Friday, November 8, 2013

Audit: Port of Hueneme Achieves Record Revenue

The Port of Hueneme in fiscal year 2013 achieved a record $13.4 million in gross operating revenue, a 10.4 percent increase over fiscal year 2012, according to the results of a recently completed financial audit.

Port CEO Kristin Decas and CFO Andrew Palomares submitted the auditor’s report to Hueneme’s Board of Harbor Commissioners at its Oct. 28, 2013 business meeting.

In fiscal year 2012, the port moved 1.31 million metric tons, but that jumped by 8.5 percent the following fiscal period, to 1.43 million. Overall total revenue jumped 12 percent year-to-year, rising from $12 million to $13.69 million, according to port data. Additionally, the port’s net assets grew by $7.2 million in FY 2013, an increase from the previous year’s $4.2 million.

Also according to the audit, expenses increased by $1.02 million, primarily a result of increased insurance costs and new accounting requirements requisite to recording previously differed bond costs.
Audit numbers show that the Port of Hueneme realized best year in volume since inception in 1937. The port says it attributes the record year in large part to continued economic recovery at the national level, as well as business retention and a sustained customer base.

Of specific importance was that the agricultural product market, which the port relies heavily on, made strong returns in fiscal year 2013. The banana trade hit a peak year realizing an historic increase of 5.7 percent. Traditionally the banana business shows an inelastic response to economic trends, but this year showed unprecedented increases. This in part stemmed from the increased capacity of Del Monte ships and the transition of Chiquita from a 10-day service to a weekly service.

Also, Del Monte’s dual use ships with roll-on/roll-off capabilities allowed for increased cargo diversification and higher exports.

Yara fertilizer and environmental solution products continued to see significant gains in market share increasing their cargo throughput at Hueneme by nearly 24 percent. The port also saw growth in the handling of other fresh fruit and vegetable commodities, with activity up about seven percent in imports and a whopping 103.3 percent in exports.

“We are proud of our record and most pleased to see the uptick in revenues, but recognize we are faced with climbing expenses and have challenges ahead,” Decas said. “The increases in revenue at this time are vital to replenishing our working capital reserves that have been depleted from the investment in major capital projects, including the installation of shoreside power.”

The Port of Hueneme’s 2013 fiscal year ran from July 1, 2012 through June 30, 2013.

Newcomers Win Port Commission Seats in Washington State

An incumbent port commissioner was reelected in Pasco on Election Day, but new commissioners were elected in Port Angeles and in Woodland, where 30-year incumbent Jerry Peterson lost his race for another stint on the Port of Woodland commission.

J.J. Burke, a former Woodland City Councilman and current executive director of the Woodland Chamber of Commerce, defeated Peterson by capturing almost 52 percent of the vote. He campaigned on the platform of bringing in new industries to further develop the port and improving the traffic flow in the area around the port.

In Port Angeles, port commission candidate Colleen McAleer was victorious over fellow candidate Del DelaBarre in a race to fill the seat currently held by Paul McHugh. McHugh was appointed to the position in late 2011 to fill the unexpired term of Jim McEntire, who had won election to the county board of commissioners. McHugh ran for election, but lost in the August primaries.

McAleer, who won with better than 64 percent of the more than 13,300 votes cast, already works for the Port of Port Angeles as its director of business development, but says she plans to resign from the position when she takes her seat on the board.

In July, she identified herself as the whistleblower who filed the complaint that launched an investigation into the resignation of then-Executive Director Jeff Robb, and subsequent rehiring for a lesser position, albeit with the same annual pay.

Port of Pasco Commission President Jean Ryckman won reelection Nov. 5 with about 67 percent of the vote, easily defeating challenger Herb Brayton.

Ryckman, a retired Franklin PUD manager, is the first woman to serve on the three-member port commission.

Port of Grays Harbor to Buy Business Park Acreage

During a special Nov. 5 meeting, the Port of Grays Harbor Commission granted Executive Director Gary Nelson, authority to execute a $1.3 million promissory note and enter into an agreement to purchase 19.67 acres of land and assets from Pivotal Solutions.

The deal includes the assets of the facility, such as intellectual property on the process of turning scrap plastics into usable building material.

The facility is the centerpiece of the Satsop Business Park, a mixed-use facility less than two hours southwest of Seattle and two hours north of Portland. It is home to more than 30 businesses and 600 acres of developed land and buildings.

“After analyzing the risk of the purchase of the assets against the rewards should we succeed in finding a user for the site, my fellow Commissioners and I felt the jobs and economic activity created, hedged against the liquidation value of the equipment, mitigated any financial risk to the port,” Port Commission President Chuck Caldwell explained.

At the same time the promissory note was approved, the Commission also granted the port’s executive director authority to sign a Letter of Intent with NewWood International, LLC, which outlines the terms of a lease and the potential purchase of the equipment and intellectual property. NewWood International is an affiliate of Triventas, a private investment firm based in Pittsburgh, which was presented to the Port Commission in June as a potential operator of the facility.

“This approach is the quickest and best way to get the facility up and running, and creating jobs for the region,” commented Gary Nelson, Executive Director. “We are hopeful Triventas will be a good tenant for the facility and bring it into production again in the shortest amount of time possible. Their commitment to success will be a win for all parties.”

Port of Tacoma Marks 95th Anniversary

The Port of Tacoma celebrated its 95th anniversary on Nov. 5. It was on that date in 1918 that the citizens of Pierce County voted to create the port district on about 240 acres of land.

The first ship, the Edmore, called at the port in March 1921.

Since then, Tacoma has grown into one of the top container ports on the West Coast of North America and a major gateway to Asia and Alaska. Significant developments in the port’s growth over the years included military shipbuilding during World War II in the early 1940s; the construction of the Blair Bridge in 1953, which improved the flows of vessels and vehicles through the Tideflats until it was closed and removed in 1997; and the opening of the first dockside rail yard on the West Coast in 1981.

The port now encompasses about 2,700 acres in the industrial area, with nine terminals serving international and domestic shipping lines, as well as four rail yards. The port is also a major center for bulk, break bulk, project/heavy-lift cargoes and automobiles.

An estimated 43,000 family-wage jobs in Pierce County and 113,000 jobs across Washington State are connected to port activities, and two-way international trade through Tacoma totaled more than $46 billion in 2012, according to port data. 

Tuesday, November 5, 2013

Fidley Watch - Warrior to Watchstander

By Chris Philips, Managing Editor,

Richard Berkowitz, Director of Operations of the Transportation Institute (, recently made us aware of a particularly difficult workforce development issue – one that should have the attention of every legislator of every coastal state. Berkowitz recently drafted a policy briefing at the request of industry members who sought a more coordinated effort to influence policy makers.

As Mr. Berkowitz notes, US-flag maritime interests have long made a priority of recruiting and hiring sea service veterans with maritime-related watch-standing capabilities and ratings. Unfortunately, the requirements of the STCW as promulgated by the USCG make it difficult to place these sea-service veterans.

The STCW has created numerous barriers for vets to transition into the commercial sector while retaining the ratings they achieved in the military, and most veterans know little about the commercial maritime industry.

Berkowitz says one senior industry leader described the problem as…”A Boatswain’s Mate in the Navy with 20 years of seagoing experience presently can’t get a job on a tug boat because he doesn’t have an AB ticket. Officers with years of sea time don’t even have 3rd Mate licenses.”

Among the problems are the fact that US military education, training, experience are not recognized as meeting STCW and USCG certifications, even though they do meet the majority of the requirements.

Berkowitz says some progress has been made in recent months, but much more needs to be done. “The economy, sequestration, graying of the maritime workforce, employment bonanza in the Gulf of Mexico, and increase in the domestic oil trade have created a unique opportunity for our sector to make a more pronounced effort to actively recruit veterans for employment in in the US-flag maritime sector.”

The Merchant Marine Personnel Advisory Committee (MERPAC) has made several recommendations to address the problem. One of these is the suggestion that the Coast Guard authorize military commanding officers to assess rating forming part of an engineering watch (RFPEW) and rating forming part of a navigational watch (RFPNW) competencies. Another suggestion is to encourage the military to utilize civilian industrial terminology whenever possible, and to offer professional credentialing pathways throughout the crewmember’s military careers.

Berkowitz says the best and most immediate path to accomplish these goals is to remind Congress members of industry’s desire to hire qualified veterans, and how leadership of the sea services can help facilitate the transition of separating vets with deck and engine competencies into the US-Flag Merchant Marine.

With President Obama’s strategy of downsizing the military, more qualified but un-credentialed mariners will be looking for work. It currently takes months for a Navy or Coast Guard seaman to even get a sea service letter from their respective service. A qualified mariner who has served his country for 20 years should be able to step from a Navy or Coast Guard vessel directly onto a commercial vessel. That he can’t is absurd.

Stockton-to-Oakland Barge Service Dedicated

The US Maritime Administration (MARAD) on Nov. 1 held an official dedication ceremony at the Port of Stockton for the M-580 barge service, also known as the California Green Trade Corridor.

The Corridor is expected to help take freight traffic off California’s congested I-580 by offering shippers an option to move cargo along the waterways between the ports of Oakland, Stockton and Sacramento. The project received a $30 million grant from the Department of Transportation, as well as $5 million from local sources.

US Transportation Secretary Anthony Foxx, Acting Maritime Administrator Paul Jaenichen and state and local leaders were on hand for the dedication.

“This $30 million investment in public infrastructure is an important part of President Obama’s national initiative to double America’s exports by 2015,” Foxx said. “This Marine Highway will help get cargo off the highways and onto our waterways, improving traffic on our roads while providing an efficient, environmentally-friendly option within our freight system.”

The M-580 Marine Highway roughly parallels the I-580 corridor between California’s Central Valley and Oakland, one of the most heavily congested highways in the country. It is estimated that about 1,600 containers currently move per day between the Stockton and Oakland ports along I-580.

Running two barges per week between Oakland and Stockton is expected to eliminate about 200 trucks per day from the highway. When the corridor is fully operational, it’s expected that barges would make three round-trips along the corridor weekly.

Officials estimate that eventually the M-580 could eliminate 180,000 truck trips from I-580, I-80, and I-205 freeways annually, saving about seven million gallons of fuel and reducing air emissions in the process.

“The Green Trade Corridor is a win-win solution for Northern California and the millions of Americans and businesses who rely on it to send and receive goods,” Jaenichen said. “This new efficient and environmentally friendly transportation alternative is also creating jobs in Stockton.”

The barge system, which had been in the planning for years, was technically launched over the summer.

Maersk Appoints New Division CEOs

Morten Engelstoft has been appointed CEO of Services & Other Shipping for Maersk, effective Jan. 1, 2014. Engelstoft will also take over the position as CEO for Maersk Tankers from Hanne Sørensen who has been appointed CEO of freight forwarding company Damco, also effective Jan. 1.

Maersk’s Services & Other Shipping division consists of Damco, Maersk Tankers, Maersk Supply Service and Svitzer. The four businesses are expected to remain individual companies with their own CEO’s reporting to Engelstoft, who will report to Maersk Group CEO Nils S. Andersen.

“As COO of Maersk Line Morten Engelstoft has been a key driver in the turnaround and in the reduction in the global network cost, which has been an important part in creating the past five quarters of positive results in Maersk Line,” Andersen said in a statement announcing the moves. “His task will now be to realize the full potential of the four businesses in Services & Other Shipping and together with the businesses CEO’s define a plan for future growth.”

In becoming CEO of Damco, Sørensen replaces Rolf Habben-Jansen, who announced his departure in September 2013. Søren Toft will replace Engelstoft as COO of Maersk Line. Toft joined Maersk in 1994 and has held several positions in the company, most recently Head of Network Planning with Maersk Line. Prior to this, he has held various positions in Maersk operations.

Long Beach, Busan Ports Sign Exchange Agreement

Representatives of the Port of Long Beach and the Busan Port Authority have signed a “sister port” agreement to establish a mutually beneficial exchange of technology, ideas and culture.

The pact was ratified this week in South Korea. Long Beach Board of Harbor Commissioners President Thomas Fields and POLB Acting Executive Director Al Moro signed the Busan agreement on behalf of the Port of Long Beach.

“As we move ahead with our $4 billion modernization program, and as you develop your extraordinary new Port of Busan facilities, we have many beneficial opportunities to share ideas, information and expertise to meet these mutual goals,” Fields said during the signing ceremony.

The Port of Long Beach has existing sister-port agreements with the Port of Qingdao in China, and the ports of Hualien and Taichung in Taiwan. Long Beach also has memoranda of understanding with the Port of Rotterdam in the Netherlands, the Panama Canal Authority, Yantian International Container Terminals in Shenzhen, China and China Merchants Holdings International, the largest public seaport operator in China.

Like the other agreements, the Busan accord is not legally binding, but is expected to create additional opportunities for cooperation between the two ports.

BNSF CFO Retiring; Successor Named

BNSF Railway Executive Vice President and Chief Financial Officer Tom Hund is expected to retire during the first quarter of 2014, and be replaced by Julie Piggott, the company’s Controller and Vice President of Planning and Studies.

Hund has been in the railroad industry since 1983, holding multiple senior management and financial roles within BNSF and previously with Atchison Topeka and Santa Fe Railway, a predecessor railroad to BNSF. He has been the company’s chief financial officer since 1999.

“We thank Tom for his incalculable contribution to our company and recognize the legacy he is leaving,” BNSF Chairman and Chief Executive Officer Matthew K. Rose said in a statement.
Piggott, who joined the company in 1991, has served in her current role since 2009. She was the company’s Treasurer and Vice President of Finance from 2006 to 2009.

Other various positions she has held with the company include Assistant Vice President, Strategic and Financial Analysis; Assistant Vice President, Expedited Services, in Consumer Products; and assistant vice president and assistant controller. Prior to joining BNSF, she was with the accounting firm of Ernst & Young and Corporate BancServices.

“Julie has been an integral part of the Finance Department and the company,” Rose said. “We have tremendous confidence in her and she is uniquely qualified to be our next chief financial officer.”