OOCL Exec Honored By POLB

By Mark Edward Nero

Orient Overseas Container Line CEO and Managing Director Andy Tung was presented with the “Port Pilot Award” by the Long Beach Board of Harbor Commissioners on Oct. 20. The award is presented to business and political leaders and advocates who have made contributions to international trade within the maritime industry.

Tung is the 77th recipient of the award and the first third-generation Port Pilot winner. His father, C.H. Tung, and grandfather, C.Y. Tung, were recipients in 1987 and 1977, respectively.

Tung has led the Hong Kong-based OOCL, one of the top shipping lines calling at the Port of Long Beach, in various management roles since March 2006. However, he first worked for OOCL from 1993 to 1998 and has held top management jobs in the maritime industry in both the United States and Hong Kong.

Prior to his return to OOCL, he was a director of Cargosmart in Hong Kong and worked at Kong Dragon Airlines.

Under Tung’s leadership, OOCL has been in partnership with the Port of Long Beach on the $1.3 billion Middle Harbor modernization project. The new terminal is expected to utilize the world’s most advanced technology, doubling capacity and cutting emissions in half.

The Port Pilot Award was established in 1954 by the Port of Long Beach to recognize significant contributions to the advancement of world trade. The award is named for the harbor port pilots who guide cargo ships safely in and out of the port in all conditions.

More information about the award and a complete list of honorees is available at www.polb.com/portpilotaward.

San Pedro Bay Ports Honor Air Quality Award Winners

The ports of Los Angeles and Long Beach recently honored five companies for their efforts in fighting harmful emissions during the 2013 Clean Air Action Plan (CAAP) Air Quality Awards in San Pedro.

The CAAP Air Quality Awards originated in 2007, after the ports approved the historic San Pedro Bay Ports Clean Air Action Plan. Port tenants and other port-related businesses are eligible to submit award entries, which are judged by a panel composed of port staff and representatives from the South Coast Air Quality Management District, California Air Resources Board and the US Environmental Protection Agency.

Awards this year were given in three categories, including:

Air Quality Leadership at the Corporate Level, where the recipients were global shipping and logistics company Wallenius Wilhelmsen Logistics (WWL); and container transportation, logistics and terminal company OOCL USA.

In 2012, WWL’s new, ultra-modern Salome vessel was the first to qualify for an incentive under the Port of Long Beach’s Green Ship Incentive Program, a voluntary clean air initiative that rewards ocean carriers whose ships are equipped with Tier II or III engines.

In 2012, OOCL signed a “green” lease with the Port of Long Beach pledging to reduce harmful emissions by 50 percent, even as the company plans to double growth.  OOCL says it plans to achieve this by using shore power to reduce emissions while at port, as well as by continuing its participation in the ports’ Vessel Speed Reduction Program, an initiative that involves the lowering of vessel speeds to reduce emissions when ships approach the port. Also in 2012, OOCL joined the Port of Los Angeles’ Environmental Ship Index incentive program, a voluntary clean air initiative that rewards ocean carriers for bringing their newest and cleanest vessels to the Port of Los Angeles.

The second category in which companies were honored was Innovative Air Quality Improvement Technologies, and the two recipients were Foss Maritime Co. and APL.

In 2012, Foss voluntarily retrofitted another tugboat for operation in the harbor as well, creating the world’s second hybrid tug.

APL, meanwhile, was the first company to install and test “seawater scrubber” technology on a container ship calling at the two ports. The technology involved the installation of a single low-maintenance seawater scrubbing device on the ship’s three auxiliary engines, which helped reduce contaminants in the exhaust stream and removed waste from the wash water prior to discharge overboard. The scrubber reduced SOx emissions by as much as 99 percent and 70 percent for PM when running on HFO (heavy fuel oil), and 97 percent for SOx and 78 percent for PM when using MGO (marine gas oil).

The third award category was Innovative Operations That Improve Air Quality. This award went to trucking company Knight Transportation.

Half of the company’s roughly 300 trucks operating at the two ports are 2010 or newer, which exceeds current requirements. Engines on the 2010 and newer trucks have reduced CO₂ emissions by about 18 percent and NOx emissions by 90 percent, according to estimates. Knight has also modified about 97 percent of its van trailers with blade technology that reduces fuel consumption by seven percent. In addition, 100 percent of its tractors are equipped with diesel-fired bunk heaters, thus reducing a driver’s need to idle trucks during the cooler winter months.

“Because of the innovative initiatives of our partners, overall diesel emissions are down by an amazing 75 percent, and we continue to advance toward our goal of zero emissions,” Port of Long Beach Acting Deputy Executive Director Noel Hacegaba said.  “We congratulate these companies whose initiatives are setting the standard for ports around the world.”

 

POLB Approves Middle Harbor Project Budget

After putting off a vote earlier this month in order to study the overall project, Long Beach’s port commission has passed a budget for the $1.2 billion Middle Harbor terminal renovation.

The approval came on a 4-0 vote during the commission’s Jan. 22 business meeting, with commissioner Rich Dines absent.

It was back during the board’s Jan. 7 meeting that the members agreed to place the vote on hold pending further review of the project by commissioners, stakeholders and the public. A workshop was conducted during the Jan. 22 business meeting, prior to the approval vote.

The Middle Harbor redevelopment plan consists of the combining of two aging shipping terminals, Pier E and Pier F, into one modern terminal for the purpose of improving cargo movement efficiency and reducing environmental hazards. The project upgrades wharves, water access and storage areas, and adds a greatly expanded on-dock rail yard.

Despite the lack of final budget approval until this week, work on the nine-year project began in the spring of 2011.

The project, which is expected to be complete by 2019, already has a tenant lined up. On April 3, 2012, Orient Overseas Container Line signed a 40-year, $4.6 billion lease with the port to operate the 300-acre terminal along with its subsidiary, Long Beach Container Terminal. LBCT has occupied Pier F since 1986.

Long Beach Board Postpones Middle Harbor Budget Vote

The Port of Long Beach Board of Harbor Commissioners has temporarily put off voting on the full budget for a $1.2 billion plan to renovate two aging shipping terminals, saying that more time is needed for review.

During its Jan. 7 meeting, the board agreed to place the vote on hold pending further review of the Middle Harbor redevelopment project by commissioners, stakeholders and the public. A workshop has been tentatively set for Jan. 22, with the time still to be determined.

“There will be a study session about the overall project,” Commission President Susan Anderson Wise explained. “Its phases and various contracts will be reviewed in order for the board to have a broader understanding of the entire project before voting on the project budget.”

The Middle Harbor redevelopment plan consists of the combining of two aging shipping terminals, Pier E and Pier F, into one modern terminal for the purpose of improving cargo-movement efficiency and reduction of environmental hazards. According to the port, the project upgrades wharfs, water access and storage area; as well as add a greatly expanded on-dock rail yard.

Despite the lack of final budget approval, work on the nine year project began in the spring of 2011; since then, the port has been upgrading the area’s wharfs, water access and storage area, plus expanding on-dock rail.

On April 3, 2012, Orient Overseas Container Line signed a 40-year, $4.6 billion lease with the port to operate the 300-acre terminal along with its subsidiary, Long Beach Container Terminal. LBCT has occupied Pier F since 1986.

Port of LB Celebrates Terminal Contract, Modernization

The Port of Long Beach on May 14 held a ceremony to commemorate construction of its in-progress $1.2 billion Middle Harbor construction project and a new 40-year, $4.6 billion lease on the property with Orient Overseas Container Line.

The event, which includes a ceremonial contract signing, attracted numerous industry and civic leaders, including OOCL CEO Philip Chow, International Longshore and Warehouse Union International President Robert McEllrath and Long Beach Mayor Bob Foster.

“What we speak of today is a collective vision - a vision to make the Port of Long Beach one of the world's most competitive ports,” Chow said during the ceremonies. “And the new design will make the Middle Harbor terminal the greenest in North America.”

Long Beach’s Middle Harbor project consists of combining two older facilities - one of which is vacant, and the other occupied by OOCL subsidiary Long Beach Container Terminal - into one facility that the port says could more than double trade while at the same time reduce air pollution by half.

Under the project, LBCT is expected to expand from its current 90-acre facility to the new, 304-acre terminal.

“In our industry we are too often criticized for lacking vision and not being forward thinking - the Middle Harbor project will turn all of that around,” LBCT President Anthony Otto said in prepared remarks during the ceremony. “This project is a testament to the concept of the whole being greater than the sum of its parts.”

Port of Long Beach Finalizes Record Lease

Orient Overseas Container Line on April 3 officially signed a 40-year, $4.6 billion lease with the Port of Long Beach to operate the port’s under-development 300-acre Middle Harbor terminal.

“I can’t overstate the significance of this agreement,” port Executive Director Chris Lytle said in a news release announcing the finalization. “It is the largest and most far-reaching terminal lease ever at the Port of Long Beach.”

The Middle Harbor redevelopment project consists of the combining of two aging shipping terminals into one modern facility to improve cargo-movement efficiency and environmental performance.

Under the nine-year, $1.2 billion project, which began in the spring of 2011, the port’s upgrading the area’s wharfs, water access and storage area, plus expanding on-dock rail. The lease will give OOCL and its subsidiary, Long Beach Container Terminal, full use of the facility.

A ceremony marking the lease’s signing was held April 3 at OOCL’s Hong Kong headquarters. In attendance were Lytle, OOCL CEO Philip Chow, members of the port’s harbor commission and representatives from the Pacific Maritime Association and International Longshore and Warehouse Union.

During the ceremony, Harbor Commission President Susan Anderson Wise presented Chow with a glass sculpture by California artist Paul Harrie. In return, Chow presented the port with a vase on behalf of OOCL.

A ceremonial groundbreaking is also scheduled for Port of Long Beach in May.

Long Beach Approves Middle Harbor Lease

The Port of Long Beach’s Board of Harbor Commissioners on Feb. 27 voted unanimously to approve a 40 year, $4.6 billion lease for its presently under construction Middle Harbor Development Project.

The approval means that Hong Kong-based Orient Overseas Container Line and its subsidiary, Long Beach Container Terminal, can assume full control of the 300-plus acre property once renovations are complete by the end of the decade.

“I’m really excited to be part of this board at the time that this is being put into place. I think OOCL has shown itself already to be a good citizen in our community,” commission president Susan Anderson Wise said at the time of the vote. “To be able to enter this lease with them, which is really the future of the Port of Long Beach, I think it’s everything coming together, so this is really terrific.”

The Middle Harbor Redevelopment Project, which has been underway since spring 2011, combines two aging shipping terminals, Pier E and Pier F, into one modern terminal for the purpose of improving cargo-movement efficiency and reduction of environmental hazards.

LBCT has occupied Pier F since 1986.

The nine-year, $1.2 billion construction project upgrades wharfs, water access and storage area; as well as add a greatly expanded on-dock rail yard. The port says the project’s expected to cut air pollution and add thousands of jobs to the economy.

The port’s finance committee approved the deal Jan. 24.

Due to a technicality, the lease must still go through a second reading by the board before it becomes official. That reading’s tentatively planned for the board’s March 12 meeting.

TEU Decline Continues at Port of Long Beach

The number of empty containers that moved through the Port of Long Beach last month rose five percent compared with the same month in 2011, but the growth wasn’t enough to halt a downward trend in total container volume at the port.

The number of empties shipped through the port jumped from 104,969 last January to 110,216 this January, according to data posted this week on the port’s website, but the number of loaded imports and loaded exports both dropped by substantial margins during the same time period.

The number of loaded inbound containers fell about 5.5 percent, from 242,445 last year to 229,125 last month. Also, the amount of loaded outbound containers was down 8.2 percent, to 117,083 last month from 127,546 in January 2011.

The overall number of 20-foot equivalent units moved dropped 3.9 percent during the time period, to 456,424 from 474,960.

For its fiscal year, which began Oct. 1, the POLB’s total volume is down 11.8 percent compared with the year prior.

The port attributes much of the decline to its loss of California United Terminals, which vacated one of the POLB’s seven container terminals in late 2010. CUT, which had accounted for about a tenth of the port’s overall container traffic, now leases about 100 acres of the 512-acre APM Terminals facility at the Port of Los Angeles.

CUT’s former terminal is being redeveloped as part of the port’s Middle Harbor project, a nine-year, $1.2 billion undertaking in which two aging terminals will be combined and modernized.

The port, which began work on the project in the spring of 2011, has signed Orient Overseas Container Line to a 40-year, $4.6 billion lease on the facility.

OOCL Reroutes Calls to Tokyo Bay Over Radiation Concerns

Orient Overseas Container Line, the Tokyo-based carrier announced Friday, it is diverting all Tokyo and Yokohama vessel calls to the more southerly port of Osaka due to concerns about radiation from a leaking nuclear power plant in the northeast.

OOCL is the fourth and latest ocean carrier to stop calls at the Tokyo and Yokohama ports, which suffered only minor damage and have remained open since shortly after the March 11 Japanese earthquake and tsunami.

German carriers Hapag-Lloyd and Claus-Peter Offen have also canceled calls to both ports, which are located in Tokyo Bay about 150 miles south of the tsunami-damaged Fukushima power plant. Carrier Hamburg Sud had stopped calling at both ports shortly after the March 11 double-disaster, but restarted service last week.

Other major lines, including APL, CMA CGM and Maersk continue to call at both ports.
Tokyo and Yokohama ports are the nation's two busiest container ports, handling more than a third of Japan’s foreign-container cargo.

The Fukushima nuclear power plant in northeastern Japan was severely compromised during the March 11 earthquake/tsunami leading to a shutdown of the cooling systems at the six Fukushima reactor buildings. Despite the best efforts of plant employees since the disaster struck to gain control of and/or cool the reactors, radiation has continued to steadily leak from the power plant.

Radiation levels in Tokyo are running on average about 300 percent higher each day for the past week than those recorded in the capitol city on the day prior to the earthquake and tsunami, though the average daily dose for residents is only about 20 percent of what a person receiving a medical x-ray would experience.

An undated statement on the website of the Tokyo Metropolitan Government’s Bureau of Port and Harbor acknowledged the growing concerns over radiation levels in the Tokyo Bay area while downplaying their impact.

"The current numerical measurement doesn’t indicate any effect on health. So, please set your heart at ease,” said the statement.

OOCL Parent Firm Up $842M in 2010

If there was any doubt that 2010 represented a very robust recovery for some in the shipping industry compared to the upheaval of 2009, the Hong Kong-based parent of Orient Overseas Container Line (OOCL) put it to rest Monday.

Orient Overseas International, Ltd. (OOIL), which along with its subsidiaries including OOCL is known internally as the Group, announced that it had recouped a $377 million loss suffered in 2009 and ended 2010 with a $842 million profit.
Chairman C.C. Tung said the rebound "has been beyond all expectations."

"Unusually strong demand in the first half of 2010 and positive trading conditions throughout the remainder of the year saw our lifting volumes nearing 2008 levels. Improvements in freight rates across all trades, combined with cost savings implemented in 2009, have produced a record profit for our liner operation in 2010."

The Group's carrier arm, OOCL, reported 4.8 million TEU lifts in 2010, a 14.6 percent increase. The carrier's vessel utilization rate, a measurement of how well its ships are being used, grew from 74 percent to 81 percent. Average revenue per TEU rose to $1,178, a 27.5 percent increase over 2009.

However, despite the bumper year, Tung cautioned, "While the ongoing improvement in trade volumes and freight rates is good news, fuel and other cost pressures are again re-emerging as the global economic recovery continues. Continued focus on operational efficiency and pricing discipline will accordingly remain important in the current year,” noted Mr. Tung."

The Group posted profits from continuing operations of $1.87 billion for 2010, a massive jump from the $402 million loss suffered in 2009. These profits include the $1 billion net profit from the firm's 2010 sale of OODL, the Group’s former People's Republic of China property development business. Group profits were based on $6.03 billion in revenues generated during 2010, a major increase over the $4.4 billion in revenue generated in 2009.

Group Chief Financial Officer Kenneth Cambie said, “As of the 31st of December 2010, the Group had total liquid asset balances of $4.13 million compared with debt obligations of $248 million repayable in 2011. Debt-to-equity ratio changed from 0.31:1 at the end of 2009 to a net-cash position at the end of 2010 with the receipt of proceeds from the OODL sale.”

Looking forward, Tung said "The immediate outlook for 2011 remains positive though the level of demand growth seen in 2010 on the East-West trades is unlikely to be repeated in 2011."

He said the Group will "continue to invest in the expansion of the OOCL vessel and box fleets, and in the terminal infrastructure needed to support anticipated demand growth."

Near the end of 2010, Group carrier arm OOCL placed an order for two additional vessels with capacity of 8,888 TEU each from Hudong-Zhonghua Shipyard in China. With this new order, OOCL has a total of eight new 8,888 TEU vessels set for delivery between 2011 and 2014, with the first two vessels due in the first half of 2011.

OOCL Names New Execs

Hong Kong-based ocean carrier OOCL has named Stephen Ng as the firm's next Managing Director of Corporate Planning.

Ng, who currently serves as the carrier's Director of Trans-Pacific Trade, will succeed retiring 36-year OOCL veteran C.L. Ting in the position as of August 1.

OOCL, a wholly owned subsidiary of Orient Overseas Ltd., also announced several related management changes.

Michael Kwok, currently General Manager, Corporate Administration, will take over the position of Director of Trades on August 1.

Tony Tong was named to replace Ng as Director of Trans-Pacific Trade.

In related news, OOCL also said it has appointed a new agent in Kuwait--Kanoo Shipping (Kuwait) C/O Al Rashed International Shipping Co. The carrier currently offers two China-Middle East/Persian Gulf services and one Europe-Middle East/Persian Gulf service each week.

On the North American West Coast, OOCL currently has scheduled service at the ports of Long Beach, Los Angeles, Oakland, Seattle, and Vancouver B.C.

OOCL to Increase Cargo Rates

Shanghai, China-based ocean carrier OOCL on Wednesday, citing ocean freight rates that remain below basic operating and transportation costs, announced ocean freight rate increases effective Jan. 1, 2010.

In a statement, OOCL said that the current rates are "unsustainable for the long term." The increases, described by OOCL as the second phase of its "rate restoration program," will vary depending on the port of egress.

Cargo transiting ports on the United States West Coast will be increased by $480 per twenty-foot container and $600 per forty-foot container.

Cargo transiting US East Coast, US Gulf ports, and all ports in Mexico and Canada will increase by $320 per twenty-foot container and $400 per forty-foot container.

OOCL said that the new rates are required to maintain a viable service level and a comprehensive liner network.