Riverbend Marine Service Auction

Friday, June 20, 2014

$123 Million Awarded for Ferry Services, Boats and Terminal Improvements

By Mark Edward Nero

The US Department of Transportation has announced the award and distribution of about $123.5 million for passenger ferry projects and ferry operators throughout the United States, including Washington state and California.

The funding, which was announced June 2, is expected to support existing ferry service on many US waterways, plus establish new ferry service where it’s needed and help repair and modernize ferry boats, terminals and related facilities.

In Washington, the State Dept. of Transportation has been awarded almost $7 million for two separate projects. First, $4.7 million is earmarked for a project to replace an aging seawall at a ferry terminal in Mukilteo with a new facility nearby. Also, $2.26 million goes toward the stabilization of an aging seawall at the ferry terminal in Edmonds.

Additionally, another $3 million is earmarked for the King County Dept. of Transportation to replace an aging ferry terminal at Colman Dock in downtown Seattle.

“Passenger ferries play an important role in our nation’s transportation network by connecting people with the jobs and services they need to reach across the river, the bay or other local waterway,” US Transportation Secretary Anthony Foxx said in a news release announcing the grants.

Also among the projects allotted funding were three in California: the Golden Gate Bridge Highway and Transportation District received $6 million to refurbish the M/V Sonoma ferry boat, which is part of the Golden Gate Ferry fleet, the largest public ferry service on the San Francisco Bay.

Additionally, the San Francisco Water Emergency Authority is to receive $3 million to build a new maintenance facility, and the Los Angeles County Metropolitan Transportation Authority has been allotted $336,600 to buy three vessels for its “WaterBus” passenger ferry service in the Marina Del Rey community.

The DOT’s ferry funds are administered separately through the Federal Transit Administration’s Passenger Ferry Grant Program, which is providing $60 million in competitive funds for 26 projects in 13 states and Puerto Rico; and the Federal Highway Administration’s Ferry Boat Formula Program, which is providing $63.5 million to 114 operators in 37 states, Puerto Rico and the US Virgin Islands.

“These projects help provide more travel choices,” Federal Highway Deputy Administrator Gregory Nadeau said. “Ferry service represents a key transportation link.”

POLB Named ‘Best Green Seaport’

By Mark Edward Nero

The Port of Long Beach was recognized as the “Best Green Seaport” in the world Tues., June 17 at the 28th annual Asian Freight & Supply Chain Awards in Shanghai, China by the Cargonews Asia shipping trade publication.

The Asian Freight & Supply Chain Awards are based on an annual poll of thousands of professionals in freight transportation services. Awards are given in numerous categories, including best shipping lines, container terminals, air cargo terminals, airports and rail haulers.

The Long Beach port was the only seaport on the North American West Coast to receive an award during the ceremonies.

The “Green Seaport” award, according to the AFSCA, is reserved for ports that have “demonstrated compliance with green freight transport regulations and environmental standards; investment in green initiatives, technology and action plans; incorporation of environmental requirements in strategic planning; use of a policy on reducing fuel emissions from freight handling operations; and ongoing training of staff in green initiatives and in measures to lower carbon footprints.”

For nearly 10 years the Port of Long Beach’s “Green Port Policy,” has helped reduce the port’s impact on the community, wildlife and the environment. Since the policy’s implementation, the POLB has overseen significant improvement in air and water quality with an array of environmental initiatives, including its Clean Trucks, Green Flag Vessel Speed Reduction and Technology Advancement programs.

Canadian Government to Fund Port Trucking Efficiency Measures

By Mark Edward Nero

Canadian Transportation Minister Lisa Raitt said June 12 that the Government of Canada is contributing $3 million to reduce trucker wait times by using new technologies to better link operations across Port Metro Vancouver’s four terminals.

“This federal funding demonstrates this government’s ongoing commitment to maintain long-term stability at Port Metro Vancouver,” Raitt said. “This project, and all the measures we’ve taken ... (are) helping to ensure the reliability of Canada’s Asia-Pacific Gateway.”

The government’s Common Data Interface (CDI) project is expected to help to better coordinate and schedule container truck movements by providing the technological capabilities to, among other things, collect data on gate and terminal activities, which would help to coordinate multi-shift operations.

The CDI project will also develop an enhanced common reservation system (i.e. a centralized appointment scheduler for container trucks), which is expected to reduce wait times and enhance efficiency of truck movements; and it will measure operational performance and enforcement through the collection of location data, via GPS technology, to help the port develop and enforce appropriate standards.

The project, which costs about $6 million, will receive $3 million over two years under Transport Canada’s Clean Transportation Initiative on Port-Related Trucking. The port ‘s contributing the other half.

The initiative is a product of the March 26 labor agreement between the governments of Canada and British Columbia, Port Metro Vancouver and members of the United Truckers Association and labor union Unifor.

The agreement, which brought about the end of a 28-day strike at the port by drayage truck drivers, resulted in a 15-point joint action plan agreed to by both sides that the port says will provide a framework for long-term stability in the container trucking industry.

APL Receives USCG Security Award

By Mark Edward Nero

The US Coast Guard has bestowed global container carrier APL with a 2013-2014 Rear Admiral Richard E. Bennis Award for Excellence in Maritime Security, it was announced June 12.

The newly-created, bi-annual Bennis Awards aims to encourage organizations to develop a comprehensive culture of security by assessing their overall security programs, seeking creative solutions to address risks, building a system of continuous improvement and sharing best practices that would benefit other organizations.

APL was recognized as ‘Company of the Year’ for its commitment to US security and the marine transportation system, particularly its contributions toward implementation of U.S. Maritime Transportation Security Act (MTSA) requirements.

The award categories this year included Company of the Year, Port Authority of the Year and Facility of the Year. APL was the only company with a West Coast presence to receive an award, however Maersk Lines and SSA Marine did receive honorable mentions.

“APL is honored to receive the Bennis Award, as it is a perfect complement to the Osprey Award – the USCG’s highest environmental accolade – which we received in 2012,” APL President Kenneth Glenn said.

In congratulating APL and the other award winners, US Coast Guard Assistant Commandant for Prevention Policy Rear Admiral Paul Thomas said the recipients demonstrated best practices in leveraging partnerships, developing business practices and implementing physical security measures that build a culture of security in their organizations. “We all own the marine transportation system and have a part in securing it,” he said. “We must stay focused on our security systems to guard against complacency and to prepare for emerging threats, including cyber attacks.”

Tuesday, June 17, 2014

The Age of the Arctic: The Rush Has Just Begun

By Michael A. Moore

The Age of the Arctic has arrived – and one of the world's greatest rushes for oil, gas and mineral riches has begun. The steady retreat of the Arctic's summer sea ice over the last thirty years is opening access to the region's on-and-offshore riches as well as creating new shipping routes from Asia and the Pacific West Coast to Europe.

Commercial activities are expanding in the Arctic in two primary areas: the extraction of oil and natural gas, and the mining of hard minerals. According to a 2008 US Geological Survey (USGS) report, "The extensive Arctic continental shelves may constitute the geographically largest unexplored prospective area for petroleum remaining on Earth." The USGS estimates that 13 percent of the world's undiscovered oil reserves (90 billion barrels) and 30 percent of the undiscovered gas reserves (1,700 trillion cubic feet of natural gas, and 44 billion barrels of natural gas liquids) are in the Arctic.

These estimates are in addition to more than 240 billion barrels of petroleum reserves that have already been discovered. Eighty-four percent of these reserves estimated by USGS are predicted to lie offshore. The report estimates that one-third of the oil is in the circum-Arctic region of Alaska and the Alaska Outer Continental Shelf (OCS). The area is ranked second behind the Gulf of Mexico for volume of resources. The USGS estimates that the Russian Arctic contains far more oil and gas resources, including more than one quadrillion cubic feet of undiscovered natural gas.

Hard mineral extraction is a mature industry in the Russian Arctic and is growing in the US Arctic. Indeed, the US Arctic is home to one of the largest zinc and lead mines in the world, which is located in northwest Alaska. The Government of Norway attributes the following percentages of worldwide mineral production to the Arctic: nickel (11 percent), cobalt (11 percent), tungsten (9 percent), zinc (8 percent), palladium (40 percent), platinum (15 percent), gem-grade diamonds (26 percent), industrial-grade diamonds (24 percent), and apatite (11 percent).

This modern-day quest for Arctic riches is no wild west, north to Alaska-style gold rush, with every country for itself – the exploitation of the vast wealth of the region has been going on for decades with extensive international corporate involvement.

"The Arctic is not the pristine, uninhabited region that many people in lower latitudes like to think it is," said John Higginbotham, a Senior Fellow of the Arctic program at the Centre for International Governance Innovation in Waterloo, Ontario. "There are established communities, people live and work throughout the Arctic, seasonal shipping takes place and mining and petroleum related activities have been going on for decades."

A Wealth of Resources
A World Economic Forum report on the Arctic states that the top of the world has "a population of 4 million people and an annual economy of roughly US$ 230 billion – the region is under the jurisdiction of eight countries (the Russian Federation, Finland, Norway, Sweden, Iceland, Greenland/Denmark, Canada and the US), with few territorial border disputes among them.
"Even offshore in the Arctic Ocean, most coastal waters fall within existing Exclusive Economic Zones, with further seafloor sovereignty extensions pending or likely under Article 76 of UNCLOS. In Canada, Greenland and the US, local control by aboriginal communities and regional business corporations can be substantial. In short, the Arctic is neither an unclaimed, contested region nor a closed military zone; it is governed under similar national structures and international frameworks to those in other areas of the world."

The development of the Arctic and its resources is not an overnight sensation – and the region's wealth of natural resources is not readily available for development, according to the WEF report. Many technological, infrastructural, economic and environmental challenges impede natural resource development in the Arctic. Extracting resources is never a simple operation in polar environments, and resource development will require high levels of investment, including development of specialized technologies and support by governments.

"We have to look ahead 30, 40 and 50 years," said Higginbotham. "A whole new maritime economy could appear in the North American Arctic – fishing, oil, minerals, and tourism. With vision and planning, the region will come to look more like Norway."

The pace and reach of Arctic exploitation and exploration has increased exponentially since 2010, when non-Russian commercial shippers started using Russia's Northern Sea Route with the transit of the M/V Nordic Barents, a modern heavy ice class bulk carrier, from Norway to China.

An even more historic event took place three years later, when the summer sea ice of Canada's fabled Northwest Passage had retreated enough to allow the first ever passage of a large freighter, the Barents' sister ship, the M/V Orion, in September of 2013. The Orion carried 73,500 tons of coal from Vancouver to Finland.

The transit of the Northwest Passage was more symbolic than a sign that the long sought shortcut was finally open to shipping. It may be decades before the Northwest Passage is more than a niche transit route – experts note that it is shallow, its network of islands and inlets make navigation tricky, there is little infrastructure, a lack of proper charts, and the passage remains ice covered longer than other parts of the Arctic.

Russia's Running Start
Russia's Northern Sea Route (NSR) has seen a steady increase in traffic – the Northern Sea Route Information Office reported 46 transits in 2012 and 71 in 2013, some of those voyages were between ports in the Russian Arctic.

The NSR will probably never become a major container route – it is more suited to project cargo and bulk commodities – the July to November sailing season and Russian icebreaker fees are among the factors that have so far limited the route to specialty cargoes. The feasibility of the NSR for more general cargo may change as the Arctic summer sea ice retreats in the coming years and decades. Some predict that the entire Arctic Ocean will be ice-free in the summer in 40 or 50 years.

The real significance of the NSR is its role in Russia's development of its offshore Arctic oil reserves and Siberian oil, gas and minerals. Russia has been using the NSR since the Soviet era, and the route remained closed to non-Russian vessels until 2009.

Russia has a definite running start for its Arctic exploration and development activities, a fact that is not lost on Alaskans and Canadians.

"Russia has put a tremendous national effort into developing its Arctic infrastructure," said Higginbotham. "It is an Arctic maritime superpower – everything that the US and Canada are not in terms of long term commitment. Canada is introspective and hyper-sensitive on sovereignty issues, while the US looks at everything globally, with limited regard to its Alaskan Arctic interests."

The lack of US and Canadian government interest in the Arctic is underlined in a report authored by Higginbotham, Andrea Charron and James Manicon for the Centre for International Governance Innovation (CIGI).

"As the Arctic Ocean's sea ice continues to melt, developing the North American Arctic's marine, resource and community potential is a clear imperative for both Canada and the United States. Such development will require an intense and focused effort in multi-level domestic and bi-national governance.

At the same time, a dramatic gap in leadership and infrastructure is emerging between North America on one side, and Russia and Scandinavia on the other, in maritime transport facilitation, search and rescue facilities, port infrastructure and resource development priority in the Arctic Ocean. The lack of progress in developing public-private infrastructure in the North American Arctic is the product of a well-intended but complex and incoherent governance structure in the North American Arctic."

That gap in leadership and infrastructure by the North American Arctic countries manifests itself in a number of ways, but the most obvious is the lack of a modern fleet of icebreakers.

Icebreaker Deficit
Coast Guard polar icebreakers perform a variety of missions supporting US interests in polar regions. The Coast Guard's two existing heavy polar icebreakers – Polar Star and Polar Sea – have exceeded their originally intended 30-year service lives. On June 25, 2010, the Coast Guard announced that Polar Sea had suffered an unexpected engine casualty; the ship was unavailable for operation after that. The Coast Guard placed Polar Sea in commissioned, inactive status on October 14, 2011.

Polar Star was placed in caretaker status on July 1, 2006. Congress in FY2009 and FY2010 provided funding to repair it and return it to service for an additional 7 to 10 years; the repair work was completed and the ship was reactivated on December 14, 2012.

The Coast Guard's third polar icebreaker – the cutter Healy – entered service in 2000. Compared to Polar Star and Polar Sea, Healy has less icebreaking capability (it is considered a medium polar icebreaker), but more capability for supporting scientific research. The ship is used primarily for supporting scientific research in the Arctic.

The Coast Guard's mission requirements, including marine environmental protection, dictate that the service maintain heavy icebreaking capability for the foreseeable future. In order to fully fund subsequent phases of this project, the Coast Guard has stated that it believes that a "whole-of-government" approach will be necessary. Obtaining a new, heavy polar icebreaker that meets Coast Guard requirements will depend upon supplementary financing from other agencies whose activities also rely upon the nation possessing a robust, Arctic-capable surface fleet.

The Coast Guard's FY2013 budget initiated a new project for the design and construction of a new polar icebreaker, according to a March, 2014, Congressional Research Service report. The project received $7.609 million in FY2013 and $2.0 million in FY2014. The Coast Guard's proposed FY2015 budget requests $6 million to continue initial acquisition activities for the ship.

The Canadian Coast Guard has a fleet of 18 icebreakers, two of which are classified as heavy, four are medium class, and the rest are multi-tasked vessels ranging from high to low endurance classifications.

Canada is making progress toward a new, world-class icebreaker, the CCGS John G. Diefenbaker. STX Canada Marine and Aker Arctic are expected to finish the design this year. The Diefenbaker is estimated to be capable of carrying fuel and supplies to be self-sufficient for 270 days and be able to make constant progress through 2.5 meters (8 feet) of ice at three knots. It is a replacement for Canada's largest icebreaker, the CCGS Louis S. St-Laurent.

Aker Arctic is also currently designing a polar research icebreaker for the Chinese Polar Research Institute as well as the next generation icebreaker for the government of Finland.

Public/Private Solution
One possible solution to the future need for modern icebreaking vessels is the development of a mix of federal ships operated by the Coast Guard and commercial icebreakers.

"The replacement of America's polar icebreakers (the two polar class ships, Polar Star and Polar Sea) has been a long-standing issue. However, this requirement for federal polar icebreaking capacity in only large, high powered ships, masks a plausible need for shallower-draft, but ice capable (smaller) Coast Guard cutters for operations in the coastal areas of northwest Alaska and the Beaufort Sea." stated Dr. Lawson W. Bigham in a speech to Stanford University's Hoover Institute. Dr. Bigham is a Distinguished Professor of Geography & Arctic Policy at the University of Alaska, Fairbanks, and a Senior Fellow at the Institute of the North in Anchorage. He was a career US Coast Guard officer serving from 1970 to 1995 and retired with the rank of Captain. He served at sea in command of four Coast Guard cutters, including the polar icebreaker Polar Sea sailing in Alaskan, Arctic & Antarctic waters.

"Within the territorial sea and exclusive economic zone around Alaska, and around the entire Arctic Ocean, the Coast Guard's polar icebreakers provide a credible, sovereign presence and a platform for law enforcement, SAR, emergency response, scientific research, and any special maritime operation required in ice-covered waters," he said. " The domain of Coast Guard polar icebreakers should be unconstrained, and thus should be a capability used in all Arctic and Antarctic waters where the US has important national interests.

The role of future commercial ship escort by icebreakers in US waters requires examination in light of advances in Arctic marine technology and new operational strategies, said Bigham.
Most of today's Arctic commercial carriers (bulk carriers, tankers, and LNG carriers) are designed as icebreaking ships capable of independent operations (without icebreaker escort). Most of the Arctic commercial carriers operating in the Canadian and Russian Arctic regions do not require icebreaker escort during a three- to four-month navigation season. The availability of capable commercial icebreakers must also be taken into account when determining the requirements for a federal icebreaking capacity.

The use of privately-owned icebreakers in the US maritime Arctic in support of offshore exploration and, potentially, the escort of commercial shipping to a US Arctic port is a compelling opportunity for the US maritime industry. US federal agencies and Congress should be supportive of this commercial opportunity and not compete with industry by using a fleet of solely government-owned icebreakers.

Foss Maritime is one of those private companies that are moving to stay ahead of the future need for private vessels capable of working in ice conditions, as Alaska's economy shifts into high gear with the opening of the Arctic.

"Foss is currently constructing Arctic-class ocean tugs with 7,000 horsepower engines to support ocean towing opportunities in the north," said Gary Faber, President, Global Services for Foss. "As bigger and more capable ships call into the northern ports and sea lanes, we will respond with bigger and more capable tugs. We have plans for icebreakers and other ice-capable support vessels as they become needed."

Poorly Positioned
Another area where Bigham sees a need for federal action is deep-water ports. A recent joint federal-state study conducted by the US Army Corps of Engineers and the Alaska State Department of Transportation and Public Facilities, the Alaska Deep-Draft Arctic Port System Study, underscored the long-term need for a US Arctic port that would be linked to natural resource export in an new era of demand for Arctic resources by global markets.

Future scenarios looking fifty years ahead were created with two key driving forces emerging that were defined as Arctic resource development and collaborative investment (a combination of public and private financing), he said. Natural resource development as a fundamental driver is consistent with the state of Alaska's long-term strategy of increased development of Arctic oil and gas and northern minerals.

Included are calls for public-private partnerships to finance the construction of an Arctic port and associated infrastructure, increased funding to NOAA for hydrographic and bathymetric surveys, and needs for navigational tools to support Arctic infrastructure developments.

Such a port would also support a range of federal agencies, especially the Coast Guard, and strategically place emergency response capacities within the US maritime Arctic. Feasibility studies of appropriate port sites in Nome and Port Clarence are ongoing.

"The US is not well positioned to take advantage of the opportunities that are presenting themselves with the opening of the Arctic," said Nils Andreassen, Executive Director of the Institute of the North. The Institute was founded by former Alaska governor and US Secretary of the Interior, Walter J. Hickel, whose vision was that "we must understand the reality, the richness and the responsibility of the North." He championed "the commons" and how to care for Alaska's commonly-owned lands and resources.

"The federal government is starting to direct more dollars towards its ability to respond to and manage risk as well as conduct more research in the region," said Andreassen. "But little is directed toward economic development in the region. It could be that much of the opportunity will pass us by, whether it's shipping or offshore development, if we can't address the infrastructure gap and regulatory uncertainty."

The federal government may not be currently making a priority of taking advantage of the economic opportunities the opening of the Arctic presents, but the State of Alaska and its tight-knit business community are.

The state lowered taxes on the oil companies last year that had been previously raised by then-governor Sarah Palin – the result has been a notable increase in exploration activity on the North Slope.

One barometer of that increased activity is the number of truck drivers needed for the North Slope winter runs.

"The typical demand is for 200 drivers over the winter," said Grace Greene, Alaska General Manager for Totem Ocean Trailer Express. "This last winter they needed 500 drivers. That's a good indicator that the new oil tax reduction has resulted in more business."

Totem Ocean is a subsidiary of Saltchuk, a Seattle-based holding company whose Alaska portfolio includes Carlile Transportation, Delta Western, Northern Air Cargo and Foss Maritime.
"The Saltchuk companies in Alaska have an Alaska project cargo team," said Greene. "We look for opportunities with resource development companies to provide them with an understanding of our integrated logistics and transportation services. Think of it as a "one stop shop" for companies looking to leverage the over 40 years of experience the Saltchuk group has successfully and safely operated in Alaska."

Support for ANWR Oil
One of the challenges the Alaska business community is currently looking to overcome is the resistance to lifting the drilling ban in the Alaska National Wildlife Refuge (ANWR).

A vast majority of Alaskans support opening ANWR to oil and gas exploration. More than 78 percent of Alaskans support exploration and production on the coastal plain of ANWR, according to a poll conducted in December 2009 by the Dittman Research Corporation.

Dittman's poll questioning Alaskans on various topics of interest has been conducted regularly over the years and includes the basic question, "The Arctic National Wildlife Refuge, usually referred to as ANWR, is located on the northern edge of Alaska between Prudhoe Bay and the Canadian border. Do you feel oil and gas exploration should or should not be allowed in that area?"

The response was 78% in favor of exploration and 21% opposed. The results over the past 10 years indicate a very steady response with only minor fluctuation.

"Based on a poll we did last year, the two priorities in the Arctic for Alaskans are to protect the environment and promote economic development – Alaskans believe in that balance," said Nils Andreassen.

Many Alaskans believe that most non-Alaskans don't really understand where the Arctic National Wildlife Refuge is located and the relatively tiny amount of space within ANWR, (the Coastal Plain), that's been set aside for potential oil and gas development.

ANWR lies in the top northeast corner of Alaska. The entire 19.6 million acre refuge lies north of the Arctic Circle and 1,300 miles south of the North Pole.

Despite its name ANWR is NOT entirely "refuge". The southern part of ANWR taking 9.16 million acres is classified as officially "Refuge". The central 8 million acres of ANWR is classified as "Wilderness".

At the top of ANWR, there is a special area of 1.5 million acres on the Arctic Coastal Plain called the "10-02" Area. The 10-02 Area takes its name from the section of the Congressional bill, the Alaska National Interest Lands Conservation Act (ANILCA) that expanded ANWR in 1980. In Section 10-02 Congress set aside 1.5 million acres of the Arctic Coastal Plain specifically for "oil and gas exploration".

This 10-02 Area is classified legally neither as "refuge" nor as "wilderness", rather defined and separated by Congress for oil and gas exploration due to its well-known geological evidence of potential large hydrocarbon deposits. The 10-02 area is bordered on the north by the Beaufort Sea, on the east by ANWR "wilderness" area and the US Canadian border, and on the west by the Canning River and ANWR outer border. It is completely flat and barren with no trees, hills, or mountains. Nine months of the year is covered with snow and ice and practically void of life. Three of those months are in total 24-hour darkness. In the 6 weeks of summer the coastal plain is dotted with thousands of lakes and is covered by boggy tundra on permafrost (permanently frozen ground).

The 10-02 Area is a further anomaly within ANWR's border in that it contains 92,000 acres of private land owned by the Kaktovik Inupiat Corporation (KIC) of Kaktovik, ANWR's only settlement and population. The subsurface rights of these 92,000 acres are owned by the Inupiat native organization the Arctic Slope Regional Corporation (ASRC).

To say or suggest then that "the Refuge" (meaning ANWR's entire area) would be opened for oil and gas exploration is completely false, according to ANWR proponents. The Congressional definitions of "refuge" and "wilderness", which comprises over 92% of the ANWR area, forbids any development of any kind.

Seaspan, Unions Enter Binding Arbitration

By Mark Edward Nero

Vancouver, British Columbia-based shipbuilder Seaspan on June 14 formally signed agreements with both the Canadian Merchant Service Guild and International Longshore Warehouse Union Local 400 to enter into binding arbitration/mediation to settle a labor dispute.

“Following extensive discussions with the Honorable Kellie Leitch, Minister of Labor and Minister of the Status of Women, Seaspan and both unions have agreed to allow the federal government to appoint an arbitrator who will run the process and be responsible for setting the terms of reference,” Seaspan announced in a news release.

Once the arbitration is complete, the outcome is binding and cannot be challenged by Seaspan or the unions. As part of the agreement, Seaspan has agreed to forgo new contract terms the company had planned to implement on June 9, and both unions have agreed not to strike.

The new seven-year contract would have given tug crew members annual one percent pay increases the first four years, followed by 1.5 percent raises the next three years. But among the sticking points were Seaspan’s desire to gain more flexibility to outsource work, the ability to revise shift schedules and to slash benefits costs by more than half.

Now the contract is on hold as a new deal is being mediated.

“I am very pleased with this outcome,” Seaspan CEO Jonathan Whitworth said. “We look forward to working with both unions and the government appointed arbitrator to bring the contract negotiations to a close as quickly as possible.”

Arbitration comes after more than eight months of collective agreement negotiations between Seaspan and the Merchant Service Guild, which began Oct. 21, 2013. Membership of the Guild consists of about 200 captains, mates and engineers on Seaspan tugs.

Seaspan had also been negotiating with ILWU Local 400, which represents deckhands and cooks on Seaspan tug crews. On June 3, ILWU Local 400 voted unanimously in favor of striking; however the local’s president, Terry Engler said he was hopeful that discussions with the labor minister and Seaspan would lead to an agreement.

LB Port Approves Shore Power, Rail Usage Discounts

By Mark Edward Nero

The Long Beach Board of Harbor Commissioners has given preliminary approval to two incentives expected to bring additional cargo to the port while also encouraging the use of air pollution-reducing shore power and on-dock rail.

In one incentive, the port will waive “dockage” charges – essentially giving free parking – for cargo ships that both slow down near the port and plug into shore power or use another approved pollution-cutting technology at berth.

The Vessel Dockage Waiver Program requires the vessel operator to slow down within 40 nautical miles of the port and then to use shore power at berth or a certified alternative. The port says that by waiving the dockage fees in such cases, it forgoes an estimated $3.3 million to $4.9 million a year. The incentive builds upon a port program in which most ships reduce speeds near port, and a state program where at least half of all ships must use shore power or an equivalent at berth.

Also given preliminary approval was a $5-per-container unit incentive that shipping lines can earn for each new loaded container they bring through Long Beach. The requirement is that each container must travel inland by “on-dock rail,” which helps to eliminate truck trips on local roadways by rail-hauling the containers from the wharf.

The Incremental On-Dock Intermodal Incentive Program would pay $5 per loaded 20-foot-equivalent container unit for new cargo above the 2013 baseline level that’s also rail-hauled either out of, or into, the POLB. According to the port, if vessels bring an additional 20 percent more cargo over two years, it would generate an additional $22 million in revenue.

The port says the incentives are designed to help the port compete with other West Coast ports that have already cut fees to grow their business. By encouraging the use of shore power or another approved system for cutting at-berth ship emissions, and by bringing more cargo via on-dock rail, the Long Beach programs seek to increase trade while also reducing air pollution.
The Board of Harbor Commissioners, which gave preliminary approval of the measures during its June 9 meeting, is scheduled to consider the incentives for final approval during its June 23 assembly.

Container Volumes Rise at LA, LB Ports

By Mark Edward Nero

The ports of Long Beach and Los Angeles have each released their May 2014 containerized cargo volumes, and in both cases, the numbers were up compared with the same month last year.

At the Port of LA, overall volumes increased more than eight percent last month compared to May 2013, according to data. Total cargo at the port for May was just under 690,000 TEUs.

Container imports rose 7.75 percent, from 326,114 TEUs in May 2013 to 351,403 TEUs last month, while exports rose 2.3 percent during the month, going from 154,904 TEUs in May 2013 to 158,473 TEUs in May 2014.

Combined, total loaded imports and exports increased six percent, from 481,019 TEUs in May 2013 to 509,876 TEUs in May 2014. Factoring in empties, which increased 15 percent year over year, overall May 2014 volumes at Los Angeles of 689,141 TEUs, was a jump of 8.2 percent compared to May 2013’s 636,851 TEUs.

For the first five months of calendar year 2014, LA’s overall volume of 3.3 million TEUs represents an 8.2 percent increase compared to the same period in 2013.

Meanwhile, at the Port of Long Beach, cargo container numbers edged up 2.7 percent last month, making it the seaport’s busiest May since 2007 by reaching nearly 600,000 container units.

Long Beach terminals handled 599,509 TEUs overall in May, including 312,439 TEUs of imports – a 2.3 percent increase compared to May 2013. Although exports were flat with a slight decline of 0.3 percent to 146,702 TEUs, the number of empty containers shipped rose 7.1 percent to 140,368 TEUs.

Although May was the second consecutive month of increasing volume, Long Beach has seen an increase of just 1.3 percent for the first five months of 2014 compared to the same period last year.

Go to www.polb.com/stats for more details on Long Beach’s cargo numbers and http://www.portoflosangeles.org/maritime/stats.asp for current and past data container counts for the Port of Los Angeles.

TOTE CEO Honored at White House

By Mark Edward Nero

TOTE Inc. President & CEO Anthony Chiarello was among 11 people recently honored at the White House as 2014 transportation industry “Champions of Change.” Chiarello, the only honoree from the maritime industry, was chosen for his role in leading the industry toward natural gas as fuel.

TOTE is building the world’s first natural gas-powered container ships to serve Puerto Rico and is converting its ships in Alaska to natural gas. The company is also among the first in the United States to convert its fleet to liquefied natural gas.

On May 13, Chiarello joined fellow honorees and guests at the White House to accept recognition and share insights during a panel discussion titled: “Opening Doors for Opportunity.”

Chiarello, a fourth-generation member of the shipping and logistics industry, said the experience was both exciting and humbling.

“It is an honor to stand among the 2014 Transportation Champions of Change representing TOTE and Saltchuk,” Chiarello wrote in a post he prepared for the White House Champions of Change blog. “My colleagues and I are proud of our investments into new technology as a reflection of our commitment to the people and customers of Alaska and Puerto Rico. We’re equally pleased to help move the US toward natural gas as a marine transportation fuel while providing the most advanced, safe, reliable service possible.”

TOTE announced plans to convert its fleet to natural gas in 2012. Since then, natural gas suppliers have begun creating distribution networks in major US ports, making gas available to all transportation modes in those markets.