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Friday, November 20, 2015

Paper: America Vulnerable to Maritime Coercion

By Mark Edward Nero

While China continues to expand both its naval sea power and its fleet of merchant vessels, the United States has adopted an ‘abandon ship’ policy towards the merchant maritime industry, according to the authors of a new paper on maritime security.

The paper, entitled “Sea Strangulation: How the United States Has Become Vulnerable to Chinese Maritime Coercion,” was released Nov. 19. It highlights the perceived defense risks of a reduced American merchant fleet and the need to improve its capability.

The authors are Capt. Carl Schuster, former Director of Operations at the US Joint Intelligence Center Pacific, and Dr. Patrick Bratton, Associate Professor of Political Science at Hawai’i Pacific University.

In their 28-page document, Bratton and Schuster state that China has the potential to implement a strategy the authors call “Sea Strangulation,” cutting off the supply of critical military and civilian goods.

“China’s growing commercial and military sea power are carefully planned to support one another, giving China the ability to control – or even halt – shipping of essential goods by other nations,” the paper reads in part. “China could severely damage the US economy, threaten our allies, hold our military hostage and deny critical supplies to Americans in locations such as Hawai’i without firing a single shot.” Currently, nearly 30 percent of global trade passes through the South China Sea.

The authors state that in the event of a military conflict with a hostile nation, America’s reliance on foreign-flagged vessels in commercial shipping could become its Achilles’ heel.

If the US were forced to rely on foreign-flagged ships to supply US troops, other nations could refuse to carry such goods, or a growing naval power such as China could blockade crucial supplies for US military forces, Bratton and Schuster speculate.

They also argue that the US should not weaken the Jones Act, which requires US-flagged ships be used to deliver goods between US ports; and that America should strengthen – and possibly expand – the US Merchant Marine.

With a renewed commercial shipping capacity, the US can control its own destiny, they say, but by contrast, an over-dependence on flag of convenience ships belonging to China or other nations “could be worse than inconvenient.”

It could, the authors state, lead to “severe hardships for those who live and serve under the flag of the United States.”

The full paper can be seen at http://www.hpu.edu/CHSS/History/DeptNews/SeaStrangulation11_171.pdf#Read.

Coos Bay Port Picks New CEO

By Mark Edward Nero

The Oregon International Port of Coos Bay Port Commission has selected John Burns as its new chief executive officer. He will replace current CEO David Koch, whose time as a port employee ends Nov. 30.

On Nov. 9 the Port Commission approved hiring Burns for the position with a starting base salary of $175,000, along with reimbursement up to $67,600 in relocation costs.

“During a time where the port is continuing to strive forward to be competitive in the port and maritime business, I feel confident in Burns to provide the executive leadership to take us to the next level,” Port Commission President David Kronsteiner said in a prepared statement.

Burns brings a long record of experience in maritime and related industries to the port. He currently serves as president of Burns Resources Group, a consulting firm specializing in improving operational and business performance of organizations within all aspects of the marine transportation system.

Burns begins at Coos Bay on Dec. 1. Current CEO Koch’s contract was amended in July to include a Nov. 30 termination date, but also includes a subsequent four-month period as a consultant. Koch began working at the port as chief operating officer in 2010, then became the interim CEO after Jeff Bishop’s December 2011 retirement. He became the full-time CEO in June 2012. Burns, throughout his entire career, has worked with ports in various ways.

In 2010, he was successful at the redelivery of about 15,000 vessels used in the aftermath of the BP Deepwater Horizon explosion. Prior to that, he was the vice president and general manager for Hornbeck Offshore Services, which at the time was a leading provider of technologically advanced vessels serving the offshore oil and gas industry, primarily in the Gulf of Mexico and in select international markets.

In addition, he served for ten years as president of global maritime trade and logistics company Maritrans Inc. “I am thrilled to be a part of Coos Bay and what promises to be a bright future,” Burns said. “I look forward to working with everyone associated with the port and the Coos Bay area.”

Oakland in Talks for Logistics Complex

By Mark Edward Nero

The Port of Oakland has begun talks to develop the next phase of a 170-acre Seaport Logistics Complex. Port commissioners on Nov. 12 gave the go-ahead, authorizing exclusive negotiations between the port and industrial real estate developer CenterPoint Properties.

The port and developer were given six months to reach agreement on building a portion of the complex that would encompass 20 acres of port property and would feature transload and cross-dock facilities where importers could transfer containerized cargo from ships to trains.

CenterPoint, which is based near Chicago but has a regional office in Los Angeles, is a major developer of transportation-related real estate projects. Under the agreement with Oakland, it would build and lease the facilities to tenants involved in international logistics.

“We’re excited to realize our vision for the Seaport Logistics Complex,” said the port’s lead negotiator, Maritime Director John Driscoll.

The 20-acre facility would be built on land acquired by the port at a decommissioned army base, and would be adjacent to phase one of the Seaport Logistics Complex, a 13-track railyard that’s nearing completion.

Port officials said they're creating the largest logistics complex at any West Coast US port. In subsequent phases of development, the port plans to construct a regional distribution center and warehouses at the complex.

Seattle-Tacoma Volumes Up Almost 3 Percent

By Mark Edward Nero

The percentage of containers imported and exported through the ports of Seattle and Tacoma combined was up 2.8 percent last month compared to the same month in 2014, according to newly released statistics.

The ports, which jointly operate a marine cargo partnership known as the Northwest Seaport Alliance, saw a total of 303,410 TEUs last month, compared to 295,147 in October 2014. For the calendar year to date, the Northwest Seaport Alliance saw container volumes surpass the three million mark in October, a five percent year-to-date increase from the 2.91 million through the first 10 months of 2014.

Containerized exports fueled the growth according to ports’ data, posting a nine percent gain over October 2014. Import volumes declined slightly, signaling the end of the peak shipping season when retailers increase inventories ahead of the holiday shopping season. Through the first 10 months of the year, imports rose four percent to 1,208,091 TEUs, and exports grew nine percent to 1,102,194 TEUs. Domestic volumes to Alaska and Hawaii remained flat, up one percent to 748,769 TEUs.

Auto imports also continued to post gains in October – up more than six percent year to date to 154,291 units – as 2016 models began arriving. Meanwhile, year-to-date breakbulk cargo volumes and grain, log, petroleum and molasses exports were all down by double digits last month as they continue to be impacted by a weaker export market.

Current and historical data regarding the seaports’ cargo volumes can be found here: https://www.nwseaportalliance.com/sites/default/files/October2015-CargoStatistics.pdf and information regarding container volumes is available at https://www.nwseaportalliance.com/sites/default/files/October2015-ContainerVolumes.pdf.

Tuesday, November 17, 2015

POLA Monthly Container Volumes Flat

By Mark Edward Nero

October 2015 container volumes at the Port of Los Angeles decreased 1.5 percent compared to the same period last year. According to newly released data, the port handled a total of 704,588 TEUs last month.

“This October’s volumes were slightly less than last October,” Port of Los Angeles Executive Director Gene Seroka explained. “However, the past few months of volumes around and above the 700,000 TEU range show that our terminals, labor and supply chain partners are adjusting to the cargo surges and other fluctuations that come with the larger vessels that are now calling in LA.”

Imports decreased 3.3 percent to 358,601 TEUs last month compared to October 2014, and exports dropped 14.7 percent to 134,963 TEUs in October. Factoring in empties, which increased 13.1 percent, overall October volumes of 704,588 decreased 1.5 percent compared to October 2014.

By comparison, the adjoining Port of Long Beach had its best October in eight years, despite a decrease in imports. A total of 619,983 TEUs moved through Long Beach in October. Cargo volume rose 6.3 percent at the port last month compared to the same month last year.

For the first 10 months of 2015, overall volumes at Los Angeles (6,824,212 TEUs) are down 2.7 percent compared to the same period in 2014. For the fiscal year, which began July 1, LA has moved 2.92 million TEUs, a drop of 1.53 percent compared to 2.96 million TEUs during the same four-month period in FY 2015.

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

Oil Pumped from Shipwrecked Bulk Carrier

By Mark Edward Nero

About 150 cubic meters of oil have been pumped from the 731-foot bulk carrier vessel Los Llanitos, which ran aground along the Pacific Coast of Mexico during Hurricane Patricia in late October, according to a Mexican environmental protection agency.

The Federal Attorney for Environmental Protection (PROFEPA) said the oil was pumped from the shipwreck over the weekend of Nov. 14-15.

Salvage work is focused on removing the entire 11,484 liters of oil, 489 cubic meters of diesel and other contaminants onboard the Mexican-flagged vessel.

It was Oct. 23 when the 22-year-old Los Llanitos dragged anchor and ran aground 25 nautical miles off Manzanillo, Mexico. A total of 27 crewmembers were onboard during the accident; 19 were rescued by helicopter, while the others initially remained to try salvaging the ship. All have since been evacuated.

The vessel, operated by Mexico City-based maritime services company Naviera Para Mineral, has been broken in half and is beyond repair, according to director general of the Mexican Merchant Marine.

Crowley Appoints Alaska VP

By Mark Edward Nero

Crowley Maritime Corp. said Nov. 12 that company veteran Craig Tornga has been named vice president of stakeholder relations for Alaska. He’ll relocate from Houston to Anchorage, and continue to report to Rocky Smith, senior vice president and general manager, petroleum distribution and marine services.

Tornga is expected to work closely with Crowley’s business units providing diverse services across the state – from fuel sales and distribution, including liquefied natural gas importation and distribution, to marine solutions and offshore towing services.

“Crowley has been serving Alaska for more than 60 years and we are deeply rooted in the state,” Smith said in a prepared statement. “Craig is the ideal person to help us continue to build partnerships with government, regulatory agencies, native Alaska corporations, trade associations, citizen advisory boards and more. He has lived and worked in the state for many years and is well known and respected.”

Tornga began his career with Crowley in July 1977 as a seaman in Seattle and over the years he held supervisory and managerial roles for the company in marine dispatch and customer service.

He worked his way up the ladder and in 2011 was chosen to lead Crowley’s new marine solutions group in Houston, and earlier this year was appointed vice president of business development in Alaska.

“I know what a special place Alaska is,” Tornga said. “I look forward to working with a broad spectrum of people and groups on issues and projects that are mutually beneficial to Crowley and our great state.”

POLB Wins Excellence Awards

By Mark Edward Nero

The Port of Long Beach won 22 awards for outstanding security, communications, and environmental programs during the annual American Association of Port Authorities in Miami earlier this month.
Among the awardees during the Nov. 2-4 event were:
  • “Virtual Port,” a program that allows the port’s security team to monitor the harbor with surveillance tools and shipping and transit data. It received the Best Information Technology Award.
  • The “West Anaheim Street Improvement Project” won the Best Environmental Improvement Award. The project, which beautified and modernized a heavily traveled corridor in the harbor district, was recognized for its sustainable design and practices, which included drought-resistant landscaping and low-energy lighting.
  • The port’s trade and summer community advertising campaigns won for best advertisements. Both campaigns incorporated the tagline “Better Together,” referring to the collaboration between the port and its stakeholders to improve the harbor by making it a safe and efficient place to do business.
  • Marketing videos, educational programs, and a Wi-Fi/recharging station at the Breakbulk Americas 2014 conference each won praise. In all, the port won 20 communications awards.

“These awards are a source of tremendous pride for the Port of Long Beach,” CEO Jon Slangerup said. “Being recognized not once, not twice, but 22 times by the North and South American port association is an exceptional salute from our peers.”

The AAPA represents 160 of the leading seaport authorities in North America, Latin America and the Caribbean, and has over 300 sustaining and associate members.