PUBLISHER'S NOTEBOOK

PUBLISHER'S NOTEBOOK

It is Sunday morning here, the temperature is in the high 50s and the sun is wrestling with the fog for dominance as one looks out across the gray-blue water toward the Bay Bridge.

In the distance, beyond the sailboats and Treasure Island, is a thicket of gantries at the Port of Oakland, which already has won its battle for dominance with the Port of San Francisco. But that is only fair; San Francisco has everything else. Better to turn the San Francisco waterfront into a spectacular mecca for tourists, cruise ships and tasteful developers. Leave the containerships to tough, blue-collar Oakland.Chuck Foster, the new head of the Port of Oakland, was saying a few days earlier that it was the long-delayed solution of the dredging issue that has given the Oakland port its current momentum and rosy outlook.

"We're pretty congested right now," said the enthusiastic Mr. Foster, who unfurled three large and impressive planning maps showing various phases of port expansion utilizing former military land.

"A new objective is to get approval to dredge to 48 feet," said Mr. Foster, who explained that a South Korean shipping line (Hanjin) had recently written saying it planned to be calling in 18 months with container vessels that would require greater depth than 42 feet. With the advent of larger containerships, Oakland must be prepared, Mr. Foster said.

"It will mean moving bedrock but we won't be dealing with contaminants," said Mr. Foster. "Disposal at sea should prove no problem."

Of course, selling such a project could prove difficult, but one gets the impression that Mr. Foster is up to the task.

* * * *

Young Tom Crowley, the 28-year-old chairman of Crowley Maritime, is now in his second year at the helm of the century-old family owned enterprise. He's showing no signs of wear and tear despite tough times and a restructuring program.

One of the biggest problems, he said, was the traffic congestion at South American ports, which left company vessels sitting idle four days and more, a very costly proposition at up to $50,000 a day per ship.

Mr. Crowley said the company would probably have total revenue of $1.1 billion in 1995 and finish in the black, though the margin of profit would be a long way from what he would like. While Mr. Crowley does not have to worry about pleasing Wall Street, he does have to keep his family happy. That can be as tough as selling dredging projects!

High visibility with the company has been one of Mr. Crowley's objectives and he's spent a lot of time in the past year pressing the flesh with Crowley employees from Alaska to Florida.

Asked about the looming deregulation of the shipping industry, Mr. Crowley said that while it did not augur well for future rate-setting, he conceded that there was at least one positive aspect:

"We'll be talking more with our customers and a lot less with other carriers," he said. "In the long run that should be a good thing to do."

* * * *

C.L. Ting, OOCL's president for North America, threw a party for the press atop the Bank of America building in San Francisco last Thursday.

He apologized that he had not met a number of the press people present since taking over his job last September but said he hoped the evening would prove the start of a good and open relationship. Judging from all the smiling faces, he succeeded.

I had not met Mr. Ting before either. He has an impressive background. The son of a Taiwanese diplomat, he spent his early years in Iran where he learned to speak and write Arabic, subsequently earning his university degree in Belgium.

I should note his English is excellent and he also speaks French, Mandarin and Cantonese!

Mr. Ting has been with OOCL since 1973. Before moving to OOCL's U.S. headquarters in Pleasanton, Mr. Ting was managing director of OOCL (UK), where he was in charge of European operations.

When someone asked Mr. Ting his preference of all the places he had ever lived, he responded with a big smile stretching his arms and looking skyward. Clearly, Northern California won the day.

Mr. Ting has earned positive reviews from executives at American President Lines, who say the 4-year-old partnership between the two companies is working better than ever. OOCL executives say the same thing.

George Hayashi, APL's president, said that the expanded consortium including Mitsui O.S.K. Lines and Nedlloyd Lines was also off to a promising start.

"The Mitsui people are very easy to deal with," Mr. Hayashi said.

The first step in the expansion to a four-line grouping came about last year with a handshake between Mr. Hayashi and Masaharu Ikuta, president of Mitsui.

"Ikuta-san and I go back 20-plus years," Mr. Hayashi said. "We talked about coming together and shook hands on it."

In APL's restructuring, Mr. Hayashi is responsible for all regional management, including relations with foreign shipping lines, although he no longer will be involved in pricing.

Pricing responsibility and overall marketing and domestic operations fall under hard-driving Timothy J. Rhein, president of American President Cos., the APL parent. Mr. Rhein distinguished himself in recent years by turning APL's intermodal operations from a big loser to high profitability.

"I have great confidence that Tim is going to be very effective," said Mr. Hayashi.

With deregulation and the loss of government subsidies both set to hit the company in the next two years, Mr. Rhein has a tough challenge. He concedes rates will certainly fall once tariff filing is eliminated in 1997. But he believes that the loss of $60 million in subsidies will not be a problem

because APL will save that much by flying foreign flags and using foreign crews.

"You can count on that," he said.

As for lower rates, Mr. Rhein believes restructuring (reducing the employee count by up to 900 people) and benefits of the company's partnerships will more than offset any revenue reduction.

Well folks, the fog has dissipated. I think it's time to enjoy another glorious day in my hometown.