Federal Marine may sign for wood chip contract

Although the Eastport Port Authority board voted at its November meeting to operate the bulk storage yard at the port, Federal Marine Terminals has presented a proposal to the board to operate the yard itself. If the agreement is approved, FMT would sign any contracts with bulk shippers, including a contract with a wood chip company that is expected to be signed soon.
Port Director Chris Gardner says the port authority is presently negotiating with FMT "to make sure the citizens of Eastport get the benefits that they should." He says the potential shippers are aware that the negotiations are taking place, and he hopes the process does not delay the shipment of wood chips. If the port authority and FMT sign an agreement within a week, then FMT could be ready to sign with a customer almost immediately. Gardner is still hoping for the first wood chip shipment to be loaded by the end of March.
The port director says that Maine-based Timber Biofuels is now the primary company being eyed for shipping wood chips. Although the port authority board had voted in November to proceed with contract negotiations with Great Northern Timber of Halifax, the port authority had concerns about pricing, the annual tonnage, the start date and the length of the contract term, and Great Northern had concerns about the wood market. "It was not the right fit at the right time," Gardner says.

A green marketing tool
At the port authority board's January 17 meeting, Gardner noted that the new bulk cargo conveyor system may turn out to be a good "green" marketing tool for the Port of Eastport. Electricity could be generated by the main conveyor belt, by the weight of the product on the line and the force of gravity as the product moves down to the ship, and could power both the main belt and the feed belt. Not only would the setup save on electricity costs, since the belts, when full, would "run for free," but the port also could use the environmentally friendly power generation for some "green" marketing of the port, Gardner said. The board authorized the port director to explore an agreement to purchase two electricity regeneration units, at a cost of approximately $20,000.
Rick Hyde of Hershey Equipment told the board that the bulk conveyor system is "substantially complete" and is working "extremely well." The system will be commissioned when the first ship carrying wood chips is loaded. The $93,000 final payment on the contract with Hershey for the approximately $4.4 million conveyor project will be delayed until the commissioning occurs.

Discussions with city council
The city council, at its January meeting, had discussed having a report four times a year from the port director at the council meetings, and City Manager Jon Southern noted that several people have approached him about having more information provided by the port authority. Port authority board members, though, felt that people who have questions should come to the port authority meetings. Gardner pointed out that councillors receive his monthly written report and noted that city councillors "are not in a position of direct oversight of the port authority." He also observed that five of the seven port authority board members are elected by the citizens of Eastport.

Record tonnage
Al Day, the FMT general manager, reported that 70 ships, including two non-cargo ships, called at the port during 2011. They loaded a record amount of tonnage for a year. A total of 463,021 metric tons was shipped. That total included 430,189 tons of wood pulp, which is also a record, with 336,501 tons headed to China and Korea. Also shipped were 20,515 cows in 1,498 containers. Other cargo included hazmat containers and a yacht. Day noted that indications are that the market for wood pulp could be weaker in 2012.
Gardner expects that the port will break 500,000 tons this year and that the pulp market will be as strong as this past year. In addition, the wood chip shipments will begin, and cow shipments will be continuing.
Other business
Gardner reported that if the state decides to go forward with a transportation bond issue this year, he will try to get a new warehouse included, along with funding for engineering work for repair of the breakwater.
Following an analysis of whether it makes financial sense for the port authority to continue providing tug operations for the port, Gardner reported that if the port handles at least four ships it is better for the port authority to own the tugs. "Tug operations are six-digit cash positive, for the short-term at least, so it's better to keep them in-house," he stated. He urged the port authority board to purchase an 85-foot tug that is for sale in Bath. The board agreed not to further pursue having the tug operations handled by a private contractor.
Gardner has been discussing with the Passamaquoddy Water District the possibility of having the district play a more active role in providing water to cruise ships at the port. Presently, the port authority would have to pay for a new meter and other equipment to meet that potential demand, yet the PWD would be the only one to benefit from the increased water usage.
The board agreed to put out to bid the sale of 5,000 cubic yards of the rock that was removed for the new bulk yard at the port.
Gardner reported that the repowered tugboat Abaco did some test dredging for an underwater transmission cable for Ocean Renewable Power Company and was up to the task. "It turned out to be the little boat that could," he stated.
At its annual meeting, the board reelected the following officers: Jett Peterson, chair; John Sullivan, vice chair; Bob Wallace, secretary; and Dean Pike, treasurer. The board also agreed that the port director and operations manager are allowed to spend up to $500 on unbudgeted items without board approval.