FMC Fines Calif. NVOCCs

By Mark Edward Nero

The Federal Maritime Commission said Feb. 18 that it has completed compromise agreements with four ocean transportation intermediaries -- including two in California -- and one vessel-operating common carrier, recovering a total of $520,000 in civil penalties.

The intermediaries include both non-vessel-operating common carriers (NVOCCs) and freight forwarders. They include Ba-Shi Yuexin Logistics Development Co. Ltd., a licensed and bonded NVOCC based in Alhambra, Calif. and Thornley & Pitt, Inc., a licensed NVOCC and freight forwarder in Millbrae, Calif.

Ba-Shi Yuexin Logistics was alleged by the FMC to have obtained ocean transportation for property “at less than the rates and charges otherwise applicable” in its service contract with NYK Line. The company was also accused of providing transportation to its customers at rates not in accordance with Ba-Shi’s NVOCC tariff.

Under the terms of the compromise, the company paid $100,000 in penalties.

Thornley & Pitt was alleged by Commission staff of knowingly and willfully obtaining transportation at less than applicable rates by improperly obtaining access to service contracts to which Thornley & Pitt was not the contract signatory.

Under the terms of the compromise, the company made a payment of $65,000.

NVOCCs and freight forwarders in Germany, Taiwan and New York were also fined between $50,000 and $170,000 under similar allegations.

The penalties resulted from investigations conducted by Commission area representatives in Seattle and New York, as well as by Washington DC headquarters staff.

Although the parties settled and agreed to penalties, they were not required to admit to violations of the Shipping Act or Commission regulations.

Oakland, Tenant Reach Lease Termination Agreement

By Mark Edward Nero

The Port of Oakland has agreed to a lease termination agreement with bankrupt tenant Outer Harbor Terminals LLC.

The port’s Board of Port Commissioners approved the agreement the afternoon of Feb. 19, and it is now set for review by a bankruptcy judge in Delaware who is overseeing Outer Harbor Terminals’ request for bankruptcy protection.

In January, Outer Harbor filed for bankruptcy and announced its intention to close its Oakland operation, which is one of five privately-operated marine terminals at the port. If the bankruptcy court approves the lease termination agreement, Outer Harbor Terminal will close April 29.

The agreement terminates the 50-year lease that Outer Harbor signed with the port in 2009, and imposes several conditions, among them that Outer Harbor Terminal would continue Oakland vessel and cargo operations through March 31, and that it would pay about $6 million in February and March rent to the port.

The agreement also requires the terminal operator to clean up debris and remove equipment on the 166-acre property, plus pay the port $5.1 million for additional cleanup and repair.

In return, the port would provide free rent in April to ensure the terminal remains open for cargo operations until the shutdown.

“We’re not pleased to see a terminal close, but this agreement helps ensure a smooth transition for our customers,” Port of Oakland Maritime Director John Driscoll said. “All of our attention now is on efficiently migrating their cargo to the other terminals in Oakland.”

Earlier this month, the port developed a continuity plan to move ships and cargo to adjacent terminals when Outer Harbor Terminal closes, and also implemented a $1.5 million transition assistance program to extend gate hours at port terminals.

Seattle Fisheries Combining Management

By Mark Edward Nero

Two Seattle-based companies, Prowler Fisheries and Blue North Fisheries, have reached a combined management agreement that they say is expected to streamline efficiencies and help optimize day-to-day operations for both businesses.

Under the agreement, Blue North Fisheries will manage Prowler Fisheries’ five hook-and-line catcher processors currently operating in the Bering Sea, Aleutian Islands and Gulf of Alaska. In addition, a Blue North subsidiary will market and sell all of the frozen-at-sea products produced by the Prowler vessels starting B Season 2016.

“Our agreement will enhance both companies’ strength and market agility,” said Larry Cotter, Prowler Fisheries managing partner. “We believe the benefits will be far-reaching: vessel crews will see a continued focus on quality and efficiency, an increased presence in Dutch Harbor Alaska and great support from the Seattle Blue North team.”

Further, Cotter said, agreement allows efficiencies to be shared by Blue North and Prowler in everything from insurance, fuel and groceries to repairs, compliance and documentation.

Also part of the agreement, Prowler Fisheries will close the Seattle office of Alaska Longline Co., the operation that currently manages its Prowler vessels. Many of the current Alaska Longline employees are expected to be retained by Blue North.

Cotter will remain the managing partner of Prowler Fisheries.

“This relationship represents a big step in operational innovation in our industry,” said Blue North President and CEO Kenny Down. “This agreement allows for the autonomy of each group while combining management under one roof in a strong structure – stronger than could ever be accomplished separately.”

Bulk Carrier Spills Oil in Columbia River

By Mark Edward Nero

The bulk carrier Nord Auckland spilled roughly 80 gallons of oil in the Columbia River while anchored near the Port of Kalama on Feb. 18, the US Coast Guard and Washington Dept. of Ecology say.

According to the USCG, watchstanders at Coast Guard Sector Columbia River received reports of sheening in the water from National Response Center personnel shortly after 10 am on the date of the incident, then about 1 pm, pollution response experts from the Incident Management Division, based at Coast Guard Marine Safety Unit Portland, Oregon, arrived on scene.

Dept. of Ecology staff later participated in an overflight surveillance and observed a number of sheening trails downriver. Oil was observed near shorelines and near wildlife concentrations, however, no direct observations of oiled wildlife have been reported, according to the USCG.

The 610-foot Singapore-flagged Nord Auckland, which was built in 2010, reportedly released bunker oil due to operator error: the oil was intended to be burned in the incinerator.

The vessel’s owner contracted the spill response and prevention non-profit Clean Rivers Cooperative, which responded with crews on two booming vessels to engage in cleanup operations.

However, after performing a close inspection of the oil observed by air, the boat assessment team determined that the oil was too thin and weathered to be recovered by mechanical collection methods.

The incident is still under investigation, according to Coast Guard Sector Columbia River.

Canadian Shipbuilders Slam Tug Leasing Proposal

By Mark Edward Nero

Canada’s shipbuilding industry is expressing concerns over recent reports that the Canadian government may lease foreign-built tugboats rather than build replacement tugs for the Royal Canadian Navy domestically.

“Canada’s shipbuilding and maritime industry is fully capable of supplying all of Canada’s shipbuilding needs,” Shipbuilding Association of Canada President Peter William Cairns said Feb. 16. “In the current economic climate, when the priority should be to put Canadians back to work, the Canadian government mustn’t use Canadian tax dollars to support foreign shipyards.”

Under the previous federal administration’s National Shipbuilding Procurement Strategy, Canada’s smaller shipyards were supposed to build small vessels, like tugboats. However, last November reports of escalating costs associated with the program resulted in the administration of the country’s newly elected Prime Minister, Justin Trudeau, saying that the entire strategy would be re-evaluated.

“While everyone agrees that major reforms are needed to ensure that the government gets the type and number of ships it needs at a reasonable price and on time, buying foreign-built ships does nothing to help build a strong Canadian maritime industry and puts Canadian jobs at risk,” said Cairns, a former vice admiral.

The Shipbuilding Association of Canada represents Canadian shipyards, marine equipment suppliers, commercial ship operators, ship designers, marine engineering firms and major marine defense industry suppliers and has been the voice of the Canadian marine industry for over 25 years.

Jensen Completes Work on Fishing Vessel Conversion

By Mark Edward Nero

Seattle-based naval architecture and marine engineering company Jensen Maritime has completed engineering services for the conversion of a 170-foot long, 40-foot wide, fishing vessel for Global Seas and Patti Marine Enterprises, the company said Feb. 17.

The vessel, now named Defender, underwent significant conversion to make her the first fish pumping vessel in the Global Seas fleet, including structural and mechanical work.

Because the vessel was being converted from fishing herring and mackerel on the East Coast to fishing pollock on the West Coast, a new fish pumping system was installed on the stern and a new full forward, sheltered fish distribution room was constructed for protection during the fish sorting process.

Both changes, according to Jensen, make the vessel better suited for the operations and weather of her new Alaska fishing assignment.

Structural work included a stern extension, bulbous bow with refurbishing of the thruster, whale back bow cover for the refurbished anchor windlass, an anti-roll tank, aft decks and bulwarks.

Mechanical work included rebuilding the main engines and generators and installation of new propellers, nozzles and a rudder system. Also, electrical systems and wiring received substantial upgrades and reworks by the shipyard along with sandblasting, water blasting, deep cleaning, and re-coating.

Once the work was completed, a renaming ceremony took place to change the vessel from Western Venture to Defender. The vessel was then re-launched and christened. Sea trials are scheduled for March, just prior to the 5,200-mile trek to Seattle for final delivery back to Global Seas in time for B season fishing in the Bering Sea.

Port Metro Vancouver Annual Volumes Steady

By Mark Edward Nero

Newly released 2015 year-end statistics from Canada’s largest seaport, Port Metro Vancouver, show that overall volumes remained steady at 138 million tons of cargo last year, as sectors experiencing declines were offset by others that hit new records.

Data released Feb. 18 show there was a five percent jump in volume for a new record of 3.1 million TEUs. Cargo shipped in containers at the port showed substantial growth due to increased trade with Asia.

Also according to the data, this is the port’s third consecutive year of strong cargo volumes, with new records set in the container, potash, grain and agri-product sectors.

Grain and agri-product exports increased by eight percent over 2014 to 25.1 million metric tons, and potash exports were 8.7 million metric tons, up 15.6 percent from the prior year.

“These strong and consistent cargo volumes through Port Metro Vancouver demonstrate the diversification of the port and the Canadian economy,” Port Metro Vancouver President and CEO Robin Silvester said in a written statement.

The port’s volumes of bulk specialty crops – lentils and pulses – reached 3.5 million metric tons last year, an increase of 20 percent, with growth in exports to India and China.

There was a decline in breakbulk metal imports (construction steel and fabricated components) during the second half of 2015, but with volumes of 1.4 million metric tons, 2015 remained the second highest year for metals on record.

Foreign forest product exports (logs, lumber, woodchips, woodpulp) ended the year at 10.9 million metric tons, a slight decrease from 2014. Coal volumes were down eight percent, mainly due to reduced demand from China and lower thermal coal exports from the United States.

Port Metro Vancouver is North America’s third busiest seaport, after the Port of Los Angeles and Port of Long Beach.