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Friday, July 19, 2013

Oakland Port Shut Down After Longshore Worker’s Death

A tractor operator suffered a medical emergency and died after the vehicle she was driving crashed at the Port of Oakland on July 16. The incident led to her fellow longshore workers shutting down port operations for 24 hours.

Joy Daniels, 45, suffered the medical emergency at about 2:45 pm Tuesday at the Hanjin Shipping on Berth 55, according to International Longshore & Warehouse Union Local 10. The cause is still under investigation, but union officials say she suffered a seizure and heart attack.

As a result of the incident, ILWU members ceased all work at the port for 24 hours in solidarity with the deceased, as well as to conduct its own inquiry into what happened. Port terminals reopened the evening of July 17.

Daniels’ death is the third at the port in less than a year, and the second in just two months.

Operations were last shut down at the port on May 17 after a truck being driven by a longshore worker was knocked into the water by a piece of machinery. Longshoreman Manuel Stimpson, 78, of San Francisco had worked at the port for about 47 years when he was killed after the truck plunged into the San Francisco Bay.

According to ILWU representatives, Stimpson was working as a clerk and helping direct the placement of containers when the truck went into the water near Berth 30 at the TraPac terminal.

In October 2012, a mechanic performing maintenance on a crane died Oct. 24 after being caught and crushed by a piece of heavy equipment.

Prior to that, however, there hadn’t been an incident at the port resulting in a fatality in at least five years, according to the California Division of Occupational Safety & Health.

 

Crowley Buys Alaska Fuel Company

CPD Alaska, the petroleum distribution arm of Crowley Maritime, has acquired Anderes Oil, a fuel company in Ketchikan, Alaska, in an effort to expand its petroleum distribution business into southeast Alaska.

“This is our first venture in the southeast Alaska market and we are very excited to be expanding into this region,” Crowley Senior Vice President and General Manager Rocky Smith said. “I am confident that we will be successful in integrating this business into the Crowley family.”

Anderes Oil, located shoreside near downtown Ketchikan, includes a bulk plant storing over a million gallons of petroleum products and has miles of pipeline, as well as a marina with a fixed 110-foot-long float outfitted to supply a variety of marine fuels to southeast Alaska.

The Anderes family, after 50 years of serving Ketchikan, is leaving the oil business. Crowley contends however, that although ownership is changing, little else will, and that the company plans to continue to provide products and services under the Anderes name and that its 20 employees are being retained.

“Anderes and Crowley have similar cultures and values emphasizing safety, environmental protection and customer service,” Crowley Vice President Bob Cox said. “Our goal is a seamless transition and supporting the fine employees of Anderes Oil going forward.”

Crowley currently operates 22 fuel terminals in western Alaska and the rail belt, with over 265 employees.

 

 

June Cargo Numbers Flat at Long Beach Port

Cargo volume rose slightly in June at the Port of Long Beach compared to the same month one year ago, while year-to-date figures show an increase of 14.2 percent for the first half of 2013 compared to the first half of 2012, according to newly released data.

A total of 565,476 TEUs were moved in June, up 1.8 percent from the same month last year, and far behind the 646,650 total TEUs moved by the neighboring Port of Long Angeles during the same month.

While imports increased 3.5 percent to 290,448 TEUs during June 2013 at Long Beach, exports were up by 0.1 percent to 133,800 TEUs. Empty containers, which were being sent overseas to be refilled with goods, were up by a mere 44 units, to 141,228 TEUs.

Despite the down month in June, the port’s container volumes showed strong gains at the mid-year point, including 16.2 percent more imports, 10.1 percent more exports and 14.8 percent more empties over the six-month period.

Strong gains were also apparent for the fiscal year to date. So far during FY 2013, Long Beach’s total TEU count has risen 13.8 percent to 4.86 million TEUs compared with FY 2012. The numbers of loaded inbound, loaded outbound and exported containers have all risen by double digits during this fiscal year compared to the last.

FY 2013 began in October 2012 for Long Beach and continues through the end of this September.

 

 

State-of-the-Art Harley Marine Tug Arrives at POLA

Harley Marine Services has brought its most powerful and environmentally friendly tug boat to service the Port of Los Angeles.

The Robert Franco, which arrived in Los Angeles in early July, is one of two Z-drive tractor tugs constructed for Harley Marine by Whidbey Island, Washington based Nichols Bros. Boat Builders. The Robert Franco joins four other tugs in the fleet that assist cargo vessels and tankers in and out of the San Pedro Bay port complex.

“The arrival of this state-of-the-art tug exemplifies our commitment to safety, the environment and providing the most advanced and dependable service to our customers,” Harley Marine Services Chairman and CEO Harley Franco said in a statement.

The Robert Franco features Tier III engines and shore-side electrical power plug-in capabilities.  Tier III engines, which are still years away from being required by law, reduce nitrogen oxides and particulate matter amounts by 90 percent compared to Tier 0 engines.

The Robert Franco is also equipped with 6,800 horsepower and provides 91 tons of bollard pull. Additionally, the vessel has state-of-the-art marine electronics, tow winches and fire and safety equipment.

Her sister ship, the M/V Ahbra Franco, is expected to enter service this summer. Both vessels were designed by Seattle-based Jensen Maritime.

 

 

Tuesday, July 16, 2013

Safe Berth Warranty Revisited


A recent decision from the Third Circuit Court of Appeals, In Re Petition of Frescati Shipping Company, Ltd., 2013 WL 2099746 (2013) should be of interest, if not concern, to many in the maritime industry. Addressing multiple claims with an incomplete factual record, the Third Circuit revisited the intent and scope of the safe berth warranty in a charter agreement.

The Facts of the Case

At all relevant times, Frescati was the owner of the Athos 1, an oil tanker. It time chartered the vessel to Star Tankers. Star Tankers, in turn, voyage chartered the vessel to a group of affiliated oil companies, CARCO.

The time charter between Frescati and Star Tankers required Star Tankers to “exercise due diligence to ensure the vessel is only employed between and at safe places.” The voyage charter between Star Tankers and CARCO provided “the vessel shall load and discharge at any safe place or wharf…” That is, the safe berth obligations in the charters were different. The time charter required only the exercise of due diligence to direct the vessel to a safe berth; the voyage charter required a safe berth.

CARCO owned a terminal on the Delaware River. It was inshore of an anchorage area, which was inshore of the navigation channel. The anchorage’s border ranged from 130 to 670 feet off CARCO’s dock. CARCO maintained a triangular-shaped area of waters adjacent to the berth up to the border of the anchorage. It inspected the area for depth but did not search for debris.

CARCO provided the master of the Athos 1 with a copy of its port manual. It stated the maximum allowable draft at the terminal was 38 feet but was subject to change. CARCO understood the Athos 1 would have a 37-foot draft. The master claimed to have loaded the vessel to a draft of 36 feet, 7 inches. Four days before the Athos 1 was to dock, the maximum berth draft was changed to 36 feet but this change was not communicated to the vessel’s master.

Vessel of the size of the Athos 1 customarily came up the Delaware River, and made a 180-degree starboard turn into the anchorage. Then, they were pushed through the anchorage to CARCO’s dock by tugs. The Athos 1 began to follow this procedure. When the vessel was approximately 900 feet from CARCO’s dock and halfway through the anchorage, it suddenly listed to port and oil became visible on the water. It was later determined that an abandoned anchor lying on the bottom of the river punched two holes in the Athos 1's hull through which 263,000 gallons of crude oil spilled into the river.

The anchor, whose presence was unknown to the parties until the accident investigation, had been in the same position for at least three years. Its owner was never identified.

Frescati was designated the “responsible party” under the Oil Pollution Act of 1990 and incurred $180 million in cleanup costs and repair of the damage to the Athos 1

The Lawsuits and Trial

Frescati filed an admiralty action in federal district court seeking to limit its liability for the spill. It was able to limit its liability to $45.474 million because it had cooperated in the cleanup effort. It was also able to recover $88 million of its cleanup costs from the Oil Spill Liability Trust Fund established under the Oil Pollution Act, because it had complied with the Act’s terms.

CARCO filed a claim in the limitation proceeding to recover the value of the oil lost in the spill. Frescati filed a cross claim against CARCO seeking to recover its non-reimbursed clean up costs, alleging CARCO violated the safe berth warranty in the voyage charter. The United States filed a separate lawsuit against CARCO to recover the amount it had paid to Frescati from the trust fund.

The district court found in favor of CARCO. It held Frescati was not a beneficiary of the voyage charter between CARCO and Star Tankers, and could not recover from CARCO if CARCO breached the safe berth warranty in that agreement. The district court also held CARCO was not negligent when it did not search for debris in the anchorage outside its berth. The district court attributed sole fault to the unknown party that had dropped the anchor. Frescati and the United States appealed the district court’s judgment to the Third Circuit Court of Appeals.

The Appeal

The Third Circuit disagreed with the district court’s analysis of the legal issues and remanded the case to the district court for further factual findings. However, it provided guidelines for the district court to follow.

Among other issues, the Third Circuit analyzed: 1) whether Frescati was a beneficiary of the safe berth warranty in the charter between Star Tankers and CARCO; 2) what the scope of the safe berth warranty was; 3) whether CARCO breached the safe berth warranty; and 4) whether CARCO could be liable for negligence.

Did the Safe Berth Warranty Benefit Frescati?

The voyage charter between Star Tankers and CARCO required CARCO to send the Athos 1 to a safe berth. Frescati was not a party to that charter. Nonetheless, it argued that as the Athos 1’s owner, it was a beneficiary of the safe berth warranty, and could sue CARCO if it sent the Athos 1 to an unsafe berth.

The Third Circuit agreed with Frescati. It relied on two United States Supreme Court cases involving a stevedore’s warranty of workmanlike service. In 1959, the Supreme Court held vessels are “automatic” third party beneficiaries of the warranty of workmanlike service given by stevedores to charterers. A year later, the Supreme Court held the vessel owner, in addition to the vessel itself, was a beneficiary of the warranty of workmanlike service. Because a safe berth warranty, like the stevedore’s warranty of workmanlike service, benefits the vessel itself, the Third Circuit reasoned it would be “nonsensical” to deprive the vessel’s owner of the benefit of such warranty. Accordingly, it held Frescati was a beneficiary of the safe berth warranty in the voyage charter between Star Tankers and CARCO, and could sue CARCO if the warranty were breached.

The Scope of the Safe Berth Warranty

A port or berth is deemed safe if a vessel can “proceed to it, use it, and depart from it without, in the absence of abnormal weather or other occurrences, being exposed to dangers which cannot be avoided by good navigation and seamanship.” Stated another way, a port is unsafe if a particular vessel cannot get to it or leave it without harm, absent abnormal or unavoidable conditions.

The Third Circuit noted the determination of whether a berth is safe must take into consideration the particulars of the vessel entering it. That is, a berth may be safe for one type of vessel but not for another type. Further, the “safe” area is more than the immediate area of the berth, and includes the adjacent areas the vessel must pass through to enter or leave. Finally, the court held the safe berth warranty was not limited to known hazards because that would undermine the strict nature of the warranty.

Was the Safe Berth Warranty Breached?

CARCO agreed if the safe berth warranty applied, it would include the area in and around the terminal including the anchorage. However, the Third Circuit held the district court erred in determining CARCO had not breached the warranty. It reasoned the district court should not have concluded the berth was safe merely because numerous other ships had entered and left it without incident. It sent the case back to the district court for further factual findings including the determination of the actual draft of the Athos 1and the depth of the water. It stated if the Athos 1 had a draft of 37 feet or less, then in the absence of bad navigation or seamanship, the warranty was breached. It also noted if the draft of the Athos 1cannot be determined or is found to be more than 37 feet, then it will be necessary to determine the amount of clearance above the abandoned anchor to confirm whether CARCO provided 37 feet of water. If it did, the warranty was not breached.

Can CARCO be Held Liable for Negligence?

As readers may recall from “A Wharfinger’s Duties” [Pacific Maritime Magazine, September 2009] a wharfinger does not guarantee the safety of a ship using its dock. Instead, it must use due diligence to determine the condition of the berth, and if possible remove known obstacles on the approach to the berth. The Third Circuit considered how far the approach to a berth might extend. It held “in most instances the approach will begin where the ship makes its last significant turn from the channel toward its appointed destination following the usual path of ships docking at that terminal.” It concluded the Athos 1was well within the approach to CARCO’s terminal when striking the abandoned anchor. Accordingly, it held CARCO had a duty to exercise reasonable diligence to provide a safe approach to the terminal. It rejected CARCO’s argument that it should not be liable because it did not have control over the area where the anchor had been abandoned. The court noted that limiting a wharfinger’s duty to areas over which it had assumed responsibility would allow the wharfinger to “define the scope of its liability regardless of the port’s actual approach.”

The holdings in In Re Frescati Shipping should not be overlooked by terminal operators or those engaged in vessel chartering. Doing so can result in unanticipated liabilities.

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 and maritime law and can be reached at marilyn.raia@bullivant.com

 

Port of Hueneme Names New COO


Port of Hueneme Names New COO

U.S. Navy officer John Demers has been named the new chief operations officer at the Port of Hueneme. He replaces Pete Wallace, who’s retiring after 21 years with the port.

Demers, who is retiring from the Navy, begins his new role with the port Tuesday July 23, 2013.

“John comes to us with a strong background in operations and logistics in his over 20 years of service with the United States Navy,” Port of Hueneme CEO Kristin Decas said. “During his military tenure he held senior level officer positions directing diverse cargo handling operations, construction projects, IT activities, training, administration and overall logistics.”

Demers completed two tours of duty at Naval Base Ventura County, first with Naval Mobile Construction Battalion Three and later with the Fifth Navy Expeditionary Logistics Regiment.  He currently serves as Deputy Assistant Chief of Staff at the U.S. Fifth Fleet.

“I am looking forward to returning to the community that I have considered my home for the last 12 years,” Demers said in a statement released by the port. “I am honored by my selection as the Chief Operating Officer, and will bring all my experience and knowledge gained during the more than 20 years of Naval service to help move forward new ideas for the port and the cities of Oxnard and Port Hueneme.”

 

Logistics Center Planned for Portland Port Property

Plans have been finalized to build the PDX Logistics Center I -- the first phase in a three-building, two-phase, 833,360-square-foot logistics park – within the Portland International Center owned by the Port of Portland.

Construction of the first phase, a two-building, 491,200-square-foot project, is expected to begin in August, with completion expected in early Fall 2014. The PDX Logistics Center site is located adjacent to Portland International Airport.

The project is expected to provide tenants with immediate access to the 205 freeway and close proximity to airport freight and transportation services. Construction is being handled by real estate development company Capstone Partners and finance and investment firm PCCP.

“There is currently a shortage of large Class A logistics space over 250,000 square feet in the Portland Metro market,” Capstone Partners Principal Chris Nelson said. “PDX Logistics Center is well positioned to provide new supply of modern industrial park space to meet the increasing needs of new and expanding traded sector firms seeking industrial space.”

The 26-acre property is being leased from the Port of Portland on a long term, 50–year, pre-paid ground lease.

“Attracting new employers to create local jobs and increase our tax base first requires a place for them to locate and grow,” Port of Portland Executive Director Bill Wyatt said. “This lease and the forthcoming development at Portland International Center will be a significant bellwether for economic development and prosperity in this region.”

 

POLA Container Volumes Down Again

Port of Los Angeles container volumes continued their downward trend in June 2013, with port terminals still attributing the decline to the loss of a vessel service that shifted out of the port last year.

June overall volumes decreased 7.2 percent compared to June 2012, according to port data. Imports dropped 7.2 percent, from 353,930 TEUs in June 2012 to 328,324 TEUs this June. Also, exports decreased 15 percent, from 174,418 TEUs in June 2012 to 148,203 TEUs last month.

Combined, total loaded imports and exports for June dropped 9.8 percent, from 528,348 TEUs last June to 476,528 TEUs in June 2013. Factoring in empties, which increased just one percent year over year, overall June 2013 volumes -- 646,650 TEUs -- declined 7.2 percent compared to June 2012’s 696,847 TEUs.

For the first six months of this calendar year, L.A.  moved 3.7 million TEUs, which is down nearly 7.5 percent from the 4.0 million moved over the same time from last year. That said, Los Angeles still moved far more containers during the first half of the year than any other North American port.

For the current fiscal year, which began in July 2012, L.A.’s volumes are down about five percent, falling from 8.1 million TEUs in FY 2012 to 7.7 million this year.

The declines are due in part to French shipping line CMA CGM Group moving a weekly ship call from Los Angeles to the neighboring Port of Long Beach last year. Mediterranean Shipping Co. also jumped from the Port of Los Angeles to the Port of Long Beach late in 2012.

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


 

Construction Begins on Desmond Bridge Replacement

Construction has begun on the $1 billion bridge that’s expected to replace the aging, seismically deficient Gerald Desmond Bridge, which traverses the Port of Long Beach and Terminal Island.

In the early morning hours of July 13, crews began demolishing the final sections of a U-shaped freeway off-ramp west of the existing four lane Gerald Desmond Bridge in order to clear the path for the first sections of the new six-lane bridge.

The port says it’s counting on the bridge to dramatically improve an important commuter and trucking corridor at the Port of Long Beach. The existing bridge height, 155 feet, restricts newer, larger ships from reaching piers within the inner channels, but the bridge will raise the clearance over the port’s inner harbor channel to 205 feet, giving it the tallest span height for a cable-stayed bridge in the U.S.

“As more big ships enter the Pacific trade routes, the Port of Long Beach must be fully capable to handle these larger vessels with optimum efficiency,” port spokesman John Pope said. “This new bridge will improve critical infrastructure that will help keep Long Beach competitive.”

The new bridge, which is expected to be complete in 2016, is being built immediately adjacent to and north of the existing 45-year-old Desmond Bridge, which has been declared obsolete; when the Desmond Bridge opened in 1968, cargo ships were about one-sixth the size of what enters the harbor today.

The $800 million project is a joint effort of the Port of Long Beach and the California Department of Transportation, with funding contributions from the US Department of Transportation and the Los Angeles County Metropolitan Transportation Authority.

Construction updates, traffic information and other details about the Gerald Desmond Bridge Replacement Project can be found at www.newgdbridge.com.