Thursday, January 8, 2015

PMA-ILWU Talks Get Federal Mediation

By Mark Edward Nero

The Pacific Maritime Association and International Longshore & Warehouse Union haven’t agreed on much lately, but one thing both sides agreed with was that federal mediation was needed in their prolonged contract talks.

And on Jan. 5, the US Federal Mediation and Conciliation Service said that it had listened to both sides and was stepping in to help.

“In response to a joint request for assistance from the parties, collective bargaining between ILWU and PMA representatives will continue as soon as possible under the auspices of the Federal Mediation and Conciliation Service,” mediation service Acting Director Allison Beck, said in a prepared statement announcing the move. “We are prepared and ready to render prompt assistance.”

Deputy Director Scot Beckenbaugh, a senior mediator with extensive collective bargaining experience in this industry, has been assigned to help the parties bring the negotiations to a mutually acceptable resolution, according to the FMCS.

The PMA and ILWU have been in negotiations since May 2014. The previous six-year labor pact between the two sides, which covered almost 20,000 longshore workers at 29 ports up and down the West Coast, expired July 1.

Negotiations between the two sides have been contentious, with the most recent example being the PMA on Jan. 3 accusing the ILWU of engaging in a work slowdown, particularly at the LA-Long Beach port complex, in order to gain leverage in the ongoing contract talks.

The PMA said it estimates that since the end of October, the average number of shifts for qualified crane operators has dropped from an average of more than 110 per day to less than 35 daily, something that has resulted in “tens of thousands of containers available for discharge sitting on the docks at the twin ports.”

The ILWU has denied withholding labor and says the congestion issues at the Southern California ports were due to larger vessels bringing in an ever-increasing number of containers, plus a shortage of chassis’ used to haul the containers to and from the port terminals.

The FMCS says it is not releasing information regarding future PMA-ILWU meeting dates and locations, nor will it have any other comment in the near future regarding the status or substance of negotiations.

Marine Group Wins 27 Vessel Contract

By Mark Edward Nero

San Diego-based Marine Group Boat Works, a family-owned boatbuilding and repair company with three yards in Chula Vista, National City and Baja California, was recently awarded three Navy contracts to build five small, powerful steel tugboats; six large steel workboats; and 16 aluminum 60-foot dive boats, for a total of 27 new vessels with a value of over $45 million.

In a fourth separate Navy contract, Marine Group is to dismantle and dispose of two 224-foot Avenger-class Mine Counter Measure ships built in the mid-1980s – USS Avenger and USS Defender – in accordance with state and federal environmental regulations, recycling parts where possible.

The shipyard said that work will begin immediately on all the recently awarded contracts and that the combined period of performance takes its workload and order books well into 2020.

“Our vision was to bring custom boatbuilding back to California where we have trained a new generation of craftsmen,” Marine Group President Todd Roberts said.

Marine Group booked the contracts after the Navy conducted a nationwide call for competitive bids from qualified shipyards with fewer than 500 employees for proven design concepts that would fulfill the Navy’s new fleet missions’ requirements.

The company says its facilities and proximity to various San Diego-area naval bases was also a factor in gaining the contracts.

“Our team has perfected our craft and has become good at what we do. We have a long history with boats of all shapes and sizes. We operate them; repair them; build them. We see problems with them. We see beauty in them. That 360-degree perspective is just how we evaluate and approach our work now,” Roberts said.

“With internal forecasts and data from our past construction of vessels, building these boats will add about 25 jobs and pay out about $22 million to subcontractors and material suppliers,” Roberts said.
For Chula Vista, National City and the region where Marine Group is located, these new construction contracts are expected to lead to about 68 jobs and $58.5 million spent in the regional economy.

TOTE Signs LNG Supply Agreement

By Mark Edward Nero

TOTE Inc. has signed a long-term agreement with fuel companies Pivotal LNG and WesPac Midstream LLC to supply liquefied natural gas to fuel TOTE’s two new state-of-the-art containerships.

Pivotal LNG and WesPac are constructing a new natural gas liquefaction facility in Jacksonville, Florida. The new Jacksonville LNG facility is expected to be operational in mid-2016 and, according to TOTE, provides the capability to add additional natural gas liquefaction and LNG storage capacity in the future in order to supply other customers in Jacksonville and regional markets.

TOTE’s new dual-fuel ‘Marlin-class’ containerships, the first in the world, are expected to be delivered to Jacksonville in late 2015 and early 2016, and are to operate between Jacksonville and Puerto Rico.

Operating these new LNG-powered containerships will result in significant emissions reductions, making them among the most environmentally friendly ships in the world. Both vessels, powered by dual-fuel LNG engines, greatly surpass the requirements of the U.S. Environmental Protection Agency’s clean air regulations.

“Together with our partners Pivotal LNG and TOTE, we’ve effectively established LNG as the fuel of the future for marine vessels in the U.S.,” WesPac President Dave Smith said. “We look forward to the completion of the project and expanding the facility going forward as more markets transition to clean LNG fuel.”

Port Commission Co-Presidents Re-Elected

By Mark Edward Nero

The Port of Seattle Commission on Jan. 6 re-elected Co-Presidents Stephanie Bowman and Courtney Gregoire to another one year term.

Bowman and Gregoire, who were both appointed to the board in 2013, were first elected co-presidents of the five-person commission in January 2014. Bowman, who worked at the Port of Tacoma from 2006 to 2011, is now executive director of the Washington Asset Building Coalition, a group that promotes ways for middle- and low-income people to earn, save and invest money.

“The Port of Seattle is a unique part of our region’s diverse economy,” Bowman said. “As we embark on this New Year, we remain focused on creating and improving opportunity for the people of King County and beyond.”

Gregoire is an attorney for Microsoft and the daughter of former Gov. Christine Gregoire.

“We began 2014 with a focus on critical issues including enhancing the competitiveness of our seaport, finding the right executive leadership for the port, and expanding job opportunities in our communities,” Gregoire said. “We made great progress over the past year and we look forward to building on these gains in 2015.”

In addition to the co-presidents being re-elected, the commission chose member John Creighton to serve as vice president, Tom Albro to serve as commission secretary, and Bill Bryant to serve as assistant secretary for 2015.

Tuesday, January 6, 2015

Fidley Watch: Interesting Times

By Chris Philips, Managing Editor

Several long-ranging policy and infrastructure developments may have a profound effect on our world in the new year. As the holidays approached, maritime industry talk on both sides of the Pacific Ocean kept coming back to the labor negotiations between the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU).

Although US West Coast ports remain open, ILWU slowdowns are causing problems for port-dependent companies – especially US agricultural exporters – and some foreign shippers are sending their cargo to Canada or Mexico, threatening the jobs of port-dependent workers not otherwise involved in the negotiations.

As the holidays approached, the South China Morning Post reported that the labor dispute was threatening to ruin Christmas for Hongkongers if it continued to delay the export of thousands of Christmas trees from Washington and Oregon bound for the city through the Ports of Seattle and Tacoma.

The ships carrying the trees take up to 22 days to reach Hong Kong, and the delay could be a disaster for the city’s Christmas tree sellers, who needed the trees by mid-December in order to take advantage of a very small sales window.

Almost 22,000 fresh Christmas trees were imported last year, with most of the trees coming from the United States, according to the Hong Kong Agriculture, Fisheries and Conservation Department, but next year people celebrating Christmas in Hong Kong might be decorating Canadian trees.

Another development out of Hong Kong is the proposed Nicaragua Grand Canal – a partnership between the Chinese Government and Hong Kong Development Group (HKND), a privately-held international infrastructure development firm headquartered in Hong Kong with offices in Managua. On July 7, 2014, HKND announced the selection of a preferred route for the construction of the canal, starting from the mouth of the Brito River on the Pacific side, passing through Lake Nicaragua, and ending in the Punta Gorda River on the Caribbean. The proposed canal will be between 750 and 1,720 feet wide and 90 feet deep. The project will include the canal and two ports, a free trade zone, holiday resorts, an international airport and several roads. The project is expected to be open for business in five years, according to project partners, including the Russians, who view the project in part as an opportunity to pursue strategic interests in the region.

Meanwhile, Recent sub-rosa negotiations between the White House and Cuba’s Castro regime led to the Obama administration’s decision to restore full diplomatic relations with the island nation. The White House is also taking steps to remove Cuba from the State Department list of countries that sponsor terrorism and roll back restrictions on travel and trade. These developments have led some in the media to speculate that sometime in the next two years the US will abandon its claim to the Guantanamo Bay naval facility.

Naval Station Guantanamo Bay, Cuba is on the front lines for regional security in the Caribbean, and supports the ability of US Navy and Coast Guard ships, along with allied nation ships to operate in the Caribbean area by providing logistical support with superior services and facilities, including maintaining US treaty obligations, a naval base for refueling ships and a forward presence near the Windward Passage to the Caribbean.

With labor issues threatening reliable port access on the US West Coast for importers and exporters alike, along with the rise of Canadian and Mexican alternatives, a possible Chinese and Russian-controlled canal through Nicaragua and the loss of the security barrier of the operating naval base in Cuba, the US can expect an interesting future indeed.

PMA Accuses ILWU of Withholding Labor

By Mark Edward Nero

The Pacific Maritime Association on Jan. 3 accused the International Longshore & Warehouse Union of engaging in a work slowdown in order to gain leverage in the ongoing contract talks between the two parties.

“The union, and Local 13 in particular, has led a sustained campaign over the last two months to withhold critically-important, skilled longshore workers from their shifts on the docks,” the PMA said in a statement that alleged that crane operators, who receive and deliver containers, were being held back.

“By withholding them, the union has negatively impacted cargo-handling operations throughout Southern California,” the PMA said while alleging that the union’s work actions started at the end of October, when contract talks began to stall.

The PMA said it estimates that the average number of shifts for qualified crane operators has dropped from an average of more than 110 per day to under 35 daily, something that has resulted in “tens of thousands of containers available for discharge sitting on the docks at the twin ports.”

Employers put in orders for the number of operators needed, and the ILWU unilaterally cut back those orders by two-thirds, the PMA claims.

“Removing qualified yard crane drivers from terminal operations is the equivalent of a football coach sending out 10 players and no quarterback. You can’t run the play effectively,” PMA spokesman Wade Gates said. “The congestion in the terminals is near a breaking point.”

The PMA says that in order to focus efforts on clearing containers from terminal yards and get them moving to their final destinations, it has been reducing the number of workers ordered to unload ships on night shifts, thereby avoiding the prospect of creating gridlock that the additional unloading of ships would create.

“It makes no sense to maintain the pace of removing containers from ships when there’s no room for them on the terminals,” Gates said. “If a parking lot were full, you would clear out empty spaces before bringing in more cars. The same rule applies here.”

“It’s not solely the number of longshoremen the union is making available that matters, it’s the type of workers themselves,” Gates said. “Without qualified yard crane drivers who play a critical role in loading and offloading cargo containers from trucks, the congestion problem is made far worse at terminal yards.”

In response, the ILWU on Jan. 3 denied that it has been withholding labor and said the congestion issues at the Southern California ports were due to larger vessels bringing in an ever-increasing number of containers, plus a shortage of chassis’ used to haul the containers to and from the port terminals.

The PMA and ILWU have been in negotiations since May 2014. The previous six-year labor pact between the two sides, which covered almost 20,000 longshore workers at 29 ports up and down the West Coast, expired July 1.

Marcon Brokers Sale of Two Crowley Tugs

By Mark Edward Nero

Coupeville, Washington-based shipbroker Marcon International says that it has facilitated the sale of two Crowley Marine Services 3,500 BHP twin screw, low profile harbor docking and coastwise tugs Spartan and Saturn to private US West Coast buyers.

Both Red Stack tugs were originally built for Crowley in 1969 by Mangone Shipbuilding of Houston.
The 91-foot by 29-foot  Spartan and Saturn were built as slightly larger and higher horsepower versions of the ApolloJupiter and Hercules built by Mangone two years earlier that also featured a low profile house and large aft deck.

The Spartan and Saturn are each powered by a pair of CAT 3516 diesels totaling 3,500 BHP at 1,800 RPM with Lufkin 7:1 gears and fixed pitch, 5-blade stainless steel open props developing a bollard pull of 54,800 lbs ahead and 40,900 lbs astern. Both boats were repowered from CAT D399s in 1994.

Towing gear consists of a Skagit RB-90 double drum waterfall winch with a capacity of 1,600 feet of 1.75-inch wire on each drum plus a 600 feet of 9-inch circ. emergency tow line.

The tugs were working in San Diego at the time of the sale and are being replaced by more modern tugs.

Marcon International, which acted as sole broker in the sale, says it has handled a number of sales and purchases for the buyer as well as over a hundred sales and purchases for seller.

Tacoma Port Accepting 2015 Summit Award Nominations

By Mark Edward Nero

The Port of Tacoma said Jan. 5 that it has opened nominations for its annual Summit Awards, which recognize customers and tenants for excellence and achievement.

The awards, which will be presented at a March 25 breakfast, recognize three categories of leadership:
  • Business Magnet: a port customer or member of the supply chain – shipper, transportation or logistics service provider, developer – recognized for business development efforts and investments that led to a recognizable increase in business volume or new business opportunities for the port and have a positive economic effect for the citizens of Pierce County.
  • Livable Community: a port customer or tenant recognized for a project, program or initiative that demonstrated the business community’s positive contribution to Pierce County through social responsibility. Criteria include philanthropy and charitable giving, community service and employee volunteering, community engagement and outreach and employee development.
  • Environmental Stewardship: a port customer or tenant recognized for a project, program or initiative that supported Pierce County’s sustainability and honors biodiversity and the interconnected nature of industry, people, wildlife and natural systems.

Recipients will be chosen by a panel of community and business leaders led by a Tacoma port commissioner.

Nomination forms and information are available at
Nominations are due by 5 p.m. Feb. 13. Completed forms can be emailed to, faxed to (253) 593-4534 or mailed to: Port of Tacoma Summit Awards, P.O. Box 1837, Tacoma, WA 98401-1837.

Updates about the awards and the annual breakfast can be received by subscribing to the port’s Summit Awards email list at

Oakland Port: Weekend Gates Alleviating Congestion

By Mark Edward Nero

New Saturday and Sunday gate hours are putting a dent in an extraordinary cargo buildup at the Port of Oakland, according to data. More than 1,000 US import containers have moved out of its marine terminals every weekend for the past month, the port revealed Jan. 5.

The largest marine terminal operators at the port have opened weekend gates since Thanksgiving. It is cargo that would otherwise move weekdays when terminals and harbor truckers strain to manage soaring volume. It was an unusual move precipitated by an unprecedented cargo surge in Oakland.  Import volume has increased in each of the past three months compared to previous year totals.

“The weekend moves are only a fraction of what we send out the gates Monday-through-Friday so they’re not the complete answer to our big buildup,” port Maritime Director John Driscoll said.  “But every little bit helps while we're working to keep cargo flowing.”

Among the reasons the port cites for the increase in volumes: increased US trade with Asia; Southern California port congestion; and labor-management negotiations disrupting West Coast port operations.

Three-to-nine vessels anchor in San Francisco Bay every day awaiting berths, according to the Port of Oakland.

Terminal operators are expected to continue moving containers on Saturdays and Sundays while demand persists, which is expected to be another month as U.S. shippers import cargo before Lunar New Year factory shutdowns in Asia.