Thursday, September 1, 2011

Toyota Signs 20-Year Lease With Long Beach Port

The Long Beach Board of Harbor Commissioners on Monday approved a $240 million, 20-year lease renewal with Toyota Motor Sales, USA, assuring Long Beach remains a key transportation hub for the automaker through 2028.

The new lease – retroactive to January 1, 2009 – also includes several environmental initiatives for Toyota's 144.5-acre Pier B facility, which handles between 200,000 and 300,000 Toyota, Lexus and Scion vehicles imported from Japan each year. Toyota first opened a facility at the port in 1981 and last signed a long-term lease in 1990. The lease expired in 2006 and the carmaker has been operating on interim leases since.

The terms of the new lease call for Toyota to pay annual rent of just over $11.2 million in 2011, with incremental increases up to $12.3 million over the next several years.

Toyota will also be required to take measures to decrease air pollution related to its operations, including the use of cleaner fuel by its RO/RO car carrying vessels.

In addition, the lease specifies that virtually all of the automobile delivery big rigs that transport the vehicles out of the terminal will have to comply with strict emission standards by 2014 – similar to requirements already in place for drayage providers at other port terminals under the port's Clean Trucks Program.

Other requirements include the use of energy efficient design on any large buildings constructed on their premises.

The port's five-member governing board gave committee-level approval to the lease on Monday and is expected to give final approval in a vote at its next meeting.

Los Angeles Port Seeks Public Input on USS Iowa Siting

The Port of Los Angeles on Tuesday released initial documents addressing the environmental impacts of siting the battleship USS Iowa at the port as an attraction and port officials are seeking public input on the port-generated Initial Study/Notice of Preparation (IS/NOP).

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

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

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

Voting unanimously to support the PBC acquisition efforts, the port commission also approved the use of Berth 87 near the port's main cruise terminal as the future home for the battleship. The Los Angeles City Council backed the PBC plan in September 2010.
The Navy has yet to make a decision on the where the battleship will be located.

The current Los Angeles plan calls for the battleship to be moored year-round at Berth 87 with sufficient public parking for visitors. Portions of the USS Iowa would be available to the public for guided tours, special events, and educational programs.

Pending future funding, a second phase of the project may include an approximately 33,800-square foot, two-story landside Visitor Center that will include a museum and education center featuring historic artifacts, educational programs, and food concession areas; ticketing, gift shop, and restroom facilities.

The IS/NOP includes a discussion of the proposed project’s potential effects on the existing environment, and identification of analysis to be expanded in the forthcoming Environmental Impact Report (EIR) to reduce potential impacts as required under the California Environmental Quality Act (CEQA).

The 30-day public comment/review period is from August 29 to September 29, 2011. A public meeting to receive comments will be held on Tuesday, September 13, from 6 to 8 p.m., at the Port of Los Angeles Administration Building.

The IS/NOP is available on the port's website at

Comments on the IS/NOP should be submitted in writing prior to the end of the 30-day public review period and must be postmarked by September 29, 2011. Please submit written comments to: Christopher Cannon, Director of Environmental Management, Port of Los Angeles 425 S. Palos Verdes Street, San Pedro, CA 90731. Written comments may also be sent via email to Comments sent via email should include the project title in the subject line and a valid mailing address in the email.

DOT Sec. LaHood Names New MTSNAC Members

US Department of Transportation Secretary Ray LaHood has named 29 new members to the Marine Transportation System National Advisory Council (MTSNAC).

Established in January 2000, MTSNAC is attached to the DOT's Maritime Administration (MARAD) and its appointed members are selected from leaders in the shipping, logistics and transportation industry and labor. The panel is charged with advising the DOT Secretary, through MARAD, on current and future matters relating to the national Marine Transportation System – waterways, ports, and their intermodal connections. The MTSNAC is tasked with addressing, according to the DOT, "strategies to ensure a safe, environmentally sound, and secure MTS that improves the global competitiveness and national security of the United States; issues and concerns raised by marine transportation industry; and other matters at the Secretary’s request."

LaHood said he would specifically task the new members of the MTSNAC panel with developing recommendations on establishing new marine highway services and port infrastructure development, among other issues.

"Shifting some of our freight from the highways to open inland waterways is a fuel-efficient, cost-effective way to move goods and reduce roadway congestion," Secretary LaHood said in a statement. "The recommendations developed by the Marine Transportation System National Advisory Council will help us increase transportation efficiency, improve the environment and grow the economy."

MARAD Administrator David Matsuda also praised the diversity of the new panel members and their experience. "These maritime experts have a lot to contribute," he said. "I look forward to their advice as we tackle the industry's most pressing challenges."

The new MTSNAC members are:
  • John Baker, President of the Great Lakes District Council, ILA, Cleveland, OH
  • Mark Barker, President, Interlake Steamship Company, Richfield, OH
  • Omar Benjamin, Executive Director, Port of Oakland, Oakland, CA
  • Jerry A. Bridges, Executive Director, Virginia Port Authority, Norfolk, VA
  • Timothy L. Byrd, Director, Global Logistics, E.I. du Pont de Nemours & Co., Wilmington, DE
  • Alice Cheng, President, Cheng Solutions, LLC, Brooklyn, NY
  • Genevieve Boehm Clifton, Manager, Office of Maritime Resources, New Jersey DOT, Trenton, NJ
  • Thomas B. Crowley, Jr., President and CEO, Crowley Maritime Corp., Oakland, CA
  • Judith A. Druskovich, Great Lakes Maritime Academy, Traverse City, MI
  • Sarah Dunham, Director, Transportation and Climate Division, US EPA, Washington, DC
  • Gary Gallegos, Executive Director, San Diego Association of Governments, San Diego, CA
  • Fred Harris, President, NASSCO, General Dynamics, San Diego, CA
  • John Kaltenstein, Marine Program Manager, Friends of the Earth, San Francisco, CA
  • Rick Larrabee, Director, Port Commerce Department, Port of New York/New Jersey, New York, NY
  • Mark Locker, Administrator, Office of Maritime and Freight Mobility, Ohio DOT, Columbus, OH
  • James Lyons, Director and CEO, Alabama State Port Authority, Mobile, AL
  • Joseph M. Mabry, Exec. VP of Logistics and Distribution, Lowe’s Companies, Inc., Mooresville, NC
  • Ron Mitchum, Exec. Director, Berkeley-Charleston-Dorchester Council of Governments, Charleston, SC
  • David Moseley, Asst. Secretary, Washington State DOT, Ferries Division, Seattle, WA
  • Michelle Noble, International Trade Ops Leader for N.America, Proctor and Gamble, Cincinnati, OH
  • Adolph Ojard, Executive Director, Port of Duluth, Duluth Seaway Port Authority, Duluth, MN
  • John Parrott, President, Totem Ocean Trailer Express, Inc., Federal Way, WA
  • Craig Philip, President and CEO, Ingram Barge Lines, Nashville, TN
  • Jeffrey Platt, CEO, Tidewater Marine, New Orleans, Louisiana
  • James R. (Randy) Richardson, Executive Director, Port of Memphis, Memphis, TN
  • Thomas J. Simmers, President and CEO, Ceres Terminals, Inc., East Brunswick, NJ
  • Faye Stewart, President, Faye Stewart Transportation Services LLC, Glendale, AZ
  • Augustin Tellez, Exec. VP, Seafarers International Union of North America, Camp Springs, MD
  • Margaret Vaughan, Representative, US Exporters Competitive Maritime Council, Houston, TX

NLRB Files Complaint Against ILWU Picketers at Longview Port

In what may be a blow to union dockers protesting the operator of a $200 million Port of Longview grain facility, the National Labor Relations Board on Monday filed a complaint accusing the local longshore union of unfair labor practices.

An administrative law judge is set to hear the NLRB complaint on Oct. 11 in Portland. If the NLRB complaint is upheld, it could force the local International Longshore and Warehouse Union members to end the eight-month long labor dispute.

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

ILWU Local 21, which covers the Longview port and has a labor exclusivity 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 at times shuttered the grain facility, halted rail service, and led to the arrest of several picketers. 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 expected to be heard sometime this month.

In its complaint, the NLRB argues that because the ILWU and EGT never signed an agreement before talks broke down, the ILWU has no complaint against the firm. Both the ILWU and EGT disagree on who broke off the talks in January. The NLRB goes on to assert that the ILWU's actual grievance is against the subcontractor that EGT hired to provide labor at the grain facility, which, ironically, is using union labor, albeit not ILWU labor.

The NLRB also contends: the ILWU picketers have at times been "violent and aggressive," including destroying EGT property and harassing employees; the ILWU is attempting to force EGT to hire a subcontractor that would only hire union labor, a violation of labor laws; the ILWU is attempting to prevent EGT from using their current labor subcontractor, also a violation of labor law.

The NLRB said that the accusations in the complaint remain allegations until the administrative judge can rule on the matter, but the federal agency hopes that the ILWU and EGT can come to a negotiated settlement.

Tuesday, August 30, 2011

Clipper Vacations: Building International Relations for 25 Years

It’s 71 miles by water from Seattle, up Puget Sound and across the Strait of Juan de Fuca, to Victoria, British Columbia on Vancouver Island.

Victoria was founded in 1843, and became the provincial capital when British Columbia joined the Canadian Confederation in 1871. For most of the nineteenth century, Victoria remained the largest city in British Columbia. Although Vancouver, on the mainland, now holds that distinction, Victoria has retained much of the charm of the 19th and early 20th century, and remains a popular tourist destination.

In June of 1986 a new high-speed aluminum catamaran from Norway was delivered, via the deck of a heavylift ship, to a newly formed Seattle company. That delivery marked the beginning of a company that redefined the interaction between Seattle and Victoria BC, and opened the Victoria tourism market to tens of thousands of visitors each year.

On July 1st, 1986, the 300-passenger Victoria Clipper made her maiden voyage from Seattle to Victoria, BC, offering a fast, comfortable cruise through Puget Sound. The 127-foot vessel was built by Fjellstrand A/S in Omstrand, Norway, for Clipper Navigation, Inc. The boat was powered by waterjets driven by MTU 16V 396 TB 83 diesel engines, each producing 2,010 bhp at 1,940 rpm, propelling the boat to a cruising speed of more than 30 knots.

“We were pretty busy that first year,” says Clipper President and CEO Darrell Bryan. “We ran the boat every day.” Bryan says the company had committed to year-round service. “We kept that commitment,” he says, “even on the days when we had more crew than passengers.”

That commitment paid off. Less than year later, in June of 1987, the company was celebrating its 100,000th passenger.

The company now transports approximately 300,000 passengers a year, with 3 daily round trips during the summer and 1-2 round trips a day during the off-season.

Clipper Navigation was the brainchild of Merideth Tall and Phil Lepley, two entrepreneurs who believed there was a market for a boat to run between Seattle, Victoria and Vancouver, BC competing with the Princess Marguerite, which was a 373-foot, 23-knot passenger/vehicle ferry built in 1949. Although having been “refreshed” in 1975 and again in 1981, Marguerite, operated by the BC Steamship Company, was still almost 40 years old, and the crossing was four and a half hours each way, making a day trip from Seattle less than desirable.

In the ‘80s, Tall was working in the travel industry, and had ridden the high-speed watercraft that plied the waters of Hong Kong. The pair decided on a high-speed aluminum catamaran, feeling the design offered the speed and passenger comfort they were looking for while at the same time offering mechanical simplicity and a robust equipment package that couldn’t be duplicated by other high tech craft.

At the time, BC Steamship was operating the Princess Marguerite, a private Canadian company operated a jetfoil, leased from Boeing, during the summer months of 1985. The Island Jetfoil offered service from Vancouver to Victoria and on to Seattle. The boat only ran for six months before it was deemed too expensive to operate and was returned to Boeing when the business closed.

The pair chose the Norwegian boat design after having eliminated other builders. Norway’s sea conditions mimicked the waters of Puget Sound, and the pair felt that the twin hulls of the new boat with water jet propulsion would be up to the challenge of crossing the Strait of Juan de Fuca on a daily basis. The builder also fortuitously offered to finance the construction of the vessel, unaware that Tall and Lepley’s financing had fallen through just hours before the partners left for Norway to sign the contract. The Norwegian yard had already substantially completed cutting the aluminum for the boat when the partners’ plane landed. Clipper Navigation took delivery of the new vessel in mid June, and started service on July 1st.

Along with a boat, in 1986 Clipper Navigation acquired a general manager. Tall and Lepley preferred to remain in the background, and Darrell Bryan was hired to run the new company. Bryan had already had a successful career in the railroad industry, coming to Clipper with 13 years of experience with the National Railroad Passenger Corporation (Amtrak), holding a variety of high-level management positions in various cities. Bryan had advanced to the position of Senior Director of Station Operations, in Washington DC, where he was responsible for 504 manned and unmanned stations nationwide. He had worked in cities all over the country, but he and his wife wanted to return to the Pacific Northwest. Darrell moved his family to Seattle and accepted the position with Clipper.
“It was a good fit for me,” he says. “I didn’t know much about the marine side of the business, but I knew a lot about passenger reservations, ticketing and operations, and it proved to be a very good move.”

All wasn’t smooth sailing for the young company. The Victoria Clipper had to compete for passengers with BC Steamship and the Princess Marguerite. We didn’t have a very inviting terminal location in Seattle,” Bryan says of the ferry company’s first location. “There had been a failed fast ferry in the same location,” Bryan says, “and a lot of our suppliers had to be convinced that we were not affiliated with the previous tenant before they would deliver to us.”

The company also had problems at the other end of the route. “The first Victoria facility we had was really inadequate,” Bryan says. “It was outside the harbor and buffeted by weather.”

The company succeeded in spite of the challenges, and largely because of the good working relationships the principals had with their employees, clients and especially the officials that held the keys to success. “We developed personal relationships with the government officials we had to work with on a daily basis,” says Bryan. These relationships helped when problems inevitably cropped up, allowing the company to secure a slip in Victoria’s Inner Harbour and establish procedures with US Customs and Border Protection and Duty Free. “We couldn’t do it today,” Bryan says.

Even the US Coast Guard was willing to work with the new company. “The local Coast Guard wasn’t very familiar with the catamaran model,” says Bryan, “And frankly, neither were we.” Bryan notes that aluminum catamaran builders Nichols Bros., of Freeland, Washington, were the local experts. They had been building high-speed aluminum catamarans for several years by the time the Victoria Clipper was delivered.

“Matt Nichols was the expert,” says Bryan. “When there was a question about a Coast Guard regulation, even the Coast Guard referred to Nichols.”

The Seattle terminal was soon improved with a better facility at the Port of Seattle’s Pier 69, and the company succeeded in having its Canadian terminal permanently relocated to Victoria’s Inner Harbour, protected from the winter winds and within walking distance to the city’s grandest buildings.

Shortly after starting the service in 1986, Clipper began including accommodation packages, tours, and other transportation links connecting Seattle and Victoria, Vancouver and Whistler BC. In 1988 the company acquired a second high speed catamaran, Victoria Clipper II, this one built by Nichols Bros. in Washington State and therefore a Jones-Act boat, capable of operating between US destinations, to provide seasonal service and whale watching tours to the San Juan Islands direct from downtown Seattle.

In 1990 the company added the Victoria Clipper III, also a Jones-Act boat, built by Gladding-Hearn in Somerset, Massachusetts.

In 1993, another Norwegian boat was delivered to the rapidly growing company. The newest vessel, Victoria Clipper IV, is the flagship of the fleet. Clipper IV, although built by the same yard as the first boat, benefitted from 7 years of design and technological improvements. Seven feet longer and capable of carrying 30 more paying customers, the Clipper IV was delivered with diesel engines, but in 1996 the boat was fitted with a pair of Allied Signal gas turbines, doubling the vessel’s horsepower to 10,000 which was supposed to cut 45 minutes off the 2.5-hour trip between Seattle and Victoria.
Clipper revived the Princess Marguerite name in 1997, acquiring a 650-passenger, 192-vehicle ferry from BC Ferries for $120,000 per year in a lease-purchase agreement. The vessel operated between Seattle and Victoria until 1999, when Clipper Navigation closed down the operation and returned the Princess Marguerite III to BC Ferries.

The turbine-powered Clipper IV operated for ten years with the new engines, but in 2006 the company had them replaced with a pair of conventional MTU 16v 396 74L diesel powerplants. “We couldn’t justify the amount of fuel we were burning with the turbines,” Bryan says, noting that rising fuel prices meant raising ticket prices or reducing consumption. “Overall it has been a pretty smooth transition,” he says. “It didn’t hurt the schedule, and the passengers haven’t minded.” Travel time is about 2 hours and 45 minutes between the downtowns of Seattle and Victoria.

The vessels continue to operate every day, except for two weeks in January, when the company stops its vessel operations to drydock its vessels and perform improvements, updates and a deep cleaning of the terminals. The company has a longstanding contract with Seattle’s Pacific Fishermen Shipyard to perform hull cleaning, painting, scheduled engine overhauls, replacement and other general maintenance.

Along the way, Merideth Tall bought out her partner, and Darrell Bryan purchased 25 percent of the company from Ms. Tall, who now owns 65 percent. The remaining 10 percent is split between two minority partners. The company, renamed and rebranded Clipper Vacations in 2009, is a major wholesaler of hotels and tours in the Pacific Northwest offering everything from pre and post Alaska Cruise packages to escorted single day wine tasting tours.

While the vessels still play an important role in the company, Clipper Vacations is busy developing its hotel and tour business, growing to become one of the largest providers of hotel packages in the Pacific Northwest, and Amtrak’s biggest customer in terms of bookings. The company keeps 130 full time employees busy, with that number increasing to 170 during the peak summer season. Many of the company’s “summer help” employees come from local commercial maritime families, and seek out Clipper to be on the water and work for a good company while earning money for college. Both of Darrell Bryan’s sons worked for him. “My boys started working here when they were 14,” he says. You can’t do that anymore.

Many of his “summer staff” have stayed on and taken full time, year round positions, and there are a number of employees who have been with the company for more than 20 years.

“It’s a good place to work,” he says.

Bryan says business is good. “Year-to-date, we’re up significantly,” he says, noting that 2001 was shaping up to be the company’s best year before the attacks of 9/11. “We still have a ways to go before we get back to pre-9/11 levels.”

With the variety vacation packages, lodging and transportation offered by the company, along with the natural beauty of the Pacific Northwest that continues to draw visitors from all over the world, those pre-9/11 levels aren’t far off.

Long Beach Port Moves Forward With Plan to Purchase LB World Trade Center

The Port of Long Beach has taken the first public steps to purchase the World Trade Center high-rise office building in downtown Long Beach.

The port governing board on Monday approved entering into a 60-day due diligence agreement with the current owner of the 13.5-acre property, Legacy Partners.

The due diligence period would allow the port to inspect the building in detail, examine building documentation and audit leasing documents of current tenants.

The due diligence agreement follows an August 1 non-binding Letter of Intent executed by the port with Legacy that calls for the port to purchase the 27-story WTC building for $130 million. The port put up a $2 million deposit that would be refunded if the port backs out of the deal at anytime within the 60-day period.

For nearly a decade, port management slowly moved forward with plans to build a $300 million state-of-the-art environmentally friendly showcase administration campus on port property adjacent to the current administration building.

While the port planned to use no tax revenue or city funds for the new building, Long Beach Mayor Bob Foster last year vetoed funding for the new port building, questioning the wisdom of the semi-autonomous port authority constructing a new headquarters while his City Hall administration has struggled with city budgets racked by deficits and dwindling revenue streams.

Since the mayor's veto of the new port building, port officials have been looking at various locations throughout Long Beach that could be leased or purchased to serve as a replacement for the current six-story headquarters. Reports over the years have indicated that the current port building would not fare well in a major earthquake as it was built to late-1950s building codes and has not received seismic retrofits.

In addition, the port staff has grown by more than 100 positions in the past five years, severely pushing the capacity limits of the existing building and at times requiring temporary offices to be utilized.

The current seven-story port headquarters building, located in the port on a 10-acre parcel at the southern end of the Queensway Bridge, was completed in 1959 at a cost of just over $3 million.

The 27-story WTC, located just blocks north of the port, was opened in 1989. It is one of the premier office towers in the downtown Long Beach skyline and was heavily sponsored by port funds during construction. It was sold to current owner Legacy Partners in 2007 for $149 million.

The five-member port governing board approved the 60-day due diligence agreement by a 4-0 vote, with commission president Susan Wise recusing herself from the vote because she has an office in the WTC.

While the vote was unanimous, the two newest members of the commission, Doug Drummond and Rich Dines, both expressed reservations about the deal.

Dines, who holds a residential realtors license, said that he had a lot of concerns regarding the purchase of the building.

"Is this actually a good deal for the port? Is it a real value?" he asked.

In addition to his concerns about the outright purchase of the WTC, Dines said unequivocally that he would oppose any scenario calling for the short- or long-term lease of the WTC property by the port. Dines said that having the lease option available gives too much leverage to the seller in negotiations.

"I'm not necessarily opposed to the purchase of the building; I'm opposed to the seller having that leverage against us. It's very easy for them to believe that if we back out of this deal we would be forced to lease from them. That is not the case. There are other options," Dines said.

Referencing what he described as high rent rates at the WTC and an occupancy rate that has dropped since the start of the recession to about 70 percent, Dines said that during the due diligence period port staff need to focus a great deal of scrutiny on the tenants in the building and where each stands with their current leases.

He also said that while the WTC appears "on the outside" to be a very well maintained building, the port needs to do a very detailed inspection of the property during the due diligence period.

"There is one reason, and one reason only, that I would consider going into this agreement and it is the 430 people that work here [in the current port building] every day," Dines said.

"This building is outdated, it has seen better days, and we have outgrown it. We need to move."

However, he added that he is unconvinced that the WTC deal is the best deal available for the port.

Commissioner Drummond, who like Dines joined the port board three weeks ago and has not been involved in the majority of the negotiations regarding the WTC deal, said that he also had reservations about the deal and would not support a lease option of any kind.

Commissioner Thomas Fields pointed out that there are only four Class-A office buildings in downtown Long Beach and only the WTC had the available space to accommodate the entire port staff. He also said that purchasing the building at this time, while property values are deflated, would be a bargain for the port.

Commissioner Nick Sramek said he was excited about the potential purchase. He pointed out that the port has been trying to find a new home since the early 2000s and that the port spent the last year looking at "every property in the city...whether it was for lease or for purchase: anything that was large enough to move our employees into."

Sramek said that many properties were considered, even some far afield and inland from the port, but in the end both Mayor Foster and the port board wanted the port headquarters to be located in downtown. Sramek also pointed out that in addition to the current port building being outdated, "it is seismically-challenged. We need to find a home for the employees that is safe and where everyone can be in the same facility."

He said that after looking as so many options throughout the city, "the WTC was by far the most cost-effective."

Port staff estimate that the total cost to move their headquarters, including the purchase of the WTC property, would be $162 million.

Latest Crowley ATB Ready for West Coast Service

Jacksonville, Fla.-based Crowley Maritime Corporation announced Monday the firm's Vision/650-10, the last of 10 Articulated Tug Barges (ATBs) in the 650-series new-build program, has been delivered by V.T. Halter Marine in Pascougla, Miss.

The Vision/650-10 is now ready to enter service, Crowley said, and will transport petroleum products between US West Coast ports. The ATB, which has a capacity of 185,000 barrels, will be operated by Crowley's petroleum services group.

According to Crowley, the Vision/650-10 incorporates many unique features, including a fixed-tank cleaning system, complete cargo heating system and the ability to carry EZ chemicals.

The 650-class barges are 27,000 deadweight tons, 587 feet in length, 74 feet wide and 40 feet in depth. When coupled for operation the tug and tank vessel measure 689 feet. The fully loaded draft is 30 feet.

The vessels can make 12 knots, powered by Twin Screw Wartsila electronically controlled engines, which generate more than 10,500 horsepower.

In making the announcement, Crowley highlighted additional features of the 650 class including the latest systems technology and double-hull construction for safety and reliability.

"Barge 650-10, like its sister vessels (650-1 through 650-9), is also certified by ABS to comply with the International Maritime IMO Green Passport program. All of Crowley's ATBs are built under the ABS SafeHull program for environmental protection. This program puts the vessel design through an exhaustive review to identify structural loads and strengthen the vessel structure," the Crowley announcement said.

Crowley already has nine 650 class ATBs capable of carrying 185,000 bbls and four 550 class ATBs capable of carrying 155,000 bbls. These vessels are Jones Act-qualified, all having been built in the United States, owned by US Citizens and crewed by US merchantmen. The firm also has three larger, Jones Act-qualified ATBs, known as the 750 class – each with 330,000 barrels of capacity – are under construction, with the first scheduled for delivery in the fourth quarter of 2011.

Horizon Lines Refinancing Planned for September Completion

Jones Act carrier Horizon Lines announced Monday that it has entered into a definitive agreement and secured commitments from holders of more than 99 percent of its 4.25 percent convertible senior notes due in 2012 that will allow the carrier to complete a $655 million refinancing of the firm's entire capital structure.

Horizon, which operates the largest domestic US ocean fleet, said "the modified agreement will completely recapitalize the company and eliminate the refinancing risk related to the maturity of the existing convertible notes and the existing bank debt in 2012. It also provides liquidity to fund continued operations through a new asset-based revolving loan (ABL) facility."

The note holders have also committed to provide Horizon with access to a $25 million bridge loan to serve as a liquidity cushion through the completion of the recapitalization.

Bondholders are being asked to swap the $330 million in existing 4.25 percent 2012 notes for $280 million in 6 percent convertible notes maturing five-and-a-half years from issuance, and $50 million in stock.

Horizon, which has been reeling from a government-sanctioned $15 million fine after pleading guilty to price-fixing in the Puerto Rico trade last March, missed a mid-August payment on its current notes and is operating within a 30-day grace period. Lenders had already altered covenants of the current credit facility twice this year and have declined further waivers or amendments.

The carrier said that assuming full participation in the exchange offer, holders of the 2012 convertible notes will own approximately 95 percent of the firm's stock on an as-converted basis following the exchange offer.

Horizon indicated that if participation of the bondholders in not realized, the firm would likely be compelled to "seek bankruptcy protection."

Additional components of the larger refinancing plan include: a commitment from 2012 note holders to purchase $225.0 million of new five-year 11 percent first-lien secured notes to be issued by a Horizon subsidiary, and a commitment by 2012 note holders to purchase $100 million of new five-year maturity second-lien 13 percent to 15 percent secured notes to be issued by a subsidiary. The $100 million amount includes the $25 million bridge loan.

Proceeds from the secured notes will be used, among other things, to satisfy in full Horizon's obligations outstanding under its existing first-lien revolving credit facility and term loan, which currently total $269.7 million.

The carrier expects to complete the exchange offer of the existing 2012 convertible notes by the end of September, at which time it expects to close the entire refinancing.

Riverside Drops 2 1/2-Year Legal Battle Over SoCal Ports Expansion

After three courtroom defeats in just over two years and nearly $350,000 in legal expenses, the California desert city of Riverside has decided to drop lawsuits over the impacts on the city of expansion at the Southern California ports of Long Beach and Los Angeles.

Riverside officials filed suit against the cities and ports of Long Beach and Los Angeles in 2009, alleging that the approval of expansion projects at the two ports did not adequately determine the environmental and congestion impacts on Riverside.

Located inland about 60 miles northeast of the ports, the Riverside area is home to many warehouses that receive goods moving through the ports. In addition, the major rail lines heading from the ports east out of Southern California travel through the Riverside area, which Riverside officials said seriously impacts traffic and air quality in the inland area.

In the suits, Riverside demanded that the ports redo environmental documents key to ongoing terminal expansion projects at the two ports. In addition, the city sought payments from the ports to build grade separations isolating cargo rail traffic from the city's street traffic.

In March 2010, Orange County Superior Court Judge Ronald L. Bauer ruled that the port environmental documents properly considered the possible impacts to Riverside and, in turn, properly concluded that terminal expansion would have "an insignificant impact" on the city. An earlier lower court ruling on the Long Beach case had reached the same conclusion in favor of the port.

Riverside appealed after losing in the two lower courts, but the appeals court in the Los Angeles port case also rejected the city's arguments and ruled in favor of the port. An appeal on the Long Beach port case was still pending.

Concerns had been raised by the shipping industry that a Riverside victory could set a precedent where ports could be held financially liable for increased cargo traffic impacts to dozens of communities regardless of distance from the actual ports.

Riverside officials told the Press-Enterprise newspaper that the more than two-year legal battle cost the city between $350,000 and $450,000 in legal expenses.