Friday, August 3, 2012

Deal Signed for Oregon Coal Export Barges

One of numerous coal export projects proposed for the Pacific Northwest took a step forward this week as the Port of Morrow, Oregon signed letters of intent with two manufacturing companies to build 20 barges that would be used to aid in the export of coal from Oregon to Asia.

Under the agreements, Gunderson Marine and Vigor Industrial would earn more than $75 million to build the barges for coal mining and export company Ambre Energy.

“We need projects like this in Oregon,” Gunderson CEO Bill Furman said. “This is an amazing opportunity.”

The so-called Morrow Pacific Project, which still requires financing and permits, calls for coal to be imported from Montana and Wyoming via railcars, to a transloading facility at the Port of Morrow.

It would then be loaded onto the enclosed barges and shipped down the Columbia River to the Port of St. Helens, where it would be loaded onto cargo ships bound for Japan and other Asian countries.

The plan is one of half a dozen coal export projects proposed for at or near ports in Oregon and Washington, including at the Port of Longview, where Millennium Bulk Terminals has applied for permits to build a $600 million terminal in a bid to become one of the largest coal exporters in North America. Coal companies have also submitted permits to build export terminals at or near Port Westward near Clatskanie and Port of Bellingham. Two other proposals have surfaced in Coos Bay and Hoquiam.

There’s been opposition to some projects by various environmental groups worried about the potential of escaping coal dust, but supporters cite the local and regional jobs that would be created among the reasons to move forward to the projects.

Hundreds of local workers are expected to be employed during construction, according to the project applicant, Ambre Energy.

In a prepared statement released July 30, the two contracting companies said that Gunderson Marine would be paid more than $55 million to build 15 of the barges, while Vigor Industrial would receive more than $20 million to build five barges.

Ambre Energy says it expects construction of the barges to begin by mid-2013.

Hanjin to Resume Port of Portland Calls

After a hiatus that has lasted a month so far, the Hanjin shipping company is expected to resume regular calls at the Port of Portland, Oregon starting this weekend.

“We are very pleased to welcome Hanjin’s container service back to Portland,” Sam Ruda, the chief commercial officer for the Port of Portland, said. “The arrival of the Mundra will certainly assist the process of restoring confidence for all industry stakeholders.”

Hanjin Shipping suspended calls at the port in June as a response to an ongoing labor dispute involving two unions, the International Longshore and Warehouse Union and the International Brotherhood of Electrical Workers.

The conflict goes back to earlier this year, when the ILWU began insisting that its contract with the Pacific Maritime Association requires the terminal operator to hire longshore workers to handle the plugging and unplugging of refrigerated containers at Terminal 6, work that until recently had been performed by the IBEW.

Although the case is still working itself out in the legal system and is anticipated to continue for the next several months, the Hanjin Mundra is expected to arrive at Terminal 6 sometime Sat. Aug. 4.

The labor issues have resulted in fewer vessel calls, affecting the flow of containerized cargo not just at the port, but in the entire region. In June, a noticeable drop in productivity began, which the container operator, ICTSI Oregon, and other stakeholders labeled a work slowdown by the ILWU.

Although the union denied it was engaging in a slowdown, a federal judge in July issued an indefinite injunction banning slowdowns pending the results of an investigation on the matter by the National Labor Relations Board.

Hanjin, which is Portland’s largest international carrier, isn’t the only company to bypass the port in recent weeks. Hapag-Lloyd bypassed Portland twice, but has since resumed its service on a week-to-week basis. Another carrier, Westwood Shipping, has maintained its monthly service to the port.

US Senators Urge End to LA/Long Beach Labor Dispute

California’s two US senators, Barbara Boxer and Dianne Feinstein this week urged an end to a contract dispute that’s been ongoing for two years between labor and employer groups at the ports of Long Beach and Los Angeles.

The dispute involves a local clerical unit of the International Longshore and Warehouse Union and the Los Angeles/Long Beach Harbor Employers Association. The two sides have been far apart in contract talks, which have been ongoing since before the contract between the employers’ group and the Office Clerical Unit expired in 2010.

“With the fragile state of California's economy and growing competition from other US ports, it is essential that both parties reach an agreement that will protect these important jobs and allow the ports of Los Angeles and Long Beach to continue operating without disruption,” the senators wrote in a letter that was delivered July 31 to the union and the employers association.

The union opposes technology that would allow customers to directly access booking information, saying it could lead to the outsourcing of jobs; the employers’ group, on the other hand, says implementation of new technology is needed to improve efficiency.

The weighing in by the senators is a sign that the prolonged dispute could come to a head soon via a strike or work slowdown. Although the clerical unit only has about 1,000 members, any picket lines established would likely be honored by the parent ILWU organization, which could cripple the ports.

Port of Astoria in Financial Peril, Audit Says

An audit has shown that the Port of Astoria has been losing about $1 million annually in recent years, according to a new investigative report by the Daily Astorian newspaper.

The audit, which was conducted by West Linn, Oregon-based Merina & Co. concluded that the port is still losing money, even though revenue has been rising faster than expenses, the paper said in a story published in late July as part of an investigative series. The reasons for the financial downturn include heavy investment in upgrades and expansion, as well as expensive legal battles.

Most significantly, after the port invested heavily in upgrades to a pier for export company Westerlund Log Handlers, the market for logs to Asia dropped significantly. About four months went by last fall without a single ship coming in, according to the newspaper.

Also, the port spent more than half a million dollars over a four-year span, according to port finance manager Colleen Browne, in battles over various issues, including with the developer of a proposed natural gas terminal, litigation against the port’s former attorney and with the Bank of Astoria over offices.

Tuesday, July 31, 2012

FIDLEY WATCH: Independence

With a (symbolic) unanimous vote, the Seattle City Council on May 29th decided to oppose the development of all future coal export terminals within the Pacific Northwest, saying that the “at least half-dozen
proposals” in development would cause too much environmental damage.

“This goes against what we stand for from a climate change standpoint,” councilman Mike O’Brien said regarding the proposed terminals.

One estimate says that if all the facilities are built, they’d move at least 100 million tons of coal annually throughout the Pacific Northwest and bring hundreds of jobs to the area, as well as much needed tax revenue to local governments.

While Seattle is the largest city so far to formally oppose building coal terminals, it has no actual power to influence the terminal development, and none of the proposed terminals is anywhere near Seattle.

There may be elected officials in cities across the US who are less engaged in the performance of their mandated duties than the Seattle City Council, but none can possibly be as proud to demonstrate that shortfall to their constituents.

Now imagine a group more than 21 times larger than the Seattle City Council that actually has the power to make and enforce international law, and you get an idea of how the 193 member states of the UN would administer US resources under the Law of the Sea treaty.

Last month the Wall Street Journal ran an editorial signed by five former Secretaries of State – Henry Kissinger, George Shultz, James Baker III, Colin Powell and Condoleezza Rice – who were hoping to persuade readers that the US should ratify the Law of the Sea treaty, formally known as the United Nations Convention on the Law of the Sea (UNCLOS).

UNCLOS has been percolating in the UN since 1956, largely as an employment program for bureaucrats seeking to aid in the redistribution of the world’s wealth through central planning. Whatever reasons the current signatories have for jumping aboard don’t apply to the US, which, has good reasons not to.

As Ronald Reagan said in 1978, no national interest of ours “could justify handing sovereign control of two-thirds of the Earth’s surface over to the Third World.” By advocating for US ratification, the aforementioned Secretaries would do just that, and worse. Their endorsement of UNCLOS would have:

Russia determining where we can run our icebreakers across the Arctic.

China should having a say in how container ships cross the ocean, and whether their routes take them closer to US ports or those of our Canadian or Mexican rivals.

Saudi Arabia helping decide whether we can explore for oil in the Chuchki Sea.

Iran helping determine how we deploy our Navy.

The Norwegians, Japanese and Russians controlling our fisheries.

In 1983, President Reagan proclaimed the sovereign rights and jurisdiction of the United States of America within an Exclusive Economic Zone, extending 200 nautical miles from the shoreline. (That same year, perhaps not coincidentally, Richard H. Philips started this magazine to serve those vessels, companies and families that were economically advantaged by the President’s proclamation.)

The United States is unique in many ways, but foremost is our generous seacoast, which gives us access to trading partners across the Atlantic, the Pacific, the Gulf of Mexico and the Arctic Ocean, as well as the international waters of the Great Lakes. US ratification of UNCLOS would cede management of our most valuable asset – our maritime port infrastructure and access – to a disparate group of countries, many of which are landlocked and most of which do not have our best interests at heart.

This month we celebrate our independence from a ruler who wished to impose his will on us from across the sea. Why would we give away that for which our forefathers fought so bravely?

Ratification of UNCLOS would be a huge mistake for our country, and one that would be difficult to undo. A cursory glance at another well-known collaboration, the Euro, should be all the incentive this country needs to stay well away
from UNCLOS.

Chris Philips, Managing Editor 

FMC Releases Seaport Competition Investigation Study Results

A new study by the US Federal Maritime Commission has found that despite previous suggestions to the contrary, carriers shipping cargo through Canadian and Mexican ports do not violate any US law, treaty, agreement, or FMC regulation.

“We identified a situation in the Pacific Northwest, even reaching southward into California, whereby cargo movements through certain other parts of our border are putting these ports at a strong competitive disadvantage,” FMC chair Richard Lidinsky wrote in a foreword to the report. “However, in the supply chain of American international waterborne commerce we oversee, US shippers violate no FMC law or regulation by using Canadian or Mexican ports.”

The report, which is entitled “Study of US Inland Containerized Cargo Moving Through Canadian and Mexican Seaports” and was issued July 27, comes eight months after the FMC launched an inquiry into whether  American policies are causing an erosion of container traffic at ports on the US West Coast.
Numerous factors account for why shippers elect to use ports in Canada and Mexico, according to the report, including overall shipment savings, risk mitigation through port diversification, perceived transit time benefits, avoidance of the US Harbor Maintenance Tax.

The maintenance tax is a US-only per-container federal fee, collected by American ports on behalf of the federal government, based on a percentage of the cargo’s value. The money collected – an average of $109 per forty-foot equivalent unit, according to the FMC is distributed to ports for dredging work and other improvements.

Since the fee’s not charged in Canada or Mexico, it has given rise to the belief by some officials that the tax could be causing diversion of cargo to non-US ports. In recent years, there’s been a steady increase in the amount of US-destined cargo moving through Canadian port Prince Rupert and the Port of Lázaro Cárdenas in Mexico.

The study confirms previous estimates that a significant amount of containerized cargo imports moving through the Ports of Oakland, Seattle, Tacoma and Portland on the US West Coast may be vulnerable to Canada routing.

The study says there are many options available to Congress should it decide to revise or replace the current maintenance tax structure.

“It is clear that HMT is one of many factors affecting the increased use of foreign ports for cargo bound for US inland destinations,” the report states in part. “While a user fee is necessary for US ports to grow, the number of proposals in both the House and Senate as well as from other sources, suggest that amendment to the current HMT structure should be given consideration.”

Among the ideas on the table are a joint proposal by the ports of Long Beach, Los Angeles and Tacoma to reform the HMT to allow for more efficient use, and other proposals have been introduced as legislation in Congress.

All would restructure the maintenance tax in various ways, and in particular reform the collection process.

County Council Moves Forward with Disputed Arena Plan

The King County, Washington Council on July 30 voted to move ahead with plans for a new sports arena that the Port of Seattle has come out against.

The contract with investor Chris Hansen’s ArenaCo was approved on a 6-3 vote. The plan now goes back to the Seattle City Council for a vote.

Under the arena plan, which was announced May 16, developer Chris Hansen would build a $490 million sports and entertainment complex in SoDo. Under the agreement, the city would buy the land from Hansen for up to $100 million and Hansen and ArenaCo would privately finance the arena’s construction.

But the Port of Seattle maintains that the proposed project, which consists of building an 18,000-seat hockey and basketball arena in Seattle’s SoDo neighborhood, in the Industrial District, would conflict with the port’s own Century Agenda, under which it plans to generate 100,000 new jobs for the area within the next 25 years.

Under the agreement, Hansen’s group would provide about $290 million in funding the cost of the arena, while Seattle would commit up to $120 million and King County would contribute up to $80 million.

However, the port has previously cautioned the City of Seattle and King County in a letter that the project “could weaken port/industrial businesses.”

Port of Los Angeles Seeks Real Estate Developer

The Port of Los Angeles has sent out a request for proposals for the development of a 30-acre parcel of land on the waterfront.

“We are investing hundreds of millions of dollars in public waterfront infrastructure along 16 miles of community-adjacent port property at the Port of Los Angeles,” port Executive Director Geraldine Knatz said.

The development site includes 3,000 linear feet of rare water frontage and 375,000 square feet of retail and tourism-related entitled uses and is located at the south end of the Harbor (I-110) Freeway.

The parcel, which was originally developed as Ports O’ Call Village in the 1960s, is located within walking distance of the port’s World Cruise Center, which sees hundreds of thousands of cruise travelers each year, and the USS Iowa battleship museum.

The port says it plans to select a master developer to carry out a comprehensive redevelopment of the property and enter into a long-term ground lease, and that applicants will be reviewed based on their development vision and strategy for the site, their experience in developing premiere and unique commercial real estate projects and experience working with public agencies.

Developers interested in responding can attend a pre-proposal meeting at 2 p.m. Wed, Aug. 8 at The Plaza at Cabrillo Marina, 224 Whalers Walk, San Pedro, CA, 90731. The port’s request for proposals and project brochure is available at Document1

Port of Coos Bay Gets New COO

Kathy Wall, the marine facilities manager and harbormaster at the Oregon International Port of Coos Bay is being promoted to the position of chief operating officer, according to the port’s new CEO, David Koch.

Koch, who confirmed the news with Coos Bay World newspaper July 30, said that since joining the port in 2006, Wall has held a variety of positions that make her “uniquely suited” to the COO job.

During her six years with Coos Bay, her duties have included economic development and marketing of industrial and marine industrial properties, along with project management in dredging and waterway permitting issues.

She has also served as the port’s representative regarding ocean policy issues including marine reserves and wave energy and has worked with port management on infrastructure projects, marketing, dredging issues and waterway permitting.

She inherits her new job from Koch, who was officially promoted to CEO in June. He joined the port as COO in October 2010. Prior to joining Coos Bay, he was one of the port’s contract attorneys with the Stebbins & Coffey law firm.

He had been named the port’s interim CEO in December 2011, replacing Jeff Bishop, who resigned last November after seven years in the position in order to accept a position as city manager of the town of Blanchard, Oklahoma.