Friday, April 3, 2015

Oakland Makes Vessel Backlog Disappear

By Mark Edward Nero

A vessel backlog that has plagued containerized trade at the Port of Oakland since January has disappeared, the port said April 2.

As recently as March, up to 20 vessels a day were lined up waiting to dock. But there are currently no vessels in San Francisco Bay or outside the Golden Gate awaiting berths, making it the first time since early in the year that all ships calling at Oakland have berthed without delay. Port officials said it’s the strongest evidence yet that a West Coast cargo slowdown is waning.

“When a ship comes to Oakland, it goes straight to berth and we go straight to work loading and unloading,” port Maritime Director John Driscoll said. “No more delays: that’s the message we’re sending to our customers and the shipping lines that carry their cargo.”

Ports from Seattle to San Diego have coped with a backlog of ships and cargo since late 2014. That was the consequence of a nine-month impasse in negotiating a new waterfront labor contract. Oakland has been recovering from the cargo buildup since a tentative contract settlement was reached Feb. 20.

Port officials said most ships are in-and-out of Oakland within two days, which is a significant improvement from recent months when vessel calls could last four-to-five days. Cargo owners are receiving containerized imports shortly after the boxes are discharged from vessels, instead of waiting weeks for shipments, as had been the case.

Although the port has caught up with the cargo backlog, it has warned that temporary buildups could recur because several ships remain anchored at severely congested Southern California ports awaiting berths, and as that logjam breaks, the vessels could arrive off-schedule and in bunches at Oakland, their next stop.

Thursday, April 2, 2015

Long Beach Port Extends Dockage Fee Waiver

By Mark Edward Nero

The Port of Long Beach Harbor Commission on March 23 voted unanimously to extend by three months a temporary waiver of the fees that container vessels typically pay when they’re docked at the port for more than four days.

The fee waiver provides financial relief to the ocean carriers whose vessels have been delayed by capping dockage at four days. The waiver, which went into effect Dec. 1, 2014, had been due to expire March 31, but was extended through June 30 by the five-member commission.

The waiver was originally passed as a reaction to the then-increasing congestion that had plagued the port for months.

Due to contributing factors like changing chassis ownership models, new vessel sharing alliances and a shortage of truck drivers, unloading vessels began taking more time last fall. As a result, carriers have experienced longer dockage periods and greater dwell time at anchor.

Historically, a container vessel would dock for an average of 3.5 to four days; however, the same vessel may now dock up to seven days due to the current congestion plaguing the port.

The port says it waived about $1.3 million in dockage fees between December 2014 and February 2015, but that the dollar amount should decrease over the next three months as it continues to work on clearing its current backlog and port operations begin to normalize.

As of the morning of April 2, there were 31 container vessels in the Long Beach and Los Angeles port complex, according to the Marine Exchange of Southern California. Of the 31 vessels, nine were at anchor, awaiting a berth.

LA Port Expanding Engine Exchange Program

By Mark Edward Nero

The Port of Los Angeles is revitalizing and expanding its existing Marine Engine Exchange Program to include all-electric and alternatively fueled engines.

The program, originally introduced in 2012, provides funding (75 percent of the total cost, up to $2,000) for local boat owners to upgrade old, highly polluting engines with ultra-low emission engines. To date, the program has helped buy nearly 100 outboard motors, resulting in the reduction of about 7,150 pounds of hydrocarbons and oxides of nitrogen annually, according to the port.

The new alternatively fueled engines all meet California Air Resources Board exhaust emission standards, while all-electric engines have zero exhaust emissions. The Port of Los Angeles says it will offer up to $3,000 to boat owners choosing to purchase an electric motor since all-electric engines provide greater emissions benefits but are significantly more expensive than the combustion based engines.

To qualify for the program, an applicant’s boat must have an operational, two-stroke outboard motor no greater than 20 horsepower and be located in a Port of Los Angeles marina. The old motor will be replaced with an approximate equivalent horsepower rating. Upon engine replacement, the boat must remain in a Port of Los Angeles marina for at least a year.

For an application form, visit, email or call (310) 732-2675.

The port says grant funding will be approved until all available funds have been distributed.

Port, Terminal Create ‘Community Investment’ Fund

By Mark Edward Nero

The Port of Portland and Pembina Marine Terminals, a subsidiary of Alberta, Canada-based Pembina Pipeline Corp., said March 24 that they intend to create a community investment fund that would total $3 million over 10 years, commencing at the time a proposed terminal at the port is fully operational.

“The people who know best where community investments are needed are the people who live in the communities we touch,” Pembina Marine Terminals Vice President Eric Dyck said. “We want their advice, their recommendations on where community investment dollars should go in their neighborhoods.”

“We hope this fund will make investments that provide direct benefits to the communities surrounding our facility,” Dyck said.

Pembina is proposing a $500 million propane export facility at the Port of Portland’s Terminal 6 complex. The project’s estimated to generate up to 800 union construction jobs over two years, 40 full-time employees who will be hired locally and $30 million in annual spending for goods, services and labor.

“We believe our investments can make a positive contribution, whether it is by increasing the urban canopy, speeding the conversion to cleaner fuels or helping the community become more resilient to climate change,” Dyck said.

The terminal operator has sought no public subsidies or tax abatement and is projected to pay $12 million annually in property taxes to fund local services and schools.

The proposed facility, which would be located at Terminal 6, is for exporting propane intended to displace higher-emission fuels.

Tuesday, March 31, 2015

BAE Expanding San Diego Drydock Facilities

By Mark Edward Nero

BAE Systems said March 30 that it plans to significantly expand the dry-docking capabilities at its San Diego shipyard, thereby enhancing the ship repair, maintenance and modernization services it provides to the US Navy, other government agencies and commercial customers.

The investment is expected to include the purchase of a new dry dock and a range of infrastructure improvements at the yard at an estimated cost of $100 million.

The company made the announcement during a ribbon-cutting ceremony dedicating a new pier at the shipyard along the San Diego waterfront. Attendees included US Reps. Susan Davis, Duncan Hunter and Scott Peters.

“Our primary strategy and mission in San Diego is to support the US Navy and its rebalance to the Pacific,” said Erwin Bieber, president of BAE Systems’ Platforms & Services sector. “The new pier and dry dock will complement and expand the shipyard’s existing capacity in this homeport and provide greater capabilities to our customers.”

The new pier and dry dock would support current and future Navy surface ship repair, maintenance, and modernization, as well as accommodate cruisers, destroyers, amphibious assault ships, mine countermeasures ships and both variants of the Littoral Combat Ship, according to BAE.

The expanded facilities could also service other ships and vessels under contract, including those for Military Sealift Command, the US Coast Guard, and the US Maritime Administration.

The new Pier 4, planned at 415 feet long and 64 feet wide, is to replace a 52-year-old pier, and includes new services such as fresh water, electrical, sewage and storm water containment.

The new dry dock will measure 950-feet long and 205-feet wide, with a design lifting capacity of 55,000 tons, according to BAE. When operational in early 2017, it would be the company’s largest dry dock in the United States.

Environmental design features include LED lighting, electric cranes, air-cooled emergency generators, a zero discharge closed-loop salt water system, and storm water recovery systems.

Third K-Line Exec Pleads Guilty to Price Fixing

By Mark Edward Nero

A third executive with Japan-based Kawasaki Kisen Kaisha Ltd. (K-Line) has pled guilty for his involvement in a conspiracy to fix prices and been sentenced to 18 months in a US prison, according to the US Department of Justice.

The DOJ said on March 26 that Toru Otoda, who was a general manager in K-Line’s car carrier division, has admitted that he conspired to allocate customers and routes, rig bids and fix prices for the sale of international ocean shipments of roll-on, roll-off cargo to and from the United States and elsewhere.

Otoda participated in the conspiracy from about November 2010 until at least September 2012, according to the DOJ. He was charged with a violation of the Sherman Act, which carries a maximum sentence of 10 years in prison and a $1 million criminal fine for an individual.

Under a plea agreement accepted by the court March 26, Otoda will also pay a $20,000 criminal fine for his participation in the conspiracy in addition to his 18-month prison term.

In February, former K-Line exec Takashi Yamaguchi pled guilty to price fixing charges and in January another executive, Hiroshige Tanioka, did the same.

All three received the same sentence: steep fine and a year-and-a-half imprisonment. Their former employer, K-Line, was sentenced in November 2014 to pay a criminal fine of $67.7 million.

The plea agreements were the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the international roll-on, roll-off ocean shipping industry.

Kvichak Catches Catamaran Construction Contract

By Mark Edward Nero

Seattle-based workboat design and build company Kvichak Marine Services, which announced in early March that it’s merging with Vigor Industrial, has been awarded a build contract for an aluminum catamaran research vessel for the California Department of Water Resources.

The 60-foot (18.3-meter) vessel was designed by Australian naval architecture firm Incat Crowther, with design guidance and customer representation by Jensen Maritime Consultants.

The research vessel is to be powered by twin Cummins QSB6.7 diesel engines rated for 425hp at 2800 rpm and fitted to Twin Disc MGX5065 marine gears, according to Kvichak Marine, while the pilot house laboratory has a full supplement of scientific water monitoring equipment along with overnight accommodations for up to five scientists.

Additional vessel features include a waterline length of 56 feet (17.1 meters); a beam of 24 feet (7.3 meters); three Morgan 200.2 cranes; and two Onan 13.5 kW generators.

The vessel’s primary purpose will be monitoring water quality, phytoplankton, zooplankton and benthic macro-invertebrates. It is planned to operate in the San Francisco Bay Estuary, San Pablo Bay Estuary and the Pacific Ocean within five miles of shore and the adjoining inland waterways.

Delivery is scheduled for early 2016.

FMC’s Doyle Appointed to New Term

By Mark Edward Nero

Federal Maritime Commission member William Doyle, who was originally confirmed by the Senate in January 2013 to fill the unexpired term of former Commissioner Joseph Brennan, has been appointed to a full four-year term.

On an 89-0 vote, the US Senate confirmed President Obama’s nomination of Doyle on March 23. Doyle’s expected to be sworn in for his second term “in the next several weeks,” according to the Maritime Commission.

Prior to his Maritime Commission appointment, Doyle spent his career in the transportation sector. He is a Coast Guard licensed engineer and was an officer in the US Merchant Marine, sailing commercially on vessels in the domestic and international trades for 10 years.

From 2011 to 2013, the Commissioner served as the chief of staff for the Marine Engineers’ Beneficial Association (MEBA). From 2008 to 2011, he was the Director of Permits, Scheduling and Compliance at the Office of the Federal Coordinator for Alaska Natural Gas Transportation Projects.

He is a 1992 graduate of the Massachusetts Maritime Academy, where he earned a Bachelor of Science in Marine Engineering. He also earned a J.D. from Widener University School of Law.

“I would like to thank President Obama for his confidence in me and am honored by the Senate’s confirmation,” Doyle said in a statement. “I will continue the important work ahead of us at the Federal Maritime Commission and I look forward to working with the Chairman, my fellow Commissioners and the Commission staff.”