Friday, April 1, 2011

Expert Predicts Positive West Coast Trade Growth in 2011, Slower Than 2010

Joining the Port of Long Beach "Pulse of the Ports" industry panel on Wednesday to offer an economic perspective of the port industry, transportation expert Dan Smith of the consulting firm Tioga Group, predicted continued trade growth through 2011, albeit at a smaller pace than in 2010. At the same time, Smith tackled several long held myths about the future impacts of the Panama Canal expansion, railroad pricing and a predicted capacity crunch at the Southern California ports of Long Beach and Los Angeles.

Smith began by pointing out that not only was 2010 a strong initial recovery for the port industry after a historically dismal 2009, but that "the recovery happened a lot quicker than we thought it would."

Container traffic at the West Coast ports swung from being down 14 percent in 2009 to being up more than 19 percent in 2010.

Smith said that while West Coast ports have regained some of the minor volumes that had shifted to the East Coast since 2006, the regular players on the West Coast also lost some cargo to alternative West Coast ports such as Prince Rupert, Manzanillo and Lazaro Cardenas – though the shift has been subtle.

"So just as trade has always shifted a little bit back and forth between the West Coast ports, it continues to shift," Smith said.

Smith acknowledged that the completion of the Panama Canal expansion in 2014 was a source of considerable discussion within the industry, but in his opinion, "the reality is probably a lot less dramatic than the trade journals and speakers might imply."

While the new Panama locks will allow some of the largest container vessels to pass through, Smith believes "the trade volumes to fill those vessels is still many years away."

Smith said that the canal authority is planning its own financial future on much more modest rates of growth – about 3 percent a year – and thus it is unlikely that there will be the volume needed for 12,000-TEU vessels to utilize the new locks before 2020.

The canal authority, Smith said, is looking first and foremost at growing the volumes of the services already using the canal and only then will they look to building the capacity to fill the larger vessels.

Smith also shot down the idea that the US railroads have been pricing themselves out of the market as a myth.

"The business the railroads have now is the business they want, and they will fight to keep it," Smith said.

He pointed out that the railroads have an "unbroken record of providing the capacity and performance to keep the traffic that they really want to keep."

Smith said any shift to the East or Gulf Coast is likely to be small and gradual, taking one or maybe two decades.

While some customers will shift to take advantage of new all-water opportunities as new non-West Coast port capacity comes on line, Smith does not predict it will be a stampede.

As for the long-term outlook for the Southern California ports or Long Beach and Los Angeles, which combined make up the busiest container port complex in the Western Hemisphere, Smith predicted slower post-recession growth than that seen in the initial 2010 recovery, which he credited primarily to large scale inventory replenishment.

Smith predicts 5 percent growth at the Southern California ports in the third quarter of 2011 and 14 percent growth in the fourth quarter.

Even further down the road, Smith does not see a future capacity crunch at the two ports once the ports complete development projects currently under way. He estimates that the two ports will still have no capacity issues well beyond 2030.

Smith predicted that growth rates surpassing the 2006-2007 peak years at the two ports are now expected to occur somewhere around 2015 and the two ports can expect to grow at about 4.5 to 5.2 percent a year from there on out.

BCOs, Retailers See Strong 2011, Warn of Potential Japan, Middle East Impacts

Offering up the perspective of retailers and beneficial cargo owners for the Port of Long Beach "Pulse of the Ports" panel on Wednesday, Jonathan Gold, the Vice-President of Supply Chain & Customs Policy for the National Retail Federation, began with a recap of the 2009 recession and the recovery of 2010.

The retail industry saw sales drop 2.7 percent in 2009, only to rebound 3.7 percent in 2010. In addition, Gold said, import volumes in 2010 jumped 17.4 percent and holiday sales, originally projected at 2.3 percent, actually came in at 5.7 percent – the largest jump since 2004.

Gold predicted that despite facing challenges such as high unemployment, continuing issues with the housing market, rising fuel and commodity prices and legislative/regulatory uncertainty putting pressure on consumers, retail sales will increase 4 percent in 2011 with single digit percentage gains in import volumes.

Cargo volumes at both East and West Coast ports will continue to grow in 2011, Gold said, but the situation in Japan and unrest in the Middle East could have an impact on the rest of the year.

Gold said that some of the consideration that retailers look at in making their port decisions include: proximity to distribution network, operational efficiency, workforce stability, the ocean services offered, and fees and regulations.

"Things such as the Clean Truck Fee, infrastructure fees, hour restrictions, and also the politics at both the local and state level also have an impact," Gold said.

In Southern California specifically, the ports of Long Beach and Los Angeles face their own challenges. Gold said that things such as the efficacy of the current night gate system, turn times, the Clean Truck Program, current chassis programs and how they will work, and a strained infrastructure are all consideration looked at by retailers.

"Even as I say these are operational challenges, I think they are also opportunities," Gold said. "Opportunities for every stakeholder to come together and work out a viable solution, so that we can make sure the supply chain remains efficient, and make sure that every participant in the supply chains remains viable and continues to grow."

Ocean Carrier Sees Increased Trade Growth, Warns of Constraints

Frank Baragona, president of CMA CGM (America), joined the Port of Long Beach "Pulse of the Ports" panel on Wednesday to offer up an industry view from the perspective of the ocean carriers.

While bullish on the continued growth of trade heading into 2011, Baragona offered warnings about issues such as container supply, landside infrastructure constraints, and rising bunker fuel costs that could damper the perceived recovery since the disastrous 2009 downturn.

"We do see continued [US] GDP growth – and that is a positive thing – in excess of 3 percent [in 2011] coming off less than 3 percent last year," Baragona said.

"This is a good signal that consumers' confidence is recovering and people are back transacting business in the marketplace."

Baragona said that the two biggest issues threatening a sustained economic recovery from his perspective are high unemployment and the housing/access to credit situation.

Despite this, Baragona said he is optimistic of a continued slow recovery.

Turning to capacity supply and demand, Baragona said that on a global level capacity has grown on average 10 percent per year over the past decade to a 2010 level of just over 14 million TEUs.

He predicted a similar 8 percent to 9 percent annual growth rate in global capacity for the next two years, ending 2012 at about 17 million TEUs.

Despite seeing a global 14 percent growth in demand during 2010, Baragona said that 2011 would likely come in at about 8 percent demand growth and 2012 would see about the same.

"So, yes there is ample global capacity. [Global] demand is tracking slightly below capacity, so this indicates that there should be adequate supply globally to meet the demand," Baragona said.

Specifically in the transpacific, however, demand continues to track well below capacity and Baragona predicted that the trend would continue in 2011, with transpacific eastbound capacity having about 3 million more TEUs than called for by estimated demand.

Baragona said that his firm had earlier predicted a more optimistic picture for demand in 2011, but the rise in bunker fuels prices, the disaster in Japan and the turmoil in the Middle East have all put a cloud on those projections, though he remains guardedly optimistic for a positive year.

Turning to issues on the landside, Baragona said that the key concern is efficiency at the ports to deal with the 12,000-plus TEU vessel classes that are now entering service.

"We would like 150 moves an hour, but we are not there yet. These ships cannot be laid up for three or four days. They only make money when they are out steaming," Baragona said.

He added that it is not just the dock, but also the rail networks, the highways systems, the port infrastructure that all play into the needed efficiency.

From a carrier operational perspective, Baragona said that bunker fuel costs, slow steaming and the Panama Canal are all major topics of internal discussion.

Baragona called his presentation chart of bunker fuel prices per ton over the past three years "scary," adding that in just over 26 months the price per ton of bunker fuel has almost tripled.

"If anyone in this room questions the logic of a bunker surcharge, this should explain it," he said.

Baragona said that a typical CMA CGM 8,200-TEU vessel on a roundtrip from South China to Long Beach and back burns about $3.5 million to $4 million in bunker fuel per trip.

"That number continues to go every day," Baragona said. "This is why the bunker formula is so important in our service contracts. It represents 60 percent of the costs of that service."

In addition to surcharges, another method to deal with rising fuel costs is slow steaming on the backhaul, where vessels on their return trip move at speeds well below standard ocean-going vessel cruise speeds. Estimates suggest that a vessel cruising at 17 to 19 knots instead of full speed at 23 to 26 knots, can save about 5 percent to 7 percent on fuel costs.

Baragona said that the industry has been quick to adopt backhaul slow steaming. Of the 45 service loops on the West Coast, for example, the number using slow steaming has risen from one service in mid-2009 to more than 15 in February 2010 and almost 25 as of today. Baragona pointed out that on the East Coast the rise of slow steaming has been even more pronounced, rising from two service loops out of 22 in mid-2009 to 12 in February 2010 to nearly 17 as of today.

As long as bunker fuel costs remain a sizable component of the costs of ocean transport, Baragona said slow steaming on the backhaul will remain a justifiable cost reduction strategy for the foreseeable future.

Turning to the opening of the $5 billion expansion of the Panama Canal in 2014, Baragona said that "It will provide an alternative. It is going to provide options to the supply chain that don't exist today."

The problem, he said, is that it is not yet known how much it will cost to transit the canal when the new larger locks open in 2014.

"The key to this," Baragona said, "is that it will change the dynamics on the East Coast. Today, we are unable to get any ship through the canal over 5,000 TEUs. And the only way we are currently able to operate larger ship efficiently [to the East Coast] is to bring them through the Suez."

Baragona said that there will be a shift from the West Coast to the East Coast, but he hesitated to describe it as a "fundamental" shift.

"You will see a shift because not everything that moves today is time sensitive," he said.

He predicted the canal opening will allow the industry to provide larger, more fuel efficient and more economical vessels to the supply chain. In the end, he said, it will provide the customer with a trade off: between cost and time to market.

The one caveat he offered, though, was the ability of infrastructure on the East Coast in 2014 to accommodate the larger vessels that will be able to transit the canal.

It is not the case today, Baragona said. "A lot has to be done on the [East Coast] infrastructure to capitalize on the opportunity."

Another constraint that Baragona said does not get a lot of discussion is the worldwide container supply. He pointed out that 96 percent of new containers are built in China and in 2008 and 2009 China almost shut off the construction. Supply dropped from 5 million new containers a year in 2007 to 300,000 in 2010. Add to this that new and larger ships continued to join the fleet and this led, in some part, to the situation last year where shippers began to experience a shortage of available containers.

Baragona said that worldwide container supply has continued to drop in relation to the number of vessels slots – from three boxes per slot in 2000 to about two boxes per slot today.

The ideal model, he said, is an equal container pool in Asia, on the vessels, and in the US, all cycling.

Baragona said the while there will be "adequate and reasonable" vessel capacity through the whole 2011 peak season, the concern he pointed to is whether there will be enough containers.

"My advice is this," Baragona said, "Be very judicious in your contracting. Equipment availability is going to be critical. I don't think any company is immune from it and I would certainly be cautious."

Railroads Ready to Handle Predicted Record Peak Season

Bringing the perspective of the railroad sector to the Port of Long Beach "Pulse of the Ports" industry panel on Wednesday, Clarence Gooden, Executive Vice President and CCO for CSX Corp., forecast a record-setting fall peak in intermodal rail traffic and said the railroads are prepared with increased equipment and support.

Gooden predicted that 2011 will see a record-setting year in the number of intermodal shipments by the railroads, surpassing the industry peaks of 2006.

"Intermodal shipments in 2006 were about 3.7 million containers and trailers that we moved, [growing] to somewhere about 3.84 million containers [in 2011] in the intermodal business," Gooden said.

He predicted that intermodal rail shipments would increase 10.1 percent in the first quarter over the same period in 2010, increase 8.2 percent in the second quarter, 6.7 percent in the third quarter and 8 percent in the fourth quarter.

Gooden also predicted that the third quarter would see the largest volumes of intermodal rail shipments in 2011, with 2.14 million international TEUs and 1.7 million domestic and transload TEUs handled.

"It looks like we are going to have a very traditional peak this year, with goods and services beginning to increase somewhere around August – a very dramatic and traditional peak," Gooden said.

From a rail perspective, Gooden said that a successful peak revolves around three major components: container capacity, train capacity and the intermodal network capacity.

On the issue of container capacity, Gooden said that the drop in worldwide container-to-slot capacity from three-to-one to two-to-one over the past decade means that the existing containers will have to be turned around faster to maintain efficiency.

Gooden said that CSX expanded their national rail asset fleet last year to handle an extra 3,000 TEUs and will further increase this amount in 2011 by another 8,000 TEUs of capacity.

On the issue of train capacity, Gooden pointed out that CSX has added more than 400 additional locomotives to their asset fleet since the recovery began in early 2010, with plans to bring several hundred more online in 2011.

In addition to increasing the number of locomotives in the system, the rail industry has also drawn down the number of rail flatcars in storage to increase the number of flatcars in service at any given time. Gooden also said that 2011 will be the largest single-year increase in new double-stack railcars added to the network.
"We currently have the capacity to put on over 100-plus trains a day if the need arose," Gooden said.

On top of the predicted record-setting intermodal traffic this year, CSX is also beefing up their assets to deal with an ongoing boom in coal shipments, which require a great deal of rail assets due to the sheer tonnage being hauled, and an expected bumper harvest in grain which is also expected to require a large amount of rail equipment. CSX also handles about 88 percent of all the fertilizer shipments in the US, which require a great number of rail assets.

"We think we have a great balance of service in terms of being able to handle this traffic as we move forward," Gooden said.

Another factor to providing adequate service, Gooden said, is in providing enough crews to man the trains.

"In the unemployment numbers you continue to see, the rail industry has been an anomaly," Gooden said. The main reason for that, he said, is the massive turnover the industry has experienced in the past several years and the hiring needed to keep staffing at proper levels. He pointed out within the next several years, more than half of the 30,000 CSX employees will have been hired in the previous five years.

"At CSX we have about 13,000 train and engine service employees and this year we plan to hire over 3,000 [workers] to either replace those to cover attrition or in anticipation of where we have growth in our business," Gooden said.

A final factor, he said, was track capacity.

"All throughout the recession, in fact since 2004, we have been investing $1.5 billion to $2 billion a year in our company and its infrastructure," Gooden said, resulting in the addition of more than 600 miles a year of new track.
"We are working hard to keep that infrastructure up and to enable us to be able to serve our country and its transportation needs."

Tuesday, March 29, 2011

Golden Seas Rescue

By Petty Officer 3rd Class Walter Shinn

A 738-foot freighter with 20 crewmembers aboard was battered by fierce Arctic winds and 30-foot seas after a mechanical failure left it with limited engine power in the midst of an ice-cold storm 70 miles north of Adak, Alaska.

The cargo vessel Golden Seas was carrying more than 132,277 pounds of rape seed used to make canola oil, 450,000 gallons of fuel oil and 11,700 gallons of diesel fuel, and as the vessel drifted toward land, the only help available was more than 400 miles away.

During the Golden Seas’ voyage to the United Arab Emirates the ship experienced a turbo-charger failure on December 3, 2010. The power failure disabled the vessel’s propulsion, setting the ship adrift in heavy seas heading toward the Aleutian Island of Atka.

As soon as the Coast Guard received the report of the vessel’s problem the life-saving service immediately began mobilizing personnel in preparation for a major incident.

Six years ago nearly to the exact day a similar incident occurred.

The Malaysian freighter, Selendang Ayu, went aground and broke in half at Skan Bay off Unalaska Island in the Aleutian chain on December 8, 2004. The accident sent 336,000 gallons of oil and 66,000 tons of soybeans into the water and onto the shores of the island. Six crewmembers died during a rescue attempt.

The similarity of the Golden Seas to the Selendang Ayu was in the minds of personnel from federal and state agencies who formed a unified command to prevent a bad situation turning into a major incident.

The unified command was faced with a difficult situation. There was a gap with hundreds of miles of empty ocean and no rescue responders close by to come to the aid of the stricken vessel.

However, there was a 251-foot, 18,300 horsepower towing vessel moored in Dutch Harbor. The crew of Tor Viking II was just a day away from being able to rescue the Golden Seas. The Tor Viking II vessel and crew was contracted by O’Brien’s Response Management, who was part of the unified command, to respond from Dutch Harbor to tow the Golden Seas to safety.

In addition to the Tor Viking II, two Air Station Kodiak Coast Guard MH-60 Jayhawk helicopters and crews were deployed to Adak to provide rescue capabilities if needed. A Coast Guard HC-130 Hercules aircrew was also deployed to communicate with the vessel and to collect set, drift, current and temperature information from a data marker buoy dropped by the aircrew.

Battling through nearly overwhelming conditions in the Bering Sea, the Coast Guard Cutter Alex Haley was also diverted to respond to the Golden Seas but was three days away. The Cutter Spar was also deployed from Kodiak to help with any needed environmental response.

Waves ranged from 10 to 30-feet, typical of the harsh weather conditions in the Bering Sea, but were no match for the Tor Viking II, which was able to reach the Golden Seas after a day’s travel of plowing through the weather.

By the time the towing vessel crew arrived, the weather became calmer for a long enough period for the Golden Seas to utilize limited engine capability and maneuver northeast away from land giving rescue vessels the time needed to get to the stricken vessel. The Tor Viking II reached the bulk carrier at 5:30 p.m. and was able to successfully attach towlines and began the tow at 8:30 p.m. Dec. 4. 2010.

A rescue operation of this size demonstrates the immense area of responsibility for the Coast Guard. The 17th Coast Guard District operates in Alaska covering a vast amount of ocean encompassing 3,853,500 square miles and more than 33,000 miles of coastline, an area larger than the land mass of the continental US.

Large bulk carriers navigate through this area because it is part of the great circle route, decreasing vessel travel time and fuel usage while crossing the Pacific Ocean.

“This case demonstrates the extreme distances involved in conducting operations in Alaska and the challenges ahead for the Arctic regions,” said Capt. Jason Fosdick, federal on-scene coordinator. “Multiple Coast Guard crews responded requiring a coordinated airplane, helicopter and ocean-going cutter response. Fortunately the Alex Haley was able to respond, demonstrating the need for Coast Guard cutters that can handle heavy seas in the Bering.”

Crews from the Coast Guard and Tor Viking II braved stormy seas to aid the stricken ship. The Tor Viking II towed the vessel near the port of Dutch Harbor for the crew to make repairs. Six days later the motor vessel departed Dutch Harbor en route to the United Arab Emirates after successful engine tests were conducted.

“This is a very different outcome from what occurred six years ago when the Selendang Ayu grounded on Unalaska Island,” said Gary Folley, state on-scene coordinator. “The State of Alaska is grateful for the efforts of all involved in the response, in particular the crew of the Tor Viking II, who demonstrated tremendous skill in taking the Golden Seas in tow at night in heavy seas.”

The Tor Viking II and the Alex Haley traveled more than 400 miles one way while Coast Guard helicopters traveled more than 600 miles to be in position to rescue the 20 vessel crewmembers if needed.

Petty Officer 3rd Class Walter Shinn has been stationed in Juneau, Alaska, for three years. Shinn has been deployed to the Arctic as well as support for the Deep Water Horizon and internationally coordinated Haiti Earthquake responses.

Puget Sound Maritime Achievement Award

By PMM Staff

The 2011 Puget Sound Maritime Achievement Award Selection Committee is accepting nominations for this year’s Puget Sound Maritime Achievement 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 affecting 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.

Contact Rich Berkowitz at (206) 443-1738 with any questions.

Appeals Court Upholds California's Low-Sulfur Maritime Fuel Regs

A federal appeals panel on Monday upheld a lower court ruling that allowed California air quality regulators in 2009 to impose regulations requiring commercial maritime vessels headed for California ports to use low-sulfur fuel within 24 miles of the state's coast.

The Ninth Circuit Court of Appeals ruled that despite California only having legal jurisdiction over coastal waters out to three miles, the California Air Resources Board (CARB) maritime fuel-use regulations that were approved April 19, 2009 – designed to dramatically reduce air pollution from ocean going vessels – can legally be enforced by the state out to 24 miles.

"In the end, we acknowledge the unusual characteristics and circumstances of the [CARB regulations]," the Ninth Circuit said in its ruling. "We are clearly dealing with an expansive and even possibly unprecedented state regulatory scheme. However, the severe environmental problems confronting California – especially Southern California – are themselves unusual and even unprecedented."

The 2009 regulations were a rewrite of 2007 CARB regulations that sought to address marine-generated diesel emissions by setting specific emission levels permitted by ocean-going vessels. The 2007 regulations were challenged in court by the Pacific Merchant Shipping Association (PMSA) and eventually determined by the courts to be preempted by the federal Clean Air Act.

In an effort to work around the court ruling, CARB rewrote the regulations to specify the type of fuel to be used by ocean-going vessels, instead of specifying set emission standards as it did in 2007.

The PMSA, which represents nearly all of the shipping lines calling at North American West Coast ports, sued CARB again in late-April 2009 to block implementation of the newly rewritten fuel regulations arguing that the state does not have jurisdiction beyond the three-mile coastal zone. While not objecting to the environmental goals of the regulations, the PMSA also argued that more universal nationwide and international regulations were the more appropriate way to tackle ocean-going vessel pollution and prevent, in the PMSA's opinion, a patchwork of regulations that differ from state to state.

The day before the CARB regulations were set to go into effect on July 1, 2009, the US District Court for the Eastern District of California turned down the PMSA request for an injunction and request for summary judgment. CARB subsequently implemented the regulations as planned.

In mid-July, 2009, the PMSA filed with the District Court seeking to modify the court's ruling and allow the trade group to seek an immediate appeal. The lower court approved the PMSA modification, citing that there was "substantial ground for difference of opinion" within the case. After nearly a year of preparatory legal action, the Ninth Circuit heard arguments on the appeal from both sides in early December 2010.

In their ruling issued Monday, the appellate panel found that the PMSA failed to support its two main points: that the 2009 CARB regulations are preempted by the federal Submerged Lands Act of 1953, and that the regulations are preempted by the US Constitution's Commerce Clause, as well as, general maritime law.

In response to the Ninth Circuit ruling, PMSA President John McLaurin expressed his disappointment with the ruling.

"The state’s requirements on how vessels must be operated 24 nautical miles off-shore, when the state’s jurisdiction ends only three miles beyond the coastline, remains a unique attempt to expand its authority. The ruling handed down today by the Ninth Circuit panel is without precedent and only reaffirms that this is a novel application of state authority."

McLaurin added that the maritime industry will meet all state, federal and international laws and will continue "working in earnest" to reduce environmental impacts.

"Even after this ruling," McLaurin said, "it is only through the application of consistent and harmonized federal and international standards that meaningful and sustainable emission reductions from ships engaged in international trade on the high seas will be obtained.”

In the end, though, the nearly four-year effort to impose California-specific standards on ocean-going vessels may be somewhat of a short-lived victory.

Almost a year to the day before Monday's ruling, the International Maritime Organization (IMO) approved a Canada/US joint proposal to set up an Emissions Control Area (ECA) along the East and West coasts of both countries under Annex VI of the International Convention for the Prevention of Pollution from Ships (MARPOL). This treaty, among other things, specifies fuel sulfur-content for ocean-going vessels. MARPOL Annex VI regulations are now accepted as the base minimum for permissible vessel fuel quality and air emissions by 136 signatory countries representing 98 percent of the world’s shipping tonnage. The Annex VI regulations apply to all vessels traveling into MARPOL signatory-member waters and to all vessels flying under signatory nation flags. Even a non-signatory nation’s vessel entering the national waters of a MARPOL signatory state are required to adhere to the Annex VI regulations.

The 2009 CARB regulations upheld Monday currently require ocean-going vessels headed to California ports to use fuel with sulfur content between 0.3 percent and 1.5 percent when within 24 miles of the coast. This standard drops to 0.1 percent as of January 1, 2012. The CARB regulations also do not apply to vessels transiting within 24 miles of the coast that are not calling at California ports.

When the IMO's North American ECA goes into effect in August 2012, all ocean-going vessels within the 200-mile ECA will be required to use fuel with no more than 1 percent sulfur. This drops to 0.1 percent on January 1, 2015.

Even the Ninth Circuit noted in its ruling that the CARB regulations are most likely to be superseded by the kind of universal solution originally argued for by the PMSA.

"The [CARB regulations] also contain a sunset clause, and it is reasonable to predict," said the court, "that once the heightened standards established by the ECA go into effect, the [CARB regulations] will be terminated."

While the aggregate costs to the shipping industry to comply with the CARB rules will be large, the Ninth Circuit pointed out that there was no dispute among the litigants that the health benefits to the residents of the state will also be dramatic.

During testimony, CARB estimated that compliance with the CARB fuel standards would cost vessel operators $30,000 per California port “call,” amounting to an industry-wide aggregate incremental cost of approximately $360 million annually and $1.5 billion through the end of 2014. The court noted, however, that CARB found that individual cost per container would amount to about $6 per TEU.

On the other hand, CARB also testified that their fuel regulations would prevent 300 premature deaths each year in the state and 150,000 cases of respiratory illness.

OOCL Reroutes Calls to Tokyo Bay Over Radiation Concerns

Orient Overseas Container Line, the Tokyo-based carrier announced Friday, it is diverting all Tokyo and Yokohama vessel calls to the more southerly port of Osaka due to concerns about radiation from a leaking nuclear power plant in the northeast.

OOCL is the fourth and latest ocean carrier to stop calls at the Tokyo and Yokohama ports, which suffered only minor damage and have remained open since shortly after the March 11 Japanese earthquake and tsunami.

German carriers Hapag-Lloyd and Claus-Peter Offen have also canceled calls to both ports, which are located in Tokyo Bay about 150 miles south of the tsunami-damaged Fukushima power plant. Carrier Hamburg Sud had stopped calling at both ports shortly after the March 11 double-disaster, but restarted service last week.

Other major lines, including APL, CMA CGM and Maersk continue to call at both ports.
Tokyo and Yokohama ports are the nation's two busiest container ports, handling more than a third of Japan’s foreign-container cargo.

The Fukushima nuclear power plant in northeastern Japan was severely compromised during the March 11 earthquake/tsunami leading to a shutdown of the cooling systems at the six Fukushima reactor buildings. Despite the best efforts of plant employees since the disaster struck to gain control of and/or cool the reactors, radiation has continued to steadily leak from the power plant.

Radiation levels in Tokyo are running on average about 300 percent higher each day for the past week than those recorded in the capitol city on the day prior to the earthquake and tsunami, though the average daily dose for residents is only about 20 percent of what a person receiving a medical x-ray would experience.

An undated statement on the website of the Tokyo Metropolitan Government’s Bureau of Port and Harbor acknowledged the growing concerns over radiation levels in the Tokyo Bay area while downplaying their impact.

"The current numerical measurement doesn’t indicate any effect on health. So, please set your heart at ease,” said the statement.

Longview Port Sets Third Straight Revenue Record in 2010

Officials from the Washington-state Port of Longview reported earning nearly $28 million in revenues during 2010, setting a port record for the third straight year.

The port earned $27.8 million in revenue in 2010, an 11 percent increase over 2009. The port first topped $25 million in revenue in 2009 and $20 million in revenue in 2008.

Officials cited a surge in logs and bulk product exports as a main reason for the 2010 increase.

Exporters sent more than 600,000 metric tons of logs over Longview docks in 2010, a massive 166 percent increase over 2009. Officials said most of this growth was from greater demand in China due to a booming Chinese construction industry and simultaneous increases in the cost of Russian lumber.

Total exports moved through the port climbed 67 percent in 2010, while total imports – representing a fraction of the port's total cargo volume – were down 16 percent compared to 2009.

Total cargo tonnage handled by the port in 2010 increased by 55 percent to 2.3 million tons.

With $24.8 million in expenses for 2010, port officials reported a net operating income for the year of nearly $3 million.