Friday, April 22, 2016

Hapag-Lloyd, UASC Talking Merger

By Mark Edward Nero

German transport company Hapag-Lloyd AG and Dubai-based container shipper United Arab Shipping Co. said April 21 that they’re currently discussing forms of cooperation including a “potential combination of their mutual container shipping operations,” or in other words, a merger.

“In case of a business combination, the parties are basing their discussions on a relative valuation of the two businesses at 72 percent Hapag-Lloyd and 28 percent UASC,” Hapag-Lloyd said in a statement.

However, the agreement is subject to a “mutually satisfactory” completion of the negotiations, as well as due diligence by both parties, according to Hapag-Lloyd.

“To date, the discussions conducted between the two carriers have not resulted in any binding agreement and no assurance can be given that these discussions will lead to a definitive agreement,” the statement says.

Hapag-Lloyd, which has a fleet of 177 modern container ships, has 366 sites in 118 countries and offers a total transport capacity of almost one million TEUs, as well as a container capacity of 1.6 million TEUs.

The company is also a founding member of the G6 Alliance, one of the largest shipping alliances in the world. United Arab Shipping, which was established in 1976, is jointly owned by six shareholding Arab states of the Persian Gulf – Bahrain, Iraq, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates.

It has more than 185 offices around the world and is the largest container shipping line in the Middle East region and adjacent markets, covering over 240 ports and destinations globally.

Methanol Plant Developer Terminates Tacoma Lease

By Mark Edward Nero

The consortium Northwest Innovation Works said April 19 that it is terminating its lease for a site on the tide flats with the Port of Tacoma. The site would have been used as the home of a $3.4 billion methanol production facility.

“We do not see a way forward with the Port of Tacoma,” NWIW President Vee Godley said in a statement. NWIW said its decision to terminate the lease centered on three business considerations particular to the Port of Tacoma site: the land, a lack of adequate time and zoning issues.

The proposed site was at the location of a former smelter “While taxpayers have paid tens of millions of dollars to remediate the former smelter site, it remains polluted to this day,” the company said in a statement explaining its decision. “Only careful planning, additional research, and the right regulatory approach would allow the development of a heavy industrial use on such a site. Developing that approach has taken longer than anticipated, and the process currently in place to resolve pending questions promises still to be a long one.”

Regarding the second issue, the company said there’s inadequate time to conduct necessary due diligence and environmental analysis. Under the terms of the current lease, NWIW must complete a comprehensive due diligence and environmental review process by April 30.

“Given what we now know about the site and the process going forward, we estimate that we would need at least three more years of development activities to perform the necessary due diligence, public process, and environmental analysis,” Godley said.

Thirdly, although the site at the port is zoned for this type of proposed business, the company says various proposals to change the regulatory requirements for this site have “injected additional risk” into the process.

NWIW is developing the same type of production facility in Kalama, Wash. as was proposed in Tacoma, and says it remains committed to its development.

The chemical methanol is used in various ways, including in antifreeze, solvent and fuel, as well as biodiesel.

Quarterly Volumes Grow at Puget Sound Ports

By Mark Edward Nero

Auto imports and container volumes at the ports of Seattle and Tacoma, collectively known as the Northwest Seaport Alliance, posted gains through the first quarter of 2016, according to data released April 18.

“Building off last year’s record-breaking volumes, March marked the highest volume of auto imports in more than a decade,” the ports said in a statement. “The 21,085 units beat the previous record from December 2002.”

Meanwhile, international containers improved four percent through the first three months of the year, largely on the strength of January and February volumes. Full containerized exports were up 18 percent year to date to 233,102 twenty-foot equivalent units, while imports were flat at 311,011 TEUs. Empty container volumes are down four percent year to date, according to the data.

But while the quarterly numbers were relatively good, the same can’t be said for last month’s volume by itself. When compared to March 2015, March 2016’s international container volumes were down nearly 22 percent.

However, March 2015 volumes were particularly robust as the alliance’s harbors quickly cleared the backlog built up during labor contract negotiations after an agreement was reached in February 2015.

The Alliance also said that March container volumes were affected by Lunar New Year, when factories in Asia close for one to two weeks. Full container numbers for the month can be seen at and full cargo statistics are available at

Monday, April 18, 2016

Vancouver USA Extends Terminal Development Contract

By Mark Edward Nero

On April 15, the Port of Vancouver USA Board of Commissioners unanimously approved an extension of the port’s lease with Vancouver Energy, the developer of a proposed oil transfer facility at the port.

The amendment extends Vancouver Energy’s permitting contract to March 31, 2017, with automatic three-month extensions after that date unless either party provides written notice of termination.

By next March, both parties would have to be satisfied that conditions such as permits to operate and environmental baseline work are met. If either party isn’t satisfied that these conditions are met on or before the end of the contract, the lease can be terminated.

If no action is taken, the lease continues for another three months.

The amendment approved last week also increases the contingency period fee from $50,000 to $100,000 per month, starting May 1; eliminates the opportunity for Vancouver Energy to operate a second petroleum-by-rail facility at the port; and provides Vancouver Energy 30 months to resolve any appeals if licenses, permits or approvals are granted and appealed.

The amendment also allows the port to use the leased area during the extended contingency period; and stipulates that oil moved through the facility must be “pipeline grade” and destined for domestic ports.

“I think we’ve ended up with a compromise that allows us to continue through the EFSEC process, but with some defined ending,” Vancouver Port Commissioner Brian Wolfe said.

Vancouver Energy’s proposal is moving through the Washington state Energy Site Evaluation Council (EFSEC) process. The Evaluation Council began reviewing the project in August 2013 and is expected to make a recommendation to Gov. Jay Inslee, who makes the final decision on the project, late this year or early 2017.

POSF Study: Billions Needed to Fix Embarcadero

By Mark Edward Nero

It would take billions of dollars to repair and fortify a three-mile seawall along San Francisco’s waterfront to prevent it from sustaining major damage during an earthquake, according to a newly released study by the Port of San Francisco.

The port’s “Earthquake Vulnerability Study of the Northern Waterfront” report, which was commissioned for $500,000 in 2014, was publicly released during the San Francisco Port Commission’s April 7 meeting.

The report recommends seismic retrofitting that could cost up to $3 billion, as well as raising the wall to protect the city from rising sea levels, which could cost up to $2 billion.

Among the findings in the study:
  • Most of the seawall is built over a weak, saturated, and highly compressible marine clay that tends to amplify earthquake shaking and is susceptible to earthquake-induced lateral spreading and settlement.
  • Fill that was used to create the land behind the Seawall is susceptible to liquefaction, a phenomenon where the soil loses strength and behaves similarly to a liquid.
  • Large earthquakes would likely cause most of the seawall to settle and move outward toward the Bay. Up to a foot is predicted in moderate-to-large quakes and more than several feet is predicted in a major earthquake.
  • Seawall movement is expected to significantly increase earthquake damage and disruption along the waterfront, with historic bulkhead wharf structures built of non-ductile concrete particularly at risk to increased levels of damage.

The study also includes an economic analysis indicating that $1.6 billion in port assets are at risk from earthquake damage within the seawall zone of influence, and that over $2 billion in annual rents, business income, and wages would be disrupted by a major seismic event.

It is feasible to stabilize the seawall by improving the soils below and the fill behind, however construction is costly and disruptive, according to the report.

The study also found that rising seas and climate change will necessitate intervention that may include major changes to the Northern Waterfront and the seawall over the next 100 years.
There is scientific consensus, the report states, that a damaging earthquake “is nearly certain” to occur within the next 30 years.

Seattle Port Presents Green Gateway Awards

By Mark Edward Nero

On April 14, the Port of Seattle presented its sixth annual Green Gateway Partners Awards, which are given to cruise and container customers whose environmental programs and initiatives exceed regulatory requirements.

This year’s award winners were Carnival Cruise Line, Royal Caribbean International, Princess Cruises, Celebrity Cruises, Norwegian Cruise Line and Holland America Line.

Carnival Cruise Line received the inaugural Program Innovator Award this year for a friendly competition and incentive program for its environmental team members that has led to improvement in waste reduction and recycling.

Celebrity Cruises was awarded for demonstrating a variety of environmental stewardship efforts that exceed regulations and industry standards, including use of fuel efficiency measures, wastewater management, water conservation practices and waste reduction/recycling.

Holland America Line was recognized with the port’s Technology Innovator award after making significant capital investments in its Seattle-based fleet, which has resulted in year over year reductions in fuel use and resultant greenhouse gases.

Norwegian Cruise Line’s Princess Cruises was an awardee after demonstrating over the past year a variety of environmental stewardship efforts that exceed regulations and industry standards, such as measurable environmental targets to reduce fuel use, wastewater, water use and solid waste.

Princess Cruises’ use of shore power, fuel efficiency measures, wastewater management, water conservation practices, waste reduction/recycling and environmentally preferable purchasing were cited by the port as reasons it was being honored.

Royal Caribbean International’s Royal Caribbean Cruises according to the port, showed impressive measurable results in reducing greenhouse gas emissions, water use and waste generation.

“These cruise lines prove by their everyday practices that you can be good environmental stewards while contributing to this region’s economy,” Port of Seattle Commissioner Courtney Gregoire said in a statement. “As we start another fantastic cruise season, we thank these cruise lines for making our planet a greener place.”

More information on the Port of Seattle’s environmental initiatives is available at

Port of SF Awarded $4 Million Ferry Grant

By Mark Edward Nero

The San Francisco Bay Area Water Emergency Transportation Authority is to receive $4 million to expand capacity at its main Ferry Terminal from four to six berths, to provide more capacity and support existing and future planned water services.

The money is part of an award of about $59 million for passenger ferry projects and ferry operators throughout the United States, issued by the US Department of Transportation’s Federal Transit Administration. The funds will support existing ferry service on many of the nation’s waterways, and help to repair and modernize ferry boats, terminals, and related facilities that thousands of residents in various communities depend on.

“Passenger ferries play a unique and critical role in our nation’s transportation network by connecting people with the jobs and services they need to reach across the river, the bay, or other local waterway,” US Transportation Secretary Anthony Foxx said in a statement.

The money, which is awarded through FTA’s Passenger Ferry Grant Program, will provide grants to 18 projects in 10 states. The projects will receive a combination of fiscal year 2015 and 2016 grants program funds.

“Waterways help to define and shape the economies of many of our cities and tribal communities, and in these places, ferry service is an essential form of transportation,” FTA Senior Advisor Carolyn Flowers said in a statement. “We must bring our existing ferry systems and facilities into a state of good repair, and support new ferry service where there’s a clear need.”

Examples of other projects receiving grants under the Passenger Ferry Grant Program include the Regional Transit Authority in New Orleans receiving $5 million to replace its 90-year old ferry terminal; and the Delaware River and Bay Authority receiving $6 million to replace four ferry engines to improve service reliability and improve maintenance capabilities for its Cape May-Lewes Ferry service, which moves customers between Eastern Delaware and Southern New Jersey.