet in San Pedro Bay. The company was so successful that in 1958 Jack Appelt brought in a dedicated employee, Richard Webber, as a partner to share the workload. The proximity to the Long Beach Naval Shipyard gave the company the ability to offer services to tankers, cargo ships, troop transports and destroyers deployed to the Korean conflict, as well as the burgeoning fishing fleet that was producing 9.6 million cases of canned tuna a year.
Quality Refrigeration started life in an 800-square-foot shared warehouse in Wilmington, California. As the business grew, so did the facility, which was expanded to 6,000 square feet in mid 1970’s. In 1996 the Long Beach Naval Shipyard was shut down, and the Navy expanded operations in San Diego. Quality Refrigeration responded by adding a facility to serve the new and existing San Diego-based Navy ships. The continued success of the company led to a move from the original Wilmington location to a new, 18,000-square-foot facility, also in Wilmington.
From the first day, Quality Refrigeration Company Inc. specialized in marine, commercial and industrial refrigeration and air conditioning with full 24-hour service and sales. The company offered service and repair to the maritime industry, including commercial shipping companies, the cruise and fishing industries, oil rig platforms, passenger vessels, tugs and shipyards, as well as industrial customers including refineries, industrial bakeries, manufacturing facilities and seafood processing facilities.
“The area used to have a huge fishing community,” says company President Jeff Hawke. “Even in the mid 1980s half the work we did was for fishing vessels.” Jack Appelt pioneered the installation of mechanical refrigeration systems onboard commercial fishing vessels and completed installations worldwide for clients such as Starkist.
“Jack introduced the flooded chiller system to the San Pedro fishing fleet,” says Hawke. “As the fishing fleet became more successful and the boats had to go farther out for fish, mechanical refrigeration became essential.”
When refrigerated containers were introduced in the 1970s, Quality Refrigeration was the frontrunner for the service of these units as well. The company has since expanded out of the “reefer” box business, but still provides warranty service and parts as a Carrier Transicold Dealer. Jack and Richard worked hard to expand the business and eventually passed on the business to their children, Charlotte Hawke Pesusich and Mike Webber. Keeping in the family tradition, the business is now in the hands of a third generation, Jeff Hawke and Jason Webber. Hawke and Webber are President and Vice President, respectively, following in their grandfathers’ footsteps and maintaining the thriving refrigeration and air conditioning business. The company’s success with its two Southern California locations has led Hawke and Webber to explore expansion into the San Francisco/Oakland region.
Jeff Hawke graduated from Cal Maritime Academy 1985 as Marine Engineer, and joined the company in 1987. Jeff began his career with the company designing and engineering systems along with job estimating and sales under the watchful eye of his grandfather. Today Jeff is President and oversees the overall operation of the company. Jeff’s mother, Charlotte Hawke Pesusich has worked for the company for more than 50 years and currently works part-time as controller. Her father Jack passed away in 1997, but he left the company in good hands.
Jack’s original partner, Richard Webber, passed the tradition down to his son, Mike Webber, who worked for the company 36 years before passing the reins to his son Jason. Jason worked his way up the ranks as a young boy sweeping the floor and carrying his dad’s tools. This led to a passion for refrigeration and air conditioning which could only be satisfied by getting his hands dirty on the equipment and fulfilling the unique needs of each customer. After attending technical schools and completing on the job training, Jason worked from the driver position in 1992, up through service technician and journeyman. Today he leads the crew of service technicians, and became Vice President when his father retired in 2007.
Today, Quality Refrigeration operates worldwide, performing installation and service of air conditioning and refrigeration systems on ships in Japan, Korea, Singapore, Guam, South America, Africa and Mexico, as well as throughout Europe and the US. As Jeff Hawke points out, when customers need parts they need them in a hurry. To that end, the company keeps an inventory of more than $500,000 in parts and equipment between the Wilmington and San Diego locations, including an extensive inventory of hard-to-find parts for outdated equipment. Quality Refrigeration also has a team of 15 service technicians available 24-hours a day and ready to go where the client needs them. Six inside customer representatives take care of sales for the company, including parts and equipment, and have clients throughout the maritime industry as well as international export customers.
Quality Refrigeration can service, repair or replace any marine refrigeration or air conditioning system, and has served as a Carrier Transicold Marine Distributor and Service Center for more than 40 of its 60 years. Jason Webber says, “Safety is a priority to our company.” Webber is responsible for insuring that Quality Refrigeration complies and works to the highest safety standards, and the company conducts weekly in-house technical training sessions to ensure that the service technicians have the latest tools and information at their disposal. The training also allows Quality Refrigeration to keep their technicians abreast of environmental issues, new refrigerant regulations and the EPA compliance requirements.
Much of the company’s work is performed under government contract, and some of the company’s most recent projects include Navy vessels. One notable contract is the Navy’s T-AKE Program at General Dynamics/NASSCO Shipyard in San Diego. The T-AKE is a dry cargo/ammunition ship, designed to operate independently for extended periods at sea while providing underway replenishment services. The ships provide logistic lift from sources of supply either in port or at sea and transfer cargo that includes ammunition, food, fuel, repair parts, and expendable supplies and material to station ships and other naval warfare forces at sea. Quality Refrigeration has been providing installation support, start-up and commissioning of the ships stores refrigeration systems.
The Navy’s T-AKE program is expected to total 14 ships, which will keep Quality Refrigeration busy on the program through 2012. Quality Refrigeration has also performed work on the US Navy T-AGOS vessels for Military Sealift Command. The T-AGOS ships are ocean surveillance ships built on a Small Waterplane Twin Hull, or SWATH, design for greater stability at slow speeds. The ships gather underwater acoustical data in support of the anti-submarine warfare mission of the Atlantic and Pacific Fleets. These ships were designed to tow an array of underwater listening devices to collect acoustical data, which also carry electronic equipment to process and transmit that data via satellite to shore stations for evaluation. The sensitive electronic equipment onboard these ships requires extensive cooling, as do the civilian crew operating the vessels. The four ships, USNS Effective, Victorious, Loyal and Able, each received three Carrier Transicold 96-ton chillers for the main air conditioning systems. The work was performed at a shipyard in Singapore, where the company provided installation support, start-up and commissioning. The USNS Effective was commissioned last month, and work on the other ships will be completed in 2011.
Earlier this month Quality Refrigeration embarked on a land-based project for the US Coast Guard. The company will replace all the galley refrigeration equipment at the Coast Guard Facility at San Pedro. Quality Refrigeration prides itself on maintaining the family atmosphere that started with Jack Appelt and Richard Webber. Along with the third generation currently running the company, many of Quality Refrigeration’s employees have been with them for decades. To thank their staff for their hard work and dedication, Hawke and Webber will be observing the company’s 60th anniversary with all of their employees and their families next month with a company-sponsored weekend celebration at a Mission Bay resort in San Diego.
Jack Appelt recognized the need for a specialized marine refrigeration service company in Los Angeles Harbor. In 1950 he used his experience in refrigeration to form Quality Refrigeration to serve the booming cargo ship market as well as the commercial fishing fleet in San Pedro Bay. The company was so successful that in 1958 Jack Appelt brought in a dedicated employee, Richard Webber, as a partner to share the workload. The proximity to the Long Beach Naval Shipyard gave the company the ability to offer services to tankers, cargo ships, troop transports and destroyers deployed to the Korean conflict, as well as the burgeoning fishing fleet that was producing 9.6 million cases of canned tuna a year.
Quality Refrigeration started life in an 800-square-foot shared warehouse in Wilmington, California. As the business grew, so did the facility, which was expanded to 6,000 square feet in mid 1970’s. In 1996 the Long Beach Naval Shipyard was shut down, and the Navy expanded operations in San Diego. Quality Refrigeration responded by adding a facility to serve the new and existing San Diego-based Navy ships. The continued success of the company led to a move from the original Wilmington location to a new, 18,000-square-foot facility, also in Wilmington.
From the first day, Quality Refrigeration Company Inc. specialized in marine, commercial and industrial refrigeration and air conditioning with full 24-hour service and sales. The company offered service and repair to the maritime industry, including commercial shipping companies, the cruise and fishing industries, oil rig platforms, passenger vessels, tugs and shipyards, as well as industrial customers including refineries, industrial bakeries, manufacturing facilities and seafood processing facilities.
“The area used to have a huge fishing community,” says company President Jeff Hawke. “Even in the mid 1980s half the work we did was for fishing vessels.” Jack Appelt pioneered the installation of mechanical refrigeration systems onboard commercial fishing vessels and completed installations worldwide for clients such as Starkist.
“Jack introduced the flooded chiller system to the San Pedro fishing fleet,” says Hawke. “As the fishing fleet became more successful and the boats had to go farther out for fish, mechanical refrigeration became essential.”
When refrigerated containers were introduced in the 1970s, Quality Refrigeration was the frontrunner for the service of these units as well. The company has since expanded out of the “reefer” box business, but still provides warranty service and parts as a Carrier Transicold Dealer. Jack and Richard worked hard to expand the business and eventually passed on the business to their children, Charlotte Hawke Pesusich and Mike Webber. Keeping in the family tradition, the business is now in the hands of a third generation, Jeff Hawke and Jason Webber. Hawke and Webber are President and Vice President, respectively, following in their grandfathers’ footsteps and maintaining the thriving refrigeration and air conditioning business. The company’s success with its two Southern California locations has led Hawke and Webber to explore expansion into the San Francisco/Oakland region.
Jeff Hawke graduated from Cal Maritime Academy 1985 as Marine Engineer, and joined the company in 1987. Jeff began his career with the company designing and engineering systems along with job estimating and sales under the watchful eye of his grandfather. Today Jeff is President and oversees the overall operation of the company. Jeff’s mother, Charlotte Hawke Pesusich has worked for the company for more than 50 years and currently works part-time as controller. Her father Jack passed away in 1997, but he left the company in good hands.
Jack’s original partner, Richard Webber, passed the tradition down to his son, Mike Webber, who worked for the company 36 years before passing the reins to his son Jason. Jason worked his way up the ranks as a young boy sweeping the floor and carrying his dad’s tools. This led to a passion for refrigeration and air conditioning which could only be satisfied by getting his hands dirty on the equipment and fulfilling the unique needs of each customer. After attending technical schools and completing on the job training, Jason worked from the driver position in 1992, up through service technician and journeyman. Today he leads the crew of service technicians, and became Vice President when his father retired in 2007.
Today, Quality Refrigeration operates worldwide, performing installation and service of air conditioning and refrigeration systems on ships in Japan, Korea, Singapore, Guam, South America, Africa and Mexico, as well as throughout Europe and the US. As Jeff Hawke points out, when customers need parts they need them in a hurry. To that end, the company keeps an inventory of more than $500,000 in parts and equipment between the Wilmington and San Diego locations, including an extensive inventory of hard-to-find parts for outdated equipment. Quality Refrigeration also has a team of 15 service technicians available 24-hours a day and ready to go where the client needs them. Six inside customer representatives take care of sales for the company, including parts and equipment, and have clients throughout the maritime industry as well as international export customers.
Quality Refrigeration can service, repair or replace any marine refrigeration or air conditioning system, and has served as a Carrier Transicold Marine Distributor and Service Center for more than 40 of its 60 years. Jason Webber says, “Safety is a priority to our company.” Webber is responsible for insuring that Quality Refrigeration complies and works to the highest safety standards, and the company conducts weekly in-house technical training sessions to ensure that the service technicians have the latest tools and information at their disposal. The training also allows Quality Refrigeration to keep their technicians abreast of environmental issues, new refrigerant regulations and the EPA compliance requirements.
Much of the company’s work is performed under government contract, and some of the company’s most recent projects include Navy vessels. One notable contract is the Navy’s T-AKE Program at General Dynamics/NASSCO Shipyard in San Diego. The T-AKE is a dry cargo/ammunition ship, designed to operate independently for extended periods at sea while providing underway replenishment services. The ships provide logistic lift from sources of supply either in port or at sea and transfer cargo that includes ammunition, food, fuel, repair parts, and expendable supplies and material to station ships and other naval warfare forces at sea. Quality Refrigeration has been providing installation support, start-up and commissioning of the ships stores refrigeration systems.
The Navy’s T-AKE program is expected to total 14 ships, which will keep Quality Refrigeration busy on the program through 2012. Quality Refrigeration has also performed work on the US Navy T-AGOS vessels for Military Sealift Command. The T-AGOS ships are ocean surveillance ships built on a Small Waterplane Twin Hull, or SWATH, design for greater stability at slow speeds. The ships gather underwater acoustical data in support of the anti-submarine warfare mission of the Atlantic and Pacific Fleets. These ships were designed to tow an array of underwater listening devices to collect acoustical data, which also carry electronic equipment to process and transmit that data via satellite to shore stations for evaluation. The sensitive electronic equipment onboard these ships requires extensive cooling, as do the civilian crew operating the vessels. The four ships, USNS Effective, Victorious, Loyal and Able, each received three Carrier Transicold 96-ton chillers for the main air conditioning systems. The work was performed at a shipyard in Singapore, where the company provided installation support, start-up and commissioning. The USNS Effective was commissioned last month, and work on the other ships will be completed in 2011.
Earlier this month Quality Refrigeration embarked on a land-based project for the US Coast Guard. The company will replace all the galley refrigeration equipment at the Coast Guard Facility at San Pedro. Quality Refrigeration prides itself on maintaining the family atmosphere that started with Jack Appelt and Richard Webber. Along with the third generation currently running the company, many of Quality Refrigeration’s employees have been with them for decades. To thank their staff for their hard work and dedication, Hawke and Webber will be observing the company’s 60th anniversary with all of their employees and their families next month with a company-sponsored weekend celebration at a Mission Bay resort in San Diego.
Long Beach Council Takes No Action on Mayor's Veto of Bridge Project Funds
The Long Beach City Council on Tuesday took no action to overturn Long Beach Mayor Robert Foster's veto of a $60 million line item in the Port of Long Beach fiscal year 2011 capital outlay budget that could delay the start of construction of the Gerald Desmond Bridge replacement.
A group of four Council members added a discussion of the Mayor's veto to the agenda during a Tuesday special meeting of the Council, but after lengthy debate and public comment, the Council as a whole took no action other than to receive and file the comments rendered.
The $60 million port budget line item rejected by the Mayor was to have paid for the relocation of the port’s maintenance yard which sits in the path of the Gerald Desmond Bridge replacement. The yard, which houses port maintenance staff and equipment, must be moved as a precursor to starting construction on the bridge project.
The Gerald Desmond Bridge is the major ingress and egress point for truck traffic into the port area. Trucks traversing the bridge currently carry an estimated 15 percent of the nation’s container traffic.
The bridge replacement project, being funded by a combination of federal, state and local funds, would replace the existing bridge with a new $1.1 billion structure that would have greater traffic capacity and allow the largest container vessels to access the port's terminal facilities beyond the bridge.
The current bridge opened in 1968, and despite multi-million dollar upgrades by the port, is deteriorating structurally at a rapid pace.
The port maintenance yard relocation was originally intended to be part of a much larger project that would consolidate port staff and the maintenance yard in a new port administration building. The current port administration building opened in 1959 and has been deemed seismically unfit. The Mayor has opposed the construction of a new port administration building.
The Mayor vetoed the port line-item arguing that because the yard relocation was still itemized under the new administration building project line, he could not approve it. The Mayor suggested that even though port officials have publicly said the administration project is not moving forward, the relocation of the yard was a way for the port to move forward with the administration building project.
The port maintains that the yard relocation is necessary for the bridge replacement project.
Mayor Foster said that the port can still obtain the funds by coming to the Council as soon as it wants with a port budget amendment reflecting the yard relocation under a line item not associated with the administration building project.
Because the Council must now approve the port’s funding for the yard relocation, this would appear to place the final financial approval of the initial component of the Gerald Desmond Bridge replacement project in the hands of the City Council instead of the Board of Harbor Commissioners.
A group of four Council members added a discussion of the Mayor's veto to the agenda during a Tuesday special meeting of the Council, but after lengthy debate and public comment, the Council as a whole took no action other than to receive and file the comments rendered.
The $60 million port budget line item rejected by the Mayor was to have paid for the relocation of the port’s maintenance yard which sits in the path of the Gerald Desmond Bridge replacement. The yard, which houses port maintenance staff and equipment, must be moved as a precursor to starting construction on the bridge project.
The Gerald Desmond Bridge is the major ingress and egress point for truck traffic into the port area. Trucks traversing the bridge currently carry an estimated 15 percent of the nation’s container traffic.
The bridge replacement project, being funded by a combination of federal, state and local funds, would replace the existing bridge with a new $1.1 billion structure that would have greater traffic capacity and allow the largest container vessels to access the port's terminal facilities beyond the bridge.
The current bridge opened in 1968, and despite multi-million dollar upgrades by the port, is deteriorating structurally at a rapid pace.
The port maintenance yard relocation was originally intended to be part of a much larger project that would consolidate port staff and the maintenance yard in a new port administration building. The current port administration building opened in 1959 and has been deemed seismically unfit. The Mayor has opposed the construction of a new port administration building.
The Mayor vetoed the port line-item arguing that because the yard relocation was still itemized under the new administration building project line, he could not approve it. The Mayor suggested that even though port officials have publicly said the administration project is not moving forward, the relocation of the yard was a way for the port to move forward with the administration building project.
The port maintains that the yard relocation is necessary for the bridge replacement project.
Mayor Foster said that the port can still obtain the funds by coming to the Council as soon as it wants with a port budget amendment reflecting the yard relocation under a line item not associated with the administration building project.
Because the Council must now approve the port’s funding for the yard relocation, this would appear to place the final financial approval of the initial component of the Gerald Desmond Bridge replacement project in the hands of the City Council instead of the Board of Harbor Commissioners.
Vancouver USA Port to Seek Fed Funds to Complete Rail Project
The governing board for the Washington-state Port of Vancouver agreed this week to apply for a federal loan to cover the remaining $76 million needed to complete a major expansion project of the port's rail infrastructure.
The three-member port board voted unanimously on Tuesday to seek the loan through the United States Federal Rail Administration.
The loan, if approved, will provide the final funding component to allow completion of the port's West Vancouver Freight Access project. The goal of the estimated $148 million WVFA project is to boost rail capacity and efficiency at the port by increasing the port's rail network from just under 17 miles to more than 44 miles.
In July, the port completed a rail loop project as the final phase of its $66 million Terminal 5 rail upgrade project--itself the first key component of the larger WVFA project.
Work began on the Terminal 5 rail loop began in November 2009 and was declared officially open by BNSF on June 29. Completed ahead of schedule and on budget, the rail loop marked the first major milestone under the West Vancouver Freight Access and Industrial Track Agreement, a deal 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.
When completed, the WVFA is expected to triple the rail car capacity of the port-area BNSF tracks.
The three-member port board voted unanimously on Tuesday to seek the loan through the United States Federal Rail Administration.
The loan, if approved, will provide the final funding component to allow completion of the port's West Vancouver Freight Access project. The goal of the estimated $148 million WVFA project is to boost rail capacity and efficiency at the port by increasing the port's rail network from just under 17 miles to more than 44 miles.
In July, the port completed a rail loop project as the final phase of its $66 million Terminal 5 rail upgrade project--itself the first key component of the larger WVFA project.
Work began on the Terminal 5 rail loop began in November 2009 and was declared officially open by BNSF on June 29. Completed ahead of schedule and on budget, the rail loop marked the first major milestone under the West Vancouver Freight Access and Industrial Track Agreement, a deal 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.
When completed, the WVFA is expected to triple the rail car capacity of the port-area BNSF tracks.
Seaspan Orders Four New Tugs for Vancouver BC Area
Seaspan International has announced that it has signed a contract for four new state-of-the-art assist tug boats that, when delivered between the end of this year and the fall of 2011, will be placed into service in the Port of Vancouver, British Columbia-area.
The order, with Sanmar Denizcilik Shipyard, of Istanbul Turkey, is Seaspan's single largest tug build commitment of a single class of vessels in more than 35 years.
Financial details of the deal were not released.
The primary duties for the new tugs will be to dock, undock and escort ships in and out of Vancouver Harbor and the Roberts Bank-area.
The new RAstar 28-meter tugs were designed by North Vancouver, BC-based naval architects, Robert Allan Ltd., and according to a statement by Seaspan, will be amongst the most powerful vessels to sail BC waters.
"We are excited to announce this fleet enhancement to our employees, the BC marine industry and the community at large," said Jonathan Whitworth, CEO of Seaspan parent-firm Washington Marine Group. "The benefits of a purchase of this type are numerous, including the rebuilding and modernization of our fleet, and increased safety and capabilities for all ship escorts performed in the Vancouver Harbor. As recently reported, the port has an immediate need for more modern and powerful tugs to assist the growing number of tankers within the port. Seaspan recognized this growing concern, and I'm extremely pleased to report that we took the necessary steps to assist Port Metro Vancouver and the BC Coast Pilots in providing the solution."
Whitworth also said that recent changes in Canadian tax laws and a favorable exchange rate due to the devaluation of the Euro environment had created a "golden opportunity" for Seaspan to order the new tugs.
"Because of these two factors alone, we were able to increase the purchase size from an initial three boats to the eventual four boat order," he said.
The order, with Sanmar Denizcilik Shipyard, of Istanbul Turkey, is Seaspan's single largest tug build commitment of a single class of vessels in more than 35 years.
Financial details of the deal were not released.
The primary duties for the new tugs will be to dock, undock and escort ships in and out of Vancouver Harbor and the Roberts Bank-area.
The new RAstar 28-meter tugs were designed by North Vancouver, BC-based naval architects, Robert Allan Ltd., and according to a statement by Seaspan, will be amongst the most powerful vessels to sail BC waters.
"We are excited to announce this fleet enhancement to our employees, the BC marine industry and the community at large," said Jonathan Whitworth, CEO of Seaspan parent-firm Washington Marine Group. "The benefits of a purchase of this type are numerous, including the rebuilding and modernization of our fleet, and increased safety and capabilities for all ship escorts performed in the Vancouver Harbor. As recently reported, the port has an immediate need for more modern and powerful tugs to assist the growing number of tankers within the port. Seaspan recognized this growing concern, and I'm extremely pleased to report that we took the necessary steps to assist Port Metro Vancouver and the BC Coast Pilots in providing the solution."
Whitworth also said that recent changes in Canadian tax laws and a favorable exchange rate due to the devaluation of the Euro environment had created a "golden opportunity" for Seaspan to order the new tugs.
"Because of these two factors alone, we were able to increase the purchase size from an initial three boats to the eventual four boat order," he said.
Mediator Wants 2-Year Extension to Canadian Docker Contract
A Canadian government mediator working to piece together a labor agreement between British Columbia dockers and their employers has recommended that the current contract be extended two years.
Contract negotiations between the union dockers and their employers have been ongoing since January 4, 2010 and the current labor agreement expired March 31, 2010.
The federal mediators' report, completed in July, recommends that if either the International Longshore and Warehouse Union of Canada or the employers' British Columbia Maritime Employers Association (BCMEA) move toward a strike before September 2012, the Canadian government be prepared to step in with back-to-work legislation.
The report also calls for the formation of an industrial inquiry commission to look at the protracted contract talks as well as persistent reports of discrimination against female dockers on the waterfront.
The BCMEA said it wants to see binding arbitration begin, while the ILWU supports the findings of the mediators' report.
A shutdown at the West Coast Canadian ports could have a devastating impact on the Canadian economy according to the mediator’s report. The three ports of Port Metro Vancouver alone, said the report, represented $9.8 billion in economic output for the British Columbia economy in 2008. The Port of Vancouver, BC, which is part of the Port Metro group along with the North Frasier and Fraiser River ports, is the busiest container port in Canada, the fourth busiest on the US/Canadian West Coast and the fifth busiest in North America.
The last labor related shutdown at the Canadian West Coast ports was in 1999.
Contract negotiations between the union dockers and their employers have been ongoing since January 4, 2010 and the current labor agreement expired March 31, 2010.
The federal mediators' report, completed in July, recommends that if either the International Longshore and Warehouse Union of Canada or the employers' British Columbia Maritime Employers Association (BCMEA) move toward a strike before September 2012, the Canadian government be prepared to step in with back-to-work legislation.
The report also calls for the formation of an industrial inquiry commission to look at the protracted contract talks as well as persistent reports of discrimination against female dockers on the waterfront.
The BCMEA said it wants to see binding arbitration begin, while the ILWU supports the findings of the mediators' report.
A shutdown at the West Coast Canadian ports could have a devastating impact on the Canadian economy according to the mediator’s report. The three ports of Port Metro Vancouver alone, said the report, represented $9.8 billion in economic output for the British Columbia economy in 2008. The Port of Vancouver, BC, which is part of the Port Metro group along with the North Frasier and Fraiser River ports, is the busiest container port in Canada, the fourth busiest on the US/Canadian West Coast and the fifth busiest in North America.
The last labor related shutdown at the Canadian West Coast ports was in 1999.
