Matson Investing $30 Million in Alaska Operations

By Mark Edward Nero

Honolulu-based Pacific shipping company Matson Inc. said this week that it is moving to fund improvements in the Alaska operations that it took over following its May 29 acquisition of Horizon Lines’ Alaska services.

Matson expects to invest more than $30 million in new equipment, with planned upgrades over the next three months, including 2,000 new standard 40-foot dry containers for general cargo; a new 65-ton gantry crane for its Kodiak Terminal; 430 new insulated containers for winter operations; and two new Kenworth tractors for Anchorage Terminal container positioning.

In addition, Matson says, it has scheduled work to install new exhaust scrubber systems on the three former Horizon D7-class vessels it now operates in Alaska, with each vessel going into dry dock for three months beginning in September.

The new equipment is expected to help the vessels comply with the latest federal emissions regulations and virtually eliminate all sulfur dioxide and particulate emissions. Matson says it will deploy a reserve container ship during the installation period to prevent any disruption to its twice-weekly service from Tacoma to Anchorage and Kodiak and weekly service to Dutch Harbor.

The modifications to all three ships are expected to be complete by December 2016.

The new gantry crane is due to arrive in Kodiak in early August and the new insulated containers are expected to be delivered in Anchorage in late October.

“These infrastructure investments will bring Alaska assets in line with our standards,” Matson President and CEO Matt Cox said.

Matson acquired Horizon Lines, including Horizon’s Alaska operations and the assumption of all non-Hawaii business, for about $469 million on May 29. Around the same time, Horizon sold its Hawaii trade lane assets and liabilities to The Pasha Group for $141.5 million.

Horizon Completes Asset Sales to Pasha, Matson

By Mark Edward Nero

Horizon Lines said May 29 that it has completed a sale of its assets, including its Alaska operations and the assumption of all non-Hawaii business liabilities, to Matson Inc. Horizon also completed the sale of its Hawaii operations to the Pasha Group.

Matson acquired the stock of Horizon for 72 cents per fully diluted common share, or $69 million, and repaid Horizon's outstanding debt, for a total transaction value of $469 million, before transaction costs.

Matson says it will continue Horizon's long operating history in Alaska with a three vessel deployment of diesel-powered Jones Act-qualified containerships that provide two weekly sailings from Tacoma to Anchorage and Kodiak, and a weekly sailing to Dutch Harbor.

In addition, Matson says it will operate port terminals in Anchorage, Kodiak and Dutch Harbor and acquire several reserve steam-powered Jones Act containerships that can be used for dry-dock relief.

Meanwhile, Pasha Hawaii assumes operations for all of Horizon’s Hawaii business, including its four US-flag containerships serving the Hawaii trade lane.

The Pasha Group has also acquired Horizon subsidiaries Hawaii Stevedores Inc.; the California-based operations of Sea-Logix LLC, which provides trucking services; and Sunrise Operations, a subsidiary that includes Horizon’s Hawaii trade-lane vessels and employees.

Horizon’s Hawaii business is to operate alongside Pasha Hawaii’s existing operations, which include two Jones Act-qualified vessels that entered service on May 7. Pasha Hawaii’s technical services team has been charged with overseeing operations for its entire fleet, with Crowley Maritime providing ship management of the new Horizon vessels and crew through Crowley subsidiary Marine Transport Management.

Pasha has engaged Norton Lilly to provide certain liner agency services, both in Hawaii and the mainland. The company also says it plans to continue its longtime partnership with Young Bros. to maintain connecting-carrier service to the neighbor islands.

Horizon first announced the proposed deals with Matson and Pasha in November 2014.

DOJ Clears Horizon Lines Acquisition

By Mark Edward Nero

The US Department of Justice has cleared The Pasha Group’s acquisition of the Hawaii trade-lane business of Horizon Lines Inc., which paves the way for an anticipated final closing before the end of the second quarter, Pasha Group revealed April 23.

Horizon announced in November 2014 that it has agreed to sell its Hawaii operations to the Pasha Group for $141.5 million.

Upon closing, Pasha Hawaii, a wholly owned subsidiary of the family-owned global logistics company, is expected to assume operations for all of Horizon’s Hawaii business, including Horizon’s four U.S.-flag containerships in the Hawaii trade lane.

In addition to the ships, The Pasha Group is also acquiring Horizon subsidiaries Hawaii Stevedores Inc.; the California-based operations of Sea-Logix LLC, which provides trucking and warehousing services; and Sunrise Operations, a subsidiary that includes Horizon’s vessels and Hawaii-based employees.

Pasha says that after the sale closes, it expects to partner with Crowley Maritime to provide ship management of the vessels and crew through Crowley subsidiary Marine Transport Management Inc.

In becoming part of Pasha, Horizon’s Hawaii business will operate alongside Pasha Hawaii’s existing operations.

“We are excited for the opportunity to welcome Horizon’s Hawaii family of employees to the Pasha team,” President and CEO George Pasha IV said. “I am confident that the combination of our two businesses will allow us to more effectively serve our new expanded customer base.”

Pasha has said it plans to make significant upgrades to the Horizon fleet, that environmental responsibility and stewardship “will continue to be a major part of Pasha Hawaii’s culture and vessel operations,” and that the company plans to stay actively involved with local charities and organizations.

Port of Anchorage Sees Annual Tonnage Increase

By Mark Edward Nero

The Port of Anchorage saw an increase in overall tonnage in 2014, the first time in three years such an occurrence has taken place, according to the port.

Last year, containerized cargo and vehicle tonnage across the dock was up four percent over 2013 numbers, based on business numbers reported by the port’s two resident ocean carriers, Horizon Lines and Totem Ocean Trailer Express.

Also, a total of 15 fuel tankers called on the Port of Anchorage in 2014 compared to only five in 2013, according to Port Director Steve Ribuffo. The total related quantity represents a 59 percent increase in fuel delivered over the dock when compared to 2013, according to the port.

“We’ve had a steady flow of fuel traffic at the Port of Anchorage in 2014 and so far in 2015,” Ribuffo said. “Essentially, there had been at least one tanker here offloading petroleum every month and we don’t see the surge letting up anytime soon.”

The fuel arrives by tanker or barge and travels through one of the nine petroleum offload headers on the two dedicated petroleum docks.

In 2013, 4.2 million barrels of fuel entered the port from domestic and foreign suppliers; that number jumped to 6.7 million barrels in 2014.

“While there’s a real and serious need to modernize our dock infrastructure, it's very clear from a business perspective that we can successfully support more tonnage within the same footprint,” Ribuffo said.

Horizon Installing Scrubbers on Alaska Ships

By Mark Edward Nero

Horizon Lines Inc. said Jan. 9 that it has entered into a supply agreement with Dutch marine supplier Alfa Laval Aalborg Nijmegen BV for design and procurement of PureSox 2.0 exhaust gas cleaning systems (scrubbers) for is three D7-class vessels that operate in the Alaska trade.

The multiple inlet hybrid system, which would clean the exhaust gas from the main engine as well as the main generators, is the first system of its kind for a Jones Act container vessel. Horizon said it expects to incur a total of about $18 million of capital spending in connection with the three vessels.

Installation of the first system is planned to begin on the Horizon Kodiak in September 2015, and completion of the project is expected by December 31, 2016.

Horizon also says it has received a conditional waiver from the US Coast Guard and US Environmental Protection Agency allowing it to operate the three D7 ships in the North American ECA on low-sulfur heavy fuel while it pursues installation of the scrubbers.

Horizon says that the scrubber systems will be developed and installed in close coordination with Alfa Laval, the American Bureau of Shipping, and the US regulatory agencies.

In a news release, Horizon said it “values the partnership” with the EPA and the USCG in supporting the advancement of the exhaust gas cleaning systems project, and “looks forward to sharing the knowledge and experience gained during the evolution of this project with the maritime industry.”

Horizon Lines announced Nov. 11 that it has entered into a merger agreement under which Matson Inc. is to acquire the stock of Horizon, including its Alaska operations and the assumption of all non-Hawaii business liabilities.

The Boards of Directors of both companies have already approved the transaction; it is expected to close later in 2015.

Horizon Selling Assets to Matson, Pasha

By Mark Edward Nero

Matson Inc. and Horizon Lines announced Nov. 11 that they’ve entered into a merger agreement under which Matson will acquire the stock of Horizon, including its Alaska operations and the assumption of all non-Hawaii business liabilities. Horizon also announced separately Nov. 11 that it has agreed to sell its Hawaii operations to the Pasha Group for $141.5 million and intends to shut down its Puerto Rico liner operations by the end of 2014.

Under the terms of the merger agreement, Matson is to acquire Horizon for 72 cents per share, or $69.2 million, plus the repayment of debt outstanding at closing. The total value for the transaction is $456.1 million before transaction costs, based on Horizon’s outstanding debt as of Sept. 21, 2014, minus the anticipated proceeds from the Hawaii business sale. Horizon has a long operating history in Alaska. The company deploys three diesel-powered Jones Act qualified containerships and operates port terminals in Anchorage, Kodiak and Dutch Harbor. Its Alaska service consists of two weekly sailings from Tacoma to Anchorage and Kodiak, and a weekly sailing to Dutch Harbor. Horizon also has a reserve steam-powered Jones Act containership for drydock relief.

“The acquisition of Horizon’s Alaska operations is a rare opportunity to substantially grow our Jones Act business,” Matson President & CEO Matt Cox said. “Horizon’s Alaska business represents a natural geographic extension of our platform as a leader serving our customers in the Pacific. We are also encouraged by the long-term prospects of the Alaska market, which mirrors Hawaii in many operational ways.”

The Boards of Directors of both companies have already approved the transaction and it is expected to close in 2015. “We wish the Matson team continued success in their new Alaska trade, and we look forward to working with them to close this transaction and provide a seamless transition for our customers,” Horizon's decision to terminate its Puerto Rico service is independent of the Matson deal and that it intends to cease operations between the U.S. and Puerto Rico whether or not the Matson deal is consummated.

Under the terms of the Pasha Group agreement, Pasha will acquire certain subsidiaries of Horizon constituting substantially all of Horizon’s Hawaii trade-lane business, including four Jones Act container ships.

“Since Pasha entered the Hawaii transportation circuit nearly 10 years ago, we have elevated the quality of customer service,” the company’s president and CEO, George Pasha IV, said. “With this acquisition, we will supplement that service and provide an improved, more competitive offering on the Hawaii trade lane.”

MARAD Announces LNG Project Grants

The US Department of Transportation’s Maritime Administration (MARAD) announced Nov. 7 that it’s providing a total of $1.4 million for two projects supporting the increased use of alternative fuels and technology in the maritime industry.

The funds are expected be used to collect information on the use of liquefied natural gas as a marine propulsion and to study the issues and challenges associated with shore side storage and fueling of LNG vessels.

MARAD says it will provide Horizon Lines with $900,000 to assist in conversion and monitoring of its vessel, Horizon Spirit, to operate on LNG. The Horizon Spirit is an 892-foot long, 115-foot wide ocean going container ship that operates between Long Beach, California, and Honolulu.

The conversion is anticipated to be completed by late 2015, according to MARAD.

The second project is a $500,000 MARAD funded LNG study conducted by the US subsidiary of Norwegian technical standards development company Det Norske Veritas to analyze the issues and challenges associated with the process of supplying fuel for ships and the landside infrastructure needed to store and distribute LNG. MARAD says it anticipates the study will be complete by spring 2014.

The two recipients were chosen via a competitive process to partner with MARAD as part of a new program to demonstrate innovative technologies and practices and share data on the results.

“Fuel-efficient ships appeal to the maritime industry for the exact same reasons that fuel-efficient cars appeal to consumers – they’re easy on the environment and their pocketbooks,” US Transportation Secretary Anthony Foxx said in a statement.

Port of Anchorage Dock Construction Could Be Undone

Most of the work to build new dock areas at the Port of Anchorage as part of an expansion project could be undone because of improper construction, the city and port officials say.

The deconstruction option was one of three possibilities discussed by officials during a three-day session regarding the project.

The mid-December work session came weeks after a report found that three of four new sections built at the port were not constructed correctly, and due to shifting land, could fail during an earthquake.

The $2.2 million, 2,200-page sustainability study was conducted by engineering firm CH2M Hill on behalf of the US Maritime Administration (MARAD) and the US Army Corps of Engineers. It says the danger comes mainly from a foundation system called Open Cell Sheet Pile, or OCSP, where instead of building a traditional dock on piling, interlocking sheets of steel are hammered into the sea floor to form U-shaped cells, which are then backfilled with dirt and gravel.

Due to the problems, most construction of the project was halted in 2010.

The Corps requested the study be conducted after it assumed control of the Port of Anchorage expansion project from MARAD on May 31.

Officials from the port, Corps of Engineers and MARAD were present during the study session. One option discussed over the course of the three days was that two major port tenants, Horizon Lines and Totem Ocean Trailer Express (TOTE), would remain at their current berths and that a new deep water berth and a barge berth would be built after the damaged material now there is removed.

Another option was the temporary movement of TOTE and Horizon from their existing terminals while the old terminals are demolished and rebuilt. A third, so-called hybrid option would be to replace two of the existing terminals on the old dock and build a new deep-water berth.

The expansion, which has been in the works for more than a decade, was originally estimated to cost $360 million, and was supposed to be complete by 2011. Instead, cost estimates have jumped to more than $1 billion and continue to climb. A completion date is at least a decade away, according to port estimates.

Horizon Lines Refinancing Planned for September Completion

Jones Act carrier Horizon Lines announced Monday that it has entered into a definitive agreement and secured commitments from holders of more than 99 percent of its 4.25 percent convertible senior notes due in 2012 that will allow the carrier to complete a $655 million refinancing of the firm's entire capital structure.

Horizon, which operates the largest domestic US ocean fleet, said "the modified agreement will completely recapitalize the company and eliminate the refinancing risk related to the maturity of the existing convertible notes and the existing bank debt in 2012. It also provides liquidity to fund continued operations through a new asset-based revolving loan (ABL) facility."

The note holders have also committed to provide Horizon with access to a $25 million bridge loan to serve as a liquidity cushion through the completion of the recapitalization.

Bondholders are being asked to swap the $330 million in existing 4.25 percent 2012 notes for $280 million in 6 percent convertible notes maturing five-and-a-half years from issuance, and $50 million in stock.

Horizon, which has been reeling from a government-sanctioned $15 million fine after pleading guilty to price-fixing in the Puerto Rico trade last March, missed a mid-August payment on its current notes and is operating within a 30-day grace period. Lenders had already altered covenants of the current credit facility twice this year and have declined further waivers or amendments.

The carrier said that assuming full participation in the exchange offer, holders of the 2012 convertible notes will own approximately 95 percent of the firm's stock on an as-converted basis following the exchange offer.

Horizon indicated that if participation of the bondholders in not realized, the firm would likely be compelled to "seek bankruptcy protection."

Additional components of the larger refinancing plan include: a commitment from 2012 note holders to purchase $225.0 million of new five-year 11 percent first-lien secured notes to be issued by a Horizon subsidiary, and a commitment by 2012 note holders to purchase $100 million of new five-year maturity second-lien 13 percent to 15 percent secured notes to be issued by a subsidiary. The $100 million amount includes the $25 million bridge loan.

Proceeds from the secured notes will be used, among other things, to satisfy in full Horizon's obligations outstanding under its existing first-lien revolving credit facility and term loan, which currently total $269.7 million.

The carrier expects to complete the exchange offer of the existing 2012 convertible notes by the end of September, at which time it expects to close the entire refinancing.

Horizon Lines Obtains Charter Payment Rate Cut on Three Alaska Tradelane Vessels

Charlotte, NC-based Jones Act carrier Horizon Lines announced Monday that it has finalized an agreement with former parent-firm CSX Corporation to reduce the carrier's charter payments on three vessels being leased from CSX.

Under the terms of the deal, the embattled carrier's charter hire expense on the three vessels has been reduced by $3 million per year, retroactive to January 2011, and carrying through the January 2015 expiration of the charter. The agreement, according to Horizon, will represents a total savings of $12 million for the carrier over the remaining life of the charter.

The three chartered vessels, the Horizon Anchorage, Horizon Tacoma, and Horizon Kodiak, serve in the Alaska tradelane and were built in 1987.

"We greatly appreciate the willingness of CSX to provide meaningful financial assistance as we work to refinance our debt and position Horizon Lines for long-term success," Horizon Executive VP and CFO Michael Avara said in a statement. "As our former parent company, CSX remains a valued and very important business partner."

The reduction in charter hire expense of $3 million achieved this year under the agreement was previously included in the carrier's estimated 2011 cost-savings projections of $18 million or greater.

A May 21 default by the carrier under a convertible note indenture was staved off when a federal court agreed last week to reduce Horizon's fine related to a rate and surcharge fixing conspiracy involving maritime cargo handling over a six-year period. The court agreed to reduce the carrier's fine from $45 million to $15 million.

Major Hawaii, Pacific Island Carriers Raise Fuel Surcharges

The three main shipping lines servicing Hawaii, Guam, Micronesia and the Northern Marianas have all announced increases in their fuel surcharge rates reflecting the dramatic global rise in oil prices.

For the third time this year, Matson Navigation announced March 31 an increase in their fuel surcharge on shipments to Hawaii as well as those to Guam and other Pacific Islands.

Set to take effect May 1, Matson's fuel surcharge for Hawaii services will rise from 35 percent to 43.5 percent. The fuel surcharge for Guam, Micronesia and the Northern Marianas will also increase from 36.5 to 45 percent.

"Matson recognizes that fuel costs impact all businesses, as well as consumers. Unfortunately, transportation companies are especially hard hit, with fuel consumption an unavoidable and significant component of operating costs," Matson Senior Vice President Dave Hoppes said in a notice to customers.

Horizon Lines, also for the third time this year, said on April 4 that it will raise its fuel surcharge on Hawaii service from 35 to 43.5 percent, also effective May 1. Horizon also matched Matson's fuel surcharge increase on service to Guam, Micronesia, and the Northern Marianas, raising the fuel surcharge from 36.5 percent to 45 percent, effective May 1. The surcharge increase on Micronesia service takes effect May 8.

"Horizon Lines will continue to closely monitor fuel costs and will adjust the fuel surcharge as trends warrant," the carrier said in service bulletin.

Pasha Hawaii also announced this week that it would increase its fuel surcharge on Hawaii service from 35 percent to 43.5 percent, effective May 1. Pasha does not serve Guam, Micronesia or the Northern Marianas.

Fuel surcharges are calculated as a percentage of the current ocean base rate.

Horizon to Kick Off New China Inland US Express Service

Charlotte, NC-based ocean carrier Horizon Lines Inc. announced Monday that it will launch an express trans-Pacific container service to key inland US cities in December.

Named the Five Star Express, or FSX, the service will operate between the Chinese ports of Ningbo and Shanghai, and the Port of Los Angeles.

The service will rely on scheduled intermodal rail service at Los Angeles each week to reach key inland US cities. Horizon claims the service will offer some of the fastest inland transit times in the industry, including 15-day availability in Kansas City from Shanghai and 16-day availability in Dallas. The service will also take advantage of on-dock rail at the Los Angeles port, which reduces drayage fees, to offer express inland service to Charlotte, Atlanta, Memphis and Chicago.

The maiden FSX voyage is scheduled to depart Ningbo, China, on December 14, 2010, Shanghai on December 15, with a scheduled arrival in Los Angeles on December 26. According to Horizon, approximately 60 percent of the initial voyage is already subscribed, and the carrier continues to make steady progress toward a goal of 75 percent bookings for the first sailing.

"As other carriers reduce service locations and slow service speeds, US shippers continue to tell us they want fast and reliable service alternatives not only port-to-port, but inland to final destinations as well," said Brian Taylor, Senior Vice President of International Services at Horizon Lines. "At a time when US retailers are maintaining lower inventory levels and placing more logistics responsibilities on their manufacturing partners here in China, our Five Star Express service offers a fast and reliable transit schedule to keep supply chains running smoothly."

Horizon envisions expanding the inland express network to other US locations next year.

In addition to offering customers a trans-Pacific import alternative, Horizon believes the new Five Star Express service will allow the carrier to better accommodate an expanding military presence in Guam, where trade is expected to grow significantly in coming years.

Horizon is the nation's largest Jones Act carrier, operating a fleet of 20 leased or owned US-flag containerships and five port terminals which link the continental United States with Alaska, Hawaii, Guam, Micronesia and Puerto Rico.

Horizon Lines Names New Board Members, CEO Raymond Re-elected as Chair

Shareholders of Jones Act ocean carrier Horizon Lines, Inc. on Wednesday elected three Class II directors and ratified the appointment of Horizon Lines' public accounting firm Ernst & Young LLP.

The vote came during the Charlotte, SC-based firm's annual meeting on Wednesday, which also saw the Board of Directors re-elect Horizon CEO Charles Raymond as board chairman.

Raymond, who was first appointed as board chairman in 2006, has served as President and CEO and as a director of Horizon Lines, Inc. and Horizon Lines Holding Corp. since July 2004 and of H-Lines Finance Holding Corp. since December 2004. He has also served as President and CEO of Horizon Lines, LLC since January 2000 and as a director of Horizon Lines, LLC since November 1999.

During the meeting shareholders re-elected Class II directors Vern Clark and William Flynn, and elected Stephen Fraser as a new Class II director to succeed Dan Colussy, who retired from the board after five years of service.

Clark is a retired United States Navy Admiral who joined the board in 2005. Flynn, who joined the Horizon board in 2006, is CEO and President of Atlas Air Worldwide Holdings.

Fraser most recently served as Executive Vice President, Corporate Strategy, at GENCO Supply Chain Solutions, where he also served as CEO of GENCO’s three reverse logistics business units.

Horizon Lines Reports $13.2M Loss in 1st Q

Jones Act ocean carrier Horizon Lines Inc. posted a $13.2 million loss in the first quarter, citing increased operating expenses and a decline in container traffic on all the carrier's routes except for its Hawai'i/Guam service.

The first quarter loss is $3.2 million greater, or 24 percent, than the $10 million loss Horizon reported in the first quarter of 2009.

"During the quarter, we faced ongoing rate pressures, high fuel costs and increased contractual labor expenses relative to last year, and we expect these to continue," said Chuck Raymond, Horizon's chairman, president and chief executive officer.

After adjustments, Horizon reported its per share loss at 39 cents. Industry watching analysts had expected the loss to be in the 26 cents per share range.

Revenues during the first quarter rose 5 percent to $286.1 million.

Company-wide, total container volume for the first quarter fell by 1.9 percent, mainly on lackluster performance in the Puerto Rico and Alaska services. However, in the carrier's Hawaii/Guam service, total container volume was up slightly for the quarter.

"Our business in Hawaii is reflecting a modest economic recovery and Alaska is stabilizing," Raymond said. "Hawaii and Guam have improved nicely. They're up a couple of percentage points in March and we're seeing the same in April."

Horizon Re-Ups Tacoma Lease, Plans Asia-West Coast Service

Jones Act ocean carrier Horizon Lines, which in recent days had been looking at a possible move from the Port of Tacoma, has signed a lease with terminal operator APM Terminals North America that will see the carrier continue to call at the Tacoma port facility at least through 2015.

Horizon's lease with APMT– which covers five ports including Tacoma – was set to expire at the end of the year and rival Puget Sound ports were reportedly vying hard for the carrier's Tacoma business.

Last year, ocean carrier Maersk left the APMT facility at Tacoma to move to the nearby Port of Seattle, leaving Horizon as the lone customer calling at the Tacoma terminal. The carrier currently has three ships per week calling at Tacoma – one to Hawaii and two to Alaska – which according to Tacoma port officials translate into about 150 terminal and terminal-related jobs.

Financial terms of the lease, which included an optional two-year extension, were not released.

In related Horizon news, the carrier also announced plans to kick off a weekly trans-Pacific service between Asia and the US West Coast, set to commence in December.

The new service will utilize five of the carrier's 2,824-TEU US-flagged Hunter-class containerships that currently call on Guam and continue on to China as part of a space-charter agreement with Maersk Line. In preparation for these plans, Horizon Lines and Maersk Line have mutually agreed not to renew their current Asia space-charter agreement when it expires on December 10, 2010.

To support development of the new Asia service, Horizon has named Brian Taylor as Senior Vice President, International Services. In the new role, Taylor, formerly President and Chief Operating Officer of Horizon Logistics, LLC, will oversee the Asia expansion.

"After looking at the various alternatives for our Hunter-class vessels, our management team determined that an Asia service offers the best potential for long-term growth,” Taylor said.

"The trans-Pacific trade, consisting primarily of China-US commerce, continues to be the largest and most dynamic market in the world. We believe we are entering the market at an opportune time."

Horizon Shifts to Ports America Terminal at Oakland Port

Jones Act ocean carrier Horizon Lines has shifted its mainland US to Hawaii, Guam and Micronesia operations at the Port of Oakland to a terminal operated by Ports America, the largest independent terminal operating firm in North America.

Charlotte, NC-based Horizon announced Monday that it had signed a deal to move its Oakland operations to the 160-acre terminal at 1599 Maritime Street, effective immediately.

Horizon had been using the Oakland terminal at 1425 Maritime Street operated by APM Terminals.

According to the Charlotte, NC-based carrier, service enhancements at the Ports America terminal include extended gate hours for early deliveries and lunchtime deliveries on Horizon Lines’ ship days with dedicated truck lanes. All transactions are processed via Electronic Data Interchange, with shipment status updates available through Horizon Lines' online shipment management portal NetCaptain.

The Iselin, NJ-based Ports America signed a 50-year lease for the terminal last year, a deal which also gave the firm an equity stake in the Oakland terminal.

Horizon Lines Axes Exec Perks

As part of an ongoing cost-cutting program, Charlotte, NC-based Jones Act carrier Horizon Lines plans to eliminate corporate perks for the firm's four top executives.

The Compensation Committee of the Horizon Board of Directors approved the move on Wednesday as part of a company-wide effort to eliminate perquisites at all levels.

“We believe the perquisite elimination for executive officers is consistent with emerging best practices in corporate governance,” said Chuck Raymond, Chairman, President and Chief Executive Officer. “In this ongoing challenging business environment, we as senior managers must continue to set new standards that support the organization as it strives for increased efficiencies and customer service excellence.”

According to a Horizon statement, the eliminated perks include, but are not limited to, country club memberships, automobile allowances and tax “gross-up” payments made to reimburse an executive officer for individual income tax incurred with respect to a perquisite.

Horizon plans to increase the base salaries of the four executives as of Jan. 1, 2010 to partially offset the eliminated perks. However, said the firm, no adjustments will be made to the salaries to compensate for tax "gross-up" payments.

In addition to Raymond, the executive targeted by the move include Michael T. Avara, senior vice president and CFO; John V. Keenan, president and COO; and Brian W. Taylor, president and COO of Horizon Logistics Holdings.

Like many carriers, Horizon has been struggling through the global economic downturn. The carrier reported third quarter revenues of $308 million, a 12.6 percent slide from the year ago period and profits of $8.4 million, a 24.3 percent decline from the third quarter of 2008.