NYMAR NEWS - Continued Stories - 2012
May 2012
TRUCKING: Two Accused of Port of NY-NJ Clean-Trucks ScamIndictment alleges insurance certificates were falsified and undercover investigator bribed
Joseph Bonney, Senior Editor | May 10, 2012 4:24PM GMT
The Journal of Commerce Online
A truck dealer and scrapper were indicted on charges of filing false insurance documents for participation in the Port of New York and New Jersey’s clean-trucks program and bribing an undercover investigator. The Manhattan district attorney’s office announced the indictments of Anisora Arnaut, manager of Five Stars Truck Sales in Elizabeth, N.J., and Lisa Devino, comptroller and manager of A. Devino, a Newark scrapping company.
The indictment alleges they submitted false insurance certificates for participation in the port authority’s clean-trucks program, which subsidizes the replacement of old trucks with newer, less-polluting models. Arnaut and Devino also were accused of bribing an undercover investigator posing as a port authority official checking on the documents.
Manhattan District Attorney Cyrus Vance Jr. commended the port authority “for its careful screening and investigation of applicants to the truck replacement program” and said he hopes the case “sends a message to others that this sort of dishonesty will be uncovered and vigorously prosecuted.”
Fred Potter, Teamsters vice president and port division director, has said he supports cleaner trucks but that owner-operators won’t be able to buy and run them without subsidy. After the indictments, he issued a statement saying the case illustrates problems with port trucking’s current business model. “
It’s all the more reason for the port authority to take the same rigor they applied to this singular investigation to develop a real and comprehensive clean-trucks program to upend this industry’s widespread fraud, illegal employment scams, and tax cheating that led to all the dirty trucks and third-world wages in the first place,” Potter said.
Contact Joseph Bonney at jbonney@joc.com. Follow him on Twitter at @JosephBonney
Global Details Bayonne Terminal Expansion
Chris Dupin | May 9th, 2012
American Shipper
Global Container Terminals, has announced plans for a multimillion-dollar expansion to its Global Terminal in Bayonne, N.J. that it said will make it one of the most technologically advanced container facilities in the country.
James J. Devine, president and chief executive officer of Global Container Terminals USA, said the expansion will add 70 acres to Global Terminal's existing 99 acres, and increase annual capacity from about 400,000 to 1 million container lifts (1.7 million TEUs) when completed in 2014.
It will use 20 new rail-mounted gantry cranes in its container yard, which the company said will allow the facility to achieve greater throughput density per acre, while improving safety and security for the longshoremen who work at the facility. Instead of having longshoremen in those yard cranes, they will be operated by longshoremen in a remote location using cameras.
The terminal will also expand its gatehouse from 16 to 29 lanes. Gate operations will use technology such as state-of-the-art line scan optical character recognition (OCR) and imaging technology to speed pre-approved trucks through the entry and exit gates, while providing maximum security and optimal routing inside the terminal.
Specially-designed drive-through checkpoints will capture high resolution digital images of the trucks, chassis and containers as they pass through light-controlled portals at speeds of up to 20 mph.
Global said the images "will allow for verification of the chassis and container numbers via OCR. In addition, the extraordinary resolution of the images will enable skilled labor located safely inside buildings to perform damage inspections."
Global had about 1,800 feet of berthing space, and is completing a 900-foot extension so that it has two full berths. The terminal also has permits from the Army Corps of Engineers to build a third berth.
The company has spent about $100 million on lengthening the berth and expects to spend another $200 million on the expansion of stacks and the gatehouse. The expansion announced today will only take up about 40 acres of the space being added to the terminal, leaving room for future expansion.
Devine said the company is being careful not to overexpand, adding that overcapacity is a problem for the longshore industry in the Port of New York and New Jersey.
Containers would be shuttled between the dock and the new container stacks using low-profile straddle carriers.
The Global Terminal is notable because it is the only major container terminal in the Port of New York and New Jersey other than the Red Hook Terminal in Brooklyn that is located east of the Bayonne Bridge, which currently limits the size of containerships that can call at the port's other major terminals in Newark and Elizabeth, N.J., as well as Global's sister terminal on Staten Island, N.Y. In addition, the channel to the terminal is being deepened to 50 feet.
The Port Authority of New York and New Jersey is planning to raise the roadbed of the Bayonne Bridge from 151 feet above the Kill Van Kull at high tide to 215 feet, but construction on that project is not anticipated to begin until early 2013, pending federal and local environmental reviews.
Devine said the "development project, in addition to the many improvements currently underway, clearly demonstrates a long-term commitment from the Port Authority of New York and New Jersey to protect the port's preeminent position as a critical U.S. gateway for global commerce."
The terminal is one of four that was acquired in 2007 by the Ontario Teachers' Pension Plan from Orient Overseas (International) Ltd. In addition to New York Container Terminal on Staten Island and Global, they own two terminals in Vancouver, British Columbia.
Devine said the new terminal was designed by three former APM Terminal executives who helped design the APMT terminal in Portsmouth, Va. which opened in 2007. They are Richard J. Ceci, Guy Buzzoni, and Pete Giugliano, all of whom now work for Global.
The International Longshoremen's Association has expressed concern about how automation at the expanded terminal would affect its members, even holding a protest in January where officials complained they had not been informed about expansion.
Since then, Devine said his company has had several meetings with the union during which it has explained the expansion plans and met with members of ILA Local 1, which represents checkers at the facility, and was meeting today with members of Local 1588, which represents longshoremen, and Local 1804-1 which represents maintenance workers. A total of about 350 ILA members work at the terminal, and Devine said the expansion will create new jobs.
"The good part is that we are adding capacity, not replacing what is there today and we are adding another facet to the facility," he said.
Devine said he spoke to ILA President Harold Daggett about the project. "I know he has concerns, legitimate concerns, about the loss of jobs, but we are working with him to better define what the real requirements are going to be," he said. "We are looking forward to growing the workforce, not shrinking it.
"We are committed to providing the training and the work opportunity for the longshore community," Devine added.
He said the number of jobs will depend on how good the company is in adding customers. In addition to the expanded marine terminal, Global expects to be awarded the contract for the nearby Greenville Railyard, and Devine said the terminal "would be the domain of the ILA."
There would also be increased opportunity for maintenance workers to work on the new automated rail-mounted gantry cranes that the facility will use, he said.
Devine said the expanded terminal would "come on line precisely in time to help meet the demands of larger vessels transiting the Suez Canal and new wider Panama Canal."
The 10 container stacks will be serviced by 20 new rail mounted ganty cranes and each each container stack is capable of storing 1,665 TEUs, including plugs for refrigerated equipment.
Devine explained that high density is important for Global because of its relatively small footprint. Other terminals in the port have more land, he said. For example, Maher Terminals has 445 acres, APM Terminals has 350 acres and PNCT is expanding from 180 acres to 260 acres.
Removal of Capsized Costa Concordia to Begin in Italy
By Megan Williams
May 9, 2012
Costa Concordia wreck (Photo: Megan Williams)
This month, an American company plans to start a long and difficult salvage project along the coast of Italy. The project is the removal of the capsized cruise ship “Costa Concordia.” It ran aground on Giglio island, off the coast of Tuscany, in January. 32 passengers were killed.
Italian authorities are still investigating the accident and the ship’s captain, who is accused of causing it. Now island residents can’t wait for the massive hulk to be gone.
“On these hills, (there is) honey that is produced, because you can see there are lots of flowers,” said a local tour guide to a goup of journalists recently, as their minivan climbed the main road on the island.
The tour is part of a plan to promote all the positives Giglio has to offer, and to counteract what most of the world now associates with the small Mediterranean island. Mayor Sergio Ortelli says there’s a need to counteract global press coverage of the Costa Concordia disaster. He wants people to associate his island with tourism, not death.
Tourist bookings on Giglio are way down this year, though the mayor concedes it’s tough to tell whether that’s a result of the economic recession in Italy or the wreck. So it’s good news for residents that the American company Titan Salvage will team with Italian contractor Micoperi to tow away the ship in one piece. The two companies will work together to tug the 114,000-ton ship upright onto an underwater platform, where they’ll repair the gash on its side. They’ll then attach two air-filled flotation devices to keep the vessel buoyant as it’s towed to a nearby port. The year-long, $300 million removal project is set to start this month.
Mayor Ortilli says the plans respects the community’s wishes. “It respects the environment,” says Ortilli. “It won’t interfere with tourism, and it will keep the ship whole, so any contaminated liquids will not be spilled.”
Those liquids include paint, cleaners and cooking oil normally used on the cruise ship. They’re still held in plastic and metal containers aboard the ship. Marcello Mossa Verre, the head of Tuscany’s Environmental Protection Agency, is worried that those containers which could begin to degrade in the corrosive sea water. “If they can remove the ship quickly, and by quickly, I mean months or a year at the most,” says Mossa Verre, “then the containers can hold. But they can’t hold indefinitely. We’ve analyzed the plastics and know that if the ship stays there longer, it will be a problem.”
A problem both for the sea around the ship, which teems with dolphins, fish and coral life, and for the local inhabitants, who want to put the Costa Concordia tragedy behind them so their island can once again be associated with pleasure, not tragedy.
Coast Guard Responding to 900-foot Container Ship MSC Idil After Explosion Onboard
May 12th, 2012
Coast Guard News
SAN JUAN, Puerto Rico — The Coast Guard has been responding since Friday to the distressed container ship MSC Idil with 25 people onboard, after the ship suffered a marine casualty following an explosion onboard approximately 60 nautical miles north of San Juan, Puerto Rico.
The crew of the 900-foot Panamanian flagged container ship is all accounted for and have suffered no injuries following the incident that caused the container ship to begin listing and take on water into a fuel tank and cargo compartment.
The crew of the MSC Idil has stabilized the situation and is controlling the ship’s stability using onboard water pumps to manage flooding.
The MSC Idil reported the explosion was most likely caused by welding that was taking place on board the vessel. The Idil also reported they have full control of their cargo and that they have not released any hazardous materials into the environment but are taking actions to mitigate any potential release. The MSC Idil is reported to have 588,000 gallons of fuel oil and 62,000 gallons of diesel on board.
Wathstanders at Coast Guard Sector San Juan were notified of the emergency at approximately 3:42p.m. Friday through Digital Selective Calling followed by Mayday VHF radio transmissions received from the ship. The Coast Guard launched an immediate response sending a 45-foot Response Boat Medium from San Juan and MH-65 helicopters from Boriquen to assess the situation. The responding Coast Guard Search and Rescue units determined no immediate threat was present and were replaced Friday night by the Coast Guard Cutter’s Matinicus and Sapelo, who remain on scene with the MSC Idil ready to provide rescue assistance while monitoring the situation.
In addition, a Customs and Border Patrol maritime patrol aircraft responded to the incident and conducted an aerial assessment Friday night reporting no signs of pollution, while the crew of a Coast Guard Ocean Sentry aircraft from Miami conducted an overflight Saturday morning and also did not detect any signs of pollution.
The Coast Guard is constantly monitoring the condition of the MSC Idil to ensure the safety of the crew and the environment. A commercial salvage team is being transported to the MSC Idil to completely assess the condition of the vessel and determine the best course of action to repair the damage. In addition, pollution response teams are on alert should they be needed.
Coast Guard Cutter’s Sapelo and Matinicus are 110-foot patrol boats homeported in San Juan, Puerto Rico.
April 2012
Scary stuff from the experts, but 'wait and see' is the best advice
by Greg Knowler
Apr 13, 2012, 10:52AM EST
This year will see the weakest Chinese growth rate since 2001, is the grim prediction from HSBC's aptly named chief economist Stephen King.
Container shipping lines, and their bulk carrying counterparts, are being squeezed from both sides of their balance sheets. The top lines are throttled by excess capacity and poor freight rate levels, while the bottom lines are hammered by rising fuel costs.
Rates have begun to improve recently, but whether the upward trend will continue is debatable. As pointed out a couple of days ago the temptation to bring idle capacity back online may prove too hard to resist, pushing rates back down.
Fuel may fall as demand drops off, but its price is driven by so many unconnected factors that it would be insane to base any cost predictions on a decreasing oil price.
Poor capacity management aside, the falling orders from the developed US and Europe markets are having a serious impact on container carriers. Production in China factories fell for the third consecutive quarter between January and March. HSBC reckons only during the depths of the global financial crisis in Q4 2008 and Q1 2009 was the factory output lower. New orders fell in Q1 at the sharpest rate in the past 12 quarters.
So there is not much good news for shipping lines at the moment. However, growth in the global economy is expected to pick up in the second half, and we have even begun to hear the feint murmurings of a "possible peak season" this year.
That would be nice. The container shipping industry may have always been cyclical but at least before the financial crisis every year had a peak and a slack season that one could set the calendar by.
Making any kind of extended prediction in the current environment means raising your reputation up a flagpole and hoping someone salutes. Of course, it could also give you a swift hoist up the petard.
Asia's economies have remained relatively robust through the past few years of economic uncertainty. That is helpful for trade in the region, but for carriers with large vessels looking at long-haul routes, intra-Asia isn't much good.
The US is slowly improving and if transpacific lines can secure decent contract rates for the year, the trade lane is expected to be profitable.
Europe, however, is the great uncertainty. If the sovereign debt crisis in Europe worsens and more countries are forced to the brink, Asia-Europe will be a very quiet trade lane. It also happens to be where most of the mega container ships are headed.
About the best advice that can be gleaned from endless reports and studies by economists, analysts and other highly educated market and industry watchers seems to be: Wait and see.
Mob stench still fouls New York Harbor
By TREY KOVACS & JACK MANN
Last Updated: 12:57 AM, April 12, 2012
Posted: 11:36 PM, April 11, 2012
As he tries to clean house at the bloated Port Authority of New York and New Jersey, new PA chief Pat Foye's thorniest problem will be the docks — where the International Longshoremen Association fights to preserve the old, corrupt ways.
Some of the outrages are outlined in last month's report from the bistate Waterfront Commission, which found the port's financial and management practices to be "dysfunctional." Others have turned up in court testimony.
How bad is it? Consider: Last year, the Port Authority, in accordance with state regulations, asked the ILA for a list of candidates to fill 60 baggage-handler and driver positions. The union's list turned out to have just one non-white on it.
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| Aulisi: Just one of many alleged racketeers in Longshoreman's union. |
That prompted the Waterfront Commission, which is mandated to ensure fair-hiring practices, to ask the ILA to certify that it doesn't discriminate against minorities.
The ILA's answer came last month: It refused to acknowledge the commission's authority to enforce federal employment law.
Later that same day, the commission issued a landmark report that made it clear why the ILA wants to keep its hiring practices secret. Among a vast string of abuses, the report describes several ILA shop stewards as "mob and union favorites" whose six-figure salaries "require little or no work."
How did they manage that? Shop stewards are paid whenever a union member is working on the docks, no matter where the steward is. This lack of accountability allowed ILA steward William Vitale to "work" while vacationing in Florida, California and Aruba.
In another instance, Edward Aulisi, the son of shop steward Vincent Aulisi, was found to be "at home, barbecuing" when sign-in sheets showed he should have been at the port.
The commission, the ILA and his employer were all made aware of his no-show activities, but he wasn't terminated or disciplined because of union "customs and practices."
Edward Aulisi was indicted on federal racketeering charges last year, stemming from phone conversations with Michael "Mikey Cigars" Coppola, a member of the mafia, that were intercepted by the FBI.
Coppola was fleeing a murder investigation at the time. Aulisi briefed him about the investigation and assured him that Vincent Aulisi was continuing to kick back to Coppola, at a better rate than the former president of his local.
Another shop steward is Ralph "Ralphie" Gigante — a nephew of mafia boss Vincent "The Chin" Gigante (a k a "The Oddfather"). In testimony before the Waterfront Commission last year, he admitted under oath that he has never handled a grievance in his career, hadn't read the CBA he was supposed to enforce and didn't know that CBA stood for "collective bargaining agreement."
Ralphie Gigante is still employed by the ILA at the port; he made over $400,000 last year. He testified to the Waterfront Commission that he holds his position "for life."
In fact, at least nine relatives of Vincent Gigante are employed by the ILA — each making a six-figure salary.
The ILA's intransigence is rooted in its desire to protect jobs that technology is rapidly making obsolete. Sixty years ago, 40,000 men swarmed over the ships coming through New York Harbor, unloading cargo bag by bag and crate by crate. Now, fewer than 4,000 workers man massive cranes that move shipping containers directly onto waiting trucks.
As ILA President Harold Daggett said this month, "We know technology is coming and we know we can't stop it forever, but we will not be deterred from protecting our work and protecting our jurisdiction."
But if "protecting our work" means preserving waste and fraud and "protecting our jurisdiction" means safeguarding corruption and criminality, America's ports would be better off without the ILA.
March 2012
- March 15th, 2012
- Billionaires Buy Gasoline Ships as Fuel Cargoes Expand: Freight
- March 15th, 2012
- Disney Fantasy Christening: Mariah Carey Serves As Ship's Fairy Godmother
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from The Huffington Post
Disney Cruise Line's newest ship, the Fantasy, was christened on the Hudson River in New York City Thursday night.
Ample amounts of champagne flowed as guests toured the ship's atrium, which still had that "new ship smell," and guests were treated to a mini-Disney concert inside the ship's theater MCed by "How I Met Your Mother" star Neil Patrick Harris. The ode to all things Disney included songs by the ship's cast, a standup routine by Jerry Seinfeld (who shrewdly said in his routine: "Oh my god, I'm on a boat. Finally, I get to see what the end of my career will be like."), and songs by Tony Award-winning actress Heather Headley.
Mayor Michael Bloomberg waltzed into the ship's theater during the show to discuss with NPH how thrilled he was that a cruise ship docked in NYC for a few days -- and to talk about how much New York loves Disney.
Celebs, mostly with Disney ties, pranced around the ship, including a super skinny Erin Andrews, Ty Pennington, Tim Gunn, Alan Cummings and, um, Nancy Grace.
But the prize of the night went to Mariah Carey, who, along with hubby Nick Cannon, served as Fairy Godmother of the ship. Carey was sure to mention that she was proud to serve as the godmother of a ship that's launching from her hometown, New York, and just in time to bring her kids.
"I christen thee Disney Fantasy. May God bless this ship and all who sail on it," Carey said next to Disney CEO Bob Iger, Walt Disney Parks and Resorts Chairman Tom Staggs, and a sailor-suit bedecked Mickey Mouse as images of Nick Cannon and Minnie Mouse breaking a bottle of champagne outside streamed into the atrium.
The $1 billion, 4,000 passenger sister ship of the Disney Dream, which launched last year, will start sailing March 31st and be based in Port Canaveral, Florida. The gilded ship -- complete with touches of Mickey and friends pretty much everywhere -- has 14 decks, a water coaster dubbed "AquaDuck" (get it?!) and pictures in the hallways that become animated as guests pass, the AP reports.
In an interview before the festivities, Disney CEO Bob Iger told The Huffington Post that his company's cruise line was created in the late 1990s to "extend the ethic of the company on land into the sea." Disney now has four ships, including the Fantasy.
"We have recruited and trained a great cast, many of whom have sailed with us on our other ships," Iger said.
And yet the Disney CEO acknowledged that the economy could be an issue for getting passengers on-board the billion-dollar boat, particularly in light of recent cruise industry woes.
"You just hope that the economy provides the opportunity [for people to cruise]," Iger said. Of recent industry turmoils with the Costa Concordia and, most recently, the Costa Allegra, Iger commented, "The whole industry suffered from a reduction in call volume when the accident occurred in Italy. I haven't seen numbers in recent days since [the Allegra], but we've recovered nicely. But call volume did decrease when the accident occurred."
Seacor swoops on Superior Energy liftboat fleet
Seacor Marine LLC, a subsidiary of Seacor Holdings Inc. (NYSE: CKH), has reached an agreement with Superior Energy Services LLC. to purchase 18 liftboats for $134 million, plus working capital. The transaction is expected to close by the end of March 2012, subject to regulatory approvals. All of the liftboats are currently located in the U.S. Gulf of Mexico.
Based on data on the Seacor Marine and Superior Energy Services web sites, the purchase appears to take Seacor Marine into the liftboat market for the first time and looks to include all of the vessels in the Superior Energy liftboat fleet.
February 2012
- February 16th, 2012
- US doubts on 100% screening of containers
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By Pete Goldin
Scanning goals have not proved feasible and July deadline cannot be met, says government security chief
US Customs and Border Patrol (CBP) and Department of Homeland Security (DHS) have not shown they can meet 100% screening of cargo containers, as required by the 9/11 Act, according to Stephen Caldwell Director, Homeland Security and Justice for the US Government Accountability Office (GAO).
"Uncertainty persists over how DHS and CBP will fulfill the mandate for 100% scanning, given that the feasibility remains unproven in light of the challenges CBP has faced implementing a pilot programmme," Caldwell said in a statement to the House Subcommittee on Border and Maritime Security.
In 2006, the CBP, Department of State and Department of Energy launched the Secure Freight Initiative (SFI), a pilot programme to determine the feasibility of 100% scanning.
However, participating ports were unable to achieve 100% scanning, and the CBP has since reduced the SFI scope from six ports to one.
Challenges encountered at the ports included safety concerns, logistical problems with containers transferred from rail or other vessels, scanning equipment breakdowns and poor-quality scan images.
Caldwell added: "Furthermore, since the 9/11 Act did not specify who is to conduct the container scans, or who is to pay for scanning equipment or operations and maintenance, questions persist regarding who will bear the costs of scanning," Caldwell added.
Caldwell testified that in 2009, the GAO recommended that the CBP perform an assessment to determine if 100% scanning was feasible, as well as to identify the best way to achieve it, or present acceptable alternatives.
"To date, the CBP has not conducted such an assessment, or identified alternatives to 100% scanning," he said.
"CBP officials told us in August 2011 that the agency's position was that a risk-based approach to global supply chain security was a more feasible and responsible approach than 100% scanning," he added.
Caldwell also revealed that the DHS had acknowledged it would not be able to meet the 9/11 Act's July 2012 deadline for implementing 100% scanning, and it expects to grant a blanket extension to all foreign ports to July 2014. - February 16th, 2012
- ILA Hits NY-NJ Terminals With Mass Grievances
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Joseph Bonney, Senior Editor
The Journal of Commerce OnlineAllegations of more than 100 safety violations follows Feb. 2 work disruption
An International Longshoremen's Association local headed by one of ILA President Harold Daggett's sons has bombarded four New Jersey container terminals with grievances alleging more than 300 safety violations.
The grievances by Local 1804-1 came a week after a dispute over crane safety interrupted work for several hours at Global Terminal, a Bayonne, N.J., container terminal whose plans for labor-saving technology have drawn ILA protests.
The Global incident followed an ILA safety inspector's claim of hazards at the terminal's six dockside cranes. James Devine, chief executive of Global's parent company, GCT USA, said the ILA inspector was "unqualified" and an Occupational Health and Safety Administration inspector later declared the cranes "absolutely safe for operation."
Video: ILA's Knott Discusses Proposed Automation at NY-NJ Terminal
Global filed a grievance against the ILA after the incident, which delayed a Hapag-Lloyd ship for several hours and generated added costs for night-shift work.The ILA grievances this week were submitted to the New York Shipping Association on behalf of Local 1804-1, the maintenance-repair local formerly headed by Harold Daggett and now led by Dennis Daggett, who previously was the international union's safety director.
Dennis Daggett is also president of the ILA's Atlantic Coast District.
The grievances alleged issues ranging from excessive truck speeds to faded pavement paint stripes at Global, Maher Terminals, APM Terminals and Port Newark Container Terminal. The port's other major terminal, New York Container Terminal on Staten Island, is outside Local 1804-1's jurisdiction.
Dennis Daggett said the grievances reflect the union's renewed emphasis on safety following the deaths of 15 ILA dockworkers in accidents during the last four years. He said the grievances were not filed in retaliation for the Global dispute, and that the timing was coincidental. "These are two separate issues," Dennis Daggett said.
Allegations of more than 100 safety violations follows Feb. 2 work disruption
The mass filing of grievances was highly unusual, said Joseph Curto, president of the New York Shipping Association. "We usually don't receive alleged violations in this quantity or this manner," he said.
Curto encouraged the ILA and terminals to address the issues through normal grievance procedures starting with direct employers. "I believe the employers and the union will follow the contract procedures, and many of these things can be corrected fairly easily," he said.
The ILA and United States Maritime Alliance are preparing to open negotiations this spring on a coast-wide master contract. The current agreement expires Sept. 30.
Harold Daggett said this week that the ILA will seek guaranteed minimum staffing and protection against job cuts from labor-saving technology. "We know technology is coming and we know we can't stop it forever, but we will not be deterred from protecting our work and our jurisdiction," he said.
- February 16th, 2012
- Two Governors' Sucker Punches at the Port Authority
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By Michael Powell
"Failure!"
"Poor management!"
"Reform is long overdue."Our gubernatorial bruise brothers, Chris Christie of New Jersey and Andrew M. Cuomo of New York, howled denunciation of the Port Authority this week, describing it as encrusted with dysfunction.
They took the narrative heard on the 10th anniversary of Sept. 11—that the authority's director, Christopher O. Ward, had found a 16-acre site lost in a swamp of political infighting and set memorial waterfalls to flowing and towers to rising—and forcibly upended it.
The governors had ordered an audit of the authority, released this week, which found that the cost of construction had grown, in the governors' words, "a staggering" $3.8 billion. "Poor management obscured full awareness of the billions of dollars in exposure," the audit said.
All of which sounded spectacular on the evening news: two tough-talking governors take on the region's vast transportation agency, slash costs and budgets, and attribute problems and fallout to past management. But little about this political bill of indictment seemed properly hinged to reality.
Let's consider the cost. Mr. Ward, who left the agency in the fall, took the helm of the Port Authority of New York and New Jersey in 2008, after years of rule by the inert Gov. George E. Pataki. Mr. Ward sent a long memo to Gov. David A. Paterson. "The schedule and cost estimates of the rebuilding effort that have been communicated to the public are not realistic," he wrote, adding that the site "faces significant delays and cost overruns."
The Port Authority could keep costs down and preside over a gaping wound in the heart of Manhattan. Or it could blast through deadlocks and accept the costs that go with that.
Mr. Ward noted the immense logistical challenges, not least building five skyscrapers with as much Class A office space as in all of Atlanta, all while keeping subways and traffic running.
As the auditors acknowledge, the $3.8 billion rise in costs does not owe to Tammany Hall-style cost overruns. The authority's portion of those increased costs is $1.7 billion, and much of that reflects money owed by other agencies.
The authority's officials last week appeared to stray from the message put down by their gubernatorial patrons. Vice Chairman Scott Rechler, a Cuomo appointee, noted that you cannot accurately compare the earlier estimate with the current one, which is larded with questionable costs. "The $11 billion in 2008 is an apple and $14.8 billion is an orange," Mr. Rechler said.
The authority chairman, David Samson, a Christie appointee, also declined to plant a tomahawk in Mr. Ward's forehead. "The costs were inevitable," he said, "once the decision was made in 2008 that we'd be open for the 10th anniversary."
In fact, there has been for some time a scandal-foreordained feel to this audit. Mr. Ward is widely hailed as a public infrastructure visionary with an independent mind. That trait can be a character failing in politics.
So in October, a Cuomo official appeared to whisper to the New York Post columnist Fredric U. Dicker that the audit had found that Mr. Ward engaged in "extravagant overspending."
This was curious, as the auditing firm had only just commenced its work.
Mr. Christie's timing, too, was not ideal. Nine days earlier, The Record of Bergen reported that the governor had larded the authority with 50 patronage appointees, including former state Republican committeemen and the author of a self-help weight loss book who happened to be a childhood buddy of Bill Baroni, Mr. Christie's appointee as the No. 2 at the authority. So it goes.
Amid the political bellowing, only one fellow remained steadfast in support of Mr. Ward: Mayor Michael R. Bloomberg. He had watched as Mr. Ward transformed ground zero into an elegant memorial site that draws millions of tourists. And the grand tower, improbably for anyone whose memory stretches back even a half-decade, will house an array of upscale tenants.
With characteristic impatience, the mayor more or less shrugged off the audit.
"The bottom line is, this whole site is perhaps the most complex construction project in the history of the world, legally, politically, engineering-wise," he said. "Every politician wanted to get involved. We had, I think, five different governors of New Jersey, four different governors for New York."
Or put another way: Who are they kidding?
- February 16th, 2012
- With Tips From Whistle-Blowers, More Hands on Deck in Pollution Cases
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By Theo Emery
Chief Warrant Officer William D. Dodson was conducting a Coast Guard inspection in Baltimore when he got a note from a whistle-blower, whose reward could be as much as $925,000. Photo by Monica Lopossay for The New York Times BALTIMORE — Nothing seemed amiss aboard the Maltese cargo ship Aquarosa when Chief Warrant Officer William D. Dodson and his Coast Guard inspection team climbed the gangway. It was a crisp Sunday morning, the day after the new vessel had berthed to load scrap metal in its first visit to the United States.
The Rev. Mary H. T. Davisson, who runs a port ministry in Baltimore, received an incriminating video from a member of a cargo crew. The ship's owners agreed to pay $2.4 million in fines. Photo by Monica Lopossay for The New York Times The Rev. Mary H. T. Davisson, who runs a port ministry in Baltimore, received an incriminating video from a member of a cargo crew. The ship's owners agreed to pay $2.4 million in fines.
That sense of normalcy evaporated after the chief engineer led the way below for tests of the rudder and fire pump. There, a crew member named Salvador Lopez nervously tugged a note from his pocket and thrust it toward Mr. Dodson. He had something to share, the note read. A secret.
Mr. Lopez's secret was that the ship had been illegally dumping oily water and sludge overboard, and he had proof: hundreds of photographs stored on his phone. Partly because of Mr. Lopez's evidence, two companies that owned and operated the ship pleaded guilty last month to obstruction of justice and other charges and agreed to pay $1.2 million each in penalties and fines.
And for his sleuthing, Mr. Lopez stands to collect as much as $925,000.
Seafaring whistle-blowers, frequently seeking a financial bounty, have become one of prosecutors' most potent weapons against maritime polluters, providing the backbone for a growing number of cases the federal government has pursued in Baltimore and other port cities across the country.
"If the third engineer had not come to me with the note and said this was going on, we wouldn't have expanded the inspection, and most likely the boat would have left the port of Baltimore without our knowledge of what was going on," Mr. Dodson said in an interview.
As such cases increase, so have objections from maritime companies. In the Aquarosa case, a lawyer for the ship's management company, Efploia Shipping, said the seaman had undermined compliance with maritime environmental laws and should have reported the violation sooner.
"They can snap their pictures, take their notes and wait until they get to a port like Baltimore and get a payday," the lawyer, Gregory F. Linsin, said in court.
The judge in the case has not yet ruled on whether to reward Mr. Lopez, but the argument holds little water with environmentalists. Jacqueline Savitz, senior scientist at the conservation group Oceana, said that without whistle-blowers, it would be nearly impossible to prosecute scofflaws.
"The kinds of conditions that these seamen are operating in don't allow them to just tattletale on their bosses without some kind of safety net," she said.
While no one knows exactly how much is dumped, estimates suggest that the total each year dwarfs many major spills that get far more attention. One analysis put the annual amount at eight times the size of the 1989 Exxon Valdez spill, which emptied an estimated 11 million gallons of crude oil into Alaska's Prince William Sound.
Most of the cases involve illegal dumping of sludge and oily bilge water, the residue from the engines. International conventions that the United States adopted in 1980 require ships to separate out oil, then incinerate it or store it until reaching port. The law also forbids dumping plastics.
To skirt that requirement and save money, unscrupulous crews hook up hoses, known as "magic pipes," that bypass the separation equipment, then pump the oil overboard. The crews then fudge the logs, and the prosecutions often result from the falsified record-keeping rather than the dumping. One estimate is that 10 percent to 15 percent of the roughly 50,000 oceangoing commercial ships worldwide illegally dump oil and sludge.
Richard A. Udell, who frequently prosecutes magic pipe cases for the Department of Justice, said in court that ocean dumping was "virtually an epidemic," and that in many cases, the government could not go after polluters without people like Mr. Lopez.
In 1987, a whistle-blower provision was added to United States law, allowing seamen who report these crimes to collect up to half of the criminal fines imposed. Those bounties can reach as much as a million dollars.
As word spreads though educational campaigns, word of mouth and sensational stories of sudden riches, seafarers are coming forward to report the dumping and perhaps collect a bounty. There have been roughly 30 such cases since the early 1990s, all but four of them since 2002, according to a government filing in the Aquarosa case. The earlier cases tended to involve cruise ship lines.
Clay Maitland, founding chairman of the industry-financed North American Marine Environment Protection Association, said he was torn about the whistle-blower awards.
"The good part about having a whistle-blower is that you've got a witness," he said. "The bad part is that it isn't always possible to determine if that whistle-blower is telling the truth."The path to a reward is neither quick nor guaranteed. The whistle-blowers often wait for months, isolated and bored, in motel rooms near their detained ships, a source of criticism from seafarers' advocates. Other witnesses and defendants similarly wait in limbo, which is the subject of a recent federal lawsuit from ship owners.
Mr. Lopez, who returned to the Philippines in December, said in an Internet interview that he had known a bounty was possible, but that his main concern had been preventing dumping, which he had also witnessed on other ships. He could not have reported the crimes anywhere but in the United States, he said, and certainly not when he was at sea.
"If others saw me, maybe I would be injured," he said. "Or they would kill me or send me home. It's dangerous."It is not always a government official who intercepts the whistle-blower. In May 2010, that person was the Rev. Mary H. T. Davisson, executive director of the Baltimore International Seafarers' Center, a port ministry that assists and counsels docked ship crews.
A crew member on the Capitola, which had docked to pick up coal, handed her a computer flash drive containing a video of a magic pipe. Ms. Davisson gave the drive to the Coast Guard. In early 2011, the Liberian company that owned the ship agreed to pay $2.4 million in fines, although in that case, the whistle-blower did not receive an award.
Ms. Davisson, 59, has been asked to do many things in her years as a chaplain. A Russian seafarer once asked her where to buy violin strings.
But she had never had to handle evidence in a whistle-blower case. "I don't think I was expecting that," she said.
- February 16th, 2012
- Man about Town—"The American Wing: Flatboats and flights of fancy"
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By Barry D. Parker for NYMAR
America's maritime tradition is celebrated in the American Wing, which has now re-opened, at the Metropolitan Museum of Art- amidships on the "Museum Mile," at 82nd Street and Fifth Avenue. Following a lengthy renovation, which reportedly cost the equivalent of multiple modern second-hand VLCCs, rooms full of iconic artworks are on display. Students of nautical history will need to be reminded that the vessels are often the backdrop to something else, a nice focal point, or maybe just a background object on a canvas conveying a broader theme. While the U.S.'s bout with owning occurs during sporadic economic booms (punctuated by decades-long Kondratieff style dips), the infrastructure and service aspects looms large throughout the cycles. So, as the history of America is revealed in the artwork—the water, and the vessels, though often in the background, are omnipresent. These are not ship portraits- but rather views of the bigger picture where maritime activity sometimes flourished.The signature painting of the expansive space, which is built around a huge airy and light-filled courtyard, is one that's actually an embellishment of reality, as boat experts will tell you. Emanuel Gottieb Leutze's very famous "Washington Crossing the Delaware"- which provided inspiration to war-weary New Yorkers when it was unveiled, during the Civil War. The 21' x 12' painting depicts the General on what's called a Durham boat, basically a floating hull (gearless) used to haul quarry stones across the river. Maritime historians suggest that George Washington might possibly have crossed the river, on Christmas Day, 1776—the day prior to the Battle of Trenton—on a flatboat, which is the 1776 equivalent of that humblest of craft- the deck-barge. The battle proved to be a big morale booster during that cold winter—a solid victory for Washington's rag-tag Colonials—who had been chased out of New Jersey by the British (with help from German mercenaries) and back through Pennsylvania. Fast-forward to the 1840's; George Caleb Bingham's "Fur Traders Descending the Missouri", on display a few rooms away, captures the importance of the rivers in early commerce; the railroads and clippers came ten years later.
Enough with the history lesson; the handful of relevant galleries (among two dozen in the American Wing) contain the finest examples mid 1800's nauticalia—but always in its broader context. In the same room where the Delaware crossing is hung- the focus on History and Landscape reveals great scenes reflecting the movement westward. This was the time of Bierstadt (not a blue water guy) and Frederic Edwin Church, resplendent in their sun-drenched glory. An adjacent room looks at the "Late Hudson River School," illuminating the Luminist oeuvre. Martin Johnson Heade stands out- with his well known scene of an approaching storm over Narragansett Bay (sadly, without tankers or racing boats).
The artwork in these galleries is largely product of the 1850's—the ultimate shipping boom years—the top of the cycle, and the subsequent decades. However, the artwork is naturalistic- no Gold Rush, no Civil War, no Transcontinental Railroad. Fitz Henry Lane's view across Gloucester Harbor (with a big clipper in the background) offers an eerie and preternatural calm, just as John Frederick Kensett's views across Long Island Sound from Darien, Connecticut (with a coastal skipjack lurking in the shadows) conveys smooth waters. Around the corner, another Kensett work, "The Sea," does show some breakers on a rocky shore (perhaps from eastern Connecticut. Again, peering closely into the murky background does indeed reveal some coastwise traffic.
There is a Greek influence hanging in the same gallery with the Leutze's seminal work. Painted in 1877, "The Aegean Sea" by Frederic Edwin Church (nearby to his depiction the Parthenon, also on display) shows an elemental fury—representing the steeping brew of conflict in the Eastern Mediterranean. This is powerful and Turneresque—including a rainbow-infused sky (a Church signature). There is a vessel, but it's cloaked in too much mist to be recognizable.Food is a nice salve for all this serious deconstruction of art. In the American Wing Café, abutting the big atrium-style courtyard, the food is strictly American—from the Pennsylvania Dutch style soup in the starters section, to the Ben & Jerry's Vermont ice cream teed up for dessert. In between, try the roasted salmon, cooked on a cedar plank. Did anyone say "flatboat"?
January 2012
- January 20, 2012
- Carnival Ship Captain Under House Arrest as Death Toll Rises
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By Andrew Davis and Chiara Vasarri
BloombergThe captain of a Carnival Corp. ship that ran aground off Italy was placed under house arrest hours after audio emerged of a Coast Guard official ordering him to return to his damaged ship and oversee rescue efforts.
Captain Francesco Schettino, who may face criminal charges including manslaughter, was put under house arrest late yesterday by a judge in Grosseto, Italy, his lawyer, Bruno Leporatti, told reporters in remarks broadcast on Sky TG24 television. The ruling came hours after divers discovered five more bodies on the stricken ship, bringing the death toll to 11. Twenty-eight people are missing, according to Italy’s Civil Protection agency.
Judge Valeria Montesarchio took three hours of testimony from Schettino as TV news programs and websites broadcast audio of phone conversations on Jan. 13 between Schettino and a senior Coast Guard official after the Costa Concordia struck rocks off the island of Giglio and tilted on its side with 4,200 people on board.
Coast Guard Commander Gregorio Maria De Falco repeatedly ordered Schettino to get back on the cruise liner, at times swearing at the captain. Schettino initially told the official that only 40 people remained on the ship at a time when hundreds were still trying to evacuate. The ship began listing, complicating efforts to lower lifeboats and forcing passengers to move across the exposed hull to reach rescue boats.
Rope Ladders
“There are people climbing down a rope ladder on the bow of the ship, take a lifeboat and climb up that ladder and climb up on to the ship and tell me how many people are there,” De Falco, speaking from the city of Livorno on the Italian mainland, told Schettino, according to audio posted yesterday on the website of newspaper Corriere della Sera. “Tell me if there are women, children and people in need.”
When the captain hesitated to reply, De Falco said there were fatalities and again ordered him to return. “You realize it’s dark and we can’t see anything?” Schettino said, adding that “other rescue workers” were now in place.
“You’ve been telling me that for an hour, now get back on board!” the Coast Guard official shouted. A Coast Guard spokesman confirmed that the audio is authentic.
Flight Risk
Schettino didn’t return and took a taxi on Giglio before being arrested, media including Sky TG24 reported. Prosecutor Francesco Verusio had requested that Schettino be held in jail because of the risk he might flee, rather than be permitted to return to his home in Sorrento, Italy.
Schettino told the judge he made a navigational error that led to the accident, daily la Repubblica reported today, citing testimony. Schettino said he knew the waters in the area but ordered the ship to turn too late, according to the Italian newspaper. He said he brought the ship close to Giglio as a salute to a colleague, with whom he was speaking on the phone at the time, Repubblica reported.
Leporatti wasn’t immediately available for comment today on the Repubblica report and didn’t respond to an e-mail seeking confirmation. He will hold a press conference today in Grosseto, according to his office. Schettino is “shattered, dismayed, saddened for the loss of lives and strongly disturbed,” Leporatti said in a statement Jan. 16.
Rescue divers discovered five more bodies yesterday after setting off small explosives to allow them to reach more remote parts of the ship. Authorities yesterday for the first time released a list of those still unaccounted for.
Carnival shares fell 14 percent in New York yesterday to $29.60, the biggest decline since the first day of trading after the Sept. 11 terrorist attacks in 2001.
‘Deeply Saddened’
Carnival Chairman and Chief Executive Officer Micky Arison, said he was “deeply saddened” by the news of the additional deaths.
“Our immediate priority continues to be supporting rescue and recovery efforts and looking after our guests and crew members, along with securing the vessel to ensure there is no environmental impact,” Arison said in an e-mailed statement late yesterday.
“My senior management team and I have been in continuous contact with the Costa executive team in Italy and we have our senior-level technical experts on the ground to provide additional support for this tragic and highly unusual incident.”
First Accident
Schettino, who joined the company in 2002, was promoted to captain in 2006 and never had a prior accident, according to Pier Luigi Foschi, chairman of Carnival’s Italian unit, Costa Crociere SpA.
The Costa Concordia ran aground about 9:45 p.m. on Jan. 13 within hours of leaving a port near Rome to continue a Mediterranean cruise. The ship’s route was set electronically before it left, and the cruise liner shouldn’t have been so close to Giglio, Foschi said at a press conference in Genoa on Jan. 16.
“The fact that the ship strayed from that course can only be due to a maneuver that was not approved, not authorized nor communicated to Costa Crociere by the captain of the ship,” Foschi said.
Foschi visited the island yesterday and said the accident didn’t reflect any safety issues with Costa ships.
“Our ships are safe just as they were on Friday,” he said from Giglio, where the Concordia juts out of the water just off the edge of the island. “It has nothing to do with security at sea nor does it have anything to do with our policy, training or the quality of our personnel.”
Electrical Problem
Passengers were initially told after the collision that the ship had an electrical problem and there was nothing to be concerned about. The order to abandon ship wasn’t given for more than an hour after the accident, when the ship was beginning to list, making it impossible to lower many of the lifeboats, passengers on the cruise liner said. Video released Jan. 16 of the rescue operation showed hundreds of passengers clamoring along the side of the ship to reach ladders that led down to water, where they were loaded onto rescue boats.
Giglio, an island of 1,500 inhabitants in winter who survive on fishing and tourism, is located about 14 miles from the Tuscan coast. Giglio lies within the “Santuario dei Cetacei,” an area of roughly 33,784 square kilometers that in 1999 was declared by the governments of France, Italy and Monaco a sanctuary for marine mammals such as dolphins and whales.
Salvage Operation
Smit Salvage, a unit of Royal Boskalis Westminster NV, contracted by Costa Crociere to remove the ship’s 2,400 tons of oil, is ready to begin inspecting the vessel as soon as today. The company will need two to four weeks to take the fuel off the ship, executives said on a conference call yesterday.
“The vessel is stable and we feel confident that removal can be done in a fairly rapid way,” Kees van Essen, Smit’s manager of operations, said during the call. There have been no leaks so far and salvage operations don’t increase the chance of leaks, he said.
Weather conditions in the area, which have been calm since the accident, are forecast to deteriorate beginning tomorrow.
Italian Environment Minister Corrado Clini said yesterday that the pumping of the fuel won’t begin until the search-and- rescue operation is completed. Clini, who said this week he was concerned about the threat of an environmental disaster, will speak in parliament today at 4 p.m. about the salvage operation.
- January 20, 2012
- N.Y.-N.J. Port Will Sell $400M
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By Paul Burton
The Port Authority of New York and New Jersey plans to auction $400 million of 171st Series consolidated bonds to support capital projects.
The deal is expected to be the largest competitive transaction for the week.
The bond maturities will run from 2030 to 2042.Standard & Poor’s and Fitch Ratings assign double-A minus ratings to the bonds, while Moody’s Investors Service rates them Aa2.
Moody’s assigned a negative outlook last year, based on stagnant growth in the New York City area and risk from development of the World Trade Center reconstruction in lower Manhattan. The move prompted concern among authority officials about access to the capital markets.
The other agencies’ outlooks are stable.
Standard & Poor’s based its rating on the authority’s diverse operations, strong liquidity, and expectation that debt service will remain strong.
“We could lower the ratings if the authority’s liquidity and financial margins erode considerably. We do not expect to raise the ratings during the next two years due to the authority’s significant additional debt needs,” analyst Joseph Pezzimenti said.
The 90-year-old bi-state agency, which last month approved a preliminary $7.1 billion combined operating and capital budget for fiscal 2012, has come under fire for what critics say is overspending on the new World Trade Center.
The authority has about $13 billion in outstanding debt. It takes in roughly $3.5 billion in annual revenues generated from the George Washington, Goethals, Bayonne and Outerbridge Crossing bridges, the Lincoln and Holland tunnels, New York City’s three primary airports, the Port Authority Trans-Hudson light rail and train systems to New Jersey and the Port Authority Bus Terminal in Manhattan.
Janney Capital Markets called the authority “the epitome of an essential-service provider,” citing the near-monopoly position it enjoys, along with the Metropolitan Transportation Authority, which runs New York City’s subway system and most of the region’s commuter rail.
Capital projects include $2.7 billion for upkeep, which includes replacing the cables on the George Washington Bridge and renovating the Lincoln Tunnel helix, $1 billion to replace the Goethals Bridge, and $545 million to enhance bus service operations at its namesake bus terminal at 42nd Street.
In August, the authority’s board of commissioners approved a series of toll and fare increases. Moody’s had cited economic stagnation in the service area, and the port agency’s exposure to the stress of two state governments. In addition, the increased debt of the authority’s capital plan will add further stress, Moody’s said.
“People will be watching what will happen with the new tolls, regarding the revenue being predicted, and what the Port Authority will do with the money,” said Jameson Doig, a Dartmouth College business professor and author of a book about the authority, “Empire on the Hudson.”
While approving the fare hikes in August, governors Andrew Cuomo of New York and Chris Christie of New Jersey insisted on an audit of the agency’s finances.
Cuomo selection Patrick Foye, who took over as executive director in October, has two governors tugging at him. Christie was recently quoted as saying he would like to “get his arms around” the agency.
According to Doig, pushback from the toll increases, which the American Automobile Association is challenging in court, and revelations of hidden employee perks, such as lifetime free EZ-Pass crossings, have given political leaders ammunition. “That’s opened the window,” Doig said.
- January 20, 2012
- Oiling the Wheels
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By N.L. | CHICAGO
The head of BP spoke at the Economic Club of Chicago yesterday. Photo credit: AFP ONE might have expected a humble presentation from Bob Dudley, head of BP, who spoke at the Economic Club of Chicago yesterday. In 2010, his company was responsible for a disaster in the Gulf of Mexico when an explosion on the Deepwater Horizon rig killed 11 men, injured 17 others, and released more oil into the ocean than any other accident in the history of the industry. But it was not to be that way. Instead, and reading between the lines, Mr Dudley had an interesting new year’s message for a country in the middle of hard economic times: you need us as much as we need you.
In the middle of 2010, BP’s reputation was in tatters. And let’s face it, 5m barrels of crude oil spilling into the Gulf were bound to upset the natives. But as the crisis unfolded, politicians made things much more difficult for BP by publicly tearing strips off the company. Eager to stay in tune with the nation, and cast off an image of impotence, the administration said it would keep its boot on the throat of BP, and the president even declared he was ready to “kick ass.”
Not to be left out, Nancy Pelosi, the then-speaker of the House, instructed BP that it was not to pay a dividend until all claims tied to the spill were settled and Ken Salazar, the interior secretary, suggested that the government would hold BP accountable not just for the harm directly done by the spill but for all the jobs lost in the oil business thanks to the freeze on oil drilling in deep water that he felt necessary to impose.
While the outrage may have been genuine, and frankly justified given BP’s miserable safety record in America, the problem it created was that less than two months after the accident, $89 billion had been wiped off BP’s value—far in excess of all but the direst forecasts of the costs of the spill. (Besides the $20 billion spent on the response, BP has also spent a similar amount on a trust to ensure that funds will be available for environmental and economic restoration).
Given that almost a third of BP’s employees are in America, the xenophobic political kicking was a little over the top. But what is done, is done. Now BP seems to want to set out its stall. And it is this: since 2006, BP has invested more than $50 billion in energy development in America—more than it invests in any other country. It directly employs 23,000 people, and if one adds in the jobs in its US supply chain, nearly a quarter of a million Americans depend on BP for employment. Moreover, American oil and gas jobs are an area of strength in the economy, having increased by 80% since 2003—accounting for one in five net private-sector jobs created since then.
This may not impress those living close to the Gulf of Mexico. But the deeper point is that BP believes that even 20 years from now 87% of America's transportation fuel will be oil-based, and finding that oil will mean drilling in new frontiers: the Arctic, Canadian oil sands and, naturally, deep water. More deep-water drilling will need a lot of political goodwill, but in return, Mr Dudley says, offers a lot more high-tech jobs. Not something that is easily sniffed at in these times. Given that safety has been revamped across the entire organisation since the accident, the choice is now simple. If America wants BP to generate more wealth, it needs to hate BP a little less.
- January 20, 2012
- Man about Town—Barry Parker Gives Us Art in New York Meatballs and Moussaka
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By Barry D. Parker for NYMAR
In a few weeks, the Norwegian American and Hellenic American Chambers of Commerce will be holding their 18th annual shipping conference. In a sign of the times, the theme of this year’s event, to be held at the Waldorf Astoria Hotel, is “Boom, Bust and Bankruptcy”. With such weighty matters on the agenda, NYMAR members, and their out of town visitors coming in for the big confab, should consider the distractions, and perhaps- the inspiration, provided by two exhibits illuminating the Nordic and the Greek psyches. Scandinavia House, at Park Avenue a few blocks south of Grand Central, offers its “Luminous Modernism: Scandinavian Art Comes to America” exhibit to commemorate the 100th anniversary of a ground-breaking show that was organized by the American Scandinavian Foundation (ASF). Though it contains eight of the works displayed a century ago, it has been expanded to include work by additional artists- and additional countries; Finland and Iceland were not part of the 1912-1913 exhibit. Not too coincidentally, the 1913 “Armory” show, ascribed by art historians as the coming-out party for modern art in the States, opened several months on the heels of the ASF show.
The only Nordic art I knew about prior to this show was the often-brooding work of Edvard Munch; indeed, I visited the Munch Museum in Oslo way back when. But even Munch had a lighter side; the Luminous Modernism exhibit includes a Munch winter snowscape (think- bright reflective light) and a scene of happy people bathing in a river. There’s also much beyond Munch here. A few of the featured Scandinavian artists, all names that were new to me, offered uplifting outdoor landscapes; these include Harald Sohlberg, Thorvald Erichsen, Vilhelm Hammershoi (a Danish artist), Thorarinn Thorlaksson (an Icelandic artist) and Prince Eugen (a Swedish prince- the son of King Oscar II). The Scandinavian style had a profound influence in the American art of the first half of the 20th century. One need look only at the well known “modernist” artists like Marsden Hartley and John Marin (both well known for iconic seascapes among their various outdoor scenes) for examples of how the Scandinavian style was infused into the American genre.
In the Olympic Tower (much celebrated by the Man About Town), the Onassis Cultural Foundation is presenting “Transition to Christianity: Art of Late Antiquity, 3rd to 7th Century AD. The exhibit, showcasing paintings, coins, mosaics, sculpture, jewelry and architectural items, takes a look at the Roman roots in the art that is associated with the one-time Greek city Byzantium, that emerged as Constantinople- the capital of a great empire looking eastward from Rome.
I would describe the whole art thing at a very emotional level; at Scandinavia House, much of the art on display depicts outdoor scenes, and different views of lighting. Even in ostensibly “dark” paintings, slivers of light, peering through clouds, or on the horizon, are visible. Maybe the seasonal extremes of light and dark in the Nordic countries have something to do with this. The Scandinavia House, the present-day home of the ASF, hosts Smörgås Chef @ Scandinavia House- a restaurant open for lunch and in the evenings. Try the cured gravlaks and Swedish meatballs.
Likewise, my big picture take-away from the Transitions show might be summed up as: “The Dark Ages were actually a time of vibrancy and human renewal.” The show reveals much about daily life in the cities at a time that Christianity came to the fore in the region. As an amateur historian of all things maritime, an hour wandering around the museum area, just downstairs from the main atrium in the Olympic Tower, filled in an a number of blanks, for me. Just as present day Istanbul is a crossroads, for shipping, so was the Eastern Roman Empire a crossroads of a different sort.
There are no seascapes or great landscapes in this exhibit, the romanticists of a much later era re-created the sublime sunsets, sometimes providing the backdrop for epic voyages and mythic battles. What emerges, albeit implicitly, is another form of light creeping out of the darkness. In a great study of survival, the Eastern Empire survived onslaughts of Huns, Goths, Vandals, Slavs and Persians. Civilization thrived; the great Hagia Sofia church was built during the 530’s, two hundred years after the reign of Constantine. After viewing this great slice of history, try the Atrium Café, in the main lobby, for moussaka washed down with Retsina. And, then contemplate how light and renewal might look, after getting past Booming, Busting and other modern concerns.
November 2011
- November 15th, 2011
- Update 2-Maersk sees more shipping losses after Q3 hit
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By John Acher and Jakob Vesterager
Reuters AfricaCOPENHAGEN, Nov 9 (Reuters)—Weak freight rates knocked shipping and oil group A.P. Moller-Maersk A/S (MAERSKb.CO: Quote) to a steeper-than-forecast drop in quarterly profits as its container shipping arm dived into the red and was seen staying loss-making this year.
The Danish conglomerate, whose Maersk Line is the world's biggest container shipping company and therefore a barometer of world trade, forecast full-year 2011 net profit in a range of $3.1 billion to $3.5 billion including divestment gains.
That compared with a profit of $5.02 billion for 2010.
"In the container business, we are hit by very low rates," Chief Executive Nils Smedegaard Andersen told Reuters. "That is a consequence of the fact that the peak season did not develop the way the market expected.
"There has simply been too much capacity in the market and there still is."
Andersen said the group's results were a mixed bag, with good results in the core businesses other than Maersk Line.
"We think that for a group of our size there will be plenty of opportunities also in shipping as this crisis -- I am talking about a capacity crisis -- unfolds further," he said.
He said capacity would need to be taken out of the market for rates to recover.
Andersen said Maersk was boosting its competitiveness and the market was likely to stabilise when some smaller and less financially solid shipping companies quit the business.
Andersen said ships on order with shipyards are equal to 30 percent of the current world fleet, so it would take some years with growth and no further capacity expansion to bring the market back into balance.
"The smaller shipping companies, and all of us, must be prepared for the next two years to be very hard to get through," he said.
Net profit dropped to 1.92 billion crowns ($356 million) in July-September from 9.62 billion in the third quarter last year, A.P. Moller-Maersk said, falling short of an average expectation of 2.41 billion in a Reuters poll.
"The group's container (shipping) activities now expect a negative result for the full year as a consequence of lower rates on especially the Asia-Europe trade," said Maersk, whose earlier forecast was for a "modest positive result" for the container business.
LOW RATES
Andersen said in a statement Maersk was headed for "a fairly satisfactory result for 2011" considering the very low container shipping rates.
But Sydbank analyst Jacob Pedersen said the full-year guidance was "on the weak side." Container shipping fell to an operating loss of 1.18 billion crowns in the third quarter from an operating profit of 6.65 billion a year earlier, below analysts' average expectation of a loss of 962 million.
Shares in A.P. Moller-Maersk fell 3.3 percent by 1147 GMT, underperforming a 1 percent drop in the Copenhagen bourse blue chip index.
Maersk's container volumes increased by 16 percent and average rates declined by 12 percent despite a 48 percent increase in bunker fuel prices from the third quarter of 2010.
The global container shipping industry, which rebounded in 2010 from a deep plunge in 2009, has slid back into trouble this year as overcapacity has dragged freight rates lower, fuel costs have risen and demand uncertainty clouds the horizon.
Andersen said freight rates were significantly below 2010 levels, though above those of 2009. But he said that when the rise in bunker fuel costs is taken into account, rates were almost at the same levels as in the disastrous 2009.
Maersk's report followed third-quarter losses and gloomy outlooks from Chinese rival COSCO Holdings and Singapore's Neptune Orient Lines (NOL) Maersk's rivals in container shipping also include Swiss-based Mediterranean Shipping Co, French group CMA CGM, Korea's Hanjin Shipping and Taiwan's Evergreen Marine.
The group's oil and gas operations, with production mainly in the North Sea and Qatar, contributed most of the group's profit and were helped by higher prices.
Operating profit at the oil and gas division rose 21 percent in the third quarter to 9.03 billion crowns but missed analysts' average estimate of 10.17 billion.
(Editing by Hans-Juergen Peters and David Holmes)
© Thomson Reuters 2011 All rights reserved
- November 15th, 2011
- Maritime unions call for Matsuda to resign
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Maritime unions are up in arms and calling for the resignation of U.S. Maritime Administrator David Matsuda, following the release of a MarAd report that compares the costs of U.S.-flag and foreign-flag vessel operations.
The report, a Comparison of U.S. and Foreign-Flag Operating Costs, reaches the conclusion that it costs more to operate ships under the U.S.-flag than under an open-register flag and that the chie reason for this is that U.S. citizen crews are more expensive than third-world crews.
Possibly this is news to the Maritime Administrator, who worked as an attorney with the safety law division of the USDOT's Federal Railroad Administration before becoming a staffer for Senator Frank Lautenberg. Matsuda has often been criticized in maritime circles for his lack of knowledge and engagement with the maritime industry. One well-known maritime attorney who works for a major flag state went so far as to say that the Administrator was "underwhelming." Another prominent member of the salvage community said he was going to make it his mission to get rid of Matsuda. One long-time maritime commentator called him "the invisible man."
What appears to have infuriated union officials is that they were not even consulted regarding the report. The American Maritime Officers, International Organization of Masters, Mates and Pilots, Marine Engineers Beneficial Association and the Seafarers International Union issues a joint statement criticizing the report.
In part the joint statement said: "The U.S. Maritime Administration recently released a highly contentious study of American-flag shipping without any input whatsoever from maritime labor. This
inexplicable decision guaranteed that the report would not contain the information that Congress and the Administration would need to develop and implement meaningful maritime policy that strengthens, not weakens, the U.S.-flag merchant marine, provides jobs for American, not foreign, maritime workers, and bolsters, not diminishes, the economic, military and homeland security of the United States. The administrator who approved the report, David Matsuda, should be held accountable."
The MarAd report also recites various suggestions for enhancing the competitiveness of the U.S.-flag fleet. Among these are to amend the Jones Act to reduce the U.S. citizen crew, introduce a second "open" U.S. register, amend labor laws and U.S. Coast Guard manning requirements, as well as changes to labor pensions and health care costs and training costs. None of these are news either and none of them are going to happen.
"The Maritime Administration," said the unions in a joint statement, "more than a year ago, was tasked by Congress with identifying ways to boost American-flag shipping. Instead, the agency accepted a report based on incomplete information whose main conclusion – that in the deep-sea commercial sector, it often costs more to use U.S.-flag ships – isn’t news to anyone. The fact that MarAd chose to exclude a significant segment of the maritime industry from this process, and accepted a report that includes possible cost-cutting suggestions that are completely contrary to the overall best interests of the United States, represents a gigantic failure in Matsuda’s leadership and a missed opportunity on the part of the Maritime Administration.
"How could the Maritime Administration sign off on a report that suggests consideration of weakening or eliminating the Jones Act, one of the bedrocks of our national and economic security? How could the agency not refuse the mere notion of turning America into a second register? (It should be noted that the carriers interviewed for the study soundly rejected lowering U.S.-citizen crewing requirements as well as the second-register idea)." - November 15th, 2011
- Shipping Companies Quizzed on U.S. Ownership Law Called Obsolete
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By Carol Wolf
Bloomberg
The Coast Guard began investigating Trico after the U.S. Maritime Administration received a tip in October 2009 that Trico was violating a 1920 law requiring 75 percent U.S. ownership of marine vessels within U.S. waters, according to a Coast Guard report. Source: Michael Pocock/maritimequest.com The U.S. Coast Guard is exploring how publicly traded companies comply with a law requiring vessels working within U.S. waters to be 75 percent American-owned, after a company it fined for violations said the requirement can’t be met.
The service, which posted the notice last week in the Federal Register, said it’s following up on Trico Marine Services Inc.’s defense that no public company can comply with the 1920 law covering vessels that operate within U.S. waters and between U.S. ports.
Enforcing the law, which is designed to protect the U.S. maritime industry, may prevent all public shipping companies from operating within U.S. waters, a ‘doomsday scenario,’ Trico officials told Coast Guard investigators, according to the service’s report.
“No one really knows how to interpret this law in this day and age,” Joseph Cox, chief executive officer of the Chamber of Shipping of America, a Washington-based industry group, said in a telephone interview. “The companies, the Coast Guard, everyone involved are feeling their way around.”
Stock in public companies can be bought by investors all over the world, with shares trading constantly and sometimes anonymously, he said. Determining if a shareholder is a U.S. citizen can be difficult, Cox said. Many public companies have corporate shareholders, which may have a U.S. chairman, a U.S. headquarters and a legal domicile in the Cayman Islands, he said.
“The Coast Guard’s understanding of what takes place is based on a stock transfer system that no longer exists,” Cox said. “The stock market has changed a lot since this rule was made.”
Trico CaseTrico, based in Woodland, Texas, rents ships to oil and natural-gas drillers. The Coast Guard began investigating the company after the U.S. Maritime Administration received a tip in October 2009 that Trico was violating the law, according to a Coast Guard report.
Trico denied the allegations and said even if they were true, every other public company owning U.S.-certified ships also violates the law, according to the Coast Guard’s report. The Coast Guard proposed fining Trico $6 million while backing down on investigators’ recommendations that operating certificates for some of its vessels be revoked.
The Coast Guard also decided to seek more information about compliance with the law, which prompted the Federal Register notice last week. The service may propose new rules based on the information it receives, according to the notice.
“We felt this was an area that we needed to get better educated on,” Mike O’Berry, a Coast Guard spokesman, said in an e-mail. “We are asking industry to share methods that they believe ensure compliance.”
Shareholder TipTrico filed for Chapter 11 bankruptcy protection in August 2010. It received about 1.4 percent of its 2009 revenue of $642.2 million from the U.S., the last available data, according to company filings.
Christen Sveaas, chairman of Kistefos AS, an Oslo-based investment company, owns 3.5 million, or about 18 percent, of Trico’s shares, according to Bloomberg data.
Kistefos’ U.S. law firm prompted the investigation by sending a letter to the Maritime Administration that Trico’s foreign ownership exceeded U.S. limits, according to the Coast Guard report.
More than 25 percent of Trico’s stock was held by non-U.S. investors every quarter from the third quarter of 2008 through the first quarter of 2010 “at minimum,” the Coast Guard concluded. Non-U.S. owners of Trico and its subsidiaries included Dimensional Fund Advisors LP, Barclays Plc (BARC), Bay Harbour Management LC, Whitebox Advisors LLC and Black River Asset Management LLC, according to the Coast Guard report.
‘Furiously Debated’The law is “furiously debated” in the shipping industry, said J. Stephen Simms, a Baltimore-based lawyer with Simms Showers LLP, which specializes in maritime and transportation litigation. Ocean-going vessels don’t have to meet the ownership requirements unless they're traveling from U.S. port to U.S. port, Simms said.
Changing or repealing the law would be politically unpopular, Simms said.
Senator John McCain, an Arizona Republican, last year introduced legislation to repeal a set of laws including the ownership requirement. The bill was never taken up by the Senate Committee on Commerce, Science and Transportation. Other attempts to repeal the law have failed after opposition by U.S. shipping companies and some unions.
“The law is unlikely to be changed,” Simms said. “Companies just have to find a way to adjust.”
To contact the reporter on this story: Carol Wolf in Washington at cwolf@bloomberg.net
To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net
- November 15th, 2011
- NYMAR's Man About Town—"Midtown restaurants are lightening-up"
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By Barry D. Parker for NYMAR
After quite a long stretch on the road, it was a delight (after my return to New York) to sample the newly opened Del Frisco’s Grille, in Rockefeller Center. This is my new favorite place. Rarely do I rave about restaurants, but this venue- an offshoot of the very famous (and still hard-to-get-a-table at steakhouse with a similar name) over on Sixth Avenue, moves to the top of my list (move over, Bobby Van’s…more on that in a bit…). When I invited some ship finance friends to join me for evening drinks at what was to be my inaugural visit to the new Grille at Rockefeller Plaza (half a block west of Fifth Avenue), I was not sure what to expect. I wanted to strike a balance between formal and informal; it was a business meal, but there should also be a good “scene," as well.
The Grille catches an excellent vibe. I was contemplating a few places for the drinks meeting. At the more formal extreme, consider that the Del Frisco Double Eagle (no relation to the tankers once owned by Eletson Corp, Seabulk and others), one block over on Sixth (at 49th Street), is very ponderous in the evenings (even at the bar, if you can get close to it). Alternatively, another recently opened entry in the “grill” category- Bills Bar and Burger, also on 51st (just off Fifth), was a little bit too informal, and, quite honestly, not far enough removed from the trade-routes for tourists.
At Del Frisco’s Grille, the large bar is an international scene, populated mostly by well-dressed business types working or perhaps visiting in the Rockefeller Center / Sixth Avenue area. While waiting, I sampled from their nice selection of bourbons from Kentucky; my guests were able to choose wines from California, the Pacific Northwest, and even Long Island. Languages overheard were a smattering of Norwegian (no, it was not Coco Jacobsen), Brazilian and Russian. There are plenty of tables (you will need to reserve at peak times), where you can try the ample selection of steaks and seafood. On one uncharacteristically warm day, I went back for lunch- and snared a choice table outside, where I would munch on a “double fisted” (as in “Big”) steak sandwich, with frittes on the side.
Another spot worth a try is the old “Anthos” on 52nd, between Fifth and Sixth, which has come back to life as the Empire Steakhouse. Though the look is more masculine than before, it does retain some of the airy feel of the previous establishment. The house speciality is the Porterhouse steak- bigger is better. When it comes to seafood, bigger is also better- with a four pound lobster on offer. All this is not surprising, the founders began their careers as waiters at Peter Lugers- one of the original New York steakhouses.
Speaking of Bobby Van’s- there is a new entry over near Times Square on West 45th Street (just to the east of Seventh Avenue), their fourth one in midtown. Though they call it a “steakhouse”, I put it in the Grille category. Maybe because I went on a very bright day, it seemed more uplifting than the traditional dark wood motif. Oh, I forgot- try the lamb chops- and get the fried onions on the side. There are plenty of red wines available.
Why all these “lite” versions (either in style, in menu, or both) of traditional meat and potatoes places? Marketing folks in the restaurant business must have figured out that midtown business people really need alternatives to the massive steaks, chops and seafood portions. While those dark “strictly business” places, with heavy wood furnishings to complement the meals, will not go out of style, brighter might also be better.
October 2011
- October 21st, 2011
- The Economic Impact of The New York-New Jersey Port and Maritime Industry [STUDY]
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By gCaptain Staff
Photo © 2009 New York Shipping Association. The following are the results of a study that was conducted to provide updated estimates on the economic impacts that the Port of New York and New Jersey has upon the region in an attempt to educated policymakers, decision makers and citizens about the importance of the industry. The results of the study, as you can imagine, should turn some heads.
More than 279,200 jobs generated by activity in the Port of New York and New Jersey, according to a study released today. The independent economic impact study of port operations, prepared by A. Strauss-Wieder Inc., of Westfield, New Jersey, showed that jobs directly associated with port activity increased by nearly 3.5 percent, despite turbulent economic conditions, since the last time a similar comprehensive economic impact analysis was conducted in 2008. The assessment also shows the significant economic value that the port and maritime industry has and continues to generate through investments in the Region’s maritime infrastructure and through the capital markets.
The analysis was prepared for the New York Shipping Association, Inc. (NYSA) and New York Maritime, Inc. (NYMAR) and reflects the economic impacts associated with the port and maritime industry in New York and New Jersey as it operated in the year 2010. The report summarizes the maritime movement of goods and people through the region, the substantial capital investments that have and continue to be made in the region’s port infrastructure, and the extent of the maritime-related capital market activity that occurs in the New York-New Jersey area.
“This study, commissioned by the membership of NYSA and NYMAR shows us how the cargo and passengers flowing through the terminals of the Port of New York and New Jersey positively impact the economy of the region. The employers and employees of the port community support the businesses and population of the largest and wealthiest consumer market in the world. Further, the public and private sectors have collectively invested billions of dollars to enable the Region to handle the growing amount of international trade. We have a state-of-the-art Port and, through our investments, have also generated significant and ongoing economic value,” said Joseph C. Curto, President of the New York Shipping Association.
“The significant results of this study make it very clear that the maritime industry continues to play a critical role in the business of this region. We are an international hub of maritime movement and maritime related investment businesses and both directly through the movement of goods and services, and through the ship owning, banking, insurance and legal infrastructure which exists in New York to support the global maritime-related investment businesses. The combination attracts international companies to our cluster,” said Peter Shaerf, Chairman of NYMAR.
The Port of New York and New Jersey is the largest port on the East Coast, the third largest port in the United States by volume, and the second largest in value; serving more than 35% of the entire population of our country.
General highlights of the study show that port operations provide:
- a total of 279,200 full-time jobs in the NY-NJ region;
- 170,770 direct jobs
- $11.6 billion in annual personal income;
- Nearly $37.1 billion in annual business income
- Almost $5.2 billion in federal, state and local tax payments
The purpose of the study is to update the estimate of economic impacts of the port upon the region, thereby educating policymakers, decision makers and citizens about the importance of the industry. In addition, the report describes how the investment of public agencies and private industry invested substantially in the port since 2006, resulting in state of the art facilities, deeper channels and multimodal access to North America. It also takes into account the aggressive capital program planned for the port region and the jobs and revenue anticipated from that work.
“Ocean shipping is the most economically efficient, safest and environmentally sound method for the shipment of import and export cargo. Because of its efficiency and continued relative obscurity people generally do not see the benefits,” said Curto. “This study hopefully will continue to bring awareness and support for the continued use and development of this port, and for using the region as a nexus for corporate location and activities. The capital investments in this industry from within New York in both the private and public domain are substantial and should hopefully make people more aware of the vitality of our industry” Shaerf concluded.
- October 19th, 2011
- Mayor Bloomberg and Norwegian Cruise Line Announce NYC to be Home Port for New State-of-the-Art Ship
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Source: MarketWatch
Monday, October 10, 2011—Manhattan Cruise Terminal will serve as year-round home port beginning in 2013 for at least 88 calls, generating an additional $35 Million in direct spending in New York City.
Mayor Michael R. Bloomberg and Norwegian Cruise Line CEO Kevin Sheehan today announced that Norwegian Cruise Line's new state-of-the-art 4,000 passenger ship, Norwegian Breakaway, will make New York City its year-round home port. Beginning in May 2013, Norwegian Breakaway--which will be the largest ship ever to home port in the City--will replace Norwegian Star, and embark on a minimum of 88 cruises from the Manhattan Cruise Terminal through March 31, 2015. The ship calls will bring an estimated 140,000 additional embarking passengers into New York City over two years, resulting in an estimated $35 million in additional direct spending. Mayor Bloomberg and Norwegian Cruise Line were joined at the announcement in the Manhattan Cruise Terminal by New York City Economic Development Corporation President Seth W. Pinsky and NYC & Co CEO George Fertitta.
"Out-of-town visitors spent $31 billion last year, supporting hundreds of thousands of jobs in our restaurants, shops, hotels, and cultural institutions," said Mayor Bloomberg. "By making New York City home to its newest and largest ship, Norwegian Cruise Line is further confirming our standing as a top cruise destination and a place that tourists from around the world want to visit."
"New York is not only one of our top markets, but also my hometown,"
said Norwegian Cruise Line Chief Executive Officer Kevin Sheehan."Therefore, I am thrilled to announce that New York will be the year-round home for our next generation Freestyle Cruising ship, Norwegian Breakaway. In addition, we are offering an exciting inaugural summer itinerary cruising to the beautiful island of Bermuda, a much sought-after summer destination."
"Norwegian Breakaway will be the largest ship ever to homeport in New York City, bringing more passengers, generating more spending, and creating more jobs in our City," said New York City Economic Development Corporation President Seth W. Pinsky. "Thank you to Norwegian Cruise Line for their commitment to New York City, and for making Manhattan Cruise Terminal the homeport for this amazing new state-of-the-art ship."
"New York City remains one of the top ten cruise ports in the United States, and we thank Norwegian Cruise Line for making Manhattan Cruise Terminal Norwegian Breakaway's year-round home port," said George Fertitta, CEO of NYC & Company, New York City's marketing and tourism arm. "Approximately 583,000 cruise passengers embarked in New York City in 2010 and that number continues to grow helping the City to report record breaking tourism numbers year after year. We hope Norwegian Breakaway and all of the Norwegian Cruise Line passengers will have an opportunity to visit New York City pre- or post-cruise and discover the energy and vibrancy of all five boroughs."
Norwegian Cruise Line was the first cruise line to homeport year-round in New York City beginning in 2003. Since then, the company has been committed to bringing its newest and largest ships to the Big Apple, with two ships calling in New York City since 2005. In 2013 alone, Norwegian Breakaway is expected to make 34 calls at Manhattan Cruise Terminal (MCT). In addition, Norwegian Gem will continue to call year-round at MCT, with an expected 47 calls, and Norwegian Star will make 15 calls in 2013 before being replaced. In total, Norwegian Cruise Line ships will bring approximately 285,000 embarking passengers into New York City in 2013, generating approximately $70 million in direct spending in the City - a $13.5 million increase due to the additional passengers on Norwegian Breakaway.
Currently under construction at Meyer Werft in Germany, Norwegian Breakaway will be 144,017 gross tons and is scheduled for delivery in April 2013. Following inaugural events, the ship will sail a series of 22 seven-day cruises from New York to Bermuda beginning May 12, 2013 through Oct. 6, 2013. Departing on Sundays, the ship will spend three full days in Bermuda, along with three days at sea.
"The Government of Bermuda is honored to be the destination of choice for the inaugural sailings of Norwegian Breakaway for 2013. As a long-standing partner with Norwegian Cruise Line, we look forward to the launch of this new and innovative cruise product," said the Hon. Terry Lister, Minister of Transport. "We know their passengers will enjoy the cruise itinerary and the hospitality of the Bermudian people."
- October 19th, 2011
- Royal Caribbean Cruises Ltd. winner of NAMEPA’s Marine Environment Protection Award—Award dinner on November 9th follows seminar on Corporate Risk Management
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Jamie Sweeting Vice President, Environmental Stewardship & Global Chief Environmental Officer Royal Caribbean Cruises Ltd. Clay Maitland, Founding Chairman of the North American Marine Environment Protection Association (NAMEPA), announced that the world’s second largest cruise company, Royal Caribbean Cruises, Ltd., is the recipient of NAMEPA’s 2011 Marine Environment Protection Award. The award will be presented at NAMEPA’s Awards Dinner to be held at Chelsea Piers’ The Lighthouse in New York following NAMEPA’s seminar on Corporate Risk Management, which will focus on the need of the maritime industry to evaluate risk in a challenging operating environment.
“We are delighted that the North American Marine Environment Protection Association has awarded Royal Caribbean with the 2011 Marine Environment Protection Award," said Jamie Sweeting, vice president of Environmental Stewardship, Royal Caribbean Cruises Ltd. "Royal Caribbean is dedicated to helping to protect the marine environment, and we are committed to caring for the unique and beautiful places we visit throughout the world. It is an honor to be recognized by NAMEPA for our commitment to protect, conserve and support the environment.”
The NAMEPA Marine Environment Protection Award is given in recognition of an individual or organization’s efforts on behalf of preserving the marine environment as exemplified by a commitment to a program which has specific objectives set for environmental performance and improvement, and which is innovative and goes beyond minimum environmental compliance. Eligible candidates include members of the commercial maritime industry, government agencies, and individuals and submissions are judged by the organization’s Board of Directors against the criteria behind the award.
Comments from the judges included “RCL's efforts to educate their passengers through their comprehensive program "Save the Waves" program deserves special attention”, “Save the Waves program is changing "Hearts and Minds"...and preserving the marine environment for future generations to enjoy”; “RCL's robust fuel consumption reduction and waste recycling programs have yield excellent results in reduced in GHG and shoreside disposal”; “RCL’s commitment and efforts in protecting the environment clearly follow the ABCs...Above Basic Compliance.”
The first NAMEPA Marine Environment Protection Award was presented three years ago posthumously to the founder of the MEPA movement, George P. Livanos who created HELMEPA 28 years ago due to his interest and concern for the marine environment. In 2009, the NAMEPA Award was presented to the United States Coast Guard and last year to liner company APL.
The NAMEPA Award Dinner will follow an afternoon seminar “Environmental Intelligence in Maritime: Corporate Risk Management”, featuring RADM James Watson, Director of Prevention Policy for the United States Coast Guard; Stacey Mitchell, Director of Environmental Crimes, Department of Justice; Dr. Steve Coan, CEO and President Sea Research Foundation, Clay Maitland, Founding Chairman of NAMEPA. The afternoon will conclude with a Senior Leadership Roundtable including Morten Arntzen of Overseas Shipholding Group, Gene Seroka of APL, Joe Hughes President of the American Club and Jeff Pribor, Chief Financial Officer of GenMar, amongst others.
Tables for the NAMEPA Awards dinner, and tickets for the afternoon seminar, may be obtained by contacting Carleen Lyden-Kluss at executivedirector@namepa.net or by calling +203 255 4686. Admittance is by reservation only and is limited.
The North American Marine Environment Protection Association was officially launched in 2007. NAMEPA is a maritime industry led initiative which engages businesses, government and the public to “Save our Seas” by promoting sound environmental practices and welcomes members who share this mission. For more information, visit namepa.net.
- October 19th, 2011
- NYSE to Suspend Horizon Lines
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By Joseph Bonney
The Journal of Commerce Online - News StoryU.S. domestic carrier's stock to be traded over-the-counter
The New York Stock Exchange said it will suspend trading in Horizon Lines stock before the market opening Thursday because the company’s average capitalization over 30 trading days fell below $15 million.
Falling below the NYSE standard triggers an automatic suspension and delisting process. Horizon said its stock will be traded over the counter through the appeals process, under a symbol to be determined.
Horizon this month completed a $652.8 million refinancing that included an exchange of convertible notes for new notes and stock and warrants. Under the refinancing the company issued 25.1 million new shares. Horizon had 30.9 million outstanding shares before the issuance.
Horizon stock closed Thursday at 32 cents a share. Its 52-week high was $5.95 before the company agreed last February to plead guilty to a felony antitrust violation for price-fixing in the Puerto Rico trade.
Under the plea agreement, Horizon agreed to a $45 million fine, later reduced to $15 million, that threatened the company with debt defaults and necessitated the refinancing. Horizon said the refinancing put the company on sound financial footing.
“The transition from the NYSE to the OTC does not place us in violation of our new refinancing agreements,” a Horizon spokesperson said. “More importantly, it does not reflect the underlying financial soundness of our company. In fact, our recent successful refinancing positions our company with adequate liquidity to fund continuing operations and affords us the opportunity to grow our business and reduce debt over time.”
Horizon is the largest U.S. domestic ocean carrier. It operates in domestic trades between the U.S. mainland and Puerto Rico, Alaska, Hawaii and Guam, and has an international service from China to the U.S. West Coast.
Contact Joseph Bonney at jbonney@joc.com. Follow him on Twitter @josephbonney
- October 19th, 2011
- Admiral Phil Greene, USMMA, to transfer to Washington, DC
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Admiral Phil Greene, USMMA Secretary Ray LaHood announced on Tuesday the appointment of Rear Admiral Philip H. Greene, Jr. (KP ’78) to be the Department of Transportation Chair at the National Defense University in Washington, D.C.
Rear Admiral Greene served with distinction as Superintendent, United States Merchant Marine Academy since August 30, 2010. A native of Southern California, Admiral Greene, was our third Kings Point Graduate to serve as Superintendent.
Rear Admiral Philip H. Greene, Jr. (KP '78), has been named the 2011 Alumnus of the Year by the USMMA Alumni Association and Foundation. This prestigious annual award will be presented at the Homecoming Alumni Awards Dinner on Thursday evening, October 13th, in the Melville Hall Officers’ Club.
Prior to his appointment as Superintendent at Kings Point, Admiral Greene was Director, Navy Irregular Warfare. Prior to this assignment Greene was commander, Combined Joint Task Force-Horn of Africa where he led operations to build regional security capacity and counter extremism in the Horn/East Africa. He also served in Naples, Italy, as director for Policy, Resources & Strategy, U.S. Naval Forces Europe/Africa (February 2008 to February 2009).
Previously he commanded Destroyer Squadron 31 from November 2002 to May 2004, where he served as sea combat commander for the Abraham Lincoln Strike Group during Operation Iraqi Freedom. Other sea duty commanding officer assignments include the Spruance class destroyer, USS Fletcher (DD 992) from March 1996 to November 1997; and the patrol missile hydrofoil, USS Taurus (PHM 3) from July 1989 to June 1991.
Significant shore assignments include duty as chief of staff to commander, Naval Surface Forces; and chief, North East Asia/China Division, the Joint Staff/Political-Military directorate (J5). In addition, Greene has served tours at the U.S. Naval Academy; the Secretary of the Navy's Office for Legislative Affairs; and the Bureau of Naval Personnel.
Greene is a 1994 graduate of the National War College (M.S. National Security Strategy) and a 1985 graduate of the Naval Postgraduate School (M.S. Information Systems). In addition, he holds a Merchant Marine license as Master (oceans, any gross tonnage).
Greene has received various service and unit awards. His personal decorations include the Navy Distinguished Service Medal, Defense Superior Service Medal, Legion of Merit, Bronze Star, Meritorious Service Medal, and Navy and Marine Corps Commendation Medal. - October 19th, 2011
- Liberty Maritime Corporation Announces Change In Union Affiliation
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Liberty Maritime Corporation (Liberty Maritime) of Lake Success, New York announced that it has entered into a new collective bargaining agreement with the American Maritime Officers (AMO) union under which the AMO will provide U.S. citizen licensed deck officers and engineers to Liberty Maritime for the operation of five U.S.-flag dry bulk carriers effective October 1, 2011. Those vessels had previously been subject to a collective bargaining agreement between Liberty Maritime and the Marine Engineers Beneficial Association, District No. 1-PCD (MEBA), which expired September 30, 2011. The MEBA will continue to provide deck officers and engineers on the three U.S.-flag Pure Car/Truck Carrier vessels (PCTCs) operated by Liberty pursuant to a separate collective bargaining agreement between Liberty Maritime and the MEBA.
Mr. Philip J. Shapiro, President and CEO of Liberty Maritime, said: “We worked many months with the MEBA to try to reach a new agreement, and as late as three days before the prior agreement was due to expire, the MEBA called to say the Union was not interested in our proposal. Although we are saddened that we could not work out a mutually beneficial arrangement with the MEBA, we remain proud of our long and productive relationship with the Union and salute the professionalism of its members.”
Mr. Thomas F. Keenan, Executive Vice President of Marine Operations for Liberty Maritime, added: “Contrary to what MEBA has publicly asserted, we offered increases in wages and in contributions to MEBA’s defined contribution retirement plan in exchange for freezing their defined benefit retirement plan. We remain convinced that their members would have been better off under our proposal than the Union’s proposal. For the record, at no time has Liberty Maritime ever sought to “lock out” MEBA members. We proposed pay increases, but in the end, we did not reach agreement because we simply could not bridge our economic and other differences prior to the expiration of the existing contract.” Regarding Liberty Maritime’s new AMO union affiliation, Mr. Keenan said: “We are all impressed with the smooth transition that has taken place with our new AMO represented officers.
Mr. Shapiro added: “We are delighted that so many of the our prior MEBA represented officers have contacted the Company seeking opportunities to continue working aboard the vessels that Liberty Maritime operates. ” Mr. Shapiro concluded: “We are looking forward to a long and productive relationship with the AMO and to continue working with the MEBA on our PCTCs.”
Mr. William G. Miossi, labor counsel to Liberty Maritime, explained: “The MEBA represented officers are supervisors, and as such they are not covered by the National Labor Relations Act. Although Liberty Maritime had no legal obligation to bargain with this Union upon expiration of their contract, we nevertheless negotiated with the MEBA in a sincere effort to reach new terms.” Mr. Miossi added: “It is our view that the MEBA’s picketing of Liberty Maritime operated vessels and other actions violate federal labor law. Consequently, today we have filed appropriate Unfair Labor Practice Charges against the MEBA with the National Labor Relations Board to deal with these issues.”
September 2011
- September 15th, 2011
- Epidemic of shipping company failures unlikely
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By Rajesh Joshi
Lloyd' List- New YorkPUBLICLY listed dry bulk companies will not see a spate of bankruptcies until at least 2014 even if rates remain weak, while some tanker companies might not be able to avert the day of reckoning for quite that long.
However, brand-name tanker companies’ superior ability to attract equity and bank debt could enable them to prevent insolvencies even better than their dry bulk peers, regardless of rates.
All shipping segments will see the odd merger, privatisation, bank repossession or Chapter 11 filing in the coming couple of years, but an exodus towards company insolvencies is unlikely.
Barring differences on some of the detail, this was the consensus that emerged when a group of senior shipping analysts gathered for the Capital Link conference in New York was asked to hold forth on the state of markets today.
Market capitalisations of shipping companies have declined dramatically amid the global meltdown this summer, with a handful of them already reduced to penny-stock level and dozens of others in danger of reaching that state.
Jefferies managing director and head of maritime equity research Douglas Mavrinac painted an encouraging picture for public dry bulk companies when asked whether today’s market values of these companies presage collapse.
Mr Mavrinac said Jefferies’ analysis of the listed dry bulk sector has established that except two companies that might have “issues” before 2014, all the others have enough cash reserves and locked-in cash flows to meet their obligations until 2014.
“The road will be bumpy, but the vast majority will be fine,” said Mr Mavrinac.
Morgan Stanley vice-president of shipping Fotis Giannakoulis said an important difference between the dry bulk and tanker sectors was that in the former, rates today are double the companies’ typical operating expenses, while tanker rates are “zero”.
This means dry bulk players in the foreseeable future would manage to pay interest and principal even amidst low revenues, while tanker companies do not have this flexibility.
“However, tankers are a very dynamic sector and things could change very swiftly,” Mr Giannakoulis said.
Mr Mavrinac was the most downbeat analyst on tankers, saying low spot rates combined with many tanker majors’ high spot exposure are a “bad combination”.
“This means tanker companies need rates to improve sooner than dry bulk companies,” Mr Mavrinac said.
Knight Capital Group director and head of shipping research Ben Nolan agreed that tankers are the more challenged sector, pointing to the Chapter 11 filings of Omega Navigation Enterprises and Seaarland-affiliated companies as a possible harbinger.
Nonetheless, Mr Giannakoulis argued that abysmal tanker rates would in fact discourage unpaid banks from pushing a tanker borrower into bankruptcy. This would happen only if the banks are “really fed up with management teams” or a massive amount of the principal has remained unpaid since the inception of the loan.
Wells Fargo Securities senior equity analyst Michael Webber discounted the gap between freight rates and operating expenses, saying that five years from today it would not matter very much.
“It is just that dry bulk companies today are farther along the cycle than tanker companies. A year from today it might be dry bulk companies whose rates barely cover expenses, while figures for tanker companies might have improved,” Mr Webber said.
Mr Webber added that tanker companies are far more adept at courting big money.
The trade press routinely has reported examples of this apparent ability. These include Teekay daughter companies’ successful follow-on issues, Overseas Shipholding Group’s success in securing a “forward start” loan of $900m, Euronav’s $750m refinancing, and General Maritime’s ability to rope in $200m in brand new capital from private equity player Oaktree.
“Dry bulk companies do not have such power and these funding alternatives. In this context, larger tanker owners are far better placed to stave off bankruptcies than the best dry bulk company,” Mr Webber said.
- September 15th, 2011
- SUNY Maritime College Turns Over the Helm
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On August 31, 2011, Rear Admiral Wendi B. Carpenter, USNR (Ret.) became the 10th president of SUNY Maritime College and the first woman to serve as president of the College, during a "Change of Office" ceremony in the historic Fort Schuyler, St. Mary's Pentagon, SUNY Maritime campus, Throggs Neck, NY.
RADM John Craine (Ret.) and Mrs. Wendy Craine departing the Change of Command ceremony. State University of New York Chancellor Nancy Zimpher addressed the audience and praised the new SUNY Maritime College for her leadership and distinguished Naval career. She also thanked Vice Admiral John W. Craine, Jr. (USN) Ret. for his years of service to SUNY Maritime College and to the State University of New York.
During the ceremony, SUNY Board of Trustees Chairman Carl Hayden also spoke about SUNY Maritime College's great traditions and the strength of the college's graduates. He offered warm thanks to Admiral Craine for his many years of service and spoke of Admiral Carpenter's leadership and abilities that will benefit the college for many years to come. US Maritime Administration (MARAD) Chief Council Denise Krepp also addressed the audience and presented Admiral Craine with a special award from MARAD in recognition of his many years of service. In addition to the formal Change of Office ceremonies, Captain Richard Smith, '81, took the podium and formally inducted 338 first-year members of the regiment, from the Class of 2015, into the regiment.
Speaking before the audience of close to 1,000 Cadets, Maritime College students, SUNY leadership, faculty, staff, alumni and friends of the College, Admiral Carpenter spoke of the future and preparing the College, Maritime's students, faculty and staff for the challenges ahead.
Captain Thomas Greene, USN (Ret.), Vice President of University Relations and Deputy Commandant of Cadets, was Master of Ceremonies, Dr. Maryellen Keefe, SUNY Maritime Humanities professor, gave the invocation and benediction. Also in attendance for the historic event were Eunice Lewin and Tina Good, SUNY Board of Trustees; Timothea Larr, SUNY Maritime College Council Chair and College Council members: Thomas Magliocca, William Garry, Mark Brosnan and Joseph Conway; RADM Mark Buzby, Commander, Military Sealift Command (MSC); RADM Philip H. Greene, Jr., USMS, Superintendent, United States Merchant Marine Academy; RADM Gerry Achenbach, Superintendent, Great Lakes Military Academy; RADM Floyd Miller, former president, SUNY Maritime College and RADM David Brown, former president, SUNY Maritime College.
Founded in 1874, SUNY Maritime College is the oldest and largest maritime college in the United States and one of six state maritime academies in the nation. In 1972, SUNY Maritime College became the first of its kind to enroll women. SUNY Maritime College is one of 64 colleges and universities that comprise the State University of New York system. - September 15th, 2011
- Coast Guard Foundation job led to Omega chairman’s departure
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by Rajesh Joshi
Lloyd's List
An Omega tanker: departing chairman Robert Flynn said he expects to remain involved in Omega’s business. Senior shipbroker says move has nothing to do with situation at company
ROBERT Flynn is stepping down from the chair of Omega Navigation Enterprises because he is set to assume the chairman’s role at the US Coast Guard Foundation from October 1, the senior shipbroker has said.
Mr Flynn, whose day job is as president of Mallory Jones Lynch Flynn & Associates, told Lloyd’s List that the USCG post would conflict in principle with his continued presence at Omega.
“I do not think it would be proper for me to continue to chair a company whose visiting ships the USCG would regulate,” Mr Flynn said.
“I wish I could have done both, but after five-and-a-half years as Omega chairman I am stepping down. Nonetheless, after passing on the baton I expect to remain involved in Omega’s business, either as a shipbroker or in another professional capacity.”
Omega, currently involved in a Chapter 11 case in Houston, has named Nicolas Borkmann to serve in Mr Flynn’s place as chairman. The company’s official statement about Mr Flynn’s departure described it as a mutual decision driven by certain opportunities that may conflict with his continued service on the company board.
Omega chief executive George Kassiotis has expressed hope of “spending more time with Mr Flynn as we work together on future projects”. Mr Flynn emphasised to Lloyd’s List that his departure has nothing to do with current developments at the company.
The US Coast Guard Foundation, based in Stonington, Connecticut, is a 90-person non-profit organisation dedicated to providing education, support and relief for USCG members and their families, and cadets at the Coast Guard Academy.
Mr Flynn, who already is a director of the foundation, served as a commissioned USCG officer from 1974 to 1979.
Omega has not announced financial results from the third quarter of 2010 onwards and has not filed its 2010 annual report, as it sought a refinancing package in the months leading up to its Chapter 11 filing.
The company’s 2009 annual report shows Mr Flynn receiving annual compensation of $150,000 as chairman.
- September 15th, 2011
- U.S. Department of Transportation Honors Service
of Merchant Mariners on 9/11 -
By Steve Strunsky
The Star-LedgerThe heroism of merchant mariners who evacuated hundreds of thousands of people from Lower Manhattan after the Sept. 11, 2001 terrorist attacks is featured in a new video released today by the U.S. Department of Transportation’s Maritime Administration. “Rescue at Water’s Edge,” includes interviews with vessel operators, emergency responders and passengers.
“The story of merchant mariners coming to the aid of those in need on September 11, 2001 is an inspiring one,” said U.S. Transportation Secretary Ray LaHood. “On that terrible day, our nation’s seafarers, with courage and selflessness, transported hundreds of thousands of people out of harm’s way to safety.”
More than 300,000 people were evacuated by water from lower Manhattan after the terrorist attacks in the largest unplanned water evacuation in the history of the United States.
“The men and women of the New York and New Jersey merchant maritime community provided a beacon of light on one of the darkest days in our country’s history. They were among the heroes running toward danger and exemplify what it means to be a U.S. merchant mariner,” said U.S. Maritime Administrator David Matsuda.
The Maritime Administration strengthens the maritime transportation system of the United States to meet the economic and security needs of the country. It also operates the United States Merchant Marine Academy at Kings Point, New York, which provides advanced education and training for professionals from the maritime community, private sector, government and military.
August 2011
- August 17th, 2011
- Cido 30 ship sale signed
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By Jim Mulrenan in London
Trade WindsCraig Stevenson’s Diamond S Shipping has confirmed that it has reached a definitive agreement with Cido Shipping to purchase 30 product carriers along with their related charters.
The deal will turn Diamond S Shipping, which was only set up in 2007, into one of the world’s top half dozen owners of medium range product carriers.
But Cido Shipping, previously the biggest owner in this sector with a fleet of vessels centred around 47,000-dwt ceases to be a major player in this market.
Craig StevensonGreenwich, Connecticut based Diamond S said the acquisition would close subject to the customary conditions in the current quarter.
The deal is being structured as the acquisition of the companies that own the 30 product carriers rather than as ship sales “in order to assume a smooth transaction of existing charters, third party management contracts, flags and classifications of the ships.”
Legendary investor Wilbur Ross of WL Ross and Co, First Reserve Corp, China Investment Corp (Beijing), Fairfax Financial Holdings, Morgan Creek Capital Management and PPM America Capital Partners are investing $600m in Diamond S as part of the deal.
The balance of the $1bn funding will be provided by debt financing committed by Nordea Bank of Finland and DnB Nor Bank of Norway.
"We have been looking for the right opportunity in the shipping industry for some time," said Wilbur Ross.
Wilbur Ross"Diamond S has a proven management team led by shipping industry veteran Craig Stevenson and provides an outstanding platform to build a leading global shipping business at what we see as an excellent time to invest in the industry," Ross added.
Former OMI chief Craig Stevenson also won plaudits from First Reserve Corp chairman and chief executive, William E Macaulay.
"Craig has well positioned Diamond S to benefit from the growth and attractive supply demand trends in the Eastern Hemisphere. We are pleased to welcome this premier group of international investors to advance Diamond S to the next level," Macaulay added.
Top shipbroker Clarksons put the competitive global sales deal together on behalf of South Korea’s Cido Shipping.Diamond S Shipping has eight Suezmax tankers and two LR2 product carriers under construction by Hyundai Heavy Industries and Samsung Heavy Industries, with the first delivery scheduled for January 2012.
[Editor’s Note: NYMAR member firms Seward & Kissel LLP and Holland & Knight assisted on this transaction. S&K represented Diamond S as special counsel on certain maritime and corporate matters in the acquisition (Jones Day was lead counsel) and Seward & Kissel LLP also represented Diamond S as borrower's counsel in the $750,000,000 acquisition finance. Holland & Knight represented the lenders in that finance. NYMAR Vice President, Larry Rutkowski, led the S&K team and was assisted by his partner Michael Timpone and associates Amanda Brown and Iden Sinai. The Holland & Knight team was led by Nancy Hengen.] - August 17th, 2011
- General Maritime Leads Slump as Oil-Tanker Stocks Plunge
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By Michelle Wiese Bockmann
BloombergGeneral Maritime Corp. (GMR) led declines by oil-tanker stocks in New York as the threat of a second U.S. recession in three years increased the risk that energy imports into the world’s largest economy may fall.
General Maritime fell 29 cents, or 39 percent, to 45 cents in New York Stock Exchange trading. The six-member Bloomberg Tanker Index (TANKER) dropped 11 percent, the most since March 5, 2009, to the lowest level since May 9, 2003.
“The stock market is discounting problems ahead,” Andreas Vergottis, research director at Tufton Oceanic Ltd., manager of the world’s biggest shipping hedge fund, said by phone. “It will be very bad for tankers.”
The U.S. economy is heading into a “double-dip” recession, Nouriel Roubini, the co-founder and chairman of New York-based Roubini Global Economics LLC, said in an interview on Bloomberg Television.
Tanker shares retreated as equities slumped globally. The Standard & Poor’s 500 Index dropped 6.7 percent to 1,119.46, the lowest level since September. The MSCI World (MXWO) Index slid 5.1 percent, extending its drop from this year’s high to 19 percent.
A return to recession in the U.S. would delay any rebound in charter rates for tankers until after 2013, said Jonathan Chappell, an analyst at Evercore Partners Inc. in New York. Hire costs for very large crude carriers, each able to haul 2 million barrels of oil, are at the lowest level in 10 years, according to the analyst.
34% Decline
“What this could do is delay the recovery out further,” Chappell said.
Hire costs on the industry’s benchmark Saudi Arabia-to- Japan route fell 1.7 percent to 46.09 industry-standard Worldscale points today, according to the Baltic Exchange in London. The decline was the 12th in a row. Rental rates are down 34 percent this year.
Seaborne shipments of oil into the U.S. were forecast to reach 6.9 million barrels a day, or 17 percent of all crude shipped this year, an 11-year low, according to Clarkson Research Services Ltd., a unit of the world’s largest shipbroker. The country is the world’s biggest oil importer.
Owners are facing a glut of ships after ordering the most in almost three decades in 2007 and 2008 before the world economy entered its worst recession since World War II. Supply and demand in the tanker market probably would only return to balance later than 2013 if demand were to weaken further, Chappell said.
Negative Rates
Average quarterly rates for VLCCs carrying crude to the U.S. from the Middle East have been unprofitable since October, according to data from the exchange. It assesses freight costs on more than 50 international maritime routes.
Unprofitable, or negative, rates mean tanker owners effectively are paying some of charterers’ costs because agreed daily hire rates fail to cover all fuel and operating expenses for a journey.
Tankers will ship an estimated 40.9 million barrels of crude oil, Clarkson said.
“Trade will slow down, and I wouldn’t be surprised if we see negative growth,” Tufton’s Vergottis said.To contact the reporter on this story: Michelle Wiese Bockmann in London at mwiesebockma@bloomberg.net
- August 17th, 2011
- Staten Island commuters eye rail link on rebuilt Bayonne Bridge
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By Steve Strunsky
The Star-Ledger
Jennifer Brown/The Star-Ledger. The Bayonne Bridge as seen through a NJ Transit train window in January. Bayonne Bridge as seen through a NJ Transit train window in January. Some Staten Islanders are continuing to clamor for a train on the rebuilt Bayonne Bridge, — a proposal that was first made 80 years ago.
To proponents of the project, raising the clearance of the Bayonne Bridge will ensure the health of the Port of New York and New Jersey and the survival of thousands of jobs and billions of dollars in economic activity that depend on it.
To others, the project also represents a chance to fulfill the dream of a commuter rail link between Staten Island and the mainland, a prospect first held out at least 80 years ago, when the Port Authority built the bridge with the capacity to add a light rail line to the four traffic lanes suspended from the span’s steel arch.
"That’s what the original planning involved," said Darl Rastorfer, an architect and author of "Bayonne Bridge: A Landmark by Land, Sea, and Air," a book commissioned by the Port Authority for the bridge’s 75th anniversary in 2006. "It was a light rail."
Now, the prospect of a rail link is being held out again by the Port Authority, with agency officials assuring local leaders it remains an option. Steve Coleman, a Port Authority spokesman, said in a statement that "the Bayonne Bridge concept does not preclude a mass transit option."
Linda Baran, president of the Staten Island Chamber of Commerce, said her impression after meeting with port officials was that they were, "open to the idea."
But the lack of specificity in the Port Authority’s assurances, along with the agency’s history of failing to follow through on plans for rail lines on the Bayonne and George Washington bridges, make some Staten Islanders skeptical.
"I’m already operating under the assumption that they’re not going to do it," said Rep. Michael Grimm (R-N.Y.), Staten Island’s combative congressman. "The people of Staten Island have been waiting 80 years. Why? Because the original plan for the Bayonne Bridge had an option for a light rail. But the last time I checked, the residents of Staten Island cannot ride an ‘option’ over the Bayonne Bridge."
Grimm wrote to the Port Authority’s executive director, Christopher Ward, in January requesting that a light rail line be included in the bridge plans. The two men then had what Grimm referred to as a "heated exchange" during a meeting to discuss the project. Grimm said the pair parted amicably, but he remains skeptical.
Raising the bridge clearance, from a height of 151 feet above the Kill van Kull to 215 feet, would let the latest generation of container ships dock directly at Port Newark/Elizabeth Marine Terminal once a widening of the Panama Canal is completed in 2014.
Gov. Chris Christie, local shippers and others have pressed the Port Authority to move full speed ahead on the project to minimize the loss of shipping business to competing ports, even as the bi-state agency is confronted with other costly projects and recession-related revenue declines.
Proponents of a rail link acknowledge it would significantly increase the cost of the bridge project, already expected to exceed $1 billion. But they say the time is ripe for rail because the southern terminus of the Hudson-Bergen Light Rail line has been extended to within just a few blocks of the bridge in Bayonne.
The line could carry Staten Island commuters to Jersey City or Hoboken, where ferries, PATH trains, or N.J. Transit trains and buses could take them to Manhattan, Newark or elsewhere.
A rail link could also spur growth on Staten Island’s West Shore."Staten Island, quite frankly, has not gotten its fair share from the Port Authority," Grimm said.
Grimm said his skepticism that Port Authority officials are serious about a rail link was fueled by preliminary specifications for the bridge’s new roadbed, which appear not to leave room for rails.The original 46-foot-wide roadbed left 38 feet of width for the addition of rails within the 84-foot-wide arch. But the new road, designed to meet federal standards for lane width, shoulders and a center divider, measures exactly 84 feet — the full width of the arch — according to plans laid out earlier this year by the Port Authority’s chief engineer, Peter Zipf.
Grimm wants new plans drafted to include a rail line in the initial construction of the raised roadbed, which he said would be more cost-effective, timely and realistic than a pledge to add rails later. Grimm said it would also let him lobby for federal mass transit money.
"I believe in my heart of hearts that if we don’t do it now, when we’re spending over a billion dollars to raise the bridge, it will never get done," he said.
Bayonne officials have also been assured by the bi-state agency that a light rail link remains possible, and seem more sanguine than Grimm. Mayor Mark Smith issued a press release following a recent meeting with the Port Authority’s deputy executive director, Bill Baroni.
"Port Authority officials said that bridge reconstruction would leave all of Bayonne’s neighborhoods intact," the mayor stated. "The span will also have the potential to add Light Rail in the future."
But bridge engineers wondered how disruption could be avoided under such a massive project, which would raise the roadbed’s height by more than a third above the waters of the Kill van Kull.
"It means your approaches will have to go another 650 feet in either direction," said Norbert Delatte, a professor of civil engineering at Cleveland State University in Ohio.
Steve Gallo, Smith’s chief of staff, acknowledged that the project would be complicated, but said city officials understood its importance to the port.
"Obviously, there are some engineering details to work out," Gallo said. But, he added, "We don’t want to be parochial and only concerned with our own issues."
July 2011
- July 19th, 2011
- A Bridge Too Low and a Lesson for Visionaries
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By Neil Genzlinger
New York Times
MARITIME MESS The Bayonne Bridge, opened in 1931. Photo by Mitch Waxman I'm concerned that the Second Avenue subway project makes no allowance for personal teleportation modules. I'm worried that the new wing of the Museum of the Moving Image in Astoria, Queens, does not account for the possibility that films might someday be projected directly onto the backsides of our eyelids.
TIGHT SQUEEZE Capt. John Doswell hosting a Hidden Harbor Tour. Photo by Emily Berl for The New York Times Such stuff is troubling me because of a lovely boat ride I took a few weeks ago: a Hidden Harbor Tour, an evening excursion intended to show people that the waterways around the city are home to more than just the Statue of Liberty. The tour did a great job of that, but it also made me wonder whether the visionaries shaping our future are visionary enough. A few generations ago, they weren't, and it's about to cost us $1 billion.
The Hidden Harbor Tours, which depart from Pier 16 on the East River, were developed by the Working Harbor Committee, which wants to make sure everyone knows New York Harbor is still an active port that provides lots of jobs in shipping, marine maintenance and such. There are actually three tours, one in the direction of the former Brooklyn Navy Yard, one up the West Side of Manhattan and the one I took, which checks in on the Erie Basin in Red Hook, Brooklyn, before heading through the Kill Van Kull and into Newark Bay. (The next offering of that tour is Tuesday at 6:15 p.m.)
Cargo container ships in Newark Bay. Photo by Mitch Waxman Capt. John Doswell, the genial host, likes to bring along a guest speaker. On my tour it was Robert LaMura, commercial director of Ports America, a shipping terminal operator in the harbor. During our two-and-a-half-hour trip on a good-looking yacht named the Zephyr, the two of them brimmed with tidbits of interest to landlubbers — why tugboats generally push rather than pull (it gives the tug more control); how those boxy shipping containers get on and off the huge ships; which of the warehouses along the shore is full of beer.
But one thing in particular was preoccupying Mr. LaMura: the Bayonne Bridge. "The hottest topic in the industry," he called it. In maritime terms, it's killing us.
Othmar H. Ammann, the Bayonne Bridge's designer, at its 1931 dedication. Photo courtesy of The Port Authority of N.Y. & N.J. That's because, with a 151-foot clearance at midspan, it's just not high enough for the giant cargo ships now on the seas. If we don't do something about it, those ships are going to go to Boston or Norfolk, Va., or some other port, and jobs with them, Mr. LaMura said.
The Bayonne Bridge was opened in 1931 and connects Bayonne, N.J., with Staten Island. I don't know why anyone would want to go from Bayonne to Staten Island or vice versa, and if I were in charge I would just rip the thing down and replace it with giant car-flinging catapults, a transportation solution I have long advocated for all the river crossings hereabouts in an effort to make commuting more festive.
But a study has already looked at various options for the Bayonne Bridge problem and presumably has rejected that one, because it has instead recommended raising the bridge's roadbed by 64 feet. Looking at the bridge as we passed under it, I was hard-pressed to imagine how that would be done, but the Port Authority of New York and New Jersey has explained it all on a succinct Web page that uses impressive-sounding words like "gantry" and "constructability" and "conceptual animation," so apparently it's possible.
What is both interesting and alarming is to look up the news coverage of the original dedication of the bridge back in 1931. The structure was designed by Othmar H. Ammann, whose credits also include the George Washington and the Verrazano-Narrows Bridges, so the guy was pretty good at what he did. And at the opening of the Bayonne Bridge that November, after remarking that its four-lane capacity would be sufficient for years to come, he said this:
"The bridge has ample strength, however, so that at any time in the future, two or three more vehicular lanes may be added, thus increasing the vehicular capacity to at least 25,000,000 vehicles a year."
In other words, Ammann, a great mind in his field at the time, foresaw that the bridge might someday become inadequate, but his vision went only horizontally. (And it wasn't very accurate; the bridge is still just four lanes, and it sees only seven million or so vehicles a year.) Neither he nor anyone else appears to have thought vertically and asked whether a ship stacked 152 feet high with cargo might one day come along. Now, fixing this oversight carries a billion-dollar price tag, considerably more than the $13 million the original bridge cost (the Port Authority's figure), even adjusted for inflation. Oops.
Anyway, all this makes you ponder what we're not envisioning today when we build new subway lines, skyscrapers, sports arenas and so on. Did we adequately study whether the tendency of crowds to do the wave counterclockwise will eventually cause our new ballparks to tilt like the Tower of Pisa? Should the High Line park have been built with a second travel lane for people who prefer to traverse it by jet pack?
One final note in this meditation. In conjunction with the opening of the bridge, tolls on the various crossings were adjusted. Here is a slice of the New York Times article reporting that news: "A single-seat passenger automobile will pay 50 cents, as will a horsedrawn vehicle. Sixty cents will be charged for a two-seat passenger car, including a rumble seat when occupied. A twenty-six trip monthly commutation ticket for both classes of passenger cars will cost $8." Today, of course, you pay $8 for a single trip through the Bayonne Bridge toll. Times, it appears, change.
E-mail: metropolitan@nytimes.com
- July 19th, 2011
- Entrepreneur Envisions Marine Highway
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By Al Lewis
gCaptain Staff, Dow Jones & Company
This column is brought to us by Al's Emporium, written by Dow Jones Newswires columnist Al Lewis, offers commentary and analysis on a wide range of business subjects through an unconventional perspective.
Every so often, an entrepreneur comes along with an idea so obvious that its adoption is only a matter of time. But first, the rest of humanity must scoff at it for a while.
Ten years and many millions of dollars into his idea, New York real estate magnate Percy R. Pyne IV is almost through the scoffing phase.
America's streets are crumbling. Its bridges are falling into rivers. Its highways are gridlocked. And government funds to fix them are depleting. Then there's the rising dependence on foreign oil, planet-warming carbon emissions, and mass unemployment that eats at the core of the U.S. economy.
At 63, Pyne has his eyes on a highway that most people don't see: Unused lanes requiring zero maintenance and less fuel to ride.
He envisions a new transportation industry that would employ hundreds of thousands of people. But when he talks about it, some people tell him he's crazy. "Nobody seems to recognize the value of it," he said.
Pyne is hardly a voice from the wilderness. He's the son and grandson of notable businessmen, philanthropists and financiers, as well as the son-in-law of former Mobil Oil chairman Rawleigh Warner Jr. And he's developed millions of square feet of property.
Pyne is also the founder of American Feeder Lines, which he envisions as a fleet of specialized container ships that will move freight on a marine highway from Halifax, Nova Scotia, to Houston, Texas, and several ports in between.The intermodal, hub-and-spoke systems that would evolve around interconnected ports would ease the strain on highways across the continent, reduce fuel consumption and carbon emissions from long-haul trucking, and create jobs where none before existed.
"This is one business we don't have to invent," Pyne said.Short-run container transportation has long thrived in Europe and Asia. But in the U.S., the interstate highway system gave rise to a trucking industry so efficient that routes along America's coastline were abandoned.
To restart this industry in the U.S., Pyne must comply with the Jones Act, which regulates commerce in U.S. waters between U.S. ports. The law requires domestic shipping by American owned, operated and staffed ships. The ships must also be built in the U.S., presenting huge challenges.
Not only are the shipbuilding costs higher in the U.S., but the nation's commercial shipbuilding capabilities have declined since the 1950s. And Pyne has to find ways to ramp them up to build the sophisticated ships his fleet requires.
He'll also face challenges raising hundreds of millions in financing, as well as getting America's companies to change the way they move materials and goods around the country.
But Pyne says he's well on his way. He has taken on partners who understand the shipping business in Europe, including Tobias Koenig, founder of Koenig & Cie., an investment firm that finances ships, and Johannes Bitter-Suermann, former senior vice president at HSH Nordbank in Germany.
Pyne also recently launched a ship that runs between Halifax; Portland, Maine; and Boston, hauling scrap metal. He hopes to show companies how they can lower their transportation costs on American Feeder Lines without sacrificing much on delivery times.
"We think it's the greatest transportation opportunity in the last century," Pyne said. "I'm drinking my own whiskey, but I've been drinking it long enough to feel comfortable saying that.
"Just think of it as the Long Island Expressway. It just doesn't have any trucks on it."
Perhaps Pyne will go down in history, like Malcom McLean.Who's Malcom McLean? He developed the metal shipping container in 1956, revolutionized the way cargo is handled around the globe, and died in 2001 with great wealth but in relative obscurity.
"Twenty years from now … the country will have adopted this," Pyne said. "There will be lots of companies doing it. There will be hundreds of thousands of people … employed in the business. And, we'll have a much greener footprint because of it.
"Nobody will remember where it started," Pyne said. "It doesn't matter. We just have to get it started."
© 2011 Dow Jones & Company, Inc.
Image via Fast Lane, The Official Blog of the U.S. Secretary of Transportation - July 19th, 2011
- Rose retires from Dahlman
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New York investment bank Dahlman Rose has confirmed the retirement of chief executive Simon Rose, who is to be replaced by chairman, Kim Fennebresque.
The stunning change at the helm of the dynamic shipping and energy focused bank was first mooted in a TradeWinds report earlier today.
"I have been incredibly proud to lead this firm since inception and am excited about the bright future ahead," Rose said in a prepared statement. "It was my hope when I asked Kim to join our firm as chairman that he would assume a senior leadership role, and this appointment realises that goal."
Rose, who is only 41, built the 200-person bank virtually from scratch in tandem with partner Ernie Dahlman, starting in 2004 on the periphery of shipping underwriting. As TradeWinds reported earlier, Dahlman also is no longer a manager at the bank, having opted about a month ago to devote his time to sales and trading.
Despite the implication of an orderly and planned transition to Fennebresque, Rose's departure is bound to fuel speculation over the circumstances. Dahlman has achieved rapid growth, doubling staff every 24 months and expanding from shipping into adjacent sectors like oilfield services, metals and mining and agriculture. But like other banks, it is facing a tough time for business both in shipping and in the general capital markets.
One person familiar with the bank said he did not know whether anyone had agitated for a change, but said that it was welcome in his opinion.
"I think it needed to happen," he said. "I think some people are good at building things, and others are good at managing. I think that now there is a chief executive who is capable of managing a bank of this size."
Fennebresque, who joined Dahlman in 2010, is a well regarded figure in New York banking circles. He most recently served as chairman and chief executive of Cowen Group. He had earlier stints as head of corporate finance/mergers and acquisitions at UBS, and co-head of investment banking at Lazard Freres.
"I am very pleased to have the opportunity to lead this fine firm," Fennebresque said. "Dahlman Rose has achieved extraordinary success in a relatively brief period, and I look forward to expanding on that record. I am also very grateful that Simon will remain a major shareholder and an active member of our board."
Also joining the management team is Donald Motschwiller, who has been named president. He joined Dahlman earlier this year, having previously been co-president of First New York Securities LLC and chief of EFX Capital/Prime Services.
- July 19th, 2011
- SUNY Board of Trustees Unanimously Appoints Rear Admiral Wendi Carpenter, USN, President of SUNY Maritime College
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First Woman to Serve as SUNY Maritime College President
The State University of New York Board of Trustees today unanimously appointed Rear Admiral Wendi Carpenter, USN, president of SUNY Maritime College. Admiral Carpenter is currently serving as the Commander of the Navy's Warfare Development Command. The SUNY Board of Trustees voted on her appointment at a special meeting held on Thursday, June 30, 2011. Rear Admiral Carpenter is the first woman to serve as president of SUNY Maritime College.Speaking of the newly appointed SUNY Maritime College president, SUNY Chancellor Nancy Zimpher said, "Admiral Carpenter's 30-plus years of naval experience and leadership make her ideally suited to be the next president of SUNY Maritime, where she is certain to enhance the college's national reputation for excellence in academic, athletic, and leadership training. Admiral Carpenter is among the Navy's elite, and she will be an outstanding addition to the SUNY leadership team."
Carpenter was among the first women to be designated as a naval aviator. Graduating from flight school at the top of her class, she was selected for immediate duty as the first selectively retained graduate instructor pilot in the T-44 advanced multi-engine pipeline. In 2005, she became the Navy's first woman aviator promoted to the rank of admiral.
College Council and Search Committee Chair Timothea Larr said, "Our extensive national search produced a strong pool of candidates from higher education, the Navy, and the maritime industry, all of which was a reflection of SUNY Maritime College's recognized reputation for excellence. Admiral Carpenter emerged as an outstanding model of leadership and accomplishment. The search committee was highly impressed with Admiral Carpenter's demonstrated record of leadership and significant executive accomplishments, as well as her training background and graduate studies. She will advance SUNY Maritime College's vision of being first and foremost in international maritime education, training, and research."
Admiral Gary Roughead, Chief of Naval Operations, said, "I applaud the selection of RADM Carpenter to head SUNY Maritime. She brings extraordinary experience and perspective from her many assignments in the U.S. Navy."
Admiral Jonathan W. Greenert, who has been tapped as the Navy's next Chief of Naval Operations, said, "I have had the honor and privilege of serving with Admiral Wendi Carpenter for several years. She has a unique combination of intellect, leadership, and management. Wendi is among our most innovative and insightful Flag Officers. I predict great things at SUNY under her leadership."
Admiral Carpenter said, "SUNY Maritime College is a unique campus that offers students some of the strongest, most competitive programs and training in the country. I am delighted to be considered for this position and grateful to Chancellor Zimpher, Chairwoman Larr, and the search committee for their confidence in my ability to serve as Maritime president. I look forward to putting my 30-plus years of Naval experience in many different areas of executive leadership into practice at SUNY Maritime College."
Outgoing Maritime President Admiral John Craine said, "It has been an honor serving The State University of New York and Maritime College, and I am delighted to be turning over leadership to Admiral Wendi Carpenter. I have the utmost confidence that she will thrive as president and truly support and encourage the outstanding work of the students, faculty, and staff of this wonderful institution."
About Rear Admiral Wendi B. Carpenter
Rear Admiral Wendi B. Carpenter is the daughter of an Air Force veteran of WWII, Korea, and Vietnam. Raised throughout the United States, she graduated from the University of Georgia in 1976 with a bachelor of science degree in psychology.
Carpenter was commissioned in 1978 through Aviation Officer Candidate School in Pensacola, Fla., and in July 1979 was designated a Naval Aviator. Graduating at the top of her class, she was assigned as the Navy's first selectively retained graduate instructor pilot (SERGRAD) in the T-44 aircraft at VT-31, NAS Corpus Christi, Texas. In 1981, she was ordered to sea duty with the "Ironmen" of VQ-3, NAS Barbers Point, Hawaii, where she served as a mission commander, aircraft commander, and instructor pilot in the EC-130 F/G/Q aircraft.
Carpenter deployed throughout the Pacific, western United States, and Alaska in support of the nation's strategic nuclear triad. She completed a shore tour as an aviation assignments officer in Washington, D.C, and, in 1985, accepted a Reserve component commission.
Carpenter has held a total of five commands at the commander, captain, and flag level in the areas of logistics, training, and aviation in fleet, joint, and coalition operations, giving her a unique warfighting perspective. She has also completed numerous fleet and shore staff assignments.
Carpenter has accepted numerous recalls to active duty, including her current assignment. In June 2008, she assumed command of Navy Warfare Development Command where she and her team work to deliver capability for Navy, joint, and coalition forces through concept generation and development, doctrine, modeling and simulation, and experimentation.
Previous flag assignments include deputy commander, Navy Region Southeast; acting director, OPNAV N31 (Information, Plans, and Security); vice director, Standing Joint Forces HQ, U.S. Joint Forces Command; and deputy commander, Second Fleet. She has represented the United States in a number of coalition and NATO forums in Europe and Africa.
Carpenter has pursued graduate studies in marketing and holds a master of arts in international relations from Salve Regina University. She is a distinguished graduate of the Naval War College and completed Capstone 06-02, as well as executive programs in business, strategic planning, and innovation at National Defense University, Defense Acquisition University, University of North Carolina Business School, Chapel Hill, and Babson College. She has accumulated over 3,500 military flight hours.
Carpenter's awards include Defense Superior Service Medal, Legion of Merit (3), Meritorious Service Medal, Navy Commendation Medal (5), Navy and Marine Corps Achievement Medal, and various unit awards. She is most proud of the FY01 DON CIO Award for "e-Business" in government, which was won by the 75-member team she led as Commanding Officer, DCNO N4, Fleet Readiness and Logistics.
About SUNY Maritime College
The first maritime school in the country, SUNY Maritime College couples its academic programs with a structured cadet life in the regiment for both men and women. SUNY Maritime offers undergraduate and graduate degrees, 20 varsity athletic teams, Summer Sea Terms to Europe aboard the training ship Empire State VI, five ROTC options, and US Coast Guard license and intern programs. SUNY Maritime prepares students for careers in the maritime industry, government, military, and private industry. Recent graduates of the college have benefited from nearly 100 percent job placement.
About the State University of New York
The State University of New York is the largest comprehensive university system in the United States, educating more than 467,000 students in more than 7,500 degree and certificate programs on 64 campuses with nearly 3 million alumni around the globe. To learn more about how SUNY creates opportunity, visit here.
- July 19th, 2011
- NYMAR's Man About Town—Trendy Ex-Cargo Spots
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By Barry D. Parker for NYMAR
A very trendy part of New York is closely tied to cargo logistics from a bygone age. The "Highline" is an elevated freight train trestle, now a public park, extending south from 30th Street extending south about a mile to Gansevoort Street. Renewal and repurposing is also the order of the day in the "Meatpacking District", a small cluster of hip-ness nestled between the Chelsea neighborhood, on its north side, and the West Village. In the old days, circa 1930's, refrigerated trains would deliver their cargo to slaughter and packing houses in the area, which would then be processed and distributed onward by trucks to New York's restaurants and retail markets.
For me, various business events had drawn me to the area, one grimy and now both safe and accessible. I can offer two starting points- a trip to Chelsea's terrific art gallery scene (which could easily merit another article), or, as an alternative, a visit to the Maritime Hotel, actually in the Chelsea neighborhood at Ninth Avenue and 16th Street. Like all the places described here, the scene is a blend of "cool" locals and affluent professional / business type people. Tourists have also discovered this neighborhood, but are not as nocturnal as the cool people.
Diagonally southwest of the hotel (replete with port-hole style windows and once the headquarters for the National Maritime Union and hostel for seafarers when ships docked nearby), is Buddakan. This restaurant, in a cavernous space (once a warehouse) with muted lighting and not-so-muted music, offers what they call a "Pan Asian" menu. For me, it was dumplings, egg rolls and shrimp to go with drinks at the bar, but there is a serious dinner menu. A block south is old stalwart- the Old Homestead Steakhouse, a New York landmark which still hosts the occasional closing dinner after a capital markets deal. For those who would rather shop than eat, the Chelsea Market (an ex Nabisco cookie factory, at 15th and 9th) is full of retail shopping. Across from the steakhouse, the Apple Store (as in I-Pad, not grannysmith), at 14th and 9th has become a neighborhood icon in the past year.
South two blocks on Ninth Avenue (now in "Meatpacking" and not Chelsea), at Little West 12th Street (yes, really) is the very famous Pastis restaurant, kind of a brasserie on steroids, or maybe on French Bordeaux. The house red is available in a big carafe to help with digestion of a dinner that might include a steak or burger with Bernaise sauce. For true night-owls, Steak frites is available on the supper menu with weekend service until 3am. Backtrack one block, and walk on 13th towards the Hudson River and you'll encounter the Spice Market, another Asian themed place. Like Buddakan, it's dark and cavern-like, but the ornate wood carved décor is reminiscent of old world Vietnam or Thailand. The dishes reflect the world class sensibilities of proprietar Jean-Georges Vongerichten, who supposedly was inspired by the markets in Southeast Asia that he once prowled, for exotic ingredients. One block further west, on Washington Street, is the aromatic SeaThai bistro, an offshoot of a place that started in trendy Williamsburg (Brooklyn). The ultra-slick Meatpacking location serves some great regional specialties, with richly flavored sauces (I am a ginger and lemon-grass novice, but these are good). The topography is multi-floored and includes outdoor seating at street level, and at the pool lounge (on the roof).
Then, across Washington Avenue from SeaThai, we come to The Standard, a hotel that straddles (as in, was built above, for zoning reasons) the Highline. The hotel is part of a family of über-cool properties in Los Angeles and a spa in Miami Beach (on a private island near South Beach). The Standard Grill, a proper restaurant, has a slight brasserie influence, with a selection of delicious looking fish dishes- though I went for the bacon cheeseburger following a charcuterie style appetizer selection. Most people come to the Standard, for the "scene", like see, and be seen, whether it's in the excellent bar at the Grill, in the huge enclosed Biergarten (huge and noisy), in the Living Room (a lounge adjacent to the hotel lobby), or the Top Of The Standard, a bar 18 floors up. During the warm season, stairs lead to an outdoor lounge on the roof, complete with a pool. The bar becomes an invitation-only club right when the post industrial nocturnals come out to play, not thinking of the cargo that once flowed 18 floors below, and likely not noticing the beautiful views out on the Hudson River.
June 2011
- June 15th, 2011
- Port Authority secures world's second largest shipper as anchor tenant, delivering $500 million of private investment and creating nearly 800 new jobs
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Lease Agreement with Port Newark Container Terminal and Mediterranean Shipping Company Guarantees Increased Cargo Volume Port-wide
The Port Authority Board of Commissioners today approved a restructured lease with Port Newark Container Terminal (PNCT) that will provide $500 million in private capital investment to upgrade the existing facility into a state-of-the-art terminal. The restructured lease will create nearly 800 new jobs – including 350 construction jobs, and will generate 1,450 overall jobs over the term of the lease. It also will guarantee an annual increase in cargo container volumes from Mediterranean Shipping Company (MSC), the world's second largest shipping company.
The restructured PNCT lease calls for a 20-year extension of the existing lease through 2050 in order to expand the terminal through a $500 million private capital investment and secure a long-term strategic commitment with MSC. The lease provides guarantees from both PNCT and MSC that will dramatically increase cargo volumes at the port – from 414,000 today to 1.1 million containers by 2030. In addition, the lease would expand the terminal's facility by more than 100 acres – from 180 acres to approximately 287 acres.
Port Authority Chairman David Samson said, "With $500 million in private investment, nearly 800 new jobs and guarantees to increase cargo volumes, the lease agreement is a win-win for the Port Authority and the entire regional economy. Governor Christie made a commitment to increase the competitiveness of our ports and the ability to secure the world's second largest shipper as our newest tenant demonstrates the economic value of that commitment."
Mediterranean Shipping Company Deputy Chairman Diego Aponte said, "The Port Authority is making the right investments as port competition continues to intensify. The investment and growth strategy under the leadership of Governors Andrew Cuomo and Chris Christie paved the way for this lease agreement and underscores their commitment to positioning the port to lead the competition. We make this move with confidence in the Port Authority's leadership and look forward to making Port Newark MSC's new home at this time of record growth for our company."
Port Authority Executive Director Chris Ward said, "This is a big deal for our port. It guarantees an increase in cargo volume, secures a major anchor tenant at our port and leverages half a billion dollars of private investment to create a state-of-the-art container terminal. This transaction will create new jobs and help keep the Port of New York and New Jersey the largest and most competitive port on the East Coast. Under Governor Cuomo's leadership, the Port Authority is attracting new business, driving growth and generating new job opportunities to the benefit of the entire region."
Deputy Executive Director Bill Baroni said, "The world's second largest shipper selecting Port Newark as its new home sends a signal to the entire industry and drives economic growth throughout the region. We welcome this news and the capital investment, new jobs, and other guarantees it brings with it."
Port Authority Commissioner Raymond M. Pocino, Vice President/Eastern Regional Manager, Laborers International Union of North America, said, "This lease agreement demonstrates the tangible benefits that come with investing in growth. During these challenging economic times, the 350 construction jobs and thousands of other jobs the agreement will generate over the course of the lease is welcome news for workers and businesses throughout the region that will benefit from this positive economic growth action by the Port Authority."
Port Newark Container Terminal has been a terminal operator at the port since 2000 and currently operates on a 180-acre terminal facility under a lease that expires in November 2030. Today's Board action provides a 20-year extension that would run through November 2050, subject to Port Newark Container Terminal's investment of $500 million during that period. As part of the agreement, the Port Authority will enter into an agreement with Mediterranean Shipping Company, which will provide for the shipping line to annually increase its cargo container volumes through November 2030.
- June 15th, 2011
- Maersk CEO Explains Details of Manifesto
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By Peter T. Leach
The Journal of Commerce OnlineElvind Kolding provides exclusive details regarding document to JOC
When Maersk Line CEO Eivind Kolding issued a manifesto to the container industry on June 7 calling for radical changes in the way both ocean carriers and shippers conduct their business, shippers largely welcomed it, but called for more details.
Kolding explained why he issued the manifesto and provided more details on his ideas in an interview with The Journal of Commerce on June 10.
Kolding said he decided to put out the manifesto to move the dialogue between carriers and shippers beyond the focus on freight rates and shift it to a competition based on service, reliability, and the lowest environmental impact on supply chains.Kolding divided the manifesto into three distinct areas. In the first section he said the industry needs to focus on providing reliable service at fair rates. When asked how shippers and carriers could establish fair rates, which are always the subject of heated contract negotiations, he said this would require long-term contracts for up to three years. "When we know that we have that business, then we actually we can price it quite competitively, and then the customer will know that he will have a freight rate he can rely on," he said.
Long-term contracts would apply to largest shippers and then to medium-sized shippers, he said. Freight forwarders would still mostly use the spot market, he said, but spot rates would become less volatile after long-term contracts take hold.
In the second part of his manifesto, Kolding called for using more technology to provide greater ease of booking and providing instructions for shipping containers. He urged the industry to develop technology that would enable shippers to easily book space for shipping containers over the Internet, instruct carriers on the requirements for the shipment and then change instruction as conditions change. Kolding said this kind of technology would benefit smaller shippers.
The larger shippers would be connected with their carriers through EDI, or electronic data interface with their carriers. He said carriers should develop technology that would enable shippers to connect with their carriers in the way they prefer.
In the third component of the Maersk Line chief's manifesto, he called for greater visibility into the environmental footprint created by a carrier's ships. Kolding explained that increased visibility into the amount of a carrier's carbon emissions would enable a shipper to choose its carrier on the basis of this, which is becoming more important as retailers demand greener supply chains.
Kolding also called for the establishment of a system of "load protection fees" that carriers would assess on the 30 percent of containers that are booked by shippers but turn out to be "no-shows" when they don't turn up at the ports of origin. He also called for fees on shippers that don't meet their volume commitments beyond a 10 percent variance.
--Contact Peter T. Leach at pleach@joc.com. Follow him on Twitter @petertleach.
- June 15th, 2011
- City officials talk to PA about Bayonne Bridge
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BAYONNE—Several officials from the city of Bayonne discussed plans for the Bayonne Bridge at a meeting with the Port Authority of New York and New Jersey on Friday.
At the Port Authority's headquarters in Manhattan, Port Authority Deputy Director Bill Baroni, engineers, and project planners explained that the roadbed on the Bayonne Bridge will be lifted by sixty-four feet to allow large cargo ships to pass below. Bayonne officials viewed an animated film that demonstrated the process the Port Authority will use to reconstruct the bridge. (That animation is available for everyone to view on the Port Authority's website at www.panynj.gov/bayonnebridge/).
The main goal of the Port Authority's plan to alter the Bayonne Bridge is to preserve and expand jobs in the metropolitan area. Mayor Mark A. Smith said, "By allowing the large cargo ships to travel on the Kill Van Kull between the Atlantic Ocean, Port Newark, and Port Elizabeth, we will secure the future of the shipping industry in our region." He continued, "If the Bayonne Bridge remained as it is, the shipping industry would move elsewhere, and consumers would have to pay more to have products brought here from distant ports. The Port Authority's plan for the bridge is good for workers, consumers, and the city of Bayonne."
Port Authority officials said that bridge reconstruction would leave all of Bayonne's neighborhoods intact. The redesigned bridge will include wider lanes, a breakdown shoulder, a walkway, and a bikeway. The span will also have the potential to add Light Rail in the future. There will be no loss of road ramps in the redesign of the bridge. The Port Authority promised no significant shutdowns during construction. The bi-state agency pledged to work with Bayonne and Staten Island to minimize the impact of construction on the two communities.
Mayor Smith concluded, "I would like to thank the Port Authority for being considerate of Bayonne's needs. I am glad that the Port Authority listened to Bayonne's concerns and that jobs in our area will be preserved."
Among the Bayonne officials who attended the meeting were Business Administrator Steve Gallo, Assemblyman Jason O'Donnell, City Planner John Fussa, City Engineer Don Schlachter, and Deputy Fire Chief Keith Weaver.
- June 15th, 2011
- Diana Containerships Sets $168 Million Stock Offering
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By Peter T. Leach
The Journal of Commerce OnlineCarrier will use funds to finance cost of Maersk ships, pay off loan
Diana Containerships on Friday set the price of its public offering of 14.25 million shares of its common stock at $7.50 per share.
The Athens, Greece-based carrier, already listed on the NASDAQ Stock Exchange, said it would use the proceeds of the $168 million offering and a $20 million private placement of approximately 2.67 million common shares to Diana Shipping to repay a secured-term loan facility with DnB NOR Bank, to fund the balance of the $70.5 million cost of three containerships it agreed to acquire from Maersk Line and the balance to buy additional container ships and general corporate purposes, including working capital.
The offering is expected to close on June 15. The underwriters have a 30-day option to purchase up to an additional 2.1375 million shares of common stock to cover over-allotments, if any.
Wells Fargo Securities, Bank of America Merrill Lynch and Jefferies & Co. are acting as joint-book running managers for the offering.
Diana Containerships, which was spun off by dry bulk ship-owner Diana Shipping at the beginning of the year, operates five container ships with capacities ranging from 3,426 to 4,714 20-foot-equivalent units.
The carrier posted a first quarter profit of $256,829 compared with a year-earlier loss of $236,682 on charter revenue of $3.2 million.
- June 15th, 2011
- NOL to Issue Bonds for New Ships
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By Joseph Bonney
The Journal of Commerce OnlineNotes are part of financing plan for 12 8,400-TEU vessels
Neptune Orient Lines said it would issue S$300 million (US$244 million) in 10-year bonds to help finance the purchase of new container ships for APL.
The Singapore-based company recently ordered 12 new ships, each with capacity of 8,400 20-foot-equivalent units, for APL. The ships, to be delivered in 2013 and 2014, have a reported price of $98 million each.
NOL's notes will be the second issued under a $1.5 billion program NOL announced in 2010. The notes will pay 4.40 percent interest and be redeemable in 2021. NOL will have the option to redeem all or part of them after 2016.
DBS Bank was appointed as the global coordinator, and DBS. Standard Chartered Bank and Hongkong and Shanghai Banking Corp. were appointed joint lead managers and book-runners for the notes.
-- Contact Joseph Bonney at jbonney@joc.com. Follow him on Twitter @josephbonney.
- June 15th, 2011
- NYMAR's Man About Town—Al Fresco wining with some dining
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By Barry D. Parker for NYMAR
Early indications are pointing to another hot summer in New York. While my friends across the pond are complaining about dreary rainy days, Big Apple denizens are basking in their collective glows gained sitting outside at some of midtown's excellent gathering places. With Marine Money Week approaching, with its action centered in midtown, the article gravitates towards the center of New York's new shipping / money universe.
Everyone is eagerly awaiting the conclusion of the construction at St. Bartholomew's Church, at 50th Street and Park Avenue, where the Inside Park restaurant and its outdoor garden, will be open all summer. The restaurant is actually inside what had been the cavernous Great Hall (including stained glass windows and a high ceiling) within the Church's community center, serves mainly American fare. But the real action (for lovers of outdoor venues) is at The Terrace, where hedgies, lawyers and professional types gather at lunchtime or at cocktail time. You can eat a full meal outside, but honestly I have not gotten past the burger sliders- to be washed down with something from the nice selection of beers, wines, or something stronger.
A block away, over on Madison Avenue between 50th and 51st (directly across from St Patricks Cathedral) is the Palace Gate, a place that's hard to get into because it's so small- nestled in the courtyard of the Villard Houses that adjoin the Palace Hotel. If you can get one of maybe a dozen or so tables in between the townhouses, order from the special lunch menu which features a selection of small sandwiches and pizzas. In the evenings, you can sample some canapé style snacks while ordering from their winelist with more than 3000 selections.
Brasserie Ruhlman, on 50th and Rockefeller Plaza (slightly west of Fifth Avenue) is the ultimate spot for people watching at lunchtime or (with long days) at dinner. From the spacious outdoor seating area (call ahead for a good spot), you can monitor the comings and goings of both tourists and business elites strolling around Rockefeller Center. Named after the famous art deco designer, a quick wander around inside first will let you check out the stylish appointments, before grabbing your outdoor table. Once you sit down, you can choose from a menu that evokes a real Parisian feel. For those who want to avoid meats (like the great steak au poivre or hanger steak), there are numerous fish items- starting with a great selection from the raw bar, and a nice choice of salads. On nice days, the after-work scene is incredible, way-way above all those rowdy biergartens recently feted in the New York Times.
Rockefeller Center has another outdoor offering- the Rink Bar- adjoining the indoor Rock Center Café, claiming to be New York's oldest outdoor bar. Whether that's true or not, the barbecued ribs in the evening, with a secret sauce based on Myers Rum, are some of the best in town (well- maybe the chef at Brother Jimmy's- a big hangout for Duke alumni, might not agree). Just to the south of the re-purposed skating rink, past the colorful row of flags, on 49th and Rockefeller Plaza, you'll likely be lured into the Morrell Wine Bar, and the neighboring newly opened Bouchon Bakery – both of which offer outdoor seating under shady umbrellas. Morrell's (tied to the well known wine merchant located next door), boasts a selection of more than 150 wines by the glass (and a bigger universe of 2000 available wines), complemented by a menu of light dishes including the "must have" charcuterie. I found a few agreeable light whites (from countries ranging from Chile, to Greece, and Australia, besides the usual suspects) to wash down the assorted meats, cheeses, and various nicely presented adaptations of fish that seemed to have taken on an Asian fusion motif. One store away, literally, is the Bouchon Bakery, inspired by boulangeries found in France, serving pastries, cookies, and light sandwiches, croissants and baguettes (none of which I ordered after the healthy meal at Morrells- just had some sweets). There's also a selection of freshly roasted coffees- also served up as ice coffee for those braving the mid-day sunshine. By the way, the bakery's other location, originally set up to provide bread for the very exclusive restaurant Per Se (under the same ownership), is up at Time Warner Center. I feel yet another "Man About Town" article coming on.
May 2011
- May 16th, 2011
- Senators Propose Extending TIGER Grant Program
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By R.G. Edmonson
The Journal of Commerce OnlineProposal would push program through fiscal 2018
A bipartisan group of senators is proposing legislation to extend the Department of Transportation's TIGER grant program through fiscal 2018, but stops short of authorizing a specific amount for grants.
The extended TIGER program would have many of the same features and requirements as the previous TIGER rounds, with the addition of loan guarantees to the previous grant-only rounds.
Projects from $10 million to $500 million may be funded, except in rural areas where TIGER money could fund projects above $1 million; eligible projects include highways and bridges, public transportation, passenger or freight rail, and port infrastructure improvements.
The sponsors, senators Patty Murray, D-Wash., Susan Collins, R-Maine, and Dick Durbin, D-Ill., represent states that have recently benefited from transportation infrastructure grants. Washington received $34 million for replacing a bridge connecting downtown Seattle with the port and airport.
DOT gave Maine a grant to repair 233 miles of railroad in the northern portion of the state, plus a $22 million TIGER grant was used to build an intermodal transportation center and downtown redevelopment in Normal, Ill.
The bill joins another filed by Sen. Jay Rockefeller IV, D-W.V., that calls for a $5 billion infrastructure fund to be administered by DOT.
--Contact R.G. Edmonson at bedmonson@joc.com.
- May 16th, 2011
- Horizon Lines' empty bankruptcy threat brings US DoJ to its knees;
victorious hedge funds rejoice -
By Hema Oza & Andrew Ragsly, Edited by Adelene Lee
DebtwireThe US Department of Justice's (DoJ) reduction of Horizon Lines' price fixing fine last month dealt a winning hand to the cargo shipper's unsecured hedge fund creditors, Debtwire reports.
North Carolina-based Horizon and its bondholders wielded the idle threat of bankruptcy to pressure the DoJ to reduce a USD 45m fine to USD 15m, said two bondholders, a hedge fund analyst, a sellside analyst and a trader. The government's concession was ironic; since its price fixing claims would have been prioritized over the bondholders' in a restructuring.
"The DoJ blinked," said the hedge fund analyst. "They didn't need to, but that's what happened. The bondholders didn't really want a filing because their recovery could have been 30 to 40 cents, but the company used the slight chance of bankruptcy as leverage."
The DoJ's stand down in Horizon mirrors similar soft touch approaches seen in recent corporate restructurings -- junior bondholders in last year's Tronox and Asarco's 2009 bankruptcy cases, for example, benefited from the government's apparent willingness to take a discount.Fears that Horizon was on the brink of bankruptcy had been looming since December when it lost its take-or-pay contract with a Danish shipping group Maersk Line, which accounted for roughly 12% of its annual EBITDA. The timing of the contract loss was inopportune since the company's USD 330m 4.25% convertible notes must be refinanced before their maturity in August, 2012.
A host of legal woes, including a class action litigation brought by customers in Puerto Rico, compounded Horizon's predicament. Separately, bond holders had the right to declare a default since the DoJ's original USD 45m fine assigned in March exceeded the USD 15m amount permitted under the convertible note bond indenture.
Horizon leveraged on the possibility of a bond default by informing the DoJ that bondholders could declare a breach of the bond indenture and accelerate repayment of their notes, forcing it into bankruptcy. However, an ad-hoc group of bondholders led by financial advisor Houlihan Lokey had been working behind scenes with the company to avoid a bankruptcy filing by executing an exchange into new notes, according to all the sources .
Thank You, Uncle Sam
Although Horizon's path to financial stability still rides on stormy waters -- the company reported negative USD 7.4m of EBITDA for the first quarter -- the government's appeasement has injected new value into the company's debt. The company's 4.25% convertible bonds traded at 87.25 the first week of May, up from 77 on 12 April.
"For junior creditors, a USD 30m fine reduction translates to incremental value," a third bondholder said. "But at the same time, now that the fine has been reduced, it just emboldens the class action litigants in Puerto Rico to ask for USD 30m more in settlement negotiations." Plaintiffs in that case included major customers such as Coca-Cola, Frito-Lay, Sears, K-Mart and Purina.
The DoJ's value give-up in Horizon mirrors the compromise the Environmental Protection Agency (EPA), a secured creditor, cut with unsecured hedge fund creditors in chemical company Tronox last year.
Rather than battle bondholders for more cash, the EPA agreed to take massive losses on its structurally senior claims. The Oklahoma-based company's unsecured bondholders walked away with equity worth more than double the face value of their bond claims, while the EPA was left with a 30% recovery.
Similarly, the EPA opted to take a USD 1.7bn repayment on its USD 6.5bn environmental remediation claim in Asarco's bankruptcy case. The Arizona, US-based copper miner's bondholders received 100% recovery on their claims, as well as accrued interest, when the company emerged from Chapter 11 in December 2009, while the sponsor, Grupo Mexico, continued to own its assets.
"But comparing the EPA to the DoJ is not a clear apples-to-apples critique," one bankruptcy lawyer said. "The EPA will often times just inflate the estimate of its claim to maximize value, so the number they walk away with usually isn't that far off what they need. The DoJ on the other hand, all I can say is maybe they were pressured to save jobs that could be lost if Horizon goes bankrupt."
Calls to Horizon and Houlihan Lokey were not returned. A spokesperson from the DoJ declined to comment.
- May 16th, 2011
- Maersk Hikes Piracy Surcharge
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Peter T. Leach
The Journal of Commerce OnlineCompany expects piracy-related costs to double in 2011
Maersk Line is increasing its emergency risk surcharge for transporting containers through the pirate-infested waters of the Gulf of Aden and the Indian Ocean.
The adjusted prices will increase to $200 to $500 per 40-foot equivalent unit from $100 to $400.The increase is necessary to pass on some of the company's rising costs to customers, Erik Rabjerg Nielsen, the division's head of daily operations, told Dow Jones on Monday.
Maersk Line expects its piracy-related costs to double in 2011 to $200 million to cover insurance premiums, hardship allowances and the rerouting of vessels away from high-risk zones in the region, according to Morten Engelstoft, its chief operating officer.
"In 2010, one hijacking attempt was registered every six days, and in 2011 there's been a large increase in the activity," Nieslon said. "The problem has never been larger than right now."
Maersk Line ships make approximately 2,000 annual trips through pirate-ridden waters off the Horn of Africa, which cover an area about the size of Europe, now are made with larger ships, which are harder to invade than smaller ones. "We have larger ships with more capacity, which isn't needed, and that costs money. As a consequence, our capacity utilization on these routes is very low," Nielsen said.
Maersk recently hired a former army major as antipiracy chief in an effort to develop a stronger strategy and lobby competitors and politicians for a tougher international stance on piracy.
"Piracy is bad for the shipping industry, it's bad for global trade, and it's important that politicians and all involved take a larger responsibility now to try to put an end to it," Nielsen said.
Contact Peter T. Leach at pleach@joc.om.
- May 16th, 2011
- DNV Certifies Online Anti-Piracy Course
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By Breakbulk Staff
Breakbulk OnlineThe International Maritime Security Network's maritime security training center has developed an eLearning-based anti-piracy defense course that has been certified by Det Norske Veritas. The course offers a blended version of eLearning and practical drills and exercises, according to IMSN.
"Mariners' lives are at risk everyday around the globe. Knowledge is the key component to safety and it's vital that ship owners and crew members take the protective measures of a training course to combat piracy," said retired Capt. Timothy D. Nease, co-founder and CEO of IMSN.
In the first quarter of 2011, pirates killed seven crewmembers, injured 34, and took 344 hostages according to the International Maritime Bureau. Additionally, 18 vessels were hijacked worldwide.
The course provides practical training for vital activities such as watch-keeping, lockdown procedures, anti-piracy drills and hand-to-hand defensive tactics, according to a statement from IMSN. It also covers contingency plans for surviving a hostage attack or movement of prisoners, as well as some aspects of anti-piracy laws.
- May 16th, 2011
- Historic Boats Find a Home at Pier 25
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Pegasus, Lilac and Clipper City to Dock Off Tribeca
There aren't many places at the edge of New York City hospitable to an old boat. That's why the dock space at the newly opened 985-foot long Pier 25, set aside for vessels that enhance understanding of the City's nautical history, was so enthusiastically welcomed by the maritime community.Earlier this month, the Hudson River Park Trust -- the city/state agency charged with designing, building and operating the five mile waterfront park on the Hudson River that extends as far north as 59th Street -- announced that the 1907 Tug Pegasus, the 1933 steamship Lilac and the 1984 tall ship Clipper City, a historic replica, had been selected to be the first vessels to dock at the pier.
"The first two vessels will come in May," Noreen Doyle, acting executive director of the Trust, told WaterWire. She declined to specify which two. "There's infrastructure work that all three still need to do, such as gangway modifications. They all will meet the pier in different ways."Each vessel will offer public programming, an HRPT requirement. The boats may stay a maximum of five years, at which point the process of selecting new tenants begins again.
The two-masted Clipper City (top two photos), which can comfortably sail 150 people, is patterned after a schooner built just before the Civil War to haul lumber. She's been docked at Pier 17 for the past few years.
Originally commissioned by the Coast Guard, Lilac (at left at Pier 40, in a photo by Kilgub/Flickr) was a lighthouse tender in the 1930s. "She is the last unaltered steam-propelled and steam-hoisting lighthouse tender designed to work on the open sea and connecting bays and sounds," wrote maritime historian Norman Brouwer on the Lilac web site. "She is also the last such vessel to survive that was operated by the United States Lighthouse Service, the civilian manned agency responsible for maintaining aids to navigation from 1910 to 1939, when this work was taken over by the United States Coast Guard." The volunteers and members of the Lilac board vow to return her to working steam propulsion, no matter how long that might take. 
"Tug Pegasus began life as one of a series of four sister tugs designed to serve waterside refineries and terminals of Standard Oil, docking ships, moving lighter barges of petroleum products, and serving as auxiliary fireboats when needed," wrote the inimitable Mr. Brouwer on the Pegasus web site. After putting in decades of work in the Esso Maritime Division and then more years with McAllister Towing, she was acquired by Hepburn Marine in 1987. Ten years later, she was retired and the preservation project began. - May 16th, 2011
- Port of New Orleans does not expect to shut
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Reuters
HOUSTON - The Port of New Orleans does not expect to have to shut down due to high water on the Mississippi River and continued to operate normally Thursday, a spokesman said.
The river held at 17 feet (5 metres) on New Orleans' Carrollton gauge, and port officials expressed confidence in U.S. Corps of Engineers efforts to slow its rise by opening spillways to divert floodwater upstream.
At 18 feet on the Carrollton gauge, the U.S. Coast Guard has said it would impose operating limits and at 18.5 feet would shut the port. But the U.S. Corps of Engineers was opening the Bonnet Carre spillway upstream and was considering opening the Morganza spillway.
"We believe the Corps' goal is to not let the Carrolton gauge reach 18 feet, and we are confident they have the controls and mechanisms in place to achieve that goal," Port president Gary LaGrange said in a news release.
Scores of U.S. heartland rivers from the Dakotas to Ohio have flooded following a snowy winter and heavy spring rains, and the rising waters are moving south down the Mississippi River to the Gulf of Mexico.
Thursday was a normal day except for high water in the river, which is something users of the river face every spring, just not to the degree their facing this year.
"We're unloading steel. We got container ships in port. It looks like a normal day except the water level is very high," port spokesman Chris Bonura said. (Reporting by Bruce Nichols; Editing by Marguerita Choy)
April 2011
- April 15th, 2011
- Troubled Horizon Says Customers Haven't Left
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By Joseph Bonney
The Journal of Commerce Online
Notice comes after carrier warns it may miss debt payment. Horizon Lines says most of its customers are sticking with the financially ailing container line despite an accountant's note that cited doubt about the company's status as a going concern.
Horizon said last month it expects to default this quarter on $330 million in debt unless it can persuade bondholders to waive covenant violations triggered by the company's recent agreement to pay $45 million for pleading guilty to price-fixing in the U.S. mainland-Puerto Rico shipping trade.
In a filing with the Securities and Exchange Commission, Horizon said meetings with shippers showed "the majority of its customers have indicated that they will continue to rely on the company for shipping services at the same level as prior to" the report last month.
Horizon also said it saw "slight improvement in its accounts receivable aging through the end of the first quarter."
Horizon announced this month the carrier and Sea Star Line and Crowley Liner Services had settled claims by their customers' customers, who claimed they paid inflated rates for goods to Puerto Rico as a result of price-fixing. The carriers still face civil antitrust claims by shippers who opted out of a class action lawsuit the carriers paid a total of $52.25 million to settle. the carriers have until April 29 to confirm the class action settlement.
-- Contact Joseph Bonney at jbonney@joc.com. Follow him on Twitter @JosephBonney.
- April 15th, 2011
- Windstar Cruises Parent Company Declares Bankruptcy
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Written by Shawn Dake
Shipping NewsIt was no April Fool's Day joke when Ambassadors International filed for Chapter 11 bankruptcy protection in a Delaware court on April 1, 2011. While the Ambassadors name may not be that familiar to the general public, they are the parent company of the three-ship Windstar Cruises and also control the remaining assets of Majestic America Line which discontinued operations in 2008. The five major vessels affected by the filing include the 14,745 gross ton WIND SURF (ex CLUB MED 1), the sister vessels WIND STAR and WIND SPIRIT, both approximately 5,700 gross tons, and the riverboats DELTA QUEEN and COLUMBIA QUEEN.
DELTA QUEEN October 9, 2007. Photo © Shawn Dake Ambassadors International had once been one of the most respected names in the travel industry. They described themselves as a cruise, marine, travel and event company. For years Ambassadors was based in Newport Beach, California before moving to Seattle, Washington to concentrate their efforts solely on Windstar Cruises.
After a very rapid expansion into the cruise business beginning in 2006, the financial outlook for this company has been going downhill for the past several years. As a publicly held company, stock trading was suspended after "unusual activity" was seen following a surge in their share trading and prices.
The Chapter 11 filing came as part of an agreement with private investment firm, Whippoorwill Associates, to whom Ambassadors has agreed to sell substantially all of their assets including Windstar Cruises. During the week preceding the bankruptcy Ambassadors stock was trading at .93 cents a share, representing a loss of 75.3% of its value from one year before. On April 13, NASDAQ delisted Ambassadors stock at the opening of business. The final price on the last day of trading was only .31 cents a share.
WIND SONG meets STAR OF INDIA at San Diego, June 27, 1987. Photo © Shawn Dake Windstar Sail Cruises Limited was formed in 1984 by Karl Gosta Andren who had the vision to believe that the traveling public would enjoy returning to passenger cruising under sail. The first of his computer-assisted sailing ships emerged in 1986 as the 439.7 foot long, 51 foot in beam WIND STAR. The 148 passenger ship measured a respectable 5,350 gross tons when built, with a winged-funnel and four masts reaching 204 feet into the air.
The first ship was followed by two sisters the WIND SONG in 1987 and WIND SPIRIT in 1988. Each featured clean, yacht-like decor. In the cabins the atmosphere was akin to that of a luxurious sailing yacht from the two brass portholes down to the teak decking on the floors of the bathrooms. In 1997, the much larger WIND SURF built in 1989 as the CLUB MED 1 for Club Med joined the company. Sadly, the lovely WIND SONG was severely damaged by fire in her engine spaces on December 1, 2002. Beyond economic repair, the ship was scuttled in the waters off Tahiti on January 22, 2003. The remaining three ships continued an annual pattern of tropical cruising in areas like the Caribbean in winter, moving to the Mediterranean in the summer.
WIND SPIRIT Owner's Suite #107. Photo © Shawn Dake In 1987 Holland America Line acquired a 50% share in Windstar Sail Cruises. The next year the rest of the company was purchased. By the end of 1988, Holland America were themselves the target of an acquisition by the Carnival Holdings group and Windstar came along with that deal. The offices of Windstar were moved to Seattle in 1994 where Holland America Line handled the marketing and operations of Windstar Cruises for several years. In 2007, Carnival Corporation sold the company to Ambassadors for $100 million.
WIND SURF, Windstar Cruises photo Ambassadors had been on a buying spree the year before, attempting to gain a near monopoly on the U.S. river cruise business by purchasing the Delta Queen Steamboat Company, American West Steamboat Company and Great American Journeys. Suddenly, they had seven vessels which together created Majestic America Line. On the Mississippi River the DELTA QUEEN, MISSISSIPPI QUEEN and AMERICAN QUEEN were to form the core of the business. On the West Coast and the Columbia River the QUEEN OF THE WEST, EMPRESS OF THE NORTH, COLUMBIA QUEEN and the 42-passenger catamaran vessel EXECUTIVE EXPLORER, renamed CONTESSA, rounded out the fleet.
It all went terribly wrong very quickly. As then CEO of Ambassadors International, Joe Ueberroth candidly stated "I acknowledge that no matter how well structured or how little capital was required, our investment in the domestic river cruise business was a very bad investment. We flat got it wrong." Not surprisingly, no buyers came forward to purchase Majestic America Line as a whole company.
By October 31, 2008 the line had shut down with the last sailing of the DELTA QUEEN. MARAD, the U.S. Maritime Administration, seized the AMERICAN QUEEN and QUEEN OF THE NORTH. The MISSISSIPPI QUEEN, which had been gutted but never refurbished, was eventually sold for scrap. The QUEEN OF THE WEST was sold to American Cruise Lines and is back in service on the Columbia River. The CONTESSA was sold in 2010 to the newly formed Alaskan Dream Cruises renamed the ALASKAN DREAM. The DELTA QUEEN which presently operates as a stationary hotel in Chattanooga, Tennessee is still an asset of the company and is for sale, reportedly for $4.75 million. The COLUMBIA QUEEN, also is still a company asset and remains laid up in the Portland area for sale.
A statement on their website reads "Ambassadors and Windstar will continue normal business operations throughout this process. Delivering extraordinary luxury travel experiences and the highest quality service to Windstar guests remains our top priority. We want you to know that: All Windstar cruises are sailing as scheduled…" On April 5th the court allowed Windstar to continue normal operations and granted interim approval of the company's debtor-in-possession financing allowing it access to $5 million in new working capital. A further hearing is scheduled for April 26th to determine if approval will be granted for the additional $5 million to provide liquidity during the remaining sales process. Ambassadors had already borrowed $20 million in two transactions from Whippoorwill during 2010.
If the full purchase of Windstar Cruises goes through as planned, the company may yet be saved. Travel agents and consumers seem to be taking a wait and see approach before committing their money and vacations into this once great but troubled company. It is now in the hands of a financial investment firm rather than shipping people, as has become so common in the cruise business these days.
- April 15th, 2011
- Charles Schumer seeks funds for port, bay outlet dredging
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By Steve Orr
RocDeals.comSaying that a federal "accounting trick" is threatening safe navigation of harbors and ports like the ones in the Rochester area, U.S. Sen. Charles Schumer said Monday that he was co-sponsoring legislation to fix the problem.
At a news conference Monday on a wind-swept veranda at the ferry terminal in Charlotte, New York's senior Democratic senator said shippers pay fees that are set aside to pay for dredging navigable harbors and rivers. Among them are Rochester's port and the Irondequoit Bay outlet to Lake Ontario.
But while there is plenty of money in the Harbor Maintenance Trust Fund to pay for dredging, federal officials refuse to release all of it. Instead, Schumer charged they hold back billions of dredging dollars to create a surplus that is used, on paper, to offset the soaring federal deficit.
"Just like the muck and mud are piling up here in Rochester's port, the dollars for dredging are piling up in Washington," he said.
As a consequence, Schumer said, dredging projects are not undertaken often enough. Rochester's port at the mouth of the Genesee River, for example, used to be dredged every two years. Now, it's done every three years.
With deficit reduction now the rage in Washington, he said he fears an even greater delay. "The port of Rochester is on the list to be dredged this summer, but if they don't put the money in, it won't happen," he said.
He and others who attended the news conference said buildup of silt carried in by the river's currents can create real problems. The freighter Stephen B. Roman, which carries dry cement from Canada to an Essroc terminal near Rochester's Turning Point Park, ran aground in the mouth of the Genesee in March 2007. Until dredging was finished months later, Essroc had to make 7,000 cement shipments by truck, a more costly and environmentally undesirable means of transport.
And last June, the captain of the large Great Lakes cruise ship Clelia II opted not to enter the river after having scraped bottom the summer before. The vessel anchored off Rochester instead and, to the dismay of some passengers, they had to be ferried ashore in small boats, city officials said.
The legislation co-sponsored by Schumer and 17 other senators, including Sen. Kirsten Gillibrand, D-N.Y., would require that shipper's fees be spent in the year they're collected. Similar anti-hoarding laws have been enacted to address similar problems in highway and airport trust funds, Schumer said.
SORR@DemocratandChronicle.com - April 15th, 2011
- ILA Calls Off NY-NJ Strike Threat
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By Joseph Bonney
The Journal of Commerce Online
'We'll be on the job Monday,' said Harold Daggett, head of union local The International Longshoremen's Association called off a threatened strike at the Port of New York and New Jersey.
"We've called it off. We'll be on the job Monday," said Harold Daggett, the ILA's executive vice president and head of Local 1804-1, which represents maintenance and repair workers.
Daggett said the threatened strike was averted when Metropolitan Marine Maintenance Contractors Association agreed to sign off on language in a contract reached in December covering ILA maintenance and repair workers in Local 1804-1 and Brooklyn-based Local 1814.
The Metro association had balked at accepting new contract language, which stated "all equipment (containers/chassis) must be inspected at the terminal depots to ensure all equipment is safe and roadworthy before being released."
Terminal operators worried that the contract language would raise legal issues over ILA inspection of chassis owned by truckers and not carriers or chassis pools that employ ILA labor.
Daggett said the contract puts in writing what the union already does. "The agreement allows us to go ahead and inspect owners' chassis," he said. "If it is not in good condition, we have the right not to put a container on it. If it is in good shape, we put a container on it."
J. Randolph Brown, president of the Metro association, could not be reached for comment.
James Devine, CEO of GCT USA, which operates New York Container Terminal and Global Terminals, said employers are relieved that the threatened work stoppage has been canceled."We're pleased that we're not disrupting our customers," Devine said. "We can ill-afford any work stoppages at this port, and all parties need to cooperate to help us avoid them. It's unfortunate that things became as inflamed as they did. They shouldn't have."
Last September the ILA closed the port for two days when dockworkers refused to cross picket lines of Philadelphia ILA members protesting the shift of work to a non-ILA terminal.Carriers and terminals in the New York Shipping Association claimed that work stoppage was an illegal strike, and sued the union for several million dollars in damages.
-- Contact Joseph Bonney at jbonney@joc.com. Follow him on Twitter @JosephBonney.
- April 15th, 2011
- Northrop Grumman completes spinoff of shipbuilding business
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New company called Huntington Ingalls Industries
The following is the text of a press release issued by Northrop Grumman Corp.:
(LOS ANGELES) -- Northrop Grumman Corporation (NYSE:NOC) today announced that it has completed the previously announced spin-off of its subsidiary Huntington Ingalls Industries, Inc. (NYSE:HII).
Northrop Grumman stockholders of record at the close of business of the New York Stock Exchange (NYSE) on March 30, 2011, received one share of HII common stock for every six shares of Northrop Grumman common stock held. Stockholders will receive cash in lieu of fractional shares of HII. As a result of the spin-off, Northrop Grumman will report Shipbuilding financial results as discontinued operations for the 2011 first quarter and all prior periods.
"Today's completion of the separation of Huntington Ingalls from Northrop Grumman is an important milestone benefitting both companies. We thank HII for their many contributions to our company and the defense of our nation, and wish them the best as an independent company," said Wes Bush, Northrop Grumman chief executive officer and president.
"Northrop Grumman will now be focused on its core markets of aerospace systems, electronic systems, information systems and technical services. Our portfolio has tremendous capability, technology and synergy across these areas, and we are fully dedicated to delivering innovative and mission-critical systems and products. Going forward, we will create value for shareholders, customers and employees through a more focused portfolio and continued performance improvement," Bush concluded.
The distribution of HII shares will be made in book entry form and no action or payment by Northrop Grumman stockholders of record is required to receive HII shares. No physical share certificates of HII will be issued. An information statement containing details of the spin-off and important information about HII was mailed to Northrop Grumman stockholders on March 21, 2011.
The HII spin-off has been structured to qualify as a tax-free distribution to Northrop Grumman stockholders for U.S. Federal tax purposes, except for the cash received in lieu of fractional shares. Northrop Grumman stockholders should consult their tax advisors with respect to U.S. federal, state, local and foreign tax consequences of the HII spin-off.
Credit Suisse served as lead financial advisor and joint lead financing arranger. Perella Weinberg Partners served as financial advisor. JPMorgan Chase served as joint lead financing arranger. Gibson, Dunn & Crutcher served as legal advisor.
Northrop Grumman is a leading global security company whose 75,000 employees provide innovative systems, products and solutions in aerospace, electronics, information systems, and technical services to government and commercial customers worldwide. Please visit www.northropgrumman.com for more information.
Statements in this release, other than statements of historical fact, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in these forward-looking statements due to factors such as: the effect of economic conditions in the United States and globally; access to capital; future sales and cash flows; changes in government and customer priorities and requirements (including government budgetary constraints, shifts in defense spending, changes in import and export policies, and changes in customer short-range and long-range plans); and other risk factors disclosed in our filings with the U.S. Securities and Exchange Commission. There may be other risks and uncertainties that we are unable to predict at this time or that we currently do not expect to have a material adverse effect on our business. Any such risks or uncertainties could cause our results to differ materially from those expressed in forward-looking statements.
You should not put undue reliance on any forward-looking statements in this release. These forward-looking statements speak only as of the date of this release and we undertake no obligation to update any forward-looking statements after we distribute this release.
- April 15th, 2011
- NYMAR's Man About Town—Life beyond
Manhattan: "...if you want the usual, don't come" -
By Barry D. Parker for NYMAR
When I interviewed Angeliki Frangou, from the Navios companies, for an article celebrating her selection as the Connecticut Maritime Association's Commodore, we had a great conversation. But, as we were finishing up, the clouds broke and the sun revealed the spectacular vista of the Brooklyn waterfront. What did not make it into Fairplay (the magazine which featured Ms. Frangou on the cover) was the discussion about the various docks over in Queens and Brooklyn with both interviewer and interviewee each pointing at some stretch of the waterfront, and swapping stories about which ships we had visited at what docks.
The Norval cement terminal in Long Island City is now condominiums, the Pepsi dock is an artist studio, and the Greenpoint lumber terminal, in Brooklyn, has now been reduced to rotting piers jutting out near Newtown Creek. The Domino Sugar terminal, under the Williamsburg Bridge, after being rescued by preservationists- may emerge as studios, and the New England Petroleum Company dock nearby has gone into corporate history after the oil price shocks in the late 1970s.
In spite of occasional snarky comments about the Outer Boroughs in "The Man About Town", waterfront parts of Queens and Brooklyn are thriving. Williamsburg (reachable by subway) and Red Hook (reachable by New York Water Taxi) are some of the hottest neighborhoods in Brooklyn. Jeffrey Landsberg, who runs Commodore Research (no relation to the CMA award winners) is an expert on Asian drybulk trades, with a loyal following of shipowners and shipping investors who read his reports and commission his studies. He shared a trio of Williamsburg recommendations with NYMAR- "Dumont", which offers Classic Americana, features a gourmet Mac n' cheese". Until the weather really warms up, Jeffrey suggests dining in the heated outdoor garden area.
He then suggested a place called "Egg", where the menu, of continental cuisine, changes frequently based on availability and seasonality of local ingredients. And finally "Fette Sau" where the lines are sometimes lengthy on weekends, but he says its well worth the wait. The specialty, barbecued food, is served by the pound, to customers who sit at shared tables. Beer, served in jugs, aids the diners in washing down their food.
Red Hook, farther to the south, and also visible from the Navios perch, is where you will find PortSide New York- run by Carolina Salguero, with a mission that includes revitalization of Red Hook along a waterfront theme. The area is definitely edgy; she told NYMAR, "Red Hook is the place where the rule-book is broken, in food, as in everything else; but if you want the suburbs, want the usual, don't come." Recently opened is the Stumptown Coffee Roasters, a weekend only place with a tasting room and old coffee sacks- a reminder of the once thriving coffee trades at the local docks.
For more substantial meals, she recommends "Good Fork"- where steak and eggs are a specialty. Speaking of eggs, a winebar called "home/made" which serves light food, and a brunch, offers eggs from chickens raised in the neighborhood. Another choice is Kevin's Restaurant, which serves dinner during the week, complemented by a brunch on weekends. Ms. Salguero tells NYMAR: "The Eggs Chesapeake is a personal favorite, it is an Eggs Benedict with the crab cakes replacing the ham. All seafood dishes are good, chef and co-owner Kevin Moore used to cook in a Montauk hotel and still goes out east to dig his own clams."
PortSide has actually produced its own Visitors Guide to the neighborhood. An excerpt, written by Carolina Salguero, captures its almost Cornish feel: "The presence of so much water has defined Red Hook's history to this day: Seagulls frequent the main drag; port cranes, ships and tugs are visible from many street ends; and residents new and old often have that waterfront thing: waterfront people, like mountain people, are an independent and colorful lot; geography cuts them off and makes them this way. Tenacity and eccentricity define Red Hook."
March 2011
- March 15th, 2011
- Kirby to acquire K-Sea for $600m
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by Rajesh Joshi for Lloyd's List
Deal would combine biggest coastwise and inland Jones Act barge fleets
Joe Pyne. New York-listed inland tank barge and towboat major Kirby has unveiled its third major acquisition in two months, a $600m takeover of fellow New York-listed coastwise barge operator K-Sea Transportation.
Market observers see the deal as a logical culmination to K-Sea's recent quest for refinancing of its debt as it emerged from a tough economic phase.
The merger of heavy-hitters in the inland and coastal Jones Act barge space is one of the first tangible after-effects of the tough economic period that has beset the US domestic wet trades involving petroleum product and chemical transport over the past two years.
Kirby will finance the transaction via available cash and its existing revolving facility, and through a new $540m bank term loan and the issuance of new Kirby shares.
In the process, Kirby will assume $265m of K-Sea's debt as K-Sea becomes a wholly owned subsidiary of Kirby. K-Sea management will continue to run daily operations.
Kirby is to pay K-Sea shareholders $335m, priced at $8.15 per K-Sea share. This is a premium over the last closing price of $6.47. Shareholders can opt for the entire payment in cash, or accept $4.08 a share in cash and 0.07 of a share of Kirby common stock. Kirby's share closed last week at $55.33.
The transaction is expected to close in June or July, after the requisite clearance under the anti-monopolistic Hart-Scott-Rodino Act.
K-Sea's board has endorsed the transaction, and a majority of K-Sea shareholders is understood to have agreed to the takeover, which is enough to carry the deal through.
Kirby's acquisition of K-Sea follows its $270m all-cash purchase of engine distributor United Holdings three weeks ago, and the $53m purchase of 36 vessels from Enterprise Marine Services that was unveiled at the beginning of February.
Houston-based Kirby operates 825 inland tank barges and 222 inland towing vessels, transporting petrochemicals, black oil products, refined petroleum products and agricultural chemicals along inland US waterways.
New Jersey-headquartered K-Sea's 58 tank barges make it one of the biggest coastwise transporters of refined petroleum products in the US. Its customers include major oil companies and refiners, many of which are current Kirby customers for inland tank barge services.
K-Sea's third-quarter results for last year had admitted that a difficulty in finding acceptable long-term charters for its fleet was a problem, and it did not expect material improvement in the near term.
However, the company said the upcoming Oil Pollution Act 1990 phase-out of single-hull units would benefit it over the longer term, as almost all its own barges are double-hulled.
Kirby chief executive Joe Pyne said the arrival of K-Sea would be a "terrific complement" to his company's inland business. Kirby is projecting a positive contribution to 2012 earnings from K-Sea.
- March 15th, 2011
- U.S. Forms Criminal Task Force on Deepwater Horizon Disaster
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By Laurel Brubaker Calkins
The U.S. Justice Department has formed the Deepwater Horizon Task Force to consolidate its investigation into possible criminal charges stemming from the drilling rig explosion that killed 11 workers and caused the worst offshore oil spill in U.S. history.
The Justice Department said in a statement that the task force brings together "separate and simultaneous investigations'' by its criminal and environmental and natural resources divisions and the U.S. Attorney's Office in New Orleans.
"After assessing the overlap of the cases and in an effort to avoid duplication of effort, Deputy Attorney General James Cole has decided to establish a single task force with authority to oversee all facets of the investigation,'' Wyn Hornbuckle, a Justice Department spokesman, said in the statement.
The three groups have been probing the April 20 "fire, explosion and aftermath'' of the Deepwater Horizon incident since U.S. Attorney General Eric Holder announced on June 1 that the government would seek potential criminal charges and civil penalties.
New Orleans Base
The task force will be led by John Buretta, criminal division senior counsel, and supervised by Assistant Attorney General Lanny Breuer of the criminal division, according to the statement. Much of the task force's activities will be based in New Orleans, where the Justice Department established a command post last year, Hornbuckle said.
Eleven rig workers died and more than 4.1 million barrels of crude gushed into the Gulf of Mexico after the Deepwater Horizon rig exploded and sank. The U.S. has sued BP Plc (BP/), which owned the well, and Transocean Ltd. (RIG), which owned the rig.
The two companies, along with other contractors that supplied equipment and services to the well and BP's partners in the offshore lease, face potentially billions of dollars in civil penalties and economic damage claims by individuals and businesses harmed by the disaster. - March 15th, 2011
- TSA Notes Challenges in International Screening
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By R.G. Edmonson
The Journal of Commerce OnlineJohn Sammon testifies on Certified Cargo Screening Program
The Transportation Security Administration is satisfied with its security screening program for goods shipped on domestic passenger airline flights, but TSA said Wednesday challenges remain in meeting Congress' order to screen 100 percent of international inbound cargo.
John Sammon, who heads TSA's air cargo security program, told members of the House Homeland Security Committee there are now 1,167 participants in the Certified Cargo Screening Program, one of the agency's key strategic layers.
"TSA must remain vigilant in ensuring that certified companies properly screen air cargo," Sammon said. To do so TSA increased its inspector staff from 450 to 500, who conducted more than 6,000 inspections last year.
- March 15th, 2011
- DOJ Allows $45 Million Fine as All Horizon Could Pay
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By Joseph Bonney
The Journal of Commerce OnlineInstallments total one tenth of authorized penalty for price fixing
The Justice Department said it allowed Horizon Lines to pay a back-loaded $45 million fine for price fixing in the Puerto Rico trade because a stiffer penalty would have threatened the carrier's viability.
Horizon pleaded guilty to a criminal antitrust charge for colluding with other carriers to fix prices between 2002 and April 2008, when federal agents raided offices of Horizon, Sea Star and Crowley Maritime.
In a memorandum filed in U.S. District Court in San Juan, the Justice Department said federal sentencing guidelines called for a criminal penalty against Horizon of $336 million to $672 million, based on the company's estimated $1.4 billion in Puerto Rico freight revenue from 2002 to 2008.
The Justice Department said it agreed to allow Horizon to pay $45 million in installments over five years after an independent forensic accountant said that was "the most Horizon could afford to pay without substantially jeopardizing its continued viability and its ability to pay restitution."
Horizon will pay $1 million up front, with payments rising annually until the fourth and fifth years, when the final two installments total $35 million.
"The parties agree that the recommended fine of $45 million and payment schedule are appropriate … due to Horizon's inability to pay a greater fine without substantially jeopardizing its continued viability, even with the use of a pro rata installment schedule," the Justice Department said in its sentencing memorandum.
The Justice Department said Horizon "is in tenous financial condition and has presented evidence of its need to resolve its criminal liability expeditiously in order to be able to refinance its existing debt."
Horizon said this month it hopes to complete in the second or third quarter a previously planned refinancing of its long-term debt, which totaled $516 million at year end. The company said it is asking lenders to waive a default provision triggered by the amount of the $45 million fine.
The Justice Department said it would not seek restitution because the company faces numerous civil antitrust lawsuits "which potentially provide for recovery of a multiple of actual damages."
Horizon offered $20 million to settle a class-action lawsuit with shippers but still faces separate claims from customers that opted out of the agreement. Horizon said last month it had reached a separate settlement with Wal-Mart, one of the companies that opted out of the class action.
Sea Star has agreed to pay $18.5 million and Crowley has agreed to pay $13.75 million to settle their parts of the class action. Those carriers and Horizon have until April 1 to decide whether to affirm the settlement or back out of it.
Neither Sea Star nor Crowley has been charged with criminal violations. Three former officials of Horizon and two from Sea Star have pleaded guilty to antitrust conspiracy or hiding evidence in the Puerto Rico price-fixing case.
Horizon reported a fourth quarter net loss of $46.4 million, including a $30 million charge from the fine, on $298.8 million in operating revenue. Adjusted earnings before interest, taxes, depreciation and amortization fell to $17.1 million from $27.9 million in the fourth quarter of 2009.
-- Contact Joseph Bonney at jbonney@joc.com.
- March 15th, 2011
- American Feeder Lines to start first service
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American Feeder Lines, which says its vision and mission is the "realization of America's Marine Highways," says it will start operations in the second quarter of 2011. Last year the company hired Hapag-Lloyd veteran Rudy Mack as its COO. Its first service will be to run a modern container feeder of 1,000-1,300 TEU capacity in a weekly service connecting Boston, Mass., and Portland, Me., with Halifax, Nova Scotia, Canada. This is the path of the former "Yankee Clipper" which provided regular weekly services to the New England states, carrying containers for Hapag-Lloyd during Mr. Mack's Hapag-Lloyd days.
Andrew Haines has been hired as Vice President Line Management and a regional office will be set up in Boston.
American Feeder Lines, it may be remembered, is the start-up that last July was reported to have signed a letter of intent with Aker Philadelphia Shipyard for five Jones Act containerships for American Feeder Lines Holdings L.P.and a similar LOI for five more containerships of the same design with an unnamed shipyard in Green Bay, Wisconsin. Its cofounders are Tobias Koenig and Percy Pyne IV, of New York real estate investment and consulting firm Pyne Companies Ltd. Mr. Koenig is a major player in the Hamburg, Germany, based shipping investment market. His Koenig & Cie. GmbH & Co. KG has launched more as 80 closed-end funds with a total investment volume of more than 4.2 billion euros. Most of these funds are investments in ships, putting the company into the top quartile of all ship initiators in Germany.
"We are very proud to announce our first North American Feeder Service along the I- 95 corridor, connecting the New England States with the world's liner network via the ports of Boston, Portland and Halifax" said chairman and cofounder Percy Pyne IV. "We have spent a lot of time with the ports and the industry stakeholders in New England. Our research showed that importers and exporters in the region are disadvantaged as there is a lack of all water services serving the region. Many conversations have pointed us to the obvious need, shippers and receivers made commitments, which have encouraged us to take our decision." - March 15th, 2011
- Pirates target the Maersk Alabama again
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By the CNN Wire Staff
Captain Richard Phillips was held hostage on this lifeboat after pirates hijacked the Maersk Alabama in April 2009.
Pirates targeted the Maersk Alabama, the ship seized in a dramatic operation in the Indian Ocean waters two years ago.
Four suspected pirates approached the ship in a skiff and a hook ladder, the Maersk said in a statement Tuesday.
"The captain followed the appropriate protocol and authorized an embarked security team to fire warning shots in order for the pirates to turn away," the statement said.
Shortly after, the boat took off and the ship was headed to the Kenyan coastal town of Mombasa.
2009: Ship fends off pirates The Maersk's hijacking in April 2009 led to a hostage standoff involving Capt. Richard Phillips.
Pirates captured the captain and held him for days in one of the ship's lifeboats.
Navy snipers killed the captors and arrested one of the pirates, who was sentenced last month to more than 30 years in prison.
- March 15th, 2011
- BP 'changing,' top executive says
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BP workers use shovels to clean oil from a beach at Port Fourchon, Louisiana, May 24, 2010. Oil has been washing ashore on the coast of Louisiana for the past several days as a result of the BP Deepwater Horizon oil rig explosion April 20. UPI/A.J. Sisco
HOUSTON, March 9 (UPI) -- BP is committed to earn back the trust of the U.S consumer while looking to frontier developments to exploit much-needed reserves, an executive said in Houston.
BP is struggling to repair its image after last year's deadly rig explosion in the Gulf of Mexico. The April sinking of the Deepwater Horizon platform killed 11 workers and resulted in one of the worst accidental oil spills in the history of the industry.
GALLERY: Photo timeline of Gulf oil spill
"We need to earn back your trust, along with that of state and federal leaders and the trust of Gulf Coast residents and customers," said BP Chief Executive Bob Dudley in a statement at an energy conference in Houston. "We are determined we will once again restore that trust and I realize this requires action, not words."Dudley said his company was conducting a "major review" of its risk management system to make sure its operations are reliable, safe and able to respond to any disaster swiftly.
He said that any suggestion that the energy industry didn't need major overhauls after the Deepwater Horizon accident was "unrealistic."The world needs oil, he maintained, even though global economies are moving to a low-carbon future. Dudley said his company was "blazing new trails" in frontier developments in deep waters, the arctic environment and parts of the North Sea.
BP won't drill in deep waters, however, unless it knows it can respond immediately to shut the well in the event of an emergency.
"I hope that my messages today have been clear," he said. "BP is sorry. BP gets it. BP is changing."
- March 15th, 2011
- Private equity taps Rickmers vet
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CONNECTICUT startup Soundview Maritime confirmed today that it has hired former Rickmers exec Dr. Moritz Mittelbach as strategic advisor for its ongoing acquisition programme.
Soundview was launched last year by two private equity funds, Littlejohn & Co. and Northern Shipping Funds. Soundview has been seeking to acquire 10-20 containerships in the 1,000-4,000teu range.
Soundview confirmed today that it has purchased three ships to date: the 2002-built, 13,698dwt Cove Island; the 2005-built, 13,727dwt Shippan Island; and the 2005-built, 38,104dwt Louds Island. According to Sea-Web, the vessels were acquired last year for $12M, $14.5M and $36M respectively.
Rickmers announced in mid-February that Mittelbach had stepped down after 10 years with the group, resigning as CFO and MD of Rickmers Holding GmbH & Cie KG and Pacific Holdings International GmbH & Cie KG. Separately, Singapore's Rickmers Trust Management disclosed that Mittelbach had stepped down as non-executive director.
In his new role at Soundview, Mittelbach will advise on purchasing, financing and long-term charters. "His initial focus will be on refining Soundview's strategy and advising on the acquisition of additional new and second-hand vessels," said Littlejohn MD Edmund Feeley.
- March 15th, 2011
- NYMAR's Man About Town—"I've sailed to the City of New York To labour in the sky High above the streets below To home, my heart would fly..."
—"The Foggy Shores of Home," by the Masterless Men -
By Barry D. Parker for NYMAR
At one time, New York had more Irish people than Dublin, or so the saying goes. It's probably not true now, but might have been during the diaspora with waves of immigration in the 19th Century that created Irish-American communities along the East Coast, particularly in Boston and New York. Though people have scattered, and neighborhoods have evolved, many of the old traditions remain. March 17th, Saint Patrick's Day- a festive holiday associated with Ireland's patron saint, has its serious religious side. Yes, he is also the patron saint of the New York Archdiocese. Indeed, a mass is celebrated at Saint Patrick's Cathedral on Fifth Avenue at 50th Street (adjacent to the Olympic Tower), just prior to the parade up Fifth Avenue.
A few standout Irish places are worth mentioning; every one will be serving a traditional Irish meal for St. Paddys. I have been to business lunches, and to a number of nice evening events (including some spectacular parties hosted by Imarex), at Maggie's Place, on 47th Street just west of Madison Avenue. The big day, March 17, features a special breakfast (to fortify the marchers in the parade, no doubt), but typically it's a lunch and dinner place- with pub food, and pasta, but also some nice steak and fish dishes. I've had the Maggie's Burger several times; my colleagues and counterparties have gone with traditional Irish dishes such as Fish & Chips.
Also very close to the parade route is PJ Morans, on 48th just east of Fifth Avenue. Back before cellphones, a predecessor "joint" (that's what it was) with the same name, on the same block, did feature shipbrokers at tables with private telephones for those four martini lunches (before the Carter-era crackdowns on shipbroker lite- the three martini version). But, this PJ Morans, under different ownership since the late 1980's, is decidedly upscale; like Maggie's Place, the ambience is dark wood, maybe mahogany, and a more hushed atmosphere. The traditional fare includes some good pot pies. PJ's does have a "Happy Hour"- but it's a business-like affair, with Guiness flowing alongside the "martinis". These days, "martini"- specialty here, is a designer drink; no more cheap gin.
Another place for serious business is Molly's Shabeen a Tudor looking-place, on Third Avenue and 22nd, which bills itself as a traditional Irish pub. Folks with clean shoes must be warned that such "authenticity" means sawdust on the floors; there is a real wood-burning fireplace, as well. Yes, they serve a wicked corned beef and cabbage sandwich here. Because of its location closer to the residential areas of Manhattan (in Gramercy, with Murray Hill to the north), it does offer a weekend brunch.
Then, there is the Ginger Man, on 36th between Fifth and Madison, a stones throw from that very swank Setai Hotel just opening up on Fifth, and a block from the Morgan Hotel on Madison. This is more for after work- and the workers include some of the creative types from the nearby Silicon Alley to the south. The food here is strictly pub style, nothing special- but they have an unbelievable selection of beers. The inside is cavernous, with a high ceiling- so those NYMAR folks looking for a celebratory St. Patrick's Day should definitely make a stop here. Next door is the Salway Hooker- where banker / lawyer types have brought this pub up a few notches in recent years. Importantly, it is named after a boat- to be clear (and politically correct), a "hooker" is a craft used to catch fish. Honorable mention goes to Slattery's Midtown Pub, a well positioned beer joint- across 36th from Ginger Man and Salway Hooker. Having said that, it does feature in many pub crawls. As real estate people say, "It's all about location."
For a musical St. Patrick's Day, the pub Tir Na Nog, at 35th and Eighth Avenue (near Penn Station) is a must. The food is good, actually quite decent- standard pub stuff, but the draw here is its whimsical artsy style (with Irish artifacts displayed on the walls) and Celtic music. Truth be told, I learned about the place from the Celtic songstress Susan Palmer Marshall, who used to sing there. The entire week prior to the big day, plus a few days after, will feature Irish music. On March 17th, the balladeers will be going all day long, and into the night. Since the whole emigration and immigration thing figures prominently in the Irish psyche (even 150 years later), there will be numerous maritime references, albeit to sailing ships and coal burning steamers- the stuff of old charter parties. Lyrics similar to those sung by the Masterless Men (who are playing at O'Reilly's – up in Newfoundland, for Paddy's- sorry, readers) are full of barks and barquentines.
Honorable mention goes to a place that's been mentioned previously, Hudson Yards Cafe, owned by Jimmy Riordan, at 35th Street and 10th Avenue, over in the increasingly yuppified Hells Kitchen neighborhood. It's off the beaten track, unless you are visiting the Javits Center, but well worth the trek two long blocks west of Tir Na Nog, to the farther reaches of the West Side.
February 2011
- February 15th, 2011
- Marine Money's George Weltman reviews Hellenic/Norwegian Chamber of Commerce's Shipping Conference
-
From Marine Money Freshly Minted
The Hellenic/Norwegian-American Chambers of Commerce 17th Annual Joint Shipping Conference was held on Tuesday. It began withMorgan Stanley's Fotis Giannakoulis telling us everything we need to know about everything to make a decision in these uncertain markets. But for us it is all about finance, so we provide below some sound bites from the conference:
Nordea's Martin Lunder highlighted what is needed to get a Pavlovian response from your banker. There is a flight to quality which favors an existing client with a strong management team. It is also critical that the client provide an opportunity for continued strategic growth. As an analogy, he suggested the window was open but the mesh is tight. Finally he provided a historic perspective of bank lending activities. During 2008, his bank underwrote $30 billion of transactions which declined to $8 billion in 2009. Last year that number rose to $15 billion and so far in 2011 they have a full pipeline.
Wiley Griffiths of Morgan Stanley and Ted Jadick of DnB NOR Markets both agreed that capital was available to existing public companies and if you haven't done it already, it's too late. While the IPO market in general is working, the exodus of the momentum investor has left shipping companies high and dry so to speak.
Ted also highlighted the importance of the capital markets by noting that the bank and owner's equity model is broken. Wiley sees the bond market as a replacement for the lack of bank capacity. While more expensive, bonds have the advantage of no amortization and less stringent covenants. Unfortunately, it is window driven. Potential issuers should note that purchasers are driven by cash flows and not as concerned about LTVs.
According to Tobias Backer, ICON Capital is project driven but there have been fewer of these deals available lately as senior debt has dried up. Instead they have turned their focus to mezzanine, bridging the gap between 60% and 80% leverage.
All agreed the order book was the problem. Ted said it best. The biggest risk to the industry is the owners' capacity to order ships and the shipyard's capacity to build them.
The final comment on the subject came later in the day from John Wobensmith of Genco, who suggested the right thing to do today is to de-lever.
Congratulations to the Chambers on a successful day.
- February 15th, 2011
- U.S. Trade Gap Probably Widened in December on Oil Imports
-
By Bob Willis for Bloomberg
A shipping container is off-loaded onto a truck at the Port of Houston Barbours Cut Terminal in Houston, Texas. A shipping container is off-loaded onto a truck at the Port of Houston Barbours Cut Terminal in Houston, Texas.
Kenneth Rogoff, a professor at Harvard University and former chief economist at the International Monetary Fund, talks about global imbalances and the risk of a trade war. Rogoff speaks with Sara Eisen on Bloomberg Television's "InsideTrack." (Source: Bloomberg)
The U.S. trade deficit probably widened in December for the first time in four months as the cost of imported oil climbed, economists said before a report today.
The gap grew to $40.5 billion from the $38.3 billion shortfall in November, according to the median of 77 estimates in a Bloomberg News survey. Other figures may show consumer confidence climbed this month.
In addition to higher costs for oil, imports may have also been boosted by the need to rebuild inventories in December as American consumers spent at a faster clip in the fourth quarter. At the same time, manufacturers like Caterpillar Inc. are seeing gains in exports as demand picks up from customers in emerging economies, including China and Brazil.
"It's a pricing story on imports, as energy prices went up quite a bit," said Harm Bandholz, chief U.S. economist at UniCredit Group in New York. "It's virtually certain that imports will keep rising in the first half as demand continues to pick up."
The Commerce Department's trade report is due at 8:30 a.m. New York time. Economists' forecasts ranged from shortfalls of $37.4 billion to $43.5 billion.
With orders to American factories climbing as global demand rebounds, manufacturer shares have strengthened. The Standard & Poor's Supercomposite Industrial Machinery Index, which includes companies like Caterpillar and Deere & Co., has jumped 64 percent in the past 12 months, almost three times the 24 percent gain in the broader S&P 500.
American Consumers
American households have contributed more to the recovery in recent months. Consumer spending, which accounts for 70 percent of the U.S. economy, rose at a 4.4 percent annual pace in the fourth quarter, the biggest gain in four years, according to Commerce Department figures.
The gain is supplementing improving sales overseas. China, set to become the world's second-largest economy this year, expanded 9.8 percent in the fourth quarter from a year earlier. India grew 8.9 percent in the third quarter and Brazil, South America's largest economy, advanced 6.7 percent.
Caterpillar, the world's largest maker of construction equipment, posted fourth-quarter profit that topped analysts' estimates as sales advanced in China, Australia and Latin America. The Peoria, Illinois-based company said 2011 sales will top $50 billion after coming in at $42.6 billion last year.
Global Recovery
"Sales are improving in every region, and are at or near records in the developing world," Mike DeWalt, director of investor relations at Caterpillar, said on a Jan. 27 teleconference. "Over the past quarter, we've become somewhat more positive about economic growth in the developed economies of North America, Europe, and Japan."
A product of stronger global growth is higher commodity costs. America's energy bill may have increased at the end of the year, boosting the value of imports in the Commerce Department's trade report. The price of imported petroleum climbed 3.9 percent in December from the prior month, and was up 14 percent from a year earlier, according to figures from the Labor Department.
Oil prices also partly reflect a weaker dollar, which is down 8.1 percent from last year's peak in June against a basket of currencies of the U.S.'s leading trading partners. The dollar's decline also makes American-made goods cheaper for buyers abroad, boosting exports and helping generate more orders to manufacturers.
President Barack Obama, who has set a goal of doubling American exports by 2014, said last month in his State of the Union address that the U.S. has made progress.
Obama on Exports
"Already, our exports are up," Obama said Jan. 25. "Recently, we signed agreements with India and China that will support more than 250,000 jobs here in the United States. And last month, we finalized a trade agreement with South Korea that will support at least 70,000 American jobs." (Bloomberg)
- February 15th, 2011
- Somali piracy 'threatens global oil supplies'
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The Irene SL was attacked about 400 miles (650km) south-east of Muscat A tanker owners' group has urged governments to do more to combat piracy in the Indian Ocean, saying hijackings could disrupt global oil supplies.
It said Somali pirates were now using at least 20 seized vessels as mother ships to launch attacks in the region.
The warning follows the latest hijacking by of a supertanker carrying some $200m (£125m) worth of crude oil off the coast of Oman.
The Irene SL was on its way from the Gulf to the US when it was attacked.
Joe Angelo, the head of the International Association of Independent Tanker Owners (Intertanko), said that the Greek-flagged tanker's cargo represented approximately 20% of one day's US crude oil imports.
"The piracy situation is now spinning out of control into the entire Indian Ocean," Mr Angelo told Reuters.
"If piracy in the Indian Ocean is left unabated, it will strangle these crucial shipping lanes with the potential to severely disrupt oil flows to the US and to the rest of the world."
Intertanko represents the owners of much of the world's tanker fleet.25-Member Crew
Athens-based shipping company Enesel said 333m (1,093ft) Irene SL "was attacked by armed men" on Wednesday morning.
"For the moment there is no communication with the vessel."
The EU's naval mission in the region, Eunavfor, said in a statement on its website the tanker was sailing 400 miles (650km) south-east of Muscat when it was seized.Although the incident happened hundreds of miles from Somalia, pirate gangs are known to operate there.
Greece's Merchant Marine Ministry told the Associated Press that the ship was carrying 266,000 tons of crude oil. It is believed to be one of the largest vessels ever seized.
It has a 25-member crew including seven Greeks, 17 Filipinos and one Georgian, according to the ministry.
The incident comes a day after pirates took control of an Italian oil tanker in the Indian Ocean, some 800 miles from Somalia's coast.
Before the latest incident, Eunavfor said pirates were currently holding 29 vessels along with an estimated 681 hostages.
Somali pirates have made millions of dollars in recent years by capturing cargo vessels in the shipping lanes around the Horn of Africa and holding the ships and crew for ransom.
Somalia has had no functioning central government since 1991, allowing piracy to flourish off its coast. (BBC) - February 15th, 2011
- Nadler Introduces Clean Ports Bill in House
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By Bill Mongelluzzo for The Journal of Commerce Online
Law would empower ports to set standards for clean trucks
Rep. Jerrold Nadler, D-N.Y., Wednesday introduced legislation to reduce truck pollution at container ports -- and to make it easier for the Teamsters union to organize harbor truck drivers.
The Clean Ports Act of 2011 is similar to legislation Nadler introduced last year. It would confirm that ports in labor-friendly cities such as Los Angeles, New York, Newark, Oakland and Seattle possess the legal authority to set standards for clean trucks.
The Port of Los Angeles clean-truck program seeks to achieve clean-air goals by banning old, polluting trucks and through various concession requirements regulating off-street parking of rigs and requiring maintenance plans for trucks.
Also, the Los Angeles plan mandates the use of employee drivers. Most harbor truck drivers across the country are owner-operators, and those independent contractors, by law, can not be organized by labor unions.
The American Trucking Associations has challenged the Los Angeles concession requirements as violating federal preemption law, which reserves for the federal government the authority to regulate the rates, routes and services of motor carriers engaged in interstate commerce. The case is under appeal to the U.S. Court of Appeals for the 9th Circuit.
The Nadler bill envisions a similar regime at ports in cities where the mayors are on record supporting clean-air initiatives and the ability of harbor truck drivers to be organized by labor unions.
"The Clean Ports Act represents a crucial modernization of federal law that would dramatically improve the quality of air for the estimated 87 millions of Americans who live and work near major container ports," Nadler said. (Journal of Commerce)
- February 15th, 2011
- Hapag-Lloyd Swings to $133 Million Operating Profit
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By Bruce Barnard for The Journal of Commerce Online
Revenue hits $2 billion on rising volume, higher freight rates
Hapag-Lloyd swung to an operating profit of $133 million in the final quarter of 2010 from a year-earlier loss of $211 million as rising cargo volume and sharply higher freight rates accelerate plans for an initial public offering of the world's sixth-largest ocean container carrier.
Revenue of Germany's largest shipping line soared 33.7 percent to around $2.1 billion from $1.5 billion a year ago, its biggest shareholder TUI reported Feb. 9.
Container traffic rose almost 7 percent year-on-year to 1.2 million 20-foot equivalent units from 1.1 million TEUs due mainly to strong growth on trans-Pacific trade lanes.
Average freight rates jumped nearly 20 percent to $1,639 per TEU from $1,368 per TEU in the final three months of 2009.
TUI, which owns 49.8 percent of Hamburg-based Hapag-Lloyd, said preparations for a possible IPO are "well on track."
TUI will look at the financial markets in the second quarter and then decide if and when it will float its stake, Chief Financial Officer Horst Baier said during a conference call. TUI's main goal remains to maximize the value of its shareholding, Baier said.
The Hannover-based tourism group is also examining whether to retain part of its stake if necessary or sell it to a strategic investor.
TUI has said its investment in Hapag-Lloyd is worth around $2.75 billion of which $2 billion is equity. TUI increased its stake in Hapag-Lloyd to 49.8 percent from 43.3 percent in the final quarter of 2010. The Albert Ballin investor consortium owns the remaining 50.2 percent. (Journal of Commerce)
- February 15th, 2011
- NYMAR's Man About Town—"Like the ocean tide, highs and lows,
love sometimes comes... then goes away... in Marina Del Rey."
–George Strait -
By Barry D. Parker for NYMAR
It's been a cold winter, too cold for shopping or going out much and cold enough to get thinking about warmer places. But it is Valentine's Day- and it's worth contemplating the affection, or not, between shipping and capital markets. Though the country crooner George Strait is unlikely to appear at New York cabarets (see below), the lyrics from his languid romantic ballad "Marina Del Rey" are very appropriate. The obvious fact is that both shipping markets and capital markets are both fickle, and are not always in alignment. Numerous soundbytes attesting to this uneasy flow of the tides could be culled from the recent conference, held jointly by the Norwegian American and Hellenic American Chambers of Commerce at the Waldorf Hotel. Seemingly, continued unease in the traditional banking sectors (evidenced by a smaller roster of lenders for shipping deals) would provide catalysts for shipping companies looking at new sources for capital. More colloquially, maybe it's time for experimentation and trying something different. But experimentation does not always work out. While New York stalwart Navios Maritime Holdings ("NM") has seen continued successes in its bond market encounters, others have seen challenges. Excel Maritime's ("EXM") money raising efforts went softly aground, in the wake of the Korea Line unease. Ole B. Hjertaker, CFO of Ship Finance Limited ("SFL"), speaking at the Waldorf on a shipowner panel, talked candidly about filing papers for a bond offering on a Friday, only to see markets rattled over the weekend by the debt crisis brewing in Ireland. "SFL" pulled the offering. Love comes and goes, like the song says.
Deal-makers and those contemplating shipping cycles, the capital markets, or just a romantic night out around the Upper East Side, might enjoy the more sultry and sophisticated sounds at the Café Carlyle, on Madison Avenue at 76th Street. Sophisticates reading this article (who are thinking Gershwin, Cole Porter, or Irving Berlin) need not worry- George Strait will not be appearing here anytime soon. Instead, consider that clarinetist Woody Allen (yes, that Woody Allen) will be playing throughout the Winter on Monday nights, accompanied by a New Orleans style jazz band. During February and March, you can see renowned folk singer Judy Collins, and New York native Kenny White (who favors an acoustic guitar when performing his own bluesy compositions or covering songs of Paul Simon and others). Also in the Carlyle Hotel, Bemelman's Bar, a piano bar, features jazz pianist Earl Rose. Speaking of Irving Berlin, Rose bangs the ivory very hard on "Isn't This a Lovely Day?", well known song once danced to by Fred Astaire- way back in the 1930s.
There are some good piano bars around the city- though I am a creature of habit and have not tried all of them. I will give honorable mention to another East Side stalwart, on 84th Street on the block east of Third Avenue. At Brandy's, a lively neighborhood place that offers a different sense of romance, patrons sometimes get up and sing (perhaps mimicking the wait-staff and bartenders). Also unlike the Carlyle, there is a lower celebrity quotient, both onstage and in the audience. Once in a while, stars from days gone who are now living nearby (this is not a BBQ "tunnel" crowd- it is, after all, in the 10028 zip code) have made surprise appearances. Brandy's is non-traditional, kind of an alternative to the Carlyle's more formal venue, but is a fun all around fun place to visit, on Valentine's Day or really any other night. Getting out of the normal mold is useful; that applies to capital markets participants like Navios, as well as guests at Brandy's.
New York is full of countless musical spots with the potential to warm the heart on cold wintry nights. And if you close your eyes, you can imagine yourself in a warm spot like Marina Del Rey. Happy Valentines Day to NYMAR readers.
January 2011
- January 17th, 2011
- No Timetable Set For Bayonne Bridge Project
-
The Journal of Commerce Online - News Story
Major engineering work needed to allow container ships to pass under bridge The Port Authority of New York and New Jersey is putting no timetable yet on its plan to raise the level of the Bayonne Bridge and that engineering work on the a ambitious project has not started.
A port authority spokesman said Monday decisions on whether the bridge will remain open during the highly complicated refurbishment will only be made after the design work and planning are completed.
"We have not yet designed the bridge," said spokesman Steve Coleman. "We have only decided on the concept of raising the roadway."
The port authority announced its long-awaited solution to questions around the Bayonne Bridge over the holidays, saying in a statement released Dec. 29 that it would seek to raise the roadway so larger container ships could pass under the span.
The project would raise bridge's roadway some 64 feet to 215 feet, high enough to allow the post-Panamax container vessels expected to reach the U.S. East Coast from Asia after an enlarged Panama Canal opens in 2014.
With no blueprints in place yet and environmental approvals still needed, it's unlikely a reconstructed Bayonne Bridge would be ready by 2014. But port authority officials say the deadline is not necessarily pressing because carriers are unlikely to immediately deploy ships with capacity of more than 10,000 20-foot equivalent containers to the region.
The 79-year-old bridge, which spans the Kill van Kull channel between Bayonne, N.J., and Staten Island, N.Y., is a major commuter thoroughfare and any construction is likely to cause significant disruption.
But until design work is done, "it is still premature to discuss access to the bridge during construction or how long construction will take," said Coleman. "We are confident that the new height will be sufficient to handle post-Panamax ships." - January 17th, 2011
- Plug-in-Power Set for Massive Growth at Major Ports
-
By William Pentland
Although international shipping accounts for less than 3% of the world's CO2 emissions, the industry's impact on air quality in the densely-populated areas that typically surround major shipping and dry bulk ports has attracted growing attention in recent years. The recent gains in the Baltic Index will likely only amplify this interest.
The world boasts a fleet of more than 50,000 cargo-carrying vessels, according to the International Maritime Organization. Oil tankers and dry-bulk carriers account for nearly 72% of the word fleet. General cargo ships account for roughly 13% of the world's total fleet. Diesel engines are the principal source of power for ships. The average ship spends 100 days in port every year. The average ship burns about 5 metric tons of fuel each day in port. Not surprisingly, people who live near ports have become especially concerned about these hotelling emissions and have increasingly called on decision-makers to implement "cold-ironing" or "shore-side power" solutions for ships in port.
Cold-ironing allows ships at dock to plug into shore-side electricity sources to power electronic and mechanical systems needed for loading and unloading activities. The term "cold-ironing" derives from the act of dry-docking a vessel, which entails shutting down all on-board engines and letting the vessel go "cold." This eliminates the need for the use of its auxiliary engines, which eliminates air emissions from auxiliary engines. Ports across the world are exploring shore-to-ship power capabilities.
New international regulations that require ships to burn low sulfur grades of fuel rather than the comparatively inexpensive bunker fuels most ships currently burn. The amount of electricity needed to operate a ship in port varies from 1 to 4 Megawatts (MW) for a container ship to 5 to 10 MW for a cruise ship. Because fuel commonly accounts for 80% to 90% of a ship's variable costs, the economic impact of these new clean-fuel requirements are likely to be significant. While cleaner fuels will cost more, shore-side costs vary from place to place and depends on availability of shore power. The list of companies developing or otherwise pursuing cold-ironing technologies and applications is getting longer rapidly. The giants like Siemens, BP, ExxonMobil have staked a claim on cold-ironing but then so have smaller outfits like TEMCO, Cavotec, Wittmar (CleanAir Marine Power) and Cochran. In addition, several utilities are exploring these applications, including Pacific Gas and Electric.
And for good reason. In a letter written to the New York State Public Service Commission, a resident of the Red Hook section of Brooklyn made a personal case for cold ironing at the nearby Brooklyn Cruise Terminal:
My young family and I live in the shadows of the smokestacks of the cruise ships that visit the Brooklyn Cruise Terminal. Can you help eliminate 100 tons of NOx, 100 tons of SOx and 6 tons of particulates per year from our neighborhood's air, and our kid's lungs, that the EPA states is created by those ships.
. . . Currently, these ships "idle" constantly in port (as do the container and cargo ships that visit the adjoining Container Terminal), burning an extra dirty form of diesel that is at least 90 times more polluting than that used by trucks. 1 ship/day = 12,000 cars/day
. . . The proposal to "plug in" the cruise ships to "shore power" while in port would eliminate these emissions from the ships visiting the Cruise Terminal, and the cruise operators have committed to doing this, but they need an appropriate power "stand by" rate to make it work, economically . . .
The author went on to ask the State regulators to allow the cruise ships to connect to sources of shore-side power without paying debatably excessive fees to the local utility, Consolidated Edison Company of New York, to do so.
While New York has not yet removed the remaining obstacles to shore-side power, California's ARB mandated in December 2007 that ships docked at large California ports either operate emissions-control technologies or "turn off auxiliary engines for most of a vessel's stay in port and connect the vessel to some other source of power, most likely grid-based shore power." - January 17th, 2011
- New York rolls out red carpet as all three of Cunard's Queens
meet in Manhattan for only the second time in the company's history -
By Travelmail Reporter
It's a familiar story; you wait all year for a Cunard liner to arrive at Brooklyn Cruise Terminal and then three turn up at once.
Yesterday saw New York play host to all three of the Cunard Queens.The flagship liner Queen Mary 2, Queen Victoria and the new Queen Elizabeth, which was making her maiden voyage to the Big Apple, sailed alongside each other under the shadow of New York's iconic Statue of Liberty.
The meeting of the Queens marks only the second time in Cunard's 171-year history that all three of the historic company's ships have been docked at the same time in New York.
A right royal send-off: Cunard's three Queens sail out of New York under a sky of fireworks In spite of freezing temperatures, plenty of spectators braved the cold and headed to the Manhattan Cruise Terminal's Piers, near Battery Park, where Queen Victoria and Queen Elizabeth departed, while Queen Mary 2 set sail from Brooklyn.
It was a regal send off too; at around 7pm local time, a 21-gun firework salute sounded as the ships sailed out of the city and the Empire State Building was even turned 'Cunard red' in acknowledgment of the historic meeting.
All three passed under Verrazano Bridge, viewed by many as the official signal that a liner has arrived in/departed New York.
The Queen Elizabeth has a long journey ahead of her; the newest Cunard ship has now embarked on a 103-day world tour. Queen Mary 2 is also on a world tour although she will will head east where Elizabeth is traveling west. Queen Victoria is bound for a four-month stint in Hawaii.
For Cunard fans, it has been a chance to experience a unique alignment in the three ships' travel plans. Queen Elizabeth and Queen Victoria set sail from Southampton on 5th January and crossed the Atlantic together.
'It proved a very popular event. All three of the ships were fully booked,' a Cunard spokesperson told MailOnline Travel. - January 17th, 2011
- NYMAR's Man About Town–"I love the wheelhouse windows,
like the eyes of a river gal that enjoys life and a full moon tide" -
By Barry D. Parker for NYMAR
After a lively Holiday season, New Yorkers have been blessed with multiple snowfalls, which provides a nice backdrop for NYMAR's Man About Town to travel virtually. Though my kids are encouraging me to explore the I-Pad world, I am still mired in the conventional internet, where a number of excellent online views of the New York waterfront are available. The TUGSTER blog at http://tugster.wordpress.com is filled with photographs of all manner of watercraft, many taken by blog owner Will van Dorp, an English teacher with literary leanings, living in a great waterfront perch in Brooklyn. Truth be told, I stumbled on this blog while searching for boat pictures to illustrate a Lloyds List article. The stated objective of blogger van Dorp is: "to help landfolk see my home waters–the port of New York– from the water perspective." He goes on to say that: "Part of my motivation is that mainstream media are ‘terracentric,' overlooking Sixth Boro news to a large degree." He says that he aims for the opposite- which he calls "maricentric".
Charleston ©Pamela Talese www.pamelatalese.com Carolina Salguero, from the PortSide New York project (http://www.portsidenewyork.org) , who lives aboard the tanker Mary Whelan docked in Red Hook, Brooklyn explained to me that the "…The Sixth Boro", coined on TUGSTER, has found its way into "Vision 2020" - The City of New York's plan for waterfront development. Vision 2020, where NYMAR can play an important role, is described at: http://www.nyc.gov/html/dcp/html/cwp/index.shtml
It does not get much better than "Maricentric." In mid January, when I logged on to TUGSTER, I was greeted by a view of Vane Brothers' tug Nanticoke, along withanother tug- Potomac, against the background of a snowy Ellis Island. Assorted Morans, McAllistersand Turecamos were also pictured as I scrolled down. Mr. van Dorp's close-up photos of Vane's 50,000 barrel tank barge Double Skin 55 (built at Jeffboat), towed by a McAllister boat, with assist from a Vane tug, provides a deckhand level view of the working waterfront. The blog extends beyond New York. A clutch of big bulk carriers (maybe Kamsarmax size) pictured at anchor (on a trip van Dorp took to Hampton Roads) revealed a few recognizable funnel markings on the vessels waiting for their turns to load.
Another blog, BOWSPRITE, at http://bowsprite.wordpress.com, (recommended by PortSide's Ms. Salguero) uses the medium of drawings to convey its message- a miscellany of ferries, fireboats and even the old Fulton Fishmarket. The blog's owner, Christina Sun, describes her venue as "a New York Harbor sketchbook." Ms. Sun's irreverent approach covers a wide ranging whimsical miscellany that includes oysters, drunken sailors, crane operators, and buoys. Ms. Salguero's favorite: "How to simulate the tugboat feeling."- should resonate among readers who live in tight spaces (remember, she lives on a 1938 built tanker). Among the two dozen suggestions was one that I liked- "…install a reading light under your coffee table, and do all of your reading there."
Business news lately has featured social networks; the comments sections on the blogs are really a virtual salty waterfront bar, with very urbane and offbeat discussions of vessel sightings (hint- these are not like those ship enthusiast groups on Yahoo). Consider one comment I found on BOWSPRITE, about an ancient tug still plying New York waters— "I love the wheelhouse windows, like the eyes of a river gal that enjoys life and a full moon tide."
Jacksonville ©Pamela Talese www.pamelatalese.com Besides all the comments and online conversations, the blogger vibe is highly viral and full of referrals; through a link on BOWSPRITE, I found the web site of oil painter Pamela Talese (the daughter of the famed writer), which includes images of vessels, warehouses and industrial buildings along the waterfront. NYMAR members who have toiled on recent Jones Act re-structurings will note renderings of US Shipping Corp.'s Charleston and Jacksonville (drydocked in Brooklyn, circa 2005) among vessels in an exhibit called "Rust Never Sleeps: Corrosion and Renewal in Maritime New York." With the beginning of a new year, I am hoping for lots of renewal.
