Friday, April 8, 2011

Major Hawaii, Pacific Island Carriers Raise Fuel Surcharges

The three main shipping lines servicing Hawaii, Guam, Micronesia and the Northern Marianas have all announced increases in their fuel surcharge rates reflecting the dramatic global rise in oil prices.

For the third time this year, Matson Navigation announced March 31 an increase in their fuel surcharge on shipments to Hawaii as well as those to Guam and other Pacific Islands.

Set to take effect May 1, Matson's fuel surcharge for Hawaii services will rise from 35 percent to 43.5 percent. The fuel surcharge for Guam, Micronesia and the Northern Marianas will also increase from 36.5 to 45 percent.

"Matson recognizes that fuel costs impact all businesses, as well as consumers. Unfortunately, transportation companies are especially hard hit, with fuel consumption an unavoidable and significant component of operating costs," Matson Senior Vice President Dave Hoppes said in a notice to customers.

Horizon Lines, also for the third time this year, said on April 4 that it will raise its fuel surcharge on Hawaii service from 35 to 43.5 percent, also effective May 1. Horizon also matched Matson's fuel surcharge increase on service to Guam, Micronesia, and the Northern Marianas, raising the fuel surcharge from 36.5 percent to 45 percent, effective May 1. The surcharge increase on Micronesia service takes effect May 8.

"Horizon Lines will continue to closely monitor fuel costs and will adjust the fuel surcharge as trends warrant," the carrier said in service bulletin.

Pasha Hawaii also announced this week that it would increase its fuel surcharge on Hawaii service from 35 percent to 43.5 percent, effective May 1. Pasha does not serve Guam, Micronesia or the Northern Marianas.

Fuel surcharges are calculated as a percentage of the current ocean base rate.

Calif. Gov. Makes Maritime and Transportation Appointments

Newly ensconced California Governor Jerry Brown has announced several new appointments related to transportation and maritime shipping.

John Cronin, of Marin, has been appointed to the Board of Pilot Commissioners for the Bays of San Francisco, San Pablo, and Suisun.

The board licenses and regulates the 60 maritime pilots who guide vessels entering or leaving those bays. The eight members of the Board are appointed by the Governor, and except for the ex-officio member who is the state Secretary of the Business, Transportation and Housing Agency, require confirmation by the State Senate.

Cronin, a 27-year maritime veteran, is currently a vessel manager for Matson Navigation Company, where he has worked since 2005. He served as a deck officer from 1979 to 2005, as a licensed officer with the International Organization of Masters, Mates & Pilots. Cronin is also a member of the San Francisco Harbor Safety Committee and currently sits on the Rules and Regulations Committee of the Board of Pilot Commissioners.

Cronin, a Democrat, still requires State Senate confirmation to serve in the uncompensated position.

Governor Brown also announced the re-appointment of both James Earp and Carl Guardino to the California Transportation Commission.

The CTC, consisting of 11 voting members and two non-voting ex-officio members, is responsible for the programming and allocating of funds for the construction of highway, passenger rail and transit improvements throughout California. The Governor appoints nine members of the CTC, one is appointed by the State Senate Rules Committee, and one is appointed by the Speaker of the California Assembly. The two ex-officio non-voting members are appointed from the State Senate and Assembly, usually by the respective chairs of the transportation policy committee in each house.

Earp, who has served on the CTC since 2007, has been the executive director of the California Alliance for Jobs since 1998. Prior to this he served as public relations director for the International Union of Operating Engineers Local 3, a heavy construction union, from 1976 to 1998.

Carl Guardino, who has served on the CTC since 2007, has been re-appointed to the commission by Governor Brown.

Guardino has served as president and CEO of the Silicon Valley Leadership Group (SVLG), a public policy trade association that represents more than 350 Silicon Valley companies, since 1997. He served as government affairs director for Hewlett Packard from 1995 to 1997 and was the vice president of the SVLG from 1991 to 1995.

Both Earp and Guardino are Democrats who were previously appointed by Governor Arnold Schwarzenegger. Each appointment requires confirmation by the State Senate.

Long Beach Port's Chief Exec Steinke Leaves On Top

Richard D. Steinke, the executive director of the Port of Long Beach for more than 13 years, has announced that he will be retiring as of Sept. 30, ending a tenure that included guiding the port through one of the most successful periods of growth and development in its 100-year history.

Considered one of the most knowledgeable and respected port directors in the world, Steinke has been a prominent voice for the Long Beach port – the Western Hemisphere's second busiest container port – on both the national and international scene.

His departure came as a surprise to many, including his direct supervisors at the port, the Long Beach Board of Harbor Commissioners.

"Even though the board is technically his boss, Dick has always served as a mentor for the commissioners," Commission President Nick Sramek said.

“Dick has helped us develop a great staff, a great team here at the port, and we’re confident that we can maintain Long Beach’s world-class status.”

Belying no hint of recent confrontations between Long Beach City Hall and the port, Mayor Bob Foster praised Steinke, adding, "He really is the kind of person you want in public service. I want to thank Dick for his leadership and wish him well in retirement and in his future endeavors."

In Sacramento State Senator Alan Lowenthal, who has faced off with the port many times on environmental issues, said he was very surprised by the news, but wished Steinke well.

"He led the Port of Long Beach through the transformation from a port that just cared about the bottom line to one that still wanted to support economic development but changed its vision to include the impacts upon the community and the reduction of those impacts" Lowenthal said of Steinke. "I applaud him. I hope who ever follows him takes on this dual vision of both economic development and also environmental protection as the mantra for the future."

Industry officials were also taken aback by Steinke's sudden announcement, but took time to praise his accomplishments.

"There are many words to describe Dick Steinke – honest, intelligent, calm, sincere, balanced and a person of integrity," said Pacific Merchant Shipping Association president John McLaurin. “While his retirement is great news for Dick and his family, it is sad news and a loss for the trade community and the general public."

Steinke, who has agreed to stay on with the port through the search for and transition to a replacement, leaves the port at literally the top of his game. In the last few years of his tenure at the port, Steinke has overseen the almost full recovery of the port from the massive industry downturn in 2009, the implementation of several highly successful environmental programs, and the launching of major port development programs.

“I have accomplished most of what I set out to do at the Port,” said Steinke. ”I’m pleased that I can move on knowing that I leave the port a better place than when I came on board.”
Indeed, the Port of Long Beach was a radically different place when Steinke took over in 1997.

Reportedly selected as the executive director in some small part because his mild-mannered management style and even-keel professionalism was nearly the antithesis of the previous top executive at the port, Steinke took the reigns of a port handling just under 4 million TEUs a year and receiving vessels that maxed out at about 5,500 TEUs.

He leaves a port that handled nearly 6.3 million TEUs in 2010 and is regularly visited by container vessels in the 10,000 to 12,000 TEU range.

During his tenure he has overseen the development of such major projects as the Alameda Corridor, the TTI container terminal, the Gerald Desmond Bridge replacement, the Carnival Cruise terminal and the Middle Harbor project.

The Alameda Corridor, a 20-mile rail expressway that connects the ports of Long Beach and Los Angeles with transcontinental rail yards near downtown Los Angeles, has been praised for increasing throughput and port efficiency while reducing rail/street traffic congestion and easing air pollution.

The TTI terminal, dubbed the first "mega-terminal," converted a former US Navy base into a 400-plus acre container facility and earned the port a $1 billion 25-year lease agreement from ocean carrier Hanjin. 

While the $950 million replacement for the aging Gerald Desmond Bridge is not likely to officially break ground before Steinke leaves the port, he has led the port's effort to secure the federal, state and local funding require to complete it.

The $1 billion Middle Harbor project, part of an overall 10-year $4 billion redevelopment project kicked of by the port last year, will see two oddly-shaped and aging terminals converted into a single contiguous megaterminal.

In addition, during his previous five-year tenure at the port as Director of Properties, Steinke oversaw the 1994 purchase of 725 acres of Union Pacific property and the $277 million redevelopment in 1997 of the 170-acre Pier A.

Under his leadership the port also made tremendous strides on addressing the environmental legacy of the both the port's past and the port's success. In the early 2000s Steinke was instrumental in the launch of the Green Port Policy, which paved the way for the Harbor Commission to approve the milestone San Pedro Bay Ports Clean Air Action Plan, an omnibus plan that set ambition standards for addressing all port-generated pollution and defined ways to address these problems. The most notable of these was the Clean Trucks Program begun in 2008. Within two years, and with a massively successful buy in from the trucking industry, the majority of the port drayage fleet had been replaced with cleaner burning 2007 or newer model year trucks – leading to the elimination of more than 80 percent of the pre-2008 drayage-generated air emissions.

While leading the port through such success, Steinke also became a major voice within the industry itself, serving as Chairman of the American Association of Port Authorities in 2000-2001, as a member of the AAPA’s Executive Committee as the representative for South Pacific ports and as President of the California Association of Port Authorities.

He has also served as a board member for the Alameda Corridor Transportation Authority, the Intermodal Container Transfer Facility Joint Powers Authority, the Harbor Association of Industry and Commerce, the Intermodal Transportation Institute and St. Mary Medical Center in Long Beach, and is a member of the Red Cross CEO Advisory Committee.

Steinke began his career at the Stapleton International Airport in his native Denver, Colorado serving as the Airport Property Officer for five years before joining the port in 1990.

Port officials said they would immediately begin a search to fill the executive director position.

Editor Keith Higginbotham worked in the Communications (public relations) Department at the Port of Long Beach from 2002-2007, including on many projects under the direct supervision of Richard Steinke.

Fidley Watch - April Fools

Chris Philips, Managing Editor

The great philosopher, Forrest Gump, said, “Stupid is as stupid does.” A couple of criminals proved the adage last month in Seattle. Over the weekend of March 12th and 13th, thieves broke into all of the Sea Scout vessels tied to a dock in the North Lake Union neighborhood of Seattle. The target was pilothouse electronics, and some physical damage to locks and doors was observed on most of the boats.

Stolen from one of the vessels, the SSS Propeller, were three VHF radios, a GPS, a navigation computer and monitor, a Ritchie 8-inch ship’s compass, two binoculars, a sextant with storage box, a Davis Hand Held Compass and a brand new, still in the box NavCom AIS B unit.

Damaged in the theft, which was carried out with crowbars and bolt cutters, were a vhf radio, loud hailer and another GPS unit.

The Sea Scouts filed a police report, and Harbor Patrol investigated. The scouts’ insurance has a $10,000 deductible, so the losses, estimated to be $4,000 would be coming out of limited operating funds.

The following week an ad appeared on Craig’s List for an AIS unit exactly matching the description of the one stolen from the SSS Propeller. As a result of the discovery, the Sea Scouts initiated a “mini sting” operation and Seattle Harbor Police carried it out, meeting the sellers at a predetermined location. The harbor patrol was able to match the serial numbers, and took the AIS unit into custody along with the two criminal masterminds, who had arrived at the meeting in a stolen car.

With suspects in custody, it’s a pretty safe bet that most of the stolen items will eventually be recovered, but it could take time, depending on what is needed as evidence and what has already been sold.

In the meantime, the Sea Scout boats that were burgled are relying on donations and loans of equipment to continue operations.

Sea Scouting, part of the Boy Scouts of America, is a nationwide co-ed program organized to promote better citizenship and to improve members’ boating skills and knowledge through instruction and practice in water safety, boating skills and knowledge of a distinct region’s maritime heritage, as well as outdoor, social, and service experiences.

Most Sea Scouting units, called ships, have sailboats or power vessels for learning to sail and cruise, and every Sea Scout has a chance to try his hand at the tiller. All Scouts are taught safe and proper ship and boat handling, and Sea Scouts learn the meaning of buoys and lights, how to take advantage of wind and tide, and how to drop anchor or approach a dock. Sea Scouts also learn vessel maintenance and responsibility. It’s a safe bet that the felons involved in the looting of the Sea Scout ships aren’t graduates of the program.

As more high school and university graduates opt to stay ashore, qualified mariners are becoming scarce in the US. It’s in the best interest of those most in need of new employees, the US commercial maritime industry, to support programs like the Sea Scouts ( that introduce tomorrow’s workforce to the waterfront.

Tuesday, April 5, 2011

Dole Looking at Hueneme Move

International fruit shipper-producer Dole Food Company is reportedly considering shifting its United States shipping operations from the Port of San Diego to the Port of Hueneme.

Dole, based in Westlake Village, Calif., currently has a ten-year lease with the San Diego port that runs out in December 2012.

Dole has been evaluating the two ports' facilities and is currently in negotiations with both – either to stay in San Diego or move to Hueneme – according to comments by a Dole spokesperson to the Ventura County Star.

The fresh fruit firm's shipping arm, Dole Ocean Cargo Express, has been at the Port of San Diego since moving from the Port of Los Angeles in 2002.

Hueneme, which has grown as a niche port specializing in, among other things, fruit and vegetable imports and exports, is already home to Chiquita Fresh North America, Del Monte's US western distribution center.

SoCal Legislators Seek Resolution Urging USS Iowa to Los Angeles Port

A state resolution introduced by two Southern California state legislators is urging the United States Navy to transfer the famed World War II-era battleship USS Iowa to a group seeking to turn the warship into a floating museum at the Port of Los Angeles.

While the resolution is non-binding, it could help persuade the US Navy to support the Los Angeles plan. The resolution, AJR 8, was introduced by state Assembly members Warren Furutani, D-Gardena, and Bonnie Lowenthal, D-Long Beach.

The battleship, which remains in the Navy inventory in "on hold" status as part of a government program that donates vessels to museum groups, saw service in World War II, Korea, and served again as part of the US Navy's "big stick" policy from 1984 to 1989. It is the last remaining battleship in the world that has not been permanently placed as a floating museum.

Applications for the USS Iowa were submitted to the US Navy in late November 2010. Two groups are currently vying for the battleship, one in Los Angeles and one that is seeking to bring the vessel to Vallejo in the Bay Area.

In November 2010, the governing board for the Port of Los Angeles approved supporting a plan by the non-profit Pacific Battleship Center to acquire the battleship and ensconce the warship at the port as a floating museum.

Voting unanimously to support the PBC acquisition efforts, the port commission also approved the use of Berth 87 near the port's main cruise terminal as the future home for the battleship. The Los Angeles City Council backed the PBC plan in September 2010.

The resolution, which highlights the major points of the pro-Los Angeles plan, also states that the plan is supported by the port-area community, including the San Pedro-area neighborhood councils, San Pedro businesses, the City of Los Angeles, the Port of Los Angeles, as well as the past four governors of the state of Iowa.

AJR 8 concludes by stating: "...the Legislature respectfully memorializes the United States Navy to approve the application submitted by the Pacific Battleship Center to house the USS Iowa at the Port of Los Angeles."

The resolution is now in the Assembly's Committee on Arts, Entertainment, Sports, Tourism and Internet Media.

An economic feasibility study conducted by outside consultant AECOM estimated that attendance to the USS Iowa at the Port of Los Angeles would range between a low of 137,000 visitors a year to a high of 236,000 visitors a year, with a median of roughly 190,000 visitors a year from 2014 on. The analysis estimated that Southern California residents would make up roughly two-thirds of all visitors and the remaining third would be outside visitors.

However, the AECOM analysis estimated that even with these attendance numbers, the USS Iowa as an attraction would run a projected deficit of about $2.7 million a year. AECOM staff said this deficit would have to be addressed by other outside revenue such as fund raising, government support or philanthropic donations.

AECOM staff pointed out that the USS Iowa, as an attraction at the port, would have an earned income of just under 50 percent of its annual budget – a figure AECOM staff called "in line with other cultural attractions."

If the warship does come to Los Angeles, the port – while incurring some costs due to required shifting of cruise vessels – will not be providing money for the setup, operation and maintenance of the USS Iowa. These costs will be borne by the PBC.

New China-Long Beach Box Service to Initially Skip Japan

The new trans-Pacific box service operated by COSCON Container Lines Co., Ltd., Hanjin Shipping Co., Ltd, Pacific International Lines and Wan Hai Lines, will initially bypass Japan when it kicks off on Tuesday, April 5.

The CLX (Central China-Long Beach Express) service, which calls at three Chinese ports before heading to the Port of Long Beach, will skip the Port of Yokohama in central Japan until mid-May, according to a statement by Hanjin. The first CLX service vessel is scheduled to arrive at the Port of Long Beach on April 20.

The CLX service, first announced on March 31, will utilize five containerships that range between 3,600 TEU and 3,850 TEU capacity.

The service rotation is: Fuzhou – Ningbo – Shanghai – (Yokohama) – Long Beach – Fuzhou. Yokohama calls will start in the middle of May.

The March 11 earthquake and subsequent tsunami which hit northern Japan on March 11 heavily damaged transportation infrastructure, shuttered factories, and led to a shortage of electrical power supply. The situation at the Fukushima nuclear power plant, which Japanese officials said may take months to bring under control, has also raised concerns.

Steinke to Retire from Port of Long Beach

Richard D. Steinke, executive director of the Port of Long Beach for the past 14 years, today announced his plans to retire from the Port, effective September 30, 2011.

“I have accomplished most of what I set out to do at the Port,” said Steinke. ”I’m pleased that I can move on knowing that I leave the Port a better place than when I came on board.”

Under Steinke’s leadership, the Port redeveloped the massive, former Long Beach Naval Complex, creating one of the nation’s largest container cargo terminals. He transitioned the Port, making it both a builder of modern cargo terminals and a leading environmental steward. Steinke implemented a pioneering Green Port Policy that included the successful Clean Trucks Program developed with the rival Port of Los Angeles.

Partnerships and collaboration are hallmarks of Steinke’s leadership style, enabling him to steer the Port through the complex process of winning approval for the $1 billion Middle Harbor Redevelopment Project, which will create one of the most efficient and greenest terminals in the world, and the $950 million Gerald Desmond Bridge Replacement Project, which will assure safe access in and out of the nation’s leading port complex. Steinke’s retirement comes as the Port is kicking off $4 billion in major improvements over the next decade to cement its position among the world’s leading ports.

“Dick has been instrumental in developing the Port of Long Beach into one of the top seaports in the world,” said Nick Sramek, president of the Long Beach Board of Harbor Commissioners, which governs the Port of Long Beach. “He led the Port out of the recent recession, keeping it strong financially, while guiding our major modernization and environmental projects. “

Sramek said the Board of Harbor Commissioners would begin the search for Steinke’s successor shortly, and Steinke has agreed to assist the Board in both the selection process and the smooth transition to a new executive director.

“Dick has helped us develop a great staff, a great team here at the Port, and we’re confident that we can maintain Long Beach’s world-class status,” Sramek added.

Steinke’s leadership extended throughout the U.S. port industry. He has been the chief spokesman for the U.S. West Coast Collaboration, a partnership of West Coast ports and the major western railroads. He has been chairman of the American Association of Port Authorities and the California Association of Port Authorities. Steinke serves as a member of the Board of Directors of the Alameda Corridor Transportation Authority, the Intermodal Container Transfer Facility Joint Powers Authority, the Harbor Association of Industry and Commerce, Intermodal Transportation Institute and St. Mary Medical Center in Long Beach, and he is a member of the Red Cross CEO Advisory Committee.

The Port of Long Beach is the second-busiest container cargo port in the United States, and part of the sixth-busiest port complex in the world. In 2010, more than $140 billion in trade moved through the Port of Long Beach, supporting 300,000 jobs throughout Southern California and 1.4 million across the country.

City Hall to Receive $40M In Long Beach Port Oil Income

A 2010 Long Beach city charter amendment that stripped the Port of Long Beach of its control of port-area oil properties and was presented to voters as having no fiscal impact, could cost the port more than $40 million in 2011, according to port projections.

In addition to putting oil properties in the port area under City Hall control, the charter amendment also redirected all oil revenues generated in the port to the City Hall-controlled Tidelands Oil Revenue Fund (TORF). Known as Measure D, the amendment was passed by Long Beach voters in November 2010 by a 55.6 percent to 44.4 percent margin.

In the lead up to the November 2010 election both Mayor Bob Foster and City Attorney Robert Shannon repeatedly emphasized that the portion of Measure D related to oil properties was merely a clarification of charter language related to control of the port-area oil properties and not an attempt to divert port revenue to City Hall.

While City Hall has said that it will most likely return the FY2011 oil revenues to the port since the port had already included these projected funds in the port FY2011 budget prior to the passage of Measure D, the final disposition of the FY2011 oil revenues appears to be up in the air at the moment.

"I don't know that the city has made any firm and final decisions on oil revenues and what might be remitted to the port and what they will be retaining," Port Executive Director Richard Steinke told the Harbor Commission on Monday.

Members of the shipping industry have raised concerns with the State Lands Commission about the transfer of oil revenues from the port to City Hall, arguing that Measure D is shifting significant portion of the port's revenue to City Hall, threatening the financial security and competitiveness of the port. The SLC, which has oversight of the state's ports, has said in the past that they are carefully watching Measure D impacts on the port.

While no analysis was conducted by City Hall before placing the measure on the ballot, port financial staff estimated that Measure D would shift more than $100 million in oil revenues to the City Hall-controlled TORF over the next five years.

However, due to the rise in the price of oil, the latest projections are much higher.
"For the full fiscal 2011," Port Finance Director Sam Joumblat told the Harbor Commission on Monday, "I project that probably the net oil income would be over $40 million, if oil prices continue to be anywhere near their lofty present levels.

If oil prices remain near their current levels, this amount of oil revenue shifted to the control of City Hall could rise to more than $200 million over five years.

Nearly all the major stakeholders involved in the local international trade business community expressed opposition to Measure D, including: the Long Beach Chamber of Commerce; the Los Angeles Customs Brokers and Freight Forwarders Association; the LA/LB Propeller Club; the Pacific Merchant Shipping Association; the Harbor Association of Industry and Commerce; FuturePorts; and the California Marine and Intermodal Transportation System Advisory Council, or CALMITSAC.

A major concern raised by the PMSA and other opponents of Measure D is what the Tidelands Oil Revenue Funds are actually funding.

By state law, the funds can only be spent in the tidelands on oil production-related expenses. However, a caveat in the city charter allows the City Council to shift funds from the TORF to the general Tidelands Operating Fund (TOF). Monies in the City Hall-controlled TOF, which come from non-oil revenues generated in the city tidelands including port profits, must still be spent in the tidelands and then only on very specific uses such as maritime, navigation, recreational, environmental, fisheries and the promotion of maritime commerce.