Tuesday, November 26, 2013

Alaska Prepares for Arctic Traffic

By Jim Shaw

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 Soléal 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.

Port of Oakland Truckers Vote to Strike

There could be about 25 percent fewer drayage truck drivers operating at the Port of Oakland starting tomorrow, as an organization representing the drivers says its members plan to go on strike Nov. 27 because the port won’t help pay for truck retrofits required by upcoming state-mandated anti-pollution regulations.

Port of Oakland Truckers Association (POTA) members voted unanimously the evening of Nov. 22 to stop work at the port on Wed., Nov. 27. Truckers Association representatives have been pushing for an extension of the California Air Resources Board-enforced deadline of Jan. 1 to acquire trucks built in 2007 or later in order to continue working at the port.

Under the regs, trucks built before 2007 can continue to operate at the port only if they undergo significant retrofitting, estimated about $80,000 per truck.

The Association has also asked for grant funding to help about 800 truckers offset the financial burden of costly truck upgrades required by the law. Those 800 drivers, according to the Truckers Association, will essentially lose their jobs once the regulations go into effect, since they won’t be able to work at the port.

The majority of truckers have already bought new trucks at a cost of between $50,000 and $80,000, and many are applying for microloans to pay loan payments on upgraded trucks just to keep working, according to the POTA. Because of this, the Truckers Association has also demanded that a green emissions fee – a tariff on each container, imposed on terminals by the Port of Oakland – be paid to truckers to offset the costs of meeting state regulations.

The truckers also seek a “congestion fee” of $50 per hour after the first two hours truckers spend waiting in line to pick up a load, to compensate them for work that is currently unpaid and to encourage terminal efficiency. They are also demanding a per-load rate increase.

“If they won’t give us an extension or money for upgrades by January, it only makes it more important that we get the green emissions fee, congestion fee and rate increase we’re demanding,” Oakland port trucker Roberto Ruiz said. “We have so much debt and we can’t afford the monthly payments that we have to make just to keep working.”

The Truckers Association, a self-organized group of owner-operator truckers representing about a quarter of the drivers at the Port of Oakland, says if the strike begins, it could go on indefinitely.

New LB Harbor Commissioner Chosen

Long Beach Mayor Bob Foster has chosen former city controller Lori Ann Farrell as his first pick to fill one of two recently created vacancies on the city’s Board of Harbor Commissioners.

Farrell, who now works for the nearby City of Huntington Beach, is set to replace Board Vice President Nick Sramek, who resigned Nov. 21. Sramek’s exit came two days after the Long Beach City Council decided on a 6-3 vote to fire Harbor Commission President Thomas Fields.

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 and in June 2013, he was elected to a one-year term as board president by his fellow commissioners.

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

Sramek’s first six-year term on the board expired July 1, but had remained on the commission the past few months while the mayor was deciding whether to reappoint or replace him.

According to the mayor, Sramek cited fatigue as a reason for his resignation and said the firing of Fields played no part in his decision. In his day job, Sramek is a senior project leader in system engineering for The Aerospace Corp, where he’s worked for over 30 years.

The woman replacing him has been the director of finance for the City of Huntington Beach since December 2010. Before that, she spent three years as Long Beach’s Chief Financial Officer, and was the city’s Controller from 2006-2008.

She previously worked for Morgan Stanley Smith Barney as a financial advisor, and also in financial roles for the city and state of New York.

In a statement, Foster called Farrell “the ideal candidate who demonstrated financial discipline while she served as the city of Long Beach chief financial officer,” and said he was confident that she would serve the commission well while the port department is “going through several new changes.”

Foster also said he’s still searching for a candidate to serve the remaineder of Fields’ six-year term, which expires in December 2015.

Crowley to Build New LNG Con/Ro Ships

Crowley Maritime announced Nov. 25 that it has signed a contract with Mississippi-based VT Halter Marine to build two of the world’s first liquid natural gas-powered combination container roll-on/roll-off (Con/Ro) ships.

The vessels are designed to travel at speeds up to 22 knots and carry containers ranging in size from 20-foot standard to 53-foot-long, 102-inch-wide, high-capacity units, along with hundreds of vehicles in enclosed, weather-tight car decking.

The Commitment Class, Jones Act ships are scheduled for delivery in second and fourth quarters of 2017 to replace Crowley’s towed triple-deck barge fleet, which has operated continuously since the early 1970s.

The new double-hulled Con/Ro ships have been designed to maximize the carriage of 102-inch-wide containers, which offer the most cubic cargo capacity in the trade. The ships will be 219.5 meters long, 32.3 meters wide (beam), have a deep draft of 10 meters, and an approximate deadweight capacity of 26,500 metric tons. Cargo capacity will be about 2,400 TEUs, with additional space for nearly 400 vehicles. The main propulsion and auxiliary engines will be fueled with LNG.

The new ships are to be named El Coquí (ko-kee) and Taíno (tahy-noh). El Coquí is the common name for several species of small frogs that are native to Puerto Rico, and Taíno were native Puerto Ricans who lived off the land.

Crowley says Seattle-based subsidiary Jensen Maritime is expected to provide management and supervision throughout the construction.

4 New LA Harbor Commissioners Seated

The Los Angeles Harbor Commission on Nov. 21 conducted its first meeting since new LA Mayor Eric Garcetti appointed four new members to the five-person body. The new members are:
Patricia Castellanos, who is deputy director of the LA Alliance for a New Economy (LAANE), a Teamsters-affiliated policy and advocacy nonprofit organization focused on advancing economic development strategies that lead to better jobs and an improved environment. Before joining LAANE, Castellanos was the harbor area director for former Los Angeles Mayor Antonio Villaraigosa.

Vilma Martinez, who most recently was U.S. Ambassador to Argentina from 2009-2013. Since 1982, Martinez has served as a partner in the law firm of Munger, Tolles & Olson, where she has specialized in federal and state court commercial litigation and equal employment opportunity and diversity policies for businesses.

Anthony Pirozzi, Jr., who is the director of systems integration, test and launch organization at the Boeing Satellite Development Center in El Segundo. He has worked for Boeing for 23 years, building and launching communication satellites. A San Pedro native, he became a member of the San Pedro Chamber of Commerce in 2006, and was chairman of its Board of Directors from 2010 to 2012. He has been a columnist for the local San Pedro Today newspaper since 2009.

Edward Renwick, who’s a partner at Los Angeles-based private investment firm The Yucaipa Companies, LLC. He also co-founded and is chief executive officer of Raineth Holdings, a $40 million real estate investment fund.

The sole holdover on the harbor board from the previous mayoral regime is former longshore union leader Dave Arian, who, like Castellanos and Pirozzi, lives in the Harbor area.

The Harbor Commission’s expected to elect its president and vice-president at its next Board meeting, scheduled for Dec. 12.