Friday, January 18, 2013

Groundbreaking Held for LA Rail Yard Project

The Port of Los Angeles broke ground this week on a new intermodal storage rail yard that’s designed to provide staging and storage for trains using the 20-mile Alameda Corridor railroad express line, thereby improving a vital link in the national freight network.

Construction of the $137 million rail project at Berth 200, also known as the West Basin Railyard, is expected to generate about 2,000 direct and indirect jobs. When completed, the rail yard is expected to eliminate about 2,300 daily truck trips from the Long Beach (710) and Harbor (110) freeways, which in turn would help improve regional air quality.

The project will also enable track space at the TraPac container terminal to serve as TraPac’s future on-dock rail facility. Over the next three years, $365 million in rail, roadway and terminal improvements will be completed at TraPac, which is currently the only Los Angeles terminal without on-dock rail.

“In order to stay competitive, we need to continue to make investments, to keep the cargo here, keep the jobs here and keep the Port of Los Angeles the no. 1 premier gateway,” POLA Executive Director Geraldine Knatz said during a Jan. 16 groundbreaking for the project. “It’s going to help us move the cargo more efficiently, it’s going to make the port a better business partner and neighbor to the surrounding community,” she said. “It will also allow us to construct an on-dock rail yard for TraPac. So the one terminal we have that doesn’t have on-dock rail will now have on-dock rail.”

The port is investing $48.37 million in the project and the rail yard has also received $16 million in federal grant money from the US Department of Transportation’s highly competitive Transportation Investment Generating Economic Recovery program known as “TIGER” discretionary grant funding.

Additionally, the port also secured $51.2 million from the State Proposition 1B Trade Corridors Improvement Fund (TCIF) grant administered by the California Dept. of Transportation and $22.1 million from METRO-awarded federal funds.

“This project creates jobs, reduces pollution and makes our city a better place to live, work and do business,” LA Mayor Antonio Villaraigosa said. “The economic and environmental benefits of this investment will be felt across the nation.”

The project will be built in two phases. Phase I includes construction of the new yard, support tracks for the TraPac and China Shipping/West Basin Container terminals, double-track connections to the Alameda Corridor and national rail network and access road improvements. Phase II is due to begin construction later this year and includes final rail network connections and vehicle overpasses to eliminate at-grade crossings for safer, more efficient flow of truck and commuter traffic. Both phases are due to be completed in summer 2014.

The new yard is projected to generate $1 billion in annual state revenues by 2030.

Metro Vancouver Annual TEU Volume Rises

Port Metro Vancouver, the third busiest seaport on the North American West Coast, moved a total of 2.71 million TEUs in calendar year 2012, an 8.2 percent increase from 2011’s 2.5 million TEUs.

Of the 2.71 million, the vast majority, 2.39 were full containerized imports and exports, while the rest were empties. The port saw substantial increases in both the number of containers imported and exported during the year, including a rise of about 10 percent in full and empty container imports.

Over 1.3 million full TEUs were imported during 2012 according to port data, while about 102,000 were exported, representing increases of 9.3 and 18.5 percent, respectively, over 2011 volumes.

Exports also were healthy throughout the year, with about 1 million TEUs being shipped out of Metro Vancouver terminals over the 12-month period, a nearly five percent jump. The number of empty containers exported jumped about 14 percent however, climbing from about 186,700 in 2011 to roughly 213,000 last year.

By tonnage, Metro Vancouver is behind only the port of Los Angeles and Long Beach when it comes to annual container volume for West Coast ports. It’s also the fourth busiest seaport in North America, after LA, Long Beach and New York-New Jersey.

POLB Monthly Container Volumes Up Sharply

The Port of Long Beach experienced a nearly 19 percent increase in the number of loaded containerized imports during December 2012, which was a main factor in the port’s overall jump in 20-foot equivalent units handled during the month compared with the same month a year earlier.

A total of 560,120 TEUs made their way through port terminals last month, a 9.8 percent jump from the 509,957 of December 2011. Of the total amount, 295,579 were loaded inbound containers, an 18.9 percent jump from the previous December, according to newly released port data.

The data also reveals that port’s volume of loaded inbound containers was up about five percent during the month, increasing to 135,561 TEU from December 2011’s 129,243. The one category where there wasn’t a year-over-year increase was empty containers. Port terminals imported and exported 128,980 empty TEUs during the month, a 2.4 percent drop from December 2011’s 132,111 units.

For the fiscal year to date, the POLB has seen across the board increases in volumes compared with the same period the year before. Loaded inbound, loaded outbound and empty container volumes were up 18.1, 13.6 and 2.5 percent, respectively, during the first three months of the year, which began Oct. 1.
On the whole, 1.64 million TEUs were shipped during the time period, a 12.9 percent jump from the 1.45 million that were moved during the same three months during the prior fiscal year.

Port of Oakland Ends 2012 on a Flat Note

Container volumes rose during 2012 at the Port of Oakland, but only just barely. California’s third-busiest port saw a grand total of 2.34 million TEUs during the calendar year, a net increase of just 0.1 percent over 2011.

Oakland saw its volumes seesaw throughout the year, with seven out of 12 months experiencing negative growth compared with the same month the year before. What helped save the port from recording a decline for the year as a whole was a 3.6 percent total increase in volumes in December, including a more than 22 percent jump in empty TEU imports.

But despite the December gains, the port experienced full year losses in two of the four categories it tracks: full imports and full exports. The 792,146 full containers imported represented a 0.6 percent decline from calendar year 2011, while the 986,841 full TEUs exported were a 0.7 percent drop from the same time period.

Additionally, the volumes of empty imports and exports grew by less than three percent each for the year. The 270,712 empty containers imported by Oakland terminals were a 2.4 percent increase over calendar year 2011, while the 294,725 TEUs exported represented a 2.7 percent gain.

Despite the overall flat growth, 2012 was still one of the busiest years on record for the port. Since 1990, Oakland has seen more than 2.3 million TEUs just four times. In addition to last year’s 2.34 million, 2.33 million containers were imported and exported through the port in2011, 2.38 million in 

Tuesday, January 15, 2013

Piracy & Maritime Terrorism: A 35 Year Retrospective

By Captain Keith F Graham

Captain Graham began giving weekend seminars for the California Maritime Academy’s Continuing Education Department to those interested in the maritime matters in 1975, while on leave from the Navy to attend law school. The most popular topic over each sixteen-hour session on everything encompassed by international maritime law was “piracy”.

Over the intervening 35-plus years, the pertinent law has evolved in some respects and changed not at all in others. What follows is the second part of Captain Graham’s own legal “take”, his own opinions, his own view of this precinct of the maritime world. The previous chapters of this series can be found on the web at

In addition to the failures and delinquencies of individual nations, described in previous installments, another legal impediment to expeditious interdiction of pirates is the lack of trust between neighboring countries. Although sharing a seaborne common scourge, coastal nations may default to enforcing their territorial sea claims by refusing to allow the military forces of another to chase and pursue pirates across a national maritime demarcation. There are ample contemporary illustrations where the presence of foreign naval vessels in another’s territorial waters is deemed more abhorrent than the pirates being chased.

As noted, at this time there is a multinational initiative among the world’s navies in fighting pirates. Squarely within their maritime mission and in the best tradition of sea power keeping the world’s sea lanes open, an international naval task force with 25 participating countries patrols in the Indian Ocean and the Gulf of Aden. It is a wonderful international cooperative venture. However, the insurmountable issue is that there are one million square miles of ocean for the 60-90 participating vessels. It may be a rhetorical and provocative question, but how long before the multinational parties now cooperating come to the same policy conclusion of India’s Navy, i.e ., it’s not worth the effort. With only 8 percent of India’s trade carried by Indian-flagged vessels, it’s a cost-benefit decision not to spend limited resources against pirates. With the US-flagged merchant fleet worldwide at only 191 vessels carrying 2 percent of the total world’s tonnage, no GAO-type “dollars and cents” decision would support our military effort to this end. Even though we don’t seem overly concerned about debt & military spending in this country, the fact remains that the United States doesn’t have many vessels regularly at risk off Somalia, and could very well look at India’s posture as a cue. While not meant to be mean-spirited or to offend members of the world’s uniformed sea services, the international naval task force as presently deployed is in my opinion a gesture only. (A thought I have been unable to transcend is why isn’t the international naval task force simply searching each and every vessel coming in and out of Somali waters thereby ultimately reducing the area needing to be patrolled?)

In the passionate legal opinion of one blogger in a New York Times debate, “…one of the oldest and most uncontested precedents in international law is that piracy is a hanging offense. This is a traditional legitimate means of reaction to piracy. All international powers connected with the Caribbean in the 1600’s and early 1700’s executed pirates… This is an example of concrete international law which solved a problem of lawlessness.” Summary execution of captured pirates would probably be the disposition of choice by most of the public. What has changed since the 1600’s? What legal impediments are influencing decision-makers? In short, why is summary justice a non-start?
Going back to UNCLOS III, Article 107 identifies vessels that are entitled to seize on account of piracy and states:

“A seizure on account of piracy may be carried out only by warships or military aircraft, or other ships or aircraft clearly marked and identifiable as being on government service and authorized to that effect.”
It is very clear that the world consensus on that point was that public craft, i.e ., warships and other military aircraft or vessels in government service, were solely sanctioned. Why? The answer involves several related issues. First, merchant vessels' crews are untrained to handle weapons, especially weapons capable of responding to sophisticated firepower brought to bear by pirates using ransom money to purchase weaponry like rocket-propelled grenades and AK-47s. Secondly, the worldwide merchant marine industry does not want their mariners to be armed, even if that would be the option most likely selected by the world’s thinly stretched navies and their commanders. People going to sea commercially want protection, not to become combatants themselves. Mariners are few in number aboard modern ships and the trend in manning is always to reduce, not add more to the ship’s crew complement. Next, arming merchant vessels arguably changes their status under international law. If serving as gun platforms, merchant vessels could assume the attributes of a warship in the perspective of an anxious coastal nation and might then jeopardize their sacred right of innocent passage through that nation’s territorial waters particularly if transit was interrupted to interdict pirates. Would such vessels also then be required to engage in hot pursuit of a pirate vessel or utilize the UN provided authority to go after pirates into the national waters of Somalia? Time is of the essence in all things in the merchant marine industry and performing some sort of transformation of all merchant vessels into warships does not contemplate the drivers of time and operating schedules that keep commerce in motion on the world’s highway. Constructing a state of the art brig within the limited operating space aboard a merchant vessel is unlikely for many reasons, not to mention the anticipated outcry from organized labor. The Masters of vessels may exercise great disciplinary authority over crews voluntarily on board, but that does not make them wardens empowered to operate a prison ship. Finally, and perhaps the most controversial point among mariners who have been on the business end of piratical activities, is that raising the threat bar by taking armed measures and exercising summary justice may cause pirates to become more brazen in attacking and more likely to use deadly force. While the policy of any impacted nation can be to out-terrorize the threat encountered, any policy involving active lethal force should be executed to that end by professional military and/or security forces.

There is legal precedent and a successful model for an embarked armed guard both in our national experience and in international law. Roughly one month before Pearl Harbor, the President of the United States decided that the safety of American merchant vessels required their defensive arming. German submarines by that time had already torpedoed US warships performing convoy duty, and, while neither President Roosevelt nor Adolf Hitler wanted to characterize such acts as constituting an act of war, the risk to unarmed commercial vessels was deemed too great not to defensively arm them in a time of peace. Under well-established law of war, a neutral may arm itself and take defensive measures when a viable, continuing threat has been established. Of course, when the US did enter WWII shortly thereafter, gun tubs were being manned by the US Navy Armed Guard. (The Armed Guard had a distinguished record in both theaters of the War and is particularly famous for successes in the Battle of the Atlantic.) As asserted, merchant mariners do not want to “fight the ship”, but if the cost of doing business can absorb the cost of their presence aboard, the lawful presence of a military armed guard may be more than a deterrent, save lives of those threatened, and actually reduce the threat in a real sense. (Paying for an armed guard option is certainly more palatable than a current proposal to levy a “piracy tax” on all goods being shipped by sea and then use the tax revenues to pay pirates not to attack maritime commerce, at best a repugnant maritime “social engineering” scheme condemned to abuse and failure.) If a routine, deadly threat to flag states is on-going, would not a contingent of armed guard aboard that nation’s vessels entering a dangerous travel corridor be more cost-effective than operating fleets of capital ships for long deployments, potentially patrolling a million square miles where pirates may simply not be operating at any given time? This historic model certainly deserves more dialogue than it has received to date.

I am personally a big fan of the armed guard approach and here is why. In 1982, I was assigned as the Navy JAG Reserve attorney for the Military Sealift Command, Pacific (MSC PAC). At that time, MSC ran special purpose vessels such as civilian manned transports for military cargo; communications and cable ships; observation vessels, etc. within the operating area of the Pacific Ocean, particularly the Western Pacific. These lumbering mostly white-hulled vessels made good targets for pirates in the straits & shallows of Asia. We had even re-designated their military hull types to our private amusement as “LSMTs”: Large Slow-Moving Targets. The then standing MSC protocol in essence directed that if boarded by pirates, the crew was all to go to a safe hold, chain themselves in, and let the pirates take anything they wanted aboard. Such an op order could also have been characterized as an open invitation for lawless sea rovers to plunder MSC PAC platforms. By 1984, MSC had been victimized enough and the institutional philosophy changed to having both uniformed and civilian ship’s officers trained with 9mm pistols and sawed off shotguns. This was supplemented by training crews to use high pressure fire hoses as an active countermeasure which in turn was supplemented by unofficial self–help measures, e.g ., nothing says deterrent like an empty beer bottle filled with sand (preferably wet) and dropped on the head of a pirate climbing up the line attached to the grapnel which was hooked over the railing. These and other physical countermeasures were certainly not rocket science, but they worked. Attacks against MSC PAC vessels dropped because there were other targets offering no resistance and PAC vessels now enjoyed the well-deserved reputation of taking on pirates.

Of course, the use of afloat private security forces hired by owners and operating companies has been going on for some years now. They have a very successful track record as a deterrent. In fact, statistically they are the best option at this point in time. As reported in the maritime press in October and December 2011, no merchant vessels with armed guards aboard have been overcome (as yet) by pirates. To my knowledge these statistics are still holding true. Who’s in the private armed guard trade already? There are Russians readily for hire and there are several “Beltway companies”. In fact, if an Internet search is made on the topic of armed guards, there will be many display as well as pop-up ads for companies in Maryland and Virginia. While not endorsing individual business entities, commercial vessels which employ effective passive anti-piracy measures designed to deter attacks through the presence of private armed guards (leaving active counter-measures to those military forces and vessels currently empowered by international law), will effectively reduce the threat and potential harm to persons involved in the business of going to sea.

One final point on the inability of the community of nations to exercise swift criminal justice is the “legal lifecycle”. A practical problem is that the justice system does not end with the appearance of pirate defendants at the bar of justice in most countries. Presuming the likelihood of convictions for murder, robbery, etc ., adjudged international felons will certainly receive sentences in the range of ten to twenty years. As international prisons are non-existent per se, will the reward for capturing a pirate be the legal obligation to accommodate convicted pirates in prison for decades? “Catch and release” sadly becomes a more fiscally sound option in a world of limited national resources.

It is the opinion of knowledgeable leaders, diplomats, and international commentators that legal measures and naval operations against pirates will not solve the specter of sea robbers off the Horn of Africa. The root causes of piracy in this hot spot can only begin to be addressed and abated by the restoration of strong, effective civil government, legitimate employment opportunities, humanitarian aid, social order, and domestic security. Similar to the likelihood of the lengthy prison sentences warranted by the crimes, the changes suggested are probably a 20-year minimum undertaking requiring concerted and coordinated international effort.

Next month I’ll address the connection between piracy and maritime terrorism, and how sovereign nations and the IMO are reacting.

Supreme Court to Hear Clean Trucks Program Challenge

The US Supreme Court on Jan. 11 agreed to hear a petition by the American Trucking Associations against aspects of the Port of Los Angeles’ anti-pollution initiative known as the Clean Trucks Program.

The program, which was established in 2008, includes a set of criteria under which drayage trucks and their drivers can enter the port. Included in the criteria is a stipulation that drivers must be employees of the companies they haul goods for, not independent operators, which until that point, the vast majority of truckers were.

The ATA is challenging numerous aspects of the regulations, including the employee mandate. The case has been making its way through the legal system since not long after the program was announced.

In September 2011, a three-member Ninth Circuit Court of Appeals panel ruled that the port couldn't require thousands of port-servicing independent truckers to become trucking firm employees. However, the appellate panel split 2-1 in favor of the port on four separate truck plan issues opposed by the ATA, including an off-street parking provision, financial capability requirement, maintenance provision and placard requirement.

The ATA took the case to the Supreme Court for review in October 2011. In their Jan. 11 decision, the justices said they would hear the case this spring and likely issue a decision by July.

“The port’s rules challenged by ATA, which range from a requirement that carriers display port-mandated information on the sides of trucks entering and leaving the port, to a requirement that trucks conform to the port’s off-street parking rules even when not on port property, have nothing to do with improving air quality,” ATA President and CEO Bill Graves said. “We are pleased the Supreme Court will review the erroneous decision of the appellate court.”

The ATA has denied contentions that it’s case, American Trucking Assn. vs. the City of Los Angeles, is being pursued because it opposes the environmental aspects of the Clean Trucks Plan.

“ATA has challenged these provisions because we believe they are incompatible with Congress’ command that state and local governments may not regulate motor carrier decisions relating to prices, routes and services,” Graves said. “Our objections to the Port's program have always been business-related, and not, as certain reactionary groups have asserted, out of a desire to cling to polluting ways.”

The Port of Long Beach, which was also a defendant in the original lawsuit, reached a court-approved settlement with the ATA in 2009 allowing the port to implement all environmental aspects of the truck plan, as well as most of the non-environmental aspects. The Long Beach version of the truck plan never called for an employee-only mandate.

Cruise Ship Returns to Port After Propulsion Damage

The Carnival Cruise Line ship Carnival Splendor returned to the Port of Long Beach a day behind schedule Jan. 14 after repair work had to be performed to repair damage to its propulsion system caused by fishing nets in Mexico during a previous cruise in early January.

The repair work, which had been scheduled for the night of Jan. 10 in Mexico, took longer than scheduled, causing the delay, according to the cruise line. After a several-hour delay, the ship left Puerto Vallarta the afternoon of Jan. 11 for the two-day trip back to Southern California.

All the ship’s services continued to function normally while the repairs were performed, according to the cruise line.

Due to the delay, passengers that were scheduled to leave from Long Beach on a Mexican cruise Jan. 13 had their departure delayed by a day. As a result, Carnival shortened the trip from six days to five and gave passengers a one-day refund and $50 credit. They were also given the option of canceling their trip without incurring any fees.

The 952-foot Carnival Splendor, which has a 3,006-passenger capacity and an onboard crew of more than 1,100, was launched in August 2007. It has a brief history of incidents, including a November 2010 engine room fire during the second day of a voyage from Long Beach to the Mexican Riviera that cut all electrical power onboard, but resulted in no injuries.

California Export Trade Down in November

A labor strike at the ports of Los Angeles and Long Beach and weakening demand for personal computers combined to shrink California’s merchandise export trade in November, according to the latest monthly trade report on the state by Beacon Economics.

According to Beacon’s examination of US Commerce Department foreign trade data, the total value of goods shipped abroad by California businesses in November 2012 totaled $13.33 billion, a decline of 5.3 percent over the $14.07 billion in exports recorded in November 2011. Adjusting for inflation, the true decline was 7.5 percent, according to Beacon.

Exports of manufactured products in November amounted to $8.25 billion, down by 3.7 percent from November 2011’s $8.57 billion, while shipments of produce, raw materials and other non-manufactured goods fell by 8.6 percent from $2.14 billion to $1.96 billion. Re-exports were also off by 7.2 percent, from $3.36 billion to $3.12 billion.

The November volumes were marginally affected by a strike by the International Longshore and Warehouse Union, which shut down 10 of 14 container terminals at the Ports of Los Angeles and Long Beach. The strike began the morning of Nov. 27 and was resolved the evening of Dec. 4. Regular port operations resumed the following day.

“While shippers certainly incurred financial losses attributable to delays in moving cargo through the two ports, the strike’s impact on the state’s overall export trade in November is largely an accounting matter,” Jock O'Connell, Beacon Economics’ international trade adviser said. “Cargo that didn't sail in November will more than likely turn up in December’s export statistics.”

POLA Annual TEU Volumes Up Slightly

The Port of Los Angeles finished calendar year 2012 with a 1.7 percent increase in overall cargo volumes compared to 2011. The total number of 20-foot equivalent containers for 2012 was 8.07 million, compared to 7.94 million in 2011.

This marks the third time in the port’s history that it was able to eclipse eight million TEUs in a single calendar year, with the most recent occasion being in 2007.

But despite the year-over-year gains, LA ended 2012 with a decline in monthly volumes for December. The number of TEUs shipped by port terminals during the month were down 9.4 percent, decreasing from December 2011’s 649,468, TEUs to 588,154 in December 2012. Imports fell 6.7 percent to 296,874 TEUs in December 2012 compared to 318,355 TEUs the previous year, and exports last month were down 16.4 percent to 147,417 TEUs, compared to 176,530 TEUs in December 2011.

Combined, total loaded imports and exports for December 2012 dropped 10.2 percent, from 494,886 TEUs in December 2011 to 444,291 TEUs in December 2012. Factoring in empties, which decreased 6.9 percent year over year, overall December 2012 volumes dropped 9.4 percent last month compared to the same month in 2011.

For the fiscal year to date, which began July 1, LA has moved 4.06 million TEUs, an 8. 75 percent increase from the same six months during the prior fiscal year.

Current and past data container counts for the Port of Los Angeles may be found at