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Horizon Lines Releases Green Initiative Progress Report

March 12, 2012
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Horizon Lines Inc., (OTCQB: HRZL) today issued a report presenting the company's progress in pursuing environmental excellence through its ongoing "Green Initiatives." The report describes the carrier's efforts to mitigate environmental impact from shipping operations and intermodal transport.

"Ensuring sustained environmental protection has always been a mission at Horizon Lines," said Stephen H. Fraser, President and Chief Executive Officer. "Our approach emphasizes environmental excellence through conservation techniques, waste stream management, system upgrades and voluntary compliance."

The report outlines a number of initiatives the company has been pursuing. In the Marine Environment area, these initiatives include vessel management controls, low sulfur diesel fuel usage, and marine terminal pollution mitigation planning. The company has focused on reducing transportation emissions through improvements in vessel fuel consumption and truck efficiency, the use of alternative fuels and the development of more fuel-efficient transportation solutions.

Additionally, the company is pursuing a long-term, sustainable approach to logistics management that should benefit all stakeholders. Examples include working to reduce empty backhaul miles through logistics network optimization and researching the feasibility of using containers built from recycled materials.

"Environmental stewardship is a fundamental tenet at Horizon Lines," said Andrew Phillips, the company's newly appointed Environmental Compliance Director. "In 2011, our company received recognition from the Chamber of Shipping of America for environmental excellence and we also were named a Top 75 Green supply chain partner by Inbound Logistics magazine. We remain ever vigilant and committed to continuous improvement when it comes to environmental stewardship and compliance."

Under Horizon Lines' Green Initiative, specific areas of focus are:

Management

Horizon Lines appointed Andrew Phillips as Environmental Compliance Director in November 2011. Mr. Phillips is responsible for leading the company's overall environmental compliance efforts moving forward, with particular focus on the carrier's marine operations. Mr. Phillips joined Horizon Lines with an extensive maritime career, including 15 years ashore in environmental and safety compliance and 20 years at sea, five of those serving as Ship Master.

Training

Horizon Lines has provided detailed MARPOL training in the form of mandatory CBT programs on its ships and mandatory senior officer seminars geared specifically towards understanding and conforming to the provisions of each MARPOL Annex. Training in 2011 addressed the potentially most problematic of the MARPOL Annexes-Annex I governing prevention of oil pollution.

Recycling & Waste Reduction

Horizon Lines has initiated a program limiting the discharge of any waste into the oceans, well ahead of any potential regulatory restrictions of this common industry practice. Where waste can be accepted shore-side, the carrier has begun sorting waste to facilitate recycling. Additionally, Horizon Lines has active recycling programs in place for ink jet and toner cartridges and batteries used on ships.

Fuel Conservation & Emissions

Through the company's EDGE process optimization program, which includes enhanced communication between terminal and vessel teams, Horizon Lines has reduced overall fleet fuel consumption by 3.5% over the past six years. Our management believes this effort has resulted in an estimated emissions reduction of 231,000 tons of CO2 during this period, through the end of 2011.

Low Sulfur Fuel

Horizon Lines has consistently purchased and consumed residual fuels with less than 2.5% sulfur content for diesel and steam plants since 1999. The carrier's Alaska Division has consumed fuels of 1.8% sulfur content since 1987. Horizon Lines is in discussions with fuel suppliers to ensure it has adequate supply of 1.0% sulfur content fuel oil in 2012, ahead of its required use within 200 nautical miles of the U.S. coastline under provisions of the new North American ECA (Emission Control Area).

Clean Trucks

On land, Horizon's California-based tractors have been compliant since 2008 with 2012 CARB clean truck rules. The company also is a member of the EPA's SmartWay initiative to reduce intermodal fuel consumption.

Biodegradable Oils

Horizon Lines has adopted a program to utilize biodegradable oils in select deck hydraulic equipment and vessel stern tubes to minimize the risk of pollution should a leak occur.

Oily Water Separator Upgrade Program

Improved technology oily water separators (OWS) were installed several years ago on a number of the company's vessels as a pre-treatment system to the ship's existing OWS. This upgrade is not required by any country, international organization or regulatory body. The dual processing approach allows for improved management of oily water discharge through more efficient processing of problematic waste streams such as oil-water emulsions, resulting in an effluent oil content of significantly less than the allowable 15 ppm. The dual approach incorporates a pre-treatment step before the contents of the bilge holding tank are processed through the existing OWS system and pumped overboard. Horizon Lines installed the improved technology OWS to further reduce the possibility of inadvertent discharge of oil into the sea.

Cargo Hold Water Pumping

Neither U.S. nor international pollution prevention regulations require vessels to treat accumulated water in the cargo holds before pumping it into the sea. Horizon Lines, however, has voluntarily modified some of its vessels systems to provide for the processing of this water through its oily water separator or an independently installed Oil Content Meter (OCM) prior to discharge into the sea. On those vessels not yet modified, Horizon Lines requires a thorough inspection of the accumulated water to ensure the absence of oil prior to discharge.

Ballast Water Management Program

At Horizon Lines, all vessels monitor and participate in deep sea ballast water transfer programs, limiting the need to transfer ballast in port. A number of ships use locked-in fresh water ballast and/or flume systems, further reducing the need to either take on or discharge ballast water in port. Horizon Lines is currently working with several suppliers and providing onboard platforms for testing the latest technologies for treatment against the incubation of invasive species in ballast water.

National Pollution Discharge Elimination System (NPDES)

Horizon Lines has obtained general permits for all of its vessels and most facilities, ensuring that they are operating in strict compliance with the provisions of NPDES regulations. The company has provided detailed instructions to its vessel crews and terminal personnel, and it audits performance against these instructions to prevent pollutants from being discharged incidental to normal operations.

SNAME Environmental Survey

Horizon Lines sponsored an internship at The Society of Naval Architects & Marine Engineers (SNAME) for the analysis of data received from SNAME's EC-7 Environmental Survey. The resulting report has helped guide efforts by SNAME to raise public awareness of environmental management efforts in the maritime industry and to improve knowledge of best practices.

Department of Energy Joint Venture

Horizon Lines and the United States Department of Energy (DOE) have formed a joint venture called MAGIC to investigate clouds and their properties by deploying radars and other instrumentation aboard the Horizon Spirit sailing between Los Angeles and Honolulufrom October 2012 through September 2013.

Source: Horizon Lines
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