Friday, March 18, 2011

Puget Sound Maritime Achievement Award

By PMM Staff

The 2011 Puget Sound Maritime Achievement Award Selection Committee is accepting nominations for this year’s award, which will be announced at the Seattle Propeller Club’s May Maritime Festival luncheon, to be held on Wednesday, May 11th aboard Holland America’s Zaandam at Terminal 91 at Smith’s Cove, Seattle.

Nominations must be received by March 31, 2011, and may be e-mailed to Nominations should include specific achievements of the candidate, particularly those impacting the Puget Sound maritime community, and a brief biography of the nominee. Industry segments represented by past recipients include steamship lines and agents, tug and barge operators, marine architects, passenger and fishing vessel operators, port authorities, stevedores, labor, and government. Several paragraphs about the nominee are sufficient.

Also, we will be accepting nominations for the recipient of the Seattle Propeller Club’s Public Official of the Year Award recipient. Each year the Seattle Propeller Club recognizes a local elected or public official whose outstanding work or service has made a significant contribution to maritime commerce in the Pacific Northwest.

Contact Rich Berkowitz at (206) 443-1738 with any questions about either award nomination.

SoCal Ports Report Solid Growth In February

Shippers moving cargo early to beat the weeklong shutdown in Asia for the Chinese New Year boosted cargo numbers at the Southern California ports in February, with Long Beach boasting double-digit increases and Los Angeles turning in a respectable increase over February 2010.

The Port of Long Beach moved a total of 458,336 TEUs in February; a 10.9 percent increase over the same month a year ago.

Port officials reported handling a total of 233,660 loaded inbound TEUs in February, a 12.4 percent increase over the year-ago period, and handling a total of 121,929 loaded outbound TEUs, a 1 percent drop over the February 2010.

Ben Hackett, founder of maritime industry consulting and research firm Hackett and Associates, said that any impacts from the early-February Chinese New Year are more likely to be reflected in the West Coast ports’ March cargo numbers. Hackett, whose firm also produces the Global Port Tracker report which tracks and forecasts cargo numbers at 12 major US ports, said that the major West Coast ports can still look forward to an estimated 8 percent growth rate for all of 2011.

Across the bay, the Port of Los Angeles handled a total of 554,913 TEUs in February, a 5.6 percent increase over last February. For the month, the port moved a total of 275,886 loaded inbound TEUs, a 3.2 percent increase, and a total of 150,357 loaded outbound TEUs, a 1.64 percent increase--both compared to February 2010.

Seattle Cargo Volumes Up, Tacoma Sees Best Monthly Increase in 3 Years

Total cargo volumes increased in February at the two major Puget Sound ports, with Seattle numbers tempering somewhat compared to the port’s past 12 months of performance and Tacoma turning in the best year-over-year increase in more than three years.

The Port of Seattle moved a total of 146,805 TEUs in February, a 4.2 percent increase over February 2010. The numbers are a bit of a cooling off from the monthly double-digit monthly growth increases the port experienced during most of 2010.
The port handled a total of 56,588 loaded inbound TEUs in February; a 5.8 percent decrease from the year-ago period, and 46,191 loaded outbound TEUs, a sizable 14.5 percent increase over the same month last year.

The Port of Tacoma reported moving a total of 116,484 TEUs during the month, a 15.4 percent increase over the same period last year. February was the third straight month of double-digit volume increases at the port and the largest single month percentage increase since 2006.

Officials said the port handled a total of 35,894 loaded inbound TEUs in February, a 15 percent increase over the year-ago period. The port also handled a total of 33,508 loaded outbound TEUs for the month, a 22 percent increase over February 2010.

Ag Secretary Vilsack Visits Long Beach Port To Pump Exports, Korean Trade Agreement

United States Department of Agriculture Secretary Tom Vilsack visited the Port of Long Beach Wednesday pushing the importance of sustaining the record-breaking productivity of America's farmers and ranchers with increased export opportunities while simultaneously trying to drum up support for the United States-Korean Trade Agreement, which currently awaits congressional ratification.

Vilsack, joined by Long Beach elected officials and California agriculture business leaders, also highlighted President Obama's National Export Initiative (NEI), a program intended to coordinate federal efforts to double US exports by 2014 with the potential to create several million new domestic jobs. The secretary said that the NEI is providing support to provide opportunities for both large and small businesses to reach the 95 percent of the world's consumers whom live outside the United States.

"US farmers and ranchers are seeing record sales of farm goods abroad, which means the agricultural economy is growing and jobs are being created. We must continue growing the economy, and Congress must focus on passing smart trade deals like the US-Korea Trade Agreement that will increase exports and support job creation," Vilsack said.

Economic output is estimated to grow more under US-Korea agreement than from the United States' last nine trade agreements combined, Vilsack said.

That type of growth, he argued, would bring additional jobs to ports like Los Angeles and Long Beach.

The first- and second- busiest seaports in the Western Hemisphere, respectively, the two ports handle more than $140 billion worth of cargo a year. In addition, the Port supports roughly 60,000 jobs in the two cities, about 600,000 jobs throughout Southern California, nearly 900,000 in California and 2.84 million jobs nationwide.

Vilsack argued that the US-Korea Trade Agreement will add tens of thousands of jobs to the US economy, especially in major agriculture-producing states like California. The US-Korea Trade Agreement would eliminate tariffs on a variety of American goods – including agricultural products like grains, fruits and vegetables, and beef – while adding tens of thousands of jobs to our economy.

The trade agreement had languished in discussions for nearly three years before being singed by President Obama in December 2010. Congress has yet to ratify the agreement, mainly over disagreement by some congress members on the included language and how it will impact certain regional sectors of the domestic economy.

Vilsack noted that exports of US farm goods in fiscal year 2011 are projected to surpass previous records by $20 billion. The agricultural trade balance – a balance of US exports versus foreign imports – is also projected to set a record surplus of $47.5 billion in 2011.

"Every $1 billion in farm exports supports roughly 8,400 jobs in the United States, and farm exports alone will support more than 1.1 million jobs in 2011," Vilsack said.

In the past five years, California farm exports have appreciated by 30 percent to more than $18.2 billion, supporting more than 150,000 jobs on and off the farm. In 2010, California ports handled a record $35 billion in agricultural exports. California is the nation's largest producer of agricultural products and the top exporting state.

Vilsack also spoke on the continuing need for education outreach to small- and medium- sized businesses on how to break into export markets. Despite recent gains, Vilsack said, only 1 percent of US companies export.

Major Carriers Suffer Vessel Losses In Tsunami

In addition to hundreds of smaller vessels, more than 10 large commercial vessels were damaged along the Japanese coast by a massive tsunami that followed the 9.0 earthquake which hit the northern region of the island nation on March 11, including vessels connected to major ocean carriers "K" Line, NYK Line, Mitsui O.S.K. and Hyundai.

At the time the tsunami hit, Lloyd's of London reports that up to 3,300 vessels were located along the eastern coast of Japan. As of Thursday, these are the major commercial vessels in Japan that have been reported damaged due to the tsunami.

The 175,775-dwt bulker China Steel Integrity, which was anchored off of the Port of Kashima and working under a "K" Line charter carrying iron ore when the earthquake hit, was driven aground near the port. All 25 of the mixed Taiwanese/Chinese crew were able to get off the vessel without injury. The vessel sustained some damage to the hull and mechanical systems, but no oil leaked from the vessel.

The 91,439-dwt Japanese-flagged cargo vessel Shiramizu was preparing to unload 70,000 tons of coal at Sinchi when the tsunami struck, slamming the vessel into the pier. All of the crew were reported safe, however, fuel and ballast tanks on the Shirmizu were holed and oil was reportedly leaking from the vessel. Hachiuma Steamship Co., a subsidiary of Tokyo-based ocean carrier NYK Line, operates the vessel.

The 77,739-dwt Panama-flagged bulker Shirouma, also working for NYK Line, was hit by the tsunami shortly after unloading a cargo of coal at the Port of Haramachi. The vessel was torn from its moorings and washed ashore near the port. All crewmembers were reported unharmed.

Berthed at the Port of Onahama when the tsunami hit, the 75,200-dwt Panama-flagged bulker Coral Ring carrying 60,000 tons of coal was driven against the dock, destroying the pier and suffering hull damage. Though the ship was immobilized due to damage, operator NYK Line said all crewmembers are reported safe and there were no reports of oil leaks from the vessel.

The 51,419-dwt Bahamas-flagged freighter M/V Emu Arrow, was caught by the tsunami waves while unloading cargo at the Port of Kashima. The ship collided with other vessels but remained afloat and damage assessments are underway. None of the 26 crewmembers were injured.

The tsunami tore the 32,385-dwt Panama-flagged handysize bulker C.S. Victory from a berth at the Port of Ishinomaki and drove the vessel aground in a shallow harbor. All crewmembers were reported to be safe. Mitsui O.S.K. Lines, which had chartered the vessel, reported Thursday that the vessel had been able to pull out of the shallow harbor under its own power and was now safely at anchor.

The 27,161-dwt Japanese drilling vessel Chikyu lost one of its six azimuth propulsion pods when hit by the tsunami about 170 miles north of the Japanese Port of Sendai. The highly advanced deep-sea drilling vessel was in the Port of Hachinohe when it was warned of the impending tsunami. The vessel departed the port at full speed, a maneuver that tore off the engine pod. The ship remains in the port awaiting repairs.

The tsunami washed South Korea-based Hyundai Glovis' 6,901-dwt freighter Glovis Mercury ashore in Sendai. No other details regarding the vessel or crew were reported.

The tsunami also pushed the 6,175-dwt Panama-flagged Capesize freighter Asia Symphony onto the road along the shore of Kamaisha. The Mitsubishi Logistics Corp. vessel remains high and dry, upright on the shore with the rear quarter of the vessel hanging over the water.

The 1,592-dwt Japanese freighter Koshin Maru either sank or ran aground due to the tsunami, though no location or fate of the crew has been given. The vessel is classified as a Hazard D dry cargo vessel.

The tsunami dragged the 523-dwt Russian reefer ship Khrizolitoviy inland from its berth at the Port of Ofunato, before the ship was carried back out into the port where it is now reported to be adrift with a damaged main engine. One crewmember suffered an unidentified broken limb. The 13 crewmembers aboard were rescued and reported in good condition. Two additional crewmembers were ashore at the time of the tsunami, but reported safe.

An unidentified ship, with 81 dock and/or shipyard workers aboard, was swept away by the tsunami from a shipyard in Ishinomaki. While initially feared lost, the Japan Navy and Coast Guard eventually located the adrift vessel and rescued the workers using helicopters. It was also reported at the same time that the unknown vessel had sprung a leak and was taking on water.

Japanese authorities on Thursday said that the northern ports of Hachinohe, Ishinomaki, Onahama and Sendai have been severely damaged, if not fully destroyed. Other northern ports with varying degrees of damage include Hitachinaka, Hitachi, Kesennuma, Kamashi, Miyako, Ofunato, Shiogama, and Soma.

Tuesday, March 15, 2011

Southern California Ports Perform in 2010

By Keith Higginbotham, California Contributing Editor

There is a saying in the shipping industry that all things are cyclical. If this is true, then 2010 will be remembered by the ports of Long Beach and Los Angeles as the year the cycle turned decidedly upward and put the effects of the global economic downturn firmly in the rearview mirror.

The two neighboring ports, which together make up the busiest container port complex in the Western Hemisphere, each boasted major cargo volume increases in 2010. The two ports reported a combined increase over 2009 of 2.25 million TEUs. This increase was greater than the total containers handled in 2010 by all but three other US ports.

While the final results for the year reaffirmed Los Angeles’ position as the busiest single port in the nation, number two Long Beach posted the largest single-year gain in total container volume in port history.

Despite the massive turnaround, 2010 was also the year that both ports began to publicly express a serious degree of concern about the looming threat faced by the set 2014 opening of an expanded Panama Canal.

Both ports continued to implement solutions to the Panama Canal problem in 2010, mainly in the form of expanded development of facilities.

In Long Beach, a $4 billion facilities program continued to gain steam, including the securing of funds for the $1 billion replacement of a key bridge, progress on a $750 million terminal development project, continued work on a redevelopment of the port’s bulk terminal facilities, and forward movement on the development of a brand new $650 million terminal.

Across the bay, the Port of Los Angeles began a major roadway rehabilitation project, moved into the final phase of a major dredging project, secured funding to construct an additional railyard, and took steps to bring an iconic World War II battleship to the port as a museum attraction.

In addition, despite the heavy load of development sprouting throughout the two ports, the environment remained a main focus for both ports in 2010.

The two ports’ similar Clean Truck Programs reported significant cuts to air pollution generated by ports-servicing drayage trucks. Various incentive programs continued to promote vessel speed reduction to cut vessel emissions, and both ports sponsored serious pilot programs to test alternative fuel vehicles.

Cargo Rebound
Cargo volumes at the two ports in 2009 were considered to be some of the most dismal in memory. Some terminals reported volume drop-offs of more than 30 percent compared to 2008, with an average decline across the ports of about 20 percent.

At the beginning of 2010, industry analysts did not have good news for the two ports, predicting that at the very most both could expect only a single digit percentage increase by year’s end. Most were predicting further declines.

“Many experts predicted that we might not get close to our peak levels of 2007 until the middle of this decade – or even later,” Long Beach Port Executive Director Richard Steinke said during a speech in January 2011.

In fact, both ports proved the analysts were off the mark by wide margins.

The Port of Los Angeles posted a year-end 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 7.83 million TEUs in 2010, an increase of more than 1.25 million TEUs over the year-end numbers for 2009.

Of this total, Los Angeles port officials reported handling 3.98 million loaded inbound TEUs in 2010, a 12.8 percent increase over the 2009 calendar year.

The port also handled 1.84 million 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.

“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,” Port Executive Director Geraldine Knatz said in January.

Next door, Long Beach port officials in 2010 recorded the largest single-year gain in total container volume in port history. The port handled nearly 24 percent more containers in 2010 than the previous year, boosted by 12-solid months of growth in both import and export volumes. The year-end numbers also reaffirmed Long Beach’s status as the second busiest container port in the Western Hemisphere for 2010.

During 2010, the Long Beach port handled a total of 6.3 million TEUs, a 23.6 percent jump over end-of-the-year numbers in 2009. In total, the port handled 1.2 million more containers in 2010 than it did in 2009, the largest single-year gain since the port began tracking TEU numbers in 1971.

Loaded inbound volumes rose 23.4 percent in 2010 to 3,128,860 TEUs, and loaded outbound volumes were up 15.6 percent to 1,562,398 TEUs.

Ending the calendar year, the port handled 523,311 TEUs in the month of December 2010, a 12 percent increase compared to December 2009, and the port’s thirteenth consecutive month of gains. Port officials reported handling 256,889 loaded inbound TEUs in December 2010, a 10.4 percent increase over the year ago period. Total loaded outbound containers were up 14.7 percent in December 2010, to 141,140 TEUs.

“This was a tremendous rebound, and happened much faster than predicted,” said Port of Long Beach Executive Director Richard D. Steinke. “Best of all, the additional cargo has brought back thousands of port-related jobs throughout the supply chain – and we’re very optimistic that the job growth in this industry will continue in 2011.”

Challenges and Solutions
In addition to focusing considerable energy on solving the short-term problem of cargo volume downturns, the ports also spent a great deal of time and effort in 2010 focusing on two long term threats: the impending opening of an expanded Panama Canal in 2014 and continued calls for the two ports to address the environmental impacts of their operations.

After several years of dismissing any serious threat to West Coast dominance in transpacific cargo posed by the Panama Canal expansion, 2010 became the first year that the canal threat became a commonplace topic in the public conversation by port officials.

In large part as a response to the Panama Canal threat – and the threat of other developing ports, such as Prince Rupert in Canada – Southern California port officials in 2010 began a stepped up campaign of major capital investment.

In Long Beach, a more than $4 billion program to develop terminals and goods-movement infrastructure began in earnest.

The major component of this project is a $1.1 billion replacement of the aging, capacity-limited and height-restricted Gerald Desmond Bridge – a major point of truck ingress and egress for both ports. In 2010, port officials managed to secure the necessary funding for the project and receive approval on the required environmental documents to move forward with construction, set to begin this year.

Another major component of the Long Beach plan – the Middle Harbor Project – also began work in 2010. The 10-year, nearly $1 billion project will transform two smaller odd-shaped and aging terminals into a single geographically efficient mega terminal.

Two additional Long Beach terminals projects saw progress in 2010: the $850 million dollar redevelopment of the Pier G breakbulk facility and the creation of a new $650 million terminal on Pier S.

At the neighboring Los Angeles port, similar efforts to increase the efficiency, capacity and environmental friendliness of facilities also moved forward in 2010.

In March, the port broke ground on a $22 million rehabilitation of a main surface street truck route from San Pedro and Wilmington to State Route 47.

In July, after nearly a five year delay, port officials and the Army Corps of Engineers kicked off the final phase of a $370 million dredging project to deepen the port’s main channel.

“The Main Channel Deepening Project is a lifeline to maintaining our competitive edge during the critical years ahead as we face increased competition on a number of fronts,” the port’s Knatz said.

The main channel project is being conducted in parallel with several terminal development projects.

“We presently have $350 million in terminal expansion projects underway at our China Shipping and TraPac container facilities,” Knatz said. “Resumption of the Main Channel Deepening Project is key to delivering those projects on schedule – a commitment we have made to those terminal operators.”

In October, the port secured $16 million in federal funds to be used to construct an intermodal railyard connecting the port’s on-dock railyards with the Alameda Corridor. The project includes a new railyard for a short-line railroad serving Union Pacific, Burlington Northern Santa Fe, and the two ports.

Port officials also joined an effort to bring the famed World War II battleship USS Iowa to the Los Angeles port as a floating museum. If approved by the federal government, the attraction is estimated to bring between 137,000 and 236,000 visitors a year to the port area.

Environment and Community Efforts
A major focus for both ports over the past five years has been the deleterious impacts the port has on the surrounding communities. In the early 2000s, the two ports were identified by state air regulators as the single largest stationary generator of diesel emissions in the Southern California basin.

Since 2006, when both ports adopted the Clean Air Action Plan to guide environmental mitigation into the future, both ports have achieved some notable successes.

In early 2010, it was revealed that the two ports’ separate Clean Trucks Programs had reduced ports-generated diesel emissions by more than 80 percent, a primary goal of the trucks programs. The early attainment of the goals also prompted the two ports to adopt even more stringent rules for the next several years of the truck program.

Both ports also continued to focus on ship emissions with the main efforts based around the Vessel Speed Reduction program. In 2010, each port’s incentive programs, designed to encourage carriers to slow their vessels down as they approach the harbor, continued to bring in more participants. More than 90 percent of all frequently calling vessels at the two ports now participate in one or both of the ports’ programs.

In addition, both ports have become test beds for advanced emission control technology for goods movement vehicles. State-of-the-art hybrid, electric and alternative fuel vehicles continue to be field tested in either pilot programs or small fleet rollouts at the two ports.

While dealing with the negative impacts of operating major industrial facilities virtually surrounded by residential communities continued to be a primary focus for the two ports in 2010, officials at both ports also continued with outreach efforts to the communities.

“It’s not just about making a difference on the docks,” Long Beach’s Steinke said.

“Of all the port’s many commitments, none is more important than our pledges to our community.”

The Port of Long Beach’s Green Port fest, free harbor boat tours, and numerous public forums continued to draw record-setting attendance. At the Los Angeles port, similar community programs, including the nationally known Lobster Fest also drew large numbers of the community.

In addition, both ports continued their long-standing tradition of providing for education in their respective communities. The Long Beach port provided more than $60,000 in scholarships to area high school and college students in 2010.

In 2010, the governing board for the Los Angeles port authorized $1.2 million for the Port of Los Angeles to sponsor maritime-related educational programs in Southern California high schools to promote international trade and career opportunities. The scholarships will allow hundreds of students to continue to receive classroom knowledge and field exposure to port and maritime business operations, as well as port-related job opportunities.

“Even in lean budget times, we understand how critical it is to educate our youth about the maritime industry and enlighten them to potential career paths,” Port Deputy Executive Director Mike Christensen said. “This investment is well worth it for the dividends that these students produce for our communities.”

New Long Beach Port Bridge Will Include Bike and Ped Paths

The aging Gerald Desmond Bridge is a major ingress and egress point for cargo truck traffic at the Port of Long Beach with more than 15 percent of the nation's cargo moving over it annually. Its replacement, which will provide greater vehicle capacity and increase clearance to allow larger vessels to transit underneath, will also include a concession to the local communities – a bike and pedestrian path allowing the public to cross the proposed structure.

Earlier this year, concerns had been raised by some local elected officials and the biking community that such a path would not be included in the estimated $950 million bridge replacement project.

Port commissioners were told Monday by port staff that the bike/pedestrian path is included in the request for proposal (RFP) that will go out to the four firms selected earlier this month by the port to bid on the bridge project. Port staff had previously assured the Long Beach City Council that the bike/pedestrian path would be part of the project, and port Managing Director of Environmental Affairs and Planning Robert Kanter told the commission that this commitment remains part of the bridge project.

"The [RFP] package will require bids to include a Class 1 bike path and pedestrian path in the solicitation – these are mandatory requirements and must be included for the [bidders] to be considered responsive," Kanter said.

A Class 1 bike/pedestrian path, according to Kanter, is an area for bicycles and pedestrians that is separated from vehicle traffic on the bridge.

In response to repeated questions from the commissioners, Kanter said that the bike/pedestrian path will be included in the estimated $950 million cost of the replacement bridge, which is being funded by a mix of federal, state, regional and local dollars.

The port and the California Department of Transportation (Caltrans) are now finalizing the first draft of the bridge project RFP that will go out to the four identified bidders in late April or early May, according to Kanter.

Following a comment period where the bidders can offer input to and/or seek clarification of the bidding package, the port and Caltrans will develop a final draft of the RFP by September Kanter said.

Final bids from the four firms are expected to be opened by the port sometime in November or December.

Although the bike.pedestrian path will not add any additional cost to the total $950 million estimate of the bridge project, the port's Managing Director of Engineering Doug Thiessen warned about the repercussions of further additions to the project.
"We have made [the bike/pedestrian path] part of the project, but, there could be a great temptation to add additional scope of work to the project," Thiessen told the commissioners, "As we progress down the road, we must resist this temptation or the budget [for the bridge project] will continue to grow."

Built in 1968, the current Gerald Desmond Bridge is outdated and, while deemed safe for commuters to travel on, the bridge suffers from a low "sufficiency rating" from Caltrans.

With millions of car, truck and port cargo trips annually crossing the bridge, the traffic now exceeds its operational capacity, posing safety, congestion and maintenance challenges.

In addition to the bike/pedestrian path, the new bridge will not only provide vehicle emergency lanes, but also three main traffic lanes in each direction, and a reduction in the bridge's steep grades to improve traffic flow and safety. The replacement will also have a higher span over the port's main channel, allowing the newest generation of cargo ships to access the port's back channels.

West Coast Ports: Too Soon to Know Impacts of Japan Disaster on Trade

Major West Coast ports are reporting that it is too early to determine what impact the massive 9.0 earthquake and subsequent tsunami that devastated northern Japan on Friday will have on trade with the island nation.

The ports of Long Beach and Los Angeles handle more than $44 billion a year with Japan, with the major players being ocean carrier's NYK and K-Line and automakers Nissan and Toyota.

Japanese cargo represents 10 to 15 percent of the Port of Los Angeles' annual cargo volumes, while the neighboring Port of Long Beach reports slightly lower amounts.

The most of the major commercial cargo ports in Japan are located in the central or southern regions of the nation and were spared direct damage from the earthquake or tsunami. However, reports suggest that at least several major manufacturing suppliers are located in the devastated northern regions. Depending on the severity of the direct damage to these facilities – which remains unknown at this point – coupled with the ongoing difficulty of simply moving in an out of the hard hit areas as well as the nation's focus on humanitarian efforts, manufacturers in the central and southern regions could experience disruptions in their supply chains.

"Even though most of the ports are in the central and south, there are suppliers in the north that may have some impact on the supply chain, but it is hard to tell right now," Port of Long Beach spokesperson Art Wong said Monday.

According to the Port of Los Angeles, roughly 83 percent of the port's Japanese commerce is moved through the central and southern Japanese ports. Of the remaining 17 percent, 3 percent was moved through port of Sendai, one of the hardest hit ports by the earthquake and tsunami. The Japanese government estimates Sendai port, and up to five other northern ports, will be closed for "many months."

Staff at the ports of Long Beach and Los Angeles both report difficulty in communicating with Japanese representatives.

The majority of the bulk grain and lumber exported from the United States to Japan moves through the various Columbia River ports. Damage to the northern Japanese ports "could potentially impact some bulk shipments," Port of Portland spokesman Josh Thomas told the Wall Street Journal.

A Port of Seattle spokesperson also told the Journal that about 15 percent of the port's annual container volume is either heading to or coming from Japan.

Over the weekend, Tokyo-based ocean carrier NYK Group temporarily suspended service on its Japan-China Express shipping service which called at Sendai as one of four stops in Japan and four in China as well as Los Angeles and Oakland.

While NYK reported that the company's offices are open in Japan, "telecommunication to/within Japan especially in the eastern and northern part of Japan is still unstable, and may continue due to planned outage announced by electric power company."

NYK also reported, "Due to the earthquake, operation has suspended at many ports in Japan last weekend and we may face delay due to berth congestion. The current situation may warrant a temporary change of rotation or omission of ports which will be considered on a vessel by vessel basis, to improve the schedule integrity."
Ocean carrier K-Line, which does not operate a regular service at any northern Japanese ports, reported Sunday that all of the central and southern ports it services in Japan were open, including Nagoya, Osaka, Tokyo, Shimizu, and Yokohama.

Earthquake Disaster Shutters Japanese Auto Industry

Nearly the entire Japanese auto industry has been shuttered in the wake of Friday's 9.0 earthquake and tsunami, either due to direct damage to manufacturing facilities or other infrastructure and utility-related problems, according to a research report from IHS Automotive released Monday.

While the report made clear that the situation in Japan was still being appraised, it pointed to at least temporary closures to facilities throughout Japan operated by Honda, Mazda, Mitsubishi, Nissan, Toyota, Subaru and Suzuki.

“Many more auto plants throughout the country are at risk of closure, some owing to temporary rolling blackouts that are being considered in order to conserve power in light of the damage to several Japanese nuclear power plants, and some through disruption to the country’s transport infrastructure, affecting everything from parts delivery, personnel mobility and shipping activity at the country’s ports.”

IHS said that in addition to those closures, and the disruption to the country’s transportation and power networks, dozens of other auto parts manufacturing facilities have also been affected.

These problems could quickly ripple outward to impact the rest of the world, IHS said, since many car makers, including those in the U.S., rely on parts manufacturers located in the hardest hit areas of Japan.

“Stoppages at those plants that produce parts that have second or third sources for manufacturing are unlikely to affect overall production very much, but disruption to production of parts that are unique and cannot be easily shifted has the potential to hit output badly at several automakers through the near term,” the report said.
Honda shuttered a research and development facility north of Tokyo after a cafeteria wall collapsed in the earthquake, and has closed several manufacturing facilities until at least March 20. Honda produces about 80 percent of its US-market cars in the United States.

While Mazda has most of its production facilities in the relatively unscathed southern parts of Japan, the carmaker idled production anyway.

Mitsubishi planned to keep its plants closed until at least Tuesday at it evaluates its supply chain logistics with suppliers in the northern part of Japan.

Nissan reported building or equipment damage at six plants, including the Oppama plant where it makes the new electric Nissan Leaf. The carmaker is assessing the impact to future Leaf supply to the United States. Nissan, which manufactures about 80 percent of its vehicles in Japan, said it is shuttering four Japanese plants until at least Wednesday, while two others will shut until at least Friday. The firm lost 2,300 finished vehicles in the disaster, and said some shipments of vehicles to the US could be delayed.

Subaru, which closed all of its domestic factories over the weekend, planned to resume production Monday.

Suzuki said all of its Japanese plants would be closed until at least March 17, when the company would reevaluate the situation.

Toyota shuttered production at all of its plants in Japan at least through Wednesday, curtailing 45 percent of the firm's global production. The car maker lost about 40,000 vehicles in the disaster, although IHS points out that this amount can easily be made up once production restarts. The company has two factories in the heavily damaged northern area of Japan.

OOCL Parent Firm Up $842M in 2010

If there was any doubt that 2010 represented a very robust recovery for some in the shipping industry compared to the upheaval of 2009, the Hong Kong-based parent of Orient Overseas Container Line (OOCL) put it to rest Monday.

Orient Overseas International, Ltd. (OOIL), which along with its subsidiaries including OOCL is known internally as the Group, announced that it had recouped a $377 million loss suffered in 2009 and ended 2010 with a $842 million profit.
Chairman C.C. Tung said the rebound "has been beyond all expectations."

"Unusually strong demand in the first half of 2010 and positive trading conditions throughout the remainder of the year saw our lifting volumes nearing 2008 levels. Improvements in freight rates across all trades, combined with cost savings implemented in 2009, have produced a record profit for our liner operation in 2010."

The Group's carrier arm, OOCL, reported 4.8 million TEU lifts in 2010, a 14.6 percent increase. The carrier's vessel utilization rate, a measurement of how well its ships are being used, grew from 74 percent to 81 percent. Average revenue per TEU rose to $1,178, a 27.5 percent increase over 2009.

However, despite the bumper year, Tung cautioned, "While the ongoing improvement in trade volumes and freight rates is good news, fuel and other cost pressures are again re-emerging as the global economic recovery continues. Continued focus on operational efficiency and pricing discipline will accordingly remain important in the current year,” noted Mr. Tung."

The Group posted profits from continuing operations of $1.87 billion for 2010, a massive jump from the $402 million loss suffered in 2009. These profits include the $1 billion net profit from the firm's 2010 sale of OODL, the Group’s former People's Republic of China property development business. Group profits were based on $6.03 billion in revenues generated during 2010, a major increase over the $4.4 billion in revenue generated in 2009.

Group Chief Financial Officer Kenneth Cambie said, “As of the 31st of December 2010, the Group had total liquid asset balances of $4.13 million compared with debt obligations of $248 million repayable in 2011. Debt-to-equity ratio changed from 0.31:1 at the end of 2009 to a net-cash position at the end of 2010 with the receipt of proceeds from the OODL sale.”

Looking forward, Tung said "The immediate outlook for 2011 remains positive though the level of demand growth seen in 2010 on the East-West trades is unlikely to be repeated in 2011."

He said the Group will "continue to invest in the expansion of the OOCL vessel and box fleets, and in the terminal infrastructure needed to support anticipated demand growth."

Near the end of 2010, Group carrier arm OOCL placed an order for two additional vessels with capacity of 8,888 TEU each from Hudong-Zhonghua Shipyard in China. With this new order, OOCL has a total of eight new 8,888 TEU vessels set for delivery between 2011 and 2014, with the first two vessels due in the first half of 2011.