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Friday, November 15, 2013

Port of Bremerton Picks New CEO

Jim Rothlin, the executive director of the Port of Chehalis, has been chosen by the Port of Bremerton to be its next CEO.

The decision to hire Rothlin was approved by a 3-0 vote during the Nov. 12 Board of Commissioners meeting.

Rothlin has been the CEO at the Port of Chehalis since 2002, and also is the Chair of the Economic Development Committee of the State Ports Association. He has a varied background in the business field, having previously been the owner Lund Theatres in Chehalis from 2003 to 2009 and the CEO of a business management consulting company from 1994 to 2001. He was also the financial controller for National Semiconductor Corp. from 1987 to 1994.

He holds a Bachelor’s degree in finance from Western Washington University and earned a Master’s in business management from San Jose State University in 1995.

He’s expected to begin his duties at Bremerton in mid-December, which would give him a few weeks to work with current CEO Tim Thomson, who announced in July that he would be retiring at the end of the year.

Thomson, 64, has been the Port of Bremerton’s CEO since 1999. At the time of his resignation, he said he wanted to spend more time with his elderly parents and his grandchildren.

Rothlin’s selection came after an extensive search and interview process by the Port Commission, during which 30 candidates were considered.

The Port of Chehalis, located in Lewis County, Washington, halfway between Seattle and Portland, was formed in 1986, making it one of the youngest ports in the state. The port’s district consists of 785 acres with more than 250 acres available for industrial development.

The Port of Bremerton, located in the Puget Sound Region of Kitsap County, turned 100 in October 2013, and is the fourth-oldest port district in the state. Its property consists of several thousand acres, including an airport, marinas and industrial and business parks.

Port of LA Approves Ocean Carrier Incentive Program

The Los Angeles Board of Harbor Commissioners has approved a new incentive program to reward shipping lines that bring new container business to the Port of Los Angeles in 2014.

Under the Ocean Common Carrier Incentive Program that was approved during the board’s Nov. 7 meeting, an ocean carrier will earn $5 per TEU for each incremental container it ships through the port in calendar year 2014.

The rate jumps to $15 per TEU for all TEUs, if a carrier’s container volume grows by 100,000 or more units for the same 12-month period.

The baseline for measuring the increased volume would be the total number of containers each carrier moved through the port in calendar year 2013. Carriers will receive their incentive in a lump-sum payment in early 2015.

The port says staff members will monitor the program on a monthly basis to evaluate its effectiveness and whether to recommend its extension beyond the first year.

Also during the same meeting, the Board established a two-member ad hoc committee on Port Industrial and Economic Development, which is dedicated to identifying and advancing the best economic practices for maintaining the port’s position as the top seaport in North America.

Vice President David Arian and Commissioner Patricia Castellanos will serve as the ad hoc committee.
“Both of these steps we’re taking today move us forward in our commitment to maintaining our No.1 status,” Arian said. “We will continue to develop new and innovative strategies to make sure we are as efficient and competitive as possible.”

Russian, Korean Companies to Build New Shipyard

Russian petroleum company Rosneft, Gazprombank & Sovcomflot and Korean shipbuilding company Daewoo Shipbuilding & Marine Engineering have signed an agreement to establish a shipbuilding and industrial cluster in the Russian Far East.

The parties say they’ve agreed to jointly complete the construction and launch the new shipyard and shipbuilding complex in 2016 in the southern part of Primorskiy Krai. The contract was signed in the presence of Russian President Vladimir Putin and Park Geun-hye, the President of the Republic of Korea, as part of an official visit by Putin to the Republic of Korea.

The companies say they plan to establish a Russian-Korean engineering center for shipbuilding and marine equipment for offshore projects. The companies also have agreed to key terms for technology exchange, localization of production and contracts placement.

Rosneft has a large-scale program to develop offshore projects in Russia. The company, according to President & Chairman Igor Sechin, has obligations to localize in Russia shipbuilding and marine equipment production necessary for offshore projects implementation and is actively working in this direction. Sechin said his company and Daewoo Shipbuilding are implementing a project expected to have a “considerable multiplying effect on all related industries.”

“We are glad the project will be implemented with the support of such an experienced technological partner as DSME, which owns cutting-edge technologies, as well as globally recognized reputation for shipbuilding, engineering and production of marine equipment for offshore projects,” Sechin said in a prepared statement. “We are convinced the cluster will become a center for high-tech arctic shipbuilding in Russia.”

Vancouver USA Approves 2014 Budget

The Port of Vancouver USA Board of Commissioners approved an $86 million 2014 budget on Nov. 12, an increase of about 46 percent from the current year’s budget of roughly $59 million.

The budget includes $34 million in total operating revenues, including $13.7 million in marine operations. It also includes $19.3 million in non-operating revenues, such as nearly $10 million in property taxes and $9.2 million in grant funding.

In all, the port estimates total revenue of $53.4 million, a nine percent increase from this year’s expected $49 million.

Also projected for the year is $32.2 million in total expenses. Of that $32 million, an estimated $25.2 million is earmarked for operating expenses, including $5 million for facilities and between $1 million and $2 million each for administrative costs, rail projects and security.

Non-operating expenses make up nearly $7 million of the budget, including $5.6 million for debt service and about $924,000 for environmental remediation.

Also during the meeting, the three-member commission voted unanimously to not implement its annual one percent increase in the port’s regular property tax levy, just as it did in 2012. The lack of an increase means that an owner of a property with an assessed value of $250,000 can continue to pay about $103 annually for the port’s share of property tax collections.

According to the port, there are about 300,000 property taxpayers within the 111-square-mile district.

Tuesday, November 12, 2013

Alaska Prepares for Arctic Traffic

The sailing of the bulk carrier Nordic Orion through the Northwest Passage this past September served notice that the waters off Alaska and northern Canada are no longer just the preserve of fishermen, oil drillers and adventurers. Operated by Denmark's Nordic Bulk Carriers, the 225-meter-long ice-strengthened ship carried 73,500 tons of coal from Vancouver, Canada to Pori, Finland, arriving there in early October. In the process it became the first vessel in history to carry a full commercial cargo through the passage.

As pointed out in the September issue of Pacific Maritime Magazine (see Access Project Cargo for Resource Extraction) the Northwest Passage is not expected to become a regular commercial sea route but it may host more commercial ships each season, the result of shrinking ice coverage. Nordic Bulk said it was able to save about $80,000 in fuel costs by sending its ship northwards instead of through the Panama Canal because the route between Vancouver and Pori is about 1,000 nautical miles shorter "over the top." In addition, the vessel was able to carry around 25 percent more cargo than it would have been able to had it travelled via the shallower canal.

Although insurance was about 30 percent higher for the arctic crossing there were no Panama Canal transit fees to pay, and the ice-strengthened bulker didn't require an icebreaker escort, although it was accompanied through much of its passage by the Canadian Coast Guard icebreaker Louis S. St. Laurent. Nevertheless, its hull insurer, Great Britain's RSA Group, noted that there was a very narrow time frame in which the voyage could have been safely accomplished - and insured.

Cruising the Northwest Passage
Although there hasn't yet been an announcement for further commercial cargo voyages through the Northwest Passage in 2014 a number of cruise companies are already planning full or partial transits next year as public interest in the region grows. The first transit by a cruise ship was made nearly three decades ago by the small 1969-built Lindblad Explorer, a pioneering expedition-type vessel that was lost off Antarctica in 2007. Since then a large number of cruise transits have been accomplished and next year six different operators will make use of the passage. This includes Lindblad Expeditions, which will operate two voyages, a 25-day trip departing July 28 and a 24-day trip departing August 19, both using its 148-passenger National Geographic Explorer.

Compagnie du Ponant of France, which made an Arctic transit with its 224-passenger Le SolĂ©al earlier this year – the first French commercial ship to transit the Northwest Passage – also plans to return next year, as does Germany's Hapag-Lloyd Cruises with its 164-passenger Bremen and 184-passenger Hanseatic. Newcomers will include Adventure Canada, which will operate the 114-passenger Sea Adventurer as far as Kugluktuk, and One Ocean Expeditions, a new company that will employ the veteran 96-passenger Russian research vessel Akademik Ioffe.

Upscale operator Silversea Expeditions plans to make a full transit from Kangerlussuaq, Greenland to Nome, Alaska with its 132-passenger Silver Explorer, a trip that will depart from Greenland August 9.

New Pollution Regulations
While the costs of meeting new US federal air-pollution regulations coming into effect in 2015 are not expected to impact ships that charge their passengers $30,000 to transit the Northwest Passage, the laws are already seeing deployment changes take place in southern Alaska where cruise numbers may actually shrink in 2014 after hitting nearly 1 million passengers this year.

Los Angles-based Princess Cruises has already announced plans to shift several ships, with the 680-passenger Pacific Princess scheduled to operate in the 49th state next year while at least one of this year's larger ships, Sapphire Princess, will move to Japan. On the East Coast, associated Carnival Cruise Lines will move ships out of Boston, Baltimore and Norfolk because of the regulations and will limit the number of cruises it will make along the North Atlantic seaboard.

John Binkley, president of Cruise Line International Association's Alaska chapter, said the moves come as cruise lines try to avoid the new, stronger federal air-pollution regulations which will mandate the burning of cleaner but more expensive fuel along the US coastline. "They've been working under the assumption that the emission control area, which requires them to burn very expensive fuel, would be in effect," noted Binkley, "and that influenced their decisions to move ships to other locations."

Although Alaska filed a lawsuit against the regulations last year, stating they would "increase the cost of shipping goods to and from the state," as well as "decrease state revenues by increasing the cost to export natural resources," the lawsuit was dismissed by a federal judge earlier this year for lack of subject matter jurisdiction. Alaska's Department of Law has said it is considering an appeal. At the same time several cruise lines have announced they will start testing new technology that could allow their ships to meet the air emission regulations while still burning standard fuel.

Meeting Requirements
Carnival Corporation, the parent company of both Carnival Cruise Lines and Princess Cruises, announced in September that it will invest more than $180 million in new technology it is developing with an undisclosed partner that will clean the exhaust of its ships and allow them to meet the new requirements. In this quest it has won the support of the Environmental Protection Agency (EPA), the US Coast Guard and Transport Canada with an agreement in principle that will give Carnival an exemption to use the fuel source for its vessels that "makes the most sense" from an environmental and economic perspective.

Carnival's proposed scrubber equipment is said to combine two established technologies which have already been successfully used in power plants, factories and on vehicles to clean exhaust from high-sulfur fuel. The goal is to use the two technologies jointly to develop a system capable of being accommodated in the restricted spaces existing aboard Carnival's ships, some of which have different engine configurations. Besides carrying the scrubber technology, Carnival ships will also make use of either low-sulfur marine gas oil or shoreside power hookups while in US and Canadian ports.

Initially, Carnival proposes to fit the new equipment to 32 vessels operated regularly within the North American Emission Control Area (ECA) by its Carnival Cruise Lines, Holland America Line, Princess Cruises and Cunard brands. Looking ahead, the company plans to explore the possibility of expanding the installation of the scrubber technology beyond the initial 32 ships, with the technology eventually expected to be made available to other cruise lines.

Towing Merger
In Alaska's towing sector an Anchorage superior court judge approved a deal in October that will allow Lynden Inc, the parent company of Alaska Marine Lines (AML), to buy competitor Northland Services, providing Sitka-based Samson Tug and Barge is allowed to expand into the state's southeast sector.

Under the arrangement, first announced back in April, Northland will remain an independent company but will operate under the Lynden umbrella with its current management team in place. However, some of its equipment and services will be taken over by Samson Tug and Barge while Samson will also be able to lease space aboard AML barges and have a guaranteed barge charter from AML during peak shipping seasons. In addition, Sitka-based Samson will have the option to rent AML terminal facilities and storage space in Southeast Alaska and in Seattle.

Samson Vice President Cory Baggen said the company plans to start its new service into southeast Alaska this month but noted that final details are still being worked out. Expected ports-of-call will be Ketchikan, Prince of Wales, Wrangell, Petersburg and Juneau.

AML President Kevin Anderson said the acquisition of Northland will help his company in Seattle, where Northland has substantial property, as well as allow it to become a "full service" Alaska seafood packager, carrier and marketer for the Bristol Bay, Kodiak, and Dutch Harbor areas.

Salvage Partnership
Consolidation is also taking place in Alaska's salvage sector where Dutch Harbor-based Magone Marine Services has been acquired by Florida's Resolve Marine Group to form Resolve-Magone Marine Services (Alaska). Dan Magone, founder of 40-year-old Magone Marine, is continuing to oversee the company's operations in Alaska but with the help of Resolve specialists as well as Resolve equipment. The latter includes two recently repositioned salvage vessels, the 80-ton bollard pull tug Resolve Pioneer and the crane-equipped salvage barge RMG 300.

One of the first jobs undertaken by the new company was salvage of the fishing vessel Lone Star this autumn that was in a partially submerged state in the Igushik River near Dillingham. The 78-foot boat had capsized earlier this year, apparently when a change in tide swung it against its anchor chain, detaching several fittings and creating a hole in the hull.

Resolve-Magone, along with the Alaska Chadux Corporation, were contracted to both remove the vessel from the river and mitigate any pollution. The boat had gone down with a reported 14,000 gallons of diesel, 150 gallons of lube oil, 150 gallons of hydraulic fluid and 250 gallons of gasoline on board. This had created a consistent sheen on the water that had shut down the local sockeye fishery at peak season. Resolve-Magone used two cranes to move the vessel to shallow water were it was pumped out and refloated for movement to a repair yard.

Alaska Newbuild
In the Alaska panhandle, Vigor Industrial's Alaska Ship & Drydock (ASD) facility at Ketchikan saw the new 136-foot by 40-foot freezer longliner Arctic Prowler christened in early October as the first vessel to be completed in ASD's new 70,000-square foot assembly and production hall – and the first factory longliner to be built in Alaska.

Designed by Jensen Maritime Consultants of Seattle for Alaska Longline Company the new boat can accommodate a crew of 22 in 8 staterooms and can fish 56,000 hooks per day while having 16,300 cubic feet of freezer space available for approximately 735,000 pounds of fish. Propulsion for the new boat is provided by twin eight-cylinder MTU 8V4000 M53R Tier 2 diesels rated at 1,000 BHP at 1,600 RPM each giving a cruising speed of 12 knots. Alaska Longline is an Alaska-based company in which the Aleutian Pribilof Island Community Development Association (APICDA) is a partner and the newbuild will assist in harvesting APICDA's community development quota cod allocation.

The new boat's christening ceremony was attended by Alaska Governor Sean Parnell as well as Frank Foti, president and CEO of Vigor Industrial, who within days of the event announced that Alaska Ship & Drydock was being renamed Vigor Alaska. "It's about better serving our customers," Foti said of the change, which also saw the company's fabrication and shipbuilding subsidiary, US Fab, renamed Vigor Fab. "The new names not only simplify things for customers dealing with Vigor, they better reflect the reality that no matter which subsidiary customers are working with, they can count on Vigor's high level of craftsmanship and customer service," added Foti, who stressed that the changes apply "to the names only" and do not alter the operating structures of any of the subsidiaries.

Future Ferries
Vigor's move into Alaska, which took place last year, has been followed by Seattle's Elliott Bay Design Group, which has opened an office in Ketchikan not too far away from the shipyard. "This move enables us to better serve our Alaska clients and to establish new relationships and deepen existing ones," said Brian King, Elliott Bay's vice president of engineering. King noted that the firm has worked in one way or another on most of the Alaska Marine Highway System's (AMHS) ferry fleet over the years and is currently involved in AMHS's design process for the new Alaska-class ferries, a class which Vigor Alaska hopes to build.

The Alaska-class project has hit a number of roadblocks over the years, most having to do with funding, which has served to "shrink" the project from one large ship to two smaller ones while also reducing the amenities to be offered on board. As of this past summer the latest proposal calls for twin 280-foot-long ships that will sail 12-hour days on the Lynn Canal between Juneau, Haines and Skagway but will make no overnight trips.

The boats will have indoor seating for 300 passengers plus enclosed deck space for a mix of about 50 cars and trucks. Bow and stern doors will be fitted to give faster roll-on, roll-off loading and unloading and the provision of side doors will allow docking at more terminals. Food service will be limited to a small food court with vending machines with no kitchen.


The latest estimate to build the two ferries is $112.2 million, or about $5 million more than a previously estimated figure, but still below the $117 million allocated to date by the Alaska legislature. If the current design is accepted it is anticipated that construction could begin during the first half of next year with the vessels delivered in 2016.

Long Beach City Council May Fire Harbor Commission President

During its Nov. 19 meeting, the Long Beach City Council will consider a resolution to remove Harbor Commission President Thomas Fields from the five-member port board.

The resolution was placed on the agenda Nov. 11 by Mayor Bob Foster. Foster has yet to explain why he placed the removal item on the agenda. The removal of a commissioner during his six-year term is extremely rare, but according to the city’s charter, the mayor may remove a commissioner at any time with the concurrence of two-thirds of the nine-member City Council.

Fields, a Long Beach advertising executive and former city planning commissioner, was appointed to a six-year term on the Board by Foster in December 2009. In January 2013, he was elected to a one-year term as board president by his fellow commissioners.

He has come under pressure from personnel within the port and City of Long Beach in recent months for numerous reasons, however, including a perceived overbilling of the port for travel expenses. Over the past two years, Fields has traveled extensively out of the country on port business, including to Hong Kong, Montreal, Europe and Guatemala, sometimes racking up tens of thousands of dollars in costs.

Fields and other commissioners, as well as senior port officials spent more than $448,000 on 12 trips abroad between October 2011 and June 2013, according to port records.

Also, Fields and the mayor have disagreed over the lingering issue of a new headquarters for port staff. In the fall of 2011, the port was considering moving from its current aging, seismically deficient headquarters to the Long Beach World Trade Center a few miles away. Fields was one of two commissioners supporting the move, while the mayor and others supported a proposal by prominent local attorney Skip Keesel to instead build a new building on one of several downtown parcels he owns. Keesel said doing so would allow the port to build what they want and save the port money in the long run.

But after considering the options, the Harbor Commission eventually agreed to purchase an interim headquarters building about 11 miles from the port for $14.25 million, a move Fields cast the lone vote against, citing the distance from port terminals as a reason.

Port of Oakland Completes Shoreside Power Infrastructure

Officials from the Port of Oakland, US Maritime Administration and Pacific Merchant Shipping Association and other agencies gathered Nov. 8 to mark the completion of construction of shoreside power infrastructure at the Port of Oakland.

Shore power – the shore-to-ship connection that provides electrical power to the ship, thereby significantly reducing diesel and other air pollutant emissions from ships while they are at berth – is being implemented at the Port of Oakland in a two-phase, multi-year program covering 11 berths. The port has completed construction of the new electrical infrastructure system, with final testing of the system scheduled to be complete before the end of the year.

The total cost for just the shoreside infrastructure was about $70 million, with the US Maritime Administration (MARAD) and the Bay Area Air Quality Management District (BAAQMD) contributed $12.8 million.

“The Port of Oakland’s shore power project received federal funding through a very competitive TIGER grant process because this project is recognized as creating a valuable, sustainable, green trade corridor,” MARAD Associate Administrator Keith Lesnick said.

An additional $20 million was awarded to the port by the California Air Resources Board (CARB) and the Metropolitan Transportation Commission (MTC)/Federal Highway Administration.

In 2008, the California Air Resources Board adopted a directive to require reductions of air pollutants from ocean-going vessels. The rule, commonly referred to as the “shore power regulation,” requires that all operators of container, passenger and refrigerated cargo vessels that visit California ports more than 25 times a year employ an emission reduction system for their fleet by Jan. 1, 2014.

“In less than two months, container ships will be plugging in at California’s ports as part of an estimated $1.8 billion industry investment in shore power,” Pacific Merchant Shipping Association Vice President Mike Jacob said. “Our members are investing billions of dollars worldwide in new ocean-going vessels outfitted with the latest technology. We’ve been retrofitting hundreds of existing ships that call on California ports and installing the necessary terminal infrastructure for the 2014 transition.”

MARAD Announces LNG Project Grants

The US Department of Transportation’s Maritime Administration (MARAD) announced Nov. 7 that it’s providing a total of $1.4 million for two projects supporting the increased use of alternative fuels and technology in the maritime industry.

The funds are expected be used to collect information on the use of liquefied natural gas as a marine propulsion and to study the issues and challenges associated with shore side storage and fueling of LNG vessels.

MARAD says it will provide Horizon Lines with $900,000 to assist in conversion and monitoring of its vessel, Horizon Spirit, to operate on LNG. The Horizon Spirit is an 892-foot long, 115-foot wide ocean going container ship that operates between Long Beach, California, and Honolulu.

The conversion is anticipated to be completed by late 2015, according to MARAD.

The second project is a $500,000 MARAD funded LNG study conducted by the US subsidiary of Norwegian technical standards development company Det Norske Veritas to analyze the issues and challenges associated with the process of supplying fuel for ships and the landside infrastructure needed to store and distribute LNG. MARAD says it anticipates the study will be complete by spring 2014.

The two recipients were chosen via a competitive process to partner with MARAD as part of a new program to demonstrate innovative technologies and practices and share data on the results.

“Fuel-efficient ships appeal to the maritime industry for the exact same reasons that fuel-efficient cars appeal to consumers – they’re easy on the environment and their pocketbooks,” US Transportation Secretary Anthony Foxx said in a statement.

Interim Director Takes Over at Port of LA

Los Angeles City Engineer and former engineering bureau general manager Gary Lee Moore has begun his duties as interim director of the Port of Los Angeles, taking over for retiring Executive Director Geraldine Knatz.

Knatz was the port’s executive director for almost eight years before announcing in October that she was stepping down.

In his decade-long tenure as city engineer for Los Angeles, Moore oversaw an annual operating budget of $149 million, according to the city. Prior to that, he was General Manager of the City of Los Angeles Bureau of Engineering, where he was responsible for the city’s public infrastructure network; his duties included the planning, design and construction of all public facilities.

“Gary is a trusted public servant, with a 28-year track record with the city,” Los Angeles Mayor Eric Garcetti, who appointed Moore to the position last month, said in a statement. “His leadership will be critical in our efforts to grow and maximize the port’s economic impact while minimizing environmental concerns in Harbor area neighborhoods and the entire Los Angeles region.”
Moore’s first order of business will be a trip to Japan, where he will meet with Japanese customers and port officials.

“The port is a critical economic engine for the city and region,” Moore said. “In the face of fierce global competition, my focus will be to keep us on a path of sustained growth that generates jobs and business investment, and also assures that we retain our position as the nation’s leading port.”