Dong Tao, the chief economist for Asia excluding Japan at Credit Suisse in Hong Kong, said the purchasing managers’ index for December, released by the China Federation of Logistics and Purchasing on Saturday, backs the view that the mainland economy peaked in the third quarter of last year.
Consumption is holding up — at least for now — while investment and exports have already slowed, signaling the looming slowdown, Tao said.
He said the recent round of increases in bank’s reserve requirement ratios, interest rates hikes and tighter controls over bank lending in December had been effective in instilling a more cautious sentiment among China companies.
The December headline PMI, softened to 53.9, a drop of 1.3 percentage points from November’s level.
Still, Tao expects a gradual cooling rather than a sharp slowdown, as cooling growth “should provide a reason for Beijing to tighten not too aggressively,” he said.
China’s growth this year is expected at 9.2%, compared to 2010’s forecasted growth 10.1%, according to Credit Suisse’s estimates.
Hutchison Whampoa boosts stake in Shenzhen, HK ports
Hutchison Whampoa Ltd HK:0013 , boosted its stake in Shenzhen and Hong Kong container ports, the world’s third- and fourth-busiest, sending its stock five percent higher.
Hutchison said on Monday it had agreed to buy port and property assets from partner China Resources (Holdings) Co Ltd, parent of China Resources Enterprise Ltd (0291), for HK$5.7 billion ($732 million).
Its shares closed up 5.25 percent at HK$84.20, the highest level since November 12, and outperforming a 1.7 percent gain on the broader market.
Hutchison, a ports-to-telecommunications conglomerate controlled by tycoon Li Ka-shing, has completed most of its investments in its third-generation (3G) mobile networks and is now seeing profits from its operations.
Shares of Hutchison surged about 50 percent in 2010 on optimism about its telecoms business and expectations of strong growth in its other core businesses, including property, ports and retail.
Hutchison said the acquisition included a 10 percent stake each in HIT Investments Ltd, Splendid Century Ltd, Eckstein Resources Ltd and Hutchison Ports Yantian Investments Ltd, representing all issued shares held by China Resources in these companies.
Brentwood, Tenn.-based OHL International announced on its website that has suspended the U.S. air export business of embattled Activair, one of OHL's freight forwarding units that operates out of the U.S. Midwest.
CBS News had reported that the TSA was investigating allegations that an air cargo company in the Midwest failed to screen for possible bombs and explosives in millions of pounds of cargo carried on international passenger flights over the last eight months.
OHL now says it will continue to ship cargo from the U.S. via air through its Barthco International subsidiary, a TSA-authorized indirect air carrier (IAC). OHL said Activair's ocean and other international shipping businesses would continue unaffected by the suspension. OHL also said Activair is “continuing to fully cooperate with the previously disclosed inquiry by the TSA.”
NAR predicts moderate commercial real estate rebound
For the commercial real estate industry, 2011 will look a lot like 2010 – at least for the first half of the year.
But as markets flatten out and stabilize throughout the year, modest growth is expected as fundamentals improve, predicts the National Association of Realtors.
“The basic fundamental of rising commercial leasing demand, resulting from a steadily improving economy, means overall vacancy rates have already peaked or will soon top out,” said Lawrence Yun, chief economist for the NAR.
“The outlook for the office and industrial markets has moderated, with modestly declining vacancy rates expected as 2011 progresses, while the retail sector should hold fairly steady. Still, high vacancy rates imply falling rents.”
USCG rescues 20 crew of vessel off Marshall Islands
The Coast Guard says distress signals received at its Honolulu center led to the rescue of 20 sailors on life rafts near the Marshall Islands.
The area is about 2,500 miles from Honolulu.
An aircraft spotted the rafts Friday morning and several vessels were sent to the area. A fishing boat rescued all 20 sailors around 6 p.m.
The Coast Guard says the sailors were on board a ship hauling construction materials that sank in bad weather. Their conditions were not known.
Coast Guard officials say the rescue was made possible thanks to the use of portable radio beacons designed for emergencies.
The Port of Seattle announced that as of January 1, all drayage trucks servicing the port’s cargo terminals must adhere to its new clean truck program guidelines in order to gain entry.
The port said in a statement that to date, nearly all trucks have the required "Green Gateway" sticker, and terminals have not reported any unusual back-ups, or longer lines. The port said it had staff on hand to take any last minute registrations.
The clean truck program came out of the Northwest Ports Clean Air Strategy, and over 5,929 trucks and 1,100 trucking companies and truck owners are registered in the Drayage Truck Registry (DTR), the port said.
Drayage trucks with engines older than model-year 1994 may be eligible for a $5,000 incentive through the ScRAPS Program (Scrappage and Retrofits for Air in Puget Sound) which continues until the end of January, the port said.
Tesoro out to raise $230 mil for logistics unit
Tesoro Corp. on Tuesday disclosed plans to raise up to $230 million in an initial public offering of its Tesoro Logistics LP unit.
Tesoro Logistics plans to trade its common units on the New York Stock Exchange under the symbol TLLP.
Tesoro Logistics' assets include a crude oil gathering system in the Bakken Shale/Williston Basin area of North Dakota and Montana, eight refined products terminals in the midwestern and western U.S. and a crude oil and refined products storage facility and five related short-haul pipelines in Utah.
UPS to open four new healthcare distribution centers globally
United Parcel Service Inc. to open four new health-care distribution facilities around the world in 2011.
The Atlanta-based shipping giant said new facilities in Singapore; Venlo, the Netherlands; Burlington, Canada, and Louisville, Ky., will give it a total of 30 health-care-dedicated facilities set up to meet the needs of pharmaceutical, biotech and medical device companies.
UPS will open the facility in Singapore in the late first quarter. The facilities in Venlo and Burlington will come online in the second quarter, and the Louisville facility will open by the end of 2011.
Oregon International Port of Coos Bay finalized a transaction with the Union Pacific Railroad on Thursday that transferred ownership of 23 miles of the Coos Bay rail line to the port.
This of track runs from Cordes on Coos Bay's North Spit to Coquille, and includes rail yard facilities in North Bend and Coos Bay.
North Korean ship sank in Yellow Sea with dead and missing crew
Two sailors were killed and 15 are missing after a North Korean-registered cargo ship sank in the Yellow Sea on Friday, state news agency Xinhua reported late on Friday.
The "Kang Bong" sank on early Friday morning after water entered the ship during strong gales, Xinhua said, citing the Rescue and Salvage Center under the Ministry of Transport.
The ship, with 20 people onboard, was traveling 120 nautical miles east of Lianyungang Port in eastern China's Jiangsu Province.
Three people were rescued by a ship and helicopters, which were still searching for those missing but winds were hampering the efforts, the report said.
U.S. companies have lost $2.4 billion in exports to Mexico annually since the U.S. shut down a U.S.-Mexican cross-border pilot trucking program in early 2009, according to Peter Friedmann, executive director of the Agricultural Transportation Coalition.
The shutdown violated a provision in the North American Free Trade Agreement, entitling Mexico to impose retaliatory tariffs on U.S. goods that previously entered the country duty-free.
Most of the products on the list are agricultural goods, including grapes from California, Christmas trees from Oregon and fresh fruits from the Pacific Northwest, Friedmann said. “They’re no longer affordable. A french fry plant in Washington state that employed 110 workers had to shut down. Now Mexico gets french fries from Canada.”
The tariffs range from 5 percent to 25 percent of the value of the goods.
The affected goods also include appliances such as refrigerators and consumer goods such as cosmetics.
Mexico imposed tariffs on 89 products in March 2009. It increased the list to 99 products last August, when it dropped 16 products from the original list, but added 26 others. At the same time, however, it dropped the tariffs on some products.
Companies affected by the tariffs include Mary Kay, the skin care and cosmetics producer, which ships three truckloads of its products from its Dallas headquarters to Mexico every week. Its products were initially subject to a 15 percent tariff, but the tariff was cut to 5 percent last August, according to Anne Crews, Mary Kay’s vice president of government relations.
Friedmann said much of the lost export business would come back in a heartbeat because it’s cheaper to buy from the U.S. But, he added, “that doesn’t apply in all cases. Once an importer shifts purchasing, it’s often hard to get it back – as importers establish relationships with different suppliers.”
Congress mandated the closure of the pilot project in response to heavy pressure from the Teamsters union, a strong supporter of the Democrats and Barack Obama during the 2008 presidential campaign. The union saw the program as a threat to its members. Some U.S. trucking companies also opposed the pilot project.
Critics argued that the Mexican trucks and drivers posed a threat to safety, but Friedmann said the Mexican trucks had better safety and emission standards than trucks driven in the United States. Selected U.S. trucking companies also participated in the pilot project.
FedEx adds direct India-China cargo route
FedEx Corp. has added a direct air-cargo route between India and China, a move it said is aimed at serving booming regional trade growth.
The new cargo flights, which began Tuesday, link Mumbai and New Delhi in India to Guangzhou in southern China and run five times a week using A310 aircraft. FedEx has been operating direct New Delhi-to-Shanghai cargo flights since 2005.
FedEx, based in Memphis, Tenn., called China and India "two of the fastest-growing economies in the world" and noted that average annual growth in the intra-Asia air-cargo market is estimated at 7.9% over the next 20 years.
The number of containers passing through Singapore grew 10 percent in 2010 from the previous year.
Throughput for 2010 was 28.4 million TEUs, according to advance estimates shared by Singapore's Minister of Transport Raymond Lim at the Singapore Maritime Foundation's New Year Cocktail reception on Thursday.
Recent reports out of China suggested that this would move Singapore off the top spot as the world's biggest container port.
According to the reports which cited unnamed city officials, Shanghai handled 29.05 million standard containers in 2010, edging past Singapore.
But as cargo volumes pick up and container freight rates stabilize, the outlook for port activities in Singapore is bright.
The Coast Guard says a nearly one-mile stretch of the Houston Ship Channel will be closed for at least four days as workers use pitchforks and fishnets to corral, pierce and remove 15,000 gallons of beef fat.
Coast Guard spokesman Richard Brahm says shipping has not been impacted. The refinery-lined waterway is one of the busiest marine thoroughfares in the country.
On Tuesday, about 250,000 gallons of beef fat leaked from a storage tank, and some reached the waterway through a storm drain. The fat solidified when it hit the colder water.
U.S. officials are investigating the death of a sailor whose body was found aboard a Ukranian cargo ship days before it docked at the Houston Ship Wednesday night.
The man, a Ukrainian national, was discovered dead New Year's Eve while the cargo ship was at sea, said Shauna Dunlap, spokeswoman for the Federal Bureau of Investigation, which is handling the case.
The FBI is trying to determine how the man died, Dunlap said. No signs of a gunshot or stab wound appear on the body, she added. An autopsy will determine the cause of death.
Dunlap said the FBI was alerted about the death Wednesday night and that the ship later docked at the Port of Houston. about 9 p.m. She said crew members told investigators they found the man dead.
Dunlap said the FBI also is trying to determine what law enforcement agency has jurisdiction in the case because the death occurred while the ship was in international waters.
Seattle’s $1.1 bil waterfront tunnel project inked
The ink is dry on a nearly $1.1 billion contract to build what will be the world's largest diameter deep-bore highway tunnel beneath downtown Seattle.
At a ceremony Thursday at the Port of Seattle headquarters, state Transportation Secretary Paula Hammond signed the 154-page agreement with representatives from Seattle Tunnel Partners, a joint-venture that offered the winning bid to dig the planned 1.7 mile long tunnel to replace the Alaskan Way Viaduct.
Seattle Tunnel Partners outbid one other team, Seattle Tunneling Group, with a proposed price of $1.09 billion to build the tunnel itself. STP includes New York-based Dragados USA, whose parent company is ACS of Spain; and HNTB Corp., which is headquartered in Kansas City and has a Bellevue office; and Tutor-Perini of California.
The contract could be worth up to $1.42 billion, depending on whether the construction team can hit certain bonuses in the contract for things such as completing the tunnel ahead of schedule and successfully protecting downtown buildings from damage during construction.
Freight traffic on U.S. railroads increased last year from depressed 2009 levels, indicative of a "slow but broad-based" economic recovery, the rail industry's main trade group said, although it cautioned that the latest figures still trailed 2008.
Intermodal volume, comprised mostly of consumer and other finished goods shipped by more than one transport mode, was up 14.2% last year, according to the statistics compiled by the Association of American Railroads.
Rail carloadings, which include bulk shipments such as grain, coal and chemicals, climbed 7.3%.
Both percentage gains were the highest on record since the trade group began compiling them in 1988.
But they came in the wake of the biggest year-over-year percentage drops on record. Intermodal volume slumped 14.1% in 2009, compared to 2008, while carloadings fell 16%.
Pacer International, Inc. announced the appointment of Daniel L. Gardner as chief executive officer of its international business unit, which includes Ocean World Lines, the non-vessel operating common carrier, and RF International, the freight forwarding and customs house brokerage operations.
“Mr. Gardner’s role will be to aggressively expand Pacer’s global transportation footprint and capabilities and to deliver seamless integration with its portfolio of domestic intermodal, highway, and transload services,” the company said in a press release.
Gardner will report to Michael Killea, executive vice president, International Logistics. Alan Baer, president of the international business unit, will remain with the company through March 31, 2011 to provide transition assistance, the company said.
Gardner previously held executive level positions with ATC Logistics & Electronics, DHL Global Forwarding, Exel Global Logistics, GeoLogistics Americas, and Fritz Companies.
St. Clair in as new breakbulk chief at Port of Tacoma
Larry St. Clair was named by the Port of Tacoma to lead its breakbulk business, according to a press release.
St. Clair has been with the port since 2006, and has more than 30 years of experience in maritime business, transportation and management.
Prior to joining the port, St. Clair worked in a variety of marketing and business development positions at the Port of Seattle, GATX Terminal, Inc., CSX Corporation, Sea-Land, and P&O Containers.
U.S. corn and soybean export demand drops
Corn fell the most in six weeks and soybeans dropped as demand declined following price rallies to 29-month highs in the U.S., the world’s biggest exporter.
In the week ended Dec. 30, U.S. exporters sold 369,043 metric tons of corn for delivery before Sept. 1, down 47 percent from a week earlier and below estimates by analysts of 400,000 tons to 800,000 tons in a Bloomberg News survey, Department of Agriculture data showed today. Soybean sales fell 26 percent from a week earlier, the government said.
Corn futures for March delivery fell 17.25 cents, or 2.8 percent, to $6.02 a bushel on the Chicago Board of Trade, the biggest decline since Nov. 19. The most-active contract gained 52 percent in 2010. On Jan. 3, the price reached $6.34, the highest since July 2008.
Soybean futures for March delivery dropped 15.5 cents, or 1.1 percent, to close at $13.78 a bushel, heading for the first weekly decline in a month. On Jan. 3, the oilseed reached $14.09, the highest since August 2008, after advancing 34 percent in 2010.
Maryland D.O.T. package explosions determined harmless despite one injury
Two incendiary devices ignited Thursday in state government offices in Annapolis and Hanover, injuring one person, officials said.
When opened, the packages at the Jeffrey Building in Annapolis and the Department of Transportation's headquarters "spit a little flame and smelled of sulfur," Gov. Martin O'Malley said.
Investigators said the note accompanying the Annapolis parcel may refer to the overhead highway signs urging motorists to report terrorism tips.
Two more suspicious packages were found in Baltimore at the Clarence M. Mitchell Jr. Courthouse and a building that houses the state health department, above, on Preston Street. Those were harmless.
