Friday, June 3, 2011

The Marine Exchange of Alaska: Alaska’s Maritime Safety Net

By Ed Page

At times an evening swapping sea stories can lead to good outcomes. Such was the case in the fall of 2000 when Coast Guard Captain Ed Page, Paul Fuhs and Jeff Thompson met in Anchorage. After sharing stories on Alaska maritime casualties, the three decided to start a marine exchange that would build and operate a vessel tracking safety net for Alaska. All three had worked in the Alaska maritime community, knew the challenges of operating in the Last Frontier and saw the need for such a capability. Ten years later, the non-profit Marine Exchange of Alaska (MXAK), launched at the dawn of the 21st century, is operating one of the largest vessel tracking networks in the world, providing information on vessels sailing the waters of our nation’s largest maritime state that boasts a staggering 34,000 miles of coastline and more than 40 ports.

The core business of a marine exchange is collecting and “exchanging” maritime information to aid safe, secure, efficient and environmentally sound maritime operations. While many of the marine exchanges in other ports and regions of the US have operated for more than 100 years by visually sighting vessels and exchanging information via phone and radios, the brokering of maritime information has become more sophisticated with the advent of radars, the internet, satellite transponders and AIS (Automatic Identification System). Due to the enormity of Alaska’s maritime regions, only through applying emerging technologies could a marine exchange cover the entire state and offshore waters.

In reflecting on the startup, Ed Page noted, “Throughout my 30 year Coast Guard career I was exposed to several marine exchanges and was impressed with their wealth of knowledge of regional maritime operations. I found them to be an invaluable asset.” While assigned as the Captain of the Port in Los Angeles and Long Beach, Page partnered with the Marine Exchange of LA/LB in establishing the first joint industry and Coast Guard Vessel Traffic Center. He became intrigued with the idea of developing a marine exchange for Alaska.

“The only way we could make a marine exchange work up here was to use satellite transponders, AIS and the Internet” remarks Board President Paul Fuhs, former Mayor of Dutch Harbor. Fuhs was a diver who met Page in the 80’s when he was hired by the Coast Guard to detonate shipwrecks in the Aleutians to burn off the fuel oil before it affected the environment. Fuhs added, “Soon after we opened the doors, in addition to Page, we hired two retired Coast Guardsmen, Paul Webb and Bill Benning, who worked in search and rescue and communications in Alaska. They helped build the Alaska vessel tracking system and safety net.”

To conduct field tests of tracking systems in the most challenging marine environment Page and Benning chartered a fishing boat in the Aleutians and installed various tracking systems. “Bill Benning’s communications expertise, savvy and tireless work ethic was pivotal in developing MXAK’s vessel tracking network.” Says Fuhs.

Membership and Funding
MXAK’s Board of Directors is comprised of Alaska Marine Lines, Crowley Maritime, Totem Ocean Trailer Express, Port of Juneau and Alaska’s three pilot associations, all of whom embraced the vision and provided the initial funding along with the State of Alaska. Federal and state legislators, mayors of Alaska communities, Alaska Governor Sean Parnell and Admiral Papp, the Commandant of the Coast Guard, have all visited MXAK and applaud the progress in maritime safety attained from the federal/state and industry partnership that has supported the development, operation and maintenance of the system. Today, with funding provided by the marine industry, Coast Guard and State of Alaska the Marine Exchange operates 80 AIS (Automatic Identification System) receiving sites throughout Alaska, from above the Arctic Circle, west to Adak and south to Ketchikan providing vessel-tracking coverage for more than 200,000 square miles of Alaska waters.

Vessel Tracking Applications
The operation of the vessel tracking system benefits both government and the marine industry.
Safety: The system’s ability to locate vessels in distress and vessels that may be able to provide assistance is routinely tapped into by the Coast Guard, who has real time access to vessel tracking information obtained by MXAK’s system.

Efficiency: The ability to ensure the timely dispatch of pilots, tugs, line handlers, shore gangs, truckers and Coast Guard vessel escorts when vessels arrive at various locations.

Environmental Protection: The effective deployment of response vessels and the validation of compliance with environmental protective measures (speed restrictions in whale areas, offshore discharge of sewage, compliance with Areas To Be Avoided, Risk Assessments and fisheries management) is enhanced by vessel tracking.

Security: The monitoring of shipping, dispatch of Coast Guard vessels and response to security incidents are also all aided by vessel tracking.

Building and Maintaining the Expansive AIS Network
Executive Director Page is proud of the accomplishments achieved by his crew of 14. “We have a team of adventurous men who think nothing of packing a sleeping bag, bear protection and tools and heading off to remote areas of Alaska on a boat, helicopter or float plane to build an AIS site,” he says. “We’ve installed AIS receiver sites at abandoned lighthouses, fish hatcheries, tug offices, port offices, schools, mountain tops, fish processing facilities and pilot stations throughout Alaska.”

While Page may be running the show, he’s also one of the crew, boarding helicopters, sailing on boats and even kayaking to remote islands to lend a hand digging foundations for solar panels and wind turbines, hauling concrete and batteries and building structures needed to support the AIS sites.

MXAK processes, displays and disseminates data received from AIS, satellite transponders and fishing vessel VMS sensors, via a secure, password protected web site, with users restricted in what they are authorized to view. The data can also be accessed on iPhones and iPads.

Maritime Advocacy
In addition to vessel tracking, MXAK has been an advocate for the Alaska maritime community and saved the industry millions by convincing TSA to establish mobile enrollment TWIC centers in Alaska, working with the Coast Guard in exempting small ports and facilities from security regulations and in allowing for less burdensome security measures for lower risk ports and facilities. Presently, MXAK is leading an effort to develop and implement more cost effective Alternative Planning Criteria (APC) for addressing Coast Guard required Vessel Response Plans for tankers and in the near future, non-tank vessels. The APC focuses on resources and procedures that will prevent oil spills in lieu of procuring large caches of offshore oil recovery equipment that in most cases is ineffective in Alaska’s offshore waters.

Coast Guard Recognition
17th District Commander Admiral Christopher Colvin recognized the Marine Exchanges’ accomplishments when he presented the Coast Guard’s Meritorious Public Service Commendation to the organization. The citation in part read “Since 2000, the Marine Exchange of Alaska has played a key and leading role for Maritime Domain Awareness throughout Alaska by adapting available, and in some cases leading edge, technology to provide critical maritime information to both commercial and government users at unprecedented levels.”

Last year the MXAK crew logged more than 3,000 miles in their 32-foot landing craft Cleat and 200,000 miles on aircraft in the process of installing and servicing their sites in Alaska. With the federal budget challenges, the Coast Guard is not receiving the funds needed to build the AIS and Rescue 21 systems Alaska needs to effectively carry out the service’s safety, environmental protection and security missions. Due to the high cost of building these networks in Alaska, the safety net provided for mariners sailing in the lower 48 won’t be built in Alaska for many years, if ever. On this issue Page says, “We’re looking at expanding our AIS network to fill in gapped areas, develop the capability to send weather and safety messages over AIS and incorporate Rescue 21 Digital Selective Calling VHF radio transceivers throughout Alaska – technology that will benefit the Coast Guard, the State of Alaska and the marine industry. And, with the Arctic oil development and maritime operations heating up, we’re expanding our capabilities up there too”.

If MXAK’s accomplishments made over the last 10 years are any indication of the future, one can expect MXAK staff should have no trouble completing this challenging worklist as well.
For more on the Marine Exchange of Alaska check out their web site at

Los Angeles Port Approves $977M Budget

The five-member governing board for the Port of Los Angeles on Thursday adopted a $977 million 2011-2012 fiscal year budget, a 7.4 percent or $67 million increase from 2010-2011 FY budget.

The budget increase, according to port officials, reflects higher total receipts from both operations and grants activity, which in turn allowed greater appropriations for both operations and capital projects in comparison to the current fiscal year budget.

“Local, national and global economies have regained stability and forward momentum,” Los Angeles Harbor Commission President Cindy Miscikowski said. “This year’s port-approved budget strikes the right balance between ensuring competitiveness and financial strength, but with a disciplined use of resources to achieve these objectives.”

“Our budget plan supports the long-term vision for the Port, with priorities based on collaborative input from our divisions and board members,” Port Executive Director Geraldine Knatz said. “Together, we have developed a fiscally responsible plan that will establish and maintain competitive operations, build stronger customer and community relationships, and enhance our organization’s financial strength for the future.”

During the 2010-2011 FY, the port remained the Western Hemisphere's busiest container port, posting a 16 percent increase in containerized cargo.

The port’s 2011-2012 FY budget projects operating revenues of $405.4 million, close to 2010-2011 FY levels. The new budget also projects a $23.2 million, or 2.3 percent decrease, in total estimated expenditures from the current fiscal year.

With a port goal of maintaining competitive operations, the new budget sets a capital budget of $291 million, including $10.7 million in terminal improvements at the TraPac Container Terminal and $5.6 million at the Berth 301-306 APL facility. Another $45 million in the capital budget is allocated for L.A. Waterfront project construction, and $44 million for surface transportation infrastructure to improve goods movement for both commercial and noncommercial users of port-owned and non-port-owned roads.

The new budget also projects the port spending approximately $7.2 million environmental efforts related to the port's Clean Air Action Plan, including $2.7 million for the Clean Truck Program, $2.5 million for the Vessel Speed Reduction Program, $1.5 million for the Technology Advancement Program, and $500,000 for the TraPac AMP ship-to-shore power demonstration project.

The port board also approved $24 million to enhance port security and protection, including projects for Port Police surveillance, threat detection, and criminal activity detection, deterrence and apprehension.

Sappio to Leave APL After Nearly 30 Years

Singapore-based ocean carrier APL said Thursday that Bob Sappio, head of the shipping line’s PanAmerican Trades, will leave the company August 1.

Sappio, a 29-year veteran of the carrier, has been the head of APL’s Trans-Pacific Trade since 2003.

According to Ron Widdows, CEO of APL-parent Neptune Orient Lines, Sappio played a key role in establishing APL as a leader in the transpacific and in building the APL brand reputation for high-quality service in the industry.

“I’ve devoted my entire career to APL – a company I have tremendous affection and respect for,” Sappio said. “But family priorities are most important, and I’ve made the decision to stay closer to home and remain in California where my family has established deep roots.”

According to APL, during his tenure Sappio guided the carrier to a top transpacific market share position, worked closely with key multinational customers and was APL’s representative to carrier groups such as the Transpacific Stabilization Agreement. In 2010, Sappio represented the industry at congressional hearings in Washington, D.C., on container shipping.

“Bob’s contributions working closely with me on issues not only of importance to our company, but the industry and our customers, were invaluable,” Widdows said, adding that Sappio has left a lasting imprint on the firm.

NOL Executive Director Ng Yat Chung, who will take over as CEO when Widdows retires from his position at the end of 2011, also praised Sappio's contributions to the firm.

Sappio will be replaced by 22-year APL veteran Steve Schollaert, currently APL’s Executive Vice President of Intermodal Strategy and former head of its Asia-Europe Trade.

Schollaert, who has a background in operations and was also responsible for APL’s terminals, will be based in Phoenix and report to Liner Trade Management Senior Vice President Dave Appleton.

DGX Increases West Coast to Latin/South America Offerings

Rancho Dominguez, Calif.-based NVOCC Dependable Global Express, which operates under the name DGX, announced Wednesday that it plans to increase its less-than-container-load all-water service to a weekly schedule from Los Angeles directly to Valparaiso, Chile.

DGX has also begun a new bi-weekly ocean LCL service from Los Angeles to the Caribbean and northern South America utilizing Colon, Panama as its hub.

The Chile service offers arrival in Valparaiso 18 days after departure from Los Angeles with direct steaming down the west coast of South America.

"We are one of the very few logistics companies providing all water LCL service to Chile from the West Coast. We believe DGX offers the best value because of this direct, all water route." DGX Latin American Tradelane Manager Antonio Bellido said.

DGX is offering LCL service to the Caribbean with the firm's new bi-weekly sailings from Los Angeles to Colon, Panama.

Bellido said that the 9-day all water service to Colon with transshipment to any island in the Caribbean, reduces delivery time compared to utilizing the traditional Miami-to-Latin America gateway.

"We are the only direct service for LCL cargo into the Caribbean from the West Coast," Bellido said.

Beelindo said the Valparaiso service cut off time for cargo is Friday with sailings on the following Wednesday; for the Caribbean cut off time is Tuesday with ship's departure on Friday.

DGX is the international sea division of the Dependable Companies, a group of corporations providing air, ocean and surface domestic and global transportation. Other companies include DHX-Dependable Hawaiian Express, one of the largest freight forwarders serving Hawaii and Guam; Dependable AirCargo Express, which provides air service to U.S. and international destinations; Dependable Highway Express, an LTL and trailer load trucking company; Dependable Distribution Centers, a public warehousing company managing more than 2 million square feet of warehousing space; and, Dependable Logistics Solution.

CBP Seizes Karaoke Machines In LA/LB With Bogus Memory Chips

Members of the United States Customs and Border Protection assigned to the Long Beach/Los Angeles port complex discovered and seized 1,932 karaoke machines worth nearly $1 million loaded with counterfeit memory chips.

CBP officers seized the karaoke machines on May 16, after CBP import specialists confirmed with the trademark holder that the memory cards bearing the SD (San Disk) logo were counterfeit. The shipment, with an estimated domestic value of $852,368 and an estimated manufacturer’s suggested retail price of $964,068, arrived via a cargo container originating in China. The karaoke machines were destroyed after San Disk confirmed the chips were counterfeit.

It is routine for CBP, citing privacy reasons, to not identify the specific terminal or facility within the port complex where a seizure occurs.

“CBP enforcement actions at Los Angeles/Long Beach seaport continue to yield outstanding results. We have an ongoing commitment that is focused towards intercepting shipments containing merchandise in violation of protected trademarks before they reach the consumer,” CBP Acting Director of Los Angeles Field Operations Carlos Martel said in a statement.

The importation of merchandise with counterfeit trademarks is prohibited, said the CBP statement. Importers violating these laws may be subject to civil penalties and/or criminal prosecution. CBP said it maintains "a vigilant stance in intercepting illegal shipments that introduce infringing merchandise into the country."

CBP’s strategic approach to intellectual property rights enforcement is multi-layered and includes seizing fake goods at ports of entry, pushing the border outward through audits of infringing importers and cooperation with international trading partners, and partnering with industry and other government agencies to enhance these efforts.

In fiscal year 2010, CBP at the Long Beach/Los Angeles port complex set a record-breaking pace with 863 trade seizures with an aggregate domestic value exceeding $34 million. This is a 42 percent increase in the number of seizures from fiscal year 2009.

Tuesday, May 31, 2011

NOL Sees Volumes Rise, Rates Drop

Singapore-based ocean carrier Neptune Orient Lines and its container shipping arm APL posted higher cargo volumes in its most recently reported four weeks period, while simultaneously reporting declining revenue per box moved.

In the four week April 9 to May 6 period, NOL carried 231,100 FEUs, up from 212,000 FEUs in the same period last year.

At the same time, the average revenue per FEU during the four-week period fell 4 percent to $2,549 per FEU, down from the $2,669 per FEU reported during the same period last year.

"The increase in volume was mainly due to higher volumes carried on the Intra-Asia and Asia-Europe trade lanes while the decline in average revenue per FEU was mainly due to lower rates in the Asia-Europe trade lane," said NOL in a statement.

Earlier in May, NOL released its first quarter 2011 results, posting a total net loss of $10 million compared to net loss of $98 million in first quarter 2010.

NOL subsidiary shipping arm APL reported first quarter 2011 revenue of $2.1 billion, a 15 percent increase over the same period a year ago. APL also posted $8 million in core EBIT loss compared to a $89 million core EBIT loss in the first quarter of 2010.

APL volume increased 764,000 FEUs during the first quarter, a 9 percent increase compared to the year-ago period.

While average APL revenue per FEU increased to $2,598 during the January to March first quarter 2011 – a 3 percent increase – the per FEU numbers remain well below the $2,669 per FEU reported during the April 9 to May 6 period last year.

“We lifted higher container volumes in the Asia-Europe and Intra-Asia trade lanes during the first quarter, and freight rates improved in the transpacific,” APL President Eng Aik Meng said in early May regarding the first quarter numbers. “But our emphasis must remain on operating efficiency, as well as slow-steaming our ships to conserve fuel and counteract the effect of rising fuel prices, which were 28 percent higher per metric ton in the first quarter of 2011 than they were in 2010.”

Vancouver USA Port Receives $800K State Loan for Facility Upgrades

The Washington state Port of Vancouver has been awarded an $800,000 loan from the Washington State Community Economic Development Revitalization Board (CERB) to make improvements to an existing port facility that are necessary before the aluminum extrusion company, Sapa Profiles, Inc., locates at the port.

"This loan will allow us to make necessary building improvements to attract a major employer to the region, and help bring nearly 100 family-wage jobs to Clark County where unemployment is still hovering near 13 percent," Port of Vancouver Executive Director Larry Paulson said.

"Our private sector partner Sapa Profiles, Inc. has a proven track record of success with tremendous potential for growth and will be a valuable new business in Clark County and Washington State."

Port officials and Sapa are working toward a final lease agreement for the former Panasonic building, which has been vacant since the electronics manufacturing company shuttered the facility in 2008 and laid off more than 200 full time and temporary employees.

Total cost of the proposed renovations is $1.3 million and includes replacement of the building’s current asphalt floor with a reinforced concrete floor, as well as electrical and HVAC upgrades.

In addition to the $800,000 CERB loan, the port will provide $500,000 in matching funds to complete the improvements.

According to CERB, a projected $10.00 of private investment will be generated for every one dollar of CERB investment.

The private-sector investment by Sapa, which includes manufacturing equipment and additional facility upgrades, is anticipated to be more than $8 million over the firm's first 12 months of occupancy.

The Sapa facility, when completed, is expected to employ 100 full-time jobs with the anticipated median hourly wage of the new jobs exceeding the median hourly county wage by 11 percent
Sapa has 15 plants located in North America. The Port of Vancouver location will be the firm's first facility in Washington State.

Long Beach Port's Outgoing Steinke Garners Further Accolades

Port of Long Beach Executive Director Richard Steinke continues to rack up prominent industry awards as he heads toward his recently announced retirement from the port after nearly 14 years at the helm of the second busiest container port in the nation.

On Thursday, Steinke was presented with the Marjorie M. Shostak Distinguished Service Award from the Foreign Trade Association of Southern California (FTASC) at the trade group's annual World Trade Week Luncheon in downtown Los Angeles.

The FTASC cited Steinke for "his leadership in the international trade industry and his accomplishments as chief of one of the largest seaports in the world.
Named after Marjorie M. Shostak – a prominent trade attorney, federal government advisor on trade issues and the first woman to serve (from 1956-1962) as an officer and director of the FTASC – the award is the penultimate accolade offered by the FTASC.

Two weeks ago, Steinke was also named as this year's recipient of the prestigious Connie Award by the non-profit Containerization & Intermodal Institute.

The Connie Award, to be presented to Steinke at a Sept. 21 ceremony in Long Beach, recognizes those who have had a significant influence on containerization in world trade and transportation.

"Richard Steinke established himself as an indispensable leader of the Port of Long Beach and the international transportation community," CII president Allen Clifford said. "His diligence, attention to detail and vision keep the port among the busiest in the world and among the most advanced for our imports and exports."

Earlier this month Steinke, the executive director of the Port of Long Beach for more than 13 years, announced that he would be retiring as of September 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.

Known as one of the most knowledgeable and respected port directors in the world, Steinke has been a prominent voice for the Long Beach port on both the national and international scene.

His announced departure came as a surprise to many, including elected officials, members of the industry, the Long Beach Board of Harbor Commissioners and the port staff – many of whom have never known another boss.

In Sacramento, State Senator Alan Lowenthal, who has faced off with the port many times on environmental issues, said he was very surprised to hear 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."

Seattle Port Fined for Failing to File 42 Months of Lobbying Expenses

The Washington state Public Disclosure Commission has fined the Port of Seattle $3,750 for failing to timely file 18 quarterly reports detailing the port's publicly-funded lobbying of the state legislature.

Following a complaint filed in July 2010, the PDC began an investigation into the matter in February 2011.

The PDC found that the port, in response to the original complaint with the PDC, filed 23 quarterly lobbying reports on January 14. Of these, 18 reports covering from the start of April, 2006 through the end of September, 2010, were between 62 days and four years late under deadlines set forth in state law.

The 18 reports detailed reportable lobbying expenses by the port totaling $269,900. However, of this amount, the PDC said in it's ruling that $233,708 of the total unreported expenses "represented payments for lobbying services previously reported in a timely manner by the port's contracted lobbyist" in required monthly disclosure reports by the lobbyist to the PDC.

The PDC found that port failed to disclose a total of $36,192 in previously unreported lobbying expenses, including $33,801 for time spent lobbying by port employees, $1,500 for lobbying-related brochures and publications, and $891 in port employee lobbying-related travel costs.

The PDC cited the port for violating state law multiple times by failing to make the quarterly reports on time.

The port was fined $7,500 for the violations, of which half would be suspended if the port made on time quarterly reports for the next four years and paid the remaining $3,750 fine within 60 days of the PDC's May 18 ruling.

Port officials, according to the Seattle Times, called the PDC reporting problems a lapse in procedures.