Maersk’s (Nasdaq OMX: MAER) fight to bring automation to its largest North American marine terminal is getting support from shippers and non-ocean carriers concerned about the impact on the environment and the precedent of government overreach into the future of freight.
The world’s biggest shipping line faces a do-over as the Los Angeles Board of Harbor Commissioners plans yet another vote on July 11 on its coastal development permit.
Maersk’s APM Terminals unit asked the board to approve plans to install electric charging infrastructure, fencing and other upgrades at its Pier 400 terminal in the Port of Los Angeles.
The upgrades are preparation for the roll-out of automated straddle carriers that will ferry containers from docks to container yards. The International Longshore and Warehouse Union (ILWU) Local 13 remains vehemently opposed to the project due to concerns about jobs for driving yard hostlers.
Board members who opposed the permit want APM to address issues such as the impact that automation will have on Pier 400’s unionized workforce.
But an industry trade group with board members drawn from Amazon (Nasdaq: AMZN) and Home Depot (NYSE: HD) said the project is aligned with a major goal of the Southern California ports: reduce air emissions.
The California Air Resources Board is considering a regulation that would require all cargo handling equipment at ports and rail yards to have zero emissions starting in 2026.
The Coalition for Responsible Transportation (CRT) said APM’s plans to introduce electrified cargo handling equipment “is an excellent example of how the maritime industry can and does make substantial environmental improvements.”
But the “decision by the City Council of Los Angeles to deny permits for the installation and operation of the generation equipment necessary to take full advantage of the air quality benefits of the planned electric cargo handling equipment is decidedly contrary to the clean air objectives of the port and region,” CRT said.
Similarly, The California Railroads, a group comprised of BNSF (NYSE: BRK.A), Union Pacific (NYSE: UNP) and short-line operators, said it will oppose a bill that is aimed directly at Maersk’s automation plan.
California Assembly member Mike Gipson (D-Los Angeles), who represents the port districts, introduced a bill that would give the state’s land commission authority to approve any automation project that occurs at a California port.
Along with losing the environmental benefits of introducing zero-emissions cargo handling technology, The California Railroads said the bill would hurt the competitiveness of the state’s ports and send more discretionary cargo to other states.
The California Railroads said the bill will “simply add a political decision-making layer to an already long approval process for automation projects at the ports; pick winners and losers depending on which terminals are allowed to automate, creating a competitive advantage for automated terminals over non-automated terminals; and make future port collective bargaining agreements unreliable at best, since the process in this bill bypasses those agreements, thereby causing alarm throughout the cargo industry.”
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