Friday, July 27, 2012

Port of Vancouver Approves New Director’s Salary

The Board of Commissioners for the Port of Vancouver USA has approved a salary for the port’s new executive director. Todd Coleman, who was promoted from the position of assistant executive director, will make over $186,000 annually, almost $17,000 a year more than his previous salary.
The amount is also more than $16,000 a year higher than what the man he replaces earned. Larry Paulson, who retired April 29 after having been executive director since 1999, was paid about $169,500 a year.

In making the decision during a July 24 open session, the three-member commission said the salary amount was chosen based partially on reviewing the salaries of high-level executives at comparable ports in the Pacific Northwest.

For example, Port of Tacoma executive director John Wolfe is paid about $220,000 a year, while the recently-named new director of the Port of Longview, Geir Kalhagen, is expected to earn about $150,000 annually. His predecessor, Ken O’Hollaren, who’s retiring in late December, earned about $135,600 a year.

Coleman first joined the Port of Vancouver USA five years ago after previously being a partner in an engineering consulting firm, Coleman & Davido Engineering Consultants, in Estacada, Oregon. He also previously held positions with two other Oregon companies, URS Inc. and Parametrix Inc.

Seattle Terminal Receives More Super Post-Panamax Cranes

SSA Terminals, which operates the Port of Seattle’s 196-acre Terminal 18, has received a shipment of three 267-foot Super Post-Panamax cranes from China, doubling the number at the terminal.

“We made this investment to continue Terminal 18 as the best destination in the Pacific Northwest for the world’s most modern and efficient ships,” SSA Marine CEO Jon Hemingway said. “No other terminal in the region comes close to Terminal 18’s size, draft and cranes, or T18’s ample on dock and nearby rail connectivity.”

The cranes, each of which a lifting height of 146 feet and an outreach of 210 feet, were made by Chinese equipment manufacturer ZPMG and delivered to the port July 24 on the ship Zhenhua 23.
As some of the largest container handling cranes in the world, they can extend out to handle the new Triple E Class vessels, which can carry up to 18,000 TEUs with a width of 210 feet, or 24 containers. The cranes can lift containers weighing up to 65 tons, according to the manufacturer.

“SSA is making Terminal 18 big-ship ready for the next generation of ocean-going vessels,” Port Commission President Gael Tarleton said in a statement announcing the arrivals.

Together with the three Super Post-Panamax cranes that arrived in December 2011, the cranes represent a $54 million investment by SSA, according to the company.

Seattle Port Receives Employer Support Award

The Port of Seattle is one of 15 employers across the US that have been named among the 2012 recipients of the Department of Defense’s Employer Support of the Guard and Reserve (ESGR) Employer Support Freedom Award.

The award, which was created in 1996, publicly recognizes employers that provide exceptional support to their employees serving in the US National Guard and military reserves. Nominations must come from a National Guard or Reserve member who’s employed by the nominated organization, or from a relative of that person.

More than 3,200 nominations for this year’s awards were received from National Guardsmen, Reservists or family members this year, according to the DoD. Seattle was named one of 30 finalists for the award back in May.

About 20 percent of Port of Seattle employees are veterans or currently serve in the National Guard or reserves, according to the port. Seattle was the only US port that was a finalist for the award, and just one of three companies on the West Coast.

The 15 award winners are scheduled to be honored at an event in Washington DC later this year.

“We are very proud of this distinct honor from the Department of Defense,” said Tay Yoshitani, Port of Seattle CEO. “Our guard and reserve employees give their all serving their country while working for the Port of Seattle, and this is a great way to recognize them for their sacrifices.” Yoshitani, who has been the port’s CEO since March 2007, is a US Army veteran. He’s a graduate of the United States Military Academy at West Point graduate and served in Vietnam.

Eight Arrested in Port, Customs Fraud Case

Eight people, including the president of the San Diego Customs Brokers Association, have been arrested on charges of running a $100 million fraud ring through the Port of Long Beach.

The eight individuals, as well as three trade companies, have been accused of scheming to import goods, much of it Chinese-made clothing and cigarettes from India, by falsely claiming the goods would not enter US commerce and were meant for trans-shipment to destinations in Mexico or other countries, according to the US Attorney’s Office.

And in making the false claims, the defendants were able to avoid more than $10 million in taxes and Customs duties, according to prosecutors, and therefore undercut the competition by selling their goods cheaper.

The imports included more than 90 shipments of Chinese-made clothing, prosecutors said, as well as tobacco and snack food.

The complaint, which was unsealed July 25, names San Diego Customs Brokers Association president Gerardo Chavez, 42, as the lead defendant in the case, saying that he used his employees to generate falsified paperwork to help orchestrate the scheme.

The defendants hired truck drivers to haul the shipments to warehouses and storage areas throughout Southern California, and then bring the goods back to the L.A. area for shipment throughout the US, according to prosecutors.

The 56-count indictment includes three counts of bringing in goods by means of false statements, 52 counts of obstruction of justice and one count of conspiracy to defraud the United States.

The seven other people charged are all agents and employees of customs brokers. Each resides within San Diego County or Tijuana, except one person, whose home address is listed as Los Angeles.
The three companies implicated in the scheme are Tecate, California-based International Trade Consultants and Tecate Logistics LLC, as well as Los Angeles-based M Trade Inc.

Tuesday, July 24, 2012

North American Emission Control Area and Lessons Learned in California

By Capt. Jeff Cowann

The International Maritime Organization (IMO) amended the International Convention for the Prevention of Pollution from Ships (MARPOL) designating specific portions of US, Canadian and French waters as Emission Control Area (ECA) in 2010. Ships will have to burn fuel oil with sulfur content not to exceed 1.0% sulfur. The ECA designation becomes enforceable in August 2012. In August 2015 the limit will be reduced to 0.1% sulfur.

California created similar regulations in 2009 to reduce vessel emissions for California waters as part of its continued mission to improve air. These are found under California Code of Regulations, Section 2299.2, “Fuel Sulfur and Other Operational Requirements for Ocean Going Vessels within California Waters and 24 Nautical Miles of the California Baseline.”

The California regulations require that vessels burn distillate fuel, either marine gas oil (DMA) with maximum 1.5% sulfur or marine diesel oil (DMB) with maximum 0.5% sulfur, in main and auxiliary engines.

California witnessed an increase in the number of Loss of Propulsion (LOP) incidents of more than 100 percent in 2009 when the distillate fuel regulations went into force. The statewide average of 23 LOP incidents per year doubled, then tripled, after the fuel switch mandate came into effect during 2009 and finally increased by almost a factor of four to 93 LOP incidents for the year 2011. The IMO requirements will soon make what had been a California-centric experience an international experience as use of distillate fuel in engines designed to operate on the Heavy Fuel Oil (HFO) expands under IMO regulations.

California will step out further and faster in the area of emission control when its air quality emission requirements change again in 2014, lowering the sulfur content allowance further in the coming years.

California Fuel Requirements for Ocean-going Vessel Main (Propulsion) Diesel Engines, Auxiliary Diesel Engines and Auxiliary Boilers

California Phase I

  • July 1, 2009 Marine gas oil (DMA) at or below 1.5% sulfur; or Marine diesel oil (DMB) at or below 0.5% sulfur
  • August 1, 2012* Marine gas oil (DMA) at or below 1.0% sulfur; or Marine diesel oil (DMB) at or below 0.5% sulfur

California Phase II 

  • August 1, 2012, consistent with the 1% sulfur limit specified under the North American Emission Control Area established under the International Maritime Organization.
  • January 1, 2014** Marine gas oil (DMA) or marine diesel oil (DMB) at or below 0.1% sulfur

* The marine gas oil (DMA grade fuel) sulfur limit will be reduced from 1.5% to 1%.

**This is one year prior to IMO regulation for 0.1% Sulfur Fuel in January 1, 2015

An analysis of industry operations and conditions suggests the shipping community may respond to the new regulations in a variety of ways, especially along the California Coast.

The IMO 1.0% sulfur ceiling can be achieved by burning Heavy Fuel Oil (HFO) if the oil refiners recognize a market for this fuel. Unfortunately they continue to add capacity for converting relatively low-value HFO into higher-value distillate. At present, most of the ships now engaged in international commerce regularly burn HFO with sulfur content not to exceed 3.5% because HFO is the least expensive fuel on the market as of May 2012 (approximately US$300 less per ton than the distillate fuels).

Ships coming into California are required to burn distillate fuel within 24 miles of the coast. Ships will start carrying three different types of fuel to remain IMO compliant: HFO at 3.5% sulfur, HFO at 1.0% sulfur and distillate fuel when calling California. For ship operators, using 1.0% Sulfur HFO will only increase shipping company expenses by US$50 to US$100 per ton versus US$300 extra per ton for distillate.

By 2015, industry will have to increase carrying capacity for distillate fuel to remain in compliance with IMO mandate. For instance, a 1995-built ship was fitted with Low Sulfur fuel tanks that had a combined capacity of 800 tons in addition to the regular HFO capacity of 3,500 tons for continuing a voyage. Low sulfur tanks can easily be converted to carrying distillate.

Considering that the number of containership/bulkers exceeds demand for cargo carriers at this time, retrofitting these ships with expensive stack scrubbing technology to reduce sulfur dioxide (SOX) and particulate matter (PM) does not appear to be an option within the various trades. If ships are already operating at close margins, industry asks, “why invest in the stack technology?” New builds could institute this newer scrubbing technology without the extra expense related to shuffling ship schedules and possible chartering issues.

Another option blends fuels (HFO with distillate) to achieve the 1.0% sulfur, but it has some challenges. First, compatibility of the fuels could keep the ship’s engine from achieving the 1.0% Sulfur spec by MARPOL. Secondly, the record keeping needed to show compliance could prove daunting. According to MARPOL, the ships must have analysis specifications of the fuel onboard. The ship will have sample analysis specifications of the HFO and sample analysis specifications of distillate, but it will not have a sample analysis of the mixed fuel being utilized or burned. Achieving the precision in records kept to the standard required for MARPOL documentation would be extremely challenging. Any inaccuracies or mistakes could jeopardize a ship’s International Air Pollution Prevention (IAPP) certification.

Liquefied Natural Gas (LNG) maybe the way of the future, except the future is not here yet! Not to mention, there is a lack of infrastructure for supporting the widespread use of LNG for ship fuel.

Looking ahead to 2015 and the requirement for 0.1% sulfur within 200 miles of the coast of North America, 0.1% HFO does not exist and ships will have to burn distillate to remain in compliance which may require segregating tanks for increased capacity to burn the IMO treaty mandated 0.1% sulfur fuel or Ultra Low Sulfur fuel in 2015.

The fuel change 200 miles out has additional effects. Depending upon the engine wear and engine type, ships may have to use different cylinder oil and or change lubrication feed rates. Usually ships use Total Base Number (TBN) 70 oil when operating on HFO, but the manufacturer B&W recommends changing to TBN 40 when operating more than one (1) week on Low Sulfur Fuel when sulfur is less than 1.5%. So to remain in compliance burning 0.1% sulfur fuel, company protocols must now address changing cylinder lube oil to limit excess wear on the engine. With computer-controlled lubricators, this will be much easier than changing the feed rate on an older ship that requires a labor-intensive manual change of feed rates. Opening up or segregating lube oil tanks to carry another lube oil means more piping, more retrofitting, more expense.

California experienced routing issues after the implementation of the LSFO requirements took effect. In 2009, ships coming to the harbors of Los Angeles/Long Beach took a route south of the Santa Barbara (SB) Channel Islands when coming from Asia to transit through the US Navy Pacific Missile Test Range in order to postpone fuel switching.

In December 2011, the California Air Resources Board (ARB) expanded the 24 mile zone to reference the islands and rocks off the coast. This extended the compliance zone for burning distillate, and more ships transited through the SB Channel than past it.

When the 2015 ECA comes into effect, California may see ship routing change once again. Ships will return to transiting the Pacific Missile Test Range. If a ship is on a Great Circle course (course line intersects two lines of longitude or latitude at different angles) from Japan and transits the SB Channel, it will have to burn the more expensive distillate longer. Operators can achieve significant fuel savings by transiting the missile range by picking a waypoint directly west of LA/LB Harbors and proceeding via a rhumb line course (course angle crossing two lines of longitude or latitude at same angle). It would be around 50 miles longer but the ship would be burning the more expensive distillate a shorter time at a cost of adding only two to three hours to the transit.

The international communities affected by the new IMO regulations have the opportunity to anticipate and prevent issues California experienced. California analyzed the difficulties distillate created and developed guidelines to help ship operators and engineers prevent and manage loss of propulsion incidents.

Guidelines for Ships Utilizing Low Sulfur Distillate Fuel Oil to Comply with North American ECA (after August 1, 2012 if distillate is used or January 1, 2015 when mandated): Initial Entry
For vessels intending to enter the Emissions Control Area for the first time, the state of California advises the crew should conduct a “Trial” (actual) fuel switching within 45 days prior to entering ECA waters. Run main and auxiliary engines no less than four (4) hours on LSDFO. This will help identify any specific change over or operational issues or problems.

Repeat and Initial Entry
Part One, Training:

  • Within 45 days prior to entering ECA Ports it is strongly advised ship engineers should exercise:

A. Operating the main engine from the engine control room.
B. Operating the main engine from engine side (local).

  • Crew should become familiar with “Failure to Start” procedures while maneuvering and establish corrective protocols for “Failure to Start” incidents.

Part Two, While Underway after Fuel Switching Completed (HFO to Low Sulfur Distillate):

  • Ships should ensure one of the senior* engineering officers is in the engine control room while the vessel is in pilotage waters and be: 
A. Able to operate the ship main engine from the engine control room.
B. Able to operate the ship main engine from engine Side (Local).
*Special Attention to International Standards of Training, Certification and Watchkeeping (STCW) Rest Requirements

Part Three, Engine Guidelines:

  • Consult engine and boiler manufacturers for fuel switching guidance
  • Consult fuel suppliers for proper fuel selection.
  • Exercise strict control when possible over the quality of the fuel oils received.
  • Consult manufacturers to determine if system modifications or additional safeguards are necessary for intended fuels.
  • Develop detailed fuel switching procedures.
  • Establish a fuel system inspection and maintenance schedule.
  • Ensure system pressure and temperature alarms, flow indicators, filter differential pressure transmitters and other crucial instruments are all operational.
  • Ensure system purifiers, filters and strainers are maintained.
  • Ensure system seals, gaskets, flanges, fittings, brackets and supports are maintained
  • Ensure that the steam isolation valves on fuel lines, filters, heaters etc. are fully tight in closed position while running on Low Sulfur Distillate Fuel Oil.
  • Ensure that the fuel oil viscosity and temperature control equipment is accurate and operational.
  • Ensure detailed system diagrams are available and engineers are familiar with systems and troubleshooting techniques. Senior engineering officers should know the location and function of all automation components associated with starting the main engine.

Since publicizing the guidelines and working with mariners, especially those visiting California for the first time since the implementation of the low sulfur regulations, California is still working to decrease LOP incidents and has seen some progress in types of LOP incidents. This experience may serve ships utilizing distillate fuel to comply with the Emission Control Area regulations after August 1, 2012 or after January 1, 2015 when mandated, by helping ships to avoid loss of propulsion from fuel switching and the accompanying potential of spilling oil from allision, collision or grounding!

Capt. Jeff Cowan sailed aboard various containerships as Master, capping a 35 year seagoing career. He now works for the State of California, Office of Spill Prevention and Response where his experience at sea and onboard vessels helps California make sound recommendations to industry. Cowan has two sons, one graduated from and the other attending his alma mater, California Maritime Academy.

Port of Ridgefield Sells Acreage

The Port of Ridgefield, located in southwest Washington state, is selling 5.6 acres to an Oregon company that says it plans to build an 80,000-square-foot steel processing, assembly and storage plant.
The port announced July 20 that it was selling the acreage for $904,000 to Portland-based steel manufacturer Alliance Industrial Group.

Under the terms of the sale, Alliance will pay the port $90,400 when the sale is closed, then make monthly payments over 25 years to pay off the remainder of the cost of the parcel, which is located near the port’s industrial park.

Alliance says the new facility will store, process, assemble and coat steel products for various customers throughout the western U.S., including industrial plants and transportation hubs. The company says it expects to employ up to 160 employees at the new site, which is expected to be operational by July 2013.

The Port of Ridgefield, which covers about 57 square miles, or roughly 36,480 acres, sits in the northern section of Clark County in southwest Washington State. It’s a few miles north of Portland, Oregon and about a two-and-a-half hour drive from Seattle, which is 160 miles to the north.