City Files $8 Million Claim Against Port of Hueneme

The Oxnard Harbor District, which oversees the Port of Hueneme, has had a claim filed against it by the City of Port Hueneme alleging that the port owes millions of dollars in back payments.

The city, according to an article in the Sept. 12 edition of the weekly Ventura County Reporter newspaper, has filed a petition against the port claiming that the city is owed $8 million in back payments for use of city-owned land and services over the past 30 years.

The issue is regarding what is included in the gross annual income numbers, and whether certain aspects were being calculated correctly. The city contends that the port hasn’t calculated payments correctly.

“The city’s position is that the city has been collecting revenues not based on the gross operating revenues until relatively recently,” City Attorney Mark Hensley told the news weekly.

Port of Hueneme Executive Director Kristin Decas told the newspaper she believes the claims are unsubstantiated and that an independent study conducted in 2012 found nothing noteworthy regarding the port’s payments.

“They’ve been reviewed by several different auditors,” Decas said of the payments. “It is the auditor’s calculation of gross revenue what we pay the city, and up until this time it has not been challenged.”

The city’s legal action indicates that it wants to take the matter to arbitration, but the city has also said that if a deal can’t be reached, it could file a lawsuit against the port.

The Port of Hueneme has in recent years operated at a net loss of income. After losing about $916,000 in fiscal year 2010 and $2.6 million in FY 2011, it dropped $1.8 million last year, and is projected to lose another $1.7 million this year, according to its latest budget projection.

Dates Set for International Freight Conference

The International Urban Freight Conference, formerly known as the National Urban Freight Conference, is scheduled for Oct. 8-10, 2013 at The Westin Long Beach Hotel in downtown Long Beach, California.

The event, known as I-NUF, brings together researchers and practitioners from throughout the world to share emerging, multi-disciplinary research on all aspects of freight in metropolitan areas. Panels, presentations and speakers from throughout the United States and 16 countries are scheduled to be part of this year’s fifth annual event.

Session topics include: environmental impacts and responses; the economics of urban trucking; port operations; emerging trends in consumption, production, and spatial organization; security and vulnerability; and best practices.

Also part of the schedule: optional site visits to a Ralphs Grocery Distribution Center and the Alameda Corridor.

The keynote speaker for the Wed., Oct. 9 luncheon is Chuck Holland, Vice President of Engineering at UPS, who will offer perspectives on emerging trends in local package delivery including the impacts of e-commerce and home shopping on the urban freight business.

Scheduled to be featured in a spotlight luncheon interview on Tues., Oct. 8 is Jake Racker, Regional Logistics Director at Kroger Co., who’ll discuss recent changes in distribution for the grocery industry especially in the area of automation.

The event is organized by METRANS Transportation Center, a joint partnership between the University of Southern California and California State University, Long Beach.

Registration and conference information is available at www.metrans.org, or by calling (562) 985-2876.

POLB to Conduct Foreign Trade Zone Workshops

The Port of Long Beach plans to conduct two free workshops next month on the advantages and opportunities of doing business in a foreign trade zone.

Attendees at the events in early October will be able to hear from foreign trade zone professionals regarding how the economic development tool can help businesses better compete in global markets.

The first workshop is scheduled for 8:30 to 11:30 am Wed., Oct. 2 at Brandman University, Room 111, 16355 Laguna Canyon Road, Irvine, CA 92618. The workshop is presented in conjunction with the Orange County Business Council. Planned speakers include officials from the port’s Trade Development Division, US Customs & Border Protection, Ricoh Electronics and KPMG.

The second workshop is set for 8:30 am to 11:30 am Thurs., Oct. 3 at the City of San Fernando’s

Aquatics Center Conference Room, 208 Park Ave., San Fernando, CA 91340. In addition to speakers from the port and Customs, officials from law firm Miller & Co. PC and distribution services company Tri-Link West are expected to address the assemblage.

Reservations for the Oct. 2 workshop can be made via http://www.polb.com/economics/ftz/oct2workshop.asp. Oct. 3 workshop reservations are available via http://www.polb.com/economics/ftz/oct3workshop.asp.

Anyone with questions may call Diana Lam-Brandt of the Port of Long Beach at (562) 283-7757, or email her at diana.lam-brandt@polb.com.

Cruise Industry Employees Help Build LA Area Home

About 100 cruise industry workers volunteered with Habitat for Humanity on Sept. 11 to build a house for a veteran in the greater Los Angeles County area.

Volunteers from three cruise lines – Princess Cruises, Cunard Line and Uniworld Boutique River Cruises – joined the “Habitat for Heroes” initiative, which was created by Habitat for Humanity’s San Fernando/Santa Clarita Valley chapter and the California Department of Veterans Affairs to help build houses for low-income veteran families.

During their day as volunteers, the cruise line employees helped with the framing, insulation and construction of a new house in the Sylmar neighborhood, located in the San Fernando Valley region of Los Angeles.

“We’re proud that members of our industry took a day out of the office to help a local veteran's family, which truly exemplifies the spirit of the National Day of Service,” Christine Duffy, President and CEO of the Cruise Lines International Association, said the day of the event. “Volunteer events like today’s are just one example of how the cruise industry gives back to worthy organizations in the ports where ships visit and the communities where employees live and work.”

Fidely Watch: 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?

Plans for Tacoma Bulk Liquids Facility Derailed

Targa Sound Terminal, which since early this year had been studying the idea of building a $150 million bulk liquids distribution facility at the Port of Tacoma, has now abandoned the plan, saying the project is not economically viable.

In a formal notification letter, TST told the port Sept. 6 that after seven months of studies, it does not intend to proceed with building the planned tank farm, which would have sat on a former smelter site and imported crude oil from North Dakota and elsewhere.

“We used the feasibility period to thoroughly evaluate the option of leasing the property and expanding our operations,” the letter, which is signed by TST President Troy Goodman, reads in part. “In spite of the tremendous support we received and our best efforts, we regret that we have been unable to identify an economical path forward for our project.”

The decision is a blow to the port, which had already begun putting the infrastructure in place for a terminal. Earlier this year, Tacoma began an environmental cleanup of the 96-acre site, including removing dozens of old buildings, while salvaging and recycling more than a million pounds of metals from the structures.

The port had also started building construction tracks to serve the terminal and other facilities along the Blair Waterway.

TST has indicated it plans to continue operating an existing terminal along the Tideflats’ Hylebos Waterway, which handles petroleum, petroleum products and renewable fuels.

Long Beach Port HQ Move Delayed

Worried about cost overruns, the Port of Long Beach has pulled back – for now – on a plan to temporarily move its headquarters to a location about a dozen miles inland.

At its most recent business meeting, the Long Beach Board of Harbor Commissioners unanimously voted to bring to a halt the work an architectural firm had been doing to renovate an eight-story building near the Long Beach municipal airport that the city bought in December 2012.

The port paid $14.25 million for the building, and since March has spent $16.6 million on repairs, upgrades and other costs. The renovations, which include new heating, ventilation and air-conditioning; carpeting; and improved access for the disabled, were originally expected to be complete this fall, but were later pushed back to the spring of 2014.

During its Sept. 3 meeting, the harbor board approved the suspension of work by San Francisco-based architectural firm M. Arthur Gensler Jr. & Associates, so that a facilities management expert in the City of Long Beach’s Public Works Department, Del Davis, can take a look at the work done so far, and give suggestions on how the renovation process might be improved.

The eight-story building, which was previously occupied by the Boeing Corp., was built in 1987; Long Beach closed escrow on it Dec. 27. The building is expected to house the port’s administrative staff of about 350 people for three to five years while the port seeks a location for, and builds a new, permanent HQ in or near downtown Long Beach.

The current seven-story administration building, which sits in the heart of the port, is more than 50 years old, overcrowded and doesn’t meet current seismic standards.

2013 Federal TIGER Grant Recipients Announced

The Port of Garibaldi has become one of very few West Coast recipients of funds doled out during the latest round of the US Department of Transportation’s Transportation Investment Generating Economic Recovery, or TIGER, program grants, which were announced Sept. 6.

Garibaldi, which is the closest seaport to Portland, received a $1.47 million TIGER grant which, when combined with funds from the Economic Development Administration and the statewide infrastructure investment program ConnectOregon, are expected to be used to complete utility and road improvements leading to the port’s Commercial Avenue wharf.

The port is in the midst of a project to revitalize the 100-foot long, 400-foot wide wharf.

The DOT also awarded $24 million in 2013 TIGER grant funding to Washington state light rail and commuter train operator Sound Transit.

The money is spread across two grants, with a proposed Tacoma Trestle Bridge replacement receiving $10 million in TIGER funds. The replacement project is designed to improve reliability by allowing two main tracks in an area of Tacoma where Sounder, Amtrak and freight trains all share the same track. Work is expected to begin in late 2015 and conclude in 2017.

The remainder of the Sound Transit funding goes toward preparation for extending light rail service across I-90 to Mercer Island, Bellevue and Redmond's Overlake area. Sound Transit and the Washington State Dept. of Transportation are working together to complete the third and final phase of adding new HOV lanes in both directions to the existing bridges.

The new lanes would establish 24-hour HOV capacity in both directions; today’s reversible lanes only serve westbound vehicles in the morning and eastbound vehicles at night. The project would ensure that the current number of general purpose and HOV lanes is in place when the I-90 center lanes are closed during the construction of light rail in the fall of 2016.

In all, 52 transportation projects in 37 states were awarded a total of $474 million from the TIGER grant program, with the majority of recipients being on the East and Gulf coasts.

San Diego Terminal Improvement Project Complete

The cargo ship M/V Fidelio, operated by Wallenius Wilhelmsen Logistics, has become the first vessel to visit the Port of San Diego’s Tenth Avenue Marine Terminal since the facility underwent $3 million in capital improvements.

On Aug. 23, 2013, the vessel offloaded three 100-megawatt generators, each weighing 160 tons. The generators were destined for a Southern California power plant.

The renovation included the demolition of transit sheds and warehouses that were originally built to accommodate cargo that moved on pallets and required covered storage, like newspaper and cotton.

The port says it invested in the project to provide more flexible berthing and to improve its ability to handle specialty cargo that requires large space for storage and staging. Demolition began in February 2013 and was completed in August.

The end result was an additional 58,000 square feet of open space at the terminal, allowing for easier offloading of cargo for either temporary storage or direct transit by truck or rail.

The 96-acre Tenth Avenue Marine Terminal, which has a maximum channel depth of 43 feet, is a multi-purpose eight-berth facility. Inbound cargo includes refrigerated commodities, fertilizer, cement, breakbulk commodities, and forest products. The terminal features a 300,000 square foot cold storage facility that warehouses fresh produce and other perishables.