Pacific Ports - Volume 5, Issue 1, February/March 2024

Page 1

APP Annual Conference
to host APP’s 110th Annual Conference Volume 5 Issue 1 www.pacificports.org February / March 2024
Taiwan
Risk Management
PACIFIC P RTS Terminals Westridge Marine Terminal transformed into world-class facility
modernization underway
Reducing risks while expanding ports
Port Modernization Major port
in Tonga’s Nuku’alofa Port

On Track with Rail

The Port of Long Beach is investing $1.5 billion in rail infrastructure – more tracks, longer trains and greener locomotives. More cargo moving faster to market more efficiently as we work to become the world’s first zero-emissions port.

Westridge Marine Terminal expansion is complete

Berths 2 and 3 come into service this spring.

Trans Mountain marks a new operating era this spring with completion of the Trans Mountain Expansion Project, notably the significant expansion of Westridge Marine Terminal. With one berth already in service, final commissioning stages are underway for the remaining two berths and terminal assets. Located in the Port of Vancouver on Canada’s West Coast, this modern marine oil export facility will boost Canada’s resource access to global markets.

Equipped with advanced technology, the terminal features a sophisticated mooring system consisting of quick-release marine hooks with load cell monitoring, high performance Teflon-padded fenders and articulated marine loading arms using hydraulic camlocks. It also boasts an industry leading Marine Vapour Control System. Importantly, our world-class facility is supported by an expanded skilled workforce and operating standards aligned with global best practices, ensuring safe and efficient oil cargo transfers and vessel turnaround.

For more information, visit transmountain.com/westridge-marine-terminal.

transmountain.com

TransMtn
www.PacificPortsConference.com

PACIFIC P RTS

6 APP EXECUTIVE COMMITTEE

7 EXECUTIVE DIRECTOR’S NOTE

8 PORT NEWS

News briefs from APP Members

12 SPOTLIGHT ON TAIWAN

Taiwan International Ports Corporation to host APP’s 110th Annual Conference

16 PORT MODERNIZATION

Major port modernization underway in Tonga’s Nuku’alofa Port

18 TERMINALS

Westridge Marine Terminal transformed into world-class facility

22 BEST PRACTICES

Port of San Diego: Environmental champions and economic powerhouse

26 PHOTOS

Memories of the APP 2024 Winter Conference

28 DISASTER RELIEF

Hawaii’s maritime industry assists with relief and recovery from Maui fires

33 GOVERNANCE

From Stem to Stern: Proper roles on board your agency’s ship

CONTENTS

36 GOVERNMENT REGULATIONS

Canada’s policy efforts to protect its Pacific coast

By David Bursey, Claire Lingley, Madison Bergen, and Brienne Gloeckler ,Bennett Jones LLP

39 SUPPLY CHAIN EFFICIENCY

Canada’s National Supply Chain Office

By Colin Laughlan

42 PORTS CANADA CONFERENCE

Ports Canada 2024 Conference heading to the heart of Vancouver Island

44 RISK MANAGEMENT

Reducing risks while expanding ports

By Alan K. Goldstein

49 INTERFERRY CONFERENCE

Interferry2024 set for Marrakech, Morocco in October

50 APP MEMBER ROSTER

On the cover: Kaohsiung Port Cruise Terminal (courtesy Kaohsiung City Government ); Top: Kaohsiung Port Cruise Terminal (source: Wikipedia Commons);

Bottom right: Queen Salote International Wharf, Nuku’alofa Port, Kingdom of Tonga (source: Royal HaskoningDHV).

Volume 5
1
February/March 2024
Issue
12 16 February/March 2024 — PACIFIC PORTS — 5

Association of Pacific Ports 2023/24 Executive Committee

OFFICERS

Kim B. Puzey, First Vice President/Treasurer, Port of Umatilla, OR USA

Conchita Taitano, Second Vice President, Port Authority of Guam, Guam USA

Stephen Ribuffo, Third Vice President, Port of Alaska, AK

Bobby Olvera Jr., Past President, Port of Long Beach, CA

REGIONAL REPRESENTATIVES

Shu-Hui Cheng, Taiwan International Ports Corporation, Ltd., Taiwan

Sean Clark, Port of Columbia County, OR USA

Lorianna Kastrop, Port of Redwood City, CA USA

Zoran Knezevic, Port Alberni Port Authority, BC Canada

Thomas Maddison, Republic of the Marshalls Islands Port Authority, RMI

Sara Young / Kevin Ware, Port of Skagit, WA USA

AT-LARGE REPRESENTATIVE

Falenaoti Loi-On Fruean, American Samoa Department of Port Administration

Ian Marr, Port of Nanaimo, BC Canada

Kimberlyn

The APP has been committed to building partnerships, facilitating dialogue, and encouraging best practices for port governance and management throughout the Pacific since it was established in 1913 as the Pacific Coast Association of Port Authorities.

Throughout our 100+-year history, our objectives have remained consistent. With a focus on collaboration, the APP strives to encourage and facilitate best practices and professional development through conferences, workshops annd strong communications.

PACIFIC P RTS

February/March 2024

Volume 5/Issue 1

Publisher

Association of Pacific Ports

Executive Director & Editor

Jane McIvor

Contributors

Madison Bergen

Greg Chu

Michael Davies

Brienne Gloeckler

DreanaLee Kalili

Claire Lingley

Chris Martin

Michael Ohashi

David Bursey

Randa Coniglio

Ruben Duran

Alan K. Goldstein

Colin Laughlan

Dan Malcolm

Jane McIvor

Mary Anne Rooney

Advertising

Phone: 323-578-2452

Philippe Critot (philippe@pacificports.org)

Editorial & Association business

Phone: 604-893-8800

Jane McIvor (jane@pacificports.org)

Contents copyrighted 2024

Association of Pacific Ports

300 - 1275 West 6th Avenue, Vancouver, British Columbia Canada V6H 1A6

Phone: 604-893-8800 / E-mail: jane@pacificports.org

The opinions expressed by contributing writers are not necessarily those of the Publisher. No part of this magazine may be reproduced in any form without written permission of the publisher.

EDITOR’S NOTE: Due to the international nature of our membership, spelling within each article remains consistent to the country of origin.

Jane McIvor (jane@pacificports.org) Philippe Critot (philippe@pacificports.org) ASSOCIATION OF PACIFIC PORTS ADVERTISERS American Samoa Department of Port Admin. 9 EA Engineering, Science, and Technology, Inc., PBC 8 Fiji Ports Corporation 35 Interferry2024 25 Liebherr BC Nanaimo Port Authority 10 Nautical Institute BC Branch ........................................................................................................ 9 Port of Hueneme 32 Port of Long Beach IFC Port of Skagit 11 Ports Canada/Port Alberni Port Authority 43 APP 110th Annual Conference 4 Shye Harding Executive Search 34 Trans Mountain / Westridge Marine Terminal .............................................................................. 3 Wiggins Lift Co. Inc. .................................................................................................................. IBC Young Brothers 31
King-Hinds, Commonwealth Ports Authority, Commonwealth of Northern Mariana Islands USA STAFF
Shao-Liang Chen, President, Taiwan International Ports Corporation, Ltd., Taiwan
6 — PACIFIC PORTS — February/March 2024

TSee you in Taiwan!

he date is set, the venue is confirmed, and planning for speakers and excursions is well underway! We’re excited to invite you to the APP’s 110th Annual Conference in Kaohsiung, Taiwan — August 11 to 14, 2024.

I’ve been very impressed so far with the ideas coming from the team at the Taiwan International Ports Corporation, our Host Port. Their enthusiasm is contagious and it’s evident that many discussions have already taken place to develop an engaging and relevant agenda.

APP PORT MEMBERS

To set the stage for the conference, Pacific Ports Magazine has a two-part series — first, in this issue, a familiarization article to set some context for your travels; and second, scheduled for the next issue, insights into the activities, issues, and future opportunities for the TIPC.

Having set a theme of “sustainability” for the conference agenda, TIPC’s leadership in this area was well-noted by a presentation from Mr. Stanley Yang during our last Annual Conference in Long Beach (see our October 2023 issue of Pacific Ports).

Mr. Yang’s description of how the Port has prioritized the goal of reducing their operating footprint can serve as an example for all ports, large and small. There is not a port on the planet that shouldn’t be making sustainability a key focal point for all their planning. Imparting their experiences in this area aligns perfectly with the APP’s mandate of sharing best practices. I encourage you to start making your travel plans as soon as possible. This conference will be one you won’t want to miss.

EXECUTIVE DIRECTOR’S NOTE
February/March 2024 — PACIFIC PORTS — 7

New fireboat stations dedicated at Port of Long Beach

On March 1, 2024, officials dedicated two new Port of Long Beach fireboat stations that are greatly enhancing the Long Beach Fire Department’s waterside and landside emergency response capabilities, better safeguarding visiting ships, cargo and waterfront workers.

The facilities — Fireboat Station 15 and Fireboat Station 20 — are the products of a $109 million Port of Long Beach program to preserve business continuity, security and economic interests.

Fireboat Station 15 is a single-level, 7,750-square-foot building in the Port’s outer harbor with living quarters, a garage for two firefighting apparatus trucks and a full wharf with a 16,311-square-foot boat bay enclosure that houses fireboat Vigilance. Construction started in April 2019 and the project was completed in September 2021.

Fireboat Station 20, located in the Port’s inner harbor, is a two-level, 9,783-square-foot structure equipped with living quarters, a garage for two firefighting apparatus trucks and a 16,280-square-foot boat bay enclosure that houses fireboat Protector. Construction started in March 2021 and the project was completed in December 2023.

Fireboat Protector entered service in 2016, followed a year later by its companion, Vigilance, heralding major advancements in harbor firefighting and emergency response capabilities at the Port of Long Beach. The fireboats are each equipped with 10 water cannons capable of sending up to 41,000 gallons per minute to a distance of up to 600 feet, or the length of two football fields.

With an anticipated lifespan of 50 years, both stations were approved for construction in 2017 by the Long Beach Board of Harbor Commissioners and funded by Port revenues.

PORT NEWS E A Engineering, Scienc e, and Technology, Inc., PBC INTERDISCIPLINARY ENVIRONMENTAL SERVICES // Planning & Assessment // Design // Permitting & Stakeholder Engagement // Operational Support // Sustainability & Reporting // Community Engagement OFFICES NATIONWIDE I eaest.com
8 — PACIFIC PORTS — February/March 2024

APP Winter Conference qualifies for

IAMPE credits

In a first for any APP Conference, the International Association of Maritime and Port Executives has granted eight (8) Continuing Education credits to any attendee who would like to receive them. Attendees can email Eric Gilmore, Director of Business Development, IAMPE, directly to process the certificates (eric.gilmore@iampe.org).

“This is a testament to the relevance of APP conferences,” said APP Executive Director Jane McIvor. “Hawaii provides the perfect setting as a half-way meeting point to allow attendees from both sides of the Pacific Ocean to come together for the purposes of learning from each other, building relationships, and demonstrating leadership within the port community.”

McIvor noted that APP Annual Conferences provide equally compelling agenda topics with the added feature of first-hand experiences to learn about the host port and their operations. “Our 109th Annual Conference in Long Beach, California, was an excellent example of how in-class sessions and presentations were combined with on-site inspections of the harbor, terminals, key logistics and key features of the Port.”

PORT OPERATIONS

• Dock Space

• Container Dock: 1,112ftx55ft, D35ft

Main Dock: 400ftx55ft, D35ft

• Inter-Island Dock: 90ftx40ft, D25ft

• Fuel Dock: 406ftx45ft, D40ft

• Service Wharf: 300ftx75ft, D25ft

• 4.5 acre Container Yard

40,000sqft Warehouse

AIRPORT OPERATIONS

Pago Pago International Airport (PPG) – Tutuila Island

700-acre public airport

• 6 miles SW of Pago Pago, AS

Ofu Airport (Z08) – Manua Islands

• 18-acre public airport

1 mile SE of Ofu Village, AS

Fitiuta Airport (FAQ) –Manua Islands

• 34-acre public airport

• .1 mile SE of Fitiuta Village, AS

Located in South Pacific Ocean, in the heart of Polynesia, Pago Pago Harbor is one of the world’s largest natural harbors, and it is also considered one of the best and deepest deepwater harbors in the South Pacific Ocean or in Oceania as a whole.Pago Pago International Airport is capable of accommodating any size of commercial aircraft. When combined, our seaports and airports make the movement of cargo and people to and from American Samoa easy because of its strategic midpoint for several shipping and air routes between the U.S. West Coast, Honolulu Hawaii, Australia, New Zealand and other pacific nations.

INDUSTRY BRIEFS MARITIME ARCTIC 2024 : Best Practice, Best Technology, Best People CONFERENCE Join The Nautical Institute BC Branch May 1 - 3, 2024 Participants from around the globe will be attending, presenting, discussing - we look forward to seeing you! https://nautinst.ca/conference-2024/ Victoria Marriott Inner Harbour British Columbia, Canada Photo credits: ABB - Azipod Propulsion Visit our site for details and updates! “In the Global Market, American Samoa will become the hub of the Pacific Island region.” americansamoaport.as.gov We are here to serve you! We are here to serve • Naturally deep - water h arbor. • Dock Space o Con tainer Dock: 1,112ftx55ft, D 35ft o Main Dock: 400ftx55ft, D35ft o nter - Island Dock: 90ftx40ft, D25ft o Fuel Dock: 406ftx45ft, D40ft o Service Wharf: 300ftx75ft, D25ft 4.5 acre C ontainer Y ard 40,000sqft W arehouse Bulk Cargo : Fuel, LPNG Harbor Tug Assist Service Tug Iseula, 3000hp Tug Sailele, 1500hp Inter Island Ferry Services Inner Harbor Anchorage for Yachts Yacht/Pleasure Craft Marina Facilities Dry Dock Facilities USDA Meat Inspectors Net Repair Yard Tuna Cannery /Docks – Star Kist Tuna Small Boat Harbors: Auasi, Aunuu, Faleasao, Ta’u, Ofu. AIRPORT OPERATIONS • Pago Pago International Airport (PPG) – Tutuila Island o 700-acre public airport o Rwy 5/23: 10,000ft x 150ft o Rwy 8/26: 3,800ft x 100ft o Elevation: 32 ft. 9.8 m o Distance From city: 6 miles SW of Pago Pago, AS o Time Zone: UTC -11 o Surface: Concrete/grooved ARFF Station o Hot Fire Training Ground • Ofu Airport (Z08) - Manua Islands 18 acre public airport o Dimensions: o Rwy8-26: 200 x 60 ft. / 610 x 18 m o Elevation: 9 ft. / 2.7 m o Distance From city: 1 mile SE of Ofu Village, AS o Time Zone: UTC -11 o Surface Concrete/grooved o ARFF Station • Fitiuta Airport (FAQ) - Manua Islands o 34 acre public airport o Rwy 12/30: 3200 x 75 ft. / 975 x 23 m Elevation: 110 ft. / 34 m o Distance From city: .1 mile SE of Fitiuta Village, AS o Time Zone: UTC -11 o Surface: Concrete/grooved o Weight bearing capacity: o ARFF Station “In the Global Market, American Samoa will become the hub of the Pacific Island region ” Locted in South Pacific Ocean, in the heart of Polynesia, Pago Pago Harbor is one of the world's largest natural harbors, and it is also considered one of the best and deepest deepwater harbors in the South Pacific Ocean or in Oceania as a whole. Pago Pago Harbor is over 400 feet (120 m) deep and two miles (3.2 km) long, with over 2,700 linear feet of dock space and numerous anchorage sites for the over 1,000 ports calls consisting of cruise, cargo military, fishing, workboats, yachts and pleasure crafts throughout the year Pago Pago International Airport is capable of accommodating any size of commercial aircraft. When combined, our seaports, and airports make the movement of cargo and people to and from American Samoa easy because of its strategic midpoint for several shipping and air routes between the U.S West Coast, Honolulu Hawaii, Austrailia, New Zealand and other pacific Visit us at americansamoaport.as.gov
February/March 2024 — PACIFIC PORTS — 9

San Diego’s “Future of the Port” planning reaches major milestone

The Port of San Diego’s planning for the “future of the Port,” formally known as the Port Master Plan Update (PMPU), has reached a major milestone. On February 28, 2024, the Board of Port Commissioners unanimously certified the Final Program Environmental Impact Report (PEIR) and approved the PMPU. Next, Port staff will

process the PMPU document with the California Coastal Commission with the goal of certification in late 2024.

“We are excited to enter the final phase of this important plan that reflects our collective vision — of our communities, stakeholders, and the Port — for the future of San Diego Bay and the surrounding waterfront,” said Chairman Frank Urtasun, Port of San Diego Board

SHIPPING SOLUTIONS AT TWO DEEP SEA TERMINALS LINKING VANCOUVER ISLAND’S ECONOMY TO THE WORLD.

of Port Commissioners. “After 11 years of community engagement including numerous public meetings and exchanges with the public, the PMPU will help us continue to deliver on promises made to voters when the Port was established in 1962. It will protect and enhance opportunities for public access and parks, preserve our natural resources, balance the need for development, provide good paying jobs, and more.”

“We are incredibly grateful to everyone who provided input and engaged with this process. Your commitment and involvement has ensured a very thorough and comprehensive effort,” said Commissioner Ann Moore, who has spearheaded the PMPU effort. “The Port has worked very hard to engage as many people as possible to ensure this plan meets the needs of all Californians and our communities for the next several decades. We look forward to the next stage with the California Coastal Commission and to celebrating when we cross the finish line.”

The Port Master Plan is a water and land use plan that designates specific areas of San Diego Bay and the surrounding waterfront for a variety of uses including maritime, fishing, visitor-serving commercial, recreational, environmental conservation and protection, and navigation. The plan determines where port activities should take place, where recreational amenities should be located, and where commercial uses like hotels, restaurants, and visitor-serving retail may be built.

The PMPU effort began in 2013 and is being done through a multi-faceted and comprehensive approach and process known as Integrated Planning. This five-phase planning process will culminate with an updated Port Master Plan.

For more information about the PMPU process and/or to sign up to receive updates, go to portofsandiego. org/pmpu.

INDUSTRY BRIEFS
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100 PORT DRIVE, NANAIMO, BC
Port of Nanaimo ships 18 different Vancouver Island products to 25 ports in 14 countries.
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Enhanced
10 — PACIFIC PORTS — February/March 2024

In Memoriam: Mike Davidson, Nanaimo Port Authority

It is with heavy hearts that we advise on the unexpected passing of Michael “Mike” Davidson, Chief Operating Officer with Nanaimo Port Authority, on January 17, 2024.

At the recent APP 2024 Winter Conference, Director and Vice-Chair of the NPA Board Fred Denning provided a short eulogy, noting that Mike had served the Port for over 38 years, beginning his career as a summer student and rising through the ranks to COO in 2018. He was a highly respected representative of the Port as he worked with Industry First Nations, government community leaders and port users. “Mike’s historical and operational knowledge of the port was vast. He was often called upon as a resource to contribute that knowledge to others,” said Denning.

Mike is survived by his wife, Kathy, his sons Ryan and Trevor, and grandson Beau as well as brothers Rob and Joe, in-laws and many nieces and nephews. He was predeceased by his son Brett last year.

From Mike’s obituary: It is clear Mike lived a rich and fulfilling life, leaving a positive impact on his family, friends, and community. His passion for sports, particularly basketball and later golf, highlights his dedication to both physical activity and building lasting connections with others. The connections made both locally and internationally, demonstrated the lasting impact of his friendly personality and charisma. His commitment to volunteering and coaching further underscores his selflessness and desire to contribute to the wellbeing of those around him.

Mike will be missed by all who knew him. May his family find comfort in the cherished memories and the positive influence he had on those around him during this difficult time.

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Part One Taiwan International Ports Corporation to host APP’s 110th Annual Conference

With the APP’s 110th Annual Conference taking place in Kaohsiung, Taiwan, August 11 to 14, 2024, we’re pleased to present a two-part series of articles — the first, in this issue of Pacific Ports, will serve as a primer for readers to familiarize themselves with Taiwan. In our next issue (June/July), we’ll delve into some of the issues that will feature prominently on the conference agenda, including insights from Shao-Liang Chen, President of our Conference Host Port, Taiwan International Ports Corporation (TIPC), and President of the Association of Pacific Ports.

Familiarization

Taiwan’s history can be traced back thousands of years when the island was home to the Malayo-Polynesian peoples. As far back as the 1500s, Portuguese sailors described the island as “Ilha Formosa” (the beautiful island), and the name stuck for over 400 years.

Located roughly 160 kilometers (100 miles) off southeastern China,

As far back as the 1500s, Portuguese sailors described the island as “Ilha Formosa” (the beautiful island) and the name stuck for the next 400 years.

Taiwan’s land mass of 36,000 square kilometers (14,000 square miles) is just a bit larger than Vancouver Island in British Columbia. It is about seven times smaller than Oregon, and 11 times smaller than California. As of 2023, Taiwan’s population reached just over 23.5 million.

Mountains cover approximately twothirds of the surface of the island with several reaching heights over 3,000 meters (10,000 feet). The mountains run north/south along the east coast, leaving the west coast — marked by terraced tablelands and alluvial plains — for the majority of farmland and population.

Taiwan’s climate is subtropical with the southern part of the island classified as tropical. With long, hot summers and short, mild winters, Taiwan enjoys a mean annual high temperature

of 21o Celsius (71o Fahrenheit) with about 2,600 millimeters (102 inches) of rain per year.

The official currency of Taiwan is the New Taiwan Dollar (TWD but also recognized as NT$). Currently, one US dollar is approximately 31.5 TWD (one Canadian dollar is about 23.4 TWD). Cost of living in Taiwan about 60 percent cheaper than in the U.S. Given that McDonald’s fast-food restaurants are worldwide, it’s often used to highlight comparisons in countries. In the U.S., a combo meal would be over US$9.00 where the same meal in Taiwan would be just under $5 (or NT$154).

The creation of TIPC

Prior to 2012, administration and supervision of operations for Taiwan’s four main ports — Keelung, Taichung,

SPOTLIGHT ON TAIWAN
12 — PACIFIC PORTS — February/March 2024

Kaohsiung, and Hualien — fell under the Ministry of Transportation and Communications (MOTC). The creation of the Taiwan International Ports Corporation was seen as a way to improve efficiencies and enhance regional and global competitiveness and on March 1, 2012, TIPC took over port operation and management functions. Meanwhile, the newly established Maritime and Port Bureau within MOTC took over maritime / port policy and supervision functions.

TIPC is a national enterprise that is wholly owned by the MOTC and headed by a Board of Directors and a Board of Supervisors. TIPC administers the four subsidiary organizations of the Port of Keelung, Port of Taichung, Port of Kaohsiung, and Port of Hualien and manages all aspects of the business of these ports, their associated facilities, and their auxiliary ports. Business-oriented operations have improved the effectiveness and flexibility of port operations greatly and have fueled port growth and expansion, stimulating local economic and industrial prosperity. In addition, TIPC manages port operations for three additional international ports as well as two domestic ones. TIPC not only manages all port operations but also determines the right resources of each port to ensure that they all can develop without competing with each other.

The modern economic importance of Mainland China and of other countries in the Asia Pacific region makes Taiwan, at the nexus of trans-Pacific and Asia-Europe shipping routes, an ideal hub for trade and commerce. Located conveniently in northern, central, southern, and eastern Taiwan, TIPC ports are backed by modern port infrastructures, surrounded by world-class industries, and connected directly to efficient national road and rail networks.

The Ports of Taiwan

Highlighting the four main ports under TIPC’s authority (Keelung, Taichung, Kaohsiung, and Hualien) a good overview of Taiwan’s capabilities is realized.

Port of Hualien — Hualien Port, in eastern Taiwan, is bound by the Pacific Ocean on the east and the Central Mountain Range in the west. With 25 deep-water wharves — 16 in the Inner Harbor and nine in the Outer Harbor — Hualien Port sees an annual loading of over 34 million tons of cargo such as oil, general goods, cement, gravel/ sand, and minerals. Its convenient traffic network, double-track eastern line of the Taiwanese railroad, and islandround shipping carrier has created a

fully functional international harbor. In addition, the Port of Hualien is home to a developing tourist and leisure industry with cruise facilities and whale-watching excursions.

Port of Kaohsiung — Kaohsiung Port is Taiwan’s largest international commercial harbor. In addition to serving as a container transshipment hub port, it is also the major port in Taiwan for the import and export of bulk cargo. The government is actively promoting the Port of Kaohsiung’s emergence as a key transshipment center for Asia-Pacific container shipping and for global logistics. It hosts seven container terminals with a total of 93 berths and 69 warehouses along with 12 outdoor yards. Major recent projects have

SPOTLIGHT ON TAIWAN
Port of Hualien
February/March 2024 — PACIFIC PORTS — 13
The Great Harbor Bridge in the Port of Kaohsiung

included a new viaduct expressway, a new Passenger Terminal, the Nanxing (South Star) Land Development Project, and the construction of a new Kaohsiung Port area sewage treatment system. Kaohsiung also serves as the location for TIPC headquarters.

Port of Keelung — Keelung Port is located near the northern tip of Taiwan and is considered one of the most important ports in the Asia-Pacific region with 56 wharves covering approximately 572 hectares and a main channel water depth of 15.5 meters. Port facilities are capable of accommodating Post-Panamax container vessels and

bulk cargo vessels up to 60,000-tonnage. The Port of Keelung focuses on serving as a logistics port in northern Taiwan for short-sea shipping, a port of call for cross-strait passenger and cargo vessels, and an international cruise and recreational tourism port.

Port of Taichung — Being the largest international commercial port in central Taiwan, Taichung Port is bound by Dajia River to the north and Dadu River to the south. It covers a vast area of more than 4,000 hectares with its hinterland stretching over seven cities and counties. It has 58 wharves with a total length of 14,695 and sees such

cargoes as grain, general, bulk and heavy lift cargo, cement, containers, passenger, waste iron, coal and LNG. Taichung was recently selected as the home port for offshore wind development given its proximity to the Taiwan Strait and winds that can get up to 12 meters per second.

Sustainability

A key theme of APP’s 110th Annual Conference is that of “sustainability”, a priority for TIPC and all of its ports. At the 2023 APP Annual Conference in Long Beach, California, Stanley Yang, Senior Deputy Director of Planning and Development for TIPC, gave a very succinct presentation that highlighted TIPC’s efforts to contribute to the world’s goals of reducing greenhouse gas and carbon emissions. It is worth summarizing his presentation here (note: the full recap of Mr. Yang’s presentation can be found in the October 2023 issue of Pacific Ports Magazine).

TIPC has committed to following the 17 integrated and interrelated sustainable development goals defined by the United Nations. These 17 goals are implemented along six themes, including digitalization, infrastructure, health safety and security, environmental care, community building, and climate and energy. Focusing on just two of the six themes, Mr. Yang addressed ways in which TIPC was addressing carbon reduction through digitalization and climate and energy.

In 2021, TIPC established the Sustainable Development Committees and Task Forces and set the goals of 50 percent carbon neutrality by 2030, and 100 percent carbon neutrality by 2050. This is in line with the 2015 Paris Agreement goal of reducing the rise of global temperatures to 1.5 degrees rather than the estimated 3.5 degrees that would be realized by the end of the century without any action.

SPOTLIGHT ON TAIWAN
Port of Keelung
14 — PACIFIC PORTS — February/March 2024
Port of Taichung

To contribute to the achievement of their goal, the TIPC applied digitalization to Taiwan’s ports to assist processing capabilities. On the harbor side, they set up a sea meteorology real-time system and ship navigation aid system; and on the land side, they set up a Smart Road Transportation system and app. The system provides information for truck drivers, such as the real-time arrival of ships, how many trucks are waiting to pass the terminal gate and estimated waiting time. This allows the driver to decide when to start his engine and ensures no one arrives too early at the port, reducing exhaust emissions. TIPC also has an Automatic Gate Sentry Post System which, if the truck is on the “white” list (i.e., has been precleared), eliminates the need to stop at the gate for inspection.

TIPC also introduced a Test Field Program for Conducting Port Innovation Projects and Digital Transformation Incentives. This program allows any company that has ideas for port digitalization to apply for conducting Proof of Concept and Proof of Service on port premises. The TIPC provides a total of US$1.3 million each year to subsidize companies that apply for digitalization projects.

Additional initiatives undertaken by the TIPC to promote a green, sustainable port include incentives for voluntary vessel-speed reduction as well as the use of low sulfur fuel. Shore power is being promoted as an effective way to reduce carbon emissions — but the cost of electricity in Taiwan is much more expensive than traditional fuel so incentives to cover the cost differences are being considered. The TIPC is also drafting clauses into lease contracts to include carbon reduction promises.

While the above was just a sample of actions taken — and much more has been done, including solar power generation and planting efforts — Yang

A key theme of APP’s 110th Annual Conference is that of “sustainability”, a priority for Taiwan International Ports Corporation and all of its ports.

estimated that the Port reduced their carbon dioxides by more than 108,000 tons.

Join us in Kaohsiung!

As the Host Port for APP’s 110th Annual Conference, TIPC has big plans for attendees! With the dates of the conference set for August 11 to 14, 2024, TIPC has reserved the Intercontinental Hotel Kaohsiung as the location for meetings and accommodations. Located at the heart of Asia’s New Bay Area along the Zhonghua and Xinguang Road, the InterContinental Kaohsiung, with its exceptional facilities and attentive service, has 253 luxurious guest rooms and suites, an indoor pool, and five signature restaurants. Conveniently located between the Kaohsiung International Airport and Kaohsiung Main Station, the Intercontinental Kaohsiung is

close to the Sanduo Shopping District, Kaohsiung Exhibition Center, and the famous 85 Sky Tower.

With planning underway to develop a relevant and engaging agenda, early confirmed excursions include a trip to the Fo Guang Shan Buddha Temple and Museum which boasts the largest copper-cast Buddha statue in the world. The Welcome Reception will be held at the Kaohsiung Port Cruise Terminal, officially opened in November 2023 (see the cover of this issue of Pacific Ports). TIPC is also planning a tour of one of Kaohsiung’s state-of-the-art container terminals to view operations first-hand.

For companions, TIPC is working with one of their trusted travel agents to develop an exciting program. Two staff will accompany companions for translation services (and to make sure no one gets lost!). PP

To learn more about APP’s 110th Annual Conference, visit www.PacificPortsConference.com. Early bird registration is already available!

INDUSTRY INSIGHT SPOTLIGHT ON TAIWAN
The Fo Guang Shan Buddha Temple and Museum — Sunday's excursion trip for the APP Conference.
February/March 2024 — PACIFIC PORTS — 15

PORT MODERNIZATION

Major port modernization underway in Tonga’s Nuku’alofa Port

Working with the Asian Development Bank, the Australian Infrastructure Financing Facility for the Pacific, and the Government of the Kingdom of Tonga, Ports Authority Tonga has embarked on a major upgrade of the Queen Salote International Wharf of Nuku’alofa Port. Under the leadership of CEO Mr. Alo Mailesani, the project is providing for climate-resilient modifications as well as a significant expansion and modernization of QSIW’s berths and harbor. Initiated in late 2020 upon approval of a $45 million grant from the ADB, the project will transform Nuku’alofa Port into a world-class international port.

Background

The Kingdom of Tonga is an archipelago of 177 islands spread across 700,000 square kilometers of the South Pacific Ocean. The majority of the population of 108,000 live on the main island, Tongatapu, where the capital and largest city, Nuku’alofa, is located. Tonga is extremely vulnerable to the adverse impacts of climate change and disaster hazards, regularly facing

Initiated in late 2020 upon approval of a $45 million grant from the ADB, the project will transform Nuku’alofa Port into a world-class international port.

extreme rainfall, tropical cyclones, earthquakes, and tsunamis.

The Queen Salote International Wharf (QSIW), situated in Nuku’alofa, is the country’s only deepsea harbor port. The cargo terminal at the port opened in 1967 and the last major maintenance was undertaken in 1999. As Tonga’s main transport and supply gateway, the facility comprises four wharves and is responsible for the arrival of 98 percent of the country’s imports. With limited capacity for larger vessels, low-lying container yards and access roads, and a height of less than three metres above mean sea level, the port’s efficiencies are critical to the people of Tonga.

Financing partners

In December 2020, the ADB approved a $45 million (Australian dollars) grant to support the upgrade of the QSIW, noting that: “The current

wharf has visibly degrading facilities, decaying concrete structure, and grapples with short berthing issues, as well as substandard safety provisions.” With the ADB grant, PAT would be able to reconstruct and extend the wharf to better accommodate larger vessels, construct a new dolphin between two wharfs, reinforce the concrete slab, and other related improvements.

ADB further noted that: “Upgrading ports in the Pacific with smart infrastructure and processes will remove inefficiencies, reduce costs, and protect against natural disasters and climate change. The Nuku’alofa Port Project is designed with green and smart components and includes gender aspects to promote the participation of women in port operations.”

The main features of the project included the extension of Wharf 2 to better accommodate larger vessels, construction of a new dolphin

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Rendering of the modernized Queen Salote International Wharf at Nuku’alofa Port, Kingdom of Tonga.

between Wharf 1 and 2, construction of new dolphins on the eastern side of Wharf 1, reconstruction of the Wharf 1, reinforced concrete slab, yard improvements, and smart and green port features such as reorganisation, new paving, drainage, smart lighting, waste management, and firefighting. Capacity building programs related to port operations, safety operation, and maintenance, and gender equity policy and training for the ports authority were also incorporated into the scope of the project.

The ABD approved a further $30 million in grants in November 2023, recognizing increased costs associated with complex global cost escalations caused by supply chain disruptions associated with the COVID-19 pandemic and the increase in fuel prices caused in part by geopolitical events. The financing was sourced from ADB’s Asian Development Fund ($10 million) and $20 million through the Government of Australia’s Australian Infrastructure Financing Facility for the Pacific. That grant will be administered by the ADB. Estimates for the total project are roughly AUD$126 million.

Design and construction partners

With initial funding approved, Royal Haskoning DHV undertook the detail design for the upgrade of the two wharves. The international engineering firm, with over 6,000 colleagues in 20 countries, has a demonstrated track record of helping clients with challenges ranging from climate change and digital transformation to changing customer demands and the energy transition.

When awarded the contract, David Perbey, Principal Engineer and Project Manager, wrote that:

One of the port’s wharfs was so badly damaged that it was unsafe and

PORT MODERNIZATION

Once complete — by 2026 — the new, modernized QSIW will realize a 50 percent increase in throughput, going from 30,000 to 45,000 TEUs.

needed to be closed immediately.

Using insights from the local people, we conducted a climate and disaster risk assessment in four stages. This included a literature review, site investigation, condition assessment, stakeholder consultation, and multi-criteria assessment.  We also projected exposure to climate and disaster hazards, identified appropriate resilience measures, calculated investment costs, and explored any residual risk as part of the assessment.

As a result of our research, we proposed to demolish and rebuild wharf 1, extend wharf 2 by 45 metres, build four additional dolphins, and deploy two new channel navigation markers.  The demolished concrete from wharf 1 will be reused in rock bags to form coastal protection, and local concrete used to build yards and buildings. As part of the rehabilitation of the port infrastructure, four cargo docks will be refurbished, a new seawall built, the container yard reorganised, and the port road upgraded with new lighting and pedestrian access. The project will also introduce green and smart solutions to enhance compliance with international regulations. To ensure a sustainable life cycle, we’ll establish an asset management framework and a dedicated maintenance team. During construction, the local workforce will be upskilled using training programmes on port operations, environmental working practices, equipment handling, HSE and port security, and gender equality.

To undertake the work, Ports Authority Tonga brought in McConnell Dowell, a leading New Zealand firm established in 1961 with extensive experience on transportation infrastructure. Selected in August

2022, McConnell Dowell established a three-phase work program with the main features of the project with a mix of marine and onshore work. The works will be predominantly selfdelivered by McConnell Dowell, supported by carefully selected specialist subcontractors who offer expertise and efficiency in delivering works in the Pacific region.

Current status

Once complete — by 2026 — the new, modernized QSIW will realize a 50 percent increase in throughput, going from 30,000 to 45,000 TEUs. It will also have lower maintenance capital expenditure, a reduced carbon footprint, and will provide safer working spaces for local operators and shipping lines, including new paving, smart lighting, and improved drainage and waste management.

A groundbreaking ceremony in October 2022 was quickly followed by mobilisation and the delivery of 96 steel piles ranging in length from 25 to 25 metres. Stage One began with a focus on Wharf 1 and in March 2023, demolition of the wharf deck began. Approximately 950 cubic metres of old concrete was set aside to be recycled in the seawall and in May 2023, a key milestone was reached when the first piles were put in place. By August 2023, 450 cubic metres of concrete were produced at the onsite batching plant. As of September 2023, 140 people were working across seven work fronts. Stage Two of the project will start in late 2024.

For more information, Pacific Ports has posted a few videos that provide good overviews of the project. Visit: www.pacificports.org/tonga-qsiw-project. PP

February/March 2024 — PACIFIC PORTS — 17

Westridge Marine Terminal transformed into world-class facility

Looking back over the process of modernizing the now complete Westridge Marine Terminal, Michael Davies, Chief Operating Officer for Trans Mountain Corporation, said he was proud of what they have achieved. “It was important to all of us to do this properly,” he said. “I’m proud of the approach that we took as a company. We were very mindful of our commitments to the communities and environment along the pipeline route and within the marine space where Westridge resides. And I’m proud that it was done in a way that reflected what Canadians expected.” Indeed, while touring the terminal with Davies, who explained the many modern features now in place, the APP was able to see that his pride was not misplaced.

Background

Numerous articles and news stories detail the process of the application from Trans Mountain (formerly Kinder Morgan) as it sought to twin its pipeline. The Trans Mountain Expansion Project included the expansion of Westridge Marine Terminal from its existing one-berth terminal to

“..here at the end of the project, you can see the evidence of how the input from stakeholders ... has turned this facility into a world-class terminal and a world-class system for oil transport...”

a modern three-berth facility. While there was no change to the type of cargo or size of vessels that would visit Westridge (Aframax-size tankers), the number of visits would increase roughly from five per month to potentially 34 per month at full capacity. The Project was intended to deliver nation-building infrastructure that would provide a new opportunity for Canadian oil to reach world markets.

What was originally expected to be a two-year project development process turned into something closer to 10 years, but Davies believed the end result was worth the wait. The rigors of consultations, reviews, and multidepartment governmental regulations, while arduous, served to strengthen the project. “We could talk about costs and schedules and issues like that but here at the end of the project, you can see the evidence of how the input from

stakeholders — Canadians, all levels of government, First Nations, environmental interests, and the marine industry — has turned this facility into a world-class terminal and a world-class system for oil transport,” said Davies.

Landside

A tour of the new dock complex starts landside with a view of three new 30-inch delivery lines coming out of the side of Burnaby Mountain and leading toward the berths (flow from three delivery lines can be directed to any of the three berths). “We committed to the City of Burnaby to tunnel the lines through the mountain and straight out to the docks,” said Davies, noting that this not only minimized disruption during the construction process — i.e., avoiding tree removal

TERMINALS

or interference with residential areas and urban infrastructure — but also reduces risks during operations.

Also new to the terminal landscape is a state-of-the-art control building, replacing the old ones. Equipped with the newest technology, the building will feature:

• Separate HMI panel for each Berth (HMI = Human Machine Interface)

• State of the art monitoring via multiple cameras

• Fire System monitoring

• Trelleborg Dynamic Mooring System Release and line management for each berth

• Incoming vessel display board on each berth (vessel’s speed and angle of approach)

• Trelleborg weather and oceanographic data monitoring (monitors and displays wind speed/direction, visibility, ran fall, wave height and current speed and direction)

• MVCS Monitoring for each train and for new VCU

There is also a new ambient air quality monitoring station that measures not only emissions related to operations but other pollutants common to the air shed. Using self-diagnosing technology, the system sends out an alert if any component being monitored drifts outside of normal operating conditions. The monitor, its measurements and recordings are all available to the public online once the system comes into service.

Moving through the extensive onland infrastructure that supports the delivery lines, one of the most striking visible changes is the Marine Vapour Control system (MVCS). The process of filling a marine vessel with oil leads to the generation and displacement of hydrocarbon vapours or gases from within the vessel’s cargo tanks. Previously, vapours

that were expelled from tanks were captured and destroyed with one Vapour Combustion Unit. Now, two new Vapour Recovery Units collect almost all odorous compounds and volatile organic compound emissions from the vapours which are then compressed, liquefied, and cooled before

being re-injected into the next vessel during the loading process. “We worked with the manufacturers to design this system specifically for the terminal,” Davies said, adding that he was unaware of any other marine terminal in the world with such advanced technology at this scale.

TERMINALS
Aerial view of the newly completed, fully modernized and expanded Westridge Marine Terminal. New Vapour Recovery Units (in dark green) stand in stark contrast to the old Vapour Combustion Unit (silver stack at the right).
February/March 2024 — PACIFIC PORTS — 19

TERMINALS

Waterside

With the old berth, now decommissioned but still visible, the new three-berth dock complex, including a utility dock, stands as a testament to the advances of technology over the past 70 years. “There were upgrades of course and it was rebuilt in the mid-2000s but there are few marine

structures that have had that long a service life,” said Davies, noting that the old dock will be removed in time.

Along the berths, the delivery lines lead to two loading arms (each with a 16-inch diametre) and a vapour arm (described above) with a 12-inch diametre. The layout of the new docks was designed in conjunction with the

Vancouver Fraser Port Authority, the Pacific Pilotage Authority, and the BC Coast Pilots. Considering factors like a high level of navigational and mooring safety as well as safe navigation for all other marine traffic in the area, Trans Mountain also prioritized minimizing the impact on the surrounding environment. For example, mitigation measures included establishing a rock reef complex in a designated area on the west side of the terminal to create refuges for smaller fish and surface area for algae to grow. The rock reef complex was constructed on the seafloor using heavy equipment to place crushed bedding rock, rock mattresses, and reef rock. The 10,400 m 2 complex includes 4-5 metre gaps between the square reefs to encourage water circulation and an expanded toe berm (nursery) reef to provide stability, prevent slumping and form rocky habitats for fish and invertebrates.

As noted previously, the docks were built to allow for continued visits from Aframax-sized vessels. “Most of the time, there will only be two or less vessels being loaded at any given time,” Davies said. “The third berth is essentially for redundancy and back up or, in some cases, it can be used for catch up if needed.”

Beyond the bricks and mortar

Providing an overview of the infrastructure now in place at Westridge Marine Terminal is only part of the story. No overview would be complete without mention of the safeguards, the people and the best practices that are in place and adhered to rigorously.

An 85-person full-time team that includes supervisory staff, technicians, marine professionals, emergency response personnel and others are involved in operating the Burnaby and Westridge Terminals on a 24/7 basis. “There are two parts to the operation,” Davies explained. “There’s the Trans

The Westridge Marine Terminal project resulted in increased marine capabilities for the entire B.C. coast, including high-performance escort tugs.
20 — PACIFIC PORTS — February/March 2024
Each berth is equipped with two loading arms and a vapour arm.

Mountain pipeline side and then there is the terminal operations. For the pipeline, the skills required are similar to other industrial operations — pulp mills and power plants, for example. For the terminal and loading of ships, the job calls for specialized marine training. While everyone will have some interface with the ship, we always have someone who was typically a master or an officer with tanker experience who is our person on the vessel during the loading process.”

The vessels themselves are vetted well in advance of arriving at the Westridge docks through a terminal management system which captures and makes available technical, inspection, and historical data from all global commercial vessels as well as owners and operators. Prior to the transfer of cargo at the Westridge dock, a loading master conducts a physical inspection of the vessel and ensures it, and its crew, are prepared for a safe loading. The loading master stays aboard the tanker throughout the loading process to monitor the vessel and its crew and to ensure efficient communication between the terminal and the vessel.

In addition to safeguards for vessels transiting the port area, Trans Mountain has committed tug escort outside the port limit (Buoy QA to Buoy J) in the commercial shipping lanes of the Salish Sea for outbound laden vessels. This includes two high-performance escort tugs supplied by KOTUG Canada, and the introduction of a new Offshore Supply Vessel which will all be based at the Sc’ianew First Nation Community of Beecher Bay on Vancouver Island. Trans Mountain is a shareholder of the Western Canada Marine Response Corporation (WCMRC), the spill response corporation for Western Canada. “WCMRC has been an integral part of our expansion project,” Davies said. “To support this project, they went from an operation of about

60 people to now close to 200 and expanded their equipment caches and bases along the entire B.C. coast not to mention the increased capabilities of its response vessels. Truly, they built a world-class response regime to compliment the increased operations for Westridge and as a result, have greatly increased the public’s confidence about our project overall.”

Throughout Trans Mountain’s Expansion Project, there was one key piece that, in Davies’ view, was critical to their overall success. “We were committed to listening to the communities, including Indigenous communities, and we acted on what we heard.” Whether it was consultation about the environment, resulting, for example, in the rock reef complex noted earlier; or about culturally sensitive Indigenous areas, resulting, for example, in one of the largest archaeological projects in Canada that identified 80,000 artifacts relevant to First Nations’ history, the Trans Mountain team did not just pay lip service to the notion of consultation. Davies also paid heed to their involvement in Canada’s reconciliation efforts. “Indigenous economic participation was a key part of

our efforts,” he said noting that there are now five preferred indigenous contractors that are a part of the longterm maintenance program.”

Conclusion

There’s so much more to the Westridge story than can be captured in a few short pages within Pacific Ports. From identifying the need for expansion and developing the concept, to moving through the approval process, extensive community engagement, collaboration with marine industry agencies and careful attention to environmental, social, and economic factors, the Trans Mountain and Westridge Marine Terminal team have persevered. The Trans Mountain Expansion Project has resulted in not only a world-class petroleum loading facility, but a world-class marine regime for the entire B.C. coast with increased capabilities in emergency response and tug assets as well as safe navigation practices for all vessels.

As Davies so aptly put it: “We lived and breathed this project every day for so many years and it was important to us that it was done right with no aspects of safety or quality compromised. I’m very proud of what we’ve accomplished.” PP

TERMINALS
February/March 2024 — PACIFIC PORTS — 21
Tour guides for APP's visit to Westridge Marine Terminal: Nathan Bellagente, Operator Tech; Stephanie Snider, Manager, Operational Performance; and Michael Davies, Chief Operating Officer (note: personal protective equipment is not required while inside the control room).

Port of San Diego Environmental champions and economic powerhouse

Choosing a topic that would be germane to every port at the APP’s 2024 Winter Conference, the joint presentation from Port of San Diego’s Dan Malcolm, Commissioner, and Randa Coniglio, Interim CEO, focused on the two topics that were of great importance to their community. “Certainly, in the State of California, our community expects us to be environmental stewards as well as an economic engine,” said Malcolm. “The real trick that we’re going to talk about today is balancing these amidst the broad range of responsibilities that fall to ports.”

Background

Coniglio provided a succinct summary and background of the Port of San Diego to provide attendees with context. She noted that the Port was created by an act of the California State Legislature in 1962, called the San Diego Unified Port District Act. At that time, the Port was tasked with a number of responsibilities: promoting commerce, navigation, fisheries, recreation, and environmental stewardship for the benefit of the entire state. As such, the Port is an indispensable economic engine for the San Diego region and the state of California, generating nearly $21 billion for the state economy each year and over 114,500 direct and indirect jobs. Within San Diego County, the Port has an economic impact of $9.2 billion and generates over 64,400 jobs.

“We have over 40,000 people working on Port Tidelands and over 800 tenants along the 34-mile coast that fall under the Port’s authority,” Coniglio said, adding that they are the home of the Pacific Naval Fleet and the various shipyards and industrial tenants that provide support to the fleet. “All of this is done in very close proximity to people who live in communities right next to the Port. So, it has always been very important for us to engage with those communities and to lower our carbon footprint to mitigate any impacts on them.”

Maritime Clean Air Strategy

“Operating in California, there are state regulations that we must follow but you’ll see that our goals go above and beyond,” Malcolm said of the Port’s Maritime Clean Air Strategy. With a Vision Statement of “Health Equity for All”, San Diego Port has set the following goals:

“The real trick ... is balancing these amidst the broad range of responsibilities that fall to ports.”

• Trucks: 100 percent zero-emission (ZE) truck trips by 2030 for all trucks that call to the Port’s two marine cargo terminals (this is five years ahead of state requirements) and 40 percent ZE truck trips by 2026.

• Cargo handling equipment: Transition diesel cargohandling equipment to 100 percent ZE by 2030.

• Harbor craft: Tugboat diesel emissions reduced 50 percent through transition to zero/near-zero emission technologies and/or other lower-emitting engines or alternative fuels.

• Port fleet:  Transition to 100 percent zero/near-zero emission technologies.

BEST PRACTICES
22 — PACIFIC PORTS — February/March 2024
Port of San Diego's Interim CEO Randa Coniglio and Commissioner Dan Malcolm.

• Ocean-going vessels:  Equip marine terminals with shore power and/or an alternative technology to reduce ocean-going vessel emissions for ships that call to the Port. Coniglio and Malcolm expanded on the summary above, noting that the Port’s goals were five years ahead of state requirements for transitioning to zero-emission cargo trucks and cargo handling equipment as well as other plans that will have a positive impact for surrounding communities. “We are implementing initiatives at every link within the supply chain,” said Coniglio, providing specific examples, including:

• Investing about $47 million into shore power capabilities has resulted in allowing two cruise ships to plug in simultaneously with a third connection at the cruise terminal under way; shore power is also now available at the Tenth Avenue Marine Terminal and work is underway to install shore power at the National City Marine Terminal.

• Recognizing that not all cargo vessels are shore-power capable, the Port has selected Clean Air Engineering – Maritime to design, build and operate a barge-based emissions control and capture system, sometimes referred to as a bonnet system.

• The Port of San Diego is now home to two all-electric Mobile Harbor Cranes, built by Konecranes, replacing the diesel-powered mobile harbor crane at the Tenth Avenue Marine Terminal. In addition to eliminating a major source of diesel emissions, the cranes will result in increased productivity and cargo business opportunities.

• The Microgrid Infrastructure Project at the Tenth Avenue Marine Terminal is now fully operational, enabling operation of critical terminal infrastructure for

approximately 12 hours at a time without being connected to the larger electrical grid.

• The eWolf — the first all-electric tugboat to operate in the U.S. — is currently undergoing sea trials. Built and designed by Crowley, the 82-foot vessel with 70 tons of bollard pull will reduce nitrogen oxide by 178 tons, 2.5 tons of diesel particulate matter, and 3,100 metric tons of carbon dioxide versus a conventional tug. It will also replace one that consumes more than 30,000 gallons of diesel per year.

• In November, SSA Marine received a 55,000-pound forklift as their first zero-emissions piece of cargo handling equipment for use at the Tenth Avenue Marine Terminal.

• The Port is partnering with Caltrans and SANDAG on “Harbor Drive 2.0” — a main thoroughfare between National City and Tenth Avenue Terminals and the main route from the terminals to the interstate. The project will create a “haul road” to separate trucks from regular traffic. Using smart technology and dedicated truck lanes, truck idling will be reduced, which will help reduce emissions, and it will help reduce the time it takes for cargo trucks to get from the

terminals to Interstate 5. The project will also include state-of-the-art electric charging infrastructure to support zero-emission trucks.

Malcolm added that, in addition to the Port’s environmental impact being very important to the Port, reinvesting in the community is equally a priority. “We’ve invested almost $2 billion into the community since 1962, including the construction of the Convention Center in San Diego,” said Malcolm. “So, when we started talking about electrification, we got very aggressive and went after grants from initiatives like the Infrastructure Act. Over $100 million has been committed to the Port through the Act and other grants.” He added that “this is just the beginning, with other projects to be identified that will lower our footprint even further.”

The Blue Economy

In the time remaining for their presentation, Coniglio and Malcolm turned to the Port’s “Blue Economy” strategy. “The Port of San Diego plays a critical leadership role in advancing blue economy opportunities in the region through the many roles it serves including landlord, operator, regulator, and environmental steward,” said Malcolm. “Ports are indeed uniquely positioned to act as catalysts for the blue economy and to take advantage of

BEST PRACTICES
February/March 2024 — PACIFIC PORTS — 23
A snapshot summary of the Port of San Diego's Maritime Clean Air Strategy.

the future business opportunities in this realm. As a champion of the blue economy, the Port is committed to supporting innovative opportunities that advance our mission, create benefits for coastal communities, and support the growth of a sustainable and equitable blue economy.”

In 2016, the Port of San Diego established the Blue Economy Incubator to assist in the creation, development, and scaling of new water-dependent business ventures in and around San Diego Bay, primarily focusing on sustainable aquaculture and port-related blue technologies. The Incubator acts as an innovation launch pad, providing earlystage companies with key assets and support services focused on pilot project facilitation. These assets and services include subject matter experts, permit-ready infrastructure, entitlement assistance, market access, and funding.  “Think of the Shark Tank only without Mark Cuban,” Malcolm said. “We invite companies to pitch their ideas in front of a panel to decide whether to invest and how much. We’ll either take a piece of the company or some other kind of profit that will contribute to the Port’s goals.”

Through the Incubator, the Port considers innovative aquaculture and blue technology proposals to address portrelated environmental challenges and inform future blue economy opportunities. “The vision for the incubator is to build a portfolio of new businesses that not only deliver economic benefits to the Port and the region, but to also create impactful social and environmental benefits as well,” said Coniglio. “The Blue Economy Incubator has demonstrated a new and unique procurement pathway for the Port to attract and support innovative pilot project proposals,

while also supporting efforts that protect our environment and improve public health.” Examples of Incubator projects were highlighted:

• HyperKelp is a smart buoy platform tailored for various port monitoring applications. The core technology includes a smart buoy platform and online dashboard designed to collect, process, and transmit ocean data in real-time. The Port authorized a two-year pilot project to develop, test and validate the platform.

• ECOncrete has developed an innovative concrete technology used to enable the construction of nature-inclusive marine infrastructure. The technology serves as a replacement for traditional riprap and provides ecological armoring and shoreline stabilization, while also creating well-defined local ecosystems that mimic natural tide pools.

• Sunken Seaweed is an aquaculture start-up company led by two marine ecologists who are successfully cultivating, out-planting, growing, monitoring, and harvesting several species of seaweed native to Southern California. Beyond commercialization, results from the pilot project are helping assess seaweed aquaculture’s multiple cobenefits, from carbon sequestration and bioremediation to improving water quality and ecosystem productivity. “It’s really exciting for us,” said Coniglio. She concluded their presentation by noting that “We hope that we have shown that it is possible to be both economic engines and environmental champions. We take both roles very seriously at the Port of San Diego, and hope that we inspire other agencies to make similar investments in their ports and communities as well.”

BEST PRACTICES
24 — PACIFIC PORTS — February/March 2024

Marrakech. Located adjacent to the conference hotel – the Mövenpick Marrakech – the Palais des Congrès is the largest meeting facility in Marrakech and will be a fantastic venue. As always, our event will feature topical speakers and sessions; ferry leaders panels; many outstanding networking opportunities; and a technical tour. Sponsors and exhibitors will enjoy a large exhibition area in which to display their products and services to conference attendees

For the latest info check the conference website, follow our social media, and subscribe to our mailing list.

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MEMORIES — APP 2024 WINTER CONFERENCE

26 — PACIFIC PORTS — February/March 2024
MEMORIES
APP 2024 WINTER CONFERENCE February/March 2024 — PACIFIC PORTS — 27

Hawaii’s maritime industry assists with relief and recovery from Maui fires

In August 2023, Hawaii’s island of Maui experienced devastating fires that killed at least 100 people and left thousands homeless. To describe the efforts of the maritime industry in both disaster relief and recovery, DreanaLee Kalili, Deputy Director, Hawaii Department of Transportation moderated a panel with representatives from three of Hawaii’s preeminent marine companies. The panel included Greg Chu, General Manager, Container Operations, Matson; Chris Martin, Vice President, Operations, Young Brothers; and Michael Ohashi, General Sales Manager, Pasha Hawaii, The Pasha Group. Providing context, Kalili noted that Hawaii has two main carriers — Pasha Hawaii and Matson — that bring cargo coming from the West Coast of the U.S. mainland to Honolulu Harbor. Young Brothers, Hawaii’s inner island water carrier,

“The historic treasures of Lahaina were gone. The Boat Harbor was gone. The economic engine for that part of the island that supports tourism was gone.”

delivers the majority of the cargo to neighbouring islands (noting that Pasha and Matson have additional routes that reach some of the islands).

Describing the day of the fires, Kalili said it was a normal Tuesday morning, just like any other. “When you listen to the news and get alerts on your phone, you just kind of tune it out and think it’s likely just a brush fire that the fire department will put out.” Later that night however, the full extent of the disaster that was unfolding in Lahaina was becoming clear. “The historic treasures of Lahaina were gone. The Boat Harbor was gone. The economic engine for that part of the island that supports tourism was gone.”

Kalili recounted the massive upswell of people wanting to help and contribute. “We started seeing food and clothing drives. Everyone wanted to help and, of course, wanted to rebuild right away,” she said. “We all know that’s not what happens in these kinds of situations, but all the goods and clothing and food and support and even machinery and equipment that needed to get to Lahaina weren’t on Maui. And there weren’t too many ways to get those items from Oahu, where they were, to the island where they needed to be.” With that, she called upon the panelists to describe how their companies supported efforts.

DISASTER RELIEF AND
RECOVERY
28 — PACIFIC PORTS — February/March 2024
Image from Michael Ohashi's presentation: Local community hubs were set up at various points on Maui.

Michael Ohashi with Pasha Hawaii first provided an overview of services and routes to familiarize attendees with the company. He highlighted routes between Oakland, Long Beach and Hawaii but also pointed out the rural service and Pasha’s capabilities for calling on neighbor islands directly to provide for extra flexibility. He also highlighted the partnership with Young Brothers in a “hub and spoke” operation that sees containers delivered to the other islands.

Turning to the Maui wildfires, Ohashi’s presentation included images that showed the devastation of O’ahu.

“How does our remote island, with about 165,000 people that’s 2,300 miles away from the nearest state in the U.S., survive? The answer is by doing what Hawaii does best, which is to come together as a community to support one another,” he said, and began to show a series of slides with people coming together to help, including the establishment of community hubs on Maui. “We coordinated a collection/ donation plan with Pasha, Hawaii Stevedores, our labor and port workers at Pier One where we had the most space. We were able to get everything loaded and, in some case, shrink wrapped and palletized, then loaded into containers.”

There were also community hubs that were established at various points on Maui with volunteers coming together. One of Ohashi’s slides showed the various points on O’ahu where some of the hubs are still in operation today, serving not just Lahaina but other affected areas on Maui as well. He described how local chefs would come down and prepare meals for displaced families and a tent store was set up with vital supplies. “There was an area with a white board where victims of the fires could post notes about what they needed and another area where donations were dropped off,” said Ohashi, adding that there was even space set up with activities for kids.

Storage was also critical in the relief response and Ohashi outlined how Pasha partnered with PODS who donated storage shelters where people could put their personal items for safe keeping. Pasha also donated a reefer container for cold items such as dairy and perishables.

Looking at the recovery stage, Ohashi showed images of portable, mobile shelters made out of containers that will use solar panels to assist with power. “These will be useful for when people start to move back to Lahaina and start rebuilding their homes.”

Following much the same format as Mr. Ohashi, Greg Chu, representing Matson, started his presentation with an overview of Matson’s services and capabilities. “We’re a proud American company based in Honolulu. We’ve been independent since 2012 and are continually investing in our ships, terminals, and services,” Chu said, adding that Matson is currently in the process of building three new

3600-TEU vessels for Hawaii, all built in the U.S. and U.S.-owned. Operating exclusively on Pacific Ocean routes, Matson serves many island communities. In addition to Hawaii, Matson routes throughout the U.S. Pacific span from Long Beach, Oakland, Tacoma, and Alaska. In 2006, they expanded into China, and in 2013, started up Matson South Pacific which goes from New Zealand and Australia to the South Pacific Islands.

“It’s hard to understand the impact of the fires without seeing it firsthand,” said Chu as he recounted a visit to Lahaina along with Matson Vice President of Sales Bernie Valencia and other managers. “Many lost everything — homes, belongings, loved ones. They also lost power and their ability to communicate, which made coordinating a response all that more difficult. But the amazing thing was how the community came together for each other.”

Within 24 hours, Matson had reached out to the Hawaii Emergency Management Agency, American Red Cross, Salvation Army, and Hawaii Food Bank to coordinate response efforts. “We also activated our incident command center and held daily zoom calls with our commercial and operational division leaders along with our Maui team to

RELIEF AND RECOVERY
Lahaina, before and after the wildfires in August 2023.
February/March 2024 — PACIFIC PORTS — 29
Images courtesy Greg Chu, Matson

RELIEF AND RECOVERY

update everyone on the latest local developments and planning information for our response.”

Describing both challenges and blessings, Chu noted that the port at Kahului had been unaffected by the fires and was still open to receive cargo. Matson met with the State of Hawaii along with The Pasha Group and Young Brothers. The three companies ensured that there was enough vessel capacity to handle the additional demand. “We had to ensure that chassis and containers turned quickly in the community as there are a limited number of chassis on the island,” he said. “And at the same time, we had to ensure the terminal did not get choked with empties, so we were moving those out constantly in order to make room for incoming freight.”

Additional actions taken by Matson to provide support included extending the charter of a barge by one month to ensure additional capacity was available; working with FEMA to get shipments of emergency generators and

supplies from Oahu to Maui; rerouting barge and vessels calls from Kauai to provide additional freight capacity as well as pull out empties to keep the terminal flowing; and supplying extra chassis. Matson also worked with Continest Technologies who gave 200 fully wired pop-up homes that moved across the U.S. on Matson’s 45-foot flat racks and loaded to their vessels from the West Coast to Hawaii. They invested in a new trailer-mounted side lift that allowed them to deck containers anywhere in the community so they could get chassis back and keep everything flowing. Another area Matson assisted was in coordinating the clean up with moving hazmat shipments.

“Now we’re in phase two which is removal of larger debris,” said Chu. “We continue to work with the State as they try to look at solutions for that.”

Going forward, Chu said that the focus would be on developing solutions for larger and more permanent housing. “Lastly, we’re looking at ways to improve the strength and resiliency of

our Hawaii terminals. Once Pasha has moved to the new Kapalama Terminal, we plan to expand the area from three operating berths to five and improve some of the technology at the facility.

Chu ended his presentation by saying that “We know we’re a lifeline for the communities we serve and we’re in it for the long haul, not just for Maui but for all the islands that we serve.”

Chris Martin with Young Brothers was the next to provide an overview of how they helped with disaster relief and recovery. First describing the operations of Young Brothers, he said that they were an inner-island tug and barge service with a fleet of nine barges and eight tugboats, servicing neighbor island ports with assist boats in and out of Kahului and Hilo. Young Brothers operates a ‘hub and spoke’ operation that runs from Honolulu to the other islands with ‘just-in-time’ deliveries.

Martin described how skilled and committed Young Brothers team took the initiative to organize space at the Kahului terminal to ensure capacity

Hawaiians pulled together and, in addition to donating goods, provided distractions for children.
30 — PACIFIC PORTS — February/March 2024
Images courtesy Michael Ohashi, Pasha Hawaii

for additional cargo that was arriving in response to the wildfires. “We had already struck up our incident command team to track a heavy weather system coming toward Hawaii,” Martin said. “Our team works to make sure deliveries aren’t impacted by weather which means adjusting cargo packages — for example, perishable cargo like livestock isn’t moved during storms, not just for safety but for animal care. So, during inclement weather, there is a lot more barge activity.”

When the tragedy struck, Young Brothers was ahead of the game, having their incident command center already up and running. Working with Pasha and Matson on prioritizing cargo, Young Brothers focused on making sure there was power and water as well as medical equipment. He recalled receiving a request to put together a “baby mobile” that included

RELIEF AND RECOVERY

Martin described how skilled and committed Young Brothers team took the initiative to organize space at the Kahului terminal to ensure capacity for additional cargo...

diapers, goods, and foods specific to young children. “It was an honor to help,” he said, especially being able to draw on their experience of segregating cargo that was of great importance to get the critical cargo out first. “Our employees took the initiative to segregate the yards so we could take on the donations and started shipping goods that were critical — medical equipment, consumable goods, water, etc.” He added that they also contributed containers and chassis to the efforts.

Now, Young Brothers is working with their partners to move everything from water purifiers to utility equipment and prefab modular homes that are coming in from both local and U.S. mainland sources. “During

this recovery phase, we’re opening up our bookings and prioritizing loads for Maui communities,” Martin said and noted that they have invested in two newer, more modern barges. He expects these to be online later this year, providing even more capacity to assist with Maui’s long-term needs.

Before ending the session, Kalili was asked how APP members can help. She provided two website addresses that can accept funds to support recovery efforts.

APP members are encouraged to show their support for Hawaii with donations via:

https://www.memberplanet.com/ campaign/cnhamembers/kakoomaui

https://www.hawaiicommunityfoundation.org/maui-strong PP

From Stem to Stern: Proper roles on board your agency’s ship

One of the highest-rated sessions at the APP 2024 Winter Conference was the dual presentation from Ruben Duran, Partner with Best Best & Krieger LLP, and Mary Anne Rooney, Commissioner for the Port of Hueneme. Through an interactive and engaging session, Duran and Rooney set out to first distinguish the roles and responsibilities between the port’s governing body and the staff, and then to establish guidelines and best practices that can make for an effective, productive, and wellfunctioning team.

The duo started by asking attendees about port governance within their own jurisdictions. It was quickly realized that the old adage rang true —once you’ve seen one port, you’ve seen one port. Even within states, governance models varied. For Rooney and the Port of Hueneme (California), for example, commissioners are elected and beholden to the citizens of the community. Comparing that to the Port of Long Beach which is part of the Harbor Department for the City of Long Beach, commissioners are appointed. Others, like Oregon and Washington, are completely separate and independent government entities with their own taxation base. Alaska is a business enterprise with the municipality and the board has very little decision-making power. Another model of governance entirely is applied to Canadian ports where directors (not commissioners) are appointed by the Federal Government.

Despite the differences and regardless of jurisdiction, Duran pointed out that all boards have essentially the same responsibilities: to set policy and priorities; to establish rules; to hire the CEO (and in some cases, legal counsel); to ensure fiscal sustainability; and to create and maintain an active mission statement and strategic plan. Rooney added that it was important for commissioners who are elected to represent their constituents. This required commissioners to stay informed and know the rules and policies of the port intimately.

On the other side of the equation — i.e., staff, it is important for commissioners to understand the roles of staff and the relationship that needs to exist between governance, management, and operations to be effective. “The best run organizations exhibit traits where staff are continually informing and educating the board,” said Duran, “and ensuring transparency to allow board members to carry out their responsibilities. Staff need to ensure all commissioners are treated equitably and fairly in the dissemination of information as they are implementing policies and, in addition

Despite the differences and regardless of jurisdiction, Duran pointed out that all boards have essentially the same responsibilities...

to managing day-to-day operations, they need to make sure the board’s priorities become their priorities and those are made into reality.”

Rooney reinforced the message of communication and transparency: “If one commissioner has information that is not shared prior to a meeting, it automatically becomes a disadvantage for the entire board. Decisions and consensus are difficult at that point.”

Another area of governance that both Duran and Rooney emphasized was that of the board’s evaluation of the CEO’s performance. Evaluations should be limited to the performance of the CEO and how staff are managed. “I hope no commissioners here have done an evaluation in an open session,” said Duran, noting that, while accountability is essential, “it’s critical to have a free and open discussion built on trust and respect.” Additionally, Rooney noted that it was important that tangible goals and measurements be established to be able to fairly evaluate a CEO’s effectiveness. Preparation prior to board meetings was also essential.

GOVERNANCE
February/March 2024 — PACIFIC PORTS — 33
Ruben Duran, BBK Law, and Mary Anne Rooney, Port of Hueneme.

Ultimately, transparency, integrity, and trust must exist between the board and staff for both to be able to carry out their responsibilities.

Noting that board meetings were often held in the public domain, preparation prior to the meeting was a necessity. Attendees at the session agreed. “At the Port of San Diego, we operate on a ‘no surprises’ basis,” said Randa Coniglio, interim CEO. “Ask questions of the staff before raising it publicly — or give notice of an issue that you’ll be raising so they can prepare.”

Summarizing the take-aways of the roles between staff and board members, Duran and Rooney outlined the following points: Recognize that board members and staff have different roles; board members should not micro-manage but, on the other hand, staff should not overstep in attempting to set policy. Ultimately, transparency, integrity,t and trust must exist between the board and staff for both to be able to carry out their responsibilities.

Previously, the presenters had given an overview of the role of a commissioner/director/board member. They now turned to look at the role of the CEO (general manager or executive director depending on the organization’s nomenclature), noting that CEOs oversee all administrative tasks necessary for operations. Hired by, and under the direction of the board, it is the CEO’s responsibility to advise the board; supervise all departments and oversee staff; implement policies adopted by elected officials; develop, oversee, and maintain the budget; and bring concerns and requests of the community to government representatives.

“While we look to our CEO to take a leadership role in the day-to-day management, we need to remember that this person is an employee and answerable to the board,” said Rooney. “The CEO needs to be well informed about all aspects of operations to be able to keep the board well advised. It would be improper for me, as a commissioner, to circumvent the CEO and reach out to staff for answers.”

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Turning to best practices, the two presenters focused on communication and problem-solving. A discussion ensued about California legislation known as the Brown Act — a law enacted to ensure the public’s right to attend and participate in meetings of local government. “It’s a big challenge,” said Rooney. “There’s a fine balance that needs to be struck between communications and ensuring you’re not engaged in conversations with a majority of commissioners outside of a public setting. Transparency has to be paramount for the benefit of the community.” Issues such as the difference between ad hoc and standing committees generated a good deal of discussion with attendees.

Another vein of discussion centered on how to make the best use of the skill sets and connections of board members. “The places where that works best are where people keep each other informed,” said Duran. “If you’re not talking to your board, you’re not going to know what networks they have.”

With the session coming to an end, one last issue was raised. “How do you deal with politics at both the board and staff levels?” Both Rooney and Duran felt that training was very important for commissioners so that they understood their role and worked on behalf of the organization in an appropriate manner. Duran added that “as elected officials, commissioners are politicians and politics will always be there. You can try to keep it out of the business at board meetings, but this requires relationships built on trust, and the understanding that everyone is working toward the same goal — the betterment of the organization.”

Attendees were in full agreement. PP

GOVERNANCE
sheyharding e x e c u t i v e s e a r c h
34 — PACIFIC PORTS — February/March 2024
February/March 2024 — PACIFIC PORTS — 35

REGULATIONS

Canada’s policy efforts to protect its Pacific coast

In recent years, Canada (at the federal level) and British Columbia (at the provincial level) have embarked on policy initiatives to protect Canada’s Pacific Coast. These initiatives include Canada’s Oceans Protection Plan (OPP) and British Columbia’s Coastal Marine Strategy (CMS). This article outlines these initiatives and the implications for ports and shipping along Canada’s Pacific Coast.

Canada’s Oceans Protection Plan Canada introduced its OPP in 2016, which included a $1.5 billion dollar investment over five years aimed at improving coastal protections across Canada’s coastline. In 2022, Canada committed an additional $2 billion over nine years to expand on the initiatives. A brief outline of the key elements of the OPP follows.

Improving marine shipping information and safety

• Transport Canada is working with industry partners, Indigenous communities, and other coastal communities to design new information-sharing systems that better incorporate scientific research, local knowledge, and technology, and expand aerial surveillance and other equipment to offer real-time access to marine shipping activities.

• Local communities are given greater input on local marine traffic issues, including the regulation of vessel size and speed, sensitive area protection, and waste discharge near harvesting areas.

• Canada has strengthened domestic vessel oversight and Canada’s ship inspections, modernizing its Port State Control Program.

• The Pilotage Act was updated to enhance the regulation and certification of marine pilots with local knowledge to pilot vessels in Canada’s ports and waterways.

• Hydrographic surveys have been undertaken for high-priority commercial ports to update the corresponding electronic navigation charts for high-traffic commercial ports and waterways.

Improved prevention and response to marine incidents

• Regional marine spill response plans are being implemented with local communities to manage marine incidents and identify and map regions of ecological, cultural, social, and economic importance.

• Search and Rescue Stations have been added and Communications and Traffic Services remote sites

GOVERNMENT
Port of Vancouver
36 — PACIFIC PORTS — February/March 2024

and back-up links have been enhanced to improve communications to mariners.

• Canada has strengthened its commitment to the polluter-pay principle through amendments to the Canadian Ship-Source Oil Pollution Fund. Amendments to the fund include removing the limit on compensation available to those affected by spills.

Greater protection for coastal marine ecosystems

• Canada is updating baseline biological, ecological, social, cultural, and economic data through ecosystem-focused projects under its Coastal Environmental Baseline Program to support environmental stewardship and improve capability to react to potential incidents and spills.

• Canada has funded initiatives to protect and restore coastal marine ecosystems that are vulnerable to increased marine shipping and development activities.

• Canada has enacted legislation to prohibit the abandonment of a vessel in Canadian waters. It also initiated programs that focus on prevention and removal of abandoned vessels, which have led to the removal or assessment of abandoned and wrecked vessels on the West Coast.

Collaboration with Indigenous and local communities

• Canada is collaborating with Indigenous and local communities to better understand the cumulative effects of shipping and to create local vessel control areas to minimize safety risks and environmental impacts.

• Working with industry, Indigenous and other local coastal communities, Canada developed the Enhanced Marine Situational

GOVERNMENT REGULATIONS

Canada is collaborating with Indigenous and local communities to better understand the cumulative effects of shipping...

Awareness web-based platform to gather and share near real-time marine traffic and environmental data to help enhance local marine safety.

• Canada has trained more than 500 participants (more than 50 Indigenous participants) in marine search and rescue, environmental response, and incident command system. This training supports the development of Indigenous Community Response Teams.

• The Indigenous-led Canadian Coast Guard Auxiliary Chapter has units in Indigenous communities along British Columbia’s coast.

• Under the auspices of the Reconciliation Framework Agreement For Bioregional Oceans Management and Protection , Canada is working with Indigenous coastal nations in British Columbia to share marine safety and environmental protection priorities, and better coordinate and collaborate on solutions to related local marine issues.

Improved oil spill response

• Building on the work of Fisheries and Oceans Canada’s Centre for Offshore Oil, Gas and Energy Research, Canada has funded research to improve technologies for oil spill cleanup. This program improves ocean models using information such as currents, winds, and waves to allow responders to track spills and predict their path.

• The Multi-Partner Research Initiative has funded projects on spill treating agents, oily waste disposal, and other aspects of spill response.

Moratorium of oil tanker traffic and offshore oil and gas exploration on the Pacific coast

• The Oil Tanker Moratorium Act, enacted in 2019, prohibits oil tankers that are carrying more than 12,500 metric tons of crude oil or persistent oil as cargo from stopping, or unloading crude oil or persistent oil, at ports or marine installations located along British Columbia’s north coast from the northern tip of Vancouver Island to the Alaska border.

• The Act implemented a policy choice to allow crude oil exports only from the South Coast of British Columbia. Oil tankers have been travelling along the British Columbia coast since the 1930s.

• This shipping moratorium complements the existing Voluntary Tanker Exclusion Zone – in place since 1985 – which requires oil tankers travelling between Alaska and U.S. states below the 49th parallel to travel far west of the Queen Charlotte Islands and Vancouver Island — a route designed to protect the coast from spills.

• In 1972, Canada announced a moratorium on oil and gas exploration off the British Columbia coast. It implemented the moratorium through policy by deciding to stop issuing any further exploration permits for the British Columbia offshore and suspending work obligations on existing permits.

• The moratorium did not affect previously issued permits, but proceeding with work under those permits became unfeasible. In February 2024, the final outstanding permits

February/March 2024 — PACIFIC PORTS — 37

GOVERNMENT REGULATIONS

“British Columbia is one of a few coastal jurisdictions in North America without a comprehensive coastal and marine strategy.”

for oil and gas development off its Pacific Coast were surrendered to the Federal Government.

British Columbia’s Coastal Marine Strategy

While regulation of ports and shipping falls within federal jurisdiction, provincial initiatives related to coastal protection also affect these sectors.

In December 2022, B.C. released A Coastal Marine Strategy for British Columbia — Policy Intentions Paper, which described its plan to address the health and stewardship of marine ecosystems and the resilience of coastal communities. The Paper noted that “British Columbia is one of a few coastal jurisdictions in North America without a comprehensive coastal and marine strategy.”

The CMS outlines 30 actions centered around three key elements: ecosystem health, good management, and prosperity. The following actions have implications for shipping and ports:

• Keep communities safe from harmful climate change impacts.

• Boost efforts to recover wild salmon.

• Monitor coastal ecosystem health.

• Prevent and clean up marine pollution and restore nearshore habitat.

• Assist in the recovery of resident killer whales and other marine species at risk.

• Shift to nature-based solutions for coastal protection.

• Protect and restore kelp beds, eelgrass meadows, and other blue carbon sinks.

• Respect and uphold Indigenous rights and advancing collaborative stewardship.

• Evaluate the need for comprehensive coastal zone legislation.

• Develop and implement marine use plans.

Public engagement ended in April 2023, followed by the release of a report that summarized public concerns voiced throughout the engagement period. British Columbia intends to release the provincial Coastal Marine Strategy later this year.

Implications for Ports and Shipping along Canada’s Pacific Coast

The goals of these initiatives are ambitious, and the successes and challenges are directly related to the complexity of the tasks and the resources available to deliver practical results that work. Ports and shipping industry members support improvements to safety, marine traffic, and coastal protection, but also seek clarity and efficiency in the governing regimes to assist in improving the marine supply chain.

When designing and implementing these initiatives, Canada and British Columbia are working with a broad spectrum of stakeholders to explore regional solutions. Converting this diverse input into practical outcomes requires substantial effort from government agencies that have limited capacity. The regulatory changes can often involve coordination among numerous governing agencies — from the federal to local level — which has inherent challenges. These challenges constrain successful outcomes.

The stronger requirements related to the “polluter pays” principle will transfer more cost and risk to the

ports and shipping sector. These sectors must increase their efforts to identify and manage risks of individual operations and the overall industry, since all members are affected by the stigma attached to high-profile marine incidents — even if caused by a member that follows substandard practice.

In the areas of environmental protection and climate change, the jurisdictional boundaries are often blurred. This overlap in jurisdiction can create challenges for ports and shippers who have planned and operated based on an understanding of the jurisdictional boundaries that may differ.

The strong focus on technology, improving local marine knowledge, and information-sharing is positive, but there is an accompanying need for equipment and facilities. Ports and shippers are already faced with aging infrastructure and equipment, so these initiatives will add to the compelling need to upgrade.

More than most sectors, ports and shippers understand the importance of environmental protection, the implications of climate change and the need to adapt. This practical understanding and commercial experience are valuable to shape effective policy.

David Bursey is a partner with Bennett Jones LLP in Vancouver, Canada. He advises natural resource and infrastructure clients (including ports) on regulatory, environmental, ESG, and Indigenous community relations to assist with successful project development and operation. Claire Lingley is an associate lawyer who also works in these areas. Madison Bergen and Brienne Gloeckler are articling students. Contact: burseyd@bennettjones.com or visit: https://www. bennettjones.com/BurseyDavid
38 — PACIFIC PORTS — February/March 2024

Canada’s National Supply Chain Office

Canada’s new National Supply Chain Office (NSCO) has undertaken a ‘big task in a big country’ says the person heading an ambitious agenda to fix serious vulnerabilities in the country’s freight transportation and logistics systems. Situated within the federal transportation ministry, the NSCO has a broad mandate to address the elements of efficiency, fluidity, resilience, and reliability of goods movement by all modes of transport.

“It’s a multimodal and integrated system and we need it to work better,” Robert Dick, Assistant Deputy Minister at Transport Canada and Head of the Supply Chain Office, said in an interview in early February.

Officially launched on December 1 last year, following a 2022 national Task Force summit identifying supply chain disruptions during three years of

Officially launched on December 1 last year, following a 2022 national Task Force summit ... the NSCO has a sweeping mandate...

climate-related flooding and wildfires, labour and civil strife, and the Covid-19 pandemic, the NSCO has a sweeping mandate across all federal government departments as well as to collaborate with key industry stakeholders.

Mr. Dick explained he must address the country’s needs from both a domestic and an international perspective. “Canada is a big country with dispersed population, and we’re also a trading nation,” he said. “We move goods longer distances than many other countries even just internally. Transportation costs matter in terms of the affordability of our goods to Canadians, so whether it’s community safety and just the well-being of Canadians to have the necessities of life, we need effectively functioning supply chains.”

From an international perspective he added: “It’s also tied to our economic performance and the competitiveness of our goods when they get to foreign markets on a pricing basis, so we need our supply chains to be part of our competitive advantage.”

Indeed, as a founding member of the World Trade Organization, Canada has entered into 15 free trade agreements around the globe over the last 35 years, the majority of them with countries on Pacific waters. While its biggest trading partner remains the U.S., close to 30 per cent of Canada’s merchandise trade moves through marine ports, and the country has recently focused considerable attention to expanding its trading relationships with Asian economies. China remains its second largest world trading partner, and Canada, as a charter member of the Comprehensive and Progressive Transpacific Partnership since 2018, has also significantly

SUPPLY CHAIN EFFICIENCY
February/March 2024 — PACIFIC PORTS — 39
Canada's National Supply Chain Office will focus on efficiency, fluidity, resilience, and reliability of goods movement by all modes of transport.
The focus

of his Office at present, Mr. Dick explained,

is to achieve the maximum possible efficiency in current supply chain operations to facilitate later infrastructure spending decisions by the government.

enlarged its trade in the Asia Pacific through the 11-member plurilateral agreement. In addition, it is currently pursuing bilateral trade agreements with India, Indonesia, and the ASEAN trading bloc.

Mr. Dick is in the early stages of ramping up his Office with 25 staff recruited from government employees in major centres coast to coast from Vancouver to Halifax, and Yellowknife in the country’s North.

“We’re trying to build that crosscountry perspective to be closer to where people are, to bring in expertise from across the government,” he said. He also hopes to bring in industry expertise. “Some of that will be on contract,” he said.

The federal government has allocated funding of $27 million (CAD) for the NSCO in its 2023 budget for an initial five-year period. However, the 2022 Task Force report has recommended that the Office develop a

30-to-50-year supply chain strategy to be updated every five years. The broad scope of Mr. Dick’s mandate includes possible legislative and regulatory changes wherever needed to improve supply chain performance. It will also address the country’s acute labour shortage in its freight movement systems, overcoming capacity constraints, and setting the stage for transportation infrastructure investments. But at three months into its panoptic role, it appears the fledgling Office is not yet the government’s sole focal point for supply chain planning.

In November 2023, Canada’s federal Treasury Board Secretariat launched its own Supply Chain Regulatory Review, a public online consultation process aimed at targeted regulatory reviews. A rapid first two rounds of consultations have resulted in more than 100 regulatory modernization initiatives. The final round, which closed on February 5, 2024, is examining three areas prioritized for updating regulations on forecasted supply chain requirements: Border Operations, Critical Minerals, and Transportation.

“The Regulatory Consultation … is actually a Treasury Board initiative that we are part of,” said Mr. Dick. “We’re going to bring our perspective now to help Treasury Board analyze that input and link it to wider agendas, including trade agendas and affordability and economic performance.”

The focus of his Office at present, Mr. Dick explained, is to achieve the maximum possible efficiency in current supply chain operations to facilitate later infrastructure spending decisions by the government.

“It’s all focused on optimizing what we have because we do have a longerterm objective that will be laying the foundation around infrastructure investment … to make some larger decisions in that regard from a supply chain perspective,” he said, “and we’ll put out our strategy that will guide that. But you don’t build infrastructure overnight; you can start to optimize and tackle stuff right now and in so doing, build habits of collaborating.”

Bob Armstrong, President of the Ottawa-headquartered Chartered Institute of Transport and Logistics in North America (CILTNA), and a member of the Supply Chain Task Force, is concerned that the approach taken by the NSCO “lacks a sense of urgency,” and needs to prioritize developing a national supply chain strategy as a framework to guide industry’s participation.

“It would really be best for a national supply chain if a strategy was developed and implemented within two years because there’s a different crisis every year. A strategy requires working with other government departments and getting their buy-in. This would also help determine that they receive the necessary funding. And if you have a strategy, then it would also provide more certainty for industry,” he said in February.

Canada’s transportation supply chain is made up of ships, ports, railways, trucks, airplane, airports, warehouses, and loading facilities operated by independent businesses but interdependent in their operations, such that the “slightest problem can reverberate across the country,” according to the Task Force.

Among major longer-term issues recommended by the Task Force for federal government examination is the potential benefit in changing the model of the country’s sea port administration. Currently all ports operate independently and competitively with

SUPPLY CHAIN EFFICIENCY
40 — PACIFIC PORTS — February/March 2024
Robert Dick, Assistant Deputy Minister, Transport Canada and Head of the National Supply Chain Office.

one another. The recommendation calls for consideration of a model where ports would work closely together and collaborate as a system within specific geographic areas.

Mr. Dick believes his immediate focus on bringing supply chain stakeholders together on specific areas of collaboration can produce early results in integrating their goods movement operations. This will involve coordination of assets, labour, and infrastructure where these components “have constrained systems or handoffs in the system,” he explained. “It’s actually operational decision-making and in some cases operational procedures and practices.”

In order to achieve the scale of efficiency he envisages, a big part of the systems integration will require sectoral investment in information and communications technology (ICT). “The real system gains where we think we can make a contribution occur from collaboration and data sharing at the network level,” said Mr. Dick. “Data and digital is a huge emphasis for us.”

However, he noted that technology adoption within the country’s transportation and logistics industry is seriously underdeveloped. “It’s a sector that underinvests in ICT, so we’d like to see enterprises move up — we call it a maturity model,” he said.

“There are things, especially in data, that have to be done at the enterprise level, and that includes government as well as business. And in many cases that will depend on data sharing.”

It’s an area that has seen resistance from Canadian industry stakeholders in the past. Protecting competitive commercial interests in proprietary data has been a long-standing point of contention by some corporations in supply chain partnerships. Mr. Dick said his Office is exploring different data governance models with Canada’s Chief Data Officer.

In order to achieve the scale of efficiency he envisages, a big part of the systems integration will require sectoral investment in information and communications technology.

“That’s got to be the subject of discussion with industry — we are in the process of launching that work now,” he said. However, in the event that voluntary data sharing remains an insurmountable obstacle, he acknowledged that the federal government has passed legislation empowering the Minister of Transportation “to regulate, to compel data to be shared for the system.”

If the legislative power is needed, we will ultimately move forward with regulation for that, but right now we’re just getting on with it,” he said, referring to efforts encouraging stakeholder collaboration.

One specific area of operational streamlining to which Mr. Dick referred was at Canada’s largest and busiest port in Vancouver on Canada’s Pacific coast.

“Vancouver has been more complex, but the opportunity is there to better coordinate berth assignments,” he said, noting that intermodal connections between vessels and trains could be improved “with a bit of advance notice of stuff coming in from vessels and what trains are arriving for yard management.”

Curiously, Canada has not met its international legal obligation to implement a Maritime Single Window (MSW) by January 1, 2024,

under an Order from the IMO. The ship-to-shore platform for the transmission of data required for a vessel’s regulatory clearance is meant to expedite just-in-time arrival at port berths. Mr. Dick’s understanding of the system is that a “Maritime Single Widow will push a bunch of forms more digitally and ease the administrative burden, especially for vessel masters, but it doesn’t really help our multimodal system.”

That is not how the Chamber of Shipping, representing owners of vessels calling on British Columbia ports, has described the need for a Maritime Single Window (MSW) in a recently released white paper. A MSW “can contribute significantly to the seamless flow of goods and information within the maritime industry,” the paper notes, going on to say, “the MSW is not just a compliance requirement, but a strategic enabler for Canada to position itself as a leader in an efficient, secure, and environmentally responsible maritime trading nation.”

It’s the kind of difference that exemplifies how vital acquisition of the relevant industry expertise will be to the success of the Canada’s National Supply Chain Office. As Mr. Dick put it: “Industry moves stuff, government doesn’t.”

Residing in Vancouver, Canada, Colin Laughlan writes on international trade and transportation. As president of Laughlan Consulting International Inc. he focuses on standards development for international trade facilitation and interoperability in cross-border regulatory data exchange. He currently serves on the board of directors of the Chartered Institute of Logistics and Transportation in North America (CILTNA). He can be reached at colin@laughlanconsulting.com.

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CANADA CONFERENCE

Ports Canada 2024 Conference heading to the heart of Vancouver Island

Embark on a journey to the upcoming Ports Canada Conference, set against the breathtaking backdrop of Port Alberni, British Columbia from September 17-19, 2024. Hosted in collaboration with the Port Alberni Port Authority and the Association of Canadian Port Authorities, this annual conference for Canada’s ports, marks a return to Port Alberni for the first time since the late 1990s.

This anticipated event brings together industry leaders, innovators, and stakeholders for three days of insightful discussions, networking opportunities, and immersive experiences. The conference will be held at the Alberni Hall, nestled in the natural beauty of British Columbia's coast.

This year sees big developments for Canada’s supply chains, with the National Supply Chain Office operational, and the expected launch of a

National Supply Chain Strategy coming on the heels of legislated reform for Canada’s port authorities. A sector forecast and what ports can expect in 2025 and beyond for supply chains, marine shipping and building the infrastructure of the future will be covered at the conference

There is a symbiotic relationship between ports, their communities and the businesses that operate with them, and how they interact can raise or lower their health and wealth. How can ports enable more maritime clusters, including aquaculture, forestry, and cruising industries? They are all important coastal sectors of Canada’s economy, and a focus for economic growth.

Be at the heart of the conversations as we delve into the pressing issues facing Canada's port infrastructure. The conference will explore how we can navigate the complexities of modern maritime operations while

maintaining environmental stewardship and operational efficiency.

Sponsors and exhibitors will enjoy a casual and open trade show area in the exclusive break lounge to display their products and services. Sponsor commitments have already been coming swiftly, however there are still a variety of sponsorship opportunities available for those who act fast.

Networking events include a Welcome Reception, at a stunning forest venue beside the flowing Stamp River. Enjoy a garden party atmosphere featuring local culinary stars, cocktails, and live music. A Cultural Reception in collaboration with local First Nations, featuring a traditional welcome and salmon dinner. The event takes place at the McLean Mill, a National Historic Site that was a former sawmill and logging operation. Many of the original machines and buildings still

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42 — PACIFIC PORTS — February/March 2024

stand today for you to see. The last night will celebrate the end of the conference with an exclusive Closing Party at the Rim Rock Casino with food, drinks, and live lounge music. Meet influential people and do business in a relaxed and friendly atmosphere, while experiencing the magic of the Alberni Valley.

Gain invaluable insights from thought leaders as they share strategies, best practices, and emerging trends. Connect with peers, colleagues, and experts from across the industry in an engaging and collaborative environment. Forge new partnerships, exchange ideas, and explore opportunities for collaboration that can drive positive change and propel your organization towards success.

Experience the rich cultural heritage of Port Alberni whether it's exploring local attractions, enjoying outdoor

CANADA PORTS CONFERENCE

activities, or sampling delicious cuisine, there's something for everyone to enjoy beyond the conference walls.

Don't miss your chance to be part of this transformative event! Join us at the Ports Canada 2024 Conference and be inspired to chart a course towards a brighter, more sustainable future for

our ports and waterways. Register now to secure your spot!

For complete conference information, and to sign up for the newsletter visit portscanada.ca. Follow the Association of Canadian Port Authorities on LinkedIn and @acpa_ aapc on X (Twitter) for updates.

Port Alberni will host representatives from Canadian ports in September.

Reducing risks while expanding ports

It was my pleasure to speak with the membership of the Association of Pacific Ports at the recent winter conference in Hawaii about ways to reduce liability exposures while expanding ports. For those who did not attend and for those who did attend but would like to consider the subject matter further, I am happy to expound in writing here upon my presentation, “Reducing Risks While Expanding Ports.”

It is, of course, no secret that expanding, modernizing, and making more energy efficient port infrastructure are principal themes of port ownership and operations today. And that will remain true for at least the foreseeable future.

Building a bigger and better port makes good sense given the competitive worldwide marketplace in which Pacific ports operate. And the billions of dollars appropriated for this purpose by the Infrastructure Investment and Jobs Act offers a huge financial incentive for ports to expand and modernize in ways that promote clean energy, efficiency, and job creation. Some states have offered incentives, too.

But development and expansion are not without risk. Hiring consultants and contractors to design and construct new facilities can lead to accidents, property damage, injuries, delays, poor workmanship, claims, lawsuits, and a host of other problems. As a construction professional once said, “In construction, the only project that goes exactly according to plan is the lunch break.”

So how do we move forward with worthwhile development projects but at the same time reduce and more effectively manage the inherent risks? One of the most important components is thoughtful legal planning and

So how do we move forward with worthwhile development projects but at the same time reduce and more effectively manage the inherent risks?

drafting to achieve contracts with your vendors, builders, development partners and suppliers that shift risk whenever reasonably possible to them and away from your port. Simply put, how you piece together construction and development contracts in advance can make a big difference in your risk exposure after the work begins.

It would be impossible in the limited space we have available now to address all the important aspects of an infrastructure expansion or modernization contract. Every project and circumstance is different and requires an agreement that is tailored to the particular needs of that endeavor and the parties involved in it. With those limitations in mind, I want to talk briefly about seven important aspects of most port construction contracts and suggest some initial concerns that should be part of your focus. The topics we will touch upon include:

• Scope of Work;

• The Indemnity, Defense and Hold Harmless Clause;

• The Insurance Clause;

• Scheduling with Carrots and Sticks;

• Warranties;

• Cancellation and Termination; and

• Dispute Resolution

Scope of Work

Scope of Work basically refers to the goals, objectives and/or deliverables for the project. Put differently, what is the contractor obligated by agreement to do for you? Reciting that in a contract might seem, at first blush, to be a nobrainer, an obvious task not needing explanation; but it can be a source of confusion and misunderstanding if not articulated in plain and simple wording.

By way of one example, earlier in this century the Port of Alaska contracted with MARAD for the construction of new terminal facilities. A builder was hired but the works they constructed

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44 — PACIFIC PORTS — February/March 2024

proved to be defective and had to be removed at great cost. The Port sued MARAD in federal court claiming that MARAD had failed to properly supervise the project and therefore was responsible for the hundreds of millions of dollars of loss that the Port suffered because of the builder’s defective construction. Ultimately, the court ruled in favor of the Port but one of the fundamental issues in the case was whether the Port or MARAD was obligated to supervise the day-to-day conduct of the construction project being performed by the builder. (See Case 1:14-cv-0166-EJD, Document 253, Filed 12/09/21.) The Port said MARAD was. MARAD said the Port was. My point here is that the Scope of Work — the fundamental statement of what MARAD was promising to do for the Port — apparently did not explain, in plain and simple language, whether MARAD was obligated to supervise the project on a day-to-day basis. The court ultimately decided, based on various factors in two

memoranda of agreement between the parties, that MARAD, rather than the Port, was responsible for supervising the project, but one would have expected — and perhaps a lot of expensive litigation could have been avoided — if the agreement between them had simply stated, among other things, that MARAD is responsible for the day-to-day conduct of the project including but not limited to supervising the construction performed by the builder.

Construction projects for a new or renovated terminal, bigger and deeper berths, a new or enhanced computer system or some other infrastructure upgrade typically will include detailed technical specifications. That makes abundant good sense since these are complicated projects involving technical expertise and extensive detail. But in addition to reams of pages reciting technical criteria, it is important to have a simple, easily understood explanation of what the contractor is promising to do. If, for example, a new computer

system is being purchased and installed so that the port can operate 10 heavy lift cranes at the same time or service a minimum number of ship loadings and unloadings per day, the Scope of Work should include that commitment. If and when the new system fails to meet those fundamental goals, it will be important for the port to be able to point to an unambiguous promise in the contract in order to convince the contractor to remedy the shortfall or compel it to do so in a court action or arbitration.

The legendary investor Warren Buffet is quoted as saying “Risk comes from not knowing what you’re doing.” In port construction projects, risk also comes from not stating in plain and certain terms what the contractor is obligated to deliver.

Indemnity, Defense and Hold Harmless

One of the most important clauses in a port construction contract, for purposes of managing and reducing

RISK MANAGEMENT APP members share a common vision: To provide an efficient, fluid, and cost-effective supply chain in a safe, environmentally sustainable and economically viable manner... We can help. With a focus on collaboration, the APP encourages and facilitates best practices and professional development through networking conferences, technical workshops and strong communications. Building partnerships throughout the Pacific Visit www.pacificports.org to learn more about the benefits of membership. Contact: Jane McIvor jane@pacificports.org | 1+604-893-8800 ASSOCIATION OF PACIFIC PORTS
February/March 2024 — PACIFIC PORTS — 45

I refer to the insurance clause as “Indemnity’s Twin” because, like the indemnity clause, its purpose is to shift the risk of loss away from the port and onto another actor.

risk, concerns indemnity, defense and hold harmless. Simply put, this clause is about shifting risk from the port to the contractor and enhancing the prospect that in the event of loss the contractor will make the port whole.

What is the justification for this clause and how do we accomplish it? Keep in mind that when a contractor agrees to build a new terminal for your port or otherwise expand or modernize your facilities, it typically will be bringing workers and heavy equipment into some part of the port’s premises and conducting construction operations there for some extended period. Presumably, the contractor, not the port, will be occupying and using those premises to perform construction operations that could result in bodily injury, death, property damage and/or various other calamities. Given those circumstances, if unfortunately, something goes wrong and injury or damage occurs, shouldn’t it be the contractor, rather than the port, that must make the injured party whole and bear the expense of defending against claims or lawsuits? Accordingly, the port should demand that the contractor agree to defend, indemnify, and hold harmless the port against such losses, damages, claims and/or expenses.

Ideally, the indemnity, defense and hold harmless clause would impose this responsibility on the contractor without requiring the port to prove the contractor was at fault for the loss. After all, the contractor oversees and controls its construction such that if something goes wrong in their area of operation, shouldn’t they take responsibility for it? Of course, obligating the contractor to protect the port without regard to fault would not preclude the contractor from

seeking to recover its own loss from a responsible third party. Do not be surprised, though, if the contractor pushes back and insists that its obligation to defend, indemnify and hold harmless be limited to instances in which it was at fault and thereby caused the loss. For the most part, our civil law system of claims for compensation or reimbursement is a fault-based system; there is a certain logic to holding people and companies responsible only if they were at fault. Whether ultimately the indemnity, defense and hold harmless clause you and your contractor agree on is fault-based likely will turn on the relative bargaining power of the two parties and how much each wants the other as a contracting partner. This clause, like other aspects of a contract with a builder or consultant, typically involves some give and take, some compromise, rather than wording that either party ideally would favor if left to its own devices.

The Insurance Clause

I refer to the insurance clause as “Indemnity’s Twin” because, like the indemnity clause, its purpose is to shift the risk of loss away from the port and onto another actor. But since we already have the indemnity clause, why do we want the insurance clause, too? For at least a couple of reasons.

First, by requiring the contractor to buy insurance to protect the port, we obtain another source of funding to afford protection against loss. That can be important since the contractor, even if a substantial entity, could suffer business reverses and no longer be able to pay for a significant loss. And even if solvent, the contractor may not have readily available cash to cover a major loss.

Second, insurance companies are in the business of insuring against risks and investigating and defending when accidents happen and claims arise. Contractors typically are not. Thus, a reputable insurance company should have claims expertise that can be important in the event of a covered loss.

Not only will a well-drafted insurance clause require the contractor to purchase and maintain insurance to protect against loss that potentially is inherent in their project for the port, but that clause also will specify the types of coverage and other important details including, among other things:

• That the coverage be primary, so that the contractor’s insurance, not the port’s own insurance, would respond first to a covered loss.

• That the port be added as an additional named insured on the contractor’s policy so that the port would have rights under the policy directly against the insurer and the insurer would owe certain obligations directly to the port.

• That the insurer waive subrogation so that in the event of a covered loss that the contractor’s insurer pays for, it would not be entitled, in turn, to seek recompense from the port for the funds the insurer has expended.

• The limits of liability and deductibles or self-insured retentions so that the port knows and is comfortable with the financial parameters of the coverage.

• That the insurance company has a particular industry rating that confirms its financial strength and stability.

• That the port be given reasonable advance notice of changes and/ or termination of the insurance contract so that the port could take appropriate action to make sure the protection of the insurance required of the contractor remains effective.

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46 — PACIFIC PORTS — February/March 2024

In drafting the insurance clause, it makes sense to confer with the port’s own insurance broker regarding the types of coverages and other insurance provisions they consider appropriate.

Scheduling with Carrots and Sticks

Presumably expanding or updating a port’s infrastructure is intended to increase the port’s capabilities and/or revenue stream. It therefore is likely that completing the project sooner rather than later would have a positive financial impact for the port. In addition, and as a general matter, construction projects tend to disrupt normal operations such that there is a significant benefit to completing them on time or ideally even ahead of schedule. Towards that end, it can make sense to offer the contractor a financial benefit (a bonus) for finishing early—the carrot—and a financial detriment (liquidated damages)—the stick—for finishing late.

This carrot and stick approach can be especially useful since, without it, there may be little practical ability to keep the project on or ahead of schedule. Absent a benefit for finishing early or what effectively is a penalty for finishing late, the contractor may have little reason to push forward to complete the project on time since there are no obvious and painful ramifications for delay. It is unlikely the port is going to cancel the project or fire the contractor if the project generally is progressing but is weeks behind schedule. Yet, those extra weeks may cost the port the ability to service a customer and/or earn additional revenue. And even if the parties ultimately end up in litigation over the cost of delay—an unenviable prospect—it can be difficult to prove the actual cost of delay. That uncertainty can be avoided if the cost of delay by day or week is specified by agreement in the contract and the amount is to be credited or paid to the port.

Warranties

Getting the job done on time is, of course, a central objective; but sometimes unfortunately what the contractor has built does not perform as contractually required. A warranty clause is important to include in the contract for the simple reason that sometimes stuff doesn’t work the way it was supposed to and how it was specified in the Scope of Work. The purpose of the clause basically is to require the contractor to fix it.

But a good warranty clause will say more than merely that the contractor must fix a building or installation that does not function in the way promised. Among other things, it is important to address:

• The scope of the warranty, in other words, what it covers and what it excludes.

• The duration of the warranty. Obviously, the port’s desire will be for a longer term and the contractor will favor a shorter one. There is no “industry standard,” but a year’s time from completion of the project would not be unusual. That limited time frame reflects the reality that as the facility is used after the work has been completed, the possibility increases that some deficiency may be due not to a failure of the contractor’s workmanship or materials but instead ordinary wear and tear and/or damage from third party that comes into contact with the structure or device.

• The limits of the warranty. Hypothetically, a new terminal might cost $200 million but if it is constructed poorly the cost of remedying its defects, or in the extreme case, tearing it down and replacing it, could exceed that amount. Thus, the port likely would not want the cost of the contract price of the project to form a cap on the value of its

RISK MANAGEMENT

warranty coverage. The contractor, in contrast, may wish to cap its liability.

• The remedy. More often than not, the remedy, as suggested earlier, will be having the contractor fix the deficiency; but there could be instances in which the port might wish to include alternative or additional remedies such as hiring a consultant at the contractor’s expense to determine why the completed project is not functioning properly, so that a proper corrective strategy can be developed and implemented, or even hiring a different contractor to perform the remedial work.

Cancellation and Termination

The contract provides entry into the relationship. It should also provide a way out of the relationship when things go terribly wrong. I say when things go terribly wrong because minor failures in performance by the contractor cannot be expected to afford a basis for cancelling or terminating the contract. But there may be some circumstances, such as but not limited to when the contractor fails to commence work within a reasonable length of time according to the schedule, loses its license to perform, becomes insolvent, violates the law or commits some other major default that, according to the terms of a cancellation or termination clause, allows the port to end the contract and specifies the mechanism for doing so. That clause also may address what happens to deposits and purchases of supplies and equipment, among other details one might imagine would become pertinent when a contractual relationship for an infrastructure project ends prematurely.

Dispute Resolution

The sad reality is that disputes between parties to a port construction project sometimes come to an impasse.

February/March 2024 — PACIFIC PORTS — 47

The dispute resolution clause affords an agreed upon method for trying to resolve the deadlock and disagreement. The principal considerations here include at least the following:

First, what mechanism are the parties obligated to use to try to resolve their differences? I tend to think a good starting point is a conference between high level executives, in the hope that reasonable and capable businesspeople will recognize the benefit of finding some mutually acceptable compromise. Since that action may fail, choices need to be made about whether to mediate, arbitrate and/or litigate next. These different mechanisms have their respective plusses and minuses, and they do not have to be mutually exclusive, but it makes sense to agree in the contract on the mechanism or mechanisms and the sequence of their use, rather than leave that unstated such that it becomes another source of uncertainty and potential conflict.

Second, what law will govern interpretation of the contract and resolution of the dispute and third, what venue or forum will be the place to do battle? I put choice of law and forum together because logically they go together. As a general matter, if a court is involved, it tends to be preferable, though not necessary, to have the court apply the law of its own jurisdiction since that is the law with which it will be most familiar and comfortable. Regarding choice of law, and especially choice of forum, I adhere to the sports metaphor of wanting home field or home court advantage. The reasons are multiple. It is much more convenient and less expensive to mediate, arbitrate or litigate in the city where the port is located and its personnel reside than in some distant place. And depending upon the forum, there certainly are venues in which judges and/or juries may exercise some bias, whether intentionally or inadvertently, in favor of the hometown business. Of course,

any reasoned thinking person or entity would prefer to have that bias work to their benefit rather than their detriment. Courts should always present an even playing field, but the reality is that sometimes they do not, which is why choice of law and especially the choice of forum can be important considerations for the port’s contract with its consultants and builders.

In connection with dispute resolution, it also is important to consider whether to reward the prevailing party (if the matter is arbitrated or litigated to a decision) with a right to recover its reasonable attorney’s fees and expenses and whether to limit, on both sides, recovery of certain more extreme remedies such as consequential damages and punitive damages.

Conclusion

I leave you with three final thoughts:

First, this is a brief introduction to a complicated and important topic that one might write a entire treatise about. What I have suggested briefly is intended as general information rather than advice for any specific project or undertaking. When negotiating and drafting a contract for a port infrastructure project or similar undertaking, there is a wealth of information and input from the client that is necessary for counsel to have to represent them effectively. And necessarily there will be a lot of give and take with the other party since contracts typically are not created in a vacuum, but instead are developed through back-andforth negotiations.

Second, as you can see from what we have talked about briefly, there are various tools in a lawyer’s toolbox

that can be used under appropriate circumstances to help manage and shift risk involved in a port infrastructure expansion or development project. Indemnity clauses, insurance clauses, warranty provisions, termination provisions and dispute resolution mechanisms are some of the many devices we may wish to employ to better protect against legal exposure. The great tennis player, Serena Williams, once said “If Plan A isn’t working, I have Plan B, Plan C, and even Plan D.” In a similar way, as a lawyer fashioning a contract for a port, I want to have multiple legal tools at our disposal since it is difficult or impossible to predict specifically what may go wrong in a project and how best legally to try to remedy that problem if it does arise.

Finally, the notion some hold that a contract for port expansion, development or other purpose is just so much boilerplate or standard wording that can casually be generated by a word processor, accepted, signed, and forgotten is a recipe for disaster. The contract defines the parties’ respective rights and obligations and thereby, among other things, assigns risk and offers a roadmap to completion of the project. Its content therefore is incredibly important. When carefully planned and negotiated, it can offer an effective means to reduce and shift to others some of the significant exposures that a port otherwise would face. By the same token, if not given its proper care and attention by a capable and experienced team of businesspeople and their lawyer, an ill-conceived contract for port expansion or development unfortunately can be a source of increased risk and legal jeopardy.

RISK MANAGEMENT 48 — PACIFIC PORTS — February/March 2024
Alan K. Goldstein specializes in admiralty and maritime law including the laws governing ports and port authorities. Recognized in America’s Best Lawyers, as a Super Lawyer and as AV Preeminent by Martindale Hubbel, the highest possible rating. Alan is based in the San Francisco Bay area and practices across a broad geographic region including the pacific rim. Alan graduated from Stanford Law School, earning Order of the Coif, and Northwestern University, as Phi Beta Kappa and first in his class. He can be reached at alan@alankgoldsteinlaw.com.

INTERFERRY CONFERENCE

Interferry2024 set for Marrakech, Morocco in October

Following their sold-out conference in Hobart, Tasmania, Interferry is making plans for Interferry2024 — their 48th annual conference — in Marrakech, Morocco from October 26 to 30. Hosted by ferry operator and President’s Sponsor FRS/DFDS, this conference marks the first ever Interferry conference to be held on the African Continent. As the trade association representing the ferry industry worldwide, the Interferry conference is renowned for attracting top-level decision makers from a wide array of international companies including ferry owners and operators; shipbuilders; designers and engineers; equipment suppliers and manufacturers; and many other related fields.

Interferry2024 will be held at the Palais des Congrès Marrakech. Located adjacent to the conference hotel – the Mövenpick Marrakech — the Palais des Congrès is the largest meeting facility in Marrakech and will be a fantastic venue. As always, the event will feature topical speakers and sessions; the very popular Ferry Leaders panels; many outstanding networking opportunities; and a technical tour hosted by FRS/DFDS. Sponsors and exhibitors will enjoy a large exhibition area in which to display their products and services to conference attendees.

This year, there will also be a special half-day session on Wednesday, October 30 that will provide followup on the Africa Ferry Safety Seminar that Interferry and the IMO are organizing and co-hosting in Tanzania in April. Taking place on April 16-17 in Dar es Salaam, the seminar furthers Interferry´s commitment to reducing casualties in developing nations by promoting the highest maritime safety standards. For more information on the Africa Ferry Safety Seminar, go

to the Regulatory Affairs section on Interferry.com.

Networking opportunities and events at Interferry2024 include PreTours to the Marrakech Medina and the Atlas Mountains; partner tours to Jardin Majorelle (The Majorelle Gardens), Musée du Parfum (The Perfume Museum) and Adouar Marrakech; the poolside Sunday Welcome Reception; the Monday Networking Reception at Palais Jad Mahal; and the Farewell Dinner at Palais Dar Soukkar (the “sugar palace”).

The Call for Speakers will be announced in mid-April as the Interferry team begins to develop another outstanding Speakers Program to elaborate on the Interferry2024 conference theme of “Safety, Security and Sustainability”. Among the many timely topics will be sessions and presentations concerning zero-emissions solutions, vessel project presentations highlighting a wide range of innovative ship designs for small to large ferry operations, as well as the very popular Ferry Leaders Panels that close each conference day. Delegates

will also hear from Regulatory Affairs Director Johan Roos who will provide a Regulatory Update – always a key aspect of the conference.

Interferry is currently implementing “All Aboard”, their new Strategic Plan for 2024 to 2026. One important new initiative — Annual Sponsorships — includes revisions and enhancements to select Sponsorship levels in order to boost recognition of corporate support for Interferry as an organization. The enhanced Annual Sponsorship packages will provide additional value throughout the calendar year. Sponsor commitments for Interferry2024 have been brisk as companies are keen to participate and support Interferry and the ferry industry as well as promote their businesses.

Conference registration for Interferry members opens June 1, and general registration opens August 1. For complete conference information, check out the InterferryConference. com; follow Interferry on LinkedIn for news and updates; and subscribe to the Interferry mailing list on the conference website or Interferry.com.

February/March 2024 — PACIFIC PORTS — 49
CEO Mike Corrigan and the Ferry Leaders panel during day one of Interferry2023 in Hobart.

APP MEMBERS

Port Members

Port of Alaska (www.portofalaska.com)

American Samoa Port Administration (americansamoaport.as.gov/)

Port of Brookings Harbor, Oregon (www.portofbrookingsharbor.com)

Port of Columbia County, Oregon (www.portofcolumbiacounty.org)

Commonwealth Ports Authority, Northern Mariana Islands (www.cnmiports.com)

Fiji Ports Corporation Limited (https://fijiports.com.fj/)

Port of Grays Harbor, Washington (www.portofgraysharbor.com)

Port Authority of Guam (www.portguam.com)

Honolulu / State of Hawaii Ports

Port of Hualien, Taiwan International Ports Corporation, Ltd. (https://hl.twport.com.tw/)

Port of Hueneme, California (www.portofh.org)

Port of Kaohsiung, Taiwan International Ports Corporation, Ltd. (https://kh.twport.com.tw/en/)

Port of Keelung, Taiwan International Ports Corporation, Ltd. (https://kl.twport.com.tw/en/)

Port of Long Beach, California (www.polb.com)

Republic of Marshall Islands (RMI) Ports Authority, Marshall Islands

Nanaimo Port Authority, BC, Canada (www.npa.ca)

Port of Newport, Oregon (www.portofnewport.com)

Pohnpei Port Authority, Micronesia (www.ppa.fm)

Port Alberni Port Authority, BC, Canada (https://portalberniportauthority.ca/)

Port of Redwood City, California (www.redwoodcityport.com)

Port of San Diego, California (www.portofsandiego.org)

Port of Skagit, Washington (www.portofskagit.com)

Port of Stockton, California (www.portofstockton.com)

Port of Taichung, Taiwan International Ports Corporation, Ltd. (https://tc.twport.com.tw/en/)

Ports Authority Tonga (www.portsauthoritytonga.com)

Port of Umatilla, Oregon (https://portofumatilla.org/)

Port of Valdez, Alaska (https://www.valdezak.gov/151/Port)

ASSOCIATION OF PACIFIC PORTS

www.pacificports.org

Associate Members

ADELTE Ports & Maritime (www.adelte.com)

Albion Marine Solutions (albionmarine.com)

AM Insurance (www.amibrokers.com)

The Beckett Group (www.thebeckettgroup.org)

Best Best & Krieger Attorneys at Law (www.bbklaw.com)

BNAC Environmental Solutions Inc. (www.bnac.ca)

Burns & McDonnell (www.burnsmcd.com)

Business Oregon (www.oregon.gov/biz/)

Davies Transportation Consulting Inc. (www.dtci.ca/)

EA Engineering, Science and Technology, Inc. (www.eaest.com)

Federated Shipping Company

FortisBC (www.fortisbc.com)

GCT Global Container Terminals (www.globalterminals.com)

Harman Kemp North America Limited (www.hknal.com/)

Innovative Manufacturing Inc. (www.marinetapes.com)

Kongsberg Maritime Canada Ltd. (www.kongsberg.com)

Law Office of Alan K. Goldstein (www.alankgoldsteinlaw.com)

Liebherr USA, Co. (www.liebherr.com)

Liftech Consultants (www.liftech.net)

Lynker (www.lynker.com)

Majuro Stevedore & Terminal Company, Inc.

Marine & Civil Maintenance Pty Ltd. (www.marineandcivil.com.au)

Marine Labs Data Systems Inc. (www.marinelabs.io/)

Maritime and Port Bureau, Taiwan (www.motcmpb.gov.tw)

Matson (www.matson.com)

Nautical Consulting International Inc. (www.nauticalconsulting.com)

NEC (www.necam.com)

Northern Economics Inc. (https://northerneconomics.com/)

The Pasha Group (https://www.pashagroup.com)

Pavement Technical Solutions Inc. (pavementtechsolutions.com)

Port and Maritime Business Management (www.pm-bm.com)

PortLink (www.portlinkglobal.com)

Reid Middleton, Inc. (www.reidmiddleton.com)

Salus Resources Inc. (www.salusresources.com)

Schrader Co. Sales, LLC (www.schraderco.com)

Shey-Harding Associates (www.shey-harding.com)

SSA Marine (www.ssamarine.com)

Trans Mountain (www.transmountain.com)

Truk Transportation

Tynebridge Solutions Inc. (www.tynebridge.ca)

Western Wood Preservers Institute (www.wwpinstitute.org)

Reciprocal Members

Association of BC Marine Industries (abcmi.ca)

Green Marine (https://green-marine.org/)

Inland Rivers, Ports & Terminals Association (https://www.irpt.net/)

Interferry (www.interferry.com)

International Association of Maritime and Port Executives (www.iampe.org)

50 — PACIFIC PORTS — February/March 2024
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