Friday, July 11, 2014

Shipping Line Moving from Seattle to Tacoma

By Mark Edward Nero

Puyallup, Washington-based Westwood Shipping Lines is shifting its maritime operations from Terminal 5 at the Port of Seattle to the Husky Terminal at the Port of Tacoma near the end of the month, the company said July 7.

The move is necessitated by the discontinuation of cargo operations at Terminal 5 so that the terminal can be renovated. Westwood says its last ship call at Seattle is expected to be the Westwood Olympia 61E, arriving at Terminal 5 on July 23.

Utilizing Husky Terminal will allow Westwood to maintain its service levels for container and project cargo customers without any interruption to its vessel or rail schedules, the company said in a statement on its website announcing the shift.

The first import ship call at Husky Terminal is slated to be the Westwood Discovery 29E, which arrives July 30; the first export ship is planned to be the Westwood Discovery 30W, which is scheduled to sail Aug. 6.

Westwood operates about half a dozen sailings monthly between the Pacific Northwest and Asia.
The Port of Seattle in May announced a plan to modernize Terminal 5 in order to accommodate larger ships. As part of the plan, Eagle Marine Services, which operates the terminal, is relocating its cargo and break bulk activities to Seattle’s Terminal 18.

“We are pleased Westwood Shipping, when faced with the need to find a new terminal, has opted to remain in the Puget Sound gateway,” Tacoma Commission President Clare Petrich, who indicated that the Seattle to Tacoma shift was the result of a discussion agreement between the two ports that was formed in January and allows them to “gather and share information” with one another.

“The ongoing conversations between commissioners at the ports of Tacoma and Seattle, under a Federal Maritime Administration Discussion Agreement, are focused on this exact situation – ensuring valued shipping lines remain in Puget Sound and that we work together to attract new services,” Petrich said.

MARAD Seeks Dismissal of Port Lawsuit

By Mark Edward Nero

The US Maritime Administration is asking a federal court to dismiss a lawsuit against it regarding MARAD’s alleged mishandling of a project to expand the Port of Anchorage, Alaska.

The lawsuit was filed the city of Anchorage in February. In it, the city seeks monetary relief as a result of what it calls MARAD's breach of its contract regarding the expansion.

The port expansion project, which has been in the works for more than a decade, was overseen by MARAD until the US Army Corps of Engineers took control in May 2012. The expansion was originally estimated to cost $360 million and was supposed to be complete by 2011. Instead, cost estimates have jumped to about $1 billion and climbing, and completion isn’t expected for another decade.

According to a $2.2 million sustainability study that was conducted by engineering firm CH2M Hill on behalf of MARAD and the Army Corps of Engineers, three of four new sections built at the Port of Anchorage were not constructed correctly and due to shifting land, could fail during an earthquake.

The city claims MARAD didn’t live up to the contracts because it failed to deliver on its promise of providing “expertise to design, construct and oversee the design and construction of the project.”

In a dismissal motion filed June 27 with US Court of Federal Claims Judge Edward Damich however, MARAD contends that contracts it worked under on the Port of Anchorage construction project were cooperative agreements and don’t hold it liable for money lost on the project.

The city has also filed suit against project management, dock design and consultant companies previously involved with the expansion. That case, which was filed in March 2013, is ongoing in US District Court.

Longview Export Terminal Negotiations Falter

By Mark Edward Nero

Port of Longview CEO Geir-Eilif Kalhagen said this week that negotiations with a Texas company that wants to build a propane and butane export terminal at the port have not progressed well up to this point.

During the July 8 Port of Longview Commission meeting, Kalhagen told the three-member panel that he was disappointed with the talks so far with Haven Energy, a subsidiary of Houston-based natural gas-related infrastructure company Sage Midstream.

Haven is proposing an export facility to move propane and butane currently being flared in the Midwest to energy markets around the Pacific Rim. The company says it’s looking at building a unit train accessible rail unloading facility, storage tanks and ship loading area at the port with the capability to load marine vessels with up to an about capacity of 550,000 barrels.

The company’s proposal calls for the cargo to be railed to the port from the North Dakota and South Dakota, then refrigerated and stored on site at Longview before being loaded to vessels for export to Hawaii, Mexico and Asia.

In April, the company entered into a one-year option agreement with the port to evaluate the project, but according to Kalhagen, lease negotiations haven’t gone particularly well.

“We’re probably farther apart now than we’ve ever been in the process,” he said.

“I think there’s a lack of understanding of the environmental concerns the State of Washington and the Port of Longview have, as far as looking at these kinds of projects,” Kalhagen told the harbor board. “There’s also the realization that this is not Texas,” Kalhagen said. “The pricing structure available in Texas is not available in the state of Washington.”

Negotiations, however, are expected to continue throughout the one-year option window.

LNG Bunkering Website Launched

By Mark Edward Nero

The International Association of Ports and Harbors’ World Ports Climate Initiative (WPCI) has launched a new website -- – that’s focused on liquefied natural gas as a maritime industry fuel.

The new LNG Bunkering website provides a detailed overview of the use of LNG as ship fuel and lays out the technical requirements for ships, bunkering infrastructure and vessels under development, as well as the business case for using LNG in the maritime environment.

“Representatives from some of the world’s largest and most progressive ports developed this site for the benefit of all interested industry parties, including port authorities, fuel suppliers and shipping companies,” IAPH President Grant Gilfillan, who’s the Chief Executive Officer/Director of Port Authority of New South Wales, Australia, said.

“The site is intended to be a resource and a conversation-starter among ports and stakeholders because we believe that LNG is the ship’s fuel of the future and ports must prepare to offer safe storage and bunkering of LNG for shipping lines,” Gilfillan said.

The site is an initiative of WPCI’s LNG Fuelled Vessels Working Group which, while focusing on the use of LNG as a marine fuel, has developed guidelines for safe LNG bunkering operations providing ports around the world with information to pursue the technology.

Tuesday, July 8, 2014

BC Ferries Awards $165 Million Build Contract

By Mark Edward Nero

Following a competitive bidding process, British Columbia-based BC Ferries has awarded contracts totaling $165 million to build three new intermediate class vessels to Gdansk, Poland-based ship repair and building company Remontowa Shipbuilding SA.

The contracts, as well as a total project budget of $252 million, have been finalized by BC Ferries’ Board of Directors, the company said July 3.

“These are design-build, fixed-price contracts that provide BC Ferries with substantial guarantees related to delivery dates, performance criteria, cost certainty and quality construction,” Mark Wilson, BC Ferries’ Vice President of Engineering said. “As we begin the next phase of our newbuild program, a key objective is to achieve capital and operating cost savings and efficiencies through an overall class and standardization strategy,” Wilson said. “Standardization offers greater interoperability and lower crew training and maintenance costs, and also enhances safety. This is a significant step forward in taking BC Ferries from 17 classes of ships to five classes.”

The new intermediate class vessels are planned to be the first vessels in BC Ferries’ fleet to operate as dual-fuel capable using liquefied natural gas (LNG) or diesel fuel for propulsion and power generation.

Two of the new ships will replace the 49-year old Queen of Burnaby, which sails between Comox and Powell River and the 50-year old Queen of Nanaimo, which services the Tsawwassen – Southern Gulf Islands route. The third vessel will augment peak and shoulder season service on the Southern Gulf Islands route, plus provide refit relief around the fleet.

The 345-foot ferries are designed to accommodate 145 vehicles and 600 passengers. The first new intermediate class vessel is scheduled to arrive in British Columbia in August 2016, the second in October 2016 and the third in February 2017, with the first vessel expected to be in service in the fall of 2016, following crew training and familiarization.

Ship repair and shipbuilding yard Remontowa Shipbuilding SA is a member of the Remontowa Holding capital group, specializing in ship design and construction of new ships, conversions and repairs, offshore units and steel structures. The shipyard, which was established in 1952, was privatized in 2001.

Gulf Coast Ports Look Beyond the Box

By Jim Shaw

Ports along the Gulf Coast have been given at least another year to prepare for the opening of new locks at the Panama Canal but events in the shale oil industry may have already blunted the importance of that event for a number of southern gateways. In particular, production from the Eagle Ford shale formation in southwestern Texas has generated rapid construction of new crude and refined petroleum handling facilities at the Port of Corpus Christi, as well as at several other Gulf ports. LNG export terminals are also on the development agenda, with new facilities being proposed for the ports of Brownsville and Freeport, Texas, as well as at Mississippi's Port of Pascagoula.

In Alabama, a new coal terminal is being contemplated for development at the Port of Mobile, a facility that would be built adjacent to the port's existing McDuffie terminal. And containers and breakbulk cargoes have not been forgotten. New Orleans, Houston, Mobile and Tampa are all continuing to build for the box while steel and forest products continue to draw investment interest.

One of the largest southern projects, beyond the energy sector, is the on-going reconstruction of Mississippi's Port of Gulfport where $580 million is being spent to restore and expand infrastructure damaged by 2005's hurricane Katrina, an event now almost a decade old but from which several southern gateways have still not fully recovered. The Cruise industry is also showing growth and a number of Gulf ports, Galveston and New Orleans included, are building for it.

Corpus Christi Crude
In southwestern Texas it's oil that's leading the boom. The Eagle Ford formation, located only about a 100 miles distant from the Port of Corpus Christi, is currently producing more than 1.38 million barrels of crude and condensate a day, more than 20 times the 55,000 barrels it produced only four year ago. Within the port this has translated into more than 450,000 barrels of crude shipped each day compared to fewer than 10,000 at the start of 2012. The boom is generating about $22 billion in new construction at Corpus Christi alone, where the price of waterfront land available for development has more than tripled.

NuStar Energy LP, the nation's second-largest independent liquids terminal operator, recently opened its third petroleum dock at the port, which has doubled the company's loading capacity there to 30,000 barrels per hour. The docks used by NuStar are connected to a 1.6 million-barrel-capacity storage terminal fed directly from the Eagle Ford formation by two pipelines. Other firms investing in new infrastructure in the area include Cheniere Energy, Valero Energy Corporation, Castleton Commodities International and Magellan Midstream Partners.

The rapid investment and expansion has made Corpus Christi the most important energy hub in the US outside of Houston. To handle the massive increase in tanker traffic the port is preparing to widen and deepen its main navigation channel, which is currently limited to one-way traffic and daylight operation.

Corpus Christi Ore
Oil is not the only commodity sparking development at Corpus Christi. Earlier this year Austria's Voestalpine Group broke ground on the construction of a new $740 million plant at the port's La Quinta Trade Gateway development that will use iron ore to make hot-briquetted iron (HBI) for export. The facility will be powered by natural gas and will create 150 full-time jobs as well as about 800 construction jobs. As the largest foreign investment in the history of the Austrian group, the La Quinta facility is expected to produce two million tons of HBI and Direct Reduced Iron (DRI) annually once it comes on line in 2016.

According to Wolfgang Eder, CEO of Voestalpine AG, and head of Voestalpine's Steel Division, the Corpus Christi site, which covers an area of about two square kilometers, was chosen out of 17 potential locations around the world because it met certain key criteria, including logistics, inexpensive energy supply, stable political environment and well-trained local labor. "In the end, Texas was the most promising on all key criteria," said Eder, who noted that the La Quinta property is "superbly located right on Corpus Christi Bay and provides direct sea access for large ships." He also observed that the price of natural gas in Texas is about half of what it is in Europe, which will allow the company to "significantly enhance" the efficiency of its use of raw materials while, at the same time, demonstrating that this is possible while being responsible with the environment. About half of the plant's production is expected to be shipped to Europe while the other half will be retained as a "strategic reserve" and sold to long-term Voestalpine partners.

Brownsville Methane
South of Corpus Christi, the Port of Brownsville is considering a proposal by Houston-based Texas LNG that would see a barge-mounted methane exporting facility positioned at the port. The company's CEO, Vivek Chandra, and COO, Langtry Meyer, were in Brownsville earlier this year to discuss the project with local officials. The company's plan calls for a gas liquefaction plant to be built on a barge that would be fabricated overseas then floated to Brownsville where it would be permanently sited along the Brownsville Ship Channel. The plant would then be fed methane gas via a yet-to-be-constructed pipeline directly from the Eagle Ford Shale deposit.

After liquefaction, the gas would be exported to Asia by ship. Chandra estimates that around 300 engineering/construction jobs would be created by the project and that about 150 employees would be needed to operate and manage the finished facility. The required pipeline would have to be built and maintained by another party and the Brownsville Public Utility Board has already expressed interest in this project because of its plans to build a new gas-fed power generating plant at Brownsville.

Independent pipeline operators are also said to be considering the construction of a pipeline into the Brownsville area that would connect the city to the nation's gas pipeline grid. The proposed Texas LNG plant could serve as an "anchor tenant" for such a line but other customers could be served. According to Chandra, Texas LNG has applied to the Department of Energy for a Free Trade Agreement export permit and plans to be liquefying natural gas for export at Brownsville by 2018.

Houston Celebration
Eastward, the Port of Houston has been celebrating the 100th anniversary of its shipping channel, although the waterway was blocked by a major oil spill only two months ago. Last year, the Texas port handled 2 million TEUs and 36 million tons of cargo while recording $231 million in operating revenue, all new records. In addition, its 6 percent increase in the handling of loaded containers outpaced all other US ports while improved grain and coal exports helped generate a 13 percent increase in dry bulks. The port's next big project is to get sections of the Houston Ship Channel widened and deepened to accommodate the larger ships expected from the Panama Canal expansion. Specifically, the channels leading to the port's Bayport and Barbours Cut container terminals need deepening work. Port officials expect the Army Corps of Engineers to issue permits shortly for approximately $100 million worth of dredging that will bring channel depth at both facilities down to 45 feet.

The port is also gearing up for investment being generated by the shale oil boom. A survey commissioned last year found that as much as $35 billion is expected to be spent on new or expanded petroleum, chemical and gas facilities in the Houston area over the next few years. ExxonMobil Chemical is already building a new ethylene cracker in the Baytown area and is adding more polyethylene capacity to its facility in Mont Belvieu. At the same time, the Chevron Phillips Chemical Company is building a new ethane cracker at Cedar Bayou while Phillips 66 is adding two 500,000 metric ton capacity polyethylene plants to its Sweeny Refinery. Such has been the level of investment interest that Houston's new Executive Director, Roger Guenther, said he has been receiving calls from area petrochemical companies asking him directly whether the port will able to handle the extra traffic, which he notes is a "first" in his 26-year career at the port.

Mobile Coal
Petroleum is not the only commodity sparking investment interest along the Gulf. Coal, which has not yet found a major outlet on the US West Coast, has been flowing in volume from several southern gateways, including Mobile, Alabama where the McDuffie Coal Terminal accounted for two-thirds of port revenue in the first half of the port's fiscal year. Although total port tonnage at Mobile was down through the half, coal volumes were ahead of budget by 19 percent. This helped offset a 10 percent decline in general cargo volumes. Port Executive Director Jimmy Lyons noted that some steel handled at Mobile, mainly for movement up the Tombigbee River by barge, is not reported in port statistics. Still, general cargo generated $17.7 million in revenue through the period, nearly 10 percent more than expected.

Looking at expanding coal exports, the port is considering a proposal by Birmingham, Alabama-based Walter Energy to build a new $140 million coal terminal on the site of the old Mobile River Terminal, which Walter purchased from Warrior & Gulf Navigation four years ago. The coal company is currently moving its export coal through the McDuffie facility but would need the additional capacity of the new terminal, expected to total between 3 million and 5 million tons annually, to meet the needs of its recently acquired Yellow Creek mine in northern Alabama. While there has been some local opposition to the project, largely because of possible air pollution, Dan Grucza, vice-president of environment for the mining company, said that covered conveyors and fog control devices, including 16 water cannons, would be used to control dust and limit air pollution from handling and loading operations.

Gulfport Restoration
In neighboring Mississippi the Port of Gulfport is one of the few American ports to have a Port Restoration Director position, and Joe Conn has had full-time work in that position as Gulfport both rebuilds and expands its infrastructure following the destruction wrought by Hurricane Katrina almost ten years ago. In April, the port commission authorized port officials to start advertising for more than $100 million in bids covering new construction, with private investment expected to add another $150 million before the end of the year. This includes a substantial upgrading of facilities maintained by DuPont as well as $58 million to be spent by Island View Casino to restore its main hotel at the port.

Hattiesburg, Mississippi-based L&A Contracting has already been awarded a $55.8 million contract to rebuild the port's West Pier wharf. This will see much of the 3,000-foot-long wharf demolished so that nearly 700 new pilings can be driven and a new wharf face built. The stronger pilings will allow the structure to support three all-electric rail-mounted gantry cranes expected to be acquired from China's Shangai Zhenhua Heavy Industries Company at a cost of nearly $30 million. The new units will replace the port's two existing diesel-powered cranes, which are to be sold or dismantled. In addition, the port is working with the US Army Corps of Engineers on a dredging project that will deepen Gulfport's main entrance channel down to its original 36-foot depth. In March, the federal government agreed to increase the amount it will provide for the project by an extra $1 million while the port will kick in nearly $8 million.

The restoration and expansion work has persuaded Crowley Latin America Services, one of the port's two major shipping lines, to extend its facilities lease for another two years. At the start of this year the Gulf Coast Shipyard Group (GCSG) signed a three-year lease for space on the port's East Pier that will be used to fit out a series of new LNG-powered offshore supply vessels being built for Louisiana's Harvey Gulf.

Regional Cruising Grows
In the cruise sector, the Port of Galveston, Texas, already the fourth busiest cruise port nationally, is planning the construction of a third cruise terminal. In April, the port's governing body, the Wharves Board of Trustees, approved the commissioning of Los Angeles-based McTigue Architecture and Design to accomplish preliminary concept design work for the facility. Within the same month Carnival Cruise Lines announced it will add a third year-round cruise ship to the port starting early next year when the 2,974 passenger Carnival Freedom launches a new seven-day Caribbean program. This will mark the first time that a cruise line has deployed three year-round ships in Texas. The repositioning will represent a 38 percent capacity increase for the line in Galveston. At the same time, the Texas port is moving forward with $10 million in improvements to one of its two existing terminals as part of a five-year deal signed with Royal Caribbean Cruises, which sails year-round from Galveston.

According to port director, Mike Mierzwa, cruising is "a big income earner" for Galveston, with forty percent of the port's operating revenue now coming from the sector. Construction of the new terminal would mean more capacity plus the potential for more business, particularly as competition along the Gulf for cruise ships heats up. Only last year the Port of Houston gained the business of Princess Cruises, which will use the port's newly opened Bayport cruise terminal.

Although Louisiana's Port of New Orleans is considered too distant to be viewed as competition, it is also moving forward with expansion projects and recently completed a $2.3 million upgrade of its Erato Street Cruise Terminal to host Carnival Cruise Line's 3,646-passenger Carnival Dream, the largest cruise ship to be home-ported in Louisiana.

LA-Long Beach Truckers Go On Strike

By Mark Edward Nero

Truck drivers from three drayage firms in the greater Los Angeles area went on strike the morning of July 7 over claims of unfair labor practices at the adjoining ports of Los Angeles and Long Beach.

About 120 truckers working for Rancho Dominguez-based Green Fleet Systems and Total Transportation Services Inc., and Pacific 9 Transportation of Carson have walked off the job for the fourth time in about a year. However, unlike the previous labor actions, which were scheduled to run a finite amount of time – usually 24 to 48 hours – the current strike is indefinite, with the drivers saying they have no plans to return unless their demands are met.

Those demands include being designated as employees, rather than independent contractors, wage increases and the ability to unionize. The group organizing the strike effort, Long Beach-based Justice for Port Truck Drivers, says that it also wants an end to “Unfair labor practices” by the three trucking companies, including alleged harassment of drivers participating in labor organization efforts.

“In a desperate quest to maintain the status quo, company owners are firing, intimidating and countersuing drivers; countersuing state agencies, filing appeals on trial court decisions; and filing to compel arbitration to stay government proceedings,” Justice for Port Truck Drivers claims in a prepared statement released as the strike began. “These companies are continuing to retaliate against their employees for engaging in union and protected concerted activities.”

However, the Harbor Trucking Association, which represents trucking companies near the ports, has blamed the labor unrest on the Teamsters, which has been trying for years to gain employee status for the drivers so they would then be eligible to join the union.

In a statement issued through the Harbor Trucking Association, Green Fleet said the Teamsters and other outside interest groups don’t represent the majority of its drivers and that independent contractor status offers drivers flexibility and the opportunity to own their own small businesses.

“The fact is that an overwhelming majority of contractors and drivers affiliated with Green Fleet don't want these groups involved in their work,” the statement said in part.

The strike has not gained the support of the International Longshore & Warehouse Union, which so far has not honored the truckers’ picket lines. During a 48-hour strike in late April, about 100 ILWU dockworkers refused to cross the truckers’ picket lines, but were eventually ordered back to work about five hours into the picket by an independent arbitrator citing the ILWU’s collective bargaining agreement.

Vigor Fab to Build San Francisco Fireboat

By Mark Edward Nero

Vigor Industrial subsidiary Vigor Fab has been awarded a contract to build a fireboat for the San Francisco Fire Department. Construction of the 88-foot by 25-foot by 14-foot vessel is expected to begin this fall in Seattle.

“We look forward to working with Vigor on this project and also to the day the new boat will be on the water protecting the people of San Francisco,” Assistant Deputy Chief Kyle Merkins of the San Francisco Fire Department’s Division of Homeland Security said.

The fireboat, designed by Jensen Maritime Consultants, is expected to have a top speed of 11.5 knots in full load condition and accommodate up to three crew members and four firefighters.

Its engines are EPA Tier III certified Cummins QSK19-M, which have a maximum horsepower of 750 BHP at 1,800 rpm, while its firefighting system will consist of six Stang fire monitors, according to Vigor, which will be supplied with water and foam from three 6,000-gpm fire pumps.

“We’ve been aggressively ramping up our ability to fabricate complex vessels,” Bryan Nichols, Vigor Fab’s sales director said. "This project is an excellent opportunity to put that preparation into action for our customer.”

The fireboat is scheduled to be delivered to the SF Fire Dept. by fall 2015.

4 West Coast Ports Earn ‘Green Supply Partner’ Recognition

By Mark Edward Nero

Four seaports on the US West Coast were among dozens of organizations recently recognized by trade magazine Inbound Logistics for commitment to sustainable supply chain, logistics and transportation practices.

In all, the magazine honored 75 organizations from various trade sectors, including ports, truckers, railroads, shipping lines, freight forwarders and air cargo carriers. The four West Coast ports recognized were those in Los Angeles, Long Beach, Seattle and Tacoma.

Inbound Logistics’ 75 Green Supply Chain Partners (G75) profiles companies that demonstrate their commitment to sustainable supply chain, logistics and transportation practices. The magazine’s editors say they choose the G75 by considering a company’s corporate sustainability initiatives, collaborative customer-driven projects and participation in public-private partnerships. Measurable green results, sustainability innovation, continuous improvement and industry recognition are four benchmarks that carry weight in the decision making, according to the magazine.

Among the other honorees this year that have a West Coast presence: container transport and shipping company APL; freight railroad BNSF railway; truck manufacturer Kenworth; shipping company Maersk Line; and container transport, logistics and terminal company OOCL.

“The 75 Green Supply Chain Partners is a very select group,” Inbound Logistics editor Felecia Stratton, said. “The G75 list represents 75 visionaries who have demonstrated a long-standing history of driving efficiencies in their customers’ operations and an internal commitment to be as lean and green as possible.”

The complete list of honorees is available at as well as information about their selection for the list .