Friday, September 21, 2012

Gulf Coast Ports Focus South

By Jim Shaw 
Pacific Maritime Magazine September 2012

Ports along the Gulf of Mexico are continuing to focus on developments to the south, in particular the new locks at the Panama Canal, due to be completed in early 2015, and the expanding economies of Latin America. While the enlarged locks at Panama will route larger container ships through the Caribbean they will also allow bigger bulk carriers to load at Gulf ports for Asia. This is expected to lure some Asia-bound bulk commodities currently moving to West Coast ports by rail south to Gulf gateways for export. In anticipation of this shift several new high-capacity floating cranes are being acquired by Mississippi river-based midstream operators while new bulk terminal developments are underway in Louisiana, Texas, Mississippi and Florida. Expanded container traffic is also being eyed, particularly by the ports of Tampa, Mobile, New Orleans and Houston, while cruise ships have not been forgotten. The latter vessels, in fact, are finding a growing customer base in the Gulf area as new facilities are developed and the destruction wrought by hurricane Katrina of 2005 is largely repaired. This will mean addition business for such ports as Tampa, New Orleans and Galveston as cruise ship operators reposition larger vessels to take advantage of expanding demand.

Tampa Bay
On the eastern fringe of the Gulf, in Tampa Bay, Florida’s Port Manatee has inaugurated cargo operations at its new Berth 12. Port Manatee Executive Director David L. McDonald said the 1,600-foot-long berth can accommodate Panamax-sized vessels and will eventually be joined by an adjacent 52-acre container terminal. The latter will be developed to attract new cargoes expected after completion of expansion work at Panama. Berth 12 has a 41-foot depth of water alongside and is served by two mobile harbor cranes. The berth and planned box terminal are considered the final pieces of Port Manatee’s 11-year, $200 million port modernization and expansion program. However, while Berth 12 has been completed on time and on budget a second project at the port, covering the development of a new LNG terminal, has fallen well behind schedule. The $850 million Port Dolphin Energy project envisioned the laying of a 36-inch diameter offshore natural gas pipeline in a water depth of 100 feet some 28 miles southwest of Tampa Bay. LNG tankers would connect to the pipeline and send gas into Port Manatee where it would be routed though existing lines for distribution but the sudden wealth in domestic natural gas has dampened demand for the facility. Nevertheless, developers, including Norway’s Höegh group, say the facility may still be completed by late 2016 or early 2017 to bring domestic LNG into Florida from Louisiana and Texas.

Next door in Alabama the Alabama State Port Authority (ASPA) is moving forward with a number of modernization and expansion projects at the Port of Mobile. One of the most important is construction of the Garrows Bend Intermodal Container Transfer Facility (ICTF), a project that, when finished, will directly connect containerized imports and exports from Mobile’s docks to major railroad lines across the country. Earlier this year the US Department of Transportation approved a $12 million TIGER grant for Phase 1 of the project, which is expected to cost over $30 million to fully complete, including site stabilization, a rail bridge, rail tracks and paving.

To be constructed adjacent to APM Terminal Mobile, formerly known as the Mobile Container Terminal, the ICTF will cover 62 acres and have three working tracks, three support tracks and a run-around track, with the total complex capable of handling three unit trains per day.

Another port project, expected to be completed later this month, is the construction of an additional cargo storage area at Pier C North where an existing rail car conveyor pit, transit shed foundation and several unused rail lines have been removed and the site paved over. This is giving the port an additional 244,840 square feet of laydown area for such cargoes as steel beams, hot rolled coils and steel plates. The additional area is needed to support nearby steel mills operated by Germany’s ThyssenKrupp that are beginning to move more cargo through the port, with steel volume more than tripling to 3.6 million tons over the last two fiscal years.

St. Bernard
Looking at expanding dry bulk commodity shipments off the Gulf, Associated Terminals LLC at St. Bernard, Louisiana has taken delivery of its seventh barge-mounted Gottwald crane for river stevedoring work after having the 8400B model unit installed on a barge fabricated by Conrad Industries. Associated has been using its fleet of floating cranes, including six 6400B models, for midstream cargo handing operations between mile markers MM 56,8 and MM 141 on the lower Mississippi. The 8400B model 8, which is of higher capacity than the earlier 6400Bs, will be used to transship dry bulks such as ores, coal, grain and fertilizers between seagoing vessels of up to 1,150 feet in length and inland waterway barges.

According to supplier Demag Cranes the 8400B can cope with loads of up to 100 tons while having an 63-ton grab curve. Depending on operating conditions the barge-mounted unit can handle up to 1,850 tons of dry bulk materials per hour.

The crane brings to 15 the number of Gottwald cargo handling cranes working on the lower Mississippi, with another 8400B model to follow shortly. This unit, to be delivered by Demag to Impala Warehouses LLC, will be used at the Burnside Terminal operated by Impala in Ascension Parish, Louisiana where it will predominantly handle bauxite and coal.

South Louisiana
In Louisiana’s St. James Parish the Port of South Louisiana is moving ahead with plans to build a new container facility on the Mississippi at the Bonnet Carre Spillway between New Orleans and Baton Rouge. The port’s engineering consultants, URS, have been studying a site near the Spillway where a 2,000-foot long dock and adjacent container yard and intermodal rail facility could be constructed for approximately $760 million. Additional construction phases would bring the total project cost to about $1.3 billion. The port is seeking $16.8 million in startup costs from the state, but port officials say most of the project would be financed through private investors. Joel T. Chaisson, the port’s executive director, said URS picked the Spillway site because of its proximity to the Kansas City Southern and Canadian National railroads as well as to Interstate route 55.

The port had earlier been in discussions with the US Army Corps of Engineers about building a dock across the front of the spillway but the current proposal places the dock in an area known as the Forebay where it wouldn’t impede water flow through the spill structure. Another advantage of the latest site is that it is adjacent to an existing anchorage on the Mississippi, although there is some local concern about the impact the terminal would have on the nearby Montz Park, which lies within St. Charles Parish.

New Orleans
The Port of New Orleans has completed a major expansion of its Napoleon Avenue container terminal while also consolidating two small cruise terminals to form the new $20 million Julia Street Cruise Terminal. Improvements at Napoleon Avenue, now the port’s premier container operation, include the addition of two new gantry cranes capable of a 19-row-across reach and an additional 4.5 acres of marshaling area. This gives the facility a capacity to handle about 640,000 TEUs per year and represents a $36.4 million investment. The box terminal is operated by Ports America and New Orleans Terminal, a joint venture established between the Mediterranean Shipping Company (MSC) and local terminal operator Ceres Gulf Inc. Besides MSC, a number of major ocean carriers, including Hapag-Lloyd, CMA-CGM, Seaboard Marine, Maersk, CSAV and Zim, will be making use of the terminal on a regular basis.

Down river from Napoleon Avenue the newly consolidated Julia Street Cruise Terminal is expected to host nearly 1 million cruise passenger embarkations and disembarkations annually while serving as a seasonal homeport for Royal Caribbean International and Norwegian Cruise Line. At the same time, the port’s nearby Erato Street Cruise Terminal, which opened in 2006, is continuing to serve as a year-around base for Carnival Cruise Lines.

Another port looking at the expansion of cruise facilities is the Port of Galveston, Texas, which operates cruise berths at Pier 25 and Pier 27 but needs additional capacity to support five ships that will be sailing from the port by the end of the year. Two of these, Carnival Cruise Lines’ Carnival Magic and Carnival Triumph, will be sailing year-round while Royal Caribbean International’s Mariner of the Seas will operate out of Galveston only during the winter months. However, next month Disney Cruise Line will position its Disney Magic to the port while Princess Cruises will launch winter sailings with its 113,000-gt Crown Princess starting in December. Finding space for all these ships is becoming a problem and some lines have already had to modify their schedules to avoid having three ships in port on the same day. In June, Galveston’s Board of Trustees approved an agreement between Galveston Port Facilities Corporation and the design and consulting firm of CH2M Hill covering a conceptual study of how to host additional ships on the same day.

Last year, Galveston spent about $12 million on improvements to its facilities used by Carnival so that it could handle the line’s larger and longer vessels. Since then, TMP-PRISMA Marina Management LLP, which is affiliated with the Texas, Mexico & Pacific Railroad, has indicated it would like to form a public/private partnership with the port to develop about 96 acres of port-owned land on Pelican Island for the development of a new combination cruise and cargo terminal. Land on the island has also been earmarked for the potential development of a container terminal by the port as well as a large dry bulk handling facility by private investors.

Another Texas port looking at new terminal development is the Port of Freeport, which enjoyed its best fiscal year ever in 2011 when total cargo volume rose to a record 2,102,431 tons, up a remarkable 16.3 percent from the port’s previous high posted in fiscal 2010. At the same time, Freeport’s total operating revenue rose 10.9 percent to a new record of $15.6 million. This has been during a period when many ports in the US and abroad have been witnessing declining volumes and revenues. Among significant contributors to Freeport’s banner year was drilling company Transocean Ltd, which used the port as a base for shuttling materials and personnel to and from its operations in the Gulf of Mexico.

Freeport has also continued to maintain its position among the top three US gateways for banana imports while moving steadily into the handling and storage of wind energy components. The port is currently moving forward with its Berth 7 construction project, considered a key element in the development of the new Velasco Terminal, which at full build-out will feature three deepwater berths and 90 acres of backlands.

The terminal is to benefit from a channel widening and deepening program expected to get underway next year. In April, Phyllis Saathoff, the port’s managing director since 1994, was named interim executive director and CEO following the retirement of A.J. “Pete” Reixach Jr. after 20 years of service. Pete has since been elected chairman of the American Association of Port Authorities (AAPA) board.

Corpus Christi 
In western Texas, the Port of Corpus Christi has entered into a sales agreement with Oxy Ingleside Property Holdings, LLC, a wholly owned subsidiary of Occidental Petroleum Corporation (Oxy), for the purchase of approximately 816 acres of the former US Naval Station Ingleside and more than 460 acres of adjacent port-owned property for $82.1 million. Closing on the sales agreement, which includes a separate $7 million bid for the Naval Base’s 100-acre “Campus” section, is expected to take place shortly.

The pier at the naval base site was earlier sold to Flint Hills Resources for $8.5 million. Oxy is the third-largest US oil and gas company by market capitalization and its wholly-owned subsidiary, Occidental Chemical Corporation, has operated a chemical plant at Ingleside since 1987.

The new Ingleside acquisition will allow an expansion of the company’s current operations in the area and may include the construction of infrastructure that would allow liquefied petroleum gas (LPG) to be loaded onto barges at the site. In addition to the Oxy agreement the port is continuing its negotiations with Ambre Energy and Cline Mining Corporation concerning the possible construction of a new coal export terminal within the port’s 1,100-acre La Quinta Trade Gateway complex. If built, this facility would have a capacity to move more than 20 million tons of coal annually. La Quinta is also being marketed by the port as a future container terminal and industrial park site. To streamline rail operations at the site the port will use a $10 million federal grant to partially fund an $18 million modernization and expansion of the Nueces River Rail Yard. Last year Corpus Christi handled over 80 million tons of cargo, the bulk of it petroleum products.

Seattle Port Commission Urges Delay
on Arena Action

In the wake of a tentative deal that could see a sports area built in an area near the waterfront, the Port of Seattle is urging public officials to delay taking action.

 In a statement released after the Council confirmed that it had come to an agreement to support the building of an arena in the industrial SoDo area, the Port Commission first reiterated its interest in working with the city to site a new arena. But the statement went on to urge the city council to “delay action while we review the proposal carefully.”

In particular, the commission took issue with a recent revision to the plan that includes a $40 million road improvement fund. The fund, which would be covered by tax revenues, would go toward the study and prioritization of area transportation improvements.

The city has also said that additional funds might be secured from the port and federal government.

“While the Port of Seattle is a stakeholder in statewide freight mobility and transportation efficiency, building roads and bridges is not core to our mission. Before the Council approves a plan that might rely on transportation funds from the Port of Seattle, please understand that through our 2020 plan of finance, the port does not now have any uncommitted dollars for new transportation projects.”

The Commission also took issue with an appearance that possible alternative sites were not reviewed closely enough, if at all.

“The Commission places a high priority on a full review of alternative sites before you make a commitment for the project. There are references to reviews of alternative sites, but it appears the MOU remains structured around the SoDo site.”

The Seattle City Council announced Sept. 11 that it had reached a tentative agreement with developer Chris Hansen to build a $490 million basketball and hockey arena. The Metropolitan King County Council, which initially approved the deal in July, is expected to consider the revised version of the deal, which includes the transportation fund, at either its Oct. 8 or Oct. 15 meetings.

POLB’s Berth 55 Tenants Get a Reprieve

A plan to evict a fish market, sport fishing company and about a dozen other businesses at the Port of Long Beach’s Berth 55 in order to make room for the relocation of a city fire station has been temporarily set aside by the Long Beach Board of Harbor Commissioners.

The port, which serves as the landlord for the waterfront property, had previously informed Long Beach Sportfishing, Berth 55 Fish Market & Seafood Deli and other businesses that they might have to move so that the city and port could relocate Long Beach Fire Dept. Station No. 20 to the site.

The station’s current location is in the path of the $1 billion replacement for the Gerald Desmond Bridge, which begins construction next year. The new fire station would be combined with a facility to be used by the Long Beach Police Dept.

In April 2012, the Port notified the Maehara family, the operators of the Berth 55 Fish Market & Seafood Deli, that they had 180 days to vacate the property, a process that the parties had agreed to more than a year earlier. Because the port had intended for some time to consider other uses for the site, the port didn’t renew its lease with the Maeharas at the end of 2008.

However, the Maeharas have been allowed to stay on a month-to-month basis, and at a Sept. 17 meeting, the Long Beach Harbor Commission decided to set aside the April decision that would have had the occupants vacate the property by Oct. 15.

“We will do an environmental analysis of the proposal for a new fire and security center at the Berth 55 site,” Commission President Susan E. Anderson Wise revealed. “In the meantime, the 180-day notice has been rescinded and the restaurant and sport-fishing vessels can stay.”

San Diego to Welcome Inaugural Disney Ship

The inaugural visit of the 2,700-passenger Disney Wonder cruise ship to the Port of San Diego is scheduled for the morning of Fri., Sept. 21, 2012 at the Port Pavilion on Broadway Pier. The visit coincides with the start of the 2012-2013 cruise season.

To commemorate this inaugural visit, a ceremonial plaque exchange will take place onboard the vessel at 11:30 between Disney Cruise Line Captain Fabian Dib, San Diego Mayor Jerry Sanders and Port Commissioner Bob Nelson.

“We are pleased to welcome Captain Dib, the crew and the passengers of the Disney Wonder to the Port of San Diego,” Board of Port Commissioners Chair Lou Smith said. “We hope they enjoy the region’s many attractions and we appreciate the economic impact this visit brings.”

The Disney Wonder is one of four cruise ships in the Disney Cruise Line fleet. The ship is sailing out of Los Angeles to San Diego as part of special Pixar-themed voyages. This will be the first of four port-of-call visits that the Disney Wonder makes to the Port of San Diego. The vessel returns to the San Diego Bay Sept. 28, Oct. 5 and Oct. 12, 2012.

The Port of San Diego has 85 cruises and more than 270,000 passengers scheduled for calendar year 2012. In early October, the port is scheduled to have two multi-ship days, with three cruise ships in port on Thurs., Oct. 4 and three more on Fri., Oct. 5.

New Port of Portland Commissioner Appointed

The Oregon Senate has confirmed Gov. John Kitzhaber’s selection of businesswoman Linda Pearce as the newest member of the nine-person Port of Portland Commission. She replaces Judi Johansen, who left the board in June.

“As the port continues in its statewide mission to promote cargo and passenger access to regional, national and international markets, Linda will provide valuable insight into the needs of Oregon businesses and the community,” Kitzhaber said in statement released by his office.

Pearce, the chief financial officer for Vancouver, Washington-based fitness equipment company Nautilus Inc., joined the company in August.

She has over 25 years of financial management experience, including an 11-year tenure with Warn Industries, which designs, manufactures and markets a full line of off-road equipment and accessories.

Pearce holds a bachelor of science in accounting and information systems and quantitative analysis from Portland State University and a Master’s degree in business administration from the University of Oregon.

“As a business leader, I understand and appreciate the importance of trade to our regional and state economy,” Pearce said. “As an Oregon native, I have a strong desire to enhance our quality of life. My role on the Port Commission will allow me to make a contribution in both areas.”

Portland port commissioners are unpaid volunteers who are appointed by the governor and confirmed by the state Senate. They serve four-year terms and are eligible to be reappointed to additional terms.

Tuesday, September 18, 2012

Port of Long Beach Monthly Container Volumes Rise

The Port of Long Beach managed to put the brakes on continuing declines in container volumes last month by recording gains in the number of loaded inbound and outbound containers it moved.

Cargo container volumes at port terminals climbed in August, coinciding with the start of the peak season, when shipments begin arriving for end-of-the-year holiday shopping. Imports were up 2.9 percent last month compared to August 2011.

According to port data, terminals handled 274,977 20-foot equivalent container units of loaded inbound cargo last month, compared to 267,198 TEUs in August 2011. The port says the rise in August points to a slight recovery during peak season and the second half of the year.

Exports were also up in August, increasing 5.7 percent to 128,225 TEUs compared to 121,277 TEUs a year ago.

Overall, container volume through the port was up 1.4 percent in August. The total includes imports, exports and empty containers, which declined 4.9 percent. With imports exceeding exports, empty containers are sent overseas to be refilled with goods. With exports up, fewer empty containers moved back to Asia in August.

For the calendar year, overall container volumes at the port are down 4.6 percent, something that Long Beach blames on continuing weakness in the global economy as well as cutbacks in ship calls at the port by several niche vessel operators in late 2011 and early 2012.

Imports are down 4.6 percent and exports down 1.2 percent through August compared to the same period a year ago.

For the fiscal year, which began last October for the port and ends Sept. 30, container traffic is down almost 7.4 percent so far. During the 11-month period, Long Beach moved 5.34 million TEUs, compared to 5.77 million in the same time period during its previous fiscal year.

The volumes of loaded inbound, loaded outbound and empty containers are down 7.2 percent, about six percent and nine percent, respectively, compared with the first 11 months of the last fiscal year, according to port data.

Port of LA Container Volumes Slip in August

For only the second time this calendar year, the Port of Los Angeles saw an overall decrease in container volumes in a given month compared to the same month last year, according to newly-released data.

Despite August being the start of the peak shipping season, traffic was down about two percent at port terminals last month compared to August 2011. Los Angeles experienced nearly across-the-board declines in all categories last month, including the number of loaded inbound and loaded outbound containers.

Imports decreased 4.1 percent, from 376,189 TEUs in August 2011 to 360,762 TEUs this August. Also, exports decreased 10.5 percent, falling from 184,231 TEUs in August 2011 to 164,819 TEUs in August 2012.

Combined, total loaded imports and exports for August decreased 6.2 percent, from 560,421 TEUs last August to 525,581 TEUs in August 2012. Factoring in empties, which decreased 11.2 percent year over year, overall August 2012 volumes – 706,669 TEUs – represented a drop of 2.3 percent compared to August 2011’s 723,170 TEUs.

The only other month so far in 2012 where container volumes were down compared with the same month last year was February, when the port moved just 525,653 TEUs, a 5.27 percent decrease from February 2011.

For the first seven months of 2012, overall container volumes have increased 5.1 percent at Los Angeles, reaching a total of 5.4 million TEUs, compared to the same period in 2011, during which the port moved 5.1 million TEUs.

So far during the port’s current fiscal year, which began in July, traffic is up about 1.5 percent at Los Angeles compared to 2011. The port has shipped 1.43 million containers so far during the two-month period, an increase of over 21,500 from the 1.41 million that were moved during July and August of 2011.

Port of Oakland Traffic Volumes Down in August

The Port of Oakland continued its yearlong rollercoaster of up and down monthly container volumes with another down month in August. The total volume of containers moved last month was about four percent lower than in August 2011.

California’s third-busiest port saw a total of almost 207,000 TEUs last month, a decrease of 4.3 percent from the number Oakland moved during the same month in 2011. It was the fifth month out of eight so far during this calendar year that volumes were down compared with the same month last year.
Oakland saw nearly across-the-board declines in all categories in August, including full exports, full imports and empty exports.

Port terminals moved just more than 70,300 full, imported TEUs during the month, a decline of 7.4 percent compared with August 2011. It imported 81,400 full TEUs, which was a nearly four percent drop from the same month last year.

And although the 22,152 empty TEUs imported represented a 4.8 percent decline from August’s 2011 numbers, Oakland did see an improvement in one category: the number of empty TEUs exported.
Just more than 33,000 empty containers were shipped out from Oakland last month, representing a 2.3 percent increase over August 2011 and continuing a trend of monthly increases in the category dating back to April.

For the calendar year-to-date, Oakland has moved a grand total of 1.55 million TEUs, an increase of 0.2 percent from the same eight-month period in 2011.

POLB Exec Wins CFO Award

Port of Long Beach Chief Financial Officer Sam Joumblat won Chief Financial Officer of the Year honors in the Government Entity category at the Los Angeles Business Journal’s CFO of the Year Awards event on Sept. 12.

The LABJ’s CFO Awards honors top financial professionals in the Los Angeles region for outstanding performance in their roles as corporate financial stewards.

Joumblat, who was appointed CFO in December 2006, oversees the port’s financial responsibilities. Before coming to the port as an employee six years ago, Joumblat worked on financial and revenue audits for the port as a deputy city auditor with the City of Long Beach.

Prior to local government, he spent most of his career in industry. He was a senior manager with the Arthur Andersen accounting firm and worked 15 years with the Atlantic Richfield Co., where he held a number of managerial positions, including supervising internal audit, general accounting, contracting, information technology, health and safety. He began his career as an engineer at Rockwell International, where he worked on the Space Shuttle and other space programs.

Joumblat earned an MBA degree in finance and accounting from the University of Southern California, along with two master’s degrees in mechanical engineering and industrial engineering. He is also a California-licensed Certified Public Accountant and a Certified Internal Auditor.