Thursday, June 21, 2012

Hamburg Süd Shifting Ops from Seattle to Tacoma

Germany-based shipping line Hamburg Süd is moving its Port of Seattle container operations to the Port of Tacoma at the end of July. Hamburg Süd’s Seattle ships are expected to arrive July 27 and 29; the first ones to call at Tacoma are due in early August.

The move isn’t unexpected due to the company’s ties to the shipping lines that announced a similar move in March. Hamburg Süd is part of a vessel-sharing agreement with Hapag-Lloyd. Hapag-Lloyd is a member of the “Grand Alliance” consortium of shippers, which also includes Orient Overseas Container Line, NYK Line and associated carrier ZIM Integrated Shipping.

The “Grand Alliance” announced earlier this year that its three members, as well as ZIM, would leave the Port of Seattle and begin calling at the Port of Tacoma’s Washington United Terminals at the end of June.

Washington United Terminals is a 105-acre container terminal on the Blair Waterway. The facility has four post-Panamax and two super-post-Panamax cranes, capable of handling the largest ships in the world, plus on-dock rail and a newly extended berth measuring 2,600 feet.

Hamburg Sud and Hapag-Lloyd will begin calling at the terminal in early August, something that Tacoma says will bring an estimated 32,000 container units a year through the port. The two shipping lines jointly operate the Mediterranean Pacific Service from the Mediterranean to the Pacific Northwest.

The weekly service consists of eight Hapag-Lloyd and two Hamburg Sud vessels. It originates in Livorno, Italy and serves Asia and the west coasts of Central and South America.

Imported cargo will originate from Italy, France and Spain and is expected to include wine, spirits, branded mineral waters, such agricultural products as olives and olive oil, as well as marble, flooring and tiles. Exports from the Pacific Northwest are expected to include Washington state apples and Alaskan seafood.

Federal Judge to Hear Portland Labor Dispute

Arguments are scheduled to take place before a federal judge June 22 regarding a request by the National Labor Relations Board for a court order barring a work slowdown by disgruntled union members at the Port of Portland’s Terminal 6.

A hearing is scheduled for 1:30 pm in US District Court, with Judge Michael Simon presiding. The NLRB wants the court to issue a temporary restraining order against International Longshore and Warehouse Union Local 8, which the labor board says is conducting a work slowdown as part of a dispute at the terminal.

The labor board’s litigation followed similar unfair labor practice charges against the ILWU by the Port of Portland and terminal operator ICTSI Oregon. All three complaints contend that the union began the slowdown as part of a dispute over labor jurisdiction.

The ILWU is attempting to claim work through the District Council of Trade Unions that’s historically been performed by another union – the International Brotherhood of Electrical Workers. The disputed jobs involve plugging/unplugging and monitoring refrigerated containers at Terminal 6.

Although the ILWU says its contract with the Pacific Maritime Association requires the terminal operator to hire longshore workers, the work in question at Terminal 6 has been performed since the early 1970s by the IBEW under a collective bargaining agreement with the port launched at commencement of terminal operations. When the port transitioned control of container terminal operations to ICTSI Oregon in 2001 under a 25-year lease, continuation of the IBEW work was included in the lease terms.
Although the longshore union has denied engaging in an orchestrated slowdown, since June 6, operations at Terminal 6 have slowed at times to the point that incoming drayage trucks have been kept waiting in line for hours or had to be turned away.

At the time of the hearing on whether to issue an injunction against the union, Judge Simon is expected to also consider an ILWU request that ICTIS Oregon be ordered to hire longshore workers for the jobs now held by IBEW members.

Port of Tacoma Monthly Cargo Volume Dips Slightly

Container volumes through the Port of Tacoma remained fairly steady last month, dipping 1.4 percent compared to May 2011. A total of 585,940 TEUs moved through the port last month, down from 589,344 in the same month last year.

Imports and exports actually grew month over month: the number of full inbound containers from overseas rose to 40,480 compared to 34,227 the same month last year, and the number of full outbound TEUs rose marginally to 28,643, compared with 28,093.

However, the number of domestic shipments – containers moved between Tacoma and Alaska and Hawaii – fell to 122,497 TEUs in May from 124,242 the same month in 2011. Despite the decline, domestic trade showed promise in May with its highest monthly volume so far during this calendar year.

For the year to date, Tacoma has moved 585,937 TEUs, a drop of 0.6 percent from the 589,340 shipped during the same five months in 2011. Also year to date, the number of foreign containers shipped through the port is up 1.7 percent so far, rising from 398,527 TEUs to 405,441. The number of domestic containers is down however, falling from 190,817 during the first five months of 2011 to 180,499 during the same period this year, a drop of 5.4 percent.

Port of Astoria Receives Pier Repair Grant

The Port of Astoria has received a $1 million state grant to resurface and repair the face of Pier 2, it announced June 19.

The project is to include removing wood covering 52,000 square feet on the east side of Pier 2, replacing parts of the support structure, laying down tin and rebar and reinforcing it with concrete, according to port property manager Mike Weston.

Pier 2 currently houses three fish processors and fish off-loading and fish net haul-out areas to support commercial fishing fleets. There’s also a dock that can accommodate vessels of up to 1,100 feet at the location, as well as a 71,800-square-foot on-dock warehouse.

The port is also in the process of seeking private investment dollars to help fund potential cold storage and cannery facilities at the location.

The $1 million comes from ConnectOregon, an infrastructure grant fund provided through the Oregon Department of Transportation to pay for projects in air, marine, rail, transit and other statewide projects. The money is part of a $40 million pool of lottery-backed bonds.

In addition to the grant, the port says it has budgeted an additional $250,000 to fund the resurface and repair project.

Tuesday, June 19, 2012

Feasibility of Truck Ferries on the US West Coast

By Mark Sisson, PE

As fuel costs and roadway congestion continue to increase, the appeal of transferring freight via water should be increasing as well. Although this type of freight movement is very common in certain corridors, especially in Northern Europe and along the Mississippi river, intra-coastal movement of freight has yet to take hold on the US West Coast.

In order to better understand how appealing a truck ferry might be, this paper examines the potential costs of a truck ferry running between the extreme ends of the US West Coast: Southern California and the Puget Sound.

In this hypothetical operation, a truck driver would drop off a trailer at a marine terminal at either end of the route, and a separate truck driver would pick up the trailer at the other end. Ships used would need to be constructed in the US and staffed with US crews in order to comply with the Jones Act.

Totem Ocean Trailer Express (TOTE) operates just such a service between Tacoma and Alaska. TOTE has the powerful advantage that the roadway connections between the Seattle Area and Alaska are relatively poor, whereas the hypothetical service described in this paper would compete with an end-to-end truck trip via Interstate 5, which runs directly between Southern California and the Seattle Metro area.

Table 1 lists the primary cost assumptions for freight transportation either as a direct truck move or as a truck-ferry-truck move where the truck trips are made by different local tractors on each end and the trailers are moved on a custom built ferry.

Table 2 lists the operating assumptions of each mode.

The end-to-end truck move is fairly straightforward to understand. The ferry + truck alternative depends on many factors, perhaps the most important is the proximity of the origin and destination (O/D) to the ferry terminal. Unless a warehouse is located directly at the ferry terminal, a truck trip will still be required at each end of the journey. Another very important input is the utilization of the ferry. A tractor is not going to make a line haul move at less than 100 percent utilized but a ferry must sail on a periodic schedule and incur the related costs regardless of the number of trailers it is carrying.

Figure 1 shows the overall results for O/D distances between 50 and 150 miles away from the ferry terminal, and for ferries at 80% utilization and 50% utilization.

As Figure 1 shows, if ferries can run reasonably full, they can move freight between the extreme locations on the US West Coast cheaper than an end-to-end truck move. The two variables are related because if the ferry can be profitable at O/D locations up to 150 miles from the terminal, it has a much larger pool of potential business and therefore is more likely to operate at a high level of utilization.

In order to better understand why ferries have a cost advantage over trucks, Figure 2 looks at the unit costs for ferries vs. trucks with ferries operating at 80% utilization. The cost for the ferry example in Figure 2 does not include any of the local trucking cost on each end of the journey.

Figure 2 highlights the relative strengths of each mode. Ferries are much more fuel-efficient than trucks, and require much less labor. Ferries cost substantially more to build than trucks, and also require additional costs at the terminals on each end. The largest cost item in Figure 2 is fuel cost for trucks. This analysis is based on $4/gal diesel. If this cost rises significantly, the advantage of truck ferries will only increase.

While many of the assumptions in this basic analysis could be refined, the overall conclusions are unlikely to change. Over a long distance such as the Southern California to Puget Sound, truck ferries can save cost if they can be run at high utilization.

So if truck ferries are such a good idea, why haven’t they been implemented? The major hurdle is a combination of cost and complexity. Starting up a ferry route with two vessels is a $100M investment and most trucking companies are small businesses without the access to this type of capital. The best opportunity seems to be for an existing Jones Act carrier with trailer expertise such as TOTE or Pasha to attempt to capture domestic coastal business. Another opportunity is for one or more large trucking companies to partner on a joint venture since they could guarantee a high level of utilization by diverting some of their existing business.

It is also important to consider the significant social benefit of a reduction of truck travel along the I-5 corridor. There will be savings in freeway maintenance, and in congestion, especially in urban areas along the route such as Sacramento, California and Portland, Oregon. There will also be substantial reductions in air emissions. If the combination of these factors is great enough, it may motivate various state and federal agencies to offer incentives for one or more ferry operators to develop routes along the coast.

Port of LA Has Its Busiest May Ever

Overall container volume reached 731,352 TEUs at the Port of Los Angeles last month, which not only was a 5.5 percent increase compared to May 2011’s 692,933 TEUs, but also set a record for the busiest May in port history.

LA’s numbers last month surpassed May 2006 volumes of 695,953 TEUs to set the high mark, according to newly released port data. LA also recorded the strongest April in its history last month.

The port’s number of loaded inbound containers increased by 2.7 percent last month, rising from 360,969 TEUs in May 2011 to 370,721 TEUs this past May, according to the data. Exports increased 0.45 percent, increasing slightly from 184,274 TEUs in April 2011 to 185,107 TEUs in April 2012.

Combined, total loaded imports and exports for May 2012 increased 1.9 percent from the same month last year, rising from 545,243 TEUs to 555,829.

The number of empty containers that moved through the port last month, both imports and exports, jumped 18.8 percent compared to the same month last year, rising from about 147,690 TEUs to 175,523.

For the first five months of the calendar year, overall container volumes have increased 5.98 percent at the port to 3.31 million TEUs compared to the same period in 2011, during which 3.12 million TEUs were moved.

For the fiscal year, which began July 1, traffic volume is up 2.3 percent, rising from 7.29 million TEUs to 7.48 million, according to port figures.

POLB Container Volumes Down Across the Board

The news was all bad regarding container volumes at the Port of Long Beach last month, as overall traffic fell 7.2 percent in May compared to the same period a year ago. Imports were down 9.2 percent and exports off 0.8 percent, according to the recently released data.

Last month, port terminals handled 497,892 20-foot equivalent container units, compared to 536,686 TEUs in May 2011, according to port figures. Imported containers accounted for 249,937 TEUs, compared to 275,100 TEUs in May 2011, while exported containers accounted for 129,083 TEUs last month, compared to 130,161 TEUs a year ago.

Empty container moves were down 9.55 percent to 118,872 TEUs in May compared to 131,420 TEUs in May 2011.

Traffic is also down for the fiscal year-to-date at Long Beach. During the port’s current fiscal year, which runs from Oct. 1 through Sept. 30, the numbers of loaded inbound, loaded outbound and empty TEUs shipped are down 9.61 percent, 9.12 percent and 9.10 percent, respectively, compared with the same period in FY 2011. The numbers add up to a total TEU deficit of 9.36 percent during the first nine months of the port’s fiscal year.

For the calendar year to date, overall container traffic is down 6.1 percent at the port through May. The port partially attributes the decrease in volumes to the elimination of several niche service strings that had called at the port last year.

But with the cargo peak season of the later summer months around the corner, some business is returning to the port; three new strings of vessels from Asia began calling on Long Beach in late May. Combined, the three services are expected to add up to 500,000 TEUs through the remainder of the calendar year, according to the port.

Port of Oakland Experiences TEU Traffic Growth

After three straight months of losses, container traffic began to rebound at the Port of Oakland last month, growing nearly five percent compared with the same month in 2011.

Oakland moved a grand total of 203,446 TEUs in May 2012, a jump of 4.9 percent over the previous May. Numbers were up in three of four statistical categories the port tracks: full imports, full exports and empty exports.

A large factor in the port’s increased numbers last month was the number of empty outbound containers moved: the 27,537 TEUs exported in May was an increase of nearly 33 percent compared with the same month last year.

There was a modest increase in full exports for the month, with the 84,443 shipped out representing a 1.8 percent increase from the same time last year. There was a more substantial rise in full inbound containers however; they rose to 72,278 TEUs, a 5.2 percent increase over May 2011.

The category that saw a decrease was empty inbound containers, the number of which was 19,188, a decrease of more than 11 percent compared with the same month last year. For the calendar year to date, empty exports are down an even five percent; it’s the only category where Oakland saw a net traffic loss during the first five months of the year.

For the year to date, overall traffic is up a relatively flat 1.2 percent. The port started off the year on a good note, with a 7.5 percent rise in total TEUs in January, but that was followed by three straight months of month-over-month traffic declines.

The brightest spot for the port the previous two months has been its number of outbound exports, which rose 32.8 percent last month and 18.6 percent in April compared with the same two months in 2011.

Port of Kalama Names New Commissioner

The Port of Kalama Commission has named Alan Basso its new District 2 commissioner, filling the vacancy left by the death of longtime commissioner Jim Lucas.

Basso, whose appointment was announced June 14, assumed his new role effective immediately and is expected to serve out the remainder of Lucas’ term, which ends next year. The contest for the District 2 seat will be part of the November 2013 general election cycle.

“We had a very qualified group of interested citizens to fill a vacant port commission position and (are) happy to announce Alan Basso is the new District 2 Commissioner,” port commission president Randy Sweet said. “We thank all of those who applied and encourage anyone interested to run for local office in the next election.”

Basso is a long-time Kalama resident and currently is a lieutenant and fire investigator with the Longview Fire Department as well as a part time juvenile detention officer with the Cowlitz County Juvenile Detention Center. He graduated from Kalama High School in 1980, earned a BA degree at Washington State University in 1986 and received an AAS in Fire Protection Technology from Portland Community College in 2010.

Lucas, the man Basso replaces, was a port commissioner from 1984 until he died April 4, 2012 from cancer-related health complications.

The Port of Kalama, which is located in southwest Washington on the Columbia River, is 30 miles northwest of Portland, Oregon and about 120 miles south of Seattle.