DECEMBER 1, 2016



Port to use reserves to cover budget, tax break

Marissa Luck, November 29, 2016, The Daily

The Port of Longview decided to cut taxes next year even though it will run a budget deficit for a second consecutive year, and port commissioners say further reductions are possible in the future.

Commissioners passed the tax reduction last week when they approved the 2017 budget. The levy will dip to 34 cents per $1,000 of assessed valuation, down from 43 cents in 2016. Port taxes for the owner of a $200,000 home will drop from $86 currently to $68 next year.

The tax cut will reduce port income by about $600,000, contributing to about a third of the projected $1.92 million gap between expenses and revenue in 2017. Port officials said it will make up the difference with reserve funds.

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Shippers fear LA-Long Beach’s green effort will increase handling costs

Bill Mongelluzzo, Senior Editor | Nov 30, 2016 7:21PM EST

Beneficial cargo owners and port users are concerned that the Los Angeles-Long Beach port complex’s next phase of slashing greenhouse emissions, ranging from cleaner truck to electrically-powered cranes, will increase cargo-handling costs at the top gateway for US importers.

Los Angeles-Long Beach, which already enforces the strictest air-quality standards of any port complex in the country, is preparing to raise the bar even higher as it develops the third version of its landmark 2006 Clean Air Action Plan, or CAAP. The 2017 CAAP will further reduce diesel emissions from trucks, cargo-handling equipment and vessels, and slash greenhouse gas emissions.

Beneficial cargo owners and port users told they are apprehensive that the environmental policies the ports say are intended ultimately to achieve zero or near-zero emissions may add costs that could reduce the competitiveness of the Southern California gateway.

Many BCOs, including the largest retailers, have their own environmental action plans that seek to reduce emissions from their supply chains, but they also express concern that each new requirement could lead to higher cargo-handling costs in the largest US port complex.

Indeed, Thomas Jelenic, vice president of the Pacific Merchant Shipping Association, told a Nov. 17 ports-sponsored hearing on the CAAP discussion document, “Transition to zero/near-zero emissions will cost terminals $19 billion to $29 billion.”

Jelenic recognized the air quality improvements already achieved under the CAAP since 2006. Citing numbers released by the ports, he noted that compared to the 2005 baseline year, diesel particulates have been reduced 85 percent, nitrogen oxide emissions 51 percent, and sulfur oxide emissions are approaching near-zero with a 97 percent reduction.

However, the PMSA, which represents shipping lines and terminal operators on the West Coast, also urged the ports to consider the impact of new requirements on their own competitiveness, as well as the financial impact on port users. “Analyze the CAAP for its impact on competitiveness. Develop a competitiveness action plan,” Jelenic said.

Los Angeles and Long Beach in the early 2000s encountered a series of setbacks in securing approval for terminal and infrastructure projects needed to handle the approximately 15 million 20-foot-equivalent units they handle each year. In response to pushback from local communities and political leaders, the ports developed the 2006 CAAP, which set goals for reducing harmful emissions from vessels, harbor craft, cargo-handling equipment, trucks, and trains. They set higher goals for emissions reduction in the 2010 revision, and are now meeting with stakeholders to agree upon the third version of the CAAP, which will be finalized in the spring of 2017.

The success the ports have achieved in reducing health-risk pollutants such as nitrous oxide, sulfur oxide, and diesel particulate matter, or DPM, has also created issues for port users. This is because with each success, Los Angeles and Long Beach raise the standards and accelerate the timetable for achieving additional emissions reductions.

For example, the ports have already exceeded the targets they set for 2023 in reducing SOx and DPM emissions, and are closing in on the 2023 target for NOx emissions, the ports stated in the discussion document.

In addition to seeking further reductions in these health-risk pollutants, the ports in the 2017 CAAP will focus heavily on greenhouse gas emissions, which will require progress toward achieving zero or near-zero emissions from all transportation sources. “The approach outlined in the CAAP is different from previous CAAP efforts because the challenge is different,” the ports stated.

Short-term and long-term goals listed in the discussion document include a zero-emission drayage fleet by 2035, reduced idling and transition to zero-emission cargo-handling equipment by 2030, reduced emissions  from vessels in transit and at berth, expanded use of on-dock rail with a goal of handling 50 percent of imported containers via on-dock rail, expanded use of alternative fuels, and developing the infrastructure for electrification of marine terminal equipment.

The ports are also cooperating with the state in achieving or exceeding the targets set in the California Sustainable Freight Action Plan. That cooperation also extends to the cities of Los Angeles and Long Beach, which have their own sustainable freight programs. The goals for greenhouse gas emissions differ somewhat in each of those plans, so the ports have set their own goal, which is to reduce greenhouse gases from port-related sources to 80 percent below 1990 levels by 2050. By necessity, achieving the goals set by the state, the cities, and the ports requires a relentless drive “to advance zero-emission and low-carbon goods movement,” the ports stated.

Port users say these ambitious goals could place the Southern California ports at a competitive disadvantage versus other ports that seek their business. Jelenic, in his presentation at the ports’ Nov. 17 forum, presented slides noting that container volume in Los Angeles-Long Beach increased 174 percent from 1996 to 2006. Since 2006, when the CAAP was introduced, container volume has dropped 2.6 percent.

However, it should be noted that container volume at all US ports plunged by double-digits during the 2008-09 global economic recession. West Coast ports also lost market share during the 2014-15 longshore contract negotiations and the ensuing labor slowdowns and employer retaliation.

Rick Cameron, managing director of planning and environmental affairs at the Port of Long Beach, said any loss of market share due solely to the 2006 and 2010 CAAPs is impossible to quantify, if it exists at all. Nevertheless, Los Angeles and Long Beach are quite sensitive to any impact their environmental programs will have on port competitiveness. “We do not stick our heads in the sand,” he said.

Cameron emphasized that the CAAP discussion document is just that, a series of suggestions as to what steps could be taken to meet clean-air goals that are open to discussion with all port stakeholders. “This is a much different approach than we took in the past,” he said. The previous two CAAPs set short-term goals and action plans that quickly reduced overall port emissions about 80 percent, Cameron said. Achieving the final 20 percent reduction will require agreeing upon long-term goals — as distant at 2050 — and in some cases will involve the use of technologies that do not exist, or are not yet commercially feasible.

Therefore, during the initial five-year period, the ports seek achievable goals that can be attained with existing technologies. For example, model years 2010 and newer trucks are much cleaner and more efficient than the 2007-model trucks mandated by the first CAAP. The ports are suggesting a phase-out period in which the pre-2010 trucks will be retired. Later, possibly by 2035, zero-emission (electric) technologies may be commercially available. The ports will continue to “check in” every five years with their revisions to the CAAP, and at a future date they may be able to work with the industry for a zero-emission truck fleet, he said.

The PMSA and others say that while they support such goals, the financial impact on their industries will be significant. Cameron agreed. The ports’ strategy has been and will continue to be to seek grants and other subsidies at the state and federal levels to assist the industry. However, in light of last month’s presidential election, the emphasis will most likely have to be at the state level, he said.

In that respect, the ports since 2006 have worked closely with the California Air Resources Board, the South Coast Air Quality Management District and other regulatory agencies to secure funding to help develop and test new technologies, and they will continue to do so. As they seek to achieve the goals contained in the 2017 CAAP, Cameron said, the ports will remind state and local regulatory agencies the ports have been leaders in championing clean-air initiatives for 10 years now. “We’re at the front of the line,” he said.

The ports are also aware of the additional competitive disadvantages they will face when the new administration takes over in January, Cameron said. In one  respect, little will change because California has always had stricter environmental regulations than all other US ports, and in fact the federal government has left it to the states to set their own clean-air regulations for ports.

However, there could be a real danger to California’s ports if the new administration would take unilateral action on international agreements, he said. For example, the administration could refuse to enforce the International Maritime Organization’s rules for the use of cleaner bunker fuels. Those rules will take effect by the end of the decade.

In that case, California would most likely require that vessels calling at its ports burn cleaner fuel, while East and Gulf Coast states may not. Those ports could even use their less-restrictive environment as a marketing tool against Los Angeles-Long Beach. In that event, “the gap would continue to widen” between California’s ports and its competitors, Cameron said.




Maersk Line snaps up Hamburg Sud

Bruce Barnard, December 1, 2016,

Maersk Line Thursday announced it is buying German carrier Hamburg Sud from the Oetker Group and aims to close the deal by the end of 2017.

The acquisition, the subject of speculation for the past few weeks, will cement Maersk’s position as the world’s biggest container shipping line.  Following the takeover, Maersk plans to operate join north-south services with Hamburg Sud, which will increase frequencies, spread the line’s geographical coverage, and cut transit times.

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Class I railroads forced to share intermodal network efficiency metrics

Reynolds Hutchins, November 30, 2016,

Intermodel shippers are poised to get a closer look at just how efficient their freight is being moved, after US federal rail regulators adopted a new rule Wednesday requiring all Class I railroads report detailed weekly performance metrics.

The US Surface Transportation Board, the nation’s top rail regulatory agency, finalized the long-anticipated rule Wednesday.  All Class I railroads in the United States and Canada will now be required to issue weekly, semiannual, and occasional reports on:

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Regulations on new Longview Rail Terminal

Bob Larson, November 30, 2016,

I’m Bob Larson. A proposed rail terminal at the Port of Longview that would boost volume and efficiency of Ag exports is being threatened with overregulation by the Department of Ecology.

Washington Policy Center’s Madi Clark says the proposed regulations included in the environmental impact statement by the DOE are related to the coal that would move through the terminal, but would negatively impact everyone …

MADI CLARK … “That ability for Washington to increase our infrastructure for trade will allow us to increase our infrastructure for trade for all the other industries including agriculture. And because we move so much across our rails that are related to the farm product, we grow in Washington, we ship through Washington, we need facilities like Millennium Bulk Terminal to be considered and to be allowed into Washington State.”

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