Cargo Business Newswire Archives
Summary for January 13, 2014 through January 17, 2014:

Monday, January 13, 2014

Top Story

NRF on retail imports: 2013 up 2.8 percent overall, January 2014 up 4.8 percent

Import volume at the top retail container ports is the U.S. went up 2.8 percent for 2013 year-over-year, and January 2014 import numbers will surge 4.8 percent, according to estimates released by the National Retail Federation and Hackett Associates.

"Retailers are still assessing the holiday season, but they're also looking ahead to see what will happen in the New Year," said Jonathan Gold, NRF vice president for supply chain and customs policy. "Based on these early numbers, 2014 looks like it should be off to a good start."

U.S. ports followed by monthly Global Port Tracker publication handled 1.37 million TEUs in November, up 6.5 percent compared to November 2012. December estimates indicate 5 percent increase at 1.35 million TEUs. If that estimate is proven once final figures for the holiday season can be accessed, 2013 will have totaled 16.3 million TEUs, up 2.8 percent from 2012's 15.8 billion TEUs.

The early numbers come as retailers are waiting on final sales for the 2013 holiday season, which NRF forecast would grow 3.9 percent to $602.1 billion.

January 2014 is forecast to be up 4.8 percent year-over-year at 1.37 million TEUs, February down 7.5 percent at 1.18 million TEUs, March up 15.9 percent at 1.32 million TEUs, April up 7.7 percent at 1.4 million TEUs, and May up 4.6 percent at 1.46 million TEUs.

"The new year looks to be stronger than the outgoing one, with better-than-expected GDP figures, lower unemployment rates and continued low inflation," noted Ben Hackett, Hackett Associates founder. "Expectations of a stronger dollar will also help to increase consumer confidence as import prices continue to fall."

Global Port Tracker covers the ports of Los Angeles/Long Beach, Oakland, Seattle, Tacoma, New York/New Jersey, Hampton Roads, Charleston, Savannah, Port Everglades, Miami and Houston.

China to surpass U.S. as world's largest goods trader

China is poised to best the U.S. as the globe's top trading country, according to the country's official trading data, released Friday.

Beijing customs reported that the nation's total trade reached $4.2 trillion in 2013, topping $4 trillion for the first time. Overall, imports were up 8.3 percent year-over-year. Exports rose 4.3 percent, a pace that is typically distorted by fake invoices filed to avoid capital controls.

For the full year, exports increased 7.9 percent to $2.21 trillion and imports rose 7.3 percent to $1.95 trillion, the customs administration said.

Although the U.S. has not yet posted its trade numbers for December 2013, China will almost certainly assume the top ranking.

2013 U.S. imports and exports totaled $3.5 trillion through November, according to the Department of Commerce, and to retain the top trader title, December trade would have to come in at more than double the average monthly performance.

"This is a milestone for the development of our national trading services," said Zheng Yuesheng, a Chinese Customs Administration official, at a press conference.

It's hard to gauge how big an edge China actually has on the U.S., since China's trade data is notoriously unreliable. Fake invoices inflated 2013 export gains by about 2 percentage points, according to Louis Kuijs, chief China economist at Royal Bank of Scotland Group.

For more of the Bloomberg story:

Meat export group backs trade pacts' fast-tracking - By Richard Knee

An organization boosting beef, pork and lamb exports is supporting legislation that would fast-track U.S. ratification of trans-Pacific and trans-Atlantic free-trade pacts before their specifics are in final form, let alone publicly revealed.

The Denver-based U.S. Meat Export Federation said in a statement at the weekend that it "strongly supports … presidential Trade Promotion Authority," but a spokesman back-pedaled a bit when asked if the organization's leaders had seen the text of either the Trans-Pacific Partnership or the Trans-Atlantic Trade and Investment Partnership.

"There is no text … to review yet. USMEF's position on each of those agreements will depend on the final outcome of negotiations," communications director Joe Schuele told Cargo Business News. "The statement below simply says that the TPP and TTIP hold great potential for U.S. meat exports. Whether that potential is fulfilled will depend on the degree to which trade barriers are reduced or eliminated."

The trade pacts are meeting vociferous opposition from labor and environmental advocates who say corporations will be the agreements' lone beneficiaries. Critics also object to the fact that the negotiations are taking place behind closed doors.

In its statement, the USMEF said that for the talks "to fulfill their potential, our trade officials need the strongest possible hand when they are at the negotiating table. Our trading partners need to know that once these agreements are negotiated, they are not going to be changed as they go through the approval process in Congress. The Bipartisan Congressional Trade Priorities Act … will ensure that Congress continues to have a strong voice on trade while giving the administration the support it needs to achieve the best possible outcome for the U.S. red meat industry from the TPP and TTIP negotiations."

ILWU asks Long Beach City Council candidates to sign labor pledge

The International Longshore and Warehouse Union' Southern California division asked Long Beach city council candidates to sign a labor pledge prior to Sunday's endorsement interview sessions in San Pedro, according to LB Report.

Those who take the "Southern California District Council Labor Pledge" will agree to "unflinchingly support organized labor, collective bargaining and workers' rights," along with several other provisions, including support of public education over vouchers, the protection of laborers' rights and the environment in free trade agreements, and the protection of marriage choice, affirmative action, religious freedom, freedom of speech and a women's right to reproductive choice.

The pledge also asks that candidates take a stand to support specific issues, including the Medicare protection, the restoration of unemployment benefits and preschool program Head Start, a green jobs initiative, and food and product content labeling.

The many endorsement interview questions included queries about limited resources and layoffs, the benefits packages of council members and staff, the candidates' views on public protests and demonstrations, their solution for the growing homeless population, and their views on growing privatization.

For more of the LB Report story:

$41B Nicaraguan canal construction to begin in late 2014

Nicaragua's President Manuel Ortega announced that construction on the planned $41 billion Nicaraguan inter-oceanic canal, which might be a global trade game changer, will start in December 2014.

"The Nicaraguan government and HKND Group are pleased to confirm that canal construction work will begin as planned in December 2014," said President Manuel Ortega on Saturday and Chinese businessman Wang Jing in a statement. Wang Jing's group, the Beijing Interoceanic Canal Investment Management Co., will dig and ultimately run the waterway.

Ortega awarded the Chinese group the rights to manage the future shipping channel for 50 years, with the possibility to renew the contract for another 50.

The gargantuan $41 billion undertaking would connect the Pacific and Atlantic Oceans to create a canal that would compete for business with the expanded Panama Canal. The project includes an oil pipeline, an overland route, two deep-water ports, two airports and duty-free zones.

Feasibility studies for the massive project are underway, but it is not yet known how the prospective canal might be built in mechanical and logistical terms.

For more of The Nation story:

U.S. Appeals Court: Apple did not violate Google patent

The U.S. Court of Appeals for the Federal Circuit upheld a decision by the International Trade Commission in April that Apple did not violate a Google patent, owned by Google unit Motorola Mobility, to make its iPhones.

This is one of dozens of smartphone industry lawsuits on several continents as Apple phones and those with Google Android software compete for market share.

For more of the Reuters story:


Tuesday, January 14, 2014

Top Story

Dispute over Panama Canal overruns rages on

The building consortium working on the Panama Canal renovation said it will need more money than the Panama Canal Authority is offering to continue the waterway expansion, as the tussle over $1.6 billion in cost overruns threatens to delay its 2015 completion.

The consortium, led by Spanish construction firm Sacyr and including Italy's Salini Impregilo, said it would continue building a third set of locks if the canal authority comes up with $400 million in addition to the $100 million previously offered.

Impregilo made a separate proposal last week asking for $1.5 billion, which was rejected by the authority's administrator, Jorge Quijano, who said negotiations with a single company were outside the contract.

On Dec. 31, the construction group threatened to stop work on the $5.25 billion expansion project within 21 days if more funds weren't forthcoming. The companies are due to build locks on both sides of the 50-mile canal, shortening sailing times from the U.S. to Asia and potentially reducing transport costs.

The canal authority said last week that the companies must match their $100 million contribution, which they have so far refused to do. The canal said it would give the group more time to repay $83 million it owes in addition to providing $200 million to keep the canal expansion on track. Quijano said the consortium must also rehire workers that have been fired during the dispute and end its threats to stop work this month.

The administrator said that the canal has a "Plan B" if the group backs out of the contract, without providing details. Impregilo called the idea of an alternative "absurd" and said it could result in a delay of up to three years.

"It will be necessary, then, to find someone to explain to the Panamanian citizens that, in addition to not recovering the lost revenues from the lack of a shipping channel, they will also have to pay for the damages ruled against them by the arbitration," Impregilo said.

Panama President Ricardo Martinelli and Spain's Public Works Minister Ana Pastor have been trying to broker a solution to the standoff.

"We've worked to find a solution to this conflict and we're confident that it will be resolved," Pastor said in an e-mailed statement from Panama's presidential palace.

Each side has blamed the other for the added costs. The canal authority claimed the business consortium was unjustly trying to force it to pay by threatening to halt work.

According to ABC News, the Grupo Unidos por el Canal consortium has said that unforeseen problems with the quality of the material supposed to be used to make cement triggered huge overruns, and blamed the canal authority for conducting substandard geological studies.

For more of the Bloomberg story:

Evergreen charters 10 new container ships

Evergreen Line recently signed charter agreements with two for a total of 10 new 14,000-TEU container ships. Costamare will deliver 5 of the vessels to the shipping line in 2016, and Shoei Kisen Kaisha will deliver 5 vessels in 2017.

The ten newbuildings will replace older, existing chartered vessels, and are timed to arrive as those current charters expire so that Evergreen's overall operating tonnage will not increase.

The fleet renewal is meant to help the company gain market share and reduce unit costs.

The ten ships will feature fuel saving technology, and will consume less fuel than ships of comparable size built before 2010.

Longshoremen at Port of Baltimore reject contract

On Monday the dockworkers of International Longshoremen's Association Local 333 rejected what has been called a "best and final" contract offer from the Port of Baltimore, according to ILA officials.

No strike has been called, and union leaders will continue talks with the Steamship Trade Association, which represents the port, leading up to Friday's contract deadline.

"We have to continue to work, which we're going to do productively, safely, efficiently and with quality service to our customers," said Riker "Rocky" McKenzie, the union's president. "We want management to sit at the table with us and bargain with us."

The contract at issue covers automobiles, forest products and other breakbulk cargo, as well as work on cruise ships. It does not cover containers, which are included in the master contract agreed to last year for the whole East Coast.

The union local, Baltimore's largest, conducted a three-day strike in October that effectively shut down the port. The strike ended when a federal arbitrator deemed it invalid, citing the master contract's no-strike provision, and started a 90-day "cooling off" period for negotiations to continue. That cooling-off period ends Friday.

Michael Angelos, president of the Steamship Trade Association, said he was shocked that the terms of the latest offer, proposed on Dec. 31, were not accepted. He said dockworkers covered under the contract would see a 45 percent increase in wages over the course of the six-year contract. Over six years, a junior longshoremen working automobiles could see his pay double, from $16 an hour to $32 an hour.

McKenzie made no comment on the propose contract, saying union leaders will meet with management again on Tuesday and will hold another membership meeting on Thursday, before Friday's deadline.

For more of the Baltimore Sun story:

Hapag-Lloyd in talks to buy CSAV

German shipping group Hapag-Lloyd is poised to make a deal to buy Chilean shipping line Compania Süd Americana de Vapores (CSAV), which has a market capitalization of $845 million, according to German newspaper Die Welt.

"We want to reach an agreement by the end of January," a Hapag-Lloyd manager told Die Welt, according to its Monday edition.

CSAV reportedly verified in December that it was in merger talks with Hapag-Lloyd, as it struggles with losses caused by low freight rates, high fuel prices and pricey leases.

Under the proposed agreement, CSAV will take a 30 percent stake in Hapag-Lloyd, the newspaper reported. The story said that it was currently unclear if CSAV's 54 vessels would be part of the transaction or whether they will just be leased to the Hapag-Lloyd, which has 152 ships on its own.

Earlier this year, the owners of unlisted Hapag-Lloyd called off a planned merger with rival Hamburg-Süd because terms could not be agreed.

For more of the Reuters story:

Nippon Yusen fined for antitrust violation

Nippon Yusen K.K., Japan's largest shipping line, fell the most in 10 weeks in the Tokyo stock market after revealing it was fined $129 million by the Japan Fair Trade Commission.

Shares of Kawasaki Kisen Kaisha, Japan's third-largest shipping line, also dropped after the company announced that it had received a notice from the commission about a fine.

The commission may fine five shipping lines a total of $212 million, according to Jiji Press. Japanese antitrust regulators raided the offices of Nippon Yusen, Kawasaki Kisen and three other shipping lines in September 2013 for a possible violation of an anti-monopoly act involving price-fixing.

For more of the Bloomberg story:


Wednesday, January 15, 2014

Top Story

Port of Oakland hires new maritime director

The Port of Oakland has hired shipping industry veteran John C. Driscoll as its new Director of Maritime, according to an email from port director Chris Lytle to port constituents.

Lytle reported that the Oakland Board of Port Commissioners is expected to confirm the appointment at their next board meeting on January 23.

Driscoll has more than 30 years of global maritime industry experience, serving most recently as vice president of export sales at CMA CGM's America division.

"Over the next several years, the port will be facing major challenges and opportunities as we focus on our top priorities including growing our maritime business and completing the Oakland Army Base redevelopment project," said Lytle. "We believe that John's expertise in the ocean carrier industry will help maintain the Port of Oakland's position as one of the nation's busiest container ports and its significance as a global gateway."

The new maritime director will be responsible for building and growing the Port of Oakland's maritime business through efficient operations, stakeholder engagement and strategic planning, Lytle said. He will oversee a full range of maritime operations including administration, finance, customer service, planning and development, and seaport security.

Driscoll started his career in 1980 at Sea-Land Service, serving in a range of sales and operations positions with the line's Atlantic Division, according to a port statement. In 1999, he served as the general manager of sales and customer service for Central America until Maersk acquired Sea-land and he assumed general management responsibility for their business in Costa Rica and Nicaragua.

After Maersk's purchase of P&O Nedlloyd in 2005, Driscoll assumed country responsibility for Brazil, integrating an organization with over a billion dollars in revenue and 550 employees. In late 2005, he moved to his most recent executive position with French-owned CMA-CGM.

John Driscoll's first day on the job is expected to be January 27.

CMA CGM/Maersk/APL/OOCL unite on Asia - Indian Subcontinent trades

Major container lines CMA CGM, Maersk, APL and OOCL are partnering to deliver three existing Far East-to-Indian Subcontinent services starting February 2014, according to a statement from French carrier CMA CGM.

The slot sharing agreement, which also includes Emirates Shipping Line, Hamburg Süd and Regional Container Lines, will deploy 18 ships with a total capacity of approximately 17,500 TEUs on the three Far East-Indian Subcontinent services, the statement said.

The network will offer 3 sailings per week, and includes Korea, China, Malaysia, Singapore, Sri Lanka, India and Pakistan calls. According to CMA CGM, the agreement will minimize route duplication and offer faster transit times on this trade.

The current CIMEX 2 service will be upgraded as follows:

CIMEX 2-N (North Loop operated by CMA CGM and Maersk Line)
Tianjin - Dalian - Qingdao - Kwangyang - Busan - Ningbo - Hong Kong - Singapore - Tanjung Pelepas - Colombo - Pipavav - Nhava Sheva -Port Qasim - Singapore - Tianjin

CIMEX 2-C (Central Loop - Hamburg Süd, OOCL and Regional Container Lines)
Shanghai - Ningbo - Xiamen - Hong Kong - Singapore - Colombo - Nhava Sheva - Pipavav - Port Kelang - Singapore - Hong Kong - Shanghai

CIMEX 2-S (South Loop - APL, Emirates Shipping Line and OOCL)
Nansha - Chiwan - Hong Kong - Singapore - Colombo - Nhava Sheva - Pipavav -Colombo -Port Kelang - Singapore - Nansha

Pacific International Lines to offer Asia-PNW service through Port of Seattle

Pacific International Lines will start calling Terminal 30 at the Port of Seattle in February, as part of an existing service, according to a port statement.

PIL's new Asia Pacific Northwest service will partner with an existing joint service offered by China Shipping Container Lines and United Arab Shipping Company, the statement said.

The service will offer the following port rotation: Nansha - Hong Kong - Yantian - Ningbo - Shanghai - Pusan - Seattle - Vancouver - Nansha.

NJ Assembly votes to rescind container fees at Ports of NY/NJ

This week the New Jersey Assembly unanimously approved a bill to stop container fees imposed on ocean carriers by the Port Authority of New York and New Jersey, in a move to boost the competitiveness of the bi-state port complex.

"By imposing a tax on ocean carriers, the authority has driven up the cost of doing business locally and driven freight to other ports along the East Coast," said Senator Bob Gordon, who co-sponsored the bill. "This threatens the future success of the port and the hundreds of thousands of local jobs that people in our region depend on. We should be looking to make the port stronger and more competitive, and repealing this fee will go a long way toward doing that."

The bill would prohibit the Port Authority of New York and New Jersey from imposing a cargo facility charge on users, ocean common carriers, marine terminal operators, and rail carriers without a written mutual agreement. After being signed by the Gov. Chris Christie, the bill would take effect, but would remain inoperative until a similar bill is enacted by the New York state legislature, which has not yet introduced the measure.

The Port Authority of NY/NJ, the third largest port in the country, supports 280,000 jobs. In 2011, the Authority became the only port in the U.S. to impose a cargo facility charge on all marine cargo, including empty containers. The fee is $4.95 per-TEU, $9.90 per-FEU, and $1.11 per-unit for vehicle cargo.

After the fee was imposed, a number of carriers, including China Shipping Container Lines, Hanjin Shipping Company and United Arab Shipping Company, filed a complaint with the Federal Maritime Commission. The lines argued that container carriers should not be responsible for rail, road and security improvement projects, to which most of the fee revenue is funneled. The case is still pending.

For more of the Newsroom New Jersey story:

USCG airlifts injured crewman from cargo ship off Grays Harbor

The Coast Guard airlifted an injured crewman from the cargo ship Star Delta approximately 10 miles west of Grays Harbor, Wash.

The crewman, who had suffered a head injury in rough seas, was rescued Friday by a helicopter crew from Astoria, Ore., according to Petty Officer 3rd Class Jordan Akiyama. He was reportedly conscious when he was transferred to the care of medics and then transported to an Astoria hospital for further evaluation.

For more of the Seattle Post Intelligencer story:

Clarification of 1/13/2014 CB Newswire story

Cargo Business Newswire reported Monday, January 13, that a spokesman for the U.S. Meat Export Federation had "back-pedaled a bit" on its position on U.S. ratification of trans-Pacific and trans-Atlantic free-trade pacts.

The "back-pedal" characterization was inaccurate, because fast-tracking presidential authority on negotiating the agreements and actual ratification of the accords are separate issues.

The USMEF supports fast-tracking authorization legislation and is withholding judgment on actual ratification of the agreements until their details are ironed out and made public, the spokesman, communications director Joe Schuele, reiterated Tuesday.

Revised story link:


Thursday, January 16, 2013

Top Story

YRC reaches tentative agreement with teamsters

With a looming $69.4 million debt payment due Feb. 15, Overland Park-based trucking giant YRC Worldwide announced it had reached a tentative agreement with the International Brotherhood of Teamsters on an extension of their collective bargaining agreement to March 2019.

"The outcome of this week's discussions is critical to the future of the company. The MOU extension is something our employees can have confidence is the best -- and only remaining -- path forward," said James Welch, chief executive officer of YRC Worldwide.

The trucking firm's debt payment deadline spurred Moody's to changed YRC's rating to negative while asserting "a favorable resolution prior to Feb. 15 remains within the realms of possibility."

The previous proposal had been voted on without reaching an agreement with the union. The trucking company said it would revise its proposal with two aims-to satisfy investors by including cost cutting measures and to protect the jobs of its 32,000 employees. The IBT represents about 26,000 YRC employees.

"The tentative agreement contains a number of revisions to the company's previous proposal which address concerns raised by the Teamsters leadership and its members," said YRC in its statement.

"Details of the revised proposal will be reviewed by local union officials at a 'two-person' meeting of local union officials to be held, Tuesday, January 21, 2014," the company said.

Puget Sound container ports file joint discussion agreement with FMC

Stopping short of proposing an actual merger, the Puget Sound container ports of Seattle and Tacoma have filed a joint discussion agreement with the Federal Maritime Commission in the face of what they described as "responding to unprecedented industry pressures."

The seven-page document the two Pacific Northwest port authorities filed outlines several points as to what they would discuss together, including: container facility planning, development; management, operational costs at container facilities; federal, state, local government cooperation, funding for transport infrastructure; container business rates of return on port-owned terminals, such as rates, tariffs, leases; port facility utilization; and expenditures of funds for the ports' container business.

The ports acknowledged the financial losses of global shipping lines, vessel overcapacity, and the subsequent consolidation of ports of call as factoring into their historic decision to discuss closer cooperation with each other.

"These discussions are aimed at increasing our collective market share and generating more container cargo moving through Puget Sound, the nation's third-largest container gateway. We value our responsibility to serve the citizens of Pierce and King counties-and the manufacturers and agricultural exporters throughout the state-to continue to support thousands of jobs and generate significant tax revenues to state and local governments," the ports said.

Discussions that would revolve around taking steps towards a merger of some sort, such as a joint port authority, would not be included in the current, proposed discussion agreement, according to the ports' statement.

"The agreement allows the two ports, with appropriate legal oversight, to share information about their respective operations, facilities and rates. Both port commissions agree that a change in governance, such as a merger, will not be part of this discussion and no subsequent outcomes are presupposed."

In early 2012, it was announced that the Grand Alliance of container-shipping lines would be moving approximately 400,000 TEUs worth of business from Seattle to Tacoma due in no small part to what was widely reported at the time to be more competitive rates at Tacoma.

The Port of Seattle promptly responded to their loss in container business to their neighbor with a statement that said "trading customers" encourages a "downward competitive spiral" for infrastructure investments in the state of Washington.

Debt-laden YRC in talks with Teamsters after initial offering voted down

Overland Park-based trucking giant YRC Worldwide is continuing talks with the International Brotherhood of Teamsters to revise contract provisions after workers voted down an initial agreement last week, according to a YRC statement.

The company said it plans to revise its proposal with two aims — to satisfy investors by including cost cutting measures and to protect the jobs of its 32,000 employees. The IBT represents about 26,000 YRC employees, according to the Kansas City Star, whose current contract expires in April 2015.

"It is clear the Teamsters understand the urgency of the current situation," said YRC Worldwide CEO James Welch in the statement. "Although the company must achieve operational costs savings in the agreement, we also understand that simply re-voting the same proposal is not an option."

The trucking firm faces a Feb. 15 deadline to pay $69.4 million in debt payments stemming from major acquisitions, the Star reports, and Moody's changed its rating to negative this week while asserting "a favorable resolution prior to Feb. 15 remains within the realms of possibility."

FMC grills G6 Alliance about East-West trades amendment

The Federal Maritime Commission approved a request to seek additional information from the ocean carriers of the G6 Alliance Agreement, regarding an amendment filed by the G6 that would extend their collaboration to all East-West trades.

On December 2, 2013, the G6 parties filed an amendment with the FMC to extend their cooperation to all major East-West trades. The G6 partners are American President Lines, Hapag Lloyd, Hyundai Merchant Marine, Mitsui O.S.K. Lines, Nippon Yusen Kaisha, and Orient Overseas Container Line.

"I have reviewed the proposed G6 Amendment and agree with the questions proposed by the commission," said FMC Commissioner William Doyle. "I also submitted questions related to the impact this amendment would have on consumers, the U.S.-flag international fleet, small businesses and third party interests such as terminals, vendors and bunker suppliers."

The additional information request halts the current 45-day statutory waiting period that started when the amendment was filed. Once the carriers submit "complete and adequate" responses, a new 45-day waiting period will begin.

Currently, the agreement authorizes G6 lines to share vessel space with each other and also enter into cooperative working arrangements on the Asia-U.S. East Coast trades. Their amendment would extend their authorization to cover the major East-West trades, including Asia - U.S. West Coast, and Europe to all U.S. coasts.

Drewry: Carrier profitability driven by cost cutting and asset sales

Due to chronically low freight rates, carrier profitability is no longer tied to increasing container volume, but is instead tied to cost cutting measures boosted by the ongoing sale of non-core assets, according to Drewry Maritime Research.

Although ten GRI attempts were made last year on the Asia-North Europe trade, average spot rates were still about $450 per-FEU lower than January 2013 levels, according to the latest quarterly issue of Drewry's Container Forecaster.

Shipping lines reportedly handled capacity well in the headhaul East-West trades last year, and in October operational capacity had risen by only 0.6 percent year-over-year. But even though carriers posted load factors of around 90 percent throughout 2013, freight rates plunged on the Asia-Europe trade to well below break-even levels in June and October.

Many carriers reported higher volume in 2013, but a third quarter industry EBIT margin of 0.9 percent (excluding the top performers Maersk and CMA CGM), Drewry says, proves that carriers can't depend on revenue or higher loads to secure future profitability.

The report notes that the industry has been given false hope by short-term GRI successes, such as the mid-December hike in the Asia-Europe trade, pointing out that many 2014 contracts have been signed on that route at rate levels that are $300 to $700 per-FEU lower than those signed in 2013.

The sale of non-core assets and cost cutting is a strategy that has been used by many shipping lines, which are falling back to core businesses to generate cash flow. Drewry forecasts that the start of P3 alliance in the second quarter of 2014 will be a game changer in this sense for the three largest lines in terms of increased cost savings.

The report says that the day of the independent operator is over. Approximately 56 ships of at least 10,000 TEUs are slotted for 2014 delivery, 52 for 2015, with more orders pending — creating an enormous challenge for a shipping industry already contending with vessel glut. The researchers say operational alliances and vessel sharing agreements on all trade routes will increase out of necessity.

"The industry's major players are continuing to adapt to a new era in the container industry, characterized by too many ships and cargo volumes on many trade lanes that refuse to live up to previous expectations," said Neil Dekker, head of container research at Drewry. "Some of their strategies are sound and we have highlighted for some time that the formation of new operating alliances are essential if the industry is to stabilize."

Long Beach harbor commission approves two executive positions

The Long Beach Board of Harbor Commissioners filled two executive positions at the port this week, appointing Richard Cameron as the port's managing director of Environmental Affairs and Planning, and Suzanne Plezia as acting director of construction management.

Cameron will manage the port's Green Port Policy, San Pedro Bay Ports Clean Air Action Plan and other environmental initiatives.

Plezia, who replaces recently retired Gary Cardamone, will oversee construction management, including the port's capital improvement program.

The start date for both appointments is Jan. 25.

For more of the Press-Telegram story:

Thick ice crippling Great Lakes shipping

As thick ice stalls Great Lakes cargo lines trying to get to steel mills and factories before key routes are closed for the winter, Coast Guard icebreakers are having an unusually hard time cutting through it.

"It really impacts the Great Lakes region and really the global economy," said Mike Davanzo, captain of USCG icebreaker Mackinaw.

One freighter got so trapped in the ice during early subzero temperatures that it took the Mackinaw 17 hours to free it.

Like most icebreakers, the 3,500-ton Mackinaw uses its weight as a battering ram to break the ice. The ship has another trick, according to Ensign Michael Cooper, who manipulates the ship's propulsion system to churn up the ice like a blender, creating a path wide enough for freighters. He says the unusual thickness of the ice made for a challenging few days.

"When you're getting reports from a range finder saying you're six feet away from a 1,000-foot vessel, you get pretty nervous," he said.

Although nine Coast Guard icebreakers will be out on the Great Lakes all winter, weather forecasts indicate that most of the shipping channels will be iced over until late March.

For more of the CBS News story:

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