Thursday, July 28, 2011

Vancouver Port Set to Reroute Trucks in Pilot Program

Officials at Port Metro Vancouver plan to implement a pilot program that will require port-servicing drayage trucks to use only major roads in the port area.

The Canadian port authority's 90-day Truck Traffic Pilot Program, set to kick off on Aug. 25, seeks to divert drayage traffic away from smaller capacity port-area roads. Port-area community members have raised concerns to the port about increased truck traffic on secondary roads in the port area.

Port Metro Vancouver and City of Vancouver officials have been working together to address community concerns regarding an increase in the number of container trucks traveling on Nanaimo Street (north of Broadway) en route to the McGill/Commissioner Street entrance to the port.

In an effort to mitigate the impact of container trucks accessing the port via city streets, the port will implement a Truck Traffic Pilot Program requiring container trucks to use only Major Road Network (MRN) authorized routes in Vancouver. Nanaimo Street is not a Major Road Network route.

“The City of Vancouver is committed to addressing the concerns of residents impacted by container truck traffic on Nanaimo Street,” said Vancouver Mayor Gregor Robertson. “This issue is a priority and by working with the port on mitigation strategies, we will be able to better manage truck traffic on authorized truck routes in a way that balances local community needs with efficient port operations.”

Implementation of the pilot program will follow a 30-day notification period for members of the drayage and port industries.

During the 90-day pilot period, both the City of Vancouver and Port Metro Vancouver will monitor Nanaimo Street. The City of Vancouver will carry out truck counts in mid-September to monitor the effectiveness of this trial program. The City of Vancouver and Port Metro Vancouver will continue to meet regularly and evaluate the change.

City and port officials are encouraging area residents to provide public comments throughout the 90 days.

Port and city officials will review and evaluate the program following its conclusion to determine whether the route changes should be made permanent.

DHL Adds New Direct LCL China-to-Pacific Northwest Service

DHL, a Plantation, Fla.-based American arm of German logistics giant DHL International, has announced the launch of a direct Less than Container Load (LCL) all-water service from Shanghai to Seattle.

The new transpac service, according to DHL, seeks to enhance DHL’s abilities to offer cost-effective solutions to Chinese businesses seeking to extend their footprint into U.S. markets.

“By adding this additional direct service from Asia to the northwest region of the US, DHL continues to strengthen its overall portfolio of LCL services to customers who are looking for more direct routes with more flexibility,” DHL said in a statement.

Operated by Danmar Lines, the new direct weekly LCL service will cover freight moving from Mainland China to Seattle and Portland on the United States West Coast. DHL asserts that new service can cut the overall transit time between China and the U.S. by four days. According to the firm, cargo shipped directly from Shanghai to Seattle can arrive in the U.S. within 12 days.

“Most of the freight arriving on the West Coast comes into the Port of Los Angeles [and the Port of Long Beach], so by DHL offering a direct service into Seattle, we are not only providing customer’s shorter transit times but also lessening the carbon footprint,” director of LCL for DHL Global Forwarding North America Tara Caputo said.

AAPA and Commerce Department Join to Support White House National Export Initiative

The American Association of Port Authorities (AAPA) trade group, which represents 160 of the nation's port authorities, and the United States Department of Commerce’s International Trade Administration (ITA) have tendered their collective support to President Barack Obama’s National Export Initiative (NEI), which seeks to double US exports in the next five years.

The AAPA and ITA solidified their collective support of the NEI last week with the signing a Memorandum of Intent (MOI) that implements the “Partnership with America’s Seaports to Further the National Export Initiative.”

Under the terms of the MOI, the AAPA and ITA will partner to coordinate communications, idea exchanges, activities and services that assist U.S. businesses in exporting; and to increase awareness of the available services, trade missions, programs and overseas events that involve U.S. export opportunities.

The MOI was signed at the Port of Oakland by AAPA President and CEO Kurt Nagle and ITA Under-Secretary Francisco Sánchez.

“The AAPA and the Department of Commerce share a strong interest and commitment to increasing trading opportunities for US products abroad,” the AAPA's Nagle said.

“We believe a collaborative approach between Commerce and America’s seaports is the best way to ensure the success of this important national initiative.”

Nagle added that achieving the NEI's five-year export goal requires both assisting exporters and improving the nation's transportation infrastructure.

“As recognized by the Export Promotion Cabinet in their report to the President on the NEI, we must improve our transportation infrastructure to fully realize the potential gains from the NEI and to sustain U.S. international competitiveness,” Nagle said.

“This partnership and investments in infrastructure will pave the way towards a prosperous future for all Americans.”

Seven Maritime Firms Honored by SoCal Ports for Green Efforts

The ports of Los Angeles and Long Beach have selected seven local maritime and cargo companies as this year's recipients of the Clean Air Action Plan Air Quality Awards.

This year's recipients, ranging from ocean carriers to terminal operators to trucking firms, were cited for "taking extraordinary measures" to cut air emissions, modernize facilities and implement innovative operations to reduce air pollution.

"These partners have shown a real commitment to cleaner and greener port operations, going above and beyond what is required," Port of Los Angeles Executive Director Geraldine Knatz said.

"These awards highlight what can be achieved when entities join forces and embrace innovation to better the environment."

In congratulating the winners, Port of Long Beach Executive Director Richard Steinke added, “The Clean Air Action Plan awards are a fantastic way to put a spotlight on the often times unheralded efforts of the goods movement industry to meet and exceed air quality goals, and to invent a better way to cleaner air for everyone."

The awards, now in their fourth year, were an outgrowth of the two ports' San Pedro Bay Ports Clean Air Action Plan in 2006. Tenants and other organizations that serve the ports are eligible to be nominated. The judging panel includes port staff, as well as representatives from the South Coast Air Quality Management District, California Air Resources Board and the U.S. Environmental Protection Agency.

The trucking group Clean Truck Coalition, transportation firm Ability/Tri-Modal Transportation Services, and carrier Evergreen Line were each recipients in the award's "Air Quality Improvement Leadership at the Corporate Level" category.

The Clean Truck Coalition, a group of ten family-owned licensed motor carriers, created a partnership and “pooling agreement” that required its members to share information to better utilize their collective truck fleets. The group was also cited for investing $109 million in new equipment, including nearly 1,000 new diesel and liquefied natural gas trucks – representing about 11 percent of all new trucks at the San Pedro Bay Port complex.

Family-owned trucking warehouse and distribution firm Ability/Tri-Modal was cited for efforts over the past two years to replace its entire fleet of 51 drayage trucks with port-certified clean trucks, resulting in significant emission reductions.

Evergreen was cited for nearly a decade of corporate environmental efforts, including the addition of S-type “Greenships” into its fleet and participation in the Port of Los Angeles' Vessel Speed Reduction program.

In the "Innovative Operations that Improve Air Quality" category, carrier Hamburg Sud and terminal operator Yusen Terminals each received awards.

Hamburg Sud was cited for 100 percent compliant participation in the Port of Long Beach’s Green Flag vessel speed reduction program.

Yusen Terminals, which operates a terminal at the Port of Los Angeles, was cited for a number of innovative operational improvements to reduce emissions and increase efficiency, including restructuring its terminal traffic flow patterns to reduce the distance that trucks and workers need to travel to complete cargo pickups and drop-offs.

Ocean carrier NYK Line and marine transportation/towing firm Sause Bros. each received awards in the "Significant Early Action to Reduce Air Pollutant Emissions" category.

NYK, which calls at the Los Angeles port, was cited for its voluntary and accelerated compliance with a California Air Resource Board (CARB) regulation requiring ship-to-shore powering of vessels at dock by 2014.

Sause Bros., which provides marine transportation and ocean towing services at the two Southern California ports, was cited for repowering five of its harbor vessels and replacing 17 engines with cleaner, lower-emission technology – all well in advance of CARB requirement deadlines.

Tuesday, July 26, 2011

Some Maritime Terms Explained – Part 3

By Marilyn Raia

July 2011
This article continues the explanation of some words and phrases commonly found in maritime contracts and marine insurance policies.

Jones Act

In 1920, Congress enacted the Merchant Marine Act, part of which is known as the Jones Act, named after its sponsor, Senator Wesley Jones. The overall intent of the act was to promote and maintain a strong US Merchant Marine.

The Jones Act addressed two very different aspects of the maritime industry. It increased the remedies available to seamen who were injured while in the course of their employment. It also imposed requirements on vessels transporting goods or passengers between US ports.

Before enactment of the Jones Act, injured seamen were limited to recovering “maintenance”, or a minimal daily stipend for food and lodging while they recuperated, and “cure”, or the medical expenses the seaman incurred until obtaining the maximum benefit of medical treatment. The recovery of maintenance and cure was not based on the seaman’s employer’s fault. Under the Jones Act, in addition to maintenance and cure, an injured seaman is entitled to sue his employer for its negligence or the negligence of his co-workers that caused the injury. The seamen’s right to sue their employers for negligence is based on the federal law pertaining to the rights of injured railroad workers. The Jones Act also provides a remedy for the personal representative of a seaman who has died as a result of a personal injury suffered during the course of his employment. A lawsuit for personal injuries or death of a seaman can be filed in federal or state court.

Another aspect of the Jones Act involves the transportation of goods or passengers between US ports and is referred to as “cabotage” law. It prohibits the transportation of goods or passengers between US ports in any vessel other than a vessel built in and documented under US law, owned by US citizens, and crewed at least 75 percent by US citizens. Federal law specifies what is considered to be a US-built and owned vessel. There are exceptions to the Jones Act. Moreover, the President can waive its application in an emergency. In the US, cabotage laws also apply to air, truck, and rail transportation between two US destinations. Many other countries have cabotage laws.

Laches is an unreasonable delay in pursuing a claim prejudicing the party against whom the claim is pursued. The equitable doctrine of laches is asserted as a defense in admiralty cases when there has been inexcusable delay by a plaintiff in commencing an action and, due to the passage of time, the defendant is unable to prepare an adequate defense. That is, in the interim, evidence may have been lost or destroyed and witnesses may have become unavailable. The defense of laches is similar to, but not the same as, the defense of the expiration of the period allowed for filing suit under a statute of limitations. In determining whether there has been inexcusable delay, the courts consider the statute of limitations that would otherwise apply to the claim. If the claim is brought after the time allowed by the statute of limitations, an inference arises that the delay was unreasonable and prejudicial, and the plaintiff has the burden of proving otherwise. Conversely, if the claim was brought before the expiration of the time allowed by the statute of limitations, an inference arises that the delay was neither unreasonable nor prejudicial, and the defendant has the burden of proving otherwise.

Letter of Undertaking
A letter of undertaking is a letter written to a claimant by a P&I Club, insurance company, or other financial organization providing security for certain maritime lien claims against a vessel, to avoid arrest of that vessel. The letter of undertaking is most commonly posted in connection with claims against a vessel for cargo loss or damage. It may also be posted in connection with other tort claims against a vessel such as collision or allision. The issuer of the letter of undertaking customarily guarantees the payment of a judgment or settlement up to a specified amount including interest and costs, and reserves all defenses available to the vessel. The letter of undertaking stands in place of the vessel in litigation. Some courts have held the refusal to accept a letter of undertaking as security for a claim against a vessel, and the insistence on the posting of a bond by an approved surety, is unreasonable and potentially sanctionable.

NVOCC is an acronym for non vessel-operating common carrier. An NVOCC is a freight consolidator and forwarder that does not own or operate a vessel but acts as a carrier by issuing bills of lading and undertaking the responsibility for the transportation of cargo. An NVOCC usually enters into two contracts with respect to a shipment: 1) a bill of lading contract with its customer; and 2) a bill of lading contract with the vessel operating common carrier that physically transports the shipment. A bill of lading issued by an NVOCC is subject to the same laws governing a bill of lading issued by a vessel operating common carrier.

Peril of the Sea
“Peril of the sea” has different meanings depending on the context in which the phrase is used. Loss of or damage to a vessel or cargo due to a peril of the sea is a covered peril under a marine insurance policy. In that context, peril of the sea is a term of art meaning an unforeseen and unanticipated action of the sea. No particular sea condition or wave height is required for the loss or damage to have been caused by a peril of the sea in the marine insurance context. However, the determination of whether a loss has been caused by a covered peril of the sea is not always easy when other factors such as deterioration and wear and tear contribute to the loss. In that circumstance, the court determines what the efficient proximate cause of the loss was. Sipowicz v. Wimble, 370 F.Supp. 442 ( S.D.N.Y. 1974) illustrates the point.

In Sipowicz, the insured vessel sank after the keel and keelson fell off and water entered the hull. The insured contended the sinking was due to a peril of the sea, or the fortuitous entry of seawater into the vessel. The court disagreed holding the loss not covered because the fastenings were deteriorated and the separation of the keel and keelson from the rest of the vessel was inevitable. The court stated perils of the seas must be “of the sea” and not merely “on the sea”.

Peril of the sea is also a defense against cargo loss or damage under the US Carriage of Goods by Sea Act (COGSA) but is not defined in the statute. Because peril of the sea is an exemption from liability available to a carrier, courts have interpreted the phrase with greater strictness than in the marine insurance context. A common definition of peril of the sea in a cargo loss or damage case is “a fortuitous action of the elements at sea, of such force as to overcome the strength of a well-found ship or the usual precautions of good seamanship.” As a condition of asserting a peril of the sea defense, the carrier must demonstrate it exercised due diligence to make the vessel seaworthy at the commencement of the voyage. Thereafter, what might factually constitute a peril of the sea sufficient to exonerate a carrier from cargo liability varies from case to case. Many cases hold conditions less than Beaufort 8 are, as a matter of law, insufficient to constitute a peril of the sea. Even when conditions have been more severe, in determining the existence of an excusable peril of the sea, courts have considered whether the weather was expectable for the time of year and location, whether the vessel itself suffered damage, and whether the vessel had to change course to avoid the conditions.

In Taisho Marine & Fire Ins. Co. Ltd. v. M/V Sea-Land Endurance, 815 F.2d 1270 (9th Cir. 1987), the defendant vessel encountered a seven hour gale with Beaufort 10-12 winds, gusts greater than 95 knots and waves that rolled the vessel more than 40 degrees. The vessel also suffered structural loss and damage. The court held the conditions sufficient to support a peril of the sea defense under COGSA. On the other hand, in Steel Coils, Inc. v. M/V Lake Marion, 331 F.3d 422 (5th Cir. 2003), Beaufort force 11-12 weather in the North Atlantic in the winter months resulting in no structural damage to the vessel was not a peril of the sea sufficient to exonerate the defendant from liability for rust damage to a shipment of steel coils.

Marilyn Raia is of counsel in the San Francisco office of Bullivant Houser Bailey. She specializes in maritime and transportation-related matters. She can be reached at

Tacoma Port's Total June Volumes Drop, Exports Up

The Port of Tacoma reported a second straight month of declining cargo growth in June, with a double-digit drop over the same month last year.

Despite the decline in the year-over-year comparisons for June, the total number of containers moved during the month was the highest of any month since October 2010 and a modest increase over May.

Tacoma officials reported handling a total of 130,838 TEUs in June, a 5.3 percent increase over May, but an 11.1 percent decline over June, 2010.

Imports for the month were down over last June, while exports posted strong growth numbers.

On the import side, the port handled a total of 40,727 loaded inbound TEUs in June, a 19 percent increase over the previous month, but a 22 percent drop over total loaded inbound boxes handled in June of last year.

Container exports fared much stronger in June, with the port handling a total of 32,435 loaded outbound TEUs. This was a 15.5 percent increase over May and a 10 percent increase over June 2010.

For the calendar year, the port remains in positive territory, up 2.3 percent over the first six months of last year with a total of 720,178 TEUs handled since the start of the year.

Oakland Port Box Volumes Down 2.3 Percent In June

The Port of Oakland followed the trend of four of the five major West Coast ports in June, with total cargo numbers and total imports down for the month, with total exports up – all compared to June of last year.

Oakland joined Los Angeles, Seattle and Tacoma in following the same trend for June. Only the Port of Long Beach bucked the trend in June, reporting total volume, imports and exports all up for the month.

Oakland port officials reported handling a total of 200,703 TEUs in June, a 2.3 percent decrease over the same month last year. However, like many of the other major West Coast port, total volumes in June at Oakland were the strongest monthly totals of the year. Total volumes at Oakland were up 3.4 percent when compared to May.

On the import side, Oakland port officials reported handling a total of 69,779 loaded inbound TEUs in June, a 1.6 percent increase over May, but a 5.2 percent drop when compared to June of last year.

Exports slipped in month-over-month comparisons, but fared better in the year-over-year comparisons. The port handled a total of 82,480 loaded outbound TEUs in June, an 0.6 percent drop over May, but a solid 9.9 percent increase when compared to June, 2010.

For the first six months of the year, Oakland handled a total of 1.14 million TEUs, a 5.2 percent increase over the January to June period in 2010.

Matson Rebrands Three Logistics Units Under "Matson Logistics" Brand

Ocean carrier Matson Navigation is rebranding its three logistics units – Matson America, Matson Global, and Matson Integrated Logistics – under the new name, Matson Logistics.

According to Matson, combining the suite of services offered by the three entities into one brand will "better define the full range of services the Matson name represents outside of ocean transportation, including domestic and international rail intermodal service, long haul and regional highway brokerage, supply chain services, LTL transportation, specialized hauling, and company-operated warehousing and distribution."

All of the services offered will be marketed using a newly created Matson Logistics logo.

“As a company with over a century of service in the Pacific, the Matson brand is well established in the maritime industry and strongly associated with experience, commitment, innovation, efficiency and superior service,” said Matt Cox, president.

Cox said that as the firm has continued to grow and strengthen the Matson brand, it has become important to differentiate Matson as both a leading ocean carrier and as a logistics provider.

"In the past decade, Matson’s logistics services have become increasingly diversified, encompassing warehousing and distribution and moving beyond North American markets to include China," Cox said.

"To clarify and strengthen our position in the logistics industry, we will now promote our services using one brand name, Matson Logistics.”

As part of the rebranding effort, Matson has changed the legal names of the three entities to better reflect the firm's more unified approach to providing logistics services.

Matson Integrated Logistics, Inc. is now “Matson Logistics, Inc.”; Matson America Transportation Services, LLC is now “Matson Logistics Services, LLC”; and Matson Global Distribution Services, Inc. is now “Matson Logistics Warehousing, Inc.”

According to Matson, the new names are only legal name changes and do not require any updates or revisions to licenses, codes, customer contracts, insurance coverage, legal rights and obligations, or other documentation.

"We believe the rebranding of our logistics services will help further define Matson as a unique and multi-faceted provider in today’s growing supply chain services markets," Cox said.

Matson Logistics is a subsidiary of Matson, itself a wholly owned subsidiary of Honolulu-based Alexander & Baldwin, Inc.

Longview Labor Dispute Sees Seven Arrested

An ongoing labor dispute between West Coast dockers and the operator of a nearly-complete grain terminal at the Port of Longview led to the arrest Monday of seven pro-union protesters, including one on suspicion of felony harassment.

The protests center on the decision by grain terminal operator EGT Development to use an outside union contractor instead of International Longshore and Warehouse Union members to staff the facility, a move the firm says will save it more than $1 million a year.

ILWU Local 21, which covers the Longview port and has a contract with the port, contends that the ILWU holds jurisdiction over the grain terminal.

Negotiations between EGT and the ILWU over the approximately 50 positions at the facility broke down earlier this year and local ILWU protests since have shuttered the grain facility at times and even halted rail service to the facility. The union blames EGT for the recent escalations in the protests.

EGT sued the port in January, arguing that it is not bound by the contract between the port and the ILWU. The union requested to join the port in the suit, a move that was recently approved by the court. The case is not expected to be heard until September.

Washington state authorities made the most recent arrests, according to authorities, as protesters blocked traffic at the grain terminal. Five of the protesters were arrested on suspicion of disorderly conduct, one on suspicion of trespassing and one on suspicion of felony harassment.