LA, LB Ports Begin Supply Chain Talks

By Mark Edward Nero

Executives with the ports of Long Beach and Los Angeles held a kickoff meeting this week to begin working together to focus on cargo conveyance strategies that would enhance velocity and efficiency throughout their gateway’s supply chain, the ports confirmed March 25.

In their first meeting under the formal discussion agreement recently approved by the Federal Maritime Commission, ranking staff of the two San Pedro Bay ports agreed that the primary goal of the collaboration is to get cargo moving more efficiently.

The initial meeting, held at Port of Long Beach headquarters, set the stage to discuss a framework for how the ports will cooperate, work with stakeholders from throughout the supply chain and communicate the results of the efforts.

The meeting became possible when, at the end of February, the Federal Maritime Commission agreed to allow the two ports to cooperate on finding new ways to prevent congestion and cargo delays, improve the transportation network and enhance air quality. The decision came after several months of severe congestion and shipment delays caused by a number of factors.

“Through this working group, we will engage with our stakeholders to discuss issues and develop solutions for optimizing cargo flow through our ports,” Port of Los Angeles Executive Director Gene Seroka said.

“Our shared goal is to optimize the performance of the trans-Pacific supply chain,” said Port of Long Beach Chief Executive Officer Jon Slangerup. “I’m confident we will find ways to significantly increase the velocity of goods movement and overall efficiency of our end-to-end system.”

The ports have said they’ll discuss approaches to improving the efficiency of marine terminal, trucking, rail and vessel operations. They also plan to talk about legislative advocacy, security enhancements, infrastructure, technology and environmental improvements related to supply chain optimization.

The deployment of larger ships, coupled with a new level of vessel-sharing dynamics created by carrier alliances, has created congestion issues at many large ports, but the problems have been especially severe at the San Pedro Bay ports due to the higher volumes of intermodal cargo that flow through the gateway.

LA and Long Beach are the two largest ports in the US, first and second respectively, and combined are the ninth-largest port complex in the world. The two ports handle about 40 percent of the nation’s total containerized import traffic and 25 percent of its total exports.

Minor Fuel Oil Spill Occurs at POLB

By Mark Edward Nero

A spill of heavy fuel oil at an anchorage inside the Port of Long Beach resulted in a response by the US Coast Guard, State of California and response crews, the USCG confirmed on March 23.

About 33 gallons of heavy fuel oil was spilled during bunkering operations around 7 am on the morning of Sat., March 21. A boom was set-up to contain the spill and commercial cleaning crews were dispatched to the scene.

California’s Department of Fish and Wildlife, Office of Spill Prevention and Response personnel also were on-scene monitoring the operations during the incident, as well as Coast Guard pollution responders.

Coast Guard spokesman PA1 Adam Eggers declined to name the company or ship involved in the incident, or the name of the terminal where the spillage took place.

The spill was a relatively small one compared to others that have occurred at Long Beach over the years. In February 2011, a 710-gallon spill was caused by the Libyan-flagged ship Aljalaa during an internal transfer of diesel at the Tesoro terminal at Berth 84A.

And in November 2010, a bulk carrier was refueling at anchorage when one of its tanks overflowed and dozens of gallons of fuel oil landed in the water.

Also, in October 2013, ExxonMobil temporarily suspended operations at an oil pipeline system at the Port of Long Beach due to an oil leak in the area. The company did not identify the source of the leak at the time or say how much oil had been released, but it noted that the oil had been contained.

Tacoma Port Recognizes Summit Award Winners

By Mark Edward Nero

The Port of Tacoma on March 25 recognized its relationships with customers and stakeholders by honoring three of them for their contributions to port business and the Pierce County community.

Recipients of the fourth annual Summit Awards were named during the port’s annual breakfast. They are: Harley Marine Services, which received the Environmental Stewardship award; the Tacoma Seafarers’ Center, which received the Livable Community award; and Regal Logistics, which earned the Business Magnet award.

Seattle-based tug and barge company Harley Marine was honored for focusing on using the newest and best engines, installing shore power when possible and instituting company-wide recycling initiatives.

Thus far, the company has replaced 12 vessel engines, reducing nitrogen oxide emissions by 47 percent and particulate matter by 57 percent. Harley Marine also recycles its waste oil and bilge water, as well as plastic, aluminum, glass, paper and composting. Its 2011 “Go Paperless!” initiative reduced paper use by 37 percent.

Award honoree Tacoma Seafarers’ Center has been a Port of Tacoma tenant since 1978. The non-profit organization’s roster of 25 volunteers serves more than 10,000 seafarers on more than 700 ships each year. The center offers Internet connections, phones, refreshments, television, reading material, a chapel, a sundry store and local transportation to seafarers who arrive on cargo ships. Last Christmas, the center distributed 1,700 gift boxes to 86 ships.

Regal Logistics has provided warehousing, distribution and logistics services to port customers since 1984. The company tracks goods in real time from when they land at the Port of Tacoma until they reach store shelves. Regal employed more than 125 full-time local workers in 2014, as well as another 100 to 300 seasonal staff.

The three award recipients were selected by a panel of community and business leaders led by port Commissioner Connie Bacon.

Annual Net Income Up at Seattle Port

By Mark Edward Nero

While total operating revenues essentially met budget at the Port of Seattle in 2014, expenses were nearly five percent below budget and as a result, net operating income at the port was six percent above budget, according to newly-released data.

Including both operating and non-operating revenues, the Port of Seattle’s overall 2014 total revenues were $742.4 million, which was $11.9 million higher than the budget and $8.2 million higher than the 2013 actual.

Year 2014 total expenses were $611 million; $41.7 million lower than the budget and $11.8 million lower than 2013 actual. The port’s bottom line net income for the year was $131.5 million, up $20 million, or 18 percent, from 2013.

Most lines of business showed strong overall financial performance at Seattle, something that the port says puts it in a strong financial position for 2015.

Seaport net operating income exceeded budget by $1 million. Even though TEU volume dropped 11 percent from 2013, grain volumes were up 168 percent from the previous year, at 3,618 metric tons, and 64 percent over 2014 budget.

Also, the port’s cruise industry showed another strong year, with more than 800,000 revenue passengers for the seventh year in a row. The port’s real estate division showed a net operating income that exceeded budget by nearly $2 million, with port commercial properties at 93 percent occupancy, above the year-end 2014 Seattle market average of 92 percent. Recreational marinas were at target occupancy of 96 percent, according to data.

“Since joining the commission, it has been my goal to ensure that this organization demonstrate strong financial health,” Port of Seattle Commission Co-President Stephanie Bowman said in a prepared statement. “I am pleased that these numbers put us on a strong footing for 2015.”

Olympia Port Commissioner Resigns

By Mark Edward Nero

Port of Olympia Commission Vice President Sue Gunn is leaving the board at the end of the month due to health reasons.

“I regret to inform you that I have decided to resign from my position on the commission effective April 1, to allow myself the time I need to heal from recent heart surgery and associated complications,” she wrote in a March 13 letter distributed to port officials and local media.

Gunn, 66, underwent surgery Dec. 18 and has missed several Commission meetings since last November. Commissioner Bill McGregor has been publicly vocal about the issue because Gunn represents a third of the three-person commission, and her extended absence has resulted in a bare quorum.

“There has been considerable pressure on me from the port, and from one of the commissioners, to return rapidly, which is not conducive to the extensive healing needed,” she wrote, referencing McGregor. “It’s necessary to take the time required to recover from this complex medical event.”

The two remaining commissioners, McGregor and Board President George Barner, will either choose a replacement for Gunn within 90 days of the effective date of her resignation, or if they cannot agree, the vote would go to the County Commission, which would have until Sept. 28 to make a choice.

Port of Olympia commissioners are chosen via district-wide vote. Gunn currently represents District 3, which includes west Olympia, Tumwater and South Thurston County. Her seat is up for election again this fall, and if whoever is appointed to serve out the remainder of Gunn’s time wishes to seek a full term, they’d have to run in the general election later in the year.

Harley Marine Adding 2 Tugs to Fleet

By Mark Edward Nero

Seattle-based Harley Marine Services said March 20 that it has received delivery of one new ship-handling vessel and is expected to add another to its fleet in the coming months.

The Michelle Sloan was delivered to Harley Marine on March 20, and her sister vessel, the Lela Franco, is currently being built at Diversified Marine of Portland, Oregon, for delivery in about three months, according to Harley Marine.

Each tug is expected to operate in the Los Angeles and Long Beach harbors.

Both vessels are designed with a length of 80 feet, a beam of 36 feet and a depth of 16 feet, eight inches. They will be powered with about 5,200 horsepower and have the ability to achieve sixty-five tons of bollard pull.

Each vessel will also equipped with two CAT 3516, Tier III engines and two 125kw John Deere 6068, Tier III generators. The engines, according to Harley, reduce NOx and particulate matter by 74 percent from a Tier II engine.

The Michelle Sloan, according to Harley Marine, is equipped with a Markey bow winch, a barge handling stern winch, and Shibata fendering. Soundproofing material was added to the bulkheads and decks to improve life onboard the vessel for the crew.

Additionally, a closed circuit TV (CCTV) has been installed to the engine room for semi-automation, and can be accessed from the wheelhouse or ashore for management to monitor.

“The vessels are being built with the most technically and environmentally advanced equipment available and will exceed all regulatory, internal, and customers’ needs and expectations,” Harley Marine said in a statement.

Longshore Worker Killed in Anchorage

By Mark Edward Nero

A longshoreman working to load military equipment into rail cars from a Totem Ocean Trailer Express (TOTE) ship was killed after being accidentally pinned between two pieces of military equipment, the Port of Anchorage has revealed.

Port officials said in a prepared statement that Charlie Tom “WD” James Jr., 64, died immediately when he was trapped between two vehicles at 9:14 am on March 13 while military equipment was being loaded onto flat-deck railcars headed for Fairbanks, Alaska.

The victim was killed instantly, according to the port.

In a statement released the day of the accident, TOTE said the man had been employed by contractor Sea Star Stevedoring.

“Totem Ocean will continue to keep the victim’s family in our thoughts and prayers and would ask that the Anchorage community do the same,” the statement read in part.

James was veteran of the US Army and had retired from the Anchorage Fire Department in 2014 after 34 years of service. He had worked as a longshoreman for more than a decade, according to port officials.

This month’s death was the fourth at the Port of Anchorage in four years.

In June 2012, a California man stole a taxi, drove through port security and jumped to his death from a fuel tank. A month later, a security guard drove a truck off the dock. And in August 2011, a construction worker was killed when the ground collapsed beneath his bulldozer while working on a major port expansion project.

The latest death is currently being investigated by the federal Occupational Safety and Health Administration.

Judge to Review Seattle Terminal Litigation

By Mark Edward Nero

A Superior Court judge on March 20 agreed to hear a case brought by environmental groups that are challenging a recently signed contract enabling Foss Maritime to lease terminal land at the Port of Seattle.

Under the terms of the lease, Foss is able to use the premises specifically as a transportation facility in which quantities of goods or container cargo are stored without undergoing any manufacturing process, transferred to other carriers or stored outdoors in order to transfer them to other locations.

But in her order granting a review of the case, Judge Mariane Spearman wrote that the permitted uses under the terms of the lease “seem to contradict the expected uses outlined in the Port of Seattle’s staff briefing memo” and that the outlined usage activities “appear to be qualitatively different” than those by Terminal 5’s previous tenant, Eagle Marine Services.

On Feb. 9, the port signed the two-year lease with Foss Maritime, giving Foss the right to short-term moorage and vessel operations along 50 acres at the port’s 156-acre Terminal 5, which is currently undergoing renovation.

On March 2 however, a coalition of five environmental groups filed a challenge against the port’s lease on the grounds that the lease would change the use of Terminal 5 by converting it into a homeport for Shell’s Arctic drilling fleet.

The lawsuit was filed by Earthjustice in King County Superior Court on behalf of Puget Soundkeeper Alliance, the Sierra Club, the Washington Environmental Council and the Seattle Audubon Society.

It is the plaintiffs’ position that the port acted illegally when it entered the lease because it relied on an exemption to bypass State Environmental Policy Act (SEPA) review. The plaintiffs also said that they’re concerned about toxic runoff from vessel repairs and maintenance as well as water pollution from the vessels while at the port and during transit.

The lease, according to the plaintiffs, would allow Shell’s drill ships to be housed at the port, including one, the Noble Discoverer, which the plaintiffs claim was the subject of eight felony convictions in December 2014 and more than $12 million in fines and community service, including for discharging oil-contaminated water in violation of water pollution laws.

In her ruling, Judge Spearman ordered the plaintiffs and defendants to begin negotiations on a resolution, which she would then review.