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Maersk Line Turns its Back on Charleston

Maersk Line, the Port of Charleston’s biggest customer, announced December 18 that it will pull out of the city after cost-cutting negotiations with the International Longshoremen’s Association and the South Carolina State Ports Authority failed.
Early next year, Denmark-based Maersk will move one line, which accounts for one-quarter of its business in Charleston, and its last vessel will call no later than December 31, 2010, when its contract with the ports authority ends.

Charleston will suffer an immediate loss of more than 100 vessel calls a year, port officials said.

The announcement follows a decision by ILA locals in Charleston to reject a proposal to allow Maersk to switch from ILA labor to non-union terminal workers.
With business down and facing shortfall fees for failing to meet volume, Maersk threatened to pull out of the historic port city if it couldn’t reduce costs.
The ports authority offered to reduce Maersk’s allocated space and take back some equipment it provides the carrier; or shift Maersk’s operations to a common-use area operated by non-union state employees � the option Maersk supported.
When the ILA in Charleston rejected the proposal, Maersk decided enough was enough.

“The South Carolina State Ports Authority offered us a workable solution that involved a move into the common yard, but we needed the consent of the local ILA,” said Dana Magliola, a Maersk spokesman. “The local ILA refused to consent, and so we are forced to move.”

Bernard S. Groseclose Jr., the State Ports Authority’s president and chief executive, said the Port of Charleston, the region, and the state will suffer greatly from Maersk’s departure.

“This will mean great losses for our economy at a time when we can least afford it,” Groseclose said in a statement.

The ILA maintains that releasing Maersk from its contract with the ILA would put dozens of jobs on the line at a time when man-hours are down more than 10 percent.
In a statement issued by ILA’s headquarters in New York, the union said, “The ILA locals were defending a contract, supposedly negotiated in good faith by Maersk Line, to protect its membership with decent wages and benefits.

Maersk Line has made it clear in its own statement regarding the move that it places its dedicated ILA workers at the end of their corporate greed chain, behind shareholders and profits.”

Minimum Wage Freeze in UK

The U.S. is just one country suffering economic turmoil. Among others, the UK is also suffering. To help manage the issues, the British Chambers of Commerce (BCC) suggest that the minimum wage should not be increased until economic situations have significantly improved.

In October 2008, the minimum wage for employees over 21 increased by 3.8 percent to £5.73 per hour. BCC says a similar increase would cost companies £300m ($414 million).
David Frost, BCC director general, says, “A rise in minimum wage would not help firms hold on to staff and would simply add to unemployment.” He adds that the BCC is not opposed to a wage increase during good economic times, but jobs are being lost daily during this recession, and “it makes no sense to increase it.”

The BCC has forecast that unemployment will reach three million by 2010.

People on the Move

• Tom Boardley, Chief Executive Officer of CMA-CGM (UK), will become the next Marine Director of Lloyd’s Register, succeeding Alan Gavin, who is retiring June 30, 2009, after a 34-year career. Gavin will continue in an advisory role to Lloyd’s Register.

• Lloyd Boyd has joined Greatwide Logistics Services as Chief Information Officer. He will oversee IT operations for each of the company’s four business segments.

• Stockholm-based Bromma Group appointed Chris Cassalia as President, Bromma Market Area Americas. He will lead Bromma sales and services efforts in the United States, Canada, Caribbean, and Latin America regions.

• Heinz Lange was promoted to Vice President of International Sales at Pilot Freight Services. He will oversee international sales and sales training and develop a global network of sales directors.

• Clark Holdings Inc., a non-asset-based provider of mission-critical supply chain solutions, appointed Donald G. McInnes as Chairman of its Board of Directors.

• Herb Ng joined Weber Distribution as Director of Warehouse Operations. He is responsible for the company’s Inland Empire facilities in California — two distribution centers in Rancho Cucamonga and two in Fontana.

• Spiro Risvas was appointed to the position of Senior Vice President, WMG � Shipyards Division. He is responsible for all operations at the Group’s three wholly owned shipyards: Vancouver Drydock, Vancouver Shipyards, and Victoria Shipyards.

• Ron Stuart was hired as Environmental Project Manager-Air Quality at the Port of Tacoma. Stuart will manage port-related diesel and greenhouse gas emissions reduction programs, among other responsibilities.

• Hellmann Worldwide Logistics, Inc. appointed Kenneth Thibeault to the position of Vice President of Human Resources.

• The Intermodal Association of North America’s (IANA) Board of Directors elected Greg Stefflre, Chief Executive Officer of Rail Delivery Services Inc. as its Chairman for 2009. Stephen G. Branscum, Group Vice President - Consumer Products, BNSF Railway, is the new Vice Chairman, and the new Treasurer is Steve Rubin, President of Seacastle Chassis, Seacastle Inc.

CN’s EJ&E Acquisition Approved

Canadian National Railway (CN) was pleased with the Surface Transportation Board’s (STB) decision to approve CN’s purchase of the principal lines of the Elgin, Joliet & Eastern Railway Company (EJ&E). The controversial purchase includes a line that would loop freight trains around Chicago. Some suburban communities fear this bypass will cause massive traffic problems.

E. Hunter Harrison, president and chief executive officer of CN, said, “We are pleased that the Board has recognized the public-interest benefits of the transaction — the critical need for rail-congestion relief in the Chicago region — while mitigating the rail acquisition’s impact on certain communities situated on the EJ&E.

“While we are pleased that the STB has approved the transaction, we are nonetheless disappointed that the STB has mandated significant additional mitigation beyond the recommendations provided in the Final Environmental Impact Statement issued by the STB’s Section of Environmental Analysis, with respect to the grade crossings in Lynwood and Aurora. We are carefully reviewing the STB’s decision.”
The STB’s decision became effective on January 23, 2009. 

For more information on the topic, just log on to www.cn.ca.

Port Authority Board Approves $6.7 Billion Budget

In New York, the Port Authority Board of Commissioners approved a $6.7 billion, 2009 budget.

The budget calls for the largest amount of capital spending in the agency’s history — $3.3 billion — an increase of $725 million or 28 percent over the 2008 budget. The infusion of investment into regional capital projects will help buffer the economic crisis and address the region’s infrastructure challenge.

To make way for the capital investment, the budget provides for zero growth in operating expenses and no increase in staffing levels.

The budget makes clear that the agency, like other public entities, faces downward pressure on its long-term capital financial capacity, given the impact of the economic slowdown on revenues. As a result, the port authority will, over the next several years, need to manage its long-term capital program in a way that reflects the new economic and fiscal realities.

The $3.3 billion 2009 port authority capital budget will include these investments, among others:

• Continued development of the World Trade Center site
• Significant investments in the continued development of the ARC Tunnel project
• Continued modernization and expansion of airports
• Expansion of ExpressRail at the port’s marine terminals to increase the use of freight

China Shipping Container Terminal to Expand 

The Los Angeles Harbor Commission certified the final Environmental Impact Report (EIR) for the proposed Berth 97-109 Container Terminal Project (China Shipping) and approved the project. The project, which includes a tenant lease to the year 2045, will provide thousands of future jobs while substantially reducing air emissions at the terminal. 

“This is the third major project EIR our Board has approved in roughly 12 months — it’s another sizable investment in the future of this Port,” added Port Executive Director Geraldine Knatz, Ph.D.

China Shipping’s expanded terminal operations will facilitate more than 8,400 direct permanent and indirect jobs, and it will increase container terminal capacity to accommodate an annual throughput of 1.5 million TEUs.

The host of roughly 60 environmental measures being applied to the China Shipping terminal construction and operations, as part of the EIR and new lease agreement, includes the use of shore-side “Alternative Maritime Power” (AMP) by 2011, by all cargo ships calling at the terminal.

Some of the other environmental measures include:
•  Use of low-sulfur fuel on container ships within 40 nautical miles of the port
• Use of alternative fueled yard tractors
•  Use of electric rubber tired gantry cranes
•  Use of diesel particulate filters on lower-emission switcher locomotives