Thursday, December 19, 2013

Boatbuilding, Repair Company Awarded $22 Million in Contracts

Shipbuilding and repair company Marine Group Boat Works, located on the Port of San Diego waterfront, has been awarded two contracts totaling $22 million for boat repair and refurbishment.

Marine Group successfully competed for two separate contracts to fully refurbish commuter ferries from the San Francisco Bay area: the 97-foot Bay Breeze, owned by the Water Emergency Transportation Authority, and the 180-foot M.S. San Francisco, owned by the Golden Gate Bridge Highway and Transportation District.

Both vessels were transported to Marine Group’s Chula Vista, California facility in October and docked for refurbishment.

“We’re privileged to be in a port city that has good weather year-round, existing infrastructure and an extensive marine services and supplies network to be able to compete with other port cities nationwide,” Marine Group Boat Works Vice President Todd Roberts said.

The Bay Breeze ferry is receiving a new conventional propeller system, a brand-new interior and systems upgrades, among other refurbishments and a new paint scheme.

The M.S. San Francisco was built in San Diego and delivered in 1977 to the Bay Area for service. After 36 years of transporting passengers, the vessel is receiving all new components: machinery, replacements and upgrades to electrical and auxiliary systems and a new interior and paint job.

The two new projects are expected to create about 50 new jobs in the area, according to Marine Group, which represents a workforce increase for the company of about 45 percent.

LB Harbor Board Gets New President

The Long Beach Board of Harbor Commissioners on Dec. 17 elected member Doug Drummond as its new board president. Additionally, the board welcomed newly appointed Commissioner Lori Ann Farrell to her first meeting.

Drummond, a former Long Beach City Councilman and retired Long Beach Police Department Commander, was appointed to the five-member Harbor Commission by Mayor Bob Foster in 2011.

Farrell, a former Chief Financial Officer for the City of Long Beach who currently works as the City of Huntington Beach’s finance director, was appointed to the board by Foster last month.

In addition to Drummond’s selection as president, the harbor board also voted in Commissioner Rich Dines as Vice President and Farrell as Secretary. The election of board officers became necessary following the firing last month of former President Thomas Fields and the resignation of then-Vice President Nick Sramek.

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, but after a series of disagreements, Foster had him removed Nov. 19.

Sramek, the man Farrell replaced on the Harbor Board, spent nearly six-and-a-half years on the panel before resigning Nov. 21, citing fatigue.

“It’s my goal to promote a spirit of cooperation among the Board and the staff of the Harbor Department,” Drummond said after being chosen president by his peers on the board. “I know that all of the commissioners take our responsibilities here very seriously. We intend to work together to make this port even stronger and better able to compete in the international marketplace.”

In her first meeting, Farrell said she looked forward to her new role as a harbor commissioner. “I’m hoping that together with the other commissioners we can really take our port to the next level,” she said.

With the seating of Farrell, the board currently has four members, one short of its allotted number. A fifth commissioner is expected to be chosen by Mayor Foster and confirmed by the City Council by either the end of the year or in early 2014.

Daewoo Shipbuilding Wins $500 Million VLCC Order

Daewoo Shipbuilding & Marine Engineering announced Dec. 16 that it has won a $500 million contract to build five very large crude carriers (VLCCs) for the US division of Scorpio Tankers, with delivery slated for the first half of 2016.

South Korea-based Daewoo said in a statement that the tankers are expected to carry about 300,000 tons per vessel and have dimensions of about 1,100 feet in length and 197 feet in width. The ships are designed to be equipped with high-efficiency engines and state-of-the-art technology in order to improve fuel efficiency.

Daewoo, the second-largest shipbuilder in the world, says this is its first VLCC order in about 23 months, since January 2012.

Scorpio Tankers, which has locations in the US and Monaco, is a provider of marine transportation of petroleum products worldwide. It owns 19 tankers and time charters in 29 product tankers.
The company says it has contracted for 65 new vessels in recent years, of which 45 are expected to be delivered in 2014.

Marine Research Campus Planned for Port of LA

The Los Angeles City Council on Dec. 17 unanimously approved a 50-year lease to transform a 100-year-old pier on the LA waterfront into an urban marine research and innovation center dubbed AltaSea.

The lease agreement – signed between the Port of Los Angeles and the AltaSea project’s fiscal sponsor, the Rockefeller Philanthropy Advisors – involves about 35 acres of land and water at the port’s City Dock No. 1 site, Berths 56-60 and Berths 70-71.

The AltaSea site will be developed through a public-private partnership that includes the port, AltaSea and regional public and private universities. Funding commitments for the project’s first phase currently total $82 million, including $57 million in site-related capital investments by the port and a $25 million gift by the Annenberg Foundation. Phase 1 is currently estimated to cost $185 million with a 2018 completion goal.

For the first phase of the project – berths 56 and 57 – the port has agreed to make improvements to the wharf and subsurfaces to ready the property for development. AltaSea is responsible for upgrading the existing historic warehouse structures, as well as other improvements and facility operations.

“AltaSea is a game changer not only for the Los Angeles waterfront but for the entire region,” LA Harbor Commissioner Anthony Pirozzi remarked, saying that the project provides “a unique opportunity to diversify the job base along the Los Angeles waterfront” via a world-class marine research institute that that he predicted would become an “economic engine” for the region.

The AltaSea campus is planned to feature circulating seawater labs, offices, classrooms, lecture halls, support facilities, an interpretive center, a facility for marine-related commercial ventures, and development of a seawater wave tank for studying tsunamis and rogue waves.

The entire project cost is estimated at more than $500 million with completion over a 15- to 20-year timeframe.

Tuesday, December 17, 2013

Diving and Salvage

By Michael A. Moore

From well-capitalized international salvage companies to high technology, such as remotely operated vehicles (ROV) and special software packages, diving and salvage along the West Coast and worldwide is evolving rapidly.

The West Coast diving and salvage business has changed a lot since Mick Leitz was in charge of salvaging the Exxon Valdez. Mick is still in business with Portland's Fred Devine Diving and Salvage Company – and still uses Fred Devine's designed and built for salvage flagship, the M/V Salvage Chief with its 400-ton line pull.

The business these days is moving away from local masters of the trade like Mick Leitz and his Alaskan counterpart Dan Magone, and toward well-capitalized international big players – such as Resolve and Crowley – and high technology, such as remotely operated vehicles (ROV) and special software packages.

But big capital and high tech are not the biggest changes to hit the salvage and commercial diving industry – nor are rough seas and deep water the biggest challenges to successful salvage operations.
Mick Leitz says the legal shoals of myriad and often conflicting regulations are the biggest challenges salvors face these days. Some of those rules are a result of the Exxon Valdez grounding and subsequent oil spill.

In fact, Leitz wonders if the Exxon Valdez operation could be pulled off in today's regulatory climate. He says it was difficult enough in those pre-OPA90 times.

"Harbors of refuge was a problem before theExxon Valdez ," he says. "It's still a major problem." Leitz says he had to write six different towing plans for taking the Valdez from Alaska to San Diego before the seventh was accepted.

"None of the harbors of refuge that were capable of handling the Valdez wanted anything to do with it," he said. "The final plan was to keep the tow route more than 200 miles offshore." Leitz lets the question of what would have happened if a problem arose during the tow remain unanswered.
Responder immunity is the biggest problem plaguing the industry from the fallout of the Exxon Valdez grounding says Leitz.

"It has to do with the way OPA90 is written," said Leitz. "The way things are now, the salvor is potentially liable, whereas environmental cleaners have responder immunity."

Leitz is referring to a responder immunity provision Congress included in the post-Exxon Valdez OPA90 legislation that was intended "to protect from liability those individuals or corporations who provide care, assistance, or advice in mitigating the effects of an oil spill."

"Unfortunately, the OPA 90 standard specific to responders has proven inadequate to protect responders from becoming entwined in such suits," writes Jonathan K. Waldron, a partner in law firm Blank, Rome, LLP, in the Fall 2011 edition of Soundings, published by the American Salvage Association. Waldron was referring to the legal problems encountered by emergency responders to the Deepwater Horizon oil platform disaster in the Gulf of Mexico.

"Immediately following the explosion on the Deepwater Horizon, emergency response vessels rushed to the rig to save lives, render assistance to those in peril and fight the fire.

"In the ensuing months, responder companies worked to clean up the oil that was pouring into the gulf in an effort to mitigate the spill. Notwithstanding these valiant efforts to help in the worst environmental disaster in US history, these emergency and cleanup responders are entwined in complex and protracted specialized multidistrict litigation (MDL) despite the fact that protections were put in place following lessons learned from the Exxon Valdez specifically to prevent such occurrences.

"Salvors could find themselves in the same situation in future incidents unless enhancements are made to current law," Waldron said. "Congress intended that responses to oil spills be immediate and effective and noted that without such a provision the substantial financial risks and liability exposures associated with spill response could deter a prompt, aggressive response.

"This immunity does not prevent any injured parties from recovering their full damages resulting from the spill incident, as OPA 90 provides that the responsible party (RP) is liable for any of the removal costs or damages that a responder is relieved of pursuant to this immunity consistent with the OPA 90 'polluter pays' principle," he said.

"This immunity does not apply if a responder acts with gross negligence or willful misconduct, or in cases involving personal injury or wrongful death."

That last sentence is the loophole big enough to tow the Exxon Valdez through when it comes to creating legal liability to salvors.

Which is what happened to emergency responders following the 2010 Deepwater Horizon explosion, which resulted in the deaths of 11 and injuries to 17 men working on the platform, plus the discharge of approximately five million barrels of oil.

Deepwater Horizon required thousands of responders working several months to contain and clean up under challenging conditions – numerous claims and lawsuits were filed.

"Unfortunately, the OPA 90 standard specific to responders has proven inadequate to protect responders from becoming entwined in such suits," said Waldron. "In these cases, plaintiffs have been successful in simply alleging gross negligence (without providing any supporting facts), and to cast "exposure" claims resulting from alleged exposure to released oil or from approved dispersants used to treat that oil as personal injury claims falling outside the scope of the specific responder immunity provisions."

The cases have been catalogued into pleading bundles called "Master Complaints" under various categories – including one bundle that named as defendants all the owners and/or operators of the rescue vessels that answered the Deepwater Horizondistress call and responded to the fire emergency after the explosion. This is similar to suits that could have been filed against salvors had there been salvage actions related to the incident, said Waldron.

Mick Leitz's way of dealing with the increased potential for lawsuits and liability in today's new world of marine salvage law is to be very selective about the jobs he takes on and the way the contracts on those jobs are worded.

"You try to protect yourself contractually, but you can still end up in court," said Leitz.

Leitz believes the increased regulatory and liability climate is counterproductive to the real mission of the salvor. "The sooner you get the vessel out of the water, the better – but the regulations slow you down," he said. "In the old days, you would use a sling to pick up a vessel and get rid of it.

"The risk the salvor runs now is if you get two drops of oil on the water, you are liable to get sued. Anything goes wrong, debris, paint chips, oil – you can spend five years in court for a week's work."
Leitz's solution is to work for state agencies as much as possible. He says the states have funds to get rid of derelict vessels and they provide an umbrella of protection if something goes wrong.

Dan Magone took another tack to solving the perfect storm of challenges he found himself facing after more than 33 years of sailing into Alaska's wintry, storm-tossed seas to rescue fishing boats and other vessels in distress.

"We never had any competition until the big companies started to notice this neck of the woods," said Magone.

"Climate change and petroleum are bringing a lot larger vessel traffic up through Alaska's waters. The Arctic passage is spurring growth – next year they will be laying cable through the passage from Norway to Tokyo," he said.

Magone decided it was better to join the big salvage and diving companies than to compete with them. He joined forces this last August with Florida-based Resolve Marine Group.

"The result will be a greatly expanded, emergency response and marine services company that combines the long-standing, deep and local expertise massed by Magone Marine's Alaskan salvors with the extensive resources, personnel, and vast salvage & wreck removal experience of Resolve Marine Group," states the joint press release on the venture. "This newly-formed business will be named Resolve-Magone Marine Services (Alaska) and coincides with increased vessel traffic now in the environmentally-sensitive Aleutian Chain."

Magone's decision to hitch up with Resolve was not made on the spur of the moment.

"I decided to join forces with the best – plus I am friends with the co-owner of Resolve," he said. "We are like-minded guys, and had been discussing this move for several years. I knew I couldn't ante up to the level it's going to take to do business with the increased competition and regulations.

"We did all the wreck removals for the fishing fleet for 20 years. The big shipping companies that are coming up are way beyond my scope."

Magone says that another challenge his company and the rest of the industry is facing is finding reliable trades people and vessel crew.

Meanwhile, back in sunny Southern California, Richard Barta has built a niche for Long Beach-based Muldoon Marine Services.

"We do mostly ship repair and maintenance inspections," he said. "When we do emergency work it's with OPA90 partners. You have to have pollution insurance.

"It's the nature of the beast – when something happens, someone has to respond. Even with a small job like boat salvage, it can be a mess," he said.

Barta's strategy is to work as a member of a larger OPA90 responder team.

"Part of OPA90 is that ship operators of vessels over a certain size have to have an OPA90 responder," he said. 'We have worked with Marine Response Alliance – there are others, like Titan and Resolve.
"If something happens in LA or some other place like Ensenada, they call in small groups to help get the job done. We worked on the APL Panama."

Barta is referring to the hard grounding of the containership APL Panama in December of 2005 when it was attempting to enter the harbor at Ensenada, Mexico and missed the ship's channel.

"On big jobs, a large contractor steps in and brings in everyone who's got the right equipment and who can get there the fastest."

The salvage of the Costa Concordia by Crowley Maritime subsidiary Titan Salvage is the latest and greatest example of multi-contractor teamwork on a difficult salvage job.

Titan teamed up with Italian engineers Microperi – Titan brought its experience as a salvor and Microperi contributed their expertise at underwater construction and engineering.

The task of bringing the gigantic ship – which is twice the size of the Titanic – upright and off the rocks in one piece required the talents of 450 specialists from 19 countries working around the clock seven days a week. The project team included more than 100 specialized divers from more eight countries – who could only work 45 minutes at a time at the 150-foot depths before entering a hyperbaric chamber for decompression.

At the same time Titan and Microperi were taking care of the physical work, specialist representatives from Costa Crociere, Carnival Corporation, London Offshore Consultants and Standard P&I Club, with the collaboration of RINA and Fincantieri, worked behind the scenes to ensure that the project had the financial, legal and governmental support needed to move forward to a successful conclusion.
The final cost for the salvage of the Costa Concordia was approximately $400 million, according to Crowley.

Crowley's history in responding to maritime emergencies also goes back to the Exxon Valdez – Crowley Marine Services was the first on scene with high horsepower tugs positioned alongside the stricken tanker and these tugs were also used to assist Marine Pollution Control during the transfer of oil from the stricken tanker to lightering vessels.

That was the first step in a working partnership that eventually became today's Marine Response Alliance – Crowley's MRA partners include Marine Pollution Control, Titan Salvage, Marine Hazard Response and McAllister Towing.

Seattle-based Global Diving and Salvage may be closer to the new model for small and medium size salvors going forward.

The company's work mix consists of marine casualty response, marine construction and offshore support for the oil and gas industry. Global Diving has worked on projects from Alaska to Saudi Arabia.

Technology combined with top professionals and teamwork is the company's formula for confronting the challenges and minimizing the risks associated with marine emergency response and salvage operations.

"There have been a lot of technical changes in this industry," said Frank Immel, Global Diving's marketing director. " We use remotely operated vehicles (ROV) to do initial recons in salvage situations instead of risking a diver.

"We can put an ROV down to do a visual inspection and gather information that allows us to develop a salvage plan."

A major part of Global's salvage plan development involves the use of a software system that was developed for the design and evaluation of all types of ships and floating structures. The software addresses flotation, trim, stability and strength by calculating the forces involved using mathematical/geometrical models of the vessels.

"You could say we use the software in a reverse mode," said Immel. "Instead of using it to design a vessel, we input a shape for the hull line and other parameters – this enables weights and stability to be calculated to a greater degree of accuracy.

"This is really important when using a crane to do a vertical lift. You want to know where is the center of gravity, where do you connect for the pick, what's the weight of the vessel? The software makes the whole process more consistent and reliable," he said.

Global prefers to use cranes instead of lift bags when the water is deeper than 15 or 20 feet.
"A lift bag is great in shallow water," said Immel. "But you can't forget the laws of physics as you go deeper – you pressurize a lift bag at depth – as it rises the bag wants to go faster. It can get out of control – the bag comes up and then wants to go back down. With cranes you have more control, there is no volumetric expansion to deal with."

Immel says that Global's objective in every aspect of their operations is to minimize risk.

"Our first job is to minimize risk to keep people alive," Immel said. "We put people where they are not supposed to be."

Oregon Gov. Awards Disputed Jobs to ILWU

Oregon Gov. John Kitzhaber on Dec. 12 announced that a two-year dispute over specific work at the Port of Portland’s Terminal 6 has been resolved. The job of plugging in and unplugging refrigerated ships at the terminal is being assigned to International Longshore and Warehouse Union workers.

Historically the work, which involves plugging/unplugging and monitoring refrigerated containers at the terminal, had been performed by another union – the International Brotherhood of Electrical Workers – since the early 1970s.

When the port transitioned control of terminal operations to ICTSI Oregon in 2011 under a 25-year lease, continuation of the IBEW work was included in the lease terms. However, the ILWU intervened, saying that its contract with the Pacific Maritime Association required the terminal operator to hire longshore workers.

The dispute led to work slowdowns by the ILWU in 2012, which in turn led to legal action by the port and National Labor Relations Board and an ILWU countersuit.

But according to Gov. Kitzhaber’s office, the Port of Portland and IBEW 48 have agreed to terms in transitioning the work from representation by IBEW Local 48 to workers represented by ILWU. Longshore union workers will perform the plugging and unplugging reefer ships as soon as the port’s able to contract with an ILWU employer for the work.

The agreement, however, neither impacts nor addresses the ongoing legal disputes between ILWU, ICTSI Oregon, the Pacific Maritime Association and the Port of Portland. The agreement settles the work assignment conflict “on a go-forward basis only,” according to the governor’s office.

However, as part of the agreement, the Port of Portland has said that no IBEW 48 members will lose work as a result, and that the electricians will be assigned other port-related duties. The port has also promised that future port-owned facilities would be serviced by Local 48, and the port and IBEW 48 will enter into a new apprenticeship arrangement to address the port’s long-term needs for skilled electricians.

The port currently employs about 60 Local 48 electricians, many of whom are approaching retirement age.

The Port of Portland’s also required provide weekly reports to the governor’s office regarding Terminal 6 productivity. The governor and his staff are to review the reports and intervene if needed, to maintain and improve terminal productivity.

“On behalf of the Port and the larger community of shippers and others who are concerned about the future of Terminal 6 and the vital role it plays in our regional economy, I want to thank the Governor for his leadership on this issue – it has been pivotal,” Port of Portland Executive Director Bill Wyatt said. “This doesn’t end all aspects of this dispute, but hopefully it is the beginning of the end.”

Container Volumes Climb at LA, Long Beach Ports

Overall container volumes at the Port of Los Angeles were up 17.3 percent last month compared to November 2012, while Port of Long Beach volumes increased a relatively modest 2.5 percent during the same period, according to newly released data.

Imports through Port of LA terminals jumped 18.7 percent, rising from 288,273 20-foot equivalent containers in November 2012 to 342,247 TEUs this past November. Exports jumped 23.3 percent, going from 145,344 TEUs in November 2012 to 179,175 TEUs in November 2013.

LA attributes the sizable increases in part to larger vessels calling at the port as well as improvement in the U.S. economy.

Combined, total loaded imports and exports for November increased 20.2 percent at Los Angeles, going from 433,617 TEUs last November to 521,422 TEUs in November 2013. Factoring in empties, which increased 8.7 percent year over year, the November 2013 overall volumes of 683,849 TEUs were an increase of 17.3 percent compared to November 2012’s 582,981 TEUs. However, despite the significant rise last month, during the first 11 months of 2013, the total container volumes of 7.21 million represented a 3.7 percent decrease compared to 2012’s 7.48 million TEUs during the same time period.

At the adjoining Port of Long Beach, cargo volumes climbed 2.5 percent in November compared to the same month in 2012.

A total of 569,599 TEUs moved through Long Beach terminals in November, according to data. Imports increased 6.5 percent to 296,638 TEUs and exports rose 9.9 percent to 151,950 TEUs – the port’s second best export total in 2013.

However, a sharp decline in shipments of empty boxes at the POLB nearly offset solid gains in both imports and exports of containerized goods. Empties were down a sizable 12.7 percent to 121,011 TEUs. For the first 11 months of calendar 2013, cargo container volume is up 12.1 percent at Long Beach – including 14.4 percent more imports, 10.8 percent more exports and 8.6 percent more empties.
More details on Long Beach’s past and present cargo numbers can be found at Current and past data container counts for the Port of Los Angeles are online:

Jensen Maritime Upgrades Portland Fireboats

Jensen Maritime, the Seattle-based naval architecture and marine engineering division of Crowley Maritime, has completed concept designs and performance specifications for two new fireboats expected to join the City of Portland’s fire and rescue fleet in the first half of 2014.

The new fast-response fireboats are to provide emergency response on long stretches of both the Columbia and Willamette rivers, and are expected to have a 20-year service life, far more than the typical five to seven years found on similar vessels in the class.

Jensen says it designed the two new fireboats with a number of technologically rich elements, including automatic compensation for the recoil from the water cannons and fully integrated controls for fast and agile maneuvering.

The two 54-foot long by 16-foot wide fireboats will be powered by twin MTU 8V2000 M84 engines each rated at 1,085 HP at 2,450 RPM. The twin MTUs will turn ZF 665TS reduction gears and Rolls-Royce FF450S waterjets, which combine to give the vessels a top speed of about 40 knots.

Each vessel’s also designed to have a 3,500 gallons-per-minute fire pump on the front end along with three monitors – two on the bow and one on top of the cabin – and numerous hose connections both forward and aft. A unique integrated hydraulics system with a hydraulic bow thruster will also be featured on the vessels.

Jensen provided the vessels’ design, and Donald L. Blount and Associates produced the final hull form. The boats are being constructed at Portland-based Oregon Iron Works.

Other Jensen Maritime-designed fireboats include a 108-foot fireboat and 50-foot fast-attack fireboat for the Seattle Fire Department; three 40-foot fireboats for the Los Angeles Fire Department; a 40-foot fireboat for the Los Angeles County Fire Department and a 37-foot, 40-knot patrol boat and 44-foot patrol boat for the Seattle Police Department.

Pacific Northwest Ports Set Emissions Reduction Goals

The ports of Seattle, Tacoma and Metro Vancouver, Canada have approved a clean air strategy in which they aim to cut diesel emissions by 75 percent per ton of cargo moved by 2015 and 80 percent by 2020.

The goals are part of the 2013 Northwest Ports Clean Air Strategy Update, which the ports adopted Dec. 12. The update is to the 2007 Northwest Ports Clean Air Strategy, a ground-breaking partnership between the three ports and five regulatory agencies that was aided by cooperation from customers, tenants, shipping lines and environmental organizations. The 2013 update commits the groups to work together through 2020.

In addition to diesel emission reductions, the ports have set goals to cut greenhouse gases by 10 percent by 2015 and 15 percent by 2020, per ton of cargo moved. All reductions would be based on a 2005 baseline.

The 2013 update was built on the results of the 2011 Puget Sound Maritime Air Emissions Inventory, which found maritime-related air pollution has decreased since 2005, due in part to significant investments by the maritime industry and government agencies in cleaner technology, cleaner fuels and more efficient systems of operation.

To develop and implement the 2007 strategy and this 2013 strategy update, the three ports partnered with various Pacific Northwest governmental agencies, including the U.S. Environmental Protection Agency, Washington State Department of Ecology and Puget Sound Clean Air Agency.