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Friday, July 18, 2014

LB Harbor Dept. Approves $858 Million Budget

By Mark Edward Nero

The Long Beach Harbor Commission on July 14 unanimously approved an $858 million budget for the Port of Long Beach in the upcoming fiscal year, which is down significantly from the current FY’s $1 billion budget.

For the fiscal year starting Oct. 1, 2014, the Long Beach Harbor Department plans to spend $579 million on capital projects as part of its decade-long, $4 billion investment in upgrades and efficiency improvements. The annual expenditure is down from FY 2014’s $788 million.

Two-thirds of the new spending is set aside for the port’s building and modernization program; the ongoing Desmond Bridge Replacement Project and Middle Harbor Terminal Redevelopment are expected to continue as the port’s largest construction projects.

The budget projects operating revenue of $346.8 million, and adds 28 new full-time positions, including 20 in the Engineering department to support ongoing capital improvements, and six to enhance Port Security department operations. The budget also includes more than $30 million for environmental programs and projects like technology-advancement demonstrations of a barge-based pollution-control system for ships at berth, and an electric truck overhead “catenary” system.

With the Harbor Board having ratified it, the budget now goes to the Long Beach City Council for final approval. On June 5, the adjoining Port of Los Angeles approved a $938.8 million fiscal year annual budget for the Port of Los Angeles, down from the previous fiscal year’s $1.1 billion budget. About $350 million, or 37 percent, of Los Angeles’ budget is earmarked for capital expenditures, down from $400 million in FY 2013-14.

Neither the Port of Long Beach nor the Port of Los Angeles receives taxpayer revenue to operate. Port operations are supported by income from terminal leases and fees charged to terminal companies and shipping lines for moving cargo through the ports.

San Diego Bay Could Host America’s Cup

By Mark Edward Nero

San Diego has been shortlisted as one of two final potential host cities, along with Bermuda, for the 35th America’s Cup, according to the sailing event’s organizers.

The Port of San Diego is the lead agency pushing the region’s bid for hosting the event.

“We’re enthusiastic about this opportunity, while mindful of both the potential benefits and costs of hosting the ‘Super Bowl of sailing’,” Port of San Diego Chairman Bob Nelson said. “We look forward to working with the City of San Diego and other regional partners as we close this deal with the America’s Cup Event Authority.”

Nelson also said an ad hoc committee has been formed to continue working on the region’s bid for the event. Port Vice Chairman Dan Malcolm is to chair the committee and its members include Nelson and port Commissioner Garry Bonelli.

San Diego is one of only seven cities to have hosted the America’s Cup. When the Cup was held there in 1988, 1992 and 1995, the race course was offshore on the ocean waters. But the port says if San Diego were selected as the venue this time, racing would take place in San Diego Bay, offering viewing opportunities for spectators along the city’s waterfront.

Over the coming months, the America’s Cup Event Authority is expected to work with both venues to finalize logistics requirements and commercial opportunities, plus establish the relationships needed with private and public entities to ensure a successful event.

Through that process, the next host city for the Cup is expected to be chosen and announced by ACEA before the end of 2014.

Millionth Subaru Lands at Vancouver USA

By Mark Edward Nero

On July 13, a red 2015 Forester became the one-millionth Subaru vehicle to cross the docks at the Port of Vancouver USA.

The SUV was one of 2,077 vehicles arriving after a two-week journey from Japan. Representatives with the port, Subaru of America and various logistics partners, including carriers, labor, stevedores, vessel agents, and transportation providers, were on hand to greet the landmark vehicle and celebrate the long partnership between the port and carmaker. Subaru of America signed its first lease with the Port of Vancouver in December 1992. Port leadership and the community commemorated the first Subaru vehicle, an Impreza wagon, during a dockside event on Jan. 7, 1993.

“Our 21-year partnership with Subaru is not only important to us here at the port, but also to the community,” port CEO Todd Coleman said. “Roughly $300 from every vehicle delivered to the port gets reinvested in Washington and Oregon.”

Automobile imports generate the most revenue of all commodities handled at the Port of Vancouver. About 200 ports jobs are supported by automobile delivery and processing, including workers who drive vehicles off the ships, process them for sale in the US, install accessories and prepare them for transport.

This summer, the port and Subaru reached an agreement to continue partnering through 2035.

POLB Has Best Cargo Month in 7 Years

By Mark Edward Nero

Cargo container volume rose eight percent at the Port of Long Beach last month, compared to the same month last year, according to newly-released data.

With more than 610,000 TEUs moved, the port says that last month was its busiest June since 2007, which happened to be the busiest year ever for container cargo at Long Beach.

POLB terminals handled a total of 610,516 TEUs in June 2014, including 316,054 TEUs of imports, which represents an 8.8 percent increase over June 2013. Also, exports were up 4.7 percent to 140,034 TEUs last month, and empty containers rose 9.3 percent to 154,428 TEUs. In all, June was the third consecutive month with a year-over-year increase in container volume. Long Beach has seen an increase of 2.5 percent for the first six months of 2014 compared to the same time last year, according to data.

For the fiscal year to date, POLB terminals have moved just over five million TEUs, a 3.4 percent increase over the 4.8 million TEUs shipped during the corresponding time last year. Long Beach’s fiscal year began in October 2013 and runs through Sept. 30.

The latest monthly cargo numbers at the Port of Long Beach, as well as other TEU data, can be found at http://www.polb.com/economics/stats/default.asp.

Tuesday, July 15, 2014

Fidley Watch – The Final Yard

By Peter Philips, Publisher

At press time, Managing Editor Chris Philips was on vacation, so Publisher Peter Philips penned this month’s editorial.

Al Larson Boat Shop has been providing commercial ship and boat repair in San Pedro Bay for more than 110 years. Readers of Pacific Maritime Magazine will know the yard as offering the only large dry docking capacity for more than 100 miles on either side – 100 miles to San Diego and almost four hundred miles to the Bay Area.

Al Larson Boat Shop provides repair and maintenance to the tugboats and barges, workboats, marine construction crane and derrick barges, fishing boats and ferries that are essential to the operation of the ports of Los Angeles and Long Beach, the nation’s largest container port complex.

Business is very good at the yard. In fact, Al Larson Boat Shop has been profitable for the entirety of its long history of service to the industry, and prospects are excellent for continued profitability into the future. Al Larson president Jack Wall has ambitious plans to expand the yard to accommodate the anticipated growth in repair work over the next generation.

Wall’s expansion plans were developed to reconfigure the property and modernize the facility to make it more efficient, cleaner and better suited to the needs of the maritime community that so relies on Al Larson Boat Shop. Those plans were submitted to the Port of Los Angeles in 2008, after they had been vetted and approved by every licensing and regulatory agency in Southern California.

Jack Wall is a responsible operator, a leader in the maritime community, and Al Larson Boat Shop provides ship repair services that are essential to the long-term economic health of the port economy. But Jack can’t get a lease.

For almost 35 years, Al Larson Boat Shop has been forced to operate on a month-to-month lease in the same manner your college age kid rents his downtown studio. The Port of Los Angeles has refused to offer the long-term lease that would give the yard the predictability it needs to make the multi-million dollar reinvestment that will allow the yard to serve our industry into the future.

Absent this long term lease, Al Larson Boat Shop will shut down. The only shipyard in San Pedro Bay capable of serving the port’s workboat community will cease to serve our industry. The result to the economic vitality of the region will be pronounced and immediate as vessel operators are forced to travel south to San Diego or north to San Francisco Bay for even the simplest of repairs.

This crisis can be resolved tomorrow if the Port of Los Angeles offers Al Larson Boat Shop a long-term lease on reasonable terms.

Our industry must stand together to protect this valuable economic asset. Whether you operate a tugboat, or sell tugboat engines, or operate a container terminal, provide engineering services or maintain container cranes, move containers or move container ships, Al Larson Boat Shop remains essential to the vitality of our interdependent maritime economy in Southern California.

You can help us save this important Southern California ship repair facility.

Join me in urging the Port of Los Angeles to do the economically and ecologically right thing.

Please write a short note today to the executive director of the Port of Los Angeles at the address listed below if you value Al Larson Boat Shop. Urge him to sign Al Larson Boat Shop to the long-term lease they need to continue to serve the Southern California maritime community.

Gene Seroka
Executive Director
Port of Los Angeles
425 South Palos Verdes Street
San Pedro, CA 90731

Or email:Gene_Seroka@portla.org

Peter Philips is president of Philips Publishing Group and publisher of Pacific Maritime Magazine. Peter can be reached at peter@philipspublishing.com or (206) 284-8285.

Maersk, MSC Sign Vessel Sharing Pact

By Mark Edward Nero

Two of the three companies involved in the failed P3 Alliance of shippers are having another go at it. Maersk Line and Mediterranean Shipping Co. (MSC) announced July 10 that they’ve signed a 10-year Vessel Sharing Agreement (VSA) on Asia-Europe, Transatlantic and Transpacific trades.

The VSA, which the companies have dubbed 2M, replaces all their existing VSAs and slot purchase agreements. The 2M sharing agreement differs from the previously proposed P3 Alliance in two major ways: first, the combined market share is much smaller. Also, the cooperation is purely a vessel sharing agreement; there is no jointly-owned independent entity with executional powers.

Maersk and MSC say the agreement includes 185 vessels with an estimated capacity of 2.1 million TEU. Maersk Line is to contribute 110 vessels with a nominal capacity of about 1.2 million TEUs, or 55 percent of total capacity. MSC contributes 75 vessels with a nominal capacity of almost a million TEUs, or 45 percent of total capacity.

The shipping lines say that with the agreement in place, they’ll be able to provide their customers with more stable and frequent services and cover more ports with direct services as well as improve the efficiency of the companies’ networks through better utilization of vessel capacity and economies of scale.

“The 2M Vessel Sharing Agreement will enable us to achieve significant reductions in fuel consumption, driving down the carbon footprint of our shipping operations,” MSC Vice President Diego Aponte said. “This vessel sharing agreement will mean major cuts in emissions while simultaneously enhancing our service to customers.”

“I am very pleased with our agreement,” Maersk Line CEO Søren Skou said. “We share the same ambition to have as efficient and effective operations as possible.”

The new alliance is a reaction to the rejection last month of plans by Maersk, MSC and CMA CGM to form a coalition. The P3 Alliance was announced in June 2013 as a long-term operational vessel sharing agreement on routes covering Asia to Europe as well as transpacific and transatlantic routes to the United States.

But although it received approvals from US and European officials earlier this year, the Chinese Ministry announced its disapproval June 17 after an anti-monopoly investigation.

Striking Port Truckers Return to Jobs

By Mark Edward Nero

About 120 truck drivers who had been picketing the dual ports of Long Beach and Los Angeles in protest of alleged unfair labor practices were back on the job as of July 14.

The drivers picketed from July 7 to 11 as part of a protest against three trucking companies, Rancho Dominguez-based Green Fleet Systems and Total Transportation Services Inc., and Carson-based Pacific 9 Transportation. The drivers’ demands included being designated as employees, rather than independent contractors, wage increases and the ability to unionize.

The Long Beach-based group that organized the strike is known as Justice for Port Truck Drivers, but 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’d then be eligible to join the union.

Last week’s truckers’ strike was the fourth time in about a year that the drivers picketed the ports. However, unlike the previous labor actions, which were scheduled to run a finite amount of time – usually 24 to 48 hours – the latest labor action was planned to be indefinite, with drivers saying they had no plans to return unless their demands were met.

The end came when Los Angeles Mayor Eric Garcetti convinced the labor action’s organizers to agree to a temporarily halt the strike for a time while the drivers’ complaints are investigated.

“Following the city’s meetings with both sides, the Teamsters have agreed to pull down their pickets and enter a cooling off period to allow the Harbor Commission time to investigate the serious allegations regarding worker safety, poor working conditions and unfair labor practices,” Garcetti said. “The city will facilitate a dialog among the parties in the weeks ahead.”

The strike’s organizers said in a statement that the three trucking companies have agreed to accept all truckers back to work “without retaliation and without being forced to sign away all future rights in new truck leases.” Drivers will also return to work on their regular shifts, according to the statement.

“While the drivers wanted to continue the strike, they agreed to a cooling off period because Mayor Garcetti personally committed to them that he will thoroughly investigate the serious injustices the drivers presented and take strong action,” Teamsters Vice President and Port Division Director Fred Potter said.

LA, Shanghai Ports Partner on Shore Power

By Mark Edward Nero

On July 10, the Los Angeles and Shanghai, China ports signed a formal agreement to exchange information, technical expertise and best practices to expand use of shore power at the Port of Shanghai.

Specifically, the Port of Los Angeles will share knowledge with the Port of Shanghai on topics that include regulations, rules, standards, policies, electricity rates and incentive programs to promote shore power. Los Angeles’ technical expertise and experience is expected to help Shanghai build on its pilot program at Waigaoqiao Phase II container terminal as it adds shore power to the Yangshan Deepwater Port - Phase III and the Shanghai Wusong Cruise Terminal.

The parties are expected to begin by developing a plan within the next 30 days to implement the three-year initiative. The signing ceremony concluded the sixth annual meeting of the U.S.-China Strategic and Economic Dialogue co-chaired by U.S. Secretary of State John Kerry, Treasury Secretary Jacob Lew, China’s Vice Premier Wang Yang and State Councilor Yang Jiechi. The annual conference brings the two nations together to address mutual challenges and opportunities on a wide range of bilateral, regional and global issues.

Chris Cannon, Director of Environmental Management for the Port of Los Angeles, signed the EcoPartnership Statement of Intent in Beijing with Director-General Jianping Sun of the Shanghai Municipal Transportation Commission (SMTC). The Commission, which oversees the Port of Shanghai, said the EcoPartnership builds on the collaborative work of the two ports to advance sustainable practices throughout the maritime industry.

The U.S.-China EcoPartnership Program advances goals of the Ten-Year Framework for Cooperation on Energy and the Environment, established in 2008.

The signing ceremony coincided with the 10-year anniversary of the first time a container ship anywhere in the world plugged in at berth: China Shipping’s Xin Yang Zhou at the Port of Los Angeles. Twenty-five berths at the Port of Los Angeles are now equipped with shore power.

LA Container Volumes Up Almost 14%

By Mark Edward Nero

Overall containerized container volumes at the Port of Los Angeles increased 13.89 percent in June 2014 compared to June 2013, according to newly-released data. The total cargo last month was 736,438 20-foot equivalent units, the largest volume in monthly containers since September 2012.

Total loaded imports and exports combined increased 14.05 percent, from 476,528 TEUs in June 2013 to 543,489 TEUs in June 2014. Factoring in empties, which increased 13.4 percent year over year, overall June 2014 volumes of 736,438 TEUs rose 13.89 percent compared to June 2013’s 646,650 TEUs.

Container imports alone rose 16.55 percent last month, going from 328,324 TEUs in June 2013 to 382,666 TEUs in June 2014. Additionally, exports rose 8.51 percent, from 148,203 TEUs in June 2013 to 160,823 TEUs in June 2014, according to port data.

For the first six months of calendar year 2014, the POLA’s overall container volume of 4.05 million TEUs represented a 9.2 percent jump compared to the 3.71 million TEUs that were moved by port terminals during the same time period in 2013. Also, last month closed out the port’s 2013-2014 fiscal year with a total of 8.2 million TEUs moved. This represents an increase of 5.55 percent from FY 2012-2013’s 7.7 million TEUs.

Current and past data container counts for the Port of Los Angeles may be found at: http://www.portoflosangeles.org/maritime/stats.asp.