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Thursday, January 13, 2011

Los Angeles City Council Asserts Authority, Revisits Failed Port Shipyard Reuse Plan

The Los Angeles City Council agreed Tuesday to revisit a Long Beach firm's plan to redevelop a shuttered shipyard at the port, despite a decision less than a month ago by the port's governing board to end any consideration of the project.

The Council's unanimous decision to revisit the shipyard proposal by Gambol Industries, coming after nearly an hour of Council discussion and comments from nearly two-dozen members of the public, was spearheaded by Councilmember Janice Hahn, whose district covers the port.

The Port of Los Angeles is operated and overseen by the city's Harbor Department and while the port's governing board is theoretically a semi-autonomous body, the City Council has final approval over many items regarding the port. It is unusual, however, for the City Council to essentially veto a port board decision.

Gambol's plan calls for a $50 million re-development of the shuttered South West Marine shipyard along the port's main channel into a modern ship repair facility. The firm, which claims it has a solid business plan that would create hundreds of union trade jobs at the proposed facility, has faced stiff criticism from the port, shipping industry, and longshore unions since proposing the plan more than a year ago. However, under pressure from Los Angeles City Hall, the port's governing board signed a memorandum of understanding with Gambol in 2009 to consider the development of the ship repair facility. After nearly a year of consideration, the port's five-member governing board voted to end negotiations with Gambol over the project in December 2010.

Port officials have maintained that the Gambol plan is unrealistic and could seriously delay an Army Corps of Engineers main channel-deepening project and ongoing terminal development at the port. The port envisioned the former shipyard's two slips as a perfect location to deposit dredge material from the Army Corps project.

Port officials pointed out at the Council meeting that it took nearly five years of planning and permitting by the port to receive permission to dump dredge material at the shipyard site. Finding another location, said the port officials, would take at least several years and force a delay in the Army Corps project, which in turn would force a delay in terminal development designed around the deeper main channel.

The shipyard proposal will now return to the Los Angeles City Council's Trade, Commerce and Tourism Committee, which is headed up by Hahn. In February 2010, Hahn stepped down as the impartial mediator between the port and Gambol after it was revealed she received $7,000 in political contributions from the president of Gambol in 2009. In total, Hahn received more than $12,000 in contributions from the Gambol president and the law firm representing Gambol in 2009.

According to data from the Los Angeles City Ethics Commission, Gambol has paid more than $700,000 to various lobbying firms between 2007 and the end of 2009 to advocate for the project at City Hall.

In the early 2000s, the adjacent Port of Long Beach found itself in possession of the federal government-shuttered Long Beach Naval Shipyard and port officials spent several years trying to identify a firm that could present a viable plan to redevelop the navy yard into a commercial shipyard. While several firms stepped forward, the plans never materialized and the drydocks were eventually filled with dredge material and paved over to add additional acreage to a massive container terminal under development at the time.

Portland Port Approves $4.4 Billion Wish List of Capital Projects

The governing board for the Port of Portland on Wednesday approved a $4.4 billion list of 99 infrastructure and environmental projects that port officials believe are necessary to address current and future port development and facility access.

The Port Transportation Improvement Plan, or PTIP, is dominated by the $3 billion Columbia River Crossing project, but also contains another 98 projects with a cumulative price tag of $1.4 billion that cover road, rail, transit, marine, environmental, aviation and waterway improvements in the port region.

The PTIP list, which is updated each year as projects move up or down in priority or are completed or abandoned, must now be submitted under state law to the Metro and the Oregon Department of Transportation.

According to the port, "Some of the projects in the PTIP are primarily the port’s responsibility; others are critical for port customers’ market access on systems owned and operated by others." Port officials also pointed out that the projects on systems owned and operated by other governments or private rail carriers are "primarily the responsibility of those entities but, due to competing priorities and capital constraints, they require some amount of port focus and/or financial participation to create the impetus for the responsible entity to pursue the project."

Port staff have identified 58 projects on the PTIP list that may require some port resources, outside grant funding, and/or commitments from the various responsible agencies to move the projects forward. According to the port, "These projects represent the most pressing bottlenecks and capital needs for port customers."

The Oregonian reports that the port's highest priorities are, "improvement to the Interstate 205 northbound on-ramp, construction of additional through lane and left-turn lane at Northeast 82nd Avenue and Columbia Boulevard, and improvements to the Troutdale interchange on Interstate 84."

Vancouver USA Port Vote Paves Way for Grain Facility Expansion

The Port of Vancouver USA has approved the demolition of three buildings near the United Grain Corporation terminal at the port, paving the way for a 60 percent capacity expansion of the grain facility.

The proposed $72 million expansion would add the capacity to handle 60,000 tons of storage for corn and soybeans as well as capacity to handle an additional 2 million tons a year of US wheat. The UGC facility currently handles an average of 3 million tons of wheat per year.

The three buildings would have needed to be removed as part of the port's West Vancouver Freight Access infrastructure project, but Tuesday's approval will see an earlier removal of the structures, allowing UGC to move forward sooner with the grain facility expansion project.

The buildings slated for removal include a warehouse, a port office and a restroom facility and are located on the port’s Terminal 2 adjacent to the grain terminal.
Tony Flagg, president of UGC, cited the recent completion of the Columbia River channel deepening project as one of the reasons behind the proposed expansion.

According to port officials, because the shipping channel depth was increased from 40 to 43 feet during the deepening project, approximately 7,200 tons of additional grain can be loaded onto each vessel calling at the Port of Vancouver.

"The ability to accommodate larger ships carrying heavier cargo loads makes the port and the U.S. farmers who ship their grain through the port more competitive in the global marketplace," said the port in a statement following Tuesday's vote.

Los Angeles Port Up 16% in 2010, Sets Export Record

The Port of Los Angeles roared back in 2010 with a 16 percent increase in total cargo traffic over 2009, cementing its place yet again as the Western Hemisphere's busiest container port.

The port handled a total of 7,831,902 TEU in 2010. Port officials reported handling 3,973,933 loaded inbound TEUs in 2010, a 12.8 percent increase over the 2009 calendar year. The port also handled 1,841,274 loaded outbound TEUs, a 10.3 percent increase over 2009. Export volumes in 2010 shattered the previous calendar year export record, set in 2008, by just over 172,000 TEUs.

City and port officials were ebullient in their praise for the port's 2010 numbers.
"With this 16 percent increase in 2010 container volumes, the Port of Los Angeles is putting people back to work and doing its part to help President Obama meet his goal to double national exports over the next five years,” said Mayor Antonio Villaraigosa. “This is good news not only for Los Angeles, but cities across the nation."

Port Executive Director Geraldine Knatz said the year-end numbers far surpass the port's start-of-the-year estimates.

"The 2010 volume gains far surpass our initial estimates, and we’ve been able to facilitate some export opportunities in the past year through our TradeConnect initiative and increased networking with local business stakeholders," said Knatz. "We want to continue that momentum and work with local business entities to advance the President’s National Export Initiative agenda."

Tuesday, January 11, 2011

America's Cup Could Shutter SF Bay Entrance to Commercial Traffic for Extended Daytime Periods

The proposed San Francisco Bay course for the America's Cup yacht race competition, designed to draw thousands of race watchers to shoreside venues by taking place just inside the entrance to the bay, will also, according to the United States Coast Guard, require shutting down all large commercial shipping in the bay during extended daytime periods for more than a week in 2012 and up to 40 days in 2013.

Organizers of the America's Cup event, who envision using the central Bay region between the Golden Gate, Oakland and Richmond Bridges as a kind of natural arena for race spectators with Alcatraz Island in the center, have asked the USCG to impose tight vessel traffic restrictions for commercial vessel transits through the racecourse during race hours.

According to the United States Coast Guard, the initial proposal by the race organizers would entail halting all large commercial vessels from moving in and out of the bay from 9 a.m. to 6 p.m. on race days.

The America's Cup events have been approved for San Francisco Bay for 2012 and 2013, though the exact course layout and dates are still fluid. The 2012 portion of the event, where challengers would face off in a competition for the Louis Vuitton Cup and the right to face off against America's Cup defenders, the Golden Gate Yacht Club. The event would return in 2013 for the actual America's Cup competition.

Under the current proposal the 2012 event, and any commercial traffic restriction, is likely to last from nine to 18 days during July or September, and the 2013 event could last up to 40 days.

The Coast Guard is currently in the very early stages of addressing the initial traffic restriction proposal from the race organizers. The federal agency plans to reach out to stakeholders of the shipping industry in an effort to minimize any disruptions the two events may cause to Bay Area commercial shipping. One such event will occur Thursday Jan. 13 at a full meeting of the Harbor Safety Committee of the San Francisco Bay Region. The public meeting will be held from 10 a.m. to noon at the Port of Richmond Harbormaster’s Office located at 1340 Marina Way South in Richmond.

Despite the first race in the bay being nearly 18 months away, the Coast Guard plans to come up with its version of what restrictions may be needed during the race within the next several months.

The Coast Guard plans to use feedback from such events as Thursday's public HSC meeting to help the agency determine its response to the event organizers regarding race day traffic restrictions. Coast Guard officials said that while safety and security will be the number one issue playing into their decisions, the agency is also keenly aware of the potential disruptions such traffic restrictions may have on commercial traffic in the bay as well as the potential for cargo diversions caused by extended closures of the bay entrance.

Roughly eight to 10 cargo vessels a day move through the bay entrance during the summer months headed toward ports such as Stockton, Sacramento, Benicia, Richmond and Oakland, the third busiest container port on the West Coast. While many vessel arrivals occur too early in the morning to be impacted by the initially proposed 9 a.m. to 6 p.m. time frame, a similar percentage of all commercial vessel departures occur in the late afternoon and would be directly impacted by afternoon and evening traffic restrictions.

Organizers of the event claim that the America's Cup could bring as much as much as $1.4 billion into the San Francisco economy and generate just under 9,000 jobs.

Long Beach Follows LA Port In Closing Clean Truck Loopholes

The governing board for the Port of Long Beach on Monday approved new drayage regulations to counter scofflaws that have been skirting clean truck rules in the port area, mirroring similar regulations adopted by the Port of Los Angeles less than three weeks ago.

The five-member Long Beach board voted to pass along applicable container fees to cargo owners for any port-servicing drivers caught transferring containers from compliant clean trucks to older and more polluting trucks within the port area – a process known as dray-offs. The fees are $35 per twenty-foot container and $70 per forty-foot container. Shifting the fees to the beneficial cargo owners is seen by port officials as a way to encourage cargo owners to discourage trucking firms from engaging in dray-offs.

Using the dray-off 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 truck program and puts fully-compliant truck firms at a disadvantage.

The new port regulations only addresses dray-offs that occur within the port boundaries.

The port board also approved closing a loophole in the clean truck program regulations that was being exploited by a growing number of drivers. The clean truck program only set model year regulations on Class 8 trucks – mainly because there were only a handful of the smaller Class 7 rigs in the port at the time and these smaller trucks can not legally handle the weight of a fully loaded container.

However, the number of old Class 7 trucks calling at the port – some estimated to cost less than $5,000 compared to a new compliant $120,000 Class 8 rig – has exploded in recent days. Estimates suggest as many as 550 Class 7 trucks, representing 2 to 3 percent of all truck moves at both ports, are working in the two neighboring ports' joint drayage fleet.

Officials from the Port of Los Angeles, who approved similar restrictions on Class 7 trucks in late December, 2010, estimated that the average age of a Class 7 truck recently brought into port service is about 12 years old, or roughly what the average age of a Class 8 truck in the port fleet was before the clean truck program began in October 2008.

The newly approved Long Beach port regulation closes the loophole by applying the truck program model year restrictions to Class 7 trucks as well. Owners of Class 7 rigs have until July 1, 2011 to either upgrade their engines or purchase new compliant vehicles.

Some trucking firms had previously testified to the port board that while they wanted to remain compliant with the truck program rules, they were forced to begin using some of the smaller trucks simply to compete with those that had first brought in the Class 7 rigs.

Portland to be Home to New Subaru Regional Parts Center

The Port of Portland has signed an agreement to lease just under 19.3 acres to a real estate management firm for the development of a new regional auto parts distribution facility to be operated by Subaru of America, Inc.

The new facility, which is set to break ground in February 2011, is envisioned as a 413,000-square-foot structure that will also feature a service training center and regional offices for Subaru.

The lease with property management firm Multi-Employer Property Trust is for a term of 55-years and Subaru will sublease the structure for an initial term of 10 years starting in October 2011. Trammell Crow Company will develop the facility for MEPT.
Financial details of the agreement were not released.

“The Port of Portland is thrilled to have Subaru of America, Inc. select Rivergate [Corporate Center III] for its West Coast distribution facility,” said Bill Wyatt, executive director of the Port of Portland. “The goal for this site was to attract users that will potentially utilize other port services and generate additional marine container business. With this lease, the Port has the opportunity to explore future logistics opportunities with Subaru for auto parts distribution operations.”
The new facility will be the second project within the 114-acre Rivergate center, which is envisioned as ultimately accommodating over 2.4 million square feet of industrial space. The site is near the port's Terminal 6 container terminal, and according to the port, ideally suited for marine cargo, rail and heavy distribution users.

Subaru and its related entities import approximately 10,000 twenty-foot containers into West Coast ports annually.

According to the port, another selling point for the location was the fact that Rivergate is already home to the largest LEED Silver certified industrial building in America. The new Subaru facility will be constructed to meet those "green" standards as well.

“We had several critical requirements for our new facility; it had to be highly-efficient and state-of-the-art,” said Stephen Gale, director of corporate facilities with Subaru of America, Inc. “We were also very pleased that the property met LEED standards, reflecting our commitment to the community and the environment.”

Port officials said that Subaru’s entry into Rivergate Industrial District will not affect the car maker's vehicle import activities across the river at the Port of Vancouver USA. The Port of Vancouver USA continues to serve as the West Coast port of entry for Subaru vehicles, with a 30,000 square-foot auto processing warehouse and 40-acre cargo backup area for its operations.

Vancouver USA Port Awards Raise to Executive Director

The governing board for the Port of Vancouver USA on Tuesday unanimously approved a 3 percent salary raise for port Executive Director Larry Paulson.

The raise is retroactive to Jan. 1, 2011 and is based on Paulson's 2010 salary of $165,600. Paulson's $500-per-month expense account related to the use of a vehicle for port business was left unchanged by the board.

The board met prior to Tuesday's public meeting to conduct its annual review of the executive director's compensation package, before voting on Paulson's increase in public session.

Last year, the port board chose not to increase Paulson's compensation, citing the condition of the overall economy. Paulson's last raise was in 2009 when he was awarded a 4 percent increase from $159,120 to $165,600.

The three members of the board, while acknowledging that national economic conditions remained difficult, were unanimous in their praise of Paulson's performance and leadership over the past 12 months – one of the strongest years on record for the port.

Like many West Coast port executive directors, Paulson's compensation is nearly identical to that of the port city's executive manager. Vancouver City Manager Eric Holmes earns $161,500 per year.

Long Beach Hires Maritime Executive as Managing Director

The governing board for the Port of Long Beach has named Ports America executive Sean Strawbridge as the port's Managing Director of Trade Relations and Port Operations.

Strawbridge, a 25-year veteran of the maritime and air transportation industries, is scheduled to start at the port on January 31.

In his new role, Strawbridge will oversee the port’s Trade Relations and Port Operations Bureau, which includes the Communications (public relations), Maintenance, Security and Trade Relations divisions. He will report to the port's Deputy Executive Director Christopher Lytle.

Port Executive Director Richard Steinke personally recommended Strawbridge for the position, describing Strawbridge as "a highly respected leader in the maritime industry."

Strawbridge is currently based in Phoenix as the Director of Corporate Development at Ports America, one of the largest terminal operator and stevedoring companies in the United States. He has previously held positions with US Airways (formerly America West Airlines), Sea-Land Service, Inc., and Marine Terminals Corporation.