Friday, June 24, 2011

Ports Best Practices: Safety and Security

Almost ten years after the terrorist attacks of 9/11, West Coast ports have made enormous strides in securing their land and waterside facilities against harm. In our continuing Ports Best Practices series, four West Coast ports describe some of the work they’ve done to ensure the continuing safety and security of both personnel and cargo from natural as well as man-made threats.

Prince Rupert Port Authority: Teamwork and Technology

The Prince Rupert Port Authority (PRPA) ensures safety and security through a collaborative, high-tech approach that capitalizes on the Port’s location.

Through the establishment of its Port Security and Emergency Preparedness Committee, the Port and its security partners have developed a “layered” approach to safety, security and emergency preparedness.

Layered security is achieved through collaboration with Transport Canada, Canadian Coast Guard Marine Communication Traffic Services, terminal operators, Royal Canadian Mounted Police (RCMP), Canada Border Services Agency (CBSA) and other key Port stakeholders.

Through required reporting regimens to federal agencies, the Port starts to assemble domain intelligence while commercial shipping is still 48 to 72 hours away from calling on the Port. Through monitoring and regular sharing of information, the Port and its partners acquire an accurate picture of what’s happening in and around its jurisdictional waters.

Given the Port’s geographic location and Prince Rupert’s small population, it has adopted a “trust but verify” layered security approach. They trust – but verify – that the ship has a sound security plan before calling on the port, that the terminal operators have an up-to-date and effective security plan and that the Port’s perimeter security responsibilities and its leadership role in coordinating Port security postures and responses are exercised on a regular basis.

A clear advantage of operating in a small city is the possibility of extensive collaboration. The Port, as directed by the Marine Act, takes a leadership role in chairing the Port Security Committee meetings. All security stakeholders and first responders are active participants at these meetings.

Whether through established relationships or because of its location, substantive collaboration and cooperation are a daily occurrence – not just when the committee meets. Through established relationships and effective command, control and communication the Port’s coordinated response to safety and security concerns or incidents is immediate.

In March 2010, the Port’s Security Operations Center (PSOC) became fully operational. The Port shares access to the PSOC with all its security partners including the Royal Canadian Mounted Police (RCMP) and Canada Border Services Agency (CBSA). Through smart collaboration and state-of-the-art technology, the Port has established a 24/7 PSOC that monitors all Port operations and coordinates required responses in the event of safety, security or emergency response incidents.

In the event of any emergency, the Port takes a leadership role by establishing a command center at the PSOC offices where all stakeholders can “plug in.” From the command center, infrastructure and human resources possess adequate support within their respective jurisdictions to deal effectively with emergencies.

Recently, the Port Security and Emergency Preparedness Committee have begun an emergency management audit of existing plans. This involves a critical infrastructure audit of the Prince Rupert area as well as working with Transport Canada and the Provincial Emergency Program on resumption plans and procedures to ensure the Prince Rupert Gateway can quickly resume its operations if an emergency were to occur.

Port of Portland Stays SHARP on Safety

Starting in 2007, Port of Portland employees and management at the marine terminals, marine facility maintenance, and landscaping/properties worked collaboratively to develop and implement a comprehensive safety and health management system. The work has paid off with acceptance into the Safety and Health Achievement Recognition Program (SHARP) in 2009, and third-year certification in 2011.

Sponsored by the Oregon Occupational Safety and Health Administration (OR-OSHA), the program was developed to provide Oregon employers with coaching and direction so that they learn to more effectively manage workplace safety and health, and in turn, be recognized for their achievement. Acceptance into the program is a public acknowledgement by Oregon OSHA that a model safety and health program exists at the Port’s work sites and that safety is a company value.

Employers approved for the second and subsequent years can be deferred from scheduled OR-OSHA inspections. Participation in SHARP does not eliminate regulatory enforcement, and employees retain all workplace safety and health rights contained in the Oregon Safe Employment Act. After five years, employers are eligible to “graduate” from the program. The Safety and Health Achievement Recognition Program emphasizes continual improvement, and the Port will be expected to continue its strong commitment to making its facilities safe places to work and do business.

In April 2010, the Port’s marine and industrial development division received notification of achieving second-year certification for its safety and health program. Announcement of the certification was made by OR-OSHA officials at a Port Commission meeting in August.

With successful completion of third-year SHARP participation in 2011, the Port received increased scores in several assessment categories. Results for five of the 58 assessment questions improved from a rating of 2 to 3, which is the highest possible rating. These improvements included: controls to minimize the risk of muscle strains; new supervisor safety training; new employee orientation integrating a Safety First eLearning program; completion of written procedures for the safety action plan; and SHARP self assessment conducted with input from employees and senior managers.

Port of Los Angeles Integrated Threat Management System

The Port of Los Angeles integrated threat management system has been awarded the 2010 Gold Medal Winner by Security Technology Executive (STE) Magazine. The award recognized the Port for developing an integrated security technology platform that provides situational awareness to all stakeholders in the event of an emergency.

“We have spent years designing and deploying this innovative security platform,” says Los Angeles Port Police Chief Ronald J. Boyd. “The leadership team at the Port of Los Angeles has encouraged and supported efforts that allow us to be at the forefront of deploying technology to make the Port as safe and secure as possible.”

The Port of Los Angeles sought a solution that would unify stakeholders and effectively monitor vast miles of waterfront, which resulted in the deployment of its Waterside Surveillance System. Over the years, the Port has made continuous investments in technology and today is making use of next-generation video management software, integrated analytics, encoders/decoders and wireless devices along the Port’s waterfront and land-based facilities. The video solution integrates with more than 350 third-party cameras to monitor highly critical areas. Captured data is then transmitted to the state-of-the-art Los Angeles Port Police Operations Center for central monitoring.

To supplement the port’s technology-based program, the Port of Los Angeles introduced the country’s first maritime curriculum for state and local law enforcement officers, the Maritime Law Enforcement Training Center (MLETC), which was introduced in April by Department of Homeland Security Secretary Janet Napolitano.

The new MLETC will teach the country’s first maritime curriculum, which was designed to train officers with basic, intermediate and advanced instruction for crewmembers aboard law enforcement and public safety vessels operated by local authorities. Course curriculum includes boat handling, chart reading and navigation rules. Additionally, students will receive comprehensive training on maritime boardings, arrest procedures, vessel identification, searches and counter-terrorism practices and procedures. The curriculum was approved by both the Department of Homeland Security and the California Emergency Management Agency. It is California Police Officer Standards and Training (POST) certified, consistent with current federal doctrine, and will be made available to municipal, county, state or federal law enforcement personnel who require maritime skill sets to perform their duties.

Located in the Wilmington area of the harbor, the new training center has classrooms and 5,000 square feet of dock space for training maneuvers. Police patrol boats will be used as training vessels.

‘It Takes a Village’ to Protect Our Ports

Nearly half of all goods imported into the US come through the Port of Long Beach and the neighboring Port of Los Angeles in Southern California’s San Pedro Bay. A shutdown of this port complex, the largest in the nation, would cost the US economy more than $1 billion a day.

The job of protecting the Port of Long Beach is complicated and does not fall on any single agency; rather it is a multi-layered approach that requires the right tools and constant communication among the stakeholders.

Before Sept. 11, 2001, port security around the country focused largely on deterring cargo theft. In the post-9/11 world, the threats are much more serious and the stakes a lot higher. Over the last decade, the Port of Long Beach has invested hundreds of millions of dollars on upgrading its security infrastructure.

“Security and business continuity are top priorities at the Port of Long Beach,” says Sean Strawbridge, Long Beach’s Managing Director of Port Operations. “This is not just about securing our own facilities; it’s about protecting a major commercial gateway into the United States.”

Today, the Port boasts some of the most advanced security technology in the world with a system that includes more than 130 surveillance cameras, radar, underwater sonar, remotely operated submersible vehicles (ROVs) and other technology deployed throughout the port complex.

Having the right tools is important, but communication and coordination among the various local, state and federal entities is equally vital to Port security and safety. In early 2009, the Port of Long Beach opened its Security Command and Control Center (SCCC), a centralized location where multiple agencies can coordinate intelligence and respond to threats, either man-made or natural.

The facilities and its resources, including radar, sonar and security camera feeds, are at the disposal of the Port’s security partners such as the US Coast Guard, US Customs and Border Protection, the Long Beach Police Department and the Port of Los Angeles. The Federal Office of Counter Terrorism has an officer stationed full-time at the Center. The Port of Long Beach has more than 30 formalized agreements in place with regional security partners and other Port stakeholders to share information, conduct joint training and coordinate threat intelligence.

Through the Los Angeles Regional Common Operations Picture (LARCOP) system, the Port’s Security Division can share incident reports instantaneously with other security agencies in the region. The Port is currently working with the Port of Los Angeles to install a fiber optic network that will link security systems in both ports. The SCCC also has a direct wireless link to the city of Long Beach’s Emergency Command Operations Center to better coordinate responses in case of an attack or natural disaster. A helipad on the roof provides helicopter access in case roads are impassable.

The SCCC also serves as the official headquarters of the Port of Long Beach’s Security Division and its Harbor Patrol, a specialized security force of more than 40 officers, including a dive team, who patrol the Port facilities 24/7. The Port of Long Beach is the only port in the country with its own deep water salvage-and-recovery diving team, a group of highly skilled “hardhat” divers who inspect and clear port wharves and waterways of security hazards.

The Port of Long Beach continues to invest heavily on its security to protect this important national asset as well as the lives of those who work here or live nearby, spending close to $25 million on security and public safety operations annually.

“We cannot let our guard down,” Strawbridge says. “This year, we will be commemorating the ten year anniversary of 9/11. It is a different world we live in from a decade ago. High security is just a way of life here at the Port of Long Beach.” 

APL To Adopt New Bunker Surcharge Formula in Transpac

Singapore-based ocean carrier APL announced Friday it would implement a new fuel surcharge formula in the transpacific trade reflecting cost savings and other financial impacts achieved by the carrier from slow steaming.

The new formula, which takes effect July 1, slightly lowers APL's current bunker surcharges from the current formula – which is based on a guideline from the Transpacific Stabilization Agreement.

APL offered two examples of bunker surcharges under the new formula:
The surcharge for a standard FEU shipped from Asia to the US West Coast drops from $568 to $538.

The surcharge for a standard FEU shipped from Asia to the US East Coast drops from $1,107 to $1,049.

APL also pointed out that under the current formula every $20-per-ton movement in fuel price resulted in a $20 surcharge adjustment for West Coast cargo. With the new formula, APL said the adjustment would only be $14. For East Coast cargo, the sensitivity is reduced from a $38 surcharge adjustment for every $20 per ton movement in fuel price to a $30 adjustment.

The carrier, which is the wholly-owned shipping arm of Singapore-based Neptune Orient Lines, said in a statement that the new formula was developed to reflect the cost savings as well as the added capital costs associated with slow-steaming – the practice of reducing vessel speed to reduce fuel consumption, control costs and reduce emissions.

As ships reduce speed, according to APL, additional vessels are generally required on each loop to maintain weekly arrival schedules.
“While not all our services are slow-steaming, many are,” Vice President of Pan-American Trades at APL Bob Sappio said.

“Considering the fuel consumption savings from slow-steaming, and the additional asset cost required, we have developed a more transparent approach, the result of which is some reduction in the cost but just as importantly, better visibility for our customers of the impact of slow-steaming.”

The carrier said that bunker surcharges will continue to rise and fall "in line with fuel price fluctuations."

Port Metro Vancouver Volumes Flat in May

For the month of May, Port Metro Vancouver remained virtually flat in the total number of containers moved compared to the year-ago period, while at the same time reporting that May was the strongest single month for total containers handled since October of last year.

Port Metro, an amalgamation of the Fraser River Port Authority, the North Fraser Port Authority and the Vancouver, B.C. port authority, handled a total of 218,250 TEUs in May, a 1.8 percent increase over April and a 0.3 percent drop from May 2010.

On the import side, the port authority handled a total of 99,970 loaded inbound TEUs in May, a 3.6 percent drop compared to April and an 8 percent drop compared to May of last year.

In the export column, the port authority reported handling a total of 91,176 loaded outbound TEUs in May, a 0.3 percent drop from April, but a solid 6.6 percent increase over the year-ago period.

For the calendar year to date, the port authority has handled a total of 1,009,360 TEUs, a 7 percent increase over the January to May period in 2010.

Seattle, Tacoma Ports Sail in Different Directions on May Cargo Volumes

The major Puget Sound ports of Seattle and Tacoma posted significantly differing cargo volume numbers in May, with Seattle taking a double-digit percentage drop and Tacoma posting respectable single-digit growth. May was also the second strongest single month of the calendar year for both ports.

The Port of Seattle handled a total of 172,622 TEUs in May, a 0.5 percent increase over April, but a sizable 13.3 percent decrease compared to May 2010. While May was second only to January in total containers moved by the port this year, each month of the year so far – except a dismal February – has seen very similar total container numbers.

In May, the port handled a total of 61,569 loaded inbound TEUs, a 2.1 percent drop compared to April and a massive 27.8 percent drop compared to May 2010.

On the export side, the port handled a total of 48,353 loaded outbound TEUs, a statistically insignificant 0.2 percent decrease from April, but a 1.1 percent increase compared to the same month last year.

For the first five months of the year, Seattle handled a total of 829,841 TEUs, a 1.6 percent increase over the first five months of 2010.

Down the coast, Tacoma port officials reported handling a total of 124,242 TEUs in May, a 10 percent increase over April's total numbers, but a 1 percent drop compared to May of last year.

On the import side, Tacoma moved a total of 34,227 loaded inbound TEUs in May, a 1 percent increase over April, but a notable 15.2 percent drop compared to May 2010.

On the export side of the ledger, Tacoma officials reported moving a total of 28,093 loaded outbound TEUs in May, a 3.9 percent drop compared to April's export numbers, but a 3.5 percent increase over May of last year.

Tacoma has moved a total of 589,340 TEUs during the first five months of the year, a 5.9 percent increase over the January to May period in 2010.

Subaru Delays Start of Richmond Port Auto Import Operations

Automaker Subaru, who was expected to begin moving cars through the Port of Richmond, in the Bay Area, as early as this month, has decided to delay the opening of its import terminal at the port until the fall due to complications resulting from the March earthquake and tsunami in Japan.

Earlier this year, the port approved a five-year deal with Subaru that would see the automaker move between 30,000 and 35,000 cars through the port's Port Potrero Automotive Facility. Subaru, which chose Richmond as its Northern California port of entry last year, plans to ship about half of the imported cars out of the port via rail and the other half via truck.

Richmond City Manager Bill Lindsay reported to the mayor and City Council earlier this month that, "Subaru has recently informed Auto Warehousing Company (AWC), the port’s operating tenant for its auto business, that the start-up of its Richmond business will be delayed approximately three months until November of this year."

Ben Seher, the vice president of AWC told the Contra Costa Times, "It's a matter of [Subaru] getting their supplies up and in order for distributing vehicles. They're definitely coming; it's just a matter of timing."

AWC, Seher told the newspaper, had already started plans to begin hiring the 40 or so employees the operation will require, but he added that the delay in opening should not impact long-term hiring plans.

Subaru was also not the only Richmond tenant impacted by the Japanese disaster. Honda, who imports about 145,00 cars a year through Richmond's Port Potrero facility, was forced to scale back imports in the past several months due to disruptions caused by the Japanese twin-disaster.

"Once the earthquake happened, it's not just Subaru, it's also Honda that started importing a ton less vehicles," Seher told the newspaper. "It's all the Japanese manufacturers."

Tuesday, June 21, 2011


An article in PMM Online's June 14 e-newsletter mistakenly identified the parties behind a recent threat to stop drayage service at the Port of Oakland as a protest to impending state truck emission regulations. While the West State Alliance and its trucking firm-members did write to the State Legislature to oppose the California Air Resources Board truck regulations, the group and its members were not the source of the work stoppage threat. This threat originated among some of the 4,400 truck drivers who frequent the Port of Oakland.

Seattle Port to Tackle Polluted Terminal

One of the most polluted areas of the Lower Duwamish Waterway will be cleaned up as a result of a $33 million settlement agreement among the Port of Seattle, City of Seattle and the United States Environmental Protection Agency.

The terms of the agreement require the port and city to implement EPA’s cleanup decision for the Terminal 117 early action area of the Lower Duwamish Waterway Superfund Site. The EPA described the agreement as a "major milestone that secures the cleanup of marine sediments next to the terminal, the former industrial facility on terminal property and ten acres of soil in nearby streets and residential areas."

The Lower Duwamish Waterway Superfund site is a 5.5-mile stretch of the Duwamish River that flows into Elliott Bay in Seattle, Washington. The waterway is flanked by industrial corridors, as well as the South Park and Georgetown neighborhoods. The site was added to EPA's National Priorities List in 2001.

Through a century of heavy use, the EPA said the waterway was contaminated with toxic chemicals from many sources – industries along its banks, stormwater pipes, and runoff from upland activities, streets and roads. Pollutants in the sediments include polychlorinated biphenyls or PCBs, dioxins/furans, carcinogenic polycyclic aromatic hydrocarbons or cPAHs, and arsenic.

The EPA said that many of these chemicals stay in the environment for a long time, and have built up to unsafe levels in the river’s resident fish and shellfish. Because of this contamination, state and local health departments warn against eating resident crab, shellfish, or bottom-feeding fish (but not salmon, which move quickly through the waterway) from the Lower Duwamish.

The Port of Seattle purchased Terminal 117 in 2000 following six decades of asphalt product production, particularly roofing shingles, by two small businesses. In the 1970s, the city supplied the owner with inexpensive used fuel oil. Much of this fuel oil came from city’s electrical utility equipment and contained poly-chlorinated biphenyls (PCBs), a hazardous substance that can be harmful to human health and the environment. Since 2000, the Port of Seattle has implemented several cleanup actions. The latest round of funding is expected to complete the cleanup of the terminal.

“We now have an enforceable agreement in place to clean up one of the most contaminated sites on the waterway,” Associate Director of EPA’s Office of Environmental Cleanup Lori Cohen said.

“The city and port stepped up and joined us in a commitment for a cleaner, safer Duwamish River. This translates into benefits for Puget Sound, where cleaning up contaminated marine sediments is a priority.”

Terminal 117 was designated an early action area of the Lower Duwamish Waterway Superfund Site because of the high level of nearby contaminated sediment in the waterway due to years of industrial activity.

The Port of Seattle and City of Seattle will conduct the Terminal 117 cleanup with EPA oversight. The new agreement outlines the obligations for the full cleanup and launches the cleanup design process, which is scheduled to be complete at the end of 2012. After the design is finalized, the port will initiate a bidding process for contractors to complete the work.

Tacoma Port Invests in Stormwater System at Log Facility

Booming business at a Port of Tacoma log-processing facility has spurred the port's governing board to invest a total of $460,000 to upgrade stormwater retention and treatment facilities at the West Hylebos location.

The investment is intended to help the busy 17-acre log facility, which sat idle just two years ago, to meet state and federal stormwater regulations. The funds will be spent to install new pre-treatment facilities at the log plant and provide new connections to the City of Tacoma wastewater treatment plant.

The port originally appropriated $145,000 in August, 2010, for the stormwater upgrades and on June 16 approved another $315,000 to continue work on the stormwater system.

The log facility prepares raw logs intended for export to Pacific Rim countries, where booming economies and the rebuilding in Japan are creating a huge demand for lumber. Prior to loading on ocean-going vessels for transport, the Washington forests logs are sorted and debarked at the log facility.

The Port of Tacoma re-entered the bulk log shipping business in the fall of 2009 by leasing half the West Hylebos log facility to Holbrook and half to Forest Marketing Enterprises (Formark).

Both companies were given access to the de-barker on site and also to the wharf for loading out vessels. Both lease terms were month to month.

In the spring of 2010, Holbrook was able to attract additional business in the form of TPT Group Limited, who brought significant volume to the facility via their customer, Hancock Forest Management.

At the conclusion of 2010, Formark had moved approximately 29 million board feet of logs, and Holbrook/TPT had moved approximately 40 million board feet. This year, port officials expect the facility to roughly double the amount of logs handled in 2010.

According to the port, issues arose rather quickly at the site regarding storm water runoff exceeding standards set by the state Department of Ecology.

Analysis of stormwater samples taken in the third and fourth quarters of 2010, and the first quarter of 2011, indicate that the log facility water discharges exceeded the established pollutant benchmarks for zinc, copper, turbidity, chemical oxygen demand and total suspended solids. These levels require corrective action and operations at the site are currently in a Level 3 corrective action, which calls for treatment to be implemented. The deadline for implementing a treatment system is September 30, 2011. Port staff began planning for the Level 3 implementation of treatment during the 2010 first quarter budget update.

Also, the Port of Tacoma holds the storm water permit at the site due to multiple tenants occupying the same storm water system. In all other facilities operated by port tenants, the tenant holds the permit.

Since it is not possible to transfer a permit to two parties, the port issued termination notices to both Formark and Holbrook on March 1st, 2011 with a 90-day notice, beginning the process of negotiating for a single tenant to hold the lease for the entire property.

The port intends to transfer the permit to a single tenant as soon as a more robust storm water treatment system is in place.

On Thursday, the port board approved a motion allowing the port CEO to negotiate a two-year lease with Holbrook/TPT, making the firm the single leaseholder on the site. The lease terms would also have three one-year extensions.

Experts: Quick Japanese Economic Recovery From Disaster Likely

Despite the destruction wrought by the March 11 Japanese earthquake, tsunami and ongoing nuclear catastrophe caused by it, Japan's economy is likely to recover quickly and while challenges loom, the disaster could provide the island nation with a major opportunity to re-invest and re-innovate key sectors of its economy.

In addition, the disaster has rekindled American economic, leadership and public interest in Japan, offering a chance for both Japan and the United States to strengthen ties in their more than 60-year-old bilateral alliance.

These were the messages delivered by a panel of experts to nearly 100 business leaders gathered for a symposium on Japan's impact on the Southern California economy hosted by the Japan America Society of Southern California at the InterContinental Los Angeles Century City Hotel on June 7.

Although titled "Japan Matters: Japan’s Positive Impact on the Southern California Economy,” the symposium's five-member panel of experts spent much of their time talking about the impacts to the Japanese economy from the March 11 Tōhoku earthquake, tsunami and subsequent meltdown of the Fukushima nuclear power plant's four reactors.

"It is too early to come to a full assessment on the impact of the earthquake on Japan's society and Japan's direction with the world, but I think that I can at least say that the earthquake and tsunami demonstrate the importance of mutual dependence between Japan and other countries throughout the world," Japanese Consul General in Los Angeles Junichi Ihara said.

This interdependence, Ihara said, presented itself clearly in the global disruptions caused by the disaster, most notably in the auto industry.

"We discovered that small factories in the Tōhoku region produce, for instance, 70 percent of a very important brake parts for automobiles. Also, some small factories in the Tōhoku region make a very special paint that is used for coating expensive cars in the United States," Ihara said.

"Although the three affected prefectures' combined GDP only represents 4 percent of total Japanese GDP, there are factories in the Tōhoku region that are key parts of very important supply chains."

Panelist Edward Lincoln, Director at the Center for Japan-US Business & Economic Studies at New York University Sterns School of Business said that when you have Japanese factories that are key nodes on larger supply chains, "this of course effects other Japanese companies more directly than it effects, say, American companies in the US But, in fact, it has effected American firms and European firms and Chinese firms because of these instances where there is some critical component that just happens to come from a [Japanese] factory that suffered some damage."

Another place where this interdependence has been visible, according to Ihara, is in the mutual aid shared between Japan and the United States.

"In the Los Angeles area we are so grateful to so many individuals, organizations and communities for their generosity. In particular some local ethic communities have made great efforts to raise money for the support of Japanese victims," Ihara said.

"I was curious why they were so kind and helpful. When I asked them, they said 'Well, Japan helped our country when we had natural disasters, sending emergency supplies or rescue teams.' So, I realized that after World War II, Japan has made a lot of contributions to the development of other countries and we are now very well connected to many countries. We are living in that interdependent and interconnected world."

Another example of this mutual cooperation and interdependence cited by several panelists is Operation Tomodashi, the US military's efforts to assist Japan in the aftermath of the Tōhoku disaster.

Panel moderator Daniel Bob, director for US–Japan Programs at the Sasakawa Peace Foundation USA, said Operation Tomodashi is an "important manifestation of the depth of the bilateral relationship between the US and Japan."

Ihara pointed out that Operation Tomodashi is the largest joint and combined operation between the US Military and the Japanese Self-Defense Forces (JDSF) in the history of the bilateral alliance.

Working alongside the 100,000 JSDF members, Ihara said that the US forces of Operation Tomodashi includes, "20,000 US sailors and marines, 160 aircraft and twenty naval ships including the [aircraft carrier] USS Ronald Reagan. The operation has been so important in terms of rescue and relief operations in Japan, so that many Japanese people were suitably impressed by our relations with the United States."

But this concern and interest in Japan has not always been at the forefront of the American mindset, according to Daniel Bob.

The American interest in Japan, according to Bob, has waned noticeably since the 1980s when Japan's booming economy was preeminent on the minds of US policy makers and legislative members.

"It is important to remember that much of that interest was negative," Bob said, "derived from problems in the bilateral relationship – particularly over trade frictions."

In addition, Bob said, there was at the same time a general sense, or unease, in the US that Japan was on a trajectory to overtake the US economically and become the world's largest economy.

However, much of the prior US interest in Japan has been transferred to China in recent years.

"The triple disaster of March 11, 2011 – the earthquake, tsunami and meltdown of the Fukushima nuclear plant, which is the worst disaster facing Japan since World War II – has reawakened interest in Japan among Americans," Bob said.

"And the outpouring of support has shown that Americans care very deeply about Japan and do recognize the importance of the US-Japan relationship."

And yet, while the panelists were congratulatory about the aid being shared by the US and much of the world, none denied that Japan faced a tough road ahead.

"The earthquake/tsunami/nuclear disaster has been quite a blow for Japan, actually worse than most of us anticipated in the first day or two after the earthquake struck," Lincoln said.

"But the good news is that Japan is already moving out of the disaster period and into recovery and reconstruction. That's going to continue for the next couple of years. Japan hasn't gone away. It is going to be just as important to the United States as it was before he disaster."

Lincoln slammed the initial American media coverage of the disaster, saying that American media watchers were given the impression that Japan was "going to fall apart or disappear." Absolutely not true, Lincoln said.

One of two economists on the panel, Lincoln said that he saw two different sets of challenges facing Japan in the wake of the disaster: one set on the supply side and one on the demand side.

"On the supply side, one thing that I always like to point out to audiences that may include some who are not economists, is that the actual destruction by the earthquake and tsunami doesn't make a bit of difference. We don't measure that destruction," Lincoln said.

He gave the example of an Angeleno losing his house to a fire.

"That value of your house is not subtracted out from American GDP. All we measure with GDP is the value of current output. So what you lose in an earthquake and tsunami is not the value of those things that got destroyed but the loss of output that they might have produced. So, if your factory falls down, what we count is the loss of the output from that factory," Lincoln said.

While he acknowledged that there was indeed actual physical destruction due to the disaster, Lincoln said it was thankfully much more minor than might be assumed.

"The three prefectures that were most heavily impacted by the earthquake and tsunami only produced 4 percent of total GDP in Japan," Lincoln said.

"And, frankly, not everything in those three prefectures fell down. In the city of Sendai, no major buildings collapsed. The real destruction of property was in those fishing villages on the coast. We lost fish processing plants, fishing vessels...yes, that output is gone. The rest of it is damage to factories, so now we are awaiting repair to that damage to get those factories back on line."
Lincoln said that a second supply-side issue is the supply chain effect.

"I initially thought, with only 4 percent of GDP up in these areas, a lot of it will be agriculture and fishing, probably not a lot of manufacturing. But lo and behold, there are some factories in that part of Japan. For example, the factory that produces black paint for automobiles – now out of production for a while," Lincoln said.

A third supply-side issue Japan has to grapple with, according to Lincoln, is electric power shortages in Tokyo.

"The Tōhoku area where the earthquake occurred doesn't produce a whole lot of Japan's GDP, but the Tokyo area does. There was some direct damage to some factories in the Tokyo area, but the big issue there was a lack of electricity," Lincoln said.

While the four nuclear plants that were shut down following the earthquake don't produce enough of Japan's electricity to have made that much of a difference in Tokyo, according to Lincoln, the real problem was "the stoppage of a number of non-nuclear power plants by TEPCO (Tokyo Electric Power Company), despite being further away from the areas with the worst and most direct damage."

On the demand-side of the equation, Lincoln said the Japanese themselves are part of the problem.

"That is this mood of enryo or jishiku (both meaning self-restraint) that seems to have taken over at least parts of Japan. Roughly, the thought is 'the people of Tōhoku are suffering, I shouldn't go out and have a good time,'" Lincoln said.

"I find it shocking, for example, that Ueno Park in Tokyo cancelled hanami (traditional picnics among the blossoming cherry trees) – it did not happen this year. Schools canceled graduation ceremonies, companies cancelled the big ceremonies for their new incoming employees. This is something that economists call the 'paradox of thrift.' Which is basically that if you believe that the world is going to be worse tomorrow, therefore you better save and spend less so that you will be in better shape to get through this bad future – you are going to make that future happen. Because by not spending you just caused the economy to go down.

Lincoln said that a time when Japan is facing a bad situation with supply cuts, consumers in Japan have complicated the economic recovery by not going out and having a good time.

"If the Japanese Prime Minister had wanted to show real leadership, he should have spent Golden Week going to a Japanese ryokan (inn) up in the Tōhoku area, invited all the local politicians and had a big party – spending lots of money. That's what Tōhoku needed – to have the tourists come back and spend money," Lincoln said.

Despite the challenges facing Japan, Lincoln said that there are indications that the recovery is already beginning. He cited numerous GDP figures for various sectors that, while inconsistent in the amount of decline created by the March disaster, all showed measured rebound in April. Lincoln also pointed to other signs of the resilience of the Japanese economy and country as a whole.

"The upside here will be surprising. Electric power is coming back, or the supply capacity in the Tokyo area is coming back quicker than TEPCO had initially predicted. The enryo/jishiku phenomena should be fading out, especially if it is a hot summer...I think a lot of people are going to go out and drink their beer. The supply chain disruptions will be beginning to fade out – several weeks ago Toyota had said 'Oh, my goodness, not until the end of this year,' and now we are hearing it will be the end of September before they are back to full production," Lincoln said.

In fact, Toyota announced June 16 that it was operating at 80 percent of full production, with eight of 12 American production lines back in full operations as of June 6. The automaker predicted it would be back to 100 percent production by sometime in September.

Lincoln, when asked by an audience member whether Japan's huge government debt would cause problems raising money for recovery from the disaster, offered a blunt assessment of "No."

As an explanation he offered up an anecdote relating how in the first day or two after the disaster, the Japanese yen actually went up, because speculators around the world were convinced that Japanese firms would have to liquidate holdings abroad in order to take the money back home and pay for reconstruction.

"The speculators were wrong," Lincoln said."

The Japanese have enough money at home. Just because the ratio of gross Japanese government debt to GDP is over 200 percent is academic. The Japanese government can float 10-year bonds at about 1.3 percent interest, which is incredibly low. That is not going to change in the next several years. Do they have a problem 10 to 15 years from now? Yeah, maybe. But not now. So, the important thing right now is to get the reconstruction done, get the economy growing again, and then that makes the whole debt problem more manageable in the future."

Consul General Ihara also noted several issues he felt must be handled in conjunction with the disaster recovery and reconstruction.

He said the first is that Japan has to tackle the simultaneous reform of the Japanese social welfare, social security, and taxation systems in order to battle the deficit. Ihara described this as the number one issue that Japan faces as a consequence of the disaster.

Another issue facing Japan – a complete overhaul of the nation's energy policy – while a sizable challenge, could offer greater opportunity for Japan to innovate according to Ihara.

"I hope that we will make further shifts toward green energy. So this earthquake and tsunami gives us a very good opportunity to further strengthen our green energy policy and energy conservation. And through this contribution to the development of alternative energy Japan can help in some way with the issue of global warming. In this way, I think that Japan's relationship will be much more useful to the American people," Ihara said.

Panel moderator Daniel Bob agreed, adding that while relief and rebuilding efforts will go on for some time in Japan, "there is some hope that out of the tragedy of the disaster, it will serve as something of a catalyst for renewal in Japan, helping return that country to a greater prosperity and growth."

Bob said he hopes that rebuilding will provide an impetus for a new wave of innovation in sectors such as energy.

Panelist Kappei Morishita, general manager of the media and content alliance office with Panasonic R&D Company of America said he is hopeful of other changes springing from the disaster.

Pointing to the long running political turmoil in Japan and lack of strong political leadership, Morishita is looking to the post-earthquake generation to change that.

"Looking at how the young people really see this disaster as a massive challenge – probably the biggest challenge of my lifetime as well as all those born after World War II – I think young people see this as a real serious threat and challenge which will need them to change their attitudes," Morishita said.

"I think, not in the next few years, but maybe in five to ten years, I think the Japanese people have the strength to turn it around to really create a new paradigm...a new attitude. And, I think that the politics will change along with that."

Despite the challenges facing Japan, Lincoln remained optimistic in his concluding summary.

“In the effected areas of Japan where damage occurred, reconstruction is already beginning to kick in, and you are going to see a bump up in GDP over the next couple of years as the construction industry – iron, steel, glass – all of those thing that go into building get a boost,” Lincoln said.

“So, at the end of the day, Japan is still the number three economy in the world; it will, and already is, beginning to recover from this disaster; it is still one of the most affluent nations in the world; and the supply chain disruption illustrate how closely we are tied. That is the reality we face. Japan has not gone away – it is rather resilient.”

State Orders Bay Area Pilots to Provide Service

This story has been revised from an earlier version.

State officials were forced to order Bay Area bar pilots to provide pilot service to CMA CGM vessel after pilots threatened to refuse to pilot the vessel to dock at the Port of Oakland because the vessel owners did not support recent moves at the state level to increase pilot rates.

The state of California grants the San Francisco Bar Pilots Association with a codified monopoly on pilot service in the Bay Area, including language that requires all large commercial vessels calling in the Bay Area to use the bar pilots.

Rates charged to vessel owners for pilot service in the Bay Area are set by the state and the pilots are licensed and overseen by the California Board of Pilot Commissioners.

On June 15, state legislation that would have increased average compensation by 2015 to $530,000 a year for the roughly 60 bar pilots who move large commercial vessels in an out of the Bay Area, failed to pass a State Senate committee.

Despite already earning on average about $400,000 a year, the pilots claimed in rate hearings that since their last raise in 2006, their pay – based on the weight of the ships they pilot – has stagnated while expenses have increased.

Maritime industry representatives opposed the rate increases, arguing that the projected increases in shipping gross tonnage would more than compensate the pilots under the current rates.

As the pilot rate statutes were being argued before the state legislature, the Pacific Merchant Shipping Association, a Bay Area trade group that represents 90 percent of the shipping lines and terminal operators on the West Coast and one of the most vocal opponents of the proposed pilot rate increases, was informed by a member shipping line that the line had been erroneously overcharged by the pilots for pilot service.

On June 9, the PMSA sent an advisory to all of its members detailing what the pilots could legitimately charge for under the current state rate statutes.

The next day, the pilots informed the Port of Oakland that, due to the PMSA advisory, the maximum length of any ship they would henceforth provide pilot service to would be 1,140 feet, as opposed to the previously agreed – as recently as June 8 – limit of 1,205 feet. The change effectively barred carrier CMA CGM's massive 1,145-foot-long 9,400-TEU container vessel CMA CGM Norma, scheduled to arrive just days later, from calling at the port.

The pilots association later told Port of Oakland officials that the pilots would provide service to longer vessels, including the CMA CGM Norma, but only to an anchorage near the port, not to a dock at the port. Since the pilots association has a monopoly on pilot service in the Bay Area, it is unclear how the CMA CGM vessel was proposed to get from the offshore anchorage to a port dock.

On Friday, the acting secretary of the state Business, Transportation and Housing Agency, who also oversees the state Board of Pilot Commissioners, sent a letter to the head of the San Francisco Bar Pilots Association.

The letter said that the state pilot Board has been closely watching the recent rate-setting process and "is aware of recent threats to refuse to pilot the CMA CGM Norma through the San Francisco Bay to dock..."

Acting BTHA secretary Traci Stevens directed the pilots association to "take every lawful action under your authority to ensure that these threats do not materialize."

She warned the pilots association's Bruce Horton that he was responsible in his role as the association's Port Agent to "supervise and manage matters related to the official duties of bar pilots licensed by the [state pilot] Board."

Stevens ordered Horton, under penalty of legal action including disciplinary action by the state pilot Board, to "take every action under your authority to ensure that full, complete, and appropriate pilotage of the cargo vessel CMA CGM Norma from the 'SF Buoy' through the San Francisco Bay to dock..."

Stevens wrote that the letter and order were necessary because there was not enough time to conduct a public meeting on the matter and that a failure to ensure proper pilotage of the CMA CGM vessel could have "serious adverse economic, transportation, and other consequences."

A statement by a public relations firm, on behalf of Captain Horton, notes the pilots had earlier negotiated with the shipping company to bring on a second pilot, at a one-half pilotage rate, for the 1145-foot CMA CGM Norma, and that Captain Bruce had communicated his decision to complete the vessel move with an additional pilot to both the ship owner and the Pilot Commission prior to the receipt of any communication or directive from the state Bureau of Transportation & Housing.

The CMA CGM Norma, piloted by a bar pilot, arrived at a Port of Oakland dock at 1 p.m. on June 19. Though originally scheduled to arrive June 18 at 3 p.m., a delay at the vessel's previous call caused the one-day delay.