Friday, February 1, 2013

Lack of Transport Infrastructure a Growth Obstacle: Report

Deficiency in transport and communications infrastructure is one of several supply chain barriers that act as obstacles for speeding up global economic growth, according to a recently released report by the World Economic Forum.

The report, entitled “Enabling Trade: Valuing Growth Opportunities,” was prepared by the World Economic Forum in collaboration with Bain & Co. a Boston-based global management consulting firm.
The report was made public Jan. 23 at the opening of the 11th annual World Economic Forum in Davos, Switzerland. The forum is a gathering of the world’s political and business leadership.

The report highlights a variety of identified supply chain barriers – ranging from poor physical and technical infrastructure to border controls, customs paperwork, lack of coordination between national agencies and regulations favoring local products over imported ones.

“This report makes clear that transportation infrastructure investment can have a very positive and immediate impact on trade growth and economic and social development, particularly in emerging market areas,” noted APM Terminals CEO Kim Fejfer, who took part in the forum, which was held Jan. 23 to 27.

AP Moller-Maersk, the parent company of APM Terminals, is an active participant in the World Economic Forum group that prepared the report.

The WEF study estimates that global trade would increase by an estimated $1.6 trillion, or 15 percent, while global GDP would rise by $2.6 trillion, or roughly five percent, if every country improved two key supply chain barriers just halfway to the world’s best practices: improving inadequate infrastructure and adopting modern communications technology such as electronic freight releases, and by streamlining and simplifying border administration procedures.

“Addressing infrastructure requirements to facilitate global market access is a relatively straightforward process when strong local partnerships can be forged,” Fejfer said. “We share a common interest in creating modern port and inland transportation facilities so local communities can benefit from trade-driven development.”

The study’s authors examined the effects of trade barriers by contacting about 90 internationally active companies representing combined annual revenue of $800 billion. Of these companies, 35 provided input, with 21 of these participating in preparing 18 case studies representative of major industries, barriers and supply chain functions.

The telecom and transport infrastructure components were defined by the report’s authors as the availability and quality of transport infrastructure; the availability and quality of transport services; and the availability and use of information and communication technologies.

Increased operational costs, increased demands on investment and working capital, and cargo delivery delays were found to be the consequences of inadequate infrastructure, discouraging individual company trade growth and participation.

The report’s executive summary can be read or downloaded at:

Environmentally Friendly Longliner Launched

The environmentally friendly longliner Northern Leader was launched Jan. 26 by JM Martinac Shipbuilding Corp. The 184-foot freezer longliner – the largest fishing vessel currently under construction in the United States -- launched at 5:30 AM from Martinac’s Tacoma shipyard.

The vessel, designed by Seattle-based Jensen Maritime Consultants and owned by fishing company Alaskan Leader Fisheries, will be homeported in Kodiak, Alaska.

The Northern Leader, which is designed to hold more than 1,000 tons of cod fish, is operated by 31 people and can deploy a long line over 45 miles.

The vessel will be used to support the longline fisheries of the North Pacific, Bering Sea and Aleutian Islands. It’s powered with five Caterpillar generators supplying two 1,000 kW Schottel Z drive electric motors. The hold is refrigerated with 3, 150-HP compressors reducing the temperature down as low as -25 degrees Fahrenheit.

The vessel is ABS classed for the Maltese Cross, A1 Fishing Vessel with AMS. Total international tonnage is estimated at 1,800 ITC.

“The launch of the Northern Leader is another proud step in the 89-year history of Martinac building ships and creating jobs in the Puget Sound,” US Senator Maria Cantwell (D-WA) said. “I was proud to write and spearhead the passage of Congressional legislation in 2010 that supported the construction of the Northern Leader. We look forward to building more state-of-the-art fishing vessels right here in Washington State and supporting the growth of our maritime economy.”

Cantwell wrote legislation signed into law in December 2010 that created a cooperative for the freezer longline fishery. The cooperative eliminates the race for fish and enables companies to harvest more value from each catch, helping to increase profit by 20 percent and spur investment in new fishing vessels with greater processing and storage capacity.

Diesel Truck Filter Company Goes Under

Cleaire Inc., a Southern California-based company that had manufactured diesel particulate filters used in some drayage trucks hauling goods to and from seaports in California, Washington and elsewhere, has suddenly and quietly ceased operations, leaving those with its products in their trucks without warranty support.

Cleaire, which was headquartered in San Leandro and had manufacturing operations in San Diego, made no public announcement of its going out of business, but in a letter to Cleaire customers, the California Air Resources Board stated that the company ceased operations on Jan. 18, 2013.

The Air Board also says it’s working to help those affected by the situation, specifically fleets, dealers and parts suppliers, and that truck owners stuck without warranty support will be given exemptions from CARB’s mandatory diesel particulate filter retrofitting program for older, more polluting trucks.

“Vehicles that have the Cleaire devices already installed in a verified configuration will continue to meet applicable in-use fleet rule requirements,” the letter reads in part. “For Cleaire customers, ARB is working directly with Cleaire distributors, installers, and other authorized representatives to minimize impacts on warranty service and to ensure that fleets have compliance options if replacement parts are unavailable.”

Although no official reason has been given for the company’s failure, the quality of Cleaire’s products had been questioned in the past: a 3,500 acre brush fire in September 2011 was blamed by Washington state officials on flaming sparks from a Cleaire filter onboard a truck. The Monastery Fire, as it was called, caused $5.4 million in damage and resulted in the company recalling a specific model of diesel particulate filters.

Then, in October 2012, the company voluntarily recalled another type of filter after a three-acre brush fire caused by the model two months earlier.

Judge Rules Against Coos Bay in Documents Case

A Coos County Circuit Court judge has issued a ruling against the Port of Coos Bay in a public records fee case against the Sierra Club. Judge Paula Bechtold ruled Jan. 25 that the port violated both the law and the Sierra Club’s constitutional rights by failing to grant the group a multi-thousand dollar fee waiver.

The issue before the court was whether the port or the Sierra Club should pay the costs of a far-reaching records request by the environmental group. In this case, Judge Bechtold ruled that the port must waive the fees and bear the costs of responding to the request and that the port violated the Sierra Club’s constitutional rights by requesting documentation to support the group’s claims that granting it a fee waiver was in the public interest.

Oregon law allows public agencies to charge reasonable fees for making public records available upon request, specifically stating that the port’s fees may include “the cost of time spent by an attorney for the public body in reviewing the public records, redacting material from the public records or segregating the public records into exempt and nonexempt records.”

The bulk of the estimated fee quoted to the Sierra Club was for the expected costs associated with legal review, redaction and segregation of records.

“I am particularly troubled by the court’s finding that the port’s handling of this matter somehow violated the Constitution,” port CEO David Koch said in a statement after the judge’s ruling. “That was certainly not the port’s intention, and we are committed to reviewing the port’s public records policies and procedures with outside legal counsel and forwarding any recommended changes to the Port Commission.”

Tuesday, January 29, 2013

Some Enlightenment on Vessel Lighting

By Marilyn Raia

Lights on an automobile give information to the driver about what is on the road ahead. Lights on a vessel give no information to the vessel operator. Rather, lights on a vessel give information to others about the vessel’s course and characteristics so that collisions can be avoided, and federal law dictates what lights are required on a vessel. The lighting laws are not as simple as one might expect, and are said to “embody an elaborate code”. This article addresses some vessel lighting basics.

Finding the Lighting Rules
Vessel lighting requirements in the United States date back to the mid 19th century. The current versions of the requirements are found primarily in two places: the International Regulations for Preventing Collisions at Sea 1972 (known as the “Colregs” or “International Rules”) and the Inland Navigational Rules Act of 1980 (known as the “Inland Rules”). The former is an international treaty adopted in 1972 and entered into force in 1977. The latter is a federal statute enacted by Congress in 1980.

The International Rules and the Inland Rules contain many types of navigation-related rules in addition to vessel lighting rules. The International and Inland rules are similar, but not identical. Both are available on the Internet for no charge or side-by-side in a booklet published by the Coast Guard.

The Basic Application of the Vessel Lighting Rules
The vessel lighting rules apply to all “vessels,” and “vessels” is defined broadly as watercraft including non displacement craft and seaplanes, used or capable of being used for transportation on the water. That means the vessel lighting rules apply to a wide variety of watercraft including, but certainly not limited to, canoes, sailboats, fishing vessels, tugs, seaplanes, barges, containerships, and tankers as well as partially submerged vessels, anchored vessels, and vessels being towed.

Whether the International Rules or the Inland Rules apply depends on where the vessel is. The International Rules apply to vessels on the high seas and on all waters connected to the high seas that are navigable by seagoing vessels. The Inland Rules apply to vessels on the inland waters of the United States and to United States vessels in the Canadian waters of the Great Lakes, if not in conflict with Canadian law. Federal regulations provide a line of demarcation for the applicability of the International and Inland Rules. That line generally follows the coastline. For example, the International Rules apply in San Francisco Bay.

The lighting rules apply from sunset to sunrise. During that time, no other vessel lights are permitted to be displayed that could be mistaken for the required lights, or that could interfere with the visibility or distinctive characteristics of the required lights. Lights that impair a vessel’s ability to keep a proper lookout are also not permitted. The lighting rules are not suspended during inclement weather.

Types of Lights
The International Rules provide for six different types of lights. They are a masthead light, sidelights, a stern light, a towing light, an all around light, and a flashing light. The Inland Rules provide for the same six types of lights plus a seventh, a “special flashing light”. Both sets of rules provide for four different colors of lights: white, red, green and yellow.

Each of the required types of lights has characteristics that may include color, intensity, and location on the vessel. For example, under the International Rules, a masthead light is “a white light placed over the fore and aft centerline of the vessel showing an unbroken light over an arc of the horizon of 225 degrees and fixed that it shows light from right ahead to 22.5 degrees abaft the beam on either side of the vessel.” Under the Inland Rules, the definition of a masthead light is the same, except on vessels less than 12 meters in length, the masthead light need only be placed “as nearly as practicable” to the fore and aft centerline of the vessel.

How intense the required lights must be is dependent on the size of the vessel. For example, under both sets of rules, the masthead light on a vessel more than 50 meters in length must be visible for a minimum of six miles. On vessels more than 20 but less than 50 meters in length, the masthead light must be visible for a minimum of five miles. On vessels from 12 to 20 meters in length, the masthead light must be visible for a minimum of three miles. On vessels less than 12 meters in length, the masthead light must be visible for a minimum of two miles.

A vessel’s type, type of propulsion, and activities also affect what lights are required. There are basic lighting rules for a power-driven vessel when underway, and modifications of the basic lighting rules if a power-driven vessel is engaged in certain activities such as towing or being towed, dredging, trawling, fishing but not trawling, mine-clearing or diving. There are also lighting requirements for vessels under sail, vessels under sail but also propelled by machinery, and vessels under oars. Vessels restricted in their ability to maneuver and vessels at anchor are also required to display particular lights.
Consequences of Not Following the Lighting Rules
When followed, the lighting rules provide important information about a vessel. When the lighting rules are not followed, serious consequences may follow. Indeed, the failure to properly light a vessel has been said to be “one of the most recklessly unlawful acts a vessel can commit”. And, under The Pennsylvania Rule, when a vessel in a collision is found to have violated a statutory rule designed to prevent collisions, such as the lighting rules, a presumption of fault is raised. To avoid liability, the violator must prove the violation did not and could not have played a role in the collision. It is a very difficult burden.

The First National Bank of Chicago v. Material Service Corporation, 597 F.2d 1110 (7th Cir. 1979) is one of many cases addressing the consequences of improper vessel lighting. That case involved a nighttime collision between a 16-foot pleasure craft and a flotilla of barges being pushed by a tug. The barges had red and green lights on their bow corners and a flashing amber light at the center head. A forward facing white light on the tug’s pilothouse was not illuminated although there were red and green directional lights on the pilothouse roof. The tug operator saw the pleasure craft’s red light and perceived the vessels to be on a collision course. He reversed the tug’s engines and steered right, believing he was leaving a wide expanse of clear water for the pleasure craft. The pleasure craft struck the center of the bow of one of the barges and two occupants of the pleasure craft were killed. The district court found the pleasure craft solely at fault. The Seventh Circuit reversed the decision and sent the case back to the district court. On retrial, the district court found the tug and barge to be in violation of three lighting rules as well as other navigational rules. It allocated sole fault in the collision to the tug and barge. The Seventh Circuit affirmed the finding of fault imposed on the tug and barge due to improper lighting and held the lighting configuration created a “traveling trap” moving down a dark river. But, the Seventh Circuit also held some fault should be attributed to the pleasure boat operator. It reasoned the pleasure boat operator should have been able to see the lights on the barges and been on warning that something, albeit unidentifiable at the time, was ahead.

The lighting rules may not be disregarded in favor of a local custom. Kaseroff v. Etersen, 136 F.2d 184 (9th Cir. 1943) involved a nighttime collision between two fishing vessels, the Martindale and the Yankee Clipper, off the California coast. The night was moonless but clear, and the sea was calm. The Martindale located and circled a school of fish. While preparing to make a set, the Martindale was struck by the Yankee Clipper and suffered hull damage. At the time of the collision, neither vessel had a white masthead light. Instead, under a local custom, they each had a red masthead light which, when illuminated, showed the vessel had priority over a school of fish. The district court found the Martindale had complied with all laws and customs, and was not at fault in the collision. The Ninth Circuit disagreed. It held a local custom of not displaying a white masthead light did not excuse compliance with the International Rules nor relieve the offender of the consequences of non-compliance. It held both vessels equally at fault for improper lighting and reduced by half the damages previously awarded to the Martindale’s owner.

The lighting requirements in the International and Inland Rules are designed to convey information about a vessel’s size, activities, and course so that collisions can be avoided. Mariners should determine what lighting requirements apply to their vessels and make sure their vessels are in strict compliance to avoid significant financial consequences.

Marilyn Raia is of counsel in the San Francisco office of Bullivant Houser Bailey. She is certified by the State Bar of California as a specialist in admiralty-maritime law and can be reached at