Economic conditions and the cost of doing business in the Bay Area have forced a shipping industry icon to move its corporate headquarters to another part of the country.
By Paul Duclos
Published: December, 2008
In an announcement made late last month, Neptune Orient Lines Limited (NOL)—the parent company of container shipping line APL and of APL Logistics—said Oakland was becoming too expensive.
NOL decided to:
• Reduce the company’s global workforce by about 1,000 positions. The largest impact will be felt in North America, where the company’s cost base is highest.
• Relocate the company’s Americas’ regional headquarters from Oakland to a more cost-effective location elsewhere in the United States. A decision on the location and timeframe for transition to the new regional headquarters will be announced in December.
NOL Group President and CEO Ron Widdows said: The negative conditions we are seeing in the marketplace are unprecedented in our industry’s history. This necessitates these very difficult decisions.
Last month, we initiated capacity reductions which will significantly reduce our vessel network and operating costs, said Widdows. Now, in view of the deteriorating market conditions, we take these additional steps. This reflects our considered view that what we are seeing goes beyond a normal cyclical downturn.
Widdows said it was anticipated that NOL’s plan would lead to a restructuring charge of approximately $33 million in NOL’s fourth quarter 2008 financial results, but would deliver positive financial outcomes in future years. Additional charges are anticipated for 2009.
Cal Maritime to Create Ballast Water Facility
On a more positive note, the California Maritime Academy in Vallejo is partnering with industry, government and higher education colleagues to create a Shipboard Ballast Water Treatment Research, Development, Test and Evaluation Facility aboard the school’s 500-foot training ship, Golden Bear.
The $700,000 project is underwritten in part by a National Oceanographic and Atmospheric Administration (NOAA) National Sea Grant. It is designed to reduce the time and expense of testing and certifying ballast water treatment systems as compared with the current approach of using commercial ships of opportunity. Operational launch is set for the fall of 2009.
Ships routinely load and discharge large volumes of water to optimize vessel stability, Davidson said. This can spread non-native species to foreign waters such as the Asian mitten crab, which has burrowed into area Bay Delta levees, weakening their flood-protection capabilities. Government and private researchers are working to devise new ballast water treatment systems in advance of approaching regulatory deadlines for implementation.
