Friday, April 26, 2013

Port of San Francisco Marks 150th Anniversary

Starting in April and throughout 2013, the Port of San Francisco is hosting events and activities on the waterfront and throughout the city that highlight the port’s rich maritime and cultural history.

The port was established April 24, 1863 with the Legislature’s creation of the State Harbor Commission for San Francisco, which oversaw the port’s development, including the construction and upkeep of wharves, piers, and seawalls, the dredging of the harbor, and the collection of all rents, tolls, wharfage and dockage fees. On Sun. April 28, the port celebrates its 150th anniversary with a Maritime Day on the Waterfront event, scheduled for 10 am to 5 pm.

Maritime Day is a family oriented daylong public celebration of events and activities along the waterfront from Hyde Street Pier in the north to Heron’s Head Park (Pier 98) in the south. Activities are scheduled to include public boat tours, bicycle tours, exhibits, lectures, public tours, a film festival and interpretive displays.

The public boat tours will be conducted from 10 am to 5 pm at the Hyde Street Pier Commercial Fishing Harbor. Cost is $15 for adults, but free for children 12 and under. More information about the boat tours and other Maritime Day events can be found on the port’s website,

European Union to Save Domestic Shipbuilding from Asian Threat

By Eugene Gerden

The European Commission, which represents the interests of the EU and ensures that EU law is correctly applied by member countries, is developing a package of measures aimed at supporting a struggling domestic shipbuilding industry which continues to lose ground amid the pressure of Asian competitors.

 So far, the European shipbuilding industry has not been able to fully recover from the effects of the global recession, which is evidenced by the fact that since 2008 the order book of EU shipyards has shrunk by 30 percent, and the number of deliveries related to tonnage is expected to significantly exceeded the number of new orders this year.

The situation is aggravated by the presence of other problems in the industry, among which are lack of cheap loans, overcapacity and irreversible job losses.

In fact, the first signs of a crisis in European shipbuilding appeared in the 1970s. Prior to 1975, the EU shipyards accounted for half of the world’s ship production, but in 1975 their share of the world market had fallen to 22 percent.

At the time the global leadership in the market was held by Japanese shipyards, which accounted for 50 percent of world production of ships. At the same time, the rise of Korean shipyards began in the second half of the 1970s after the oil crisis, which led to massive lay-offs in the industry and cancelled orders.

By the 1990s Korean shipyards had increased their production shipbuilding capacities by more than three times, and a few years later had become the world’s largest manufacturer of ships. At the same time, this resulted in a sharp decline of world prices for ships and market overcapacity.

At present, Asian manufacturers account for up to 80 percent of the global production of ships, while their order portfolio represents as much as 90 percent of the global orders. Meanwhile, the European Union’s share of shipbuilding has declined to its current level of 7 to 8 percent.

The decline could have disastrous consequences for the European shipbuilding industry, which currently remains of great importance to the EU, given that more than 500,000 workers are employed in the €80 billion industry.

Heino Bade, former chairman of the European Metalworkers’ Federation (EMF), warns: “The EU and national governments must be fully aware that abandoning shipbuilding will lead to industrial erosion in Europe’s maritime regions, the irrecoverable loss of highly-skilled employment, the disappearance of numerous modern and high-tech shipyards together with their network of equipment suppliers, and the extinction of an effective and energy-efficient transport mode made in Europe.”

In this regard, according to the plans of the European Commission, the development of a special package of measures should significantly increase competitiveness in the international arena.

Such a position has already been welcomed by some leading EU analysts.

The implementation of the new support measures is intended to help to solve the most acute problems of the European shipbuilding industry and to stimulate local demand, provide an access to cheap loans, to set conditions for better protection of workers, and to create a level playing field.

In the case of employment policy in the sector, according to the plans of the European Commission, there is a need to introduce a practice of short-time working arrangements, which would better protect the rights of workers, amid the instability of the European shipbuilding and the decline of orders.

The European Commission also plans to create conditions for long-term funding of the industry, and to provide incentives for banks to lend to local shipbuilders. In addition, the European Commission plans to create the conditions for increasing the volumes of building of ships with an advanced environmental profile, which is also expected to help stimulate the market demand.

As part of these efforts, there are plans to encourage the local shipyards to increase investments in R&D activities, which already make up more than 10 percent of their annual profits.

The European government understands the importance of supporting the national shipbuilding industry, which is currently going through difficult times, while stressing that the support measures should be aimed at improving the quality of ships, not their number.

At the same time European officials realize that the absence of large orders could also result in a lack of scientific discovery and continuing innovation in European shipbuilding.

Currently the majority of European shipyards are going through different times, including the producers from Germany, Italy and Nordic countries, whose positions in the global market have always been strong.

Perhaps the only bright spot on this background are the Turkish producers, which managed to maintain a fairly high level of efficiency, mainly benefitting from relatively cheap labor, compared with other European shipyards.

Aware of the inability to compete with Asian shipyards in the production of container and other standard ships, European shipbuilders plan to continue to focus on building specialized vessels, including cruise liners, the demand for which is steadily growing amid the boom of cruise travel.

The area of interest also includes a segment of ferries, which have always been dominated by European shipyards. According to analysts, the global demand for these types of ships will continue to grow in the near future, due to aging ferry fleets in the Mediterranean and other world regions.

Construction of cable-laying ships and other service vessels is expected to remain another promising niche for European shipbuilding during the next several years, and an increase in oil and gas production on the sea shelf means that the demand for offshore and special vessels for the implementation of such works will grow.

Finally, amid the global wind energy boom many European shipyards are expanding their portfolios, including orders for new ships to serve the offshore wind energy market.

“From 2020 we will see 40,000 MW per year built offshore” said Eddie O’Connor, founder and CEO of Mainstream Renewables, a renewable energy group, and an honorary Director of the European Wind Energy Association. “This will require ten to twelve new heavylift vessels, other vessels for transporting foundations, towers, nacelles and blading systems. New ports will have to be built across Europe.”

At the same time further tightening of environmental regulations for ships could benefit European shipyards and provide them a competitive advantage over their Asian rivals, which traditionally paid lesser attention to environmental issues than Europeans.

Securing competitive advantage against Asian yards is of special importance for EU shipbuilders, as the competition between the sides will continue to be tightened, and not necessarily on a level playing field.

This is reflected by the fact that despite repeated negotiations between the European Commission and the governments of major Asian shipbuilding nations about fair competition and creation of a level playing field, the latter still provide huge financial support to domestic producers, allowing them to dump in the global market, at the times when EU countries are no longer able to subsidize their shipyards.

For example, the South Korean government recently announced its plans to expand the volume of financial support to its shipbuilders by providing additional $3.5 billion for this year. The additional loans will be available at two state-run lenders-Korea Finance Corp. and Korea Development Bank-and five commercial banks, including Kookmin Bank. The additional financing plan for local shipyards is on top of the country’s existing KRW3.5 trillion in such loans available.

In the meantime, this news has already caused sharp criticism by the European Commission, which again accused the Korean government of the adoption of protectionist measures that create conditions for almost 20 percent dumping in the global shipbuilding market.

At the same time representatives of Korea’s largest shipyards, including Hyundai, Daewoo and some others have already denied the accusations of price dumping, claiming that their lower prices are the result of increased efficiency, lower labor costs and availability of private investments.

Due to unfair competitive practices by Asian shipbuilders, the EU has not ruled out the possibility of special measures to protect the domestic producers. There is a possibility that the list of such measures could be announced early this year.

The EU is aware of the ever growing shipbuilding threat from Asia, and some European yards are accelerating their activities in the field of design and production of high-tech ships. It’s also possible that the adoption of modern technologies will come through the purchase of European shipyards by their Asian competitors. For example, China Shipbuilding Industry Corp, one of China’s two largest shipbuilding conglomerates, recently announced its interest in acquiring shipbuilding companies in Europe. According to Sun Bo, senior executive of China Shipbuilding, the company has already held “advanced talks” with a European company in recent months, the name of which is not disclosed.

In addition to the Asian threat, the ever rising production costs and in particular steel prices could be another obstacle for the development of EU shipbuilding in the coming years. This mostly affects those shipyards that signed a large portion of orders when steel prices were significantly lower.

Despite the planned measures, most analysts believe that EU shipbuilding will experience difficult times in the long term, including passenger ship orders. The annual average amount of orders for European shipyards is not expected to exceed 6-8 ships a year, compared to an average of 12 in the period 2004-2007, with a peak of 16 in 2007.

Eugene Gerden is a free-lance writer based in Moscow, Russia who has covered the European maritime industry for 10 years. He can be reached at

Tesoro, Savage Planning Vancouver USA
Rail Facility

Petroleum products company Tesoro Corp. and Savage Companies, a supply chain solutions business, have formed a joint venture to develop and operate a new 120,000 barrel-per-day (bpd) crude-by-rail unloading and marine loading facility at the Port of Vancouver, Washington.

 The deal is subject to approval by regulatory agencies and the port commission, but if all hurdles are cleared, the Tesoro-Savage Joint Venture would own the crude unloading and marine loading facilities and enter into a land lease agreement with the port for an initial 10-year period.

Port of Vancouver USA CEO Todd Coleman called the Tesoro-Savage joint venture “an ideal fit” for the port.

“This project aligns with our strategic goals and our mission to provide economic benefits to our community through leadership, stewardship and partnership in marine and industrial development,” he said. “The port will benefit from Tesoro’s and Savage’s shared expertise and we look forward to working with them to help support the local economy by further diversifying our cargo handling capabilities.”

Under the plan, Savage would oversee and manage the design, construction and operation of the facility on the joint venture’s behalf. Tesoro and Savage have already operated in close partnership for almost ten years on the West Coast.

“We are pleased to be partnering again with Savage,” Tesoro President and CEO Greg Goff said in a statement. “Building upon the recent success of the rail unloading facility at our Anacortes, Wash., refinery, where we have been delivering mid-continent crude oil ... this project is the ideal next step.”

Savage President and COO Kirk Aubry said his company was looking forward to bringing crude oil destination services to the Port of Vancouver. “This partnership solidifies Savage’s position as a leading provider of services in the crude-by-rail market to refiners, producers and marketers,” he said.

The facility, which is expected to be operational in 2014, could cost between $75 to $100 million to build according to the companies, and would be designed to handle an estimated initial volume of 120,000 bpd with potential near-term expansion capability to 280,000 bpd.

New Seattle Port Commissioner Chosen

The Port of Seattle Commission has selected Stephanie Bowman to fill the seat vacated in March by former commissioner Rob Holland. Bowman, executive director of the Washington Asset Building Coalition, was previously the Port of Tacoma’s manager of federal government affairs.

“She has the background and skills to be an outstanding member of our commission and asset to the port,” Seattle Commission President Tom Albro said. “Her in-depth knowledge of port issues will enable her to hit the ground running.”

Bowman becomes the second new member of the five-person commission in as many months. In early March, Microsoft attorney Courtney Gregoire was chosen to fill the seat that was vacated earlier this year by Gael Tarleton, who was elected to the Washington House of Representatives.

Bowman, who was selected from seven finalists to fill the seat, worked at the Port of Tacoma from 2006 to 2011 and was a candidate in 2012 for the state House of Representatives, running in the same race as Holland.

Both lost in the primary.

Both Gregoire’s and Bowman’s positions on the commission are scheduled to be on the King County ballot in November; the winner in the race for Gregoire’s seat will serve until 2015, while the winner in the election for Bowman’s seat would receive a full four-year term.

Crowley, Bowhead Announce Joint Venture

Crowley Marine Services and Bowhead Transport Co. have formed a joint venture to provide marine services in Alaska’s Arctic region. The new company, operating under the name UIC Bowhead-Crowley, is expected to focus on the needs of the Arctic’s oil and gas industries.

“We look to provide greater efficiency, lower costs, expanded capabilities and higher value to our customers through the joint venture,” Bowhead Transport General Manager Jim Dwight said.

Both companies have long histories of providing services in the Arctic. Bowhead Transport, a subsidiary of Ukpeaġvik Iñupiat Corp. (UIC) - the Alaska Native Village Corporation of Barrow, Alaska - has provided common carriage service for 30 years to the coastal communities of Alaska. Crowley has provided marine transportation, energy support and petroleum distribution services throughout the state for over 60 years. Seattle-based Bowhead Transport is a provider of marine cargo transportation whose fleet of vessels serves the North Slope of Alaska’s coastal communities.

“This new partnership is really tailored to meet the needs of customers in the oil and gas, mining and minerals, and engineering, procurement and construction management industries,” Bruce Harland, Crowley’s vice president in Anchorage said. “Our solutions team is very much looking forward to working with Bowhead.”

Wednesday, April 24, 2013

Two New Commissioners at Port of San Diego

After a three month tussle over whether their appointments could be vetoed by the city’s mayor, two new commissioners have finally been sworn in at the Port of San Diego. Rafael Castellanos and Marshall Merrifield took the oath of office Mon., April 15, 2013 at the port’s Administration Building.

San Diego Mayor Bob Filner had vetoed the City Council’s appointments of the two on Jan. 8; he had objected to the process used to make the selections, and said a city policy on the waterfront should be adopted first. But earlier this month, City Attorney Jan Goldsmith ruled the veto invalid, which allowed for Castellanos and Merrifield to be sworn in.

The Port of San Diego is governed by a seven-member board, three of whom are appointed by the City of San Diego, and one each is appointed by the cities of Coronado, Chula Vista, National City and Imperial Beach. Castellanos and Merrifield both represent San Diego.

“They will provide valuable expertise and perspective as we continue to pursue integrated planning for public access, commerce, development and other activities taking place along our waterfront,” POSD Board Chair Ann Moore, who represents Chula Vista, said.

Merrifield is the President/CEO and majority shareholder for Bluewave Security, which manufactures high-tech equipment for video and door-access surveillance. He previously was President/CEO and majority shareholder for the security company General Lock and Clark Security Products, the largest privately held security hardware business in the U.S., until 2010. He holds a Bachelor of Arts in Economics from Princeton University.

Castellanos is a partner with the San Diego law firm Solomon Minton Cardinal Doyle & Smith LLP, where he specializes in commercial real estate and business transactional law. He holds a Bachelor of Arts from Arizona State University, and a Juris Doctorate from the University of Chicago Law School as a Cornerstone Scholar.

Castellanos and Merrifield replace former commissioners Scott Peters, who was elected to Congress in November 2012, and Lee Burdick, who resigned to become Filner’s director of special projects and legal affairs.

Tuesday, April 23, 2013

Improved Lighting Technology Supports
Port Sustainability

Each seaport – no matter the location – has a unique set of geographic, political, community, operational, and financial circumstances that shape and define its environmental initiatives. Within the United States, there are numerous acts, regulations, and initiatives aimed to reduce the impact from port activities, thus increasing the ever-important focus on sustainability.

The American Association of Port Authorities (AAPA) recently implemented a task force to examine port sustainability issues, and it encourages ports to implement the concept of sustainability as part of standard business practices for both short and long-term planning.

Seaports and Energy Consumption

Energy consumption and costs can account for up to 60 percent of a port’s operating expenses – a fact not lost on terminal and port operators. To address some of these costs, ports are turning to the installation of Light Emitting Diode (LED) lighting fixtures on cranes. The specification of energy-efficient LED floodlights onto container and bulk handling equipment dramatically reduces energy consumption and moves terminal operators closer to global goals of long-term sustainability and profitability.

LEDs and Container Handling Equipment

Automating terminals also presents new opportunities to reduce maintenance expenses and environmental impacts. Automated equipment lighting requirements are different from standard equipment; less lighting is needed overall, but it is still required to be available on-demand for remote control and maintenance operations. Furthermore, LED lighting is instant-on, as opposed to many traditional lighting options that require an extended warm-up time. This allows for lighting to be turned on only when necessary. There is a strong trend to outfit Automated Stacking Cranes (ASCs) with LED lighting which significantly reduces energy costs, minimizes downtime, and puts that particular terminal on the path to sustainability. Lighting is often perceived to be a fixed expense; with LED technology, however, power consumption from lighting can be reduced by up to 75 percent.

New optic technology can distribute a very even light over a wider target than traditional lighting options. This means that fewer lighting units are required and exterior units can be mounted lower. Light pollution is also reduced as the light output is focused only where it is needed. The reduction of fixture quantity using LED technology offsets the additional costs and allows for a reasonable two year payback period.

Container crane light fixtures are subject to extremely high vibration, and they have very frequent failures. The use of LED floodlights can eliminate constant maintenance in this abrasive environment and reduce the ground personnel entering the automated terminal. Just as crane manufacturers have engineered revolutionary advances, so too have LED fixture manufacturers, making these lights ideally suited for the harsh, corrosive environment in which container cranes operate.

RTG Electrification

In their drive to achieve environmental targets, terminal operators continue to transition to electric Rubber Tired Gantry cranes (E-RTG’s). Most major crane manufacturers now promote E-RTG’s as cranes that operate more efficiently. Surprisingly, LED lighting has not yet been included as a standard feature of these electrified RTG’s. A traditional RTG with fourteen 400-watt fixtures consumes 6,150 watts of power when all fixtures are illuminated and ballast losses are included. Conversion to LED floodlights reduces power draw to only 2,100 watts – nearly one third of the energy. The design of LED floodlights onto a standard or E-RTG crane also opens the possibility of reducing illumination levels during idle time with the use of dimming technology. This lowers energy consumption further and therefore reduces the emissions of the equipment. As terminals convert to or purchase E-RTG’s, upgrades to LED lighting are being considered as a means to achieve even greater energy efficiency and cost savings.

LED Fixtures in Action

Based on the premise that growth and environmental improvement are mutually attainable goals, the South Carolina Ports Authority (SCPA) has an ongoing sustainability program that includes upgrading technology and equipment. To ensure that this southeast cargo hub keeps its place as a top ten US port, the SCPA has laid out measures that will keep them on track to achieving its goals, including investing in newer, more efficient equipment.

Recently, LED fixtures were installed on a STS crane with mounting height of 125ft with the goal of improved lighting into the vessel hold. After the upgrade, light levels increased by nearly 55 percent.

Durability and Versatility

Another important advantage to LED technology is its inherent durability. LEDs are solid-state light sources that contain no moving parts, filaments, or fragile glass. This dramatically reduces the risk of damage during transportation, installation, and operation, even in the toughest environments. The durability of LED fixtures allows terminals to reduce the hazardous waste from broken lamps. A standard STS crane is lit with up to fifty 1,000-watt HID floodlights and over 150 fluorescent walkway fixtures. Due to vibration and corrosion, broken floodlight lamps often require numerous replacements each year and are discarded to the environment. Conversion to LED fixtures will eliminate this hazardous waste stream to the environment while reducing both disposal and maintenance costs.

LED technology also offers a great deal of versatility to improve operational light while limiting wasted light to the surrounding environment. A modular design of LED fixtures allows for customization for specific crane heights. The directional nature of LED light allows for improved light penetration at the bottom of the vessel hold and improved operator viewing conditions. Manufacturers on the forefront of this technology take into account the variety of lighting requirements for port equipment when designing optical packages. An LED fixture can incorporate an array of point sources that direct light precisely where it’s needed with very little scattering or loss of light to the surrounding environment. Effective fixture design can translate to lower optical losses and an even distribution of light across the target area.

Ready for Prime Time

The question has been raised as to whether LEDs have adequate lumen output. As US terminals on all coasts and some of the largest European terminals have begun to embrace LED lighting solutions, however, concerns have been quelled. Crane operators especially appreciate the color of light and improved visibility into the vessel hold while maintenance staff values the elimination of lamp & ballast replacements. Incorporation of LED technology is a decision that moves a terminal closer to being a “green port” and provides significant maintenance savings and operational improvements.

Ryan Hertel has a degree in mechanical engineering and is pursuing a MBA from the University of Chicago. He is the Director of Business Development at Phoenix Products Company and can be reached at +1-414-973-3349 or rhertel@

APL, POLB Receive Federal Environmental Awards

The Port of Long Beach and transportation and logistics company APL have been named recipients of the Federal Maritime Commission Chairman’s 2013 Earth Day Awards for their commitment to mitigating the environmental impacts of international shipping.

The awards were presented at a Tues., April 23 ceremony in Washington, DC. The award selections were made in March by then-Commission Chairman Richard Lidinsky, who has since been succeeded as FMC chair by former Long Beach port commissioner Mario Cordero.

The Earth Day Awards, which were launched by Lidinsky in 2010, honor outstanding environmental contributions by stakeholders in the U.S. maritime and transportation industry.

For the first time this year, the award was expanded to include three categories: Ocean Carriers, Shippers and Ports, to enable greater recognition of those in the three major sectors of maritime and transportation industry.

APL was recognized for its continued commitment to mitigation of the environmental impacts of international shipping and encouraging greater sustainability of vessels in both their liner services and terminal operations.

The Port of Long Beach was chosen for its continued commitment to mitigating the environmental impacts of international shipping on local port communities and in encouraging greater sustainability in port operations.

The other award recipient was Wal-Mart, which was recognized for its efforts to mitigate the environmental impacts of international shipping and to encourage greater sustainability practices in both their domestic and international logistics operations.

Seattle Monthly Container Volumes Down

Seattle Harbor container volumes were down 30 percent in March 2013 compared to the same month in 2012, and are down about 19 percent for the year to date, something attributed to the shift of the Grand Alliance to the Port of Tacoma.

The Grand Alliance is a consortium of three of the world’s largest shipping lines - Germany-based Hapag-Lloyd, Orient Overseas Container Line of Hong Kong and Japanese company NYK Line - along with associated carrier ZIM Integrated Shipping of Israel.

In July 2012, the Alliance began three new calls each week at Washington United Terminals, having moved their business from the Port of Seattle. Since the shift, Tacoma has seen year-over-year container volume increases while Seattle has experienced the opposite, something that’s expected to continue until mid-2013.

Seattle saw 119,297 TEUs in March, a 30 percent drop from March 2012’s 170,680 TEUs. As a region, the ports of Seattle and Tacoma were down four percent for March 2013 vs. 2012, but up 4.2 percent YTD.

As far as Seattle’s solo year-to-date volumes, its terminals moved 393,910 TEUs during the first three months of the year, a 19.4 percent decrease from the same three months in 2012. However, with the Grand Alliance volume shift factored out, Seattle volumes are actually up 2.5 percent year-to-date, according to port data.

Port of Oakland Container Volumes Drop

A more than 13 percent jump in empty container imports wasn’t enough to counterbalance year-over-year declines in full container imports and exports at the Port of Oakland in March, as the port saw an overall five percent volume decline compared with the same month in 2012.

Oakland terminals imported 29,311 TEUs during March 2013, a 13.5 percent jump over the same month in 2012. However, there were declines in all the other major categories the port monitors, including full imports and exports, as well as empty exports.

The steepest year-over-year decline was in full imports: Oakland saw 53,532 TEUs in March, a 14.8 percent decline from the same month last year. Empty exports were down 7.3 percent, to 15,809, and full exports dropped to 87,965, a four percent decrease from March 2012.

The numbers added up to a grand total of 186, 617 TEUs last month, a 5.4 percent year-over-year decline. But despite the down month, Oakland is actually slightly ahead of last year’s year-to-date volumes. During the first three months of 2013, the port saw 566,796 TEUs, 1.2 percent improvement over the same time period in 2012.

The growth can be attributed in part to imports of empty containers; in addition to March’s 13.5 percent jump, there was a 6.1 percent increase the month before, which has helped the port’s year-to-date empty imports volume climb to 6.3 percent.