Monday, January 4, 2010
Credit Managers’ Index:
Economy headed in right direction
The weak economy is headed in the right direction, according to the Credit Managers’ Index (CMI) for December.
The Index remained above the 50 mark that separates growth from contraction and showed a slight gain as it moved from 52.3 to 52.9.
“This is hardly the kind of advance that provokes celebration, but given the gloomy assessments made about the 2009 holiday season, the gain is certainly preferable to what had been anticipated,” said Chris Kuehl, economist for the National Association of Credit Management (NACM).
The indicators that showed the least movement included sales and new credit applications.
“This is to be expected and is consistent with December readings in past years,” said Kuehl. “This is the period in which most manufacturers are in semi-hibernation unless the retail community is frantically trying to bolster inventory. That was not the strategy employed by retail this year; stores held the line on inventory and shoppers eventually caved and bought what was available.”
The retail numbers showed a gain of around 4.5 percent over last year. There was also a more positive increase in dollar collections and an expansion of credit extended, the CMI reported.
Filings for bankruptcies have dropped significantly, the report said.
“There have been more bankruptcies and that poses some long-term problems. The growth of bankruptcy activity is not unexpected at this point in a recession, but until these are worked through, there will be hesitation in the market to extend credit to any but the most healthy companies,” Kuehl said. “As the economy rebounds, the companies that have been struggling to survive will start to encounter more aggressive competition, which is often the straw that breaks the back of these weakened companies.”
The NACM’s overall conclusion from December’s CMI data is: “The economy remains weak, but headed in the right direction. The slow thaw in the credit markets is still taking place and there are signs of expansion in both the manufacturing and service sectors. There has been no sign of explosive growth thus far, but that is consistent with most of the other assessments on the economy. The improvement in 2010 looks more feasible, but there are still no fireworks in the immediate future.”
L.A.-Long Beach ports gear up for competition
Southern California's twin ports make up the nation's biggest cargo container hub -- and they're launching an ambitious campaign to stay that way as they navigate a weak economic recovery and increasing competition from foreign and domestic harbors.
The ports of Los Angeles and Long Beach are aggressively advertising and giving customers discounts at a time when they and most other U.S. ports are wrapping up their worst ever year-over-year decline in shipping business. In 2009, the two ports moved about 2.5 million fewer containers than the year before, the equivalent of shutting down the country's fourth-busiest seaport -- Savannah, Ga. -- for the entire year.
-Los Angeles Times
For the full story: www.latimes.com/business
DP World keeps London Gateway project alive
DP World, the global port operator, today spent £130 million to keep alive an ambitious plan to build Britain's newest deep-sea container port — the London Gateway.
The £1.5 billion project, which would also involve building Europe's biggest logistics park, 25 miles east of London at Thurrock, Essex, was put on hold in March when DP World said that it was reviewing its future in light of the collapse in the world shipping market and the difficulty of financing the development.
-The Times of London
For the full story: business.timesonline.co.uk
New Year could be bright for luxury retailers
The New Year could be brighter for luxury retailers, as improving stock markets and economic conditions pave the way for a potential recovery, an analyst said Monday.
While shoppers remained budget conscious in 2009 and flocked to discount retailers, Randal Konik of Jefferies & Co. said luxury retailers like Tiffany & Co. and Ulta Salon, Cosmetics & Fragrance Inc. will be among those that could see improved business in 2010.
The analyst upgraded both Tiffany and Ulta to "Buy" from "Hold."
Source: Business Week
-For the full story: www.businessweek.com
Dockworkers strike at busiest French ports
A strike by French dockers on Monday paralyzed freight traffic at France's two busiest ports, Marseille and Le Havre, port authorities said.
The one-day nationwide strike was called by the CGT union to protest the government's port reforms and press demands for compensation for workers exposed to asbestos.
The work stoppage brought container and freight traffic to a halt at Le Havre and in Marseille but the oil terminals and ferry services were not affected, port officials said.
About 16 ships were prevented from docking at Fos-sur-Mer and Marseille, according to Marseille port officials.
For the full story: www.google.com
Tuesday, January 5, 2010
NRDC clean truck lawsuit in Long Beach garners ATA response
Pot shots over port programs continue to fly, with the Natural Resources Defense Council and the Sierra Club alleging in a lawsuit that the American Trucking Associations and the Long Beach Harbor Commission are reversing air clean-up efforts in a “backroom agreement” and the ATA crying foul and saying the claims are “baseless and inaccurate.”
On the contrary, an ATA news release responded, “The settlement agreement between the ATA and Long Beach did not make any change that would reduce, let alone reverse, the Port’s progress in cleaning the air. What is cleaning the air is the progressive banning of older trucks.
For the full story: www.thetrucker.com/News
Last-minute deal extends Oakland’s clean truck deadline two more weeks
A last-minute deal between California air pollution regulators and Port of Oakland truckers Monday will allow hundreds of big rigs to operate at the port for two weeks while they work to meet stricter requirements on diesel emissions that officially took effect for the new year Friday.
Read more: www.sfgate.com
Report: Deutsche Post to sell U.K. unit to Home Delivery Network
German logistics and mailing company Deutsche Post AG (DPW.XE) has agreed to sell its non-time sensitive package delivery business in the U.K. to Home Delivery Network, spokesman Claus Korfmacher told Dow Jones Newswires on Tuesday.
The company declined to disclose financial terms of the deal, which is still subject to government regulatory approval.
If the deal is approved, it should be completed within the first quarter of 2010, Korfmacher said.
Story source: online.wsj.com/article
Genco takes delivery of ninth new build
New York-based Genco Shipping & Trading Limited announced it has taken delivery of the last of nine new builds – the Genco Claudius, a 169,025-dwt Capesize vessel.
The company said the Genco Claudius was delivered to its charterer, Cargill International S.A., on January 4, 2010 to commence a time charter for 10.5 to 13.5 months at a rate of $36,000 per day, minus a 5 percent third party brokerage commission. Currently, Genco says it has approximately 51 percent of its fleet's estimated available days secured on contracts for 2010.
PM Gordon Brown weighs in over DP World’s London Gateway re-start
Prime Minister Gordon Brown has said a Middle Eastern developer's decision to go ahead with the creation of a new deep sea port on the banks of the River Thames is a "massive vote of confidence in the UK's economic recovery".
Mr. Brown said the development of the London Gateway port on the north bank of the Thames near Thurrock, Essex, would bring jobs growth and prosperity.
Developer DP World - the port arm of Dubai World - on Monday said it was pressing on with the £1.5 billion project.
-The Press Association (UK)
For the full story: www.google.com
Holidays, weather strand 200 Russian freight trains
About 200 freight trains are stuck at port cities in Russia's Far East region as new year holidays rob operators of labor, local media reported on Tuesday.
Some 10,500 freight cars loaded with coal and oil products were held up at the Primorye Territory and the Khabarovsk Territory, due to a lack of workers and port shutdowns for the new year vacation.
Recent blizzards in some Far Eastern regions further added to the railway traffic jam.
The Eastern Siberia-Pacific Ocean (ESPO) pipeline currently ends at Skovorodino in the Amur Region and rail is used to transport the crude oil it carries the rest of the way to the port of Kozmino near the Pacific city of Vladivostok.
For the story source: news.xinhuanet.com
Wednesday, January 6, 2010
NYK president: Could become difficult to maintain liner and air cargo businesses
The president of Japan’s largest shipping group remarked in his New Year’s speech that despite the rebound in cargo movement, various cost cutting measures and some rate restoration “the deficits still remain enormous. If things go on like this, there will be no change in the prospect that it will become difficult to maintain our liner trade and air cargo transport business,” said Yasumi Kudo, president of NYK Line.
“Finished products and their component parts for their manufacturing and maintenance constitute principal transport items for liner trader and air cargo transport businesses. Since most of them are consumer goods, however, there are no long-term transport contracts with customers guaranteeing the freight rate level and the transportation volume, unlike the resources and energy transport. As a result, once the supply-demand situation becomes tight, freight rates shoot up; whereas once supply eases, freight rates plummet. That is, liner trade and air cargo transport businesses are characterized by an extremely high degree of volatility.” Kudo said.
NYK’s own efforts to restore profitability over the second half of the current fiscal year has included cutting its operating fleet from 115 containerships at a total of 410,000 TEUs, to 90 vessels at about 360,000 TEUs. Two of the company's 10 aircraft have been mothballed, with warehouse space reduced from 850,000 to 760,000 square meters, and truck fleet -reduction from 1,500 vehicles, to 1,100.
Kudo said NYK plans to cut the number of ships and total capacity by one-third by 2015.
"I believe that emphasis should be placed on "non-asset" operations for the time being, in the course of our efforts to augment liner trade and air cargo transport businesses," he said.
“This by no means rules out owning of container vessels and airplanes…the recent recovery in the air cargo transport sector has been accompanied by a sharp rise in customer inquiries and contracts for charter flights. But a lack of adequate hardware will make it impossible to properly cope with such a demand," Kudo said.
"Furthermore, because ocean transport is a growth industry from a medium- and long-term perspective, there is the strong possibility that the supply-demand balance will settle down if operators learn enough from their recent bitter experiences and accept slow steaming as normal practice to deal with soaring fuel prices and environmental problems," he said.
"Nonetheless, these surplus-reduction measures do not restore profits, especially in the liner trade and air cargo. It is necessary to raise freight rates to the proper level…Fortunately, our rate restoration efforts have started to score a measure of success since the summer of last year."
Kudo also said the parent company is exploring the possible merger of its two logistics units: NYK Logistics and Yusen Air & Sea Service.
“Merging these two companies make it possible not only to eliminate overlapping sales system, but also to establish a structure capable of fully serving all logistics needs of customers—ocean/air freight forwarding and contract logistics businesses,” he said.
NYK’s backlog of new build orders was at approximately 190 vessels as of the New Year, Kudo said, with about 140 of them being bulk-and-energy transport ships. “We are expanding long-term transport contracts with such overseas giants as major steel mills of China and India and mining companies of Brazil. Henceforth, we will continue to invest in the transport of resources for steel, electric power and energy-related industries on the basis of long-term contracts. Our backlog of new building orders also includes a drill ship, a contract for which we concluded last year. At present, moreover, we are making positive efforts to take part in other offshore business sectors as well.”
Trucking group seeks court action over parts of Port L.A. clean truck concession plan
The American Trucking Associations (ATA) announced the filing in U.S. District Court of Central District of California of what it said was its “final response brief seeking summary judgment in certain aspects of its challenge to the Port of Los Angeles Concession Plan mechanism.”
The summary judgment allows a court to decide on some, or all, of the legal issues involved in a case prior to trial if there is no legitimate dispute as to the material facts surrounding those issues, the ATA said.
The ATA contends it is “asking the U.S. District Court to find in its favor the legal issue of whether the Port’s Concession Agreement has a sufficient impact on motor carrier rates, routes and services to fall within the federal pre-emption provision.”
The ATA said the court is scheduled to hear its motion coupled with the port’s cross motion for summary judgment on Jan. 11, with a decision expected shortly thereafter. A trial is scheduled to commence in mid-March in order for both sides to argue the legal issues.
U.S. surface trade dropped over 15 percent in October
Trade using surface transportation between the United States and its North American Free Trade Agreement (NAFTA) partners Canada and Mexico was 15.5 percent lower in October 2009 than in October 2008, dropping to $61.4 billion, according to the Bureau of Transportation Statistics (BTS) of the U.S. Department of Transportation.
The BTS reported that the value of U.S. surface transportation trade with Canada and Mexico rose 7.2 percent in October 2009 from September 2009.
U.S.–Canada surface transportation trade totaled $36.3 billion in October, down 19.0 percent compared to October 2008. U.S.–Mexico surface transportation trade totaled $25.1 billion in October, down 10.0 percent compared to October 2008, the BTS said.
Port of Everett commission authorizes $3 mil rail spur
Greif to build service complex in Shanghai
Greif, the Ohio-based industrial packaging manufacturer of products such as steel containers announced it plans to expand into China by building a service complex for its subsidiary Delta Companies near the Shanghai Chemical Industrial Park (SCIP).
The multi-client service center will provide blending and logistical services; packaging products including pails, drums and totes; and warehousing for global customers with operations in the SCIP and the surrounding area, the company said.
Darren Cherry, vice president and general manager of Delta, said, “This expansion enables us to bring our strategic advantages to one of the fastest growing packaging service markets in the world. We look forward to building upon more than six decades of achievements as a third-party resource for our customers who produce oil-based and specialty chemical products throughout North America.
“During the past three years, we have embedded the Greif Business System into our operations and enhanced our performance to position us for international expansion. We are exceptionally prepared for this opportunity to extend our services to customers in China.”
Greif has operations in more than 45 countries producing steel, plastic, fiber, corrugated and multi-wall containers for a wide range of industries such as producers of oil-based and specialty chemical products.
China to help develop second Kenyan port
Kenyan President Mwai Kibaki said China has committed to help develop a second port in the East African nation, which is expected to start being built this year.
Construction of the port at Lamu on Kenya’s northeast coast forms part of a $22 billion project announced by the government in April 2008. It includes a railway line, a highway linking neighboring Ethiopia, Southern Sudan and Rwanda to Lamu and three airports, according to Kenya’s Transport Ministry. The port at Lamu will be bigger than the Kenya’s existing facility at Mombasa.
For the full story: www.bloomberg.com
Thursday, January 7, 2010
Coast Guard launches icebreaking operations on Hudson River
The Coast Guard has announced it has started icebreaking operations on the Hudson River, which usually begins about Dec. 15.
Using a fleet of five cutters to maintain commercial lanes on the Hudson from the port of New York and New Jersey to Albany, the Coast Guard expects to continue its mission until the middle of March.
“An average of 300 vessels transit the Hudson River during the winter months, carrying over 5 million barrels of petroleum products to the communities of this northern region,” said Lt. Cmdr. Edward Munoz, Coast Guard Sector New York's Chief of the Waterways Management Division for the New York region. “This includes home heating oil, which impacts hundreds of thousands of people in our area.”
-The Jersey Journal
For the full story: www.nj.com/bayonne
Drop in construction business impacted Stockton, Calif. port in 2009
The construction industry collapse and last fall's credit crisis sharply cut into shipping activity at the Port of Stockton, its director reported Wednesday.
"We saw a decrease in construction-oriented shipping, such as cement and steel, and you also saw a decrease in the latter half of last year in the windmill segments we were handling," Port Director Richard Aschieris said.
Maritime shipments in 2009 totaled more than 1.3 million metric tons, he said Wednesday, down 22.6 percent from the 1.7 million metric tons tallied the year before. A metric ton is 2,200 pounds.
The port counted 102 ships and 13 barges delivering or receiving cargo at the port last year, compared with 149 ships and 21 barges in 2008.
For the full story: www.recordnet.com
DHL air cargo unit to lay off 303 pilots
ASTAR Air Cargo said it will lay off 303 pilots between March 6 and July 1 as a result of the reduced cargo flying demand from DHL, which slashed its U.S. express delivery operations in 2009 to international-U.S. shipments only in order to cut its $1 billion annual losses in the American market.
The layoffs will affect pilots based at Cincinnati-Northern Kentucky International Airport, according to a letter dated Tuesday, Jan. 5, from ASTAR Air Cargo to the Air Line Pilots Association, the union representing ASTAR pilots. Rob Miller, ASTAR’s vice president for employee relations, wrote that the letter was intended to give the pilots’ union 60 days advance notice of the layoffs under the federal Worker Adjustment and Retraining Notification (WARN) law.
-Dayton Daily News
For the full story: www.daytondailynews.com/business
Titan tapped for tanker salvage in James River
Titan Salvage announced it has been hired to handle the salvage of the Monongahela, a decommissioned tanker ship that broke loose from its moorings on the James River in the state of Virginia the night of Nov. 12.
The tanker ship, which is part of the James River Reserve Fleet (JRRF), was blown aground by a severe storm and unusually high water surges in the James River approximately one-half mile downstream of the JRRF near the western bank of the river.
Titan said has completed hydrographic surveys and “the salvage team is preparing to execute a test pull using one Titan hydraulic puller to verify holding power of the anchors being used and help in determining re-floating calculations relative to onsite conditions.”
The salvage company said there is a planned re-float of the vessel in mid-January.
Pirate seize 2,300 Hyundias, KIAs
Seeing the humor in pirate attacks isn't always easy, but even the jaded have to crack a grin at Hyundai public relations man Dan Bedore's Twitter commentary on the hijacking of a cargo ship carrying 2,300 Hyundai and KIA cars. "Even Pirates seem to be switching to Hyundai."
According to a report from Korea, the ship Asian Glory was captured by pirates about 600 miles off the coast of Somalia late Friday. On board were 2,300 compact and sub-compact cars headed to Saudi Arabia from their homeport of Ulsan. The hijack occurred just short of EU-patrolled international shipping channels. Reports of a last-minute phone call from one of the crew indicate no one aboard was injured in the attack.
-The Car Connection
For the full story: blogs.thecarconnection.com
A $3 million railroad spur that could provide more efficient handling of cargo
at the Port of Everett was approved Tuesday.
The port's commission agreed to authorize the agency to seek bids for construction of 2,500 feet of track that would connect its piers and other facilities with the Burlington Northern Santa Fe's main line.
The line would also be used to send oversized containers with jet parts to The Boeing Co.'s Everett plant in the event of a problem with port's barge pier in the Mukilteo area.
For the full story: www.heraldnet.com
Friday, January 8, 2010
UPS revises earnings projections upwards; will cut 1,800 jobs
United Parcel Service (UPS) announced it expects to exceed its previously announced estimate for 4th quarter 2009 earnings, and that it is cutting 1,800 management and administrative positions.
The company said it now anticipates a range of $0.73 to $0.75 per diluted share, whereas it previously projected earnings of $0.58 to $0.65 per diluted share for the period.
"The stronger earnings stem from better-than-expected results in both domestic and international operations and savings through cost management," said Kurt Kuehn, UPS' chief financial officer. "However, we still anticipate a gradual economic recovery with improvement more evident as 2010 progresses."
The company said it would provide additional details during its 4th quarter earnings call on Feb. 2.
UPS also announced it is streamlining its domestic management structure and reducing the number of districts and regions in its U.S. small package operation.
Effective in April, UPS said it would reduce its U.S. regions from five to three, and its U.S. districts from 46 to 20. As part of the realignment, UPS said it would expand its outreach to customers by strengthening local sales and marketing efforts.
The restructuring will eliminate approximately 1,800 management and administrative positions across the country, UPS said. Normal attrition will minimize some job displacements, and approximately 1,100 employees will be offered a voluntary separation package, the company said. In addition, UPS said other impacted employees would receive severance benefits and access to support programs based on length of service.
UPS said there are no plans to close any operating facilities.
"The new management structure creates Regions and Districts that are better aligned geographically," said Scott Davis, UPS chairman and CEO. "In turn, this will enable more local decision-making and resources to be deployed for our customers.
Greenbrier posts narrower quarterly loss
Railroad equipment supplier Greenbrier Cos Inc posted a narrower quarterly loss, but said it expects 2010 revenue to be lower due to weak demand.
Greenbrier and peers such as FreightCar America and American Railcar have been hit by a weak freight environment that has lead to low levels of railroad traffic and high levels of railcar storage.
For the first quarter, the company reported a loss of $3.2 million, or 19 cents a share, compared with a loss of $3.9 million, or 23 cents a share in the year-ago period.
For the full story: www.reuters.com
D.O.T. rules Virgin America remains a U.S. citizen
The U.S. Department of Transportation today announced it has found that Virgin America remains a U.S. citizen.
Under U.S. law, only airlines that meet the standards for U.S. citizenship may hold authority to operate as a U.S. airline.
The D.O.T. said it originally certified the airline’s citizenship status in August 2007. Virgin America subsequently notified the D.O.T. of a potential change in its shareholder makeup. As a result, the D.O.T. launched a review into whether the air carrier would continue to meet U.S. citizen requirements.
To meet the necessary standards, at least 75 percent of an air carrier’s voting stock must be owned or controlled by U.S. citizens, the president and at least two-thirds of the board of directors and managing officers must be U.S. citizens, and the air carrier must be under the actual control of U.S. citizens.
The D.O.T. said Virgin America agreed to make a number of changes to ensure it would remain under the ownership and actual control of U.S. citizens.
Changes include provisions to ensure that new investments of capital from entities other than the U.K.-based Virgin Group that own 25 percent of the air carrier’s stock can and will be obtained. Virgin America said it would also add an additional U.S. citizen to its board, resulting in seven U.S. citizen investor designees as voting members on the nine-member board.
As a result, the D.O.T. said it dismissed petitions by Alaska Airlines and the Aircraft Mechanics Fraternal Association for a public inquiry into Virgin America’s citizenship.
Army Corps awards first La Quinta Channel Extension contract
The US Army Corps of Engineers awarded the first construction contract associated with the construction of the La Quinta Channel Extension project at the Port of Corpus Christie, Texas.
The contract was awarded to RLB Contracting, Inc. of Port Lavaca, Texas for $1,123,400 to construct a 126-acre dredge material placement area on Port of Corpus Christi property in San Patricio County. The contract award is for the first of several construction projects required to complete the $75 million plan to construct the 7,400-foot-long, 40-foot-deep La Quinta Channel Extension.
Federal funds to bid and award the placement area contract were made possible through the granting of American Recovery and Reinvestment Act stimulus funds. Future contracts will reportedly be bid and awarded as Federal funds become available.
The Port of Corpus Christie said it is designing the initial phase of a multi-purpose dock and terminal project to be constructed on the Port’s 1000-acre La Quinta property site.
DOT issues proposed ruling on air transport of lithium batteries
The U.S. Department of Transportation announced it has proposed to strengthen safeguards for air shipments of lithium batteries and cells, including when they are packed with or contained in equipment.
The D.O.T. said the proposed changes are to ensure that lithium batteries are designed to withstand normal transportation conditions and packaged to reduce the possibility of damage that could lead to an unsafe incident.
“Safety is our highest priority, said U.S. Transportation Secretary LaHood.
“This rulemaking is important for the protection of the traveling public and many of those who work in the aviation industry. We have to make sure lithium batteries or any other hazardous materials taken on planes are carried in the safest way possible. This rule will help us achieve a safer aviation environment without imposing a ban on the transport of lithium batteries by air.”
The D.O.T. said that since 1991, more than 40 air transport-related incidents involving lithium batteries and devices powered by lithium batteries have been identified.
For detailed information on battery shipment requirements in the Hazardous Materials Regulations: www.phmsa.dot.gov/hazma