Friday, August 9, 2013

ILWU Sues Port of Portland Over Public Records

The International Longshore and Warehouse Union revealed on August 7 that it has filed a lawsuit against the Port of Portland, alleging numerous ongoing violations of the Oregon Public Records Act.

The lawsuit, filed in Multnomah County circuit court on July 25, outlines public records requests submitted by the union in June, September and December of 2012. According to the union, the port responded to the requests by sending the union an “arbitrary and excessive estimate” of about $200,000 – to be paid upfront -- to identify and locate the requested records.

The $200,000 quote covered only what the port labeled as ‘first phase’ costs and did not include ‘second phase’ costs of attorney and paralegal fees to review and segregate records between exempt and non-exempt information before production of any documents, the union’s lawsuit contends.

Also according to the ILWU, the port asserted it could not provide an estimate of such ‘second phase’ fees other than to say that it could be a substantial amount.

The lawsuit maintains that the port’s treatment of the ILWU’s public records requests were “motivated by discrimination, retaliation and hostility against” the union because of the ILWU’s participation in ongoing litigation involving the port.

“Oregonians have a right to know whether the Port of Portland is irresponsibly managing the biggest public port in our state,” ILWU Coast Committeeman Leal Sundet, a member of ILWU Local 8 in Portland, said. “The port’s lack of transparency is inexcusable.”

In its legal filing, the union asks for, among other things, that the court issue an order declaring the port’s handling of the union’s public records requests to be neglectful, in bad faith, and in violation of the Oregon Public Records Act.

The union also asks that the court order the port to waive or substantially reduce its fees and compel the port to produce to the ILWU the records requested in June, September and December 2012.

The Port of Portland has responded to the lawsuit by saying it has abided by state public records law and that the high fees were due to the broad scope of the information requests, which the port estimates would take hundreds of hours and a large allocation of port resources to compile.

The port says it eventually lowered the $200,000 preliminary quote to $50,000 and offered to set up a payment plan, an offer the union has yet to respond to.

The union has been seeking port records as part of an ongoing labor dispute involving contract negotiations with a Port of Portland grain handling terminal.

Port of Seattle Approves Viaduct Replacement Funding

The Port of Seattle Commission on August 6 approved spending almost $268 million in tax funding on the SR 99 Alaskan Way Viaduct Replacement Program, a two-mile, four lane tunnel being constructed in Seattle.

“If Washington state is going to keep family wage jobs, we’ve got to keep freight and goods moving through our region,” port Commissioner Bill Bryant said. “That’s why the port helped pay for underpasses and overpasses in the Kent-Auburn valley, and why the Port of Seattle is fulfilling its commitment to help pay for a reconfigured SR 99 and tunnel.”

Under funding agreement, the port has committed to pay $120 million on May 1, 2015 toward the tunnel and north and south portal projects, and $147.7 million on May 1, 2016, for a total of $267.7 million.

The replacement tunnel is expected to carry State Route 99 under downtown Seattle from the SoDo neighborhood to South Lake Union in the north. Over 20 projects, including the SR 99 tunnel, are expected to work together to replace the Alaskan Way Viaduct while improving freight mobility.

Tunneling beneath Seattle allows crews to replace the viaduct while minimizing highway closures during construction. Additionally, a new overpass under construction to the west of the stadiums is expected to allow freight and other traffic to bypass a busy railroad track that crosses South Atlantic Street, near the entrance to Terminal 46.

The new funding between the State of Washington and the port fulfills an agreement the two agencies originally adopted in early 2010.

“This agreement is critical to the successful completion of the bored tunnel replacement for the Alaskan Way Viaduct,” George Allen, Senior Vice President of the Seattle Metropolitan Chamber of Commerce, said in a statement. “By keeping traffic flowing along the SR 99 corridor, this project maintains the regional capacity we need for continued movement of freight and other goods between the industrial areas of the city.”


Tacoma, Prince Rupert Ports Rank High in Quality Awards

The Port of Tacoma ranked highest among West Coast ports in the 30th annual Quest for Quality awards, when it came to ease of doing business while the Prince Rupert Port Authority won first in overall value.

The awards, which were revealed August 1, are given out by Logistics Management Magazine. Winners are selected by the magazine’s readers, who are the buyers of logistics and transportation services. The 2013 awards recognized 129 top performers, including carriers, third-party logistic providers and ports.

The survey, which was by invite only, was conducted by Peerless Research Group. During it, readers evaluated ports using five criteria: ease of doing business, value, ocean carrier network, intermodal network, and equipment and operations.

“In order to evaluate a provider, the voter must have experience with that specific provider at some point over the past 12 months,” Peerless Research Group research director Judd Aschenbrand said. “So, the Quest for Quality Survey goes beyond name recognition and popularity and is based on the merits and performance of the service provider.”

Besides its high mark for ease of doing business, Tacoma ranked second in the West Coast port category in total value, after the Prince Rupert Port Authority.

Trailing Prince Rupert and Tacoma in the ease of doing business and value categories were the ports of Seattle, Oakland, Los Angeles and Long Beach.

In the same survey, Hapag-Lloyd was voted the best ocean carrier for on-time performance and COSCO was tops in overall value.

The complete list of winners is featured in the magazine’s August issue and online at


Panama Canal Expansion Reaches New Milestone

The Panama Canal Expansion project is now more than 60 percent complete, according to the latest progress report from the government agency in charge of managing and overseeing the project.

As of late July, the expansion was 60.4 percent finished, a 15 percent increase from a year ago, reports the Panama Canal Authority.

The project, which involves the construction of a third lane of traffic, is expected to double the canal’s capacity by 2015, was reportedly almost 45 percent complete as of August 31, 2012, but is believed to be about six months behind it’s originally projected schedule.

The project, which was officially kicked off in September 2007, consists of, among other things, the excavations of new access channels, the widening of existing channels and the deepening of navigation channels.

The expansion is expected to allow post-Panamax ships to travel through the canal en route to East Coast terminals, something that could negatively affect West Coast vessel traffic.

The Panama Canal Authority also says that both canal entrances are now ready for bigger ships because the deepening and widening of the Atlantic and Pacific access channels have been completed.

Also, the Authority says, in June the Panama Canal received three of the 14 new tugboats that are expected to enhance the Canal’s current fleet. The additional tugs are to be used to assist post-Panamax vessels expected to transit the expanded Canal.

A final commissioning of the expansion is planned to begin in September 2014, with commercial transits expected to begin by mid-2015.


M/V Hawaii: Teaching Old Tugs a New Trick

In late June, a new 120-foot by 35-foot ocean-going tugboat was christened by June Nakachi, the new vessel’s sponsor, at the JT Marine Shipyard in Vancouver, Washington. The M/V Hawaii was built as the first of two vessels in a venture by newly-formed Hyak Maritime LLC. Hyak co-owners Gordon Smith and Robert Dorn hope to build a series of these vessels to replace an aged fleet of US line-haul coastal and ocean tugs, most of which are nearly 40 years old. Hyak’s second tug, the M/V Washington, will be delivered by the end of the year.

“We expect to build several more of these boats to lease to operating tug and barge companies,” Dorn says. He notes that while the US ship-assist and ship escort tug fleet is fairly modern, there has been little innovation in the US ocean-going line-haul fleet for decades. “In 2011, we did an in-depth study of the US coastal towing industry,” he says. “It became clear that the boats that made up the largest working segment – 335 boats with 4,000 to 6,000 horsepower – were some of the oldest tugboats in the country.” Dorn notes that these are the most properly sized tugs in most of the large US company fleets and are indispensable to move our most common sizes of ocean-going fuel and freight barges on the coasts and across the oceans. Most of these boats now cannot work in California without paying heavy state fines, are in violation of evolved MARPOL rules and cannot sail to foreign countries.

Dorn predicts that the 4,000 to 6,000-HP tugboat will continue to make up the largest component of the US coastal market, based on the sizes of the ocean-going freight and fuel barges that continue to be regularly built in US shipyards.

“The tug requirements for the US coastal barge fleet will remain the same as they have been for decades; but operators and their customers could enjoy much lower fuel, operating, and maintenance/repair costs with safer, more modern boats that are allowed to go anywhere in the world, ” Dorn states.

Most US transportation industries rely on standardized equipment, whether it be a rail car, a truck/truck trailer, or a 737. In considering how a standard ocean-going tugboat should be, Hyak consulted Bob and Ric Shrewsbury of Seattle-based Western Towboat. Their company builds its own tugboats, and is currently working on the seventh Titan-class ocean tugboat utilizing azimuthing stern drives. “The Shrewsburys and their Port Engineer, Ed McEvoy, have developed the perfect tugboat to perform the most difficult weekly scheduled towing job on the planet,” Dorn says. The vessels move 420-foot by 105-foot loaded rail/freight barges from Seattle to Whittier, Alaska across the notorious Gulf of Alaska at 10 knots, and then moor the barges in a remote difficult port without needing assist tugs. “The Western Titan boats hit the power, the speed and the maneuverability ‘sweet spots’,” Dorn says. “Gordon and I are very grateful that Western Towboat and their naval architect, Jensen Maritime, licensed us the use of their design.”

Hyak is powering the Hawaii with a pair of medium-speed 900-RPM General Electric 8L250 EPA Tier II engines coupled by Centa connectors and carbon-fiber shafting to Schottel FP1515 azimuthing stern drives. Dorn expects that virtually no maintenance will be required on the power train for 40,000 hours. “I budgeted an average of $350,000 in annual maintenance and repair costs to a machinery-class 5,000 HP tug during my days towing ocean tank barges at Sea Coast and Sirius,” he says. “Getting to 40,000 hours without overhauls is about 7 years without that annual number pinned to the tug.”

The projected fuel and lubricating oils savings for the Hyak boats are also remarkable. The GE four-stroke medium speed engine uses 18 percent less fuel than a high-speed four-stroke engine of similar horsepower, and unlike the industry standard two-stroke medium speed engine boats, consumes no lubricating oil. “I kept comparing the fuel power curves of the GE engines to similar horsepower engines and realized that I could expect to save more than 800 gallons of fuel and 30 gallons of lube oil daily over my normal Sea Coast or Sirius tug.” At $3.00/gallon for diesel and $8.00/gallon for lube oil, the numbers showed that using the Hawaii would have saved him more than $700,000 in fuel costs annually over one of his older boats. “Gordon and I were trying to find instances in our histories of towing barges around the Pacific where we would have preferred the tug we actually used over the Hawaii , he says. “We couldn’t think of a single instance where the Hawaii would not have made one of our tows cheaper, faster, and safer.”

The Hyak vessels are being offered out on long-term bareboat charter. The Hyak goal is to have the Titan class boats become the industry preference. “Tugboatmen typically have very specific ideas about what they want in a boat and what will work for their particular companies. It’s been very gratifying to have many tug industry leaders visit us during construction and tell us that they love the boat and it could easily tow their barges. Trust me, tugboat guys would tell us if they didn’t like it,” Dorn says.

During sea trials, the Hawaii measured 82.5 tons of bollard pull, and 14.5 knots free running speed. “This was even better than we expected, and means that our performance standard –pulling a loaded 420-foot barge at 10 knots – has been met. It has the fuel efficiency of a 4,000-horsepower boat but pulls like a 6,000-horsepower boat.”

The tug is set up for both barge towing and barge pushing modes, and the hydraulic deck machinery, provided by JonRie, is all fully visible and controlled from the pilothouse. The double-drum tow winch has 2,600 feet of 2 ¼-inch wire on one drum and 1,800 feet of 2-inch wire on the second drum. The headline winch has 450 feet of 7-inch plasma line. Two John Deere 6081 Kohler gensets each provide 195 kW of electrical service and each genset is also plumbed to provide full hydraulic power to the winches.

The Hawaii and Washington each measure 91 US regulatory tons and 497 international tons, allowing the vessels to operate with the smallest crew complement possible in US and international waters. The ABS A1 Maltese Cross Towing certification with Marpol annexes compliance allows each vessel to sail to all international ports. The living quarters are acoustically dampened and fireproofed to the highest international crew comfort and safety standards, and a Daikin HVAC system conditions each cabin or crew space individually.

While admitting that a tugboat is already a complex machine, Dorn says in the case of the new Hyak boats, simplicity is the name of the game. “We’re building a very straightforward tug that will be pretty simple to operate and maintain, and will provide tug companies and their customers substantial cost savings while meeting the new regulatory requirements. We think we met our goal of taking Western Towboat’s great Titan-class boat and modifying it to suit a broad range of operating companies’ requirements,” he says.


Tuesday, August 6, 2013

Congressional Representation

Washington State’s Junior Senator, Maria Cantwell (D) has perked up the ears of the maritime community with recent comments about the Jones Act.

At a hearing of the Energy and Natural Resources Committee on July 16th, the senator called for greater transparency in gasoline markets and refinery shutdowns. Senator Cantwell highlighted a new report demonstrating that West Coast gasoline prices have broken from historic trends since April 2012. The senator noted that in Washington State, prices had risen 9 cents in the past week and were 27 cents higher than the national average.

“Washington state prices are among some of the highest in the nation,” she said, noting that last year’s West Coast refinery fire was unfairly blamed for a spike in prices (see Pacific Maritime Magazine, September 2012) saying, “My constituents want to see more transparency there. Hamburger probably has more regulation on it than gasoline.”

During a presentation to the committee, Faisel Khan, Managing Director of Citi Research claimed that one of the reasons for spikes in gas prices was the Jones Act, and told the committee that the cost of moving crude by Jones Act tanker could be three to six-times the price of using non-Jones Act tankers.

“Mr. Khan I wanted to mention the fact that you bring up the Jones Act as something of a price increase,” the Senator countered. “CitiGroup has been under investigation and paid penalties both for fraud in the mortgage market and is now under investigation by the Financial Services Authority (FSA) for manipulation in gas prices, and the fact that you come here and blame the Jones Act as some reason why we have high gas prices is just amazing to me.”

Senator Cantwell’s mention of the Jones act had many in the US maritime industry cheering her defense of the much-maligned legislation. Ed Morse, chief commodity analyst at Citigroup, has said publicly the Jones Act adds between $6 and $8 a barrel to transport costs. Morse has said that based on his calculations, it’s often cheaper for a Gulf Coast refiner to send gasoline to Brazil than to New York. Recent news stories have interviewed oil company executives such as Joe Petrowski, CEO of Gulf Oil, who said, “If foreign owned and flag ships were able to carry gasoline in US waters, the price of gasoline in the North East and in Florida could be 20 to 30 cents lower.”

According to shipping and capital magazine Marine Money International, a mid-sized product tanker costs $130 million in the United States versus $34 million in Korea, and a 4800 TEU container ship would have a price tag of $200 million in the US vs. $46 million in South Korea.

This column doesn’t often see the need to defend the Jones Act, but we will call attention to the sad story of the 5-year-old MOL Comfort, a state of the art Korean-built containership that broke in two in the Indian Ocean in June, thankfully with no loss of life. The two pieces floated separately for a time while salvors raced to the scene. Too late for the aft section, which sank in late June and the bow section, which burned and sank in mid-July. Had that ship been built by a US yard, would she have met the same fate?

Port of Tacoma Settles Wetlands Damage Case

The Port of Tacoma and two contractors have agreed to pay a $500,000 penalty and restore wetland habitat to compensate for alleged violations of the Clean Water Act that damaged valuable Puget Sound wetlands.

The Port of Tacoma and contractors Scarsella Brothers Inc. and WAKA Group Inc. have agreed to spend an estimated $3 million on restoration projects, including restoring wetlands on nearly 10 acres of port property, including stream ecosystem restoration and enhancements on nearby Upper Clear Creek where the port will restore or improve 28 acres of wetlands as part of a larger project.

The case originated in 2008, after the EPA and US Army Corps of Engineers discovered that the Port of Tacoma hired a contractor to raze vegetation and destroyed more than four acres of wetlands in Hylebos Marsh, an area that provided important wildlife habitat and enhanced Puget Sound water quality.

The contractor performed the work at the direction of the port, which had been working to eradicate vineyard snails from Hylebos Marsh with guidance from the US Department of Agriculture. An order from USDA stated that plowing and grading to deal with the invasive snail species was acceptable in non-wetland areas only.

At the time EPA and the Army Corps discovered the destroyed wetlands at Hylebos Marsh, the port also disclosed that in 2006 it directed a contractor to dump over 4,000 cubic yards of urban fill materials—including soil, concrete and asphalt pieces—into nearly two acres of wetlands in an area east of Hylebos Marsh.

The Clean Water Act prohibits discharge of pollutants to the waters of the United States, including certain wetlands, except as authorized by a permit. The Port of Tacoma did not have required Clean Water Act permits to conduct work in the wetlands.

The wetlands impacted by the unpermitted activity were located adjacent to Commencement Bay, a waterway that has undergone a major EPA Superfund cleanup and an area that has lost most of its historic streams and wetlands.

“We can’t afford to lose Puget Sound wetlands, especially where they are so scarce,” EPA Regional Administrator Dennis McLerran said. “The permitting process exists to allow responsible development that also protects the environment.”

The settlement proposal has been filed with the court, and according to the terms of an August 5 settlement with the U.S. Environmental Protection Agency and US Justice Department, the public will have 30 days to provide comments, which the court will consider before the settlement is approved.

The restoration work is scheduled to begin later this month.

Chevron Settles Refinery Fire Case

Chevron Corp. on August  5 agreed to provide $2 million in fines and restitution to settle legal actions resulting from a fire that took place at its Richmond, California refinery one year ago today.

“This criminal case achieves our goals of holding Chevron accountable for their conduct, protecting the public and ensuring a safer work environment at the refinery,” Contra Costa District Attorney Mark Peterson said in a prepared statement.

Chevron and government investigators had both found that it was pipe corrosion that caused a leak that sparked the August  6, 2012 fire. Both investigations determined that Chevron failed to replace the 40-year-old pipe despite numerous warnings from its own inspectors.

At the time of the accident, workers were reportedly in the process of repairing piping connected to the still-operating distillation tower when the leak intensified, and due to the high temperature of the material in the tower, in excess of 600 degrees Fahrenheit, the gas-oil immediately formed a large flammable vapor cloud.

No fatalities or serious injuries occurred, but the large noxious cloud resulted in about a dozen refinery employees and scores of residents of the surrounding area being hospitalized with respiratory problems and other ailments.

In January, Chevron said it paid $10 million so far to settle over 23,300 claims connected to the blaze.

Before the fire, the 2,900-acre facility, which is in the San Francisco Bay area, was processing about 242,000 barrels of crude oil daily, with the end products primarily being diesel and jet fuels, as well as gasoline. But after the blaze, production of motor fuel at the facility was cut by over 50 percent.

Before the accident, the Richmond refinery was processing 242,000 barrels of crude daily, accounting for about 12 percent of the state’s 2.09 million barrels per day of net capacity.


Freighter Detained Due to Safety Violations

The US Coast Guard last week detained the Hong Kong-flagged container ship Great Success, requiring the vessel to remain at the Port of Longview because of numerous safety violations, the USCG revealed August 2.

Port State Control officers from Coast Guard Sector Columbia River’s Marine Safety Unit in Portland, Oregon discovered the discrepancies during routine inspections of the 553-foot bulk carrier vessel in Kalama, Washington on July 30 and Longview on July 31.

The vessel, which was built in 1998 and is owned by Rich Target Shipping, was loaded with grain and had been scheduled to depart for Japan prior to its detention.

Most safety discrepancies were related to fire danger and included excessive oil and oily water mixture in the bilges, excessive oil in the engine room and oil-saturated lagging insulation throughout the engine room, the Coast Guard says.

Among the violations found was an emergency fire pump that was leaking water and flooding the emergency fire pump room. Also, the condition of the incinerator posed a significant fire hazard and could not be tested safely due to oil-saturated lagging insulation on the incinerator and pooling of oil in the immediate vicinity.

Additionally, all three generators and the boiler burner had active lube oil leaks, causing pooling of lube oil beneath the equipment, according to the USCG, and a fire door within the purifier flat could not be opened from inside the space creating an unsafe way out for crewmembers.

Despite the violations, no pollution has been reported in connection with the ship.

As of August 6, the vessel is still at anchor in Longview and is expected to remain there until the violations have been corrected.


China Reveals Shipbuilding Industry Revival Plan

China, home of the world’s biggest shipbuilding market, has revealed a three-year plan to restructure its shipbuilding industry in order to help end a prolonged slump.

The 2013-2015 strategy, which was publicly unveiled by the Chinese State Council August 4, outlines multiple areas of focus to raise the efficiency of the sector and position it as a global competitive industry.

One of the plan’s components is disallowing financial institutions to lend to companies embarking on new shipbuilding facilities. Among the other components are: the advancement of technology in the shipbuilding sector, an expansion into offshore shipbuilding and equipment construction, controls on adding new yard capacity, faster phasing out of old vessels and the capturing of a larger global market share.

The capacity controls involve local authorities and governments strictly controlling new capacity by halting approvals of new shipbuilding facilities as well as stopping projects that had proceeded without first securing the necessary permits.

China had previously said it plans to force consolidation in a number of industries struggling with sluggish demand and severe overcapacity to rebalance the economy. As part of the consolidation, the government wants aging ships dismantled and shipbuilders to build high-end offshore engineering products, which it expects will have higher market demand.

Although the country’s shipbuilding sector is the world’s largest, since the most recent global recession, it has suffered from overcapacity, a shortage of new orders, price declines for building ships and a slump in the freight market.

Under its new three-year plan, the government says, Chinese shipbuilders should aim to secure 25 percent of the global market share for high-tech ships and one-fifth for the global offshore engineering product market by 2015.