Friday, September 27, 2013

NASSCO, San Diego Port Sign Clean-Up Accord

An agreement has been reached between shipbuilding and repair company NASSCO and the Port of San Diego regarding what could eventually become the largest-ever cleanup of toxins in San Diego Bay.

Under the agreement, which was reached Sept. 18, the port has agreed to pay an undisclosed share of the cleanup project’s estimated $75 million cost.

The area around the NASSCO and BAE Systems’ shipyards is expected to be the first – and largest – of several sites to be cleaned up over the next few years, according to the accord. In all, about 140,000 cubic yards of contaminated sediments is expected to be removed.

The San Diego Regional Water Quality Control Board directed several parties to undertake the dredging project for what it refers to as the “Shipyard Sediment Site” in a March 2012 order. They include NASSCO, BAE Systems, the City of San Diego, Campbell Industries, San Diego Gas and Electric, the US Navy and the Port of San Diego. These parties, among others, have been involved in a federal court lawsuit over responsibility for the contamination at the site and the cost to clean it up.

The Port of San Diego has agreed to pay a share of the project costs to help move the project forward and resolve the port’s involvement in the litigation relating to the cleanup at the NASSCO site.

“The Port of San Diego takes its stewardship of San Diego Bay very seriously,” Port Chair Ann Moore said in a prepared statement regarding the matter. “This agreement with NASSCO represents the port’s long-standing commitment to a clean and healthy bay, and we are excited for the work to begin.”

The cleanup operation is expected be conducted from a barge; a clamshell bucket would be lowered from a crane into the bay where it will scoop up the sediments, which would be mixed with a cement mixture before being trucked to a landfill. The work won’t begin, however, until funding from other involved parties is secured.

“NASSCO is delighted that it has now reached an agreement in principle with the Port District that would bring this historic cleanup project one step closer to implementation,” NASSCO Communications Director Sarah Strang said.

NASSCO, which leases 126 waterfront acres from the Port of San Diego, has been building and repairing ships there for more than 50 years.

Port of Longview CEO Gets New Contract, Raise

Port of Longview Chief Executive Officer Geir Kalhagen, who was hired a year ago to replace the retiring Ken O’Hollaren, will receive a six percent pay raise and new three-year contract, which is expected to keep him at the port through at least 2016.

Kalhagen is slated to be paid $170,000 annually as CEO, up from the $160,000 salary he earned after replacing O’Hollaren in September 2012. O’Hollaren, who retired Dec. 31, 2012 after 32 years with the port, had earned about $135,600 annually at the time of his departure.

The new contract, which was discussed by the port’s Board of Commissioners in closed session Sept. 11, was signed Sept. 15 and goes into effect Oct. 1.

The new contract was a vote of confidence in Kalhagen, who has overseen measurable growth at the Port of Longview during his relatively short tenure. In 2012, the port generated $33.8 million in operating revenue, surpassing the Port of Vancouver as second-largest port on the Columbia River for the first time. During the first half of 2013, the port took in about $15.2 million, about two percent above last year’s pace, according to data.

Prior to joining the Port of Longview, Kalhagen was the general manager for the Pacific Northwest office of Tidal Transport and Trade for a little over two years. Before joining Tidal Transport in June 2010, he spent 15 months as an operations manager with Grieg Star Shipping. From December 2007 to January 2009 he was an operations manager with Star Forest Carriers PTE Singapore.

Cruise Industry Publication Lauds Port of Seattle

The Port of Seattle has been named “Port of the Year” for 2014, by the editors of German cruise industry publication Koehler’s Cruise Guide, with the magazine citing the port’s environmental initiatives and cruise customer experience as factors in the choice.

Koehler’s covers the international cruise industry for travel agents and tourists in the European Union’s largest economy. The award was announced Sept. 24 in Hamburg.

“The Port of Seattle is dedicated to continuous reductions in maritime-related emissions,” the publication said of its choice. “Being a pioneer in shore power for the cruise industry, the US gateway to Alaska offers perfect logistics, as well as passenger friendly downtown locations.”

The Cruise Lines International Association recently estimated that 1.7 million Germans will take an overnight cruise in 2013 – more than any other European nationality.

“Germany is an increasingly important market for Seattle’s cruise and tourism-related businesses,” Port of Seattle Commissioner John Creighton said. “This recognition will drive home the message that we offer a unique vacation experience even as we work to reduce our environmental footprint.”

Seattle currently leads all West Coast cruise homeports in passenger volume, generating more than 4,000 jobs, $381 million in annual business revenue and $16.8 million annually in state and local tax revenues. Each vessel call generates $2.1 million for the local economy, according to port data.

Royal Caribbean Begins Oasis-Class Vessel Construction

Royal Caribbean International cut the first piece of steel for its third Oasis-class ship on Sept. 23, marking the first construction milestone for a vessel that, at about 227,700 gross register tonnage, is expected be the world’s largest cruise ship.

A ceremony marking the event was held at the STX shipyard in Saint-Nazaire, France, where the ship will be built. Royal Caribbean Cruises Chair and Chief Executive Officer Richard D. Fain, Royal Caribbean International President and CEO Adam Goldstein and STX France CEO Laurent Castaing were among those in attendance.

“We have built 12 ships for Royal Caribbean and are extremely proud of the strength of our relationship,” Castaing said. “Oasis 3 is one of the biggest challenges ever undertaken in the history of our company and our teams are excited and ready to make this a successful project.”

The new vessel will join sister-ships Oasis of the Seas and Allure of the Seas, which were introduced in 2009 and 2010, respectively. The two ships have 225,282 GRT and 16 decks with 2,700 staterooms, as well as 82-foot-long zip line, a handcrafted carousel, elevating bars, high-diving performance venues and a “Central Park” with more than 12,000 live trees and plants. “The Oasis-class ships have fundamentally changed the cruising landscape,” Fain said. “We are delighted to be offering a third Oasis-class vessel for our guests as well as to be back at STX France after such a long tradition of building amazing ships together.”

The new ship is expected to be delivered in mid-2016. Royal Caribbean has said more details of the vessel will be revealed in the coming months.

Tuesday, September 24, 2013

Arctic Access: Project Cargo for Resource Extraction

Almost everything you’ve heard about the melting Arctic is wrong.

How can I possibly say that? Everything in the press of late would indicate that the Northwest Passage (NWP) between the North Slope of Alaska and the eastern part of the Canadian Arctic will soon be overrun with all manner of ships, especially container ships taking advantage of the shorter distance.

The ‘fact’ that Arctic ice is disappearing fast is so well established that discussion has moved on to examine the lack of available charts, whether modern hydrography can ensure the charts that do exist are even accurate, and who really owns this prospective Arctic shortcut. The US is even denying Canadian sovereignty and Canada is enforcing its claim by building the world’s most expensive conventional icebreaker.

Take these examples from recent news articles:
“The future for Canadian sovereignty in the North may be melting as fast as the Arctic ice”
- Carleton University

“...We do not know that much. Some of the charts (i.e. maps) we have of the Northwest Passage date back to the late 1800s.”
- Dr. Huebert, University of Calgary:

“The Arctic ocean could be ice free in the summer very soon, possibly in as little as 4 or 5 years”- David Suzuki

So the story seems to be that the Arctic is melting at a precipitous rate and the entire place is almost wide open for shipping for the majority of the summer. Unfortunately, the truth is slightly different.

Yes, the Arctic is melting and the ice cover continues to shrink at a rapid rate. Yes, there is an open water passage that is wide open due to melting of the ice cover. But awkwardly for the story it’s the Northern Sea Route (NSR) along the northern coast of Russia that is melting first and where the passage is open for a good deal of the summer.

On our side of the polar cap it’s a different case entirely. Ice is melting but the period when the passage is wide open from one end to the other is still only a couple of weeks – and not always at the same time of the summer. (Why the length and regularity of this period is important we’ll address a bit later.)

While the ice conditions on the NSR are by no means benign, the North American side of the cap has a lot of nasty ice that raises the difficulty to a much higher level. By nasty ice I mean multi year and glacial ice. For the uninitiated, multi year ice is ice that has survived more than one summer’s melt. Glacial ice is icebergs, the Titanic killing stuff that is shed by glaciers, the overwhelming majority of which are produced in northwest Greenland. As ice ages it becomes less salty and it’s structure changes. It becomes harder.

This is important because while regular Arctic ice is hard, multi year and glacial ice is really, really hard. As an old shipmate of mine used to say, when you are navigating in ice, the difference between hitting first year ice and multi year ice is the difference between hitting porridge or concrete. This hard ice drifts down from the polar cap through the Arctic islands, or in the case of icebergs from the Melville Bight into Baffin Bay. It causes havoc for anyone trying to take a low- or no-ice-class container ship through the NWP. Multi year ice is disappearing, and according to some studies, at a faster rate than first year ice, but the last place it is forecast to disappear, of course, is the NWP.

Another issue that is mentioned is the lack of adequate hydrography, by which I mean the surveying of the area so as to produce suitable modern charts.

I have read several times about the dire state of charting in the Arctic and there are certainly vast areas that are either unsurveyed or where the survey depths are so far apart or were surveyed so long ago as to be of little practical value. However, there is a channel that runs from Alaska through Coronation Gulf to the eastern part of the Canadian Arctic that was surveyed in the 1990s, using modern methods, with narrow intervals that would indicate a safe passage for a Panamax size vessel. I know this to be true for two reasons, first because I was involved in the project where the Canadian Hydrographic Service in partnership with mining and shipping companies completed the survey and second because I have pulled the charts and examined them in detail.

Where ships frequently have problems of late is when they stray from surveyed areas or do not have sufficient ice class to stay in the surveyed channel when there is ice in their path. (They also get into trouble when they try to take shortcuts.) For the American side my understanding is that fourteen new or revised charts of the Alaska coastline will be released this summer. So while the Arctic is certainly not well surveyed, it is not just a white area on the charts either.

There have been frequent references in the press, particularly in Canada, about the threat to Canadian sovereignty by the US insisting on the right of free passage through Canadian Arctic waters. Indeed one of the first pieces of modern Arctic antipollution legislation came about because of the SS Manhattan voyage through the Canadian Arctic, done without permission but with assistance from Canada. This is not a simple issue and for that reason the press reports in attempting to simplify, or perhaps to gather more eyeballs, report it incorrectly. As President Bush stated in 2007, “...the United States does not question Canada’s sovereignty over its Arctic islands.”

There is not so much an argument between Canada and the US on this issue; it is more that they have different aims that are just not compatible. The US wants to maintain the right of free passage through the Arctic Archipelago, not because they think that Canada would ever try to withhold that but because if they concede the right of free passage here it means that other countries would attempt the same arguments elsewhere. Canada for its part just wants to have the ability to stop substandard ships from transiting the Arctic, which is something the US would certainly not argue with in other circumstances. I sometimes think that mostly the diplomats just try to avoid talking about it because they know there is not an easy solution. This of course is an over-simplification of a complex matter, but a very readable explanation of all of the issues is available from

Lastly of course there is the whole discussion about the imminent use of the Northwest Passage by container ships, roaring through that open water using inadequate charts. The first argument to this is entirely empirical. I attend at least a couple of conferences each year that are devoted to Arctic shipping and I have done this for a number of years. I have yet to see anyone attending those conferences from a container shipping company. This is pretty thin evidence I grant you, but if there really were an overwhelming interest surely someone would’ve shown up?

There is other evidence as well. There is no doubt that the route through the Northwest Passage is certainly shorter for ships going between Europe and the Far East. Ships certainly would save fuel taking a route through the Northwest Passage, but fuel is not the only consideration.

I gave a presentation several years ago to the Transportation Association of Canada on just this subject. I consulted a couple of different container shipping companies for their opinions as a peer review. They felt that the Northwest Passage was not going to be of interest to them at least for the next several years for a number of reasons:

Container lines function on regularity and predictability. They have to be able to give ETAs for containers that people can rely on, particularly for supply of industrial parts. Routing a ship through the Northwest Passage when there’s even a chance of ice that could slow the ship or force it to turn around and go back is just not going to happen. In the same vein, if anything goes wrong with one of the ships while it is in the Arctic there is virtually nowhere for it to be fixed, and the ship would likely have to be towed out of the Arctic to a repair yard. In that case those containers are going to be a long time getting to their final destination.

Added insurance and ice class costs.
There is a considerable saving in bunker cost for the shorter route, particularly with the rise in cost of bunkers. However, there is also an offsetting increase in insurance costs for breaking what is called Institute Warranty Limits, basically for going far enough north to increase the chance of encountering ice. Additionally the ships would likely have to carry some degree of ice class, at least for the foreseeable future. Ice class can add 10 to 15 percent to the build cost of a typical ship. How much of the savings are reduced by increased insurance and capital costs is an area that is being studied. A report released by the classification society DNV thought that the area would not be ready for container ships until after 2030 and possibly as late as 2050.

Container ship routing.
The routing of container ships is not based on one loading port and one discharge port per voyage. Even though the two of the largest container terminals in the world are in Shanghai and Rotterdam there are virtually no container ships that go directly between the two ports. Their routing is more like a milk route, dropping off full containers and picking up. The route for our two areas as given above is more likely to be from China to the West Coast of the US, a couple of ports there, through the Panama Canal and into Galveston, thence to Georgia and up to New York and finally across to Europe. Loading a ship in Shanghai and sending it straight through to the East Coast of the US or to Europe would require a large degree of unusual planning to ensure there were only containers going point-to-point, which would mean delays in storing containers and therefore extra cost.

The size of container ships.
The 10,000-TEU and 13,000-TEU ships being built today can’t fit through the existing Panama Canal but they will through the new one, as well as a proposed canal in Nicaragua, should it be built. The draft in parts of the NWP is nowhere deep enough to allow the larger ships that now exist, much less the ships being planned. It is of course possible to build wider, shallower ships for the route but again that adds extra expense.

The Arctic ice is melting, there is no doubt. There will be much greater access for ships in the next 20 to 30 years. But for now it’s going to be project shipping for new mines and oil and gas developments. As for the imminent hordes of container ships sailing freely through dangerously unchartered waters? Not likely.

Vancouver Port Welcomes Ship’s Maiden Voyage to US

The Port of Vancouver USA recently welcomed the 636-foot long, 95-foot wide general cargo ship AAL Hong Kong on her maiden voyage to the United States.

The AAL Hong Kong is among a new generation multi-purpose vessels with a maximum lifting capability of 700 metric tons. Singapore-based Austral Asia Line is the owner and operator of the ship, which has a deadweight capacity of 31,123 metric tons.

The Marshall Islands-flagged vessel, commanded by Capt. Zeljko Presecan of Croatia, arrived at the Washington state port in mid-August with a 22-member crew.

They were welcomed to Vancouver by AAL port captain Tommy Hayes; Mike Titone from Columbia River Steamship Operators Association (CRSOA); representatives from the Port of Vancouver USA; and Ion Badea, Jim Horne and Beth Sanchez from vessel agent Norton Lilly International.

The vessel, which was built in China during the first half of 2013, launched on June 25 of this year.
The AAL Hong Kong sailed to the Port of Vancouver from Shanghai, China, where she unloaded 26 complete, three-piece wind towers for Danish wind turbine company Vestas Wind Systems before returning to Chinese ports.

Redwood City Port Plans Meetings on Proposed Plant

The Port of Redwood City plans to hold two public meetings regarding a clean technology company’s proposal to build a pilot plant industrial facility that would use natural gas and electricity to produce sample quantities of carbon black and hydrogen.

Carbon black is a material that is used as a reinforcing agent in nearly all black rubber and plastic products, including tires, belts, hoses, cables, and most high volume consumer electronics. Its physical appearance consists of pellets or a fine powder.

The project, proposed by Mountain View, California-based Boxer Industries, would be located on about 0.6 acres (26,000 square feet) of port land, including the 5,000-square foot pilot industrial facility and office trailer. The pilot plant would be partially assembled prior to delivery and installation at the project site. It would be delivered via semi-trailer on three skids of about 12 feet by 12 feet each. The plant would be constructed above a new pier-supported foundation pad and would be about 30 feet tall once fully assembled.

The port plans to conduct public meetings on the project at 8 am Sept. 25 and Oct. 23 at the Port Administration Building, 675 Seaport Blvd., Redwood City. The port’s mitigated negative declaration and supporting documentation for the project are available now through Oct. 14, 2013 at the port.
For more information on the project or public hearings, contact Don Snaman of the Port of Redwood City at (650) 306-4150.

LA Port Scraps Cargo Fee

The Port of Los Angeles has decided to eliminate a container fee that was created – but never implemented – in 2008 to help finance major rail, highway and bridge improvement projects.

The infrastructure cargo fee (ICF), which would have varied from $6 to $18 per 20-foot equivalent container unit, would have been assessed on all loaded containers entering and leaving the port by truck or rail. The fee was formally revoked by the Los Angeles Board of Harbor Commissioners Sept. 19.

“It is time to take this fee off the books for good,” port Executive Director Geraldine Knatz said. “The fact that we never collected it illustrates how the port successfully sought funding from other sources – specifically grants – in order to develop port infrastructure in a responsible manner that makes sense for all our stakeholders and preserve our competitive advantage.”

The ICF was added to the tariff the same year the Port was developing its Clean Truck Program and related channels to finance conversion of the private fleet of mostly older and more polluting drayage trucks that called at port terminals. It was initially established to help fund key infrastructure projects that would reduce traffic congestion, improve the flow of cargo and cut air pollution.

The fee was expected to begin in 2009 and raise $1.4 billion in order to secure matching state transportation funds for the design and construction of 17 specific highway and rail construction projects throughout the harbor district. But when the economy began to slide into a deep recession, the port put the ICF on hold and pursued other federal, state and regional grants to advance its projects.
Over time, the port managed to secure 55 percent of more than $313 million needed to pay for four capital projects now being built or due to begin construction by January 2014. The port’s funding the remaining 45 percent itself.

Among the projects moving forward are the Berth 200 Railyard, the South Wilmington Grade Separation and two freeway interchanges. Of the 13 remaining projects that the ICF was intended to support throughout the harbor complex, five projects may not be needed before 2025 and can be deferred, according to the port.

Study: Port of Tacoma Can Handle Ultra-Large Ships

A study commissioned at the prompting of several containership lines calling at the Washington United Terminal at the Port of Tacoma has determined that the port’s Blair Waterway is capable of handling ultra-large container ships, as long as certain conditions are followed.

“I’m pleased to confirm for the Commission that the Port of Tacoma is ready to receive ultra-large container ships,” Tacoma Strategic Operations and Risk Management Director Lou Paulsen said during the Port Commission’s Sept. 19 business meeting.

The conclusion is based on an operational assessment conducted Aug. 5 to 9 to simulate the transit of a 13,000-TEU container vessel into and out of the Blair Waterway.

The study, which was commissioned by the port and Puget Sound Pilots organization, used a model of the Blair Waterway and a model of the 13,000-TEU MV Hamburg Express, the largest ship in the Hapag-Lloyd fleet.

The test, which was conducted under several scenarios, including different load configurations and inclement weather conditions, found that a vessel the size of the MV Hamburg Express – 1,200 feet long and 157 feet wide – could safely navigate the waterway if it had a working bow thruster, was accompanied by three tugboats and was guided by two Puget Sound pilots. The wind also has to be at 20 knots or less for the vessel’s path to not be affected, according to the assessment.

“The conclusion from the assessment is that 13,000-TEU vessels can safely and reliably transit to and from the Washington United Terminals facility,” Strategic Operations and Risk Management Director Lou Paulsen said.

Earlier this year, the ZIM Djibouti became the largest container ship ever to call at the Port of Tacoma when it arrived at Washington United Terminals on July 10. The ship, which has a capacity of 10,000 TEUs, is 1,145 feet long and 150 feet wide.