Thursday, August 18, 2011

Major US Port Real Estate Markets Leading Recovery, SoCal Ports Top List

Leading the United States industrial real estate recovery, port-centric gateway industrial assets are outperforming commercial real estate in general, and the outlook continues to grow brighter, according to the new Jones Lang LaSalle’s 2011 Port, Airport and Global Infrastructure Outlook (PAGI) report.

The 46-page PAGI report finds that while overall industrial real estate in the US remains volatile and slow to grow, most seaport- and airport-related facilities are recovering and backfilling space, spurred on by steady cargo volume growth.

In addition, warehousing and distribution assets surrounding seaports and airports continue to distinguish themselves in terms of investment value, leasing volumes and rental rate premiums, outperforming the overall sector.

The report's 2011 seaport index, a 100-point measure of the performance of industrial real estate markets around the nation’s top cargo ports, found that the Southern California ports of Long Beach and Los Angeles were the nation's best port real estate markets.

Los Angeles topped the index list with a 95.1-point rating, with Long Beach close behind with a 92.8-point rating. Both ports, which each boasted the lowest vacancy rates of the twelve major ports studied at 6.2 percent, were also the only two ports to top 90 points in the 100-point index rating.

The other two West Coast ports studied, Oakland and Seattle/Tacoma, came in at 74.8 points and 81.1 points respectively. Oakland had a vacancy rate of 8.9 percent while Seattle/Tacoma had a vacancy rate of 7.2 percent.

All of the West Coast ports easily surpassed the national general industrial real estate market vacancy rate of 10 percent for 2011.

Other key findings in the 2011 PAGI report include:
  • The global economy remains on fragile footing: rising oil and commodity prices, supply chain disruptions and geo-political strife have created challenges for more robust economic growth, but signs of improvement are emerging. Consumer spending is on the rise and hiring will likely continue at a slow but steady pace, ultimately boosting trade activity.
  • Trade activity is still on the upswing: trade drives demand for warehouse space near seaports and airports. Industrial real estate markets in close proximity to sea and airports are recovering more quickly from the impacts of the recession than other peer markets, continuing the ‘coast inward’ resurgence that has characterized the period after the economic downturn.
  • Preparing for the future: speed is no longer the only burden of successful movement of goods. Ongoing efficiency improvements in shipping technology, including upgrades to intermodal facilities, increased cold storage capacity, double-stack capable rail lines, and larger container ships and airplanes – all will speed up transit times and reduce costs, especially fuel costs. The Panama Canal expansion is driving port and infrastructure-related improvements along both the Gulf and East Coasts as these ports fight to establish future market share once the new set of locks open.
  • The growing importance of P3s: In a growing number of US port and airport markets, public private partnerships (P3s) are being considered, if not already formed, to develop, build, maintain and operate both the real estate and operational assets.
  • Seaport markets continue to outperform: again advancing ahead of the general industrial market, which has just eclipsed a 10.0 percent vacancy rate in mid-2011, major seaport-related industrial real estate experienced a 50 basis point decline in vacancy over the last year to reach 8.5 percent, but still remains elevated even above 2009 levels. With continued TEU growth, which is expected into 2012, it is anticipated that further gains will be made in overall occupancy.
  • Rising energy costs swing into intermodal’s favor: as population density increases, along with rising energy costs and vehicles on the road, the importance of alternative transportation for goods will be paramount. As such, intermodal transportation has a bright and prosperous future ahead. State and local governments would benefit greatly from contributions and investment, along with private capital, especially in the long term.
  • Global economic growth is also resulting in greater air cargo movement: volumes are approaching levels last seen in 2007, prior to the start of the recession. Although cargo carriers were focused on downsizing and consolidating operations in 2009 and 2010, these efforts have largely been completed, and the industry appears to be in growth mode once again. As a result, demand for industrial real estate near major US airports is beginning to pick up, and market fundamentals should continue to stabilize through the remainder of 2011, with stronger demand expected in 2012.

Appeals Court Rules On Suit Over Long Beach Port Fire Station Work

A California state appeals court ruled Tuesday upheld a 2009 lower court decision that a Thousand Oaks, Calif.-based contractor was not entitled to damages or legal fees over a case springing from the construction of a fire station at the Port of Long Beach.

The appeal case stems from a Union Excavating, Inc. (UEI) suit filed in July, 2008 against port fire station prime contractor DJM Construction Company (DJM) alleging breach of contract and quantum meruit (payment for services rendered).

The port awarded DJM the $6.4 million contract for the construction of the port's Fire Station 24 in November 2006, and the 6,300-square-foot station was completed in March 2008. The first new fire station at the port in more than 20 years, Fire Station 24 was officially dedicated in May 2008, coming in at a total cost of $11.7 million.

UEI alleged in the original suit that in late 2007 it had entered into a verbal contract with DJM to furnish labor, equipment and materials to DJM for the fire station project. Following work completed in November 2007, UEI presented invoices to DJM totaling $122,500, which DJM refused to pay.

DJM said during the lower court trial that it thought it had hired UEI on a "time and materials" basis and that UEI would complete the work for "a payment not to exceed $55,000."

UEI maintained the total value of the work performed was approximately $129,000; DJM maintained it was approximately $80,000.

After a five-day trial in October 2009, the lower court ruled that no contract existed between the two firms, UEI was entitled to be paid for its services, and entered a judgment in favor of UEI in the amount of $112,000.

However, UEI objected to the decision, asking the lower court to also include statutory penalties, attorney fees, and costs in the award amount.

The lower court disagreed with UEI and in December 2009, filed a judgment awarding UEI $112,000 and stating that UEI was not entitled to "prejudgment interest or attorney fees."

UEI filed with the state appeals court, arguing that the lower court erred in not awarding interest, penalties and attorney costs.

In the ruling filed Tuesday, the appeals court pointed out that nether UEI or DJM maintain that the lower court was incorrect in determining that no formal contract existed between the two parties.

However, the ruling stated, if no formal contract existed, and UEI was only being awarded payment for services rendered under quantum meruit, UEI could not simultaneously claim additional "penalties, attorney fees and costs" that were premised on the existence of a contract between the two parties.

The appeals court concluded that the lower court did not err in its decision and upheld the original $112,000 award to UEI.

Tacoma Port Marks Auto Handling Milestone

August has been a month of milestones at the Port of Tacoma.

Just days after celebrating the 100-millionth board-foot of lumber moving through the West Hylebos Log Facility last week, the port marked the handling of the one millionth Kia vehicle moving through the port.

The 2011 Optima Hybrid, still covered in protective wrap – rolled off a ship at the port’s Blair Terminal on August 11.

The automaker began importing vehicles through the port in February 1995, and like every vehicle since, the one millionth Kia was processed by Blair facility operator Auto Warehousing Company (AWC). AWC, which has been based in Tacoma since 1970, is the largest vehicle processing firm in North America and employs about 200 workers at the Tacoma auto facility.

Port commission president Connie Bacon celebrated the milestone and praised the benefits the port's association with the South Korea-based Kia and AWC have brought to Tacoma.

“Over the years, the Kia business in Tacoma has meant thousands of longshore hours for our International Longshore Workers Union Local 23 workers who drive the vehicles off the ships, and hundreds of jobs at AWC and throughout our community," Bacon said.

The United States market share for Kia Motors America (KMA) – the US marketing and distribution arm of Seoul-based Kia Motors Corporation – has grown each year since the automaker entered the US in 1994. Last year the automaker eclipsed the 350,000-unit per-year sales mark in the US for the first time – its best-ever US sales year and its 16th consecutive year of increased US market share.

Tuesday, August 16, 2011

Ports Best Practices: Remaining Competitive

In order to compete with local as well as international neighbors, West Coast ports are continuing to invest in infrastructure. At the same time, new ways of doing business within the ports are streamlining the supply chain and offering customers increased access to information about their cargo.
Remaining Competitive at the Port of Everett
With competitive pressures from neighboring countries, it is imperative that significant investments are made in maintaining an efficient, effective and competitive U.S. marine transportation system.

In recognition of the intrinsic link between cargo and infrastructure, the Port of Everett, Washington has embarked on a deliberate re-capitalization effort for its naturally deep water shipping terminals. Over the last five years, the Port has invested more than $50 million in terminal infrastructure. Some projects include building a new shipping facility to support the aerospace industry, upgrading its cargo handling capabilities (reachstackers, cranes, cargo ramps), and focusing on facility maintenance and repair. These investments have increased the Port’s cargo capacity.

In 2011, the Port will continue its infrastructure investment by constructing a 2,500-lineal-foot rail line on its terminals, install permanent lighting to accommodate various cargoes and increase safety, and continue to focus on customer service.

Rail and Lighting Improvements
In May, the Port went out to bid for the construction of the new 2,500-foot rail line. This new rail line provides operational improvements for the Port for its regular business as well. The Port actively uses rail to serve the aerospace industry, mining and oil drilling operations, transport machinery, power transformers and cement.

Increased lighting is planned for both South Terminal and Hewitt Terminal. The new lighting will increase safety and assist in security. The design of the lighting improvements takes into account the Port’s sensitivity to the adjacent residential neighborhoods.

Customer Service& Skilled Workforce
The Port of Everett has undertaken customer service initiatives to better serve its growing customer base, including personalized and proactive interfaces with customers and service providers using the Port’s marine terminals.

The Port of Everett prides itself on its skilled workforce, including the longshoremen and Port terminal operation staff. As ports continue to vie for the same cargo shipments, Everett’s good working relationship with its workforce facilitates quick, safe and efficient cargo handling.

Business Exchange Improves Rail Efficiency at the Port of Tacoma
Along with modern facilities, it takes coordination, communication, and a skilled workforce and equipment to make a port’s rail system run smoothly and efficiently. To meet the challenge, the Port of Tacoma has worked with a variety of partners to develop an additional tool called the Business Exchange.

The Business Exchange is a web-based software application that offers shared data on arrival and departure of trains and vessels to and from the Port of Tacoma. It increases the visibility within the supply chain, and provides better access to key information.

The Business Exchange was first developed in 2005 by the Port of Tacoma, BNSF Railway, Tacoma Rail, and terminal operators, and plays a key role in maximizing the efficiency, reliability, and flexibility of the Port’s rail system.

According to Mike Reilly, director, intermodal services at the Port of Tacoma, “The Business Exchange is an excellent example of how the Port works cooperatively with its customers – shipping lines, shippers and terminal operators – and railroads – BNSF, UP, and Tacoma Rail – to address issues and improve service.”

The Business Exchange also provides customers with increased visibility to the rail element of the supply chain at the Port, and is an excellent example of how technology is being used to improve the speed and flow of information.

Prior to the implementation of the system, everyone involved in planning and scheduling train moves through the Port was spending hours a day on the telephone, creating and updating spreadsheets with key cargo information, and faxing them to key customers, railroad workers, and Port personnel. The Business Exchange provides improved, timely communications that leverages available computer technology.

With the Business Exchange, the information is available to anyone who is a transportation provider or shipper. The password-protected system also enables users to track rail movements at and through the Port of Tacoma from any internet access point in the world, on a 24/7 basis.

A variety of information is available through the Business Exchange. For example, a customer can see how traffic moves between parties at the Port of Tacoma to the point of mainline departure. It also provides visibility to the supply of westbound trains moving to a specific terminal.

Following its successful implementation at the Port of Tacoma, BNSF later introduced similar systems at the Ports of Los Angeles and Long Beach and at other rail interchange points including Chicago.

Strategic Investments at Port of Vancouver USA
With more and more wind cargo coming into the US for destinations across the continent, a growing number of West Coast ports are competing to handle this unique and often challenging project cargo. Recognizing the trend early, the Port of Vancouver USA put strategies in place that are attracting an ever-increasing list of global wind energy sector customers.

Located 106 nautical miles up the Columbia River from the Pacific Ocean and the furthest port inland on the deep-draft shipping channel, the Port of Vancouver offers a shorter, more cost-effective route for shipments coming from Asia and bound for destinations in the US Midwest and parts of Canada. Capitalizing on this geographical advantage, the port refined its niche as a heavy-lift cargo port by making significant strategic investments in equipment and land.

Vessels calling at the Port of Vancouver can be handled at multiple berths designed for heavy, oversized project cargo such as wind energy components that currently weigh 90 metric tons or more, but which are expected to top 130 metric tons in the near future. The port’s multiple berths and a terminal dedicated solely to project cargo also greatly reduce vessel congestion and the associated delay to customers.

Making the heavy lifts possible, the port purchased two 140-metric ton Liebherr mobile harbor cranes in the mid 2000s, making it the only port in North America to have two such cranes in operation. Easily moved into position on the dock, the cranes can reach the offside of a vessel and unload cargo without having to turn the ship around, further saving shippers time and labor costs. In addition, the two cranes can be used in tandem to pick up and offload cargo weighing as much as 210 metric tons. A frequent occurrence at the Port of Vancouver is the tandem pick of large wind tower sections from both ends, a practice that has become mandatory by most equipment manufacturers.

Available land is another key component to the port’s success in handling wind energy imports. Unlike containers, components are not easily stacked and require large parcels of property for staging and storage. While other ports may face space restrictions, the Port of Vancouver has invested wisely and has expanded its land base over the past several years by 218 acres, with more than half dedicated to wind storage alone. The expansion enables the port to not only provide, but guarantee sufficient land to its customers for storing and staging their cargoes.

By strategically focusing on core businesses and making strategic investments in equipment and land, the Port of Vancouver USA has been able to remain highly competitive, and continues to attract companies looking to partner with an experienced port that can offer the best and most cost-effective options for getting their goods to market.

À La Carte Cargo Handling Services at Longview
For its third straight year the Port of Longview has defied the economic slowdown, setting another record revenue year in 2010.

The combination of location, performance and value-added services continues to attract new and repeat business to the Port. Customers find the Port’s à la carte menu of services to be quite appealing. Whether it is long-term storage, cargo cleaning or painting, the Port understands that not all cargoes require the same services and is prepared to create new services if the demand arises.

With the demands for raw materials booming in Asia, the Port’s marketing department is focused on new growth markets, such as agricultural products, feed stocks and wood products. Demand for log handling, primarily to Asia, continues to surge with no end in sight. Nearly 40,000 log trucks moved through the Port of Longview last year with log cargo growing more than 150 percent from 2009 to 2010.

Bulk materials are also on the rise at the Port. Earlier this spring the Port was awarded a county grant to begin construction on a new bulk storage facility, which comes just in time to meet the growth in iron oxide fines, ammonium sulfate and green coke at the Port.

In addition to cargo growth, tenants are also flocking to the Port. This summer the Port will celebrate the grand opening of new tenants Skyline Steel and EGT, LLC, both of which were attracted to the Port for its available land and dedicated rail corridor to serve the facilities. In anticipation of future development, the Port recently purchased 275 acres of waterfront property to meet future customer needs.

Building Infrastructure at San Francisco
The Port of San Francisco offers a broad spectrum of maritime businesses that are a large part of the city’s heritage and future. Maritime operations including cruises, cargo, harbor services such as tugboats and barges, fishing, excursion boats and ship repair. The Port has embarked on projects to expand and improve its maritime facilities during the recent economic downturn in an effort to remain competitive with other ports.

The Port of San Francisco has long been one of the major travel destinations in the world, and the Port’s cruise terminal delivers passengers into the heart of the city. San Francisco’s Passenger Cruise Terminal at Pier 35 is centrally located on the port’s northeast waterfront, adjacent to popular tourist attractions such as Pier 39 and Fisherman’s Wharf and within easy walking distance of North Beach and Chinatown.

To remain competitive in the cruise business, the Port of San Francisco is currently in the planning stages to develop Pier 27 into a new state-of-the-art cruise terminal that will serve the needs of the cruise industry for years to come. The America’s Cup race, which San Francisco has been selected to host in 2013, will use Pier 27 and the cruise terminal as its race spectator headquarters, and the facility will be completed and opened for cruise passengers subsequent to the completion of the race.

On the cargo side, the port has continued to market its Pier 80 facility as the only breakbulk facility in San Francisco Bay, and has seen tonnages steadily improve over the past year. The Port has improved rail links to the facility with the opening of the Illinois Street Intermodal Bridge over Islais Creek, providing direct rail access to the facility.

The Port is also working to take advantage of new cargo opportunities. Demand for bulk export facilities has grown during the past year, particularly for iron ore. The Port has embarked on an initiative to attract a terminal operator to invest in developing a bulk shipping facility at the vacant former container terminal at Pier 96, issuing a Request for Interest in March that resulted in multiple expressions of interest that are currently being evaluated. The plans are for improving and expanding Port rail infrastructure for receiving the product from western mines, then loading the ore onto ships from purpose-built covered storage facilities and shiploading conveyor systems for shipment to destinations in Asia.

The Port’s recent expansion of its ship repair yard at Pier 70, in partnership with operator BAE Systems and Princess Cruises, has resulted in a 28 percent increase in ship repair business from post-Panamax cruise vessels that had been too large for the shipyard to handle prior to these improvements. The shipyard successfully completed repairs on the Carnival Splendor earlier this year that resulted in more than 800 job placements and $12 million in economic benefit to the Bay Area in terms of wages, benefits, goods, services, and state and local taxes. The vessel became disabled on a cruise to Mexico in late 2010 and would have been too large for the Port’s drydock to accommodate prior to its expansion.

Upgrading Terminals, Rail at Los Angeles
The Port of Los Angeles, America’s busiest container port and major trade gateway, continues to improve its infrastructure and assets to retain its competitive advantage.

The Port is completing the final phase of its 13-year, $370 million Main Channel Deepening Project, which is critical to future trade growth. The project, which ensures 53-foot-deep access to the Port’s container terminals, is expected to be completed in 2013.

There are several major container terminal expansions at the Port of Los Angeles. China Shipping, which operates the West Basin Container Terminal, recently added a new 925-foot section of wharf, 18 additional acres of backland and four container cranes in a $47 million expansion project that will increase cargo throughput and reduce emissions. The terminal now has 2,125 feet of wharf space and eight super post-Panamax cranes. Over the next three years, 375 feet of additional wharf space will be added, along with more backland space that will eventually double the size of China Shipping to 142 acres.

Meanwhile, the TraPac container terminal is expanding through a five-year, $274 million program that will extend TraPac’s wharves to 4,600 linear feet, deepen water depth, install new cranes, upgrade 50 acres of backlands, make road and gate improvements and build a new on-dock rail facility.

Already underway is yet another terminal expansion project, as the APL Ltd. terminal operated by Eagle Marine Services is adding 40 acres and 1,250 linear feet of new wharf space to a facility already encompassing 292 acres and 4,000 linear feet of wharf space.

The Port is also developing its first new liquid bulk terminal in decades with the building of a deep draft super tanker berthing and tank farm facility at Berth 408 in the outer harbor. The facility, which is slated to have a total capacity of 4 million barrels, will be operated by Pacific Los Angeles Marine Terminal LLC, a subsidiary of Houston-based Plains All American Pipeline L.P.

The Port recently added a new terminal operator – California United Terminals, Inc., a subsidiary of South Korea-based Hyundai Merchant Marine Co. Ltd. The new operator, known as CUT, is subleasing 98 acres of the 484-acre APM Terminals facility in the Pier 400 area of Terminal Island and has the right to further expand its operations in future years.

Augmenting terminal development are major rail improvements aimed to ensure swift, efficient links between Port of Los Angeles berths and inland destinations. The Port is moving ahead with its West Basin Railyard, a $125 million on-dock intermodal facility project. When completed, all container terminals in the Port will have on-dock rail. In addition, a new near-dock rail facility proposed by BNSF Railway Co. and the proposed expansion of an existing near-dock railyard operated by Union Pacific Railroad should further guarantee smooth connections between terminals and transcontinental rail services. Environmental impact reports for both rail projects are expected to be completed in the months ahead.

Capital Improvements at Long Beach
The Port of Long Beach for many years has enjoyed a well-earned reputation as being a premier gateway for trade with other Pacific Rim countries, and it’s working hard to maintain that competitiveness.

There’s no question that all West Coast ports need to modernize their facilities and make other preparations to plan for the 2014 opening of the wider Panama Canal and the new competition that will create with East Coast seaports.

So the Port of Long Beach is moving full steam ahead with a wide array of capital improvement projects that when coupled with Long Beach’s penchant for service to its customers, will continue to make this Port a top choice for shippers.

Recently, the Long Beach Board of Harbor Commissioners approved an $828 million budget for fiscal year 2012 that includes significant investments in development to expand trade – namely $630 million in capital improvement projects. The expenditures are part of a 10-year, $4 billion program to reinvest in Port facilities.

With terminal modernization projects, a major bridge replacement and more, the Port is aiming to be well positioned when the economy reaches full recovery. The fiscal year 2012 budget represents a 26 percent increase from the previous year, mainly as a result of the increase in capital spending.

“We are seeing some signs that the global recession is easing and our revenues are beginning to recover,” said Port Executive Director Richard D. Steinke. ”We are investing in our future, while living within our means today. Our prudent fiscal management is what gives us the ability to invest and to stay competitive in our industry. We must continue to modernize and ‘green’ our operations.”

In addition to staying ahead of the competition, the Port of Long Beach is also “staying below.” Recently, the Port reached a milestone in an ongoing dredging project being conducted in conjunction with the US Army Corps of Engineers.

The Main Channel Deepening project has improved navigation and the environment in the harbor, providing a uniform depth of 76 feet from two miles outside the harbor entrance all the way into the middle harbor, improving access for oil tankers and creating one of the deepest harbors among U.S. seaports. The deeper, wider channel and basin also provides additional, safer access for the world’s largest container ships to call in Long Beach.

“This is a critical project for the Port of Long Beach. It greatly enhances the Port’s capabilities and navigational safety,” said Doug Thiessen, Port of Long Beach Managing Director of Engineering.

The Port of Long Beach is also maintaining its strong business links with its international trading partners and has been active in finding more ways to take part in trade with Latin America, for example.

A recent trade mission to the Latin American Congress of Ports was the Port of Long Beach’s latest effort to build and maintain ties with that region.

Total July Cargo Numbers Down At SoCal Ports, Exports Show Growth

Total container volumes at the ports of Long Beach and Los Angeles remained strong for the calendar year, but both fell short of total monthly levels seen in July 2010.

The Port of Long Beach in July reported the highest monthly level of box moves for the calendar year-to-date and the highest monthly numbers since October of last year, despite falling 2.5 percent short of levels seen last July.

The Port of Los Angeles in July turned in its second strongest month of the year for total container moves, but fell 5.8 percent short of volumes reported in July 2010.

“July’s volumes do show that importers, particularly retailers, are taking a much more conservative approach to their holiday inventories,” Port of Long Beach Managing Director of Trade Relations and Port Operations Sean Strawbridge said. “But, it’s important to note 2010 was a very strong year for imports, with record gains of nearly 25 percent. So the fact that this year’s volumes are holding steady at those levels is not bad news, given the general state of the economy.”

Imports fell at both ports in July, while on the export side, Long Beach moved upward slightly for the month and Los Angeles saw a nearly 13 percent surge in outgoing boxes compared to July, 2010, levels.

“The primary source of growth for the US over the past year has been through the export sector,” Beacon Economics’ Founding Partner Christopher Thornberg said in a recent analysis. “Export trade is key in re-balancing the domestic economy given the massive trade deficit that opened in the middle part of the last decade."

The Southern California ports, which together make up the San Pedro Bay port complex, are the two busiest container ports in the Western Hemisphere. Combined the two ports have handled a total of 8 million TEUs since January, more than two times the TEU volumes handled by the hemisphere's second busiest port complex of New York/New Jersey.

Long Beach
For July, Long Beach port officials reported handling a total of 572,926 TEUs, a 2.5 percent drop off from the same period last year.

Imports through the port fell 1.2 percent in July, with a total of 290,314 loaded inbound TEUs reported. The port also handled a total of 126,968 loaded outbound TEUs in July, a 0.6 percent increase over July of last year.

For the year-to-date, Long Beach remains up 4.7 percent for the first seven months of the year, with 3.54 million TEUs handled.

Los Angeles
Across the bay, Los Angeles port officials reported handling a total of 688,326 TEUs in July, a 5.8 percent drop off from the year-ago period.

On the import side, Los Angeles handled a total of 357,667 loaded inbound TEUs in July, a 3.2 percent drop over the same month in 2010. The port fared much better on the exports side of the ledger, handling a total of 165,135 loaded outbound TEUs in July, a 12.8 percent increase over July of last year.

For the calendar year, Los Angeles remains 1.4 percent above the first seven months of 2010, with a total of 4.46 million TEUs handled.

Analysis: Good News for California Exporters

Despite the inert and lackluster forward movement of the national economy, exporters in California turned in their 20th consecutive month of vigorous growth in June, according to an analysis by Beacon Economics of foreign trade data released last week by the United States Commerce Department.

California firms moved $13.83 billion in exports shipments during June, a gain of 13 percent over the $12.25 billion reported in June of last year.
"Adjusting for inflation, California’s export trade has firmly returned to its pre-recession peaks," Beacon Economics’ International Trade Adviser Jock O’Connell said.

"More importantly, on a seasonally-adjusted basis, California’s export trade remained on an upward trajectory through the second quarter of 2011, despite the economic and financial tribulations several of our leading trading partners have been enduring," O’Connell said.

According to Beacon's analysis, the importance of this positive news should not be under-estimated: Gearing up to meet export demand is one of the few incentives US corporations have for investing in the domestic economy.

"The primary source of growth for the US over the past year has been through the export sector," Beacon Economics’ Founding Partner Christopher Thornberg said.
"Export trade is key in re-balancing the domestic economy given the massive trade deficit that opened in the middle part of the last decade."

Trade in California traditionally picks up in the second half of the year and Beacon Economics expects continued growth in the state's export trade during this period.
"The upside of a battered dollar is that California products, from farm produce to pharmaceuticals, are at bargain prices in the world market," O’Connell said.
"The recent drop in oil prices doesn't hurt."

However, the analysis pointed out, the picture was not as positive on the import side of the ledger. The number of loaded inbound shipping containers arriving at the state's seaports in June was down by 5.5 percent from June, 2010, while import tonnage through California's airports declined by 11.7 percent.

SoCal Port Terminals Settle Pollution Warning Suit by State AG

California state Attorney General Kamala D. Harris on Monday announced a settlement with seven terminal operators at the ports of Long Beach and Los Angeles requiring the completion of $7 million in diesel pollution-reduction projects and better notification of the public regarding the emissions.

In June, Harris' office filed suit alleging the terminals violated Proposition 65 – the 1986 voter-approved state law requiring warnings of potential exposure to toxic substances – by exposing thousands of port-area residents to high levels of diesel exhaust without providing adequate and required warning.

"This settlement will speed the requirements for port terminals to reduce diesel emissions," Harris said. "This is vitally important because expanding port traffic leads nearby residents to be exposed to polluted air, and increased risk of cancer and other diseases."

In a statement, Harris' office named seven terminals at the ports of Long Beach and Los Angeles: APM Terminals Pacific, Ltd.; Eagle Marine Services, Ltd.; International Transportation Service, Inc.; SSA Terminal (Long Beach) LLC; SSA Terminals, LLC, Pacific Maritime Services, L.L.C.; Trapac, Inc.; West Basin Container Terminal LLC; and, Yusen Terminals, Inc.

Approved Monday in Los Angeles Superior Court, the settlement requires the seven terminals to: implement a warning program using newspaper ads, bus shelter signs and the Internet to inform the community about the diesel exposures; undertake projects valued at $1 million per terminal to reduce diesel emissions from their respective operations; and pay monies to the ports of Long Beach and Los Angeles for projects to lower diesel emissions from the trucks, tractors and trains that operate at the port.

The $1 million projects to be undertaken at the seven terminals include pilot projects to test solar electric panels that withstand the saltwater environment and a crane mounted system to capture exhaust from idling vessels.

The agreement also requires the terminals to make collective payments of $756,000 to the Port of Los Angeles for grants to allow small trucking firms to buy new, low-emission trucks; $324,000 to the Port of Long Beach for projects for clean running trucks and locomotives; and $540,000 in civil penalties.

Tacoma Port CEO Forgoes Salary Increase

Port of Tacoma chief executive John Wolfe has rejected a salary increase for the year, telling the port governing board that he considered such an increase inappropriate given the current economy and economic conditions facing the port.

On August 4, the five-member port board unanimously approved the review, Wolfe's first since taking the reigns at the port in January 2010 – first as interim CEO, then in June 2010 as the permanent CEO.

The review found that Wolfe's performance "at all levels to reach and exceed expectations." The review further stated that Wolfe, who joined the port at a financially challenging period, "managed issues professionally and openly," and praised Wolfe for "proactively engag[ing] stakeholders in reaching mutually beneficial solutions."

While such positive port CEO reviews typically include a raise, the board deigned not to increase Wolfe's $220,000 annual salary and other compensation.

"Normally, your performance would warrant some level of reward in the form of increased compensation or other benefit," Port of Tacoma Commission President Connie Bacon wrote in the review.

"The commission, with your strong concurrence, has agreed to make no changes in your current compensation and benefit package, but we look forward to an economic upturn and port growth where we can acknowledge the high level of your work."

The board highlighted numerous improvements that Wolfe has overseen or implemented during his tenure including: improving staff morale; improving financial clarity; initiating a strategic plan for the port; improving port relations with labor; and, improving relationships with port stakeholders.

In June 2010, Wolfe beat out a pool of 59 applicants for the CEO job. Wolfe's salary, which is the same as previous director Tim Farrell's, was in the middle of the position's $200,000 to $240,000 advertised range. His contract with the port also provides for a $700 monthly car allowance, four weeks of annual vacation, a typical port employee benefits package and a provision entitling him to six months of severance pay if he is asked to leave without cause.

Between January 2010, and June, 2010, Wolfe had served as interim CEO of the port following the late-2009 resignation of Farrell. Prior to this, Wolfe had served as deputy executive director at the port since 2005. Prior to joining the Port of Tacoma, Wolfe served in several top executive positions at the Port of Olympia, including two years as executive director. Before this he spent a decade with Maersk Sealand/APM Terminals in Tacoma.