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Summary for January 14, 2013 - January 18, 2013:
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Monday, January 14, 2013 Top StoryCargill breaks with other Northwest grain terminal owners, in secret talks with ILWU
A separate contract between Cargill and the ILWU could weaken the efforts of the other three terminal owners to force the union into permanent concessions. The owners' coalition, now comprised of United Grain Corp., Columbia Grain Inc. and Louis Dreyfus Commodities, has been forcing the dockworkers at four grain terminals in Portland, Seattle and Vancouver to work under contract terms that its members already voted to reject. Cargill's Temco has allowed the longshoremen work under the terms of the expired contract that workers prefer. Cargill attorney Felix Ricco referred The Oregonian to company spokesman Mark Klein. "Afraid we're going to have to stay with the policy of not commenting about ongoing negotiations," Klein said in an email. The ILWU had no comment. A spokesman for the Pacific Northwest Grain Handlers Association, which is negotiating on behalf of the owner's coalition, said they were not aware of the Cargill-ILWU talks. When the talks between the ILWU and the Grain Handlers Association stalled before the New Year, the union members voted to reject the employers' final offer over numerous work-rule changes. The ILWU chose to have their members continue working under the imposed work rules "but seek further bargaining." The longshoremen have been working without a contract since September 30 of this year. A port lockout or strike would impede or stop the export of billions of dollars worth of U.S. agricultural products. USMX and ILA labor talks to restart Tuesday on East CoastThe United States Maritime Alliance and the International Longshoremen's Association will resume contract talks Tuesday for the first time since the second extension of the deadline from December 28 to February 6. The talks concern the terms of the contract for 15,000 dockworkers at 14 ports on the U.S. East and Gulf coasts. A prolonged strike could be devastating to the movement of goods in the U.S., costing billions. The two sides made the decision to continue with discussions after the USMX capitulated regarding container royalties, which was a major sticking point for the union. They still need to come to an agreement on the details of the fee and other topics still need to be resolved. Negotiators for the ILA and the USMX will meet for three days at the Stockton Seaview Hotel and Golf Club in Galloway Township, according to ILA spokesman Jim McNamara. In the meantime, subsidiary agreements regarding local issues between local union branches and individual ports are also being negotiated. On Wednesday, regional talks broke down between the New York Shipping Association, representing the Port of New York and New Jersey, and a dozen ILA locals that represent the over 3,000 longshoremen who work there. The local ILA leaders walked out of talks, "very angry" about demands made for proposed changes in work rules by negotiator Joseph Curto, who is the president of the regional New York Shipping Association as well as being a national negotiator for the United States Maritime Alliance. McNamara said he hopes that the informal contact at the national negotiations in Galloway this week might prompt a return to regional talks. For more of the Star-Ledger story: nj.com Supreme Court to hear trucker's challenge to LA Clean Truck ProgramThe Supreme Court said Friday it will hear the trucking industry's case challenging the authority of the Port of Los Angeles to limit the pollution emitted by trucks, as it currently requires through its Clean Truck Program. The court said it would hear American Trucking Association vs. City of Los Angeles beginning in spring 2013 and will rule by July. The Port of Los Angeles mandates that truckers enter into agreements with the port authority that includes metrics regarding the maintenance of trucks, off-street parking and posted signs that feature identifying information. One contended rule mandates that all drivers become employees of trucking companies, rather than work as contractors. The American Trucking Association has sued over the L.A. rules, contending that the local regulations violate federal law that deregulates motor carriers. One provision of the federal law blocks, or preempts, any state or local measure that is "related to the price, route or service of any motor carrier." In the past, the Supreme Court has given the federal law, which was intended to speed the free flow of trucks and other shipping vehicles, a broad interpretation. For more of the L.A. Times story: latimes.com Mediterranean Shipping Company to call at Port of TampaMediterranean Shipping Company, the second largest global container carrier, will add the Port of Tampa to their worldwide cargo service, according to a statement released by the port last week. MSC will connect the port to the South American west coast, the Middle East, and through the Suez Canal to the Indian subcontinent. "MSC covers the entire world," said Ports America executive Doug Wray. "This effectively opens virtually every trade lane to Tampa." Ports America, which runs Tampa's shipping terminals, and port officials have spent six years trying to court MSC. In the long term, the deal has the potential to transform the port, which currently has a nonexistent cargo sector, in future decades. Companies could build, relocate or expand their distribution or manufacturing centers in Tampa because of the draw of a global port, according to Jim Kruse, the director for the Center for Ports and Waterways at the Texas A&M Transportation Institute. "It's hard to get a distribution center set up in your area if you can't guarantee quick and efficient service to the world's markets," Kruse said. "This may go beyond just the immediate effect. It may spur the development of business you wouldn't otherwise get in that area." For more of the Tampa Bay Times story: tampabay.com 8 missing after boat sinks off MalaysiaA boat carrying a group of illegal Indonesian migrant workers sank on Monday as it was smuggling the group out of Malaysia. So far 41 people have been rescued and 8 are confirmed missing, according to the Maritime Enforcement Agency, after the boat capsized near the Malaysian state of Johor. The boat was thought to have been carrying 50 people, although the exact number is not known. "The boat was overloaded, and the seas were rough so it sank," a maritime official said, adding that search and rescue efforts were ongoing. For more of the Australian story: theaustralian.com.au
Tuesday, January 15, 2013 Top StoryReport: U.S. faces shortage of skilled manufacturing workers
Along with housing, global manufacturing has shown a significant improvement over the past year. An international study by McKinsey & Company forecasts that 95 million skilled workers will be needed by 2020, while also predicting a surplus of low-skill workers. According to Bloomberg, the numbers are smaller than they seem, because non-manufacturing jobs in manufacturing plants, such as shipping and administrative positions, are included in the data. Many of these jobs, although technically classified as open, will never be filled as many positions were eliminated as a cost-saving measure. A true lack of skilled workers would trigger a wage increase to attract qualified individuals, but the average hourly wage for U.S. manufacturing jobs has stayed fairly stagnant for three years, according to the Bureau of Labor Statistics. As of July 2012, the rate was $24. There are several reasons why the wages remain low. The sluggish economy means companies don't always fill advertised vacancies, because they want to run as lean as possible. Management tries to make do with existing employees, offering them more overtime. Training is key. A recent survey by ThomasNet.com indicates that about half of 1,600 manufacturing firms queried were having difficulty filling open positions for skilled labor. Even experienced workers need training to work in a manufacturing plant. Unfortunately, many employers cut training programs during the economic downturn, and have yet to reinstate them. "The trades are not just about swinging a hammer any more; they involve applying brainpower and advanced education," said Ira Wolfe, owner of Success Performance Solutions. Working in the trades is no longer just about a strong back—it's about combining substantive technical training with physical labor. The average age of a highly skilled U.S. manufacturing worker is 56. The answer to the demographic problem could be to recruit and train the younger generation to fill the jobs that Baby Boomers will vacate in the next decade. For more of the Bloomberg story: businessweek.com For more of the Forbes story: forbes.com Container volume at Port of Virginia up 10 percent in 20122012 was the second best year for cargo at the Port of Virginia, which handled more than 2.1 million TEUs, an increase of 10 percent compared to 2011. The 2012 cargo volume is only 22,000 TEUs less than Virginia's highest cargo year ever in 2007. The news came on the same day a legislative audit determined the Port of Virginia is poised to generate a net profit over the next five years. Florida officials have been frustrated over the sluggish growth of the port, which is the third largest on the East Coast, and are currently considering the bids of private companies to handle port terminal operations. For more of the WVEC.com story: wvec.com State committee questions compensation of Virginia port executiveIn addition to considering whether Hampton Roads port operations should be privatized, the Virginia House Appropriations Committee is looking at the pay of port executive Joe Dorto, president and CEO of Virginia International Terminals, the current state-created, nonprofit terminal operator of the port. Dorto was given substantive bonuses despite five years of losses at the port. He made $754,330 in 2012, including a $192,335 bonus, according to a recent report from the Joint Legislative Audit and Review Commission. He was also given a $488,990 bonus in 2010. "Typically, when you have very good operating years, you receive substantial bonuses," said Del. Joe May, R-Loudoun County. "And when you don't have good operating years, you don't." JLARC investigators discovered that Dorto's base salary is 47 percent higher than the highest-paid public port agency director in the United States. Overall, JLARC concluded that despite its recent operating losses, the port could become profitable over the next two years, disagreeing with a statement by Transportation Secretary Sean Connaughton last fall that the port is "financially unsustainable." For more of the Virginia-Pilot story: hamptonroads.com BNSF agrees to change personnel policies in accordance with OSHA rulesBNSF signed an agreement with the U.S. government to revise several personnel policies that the Occupational Safety and Health Administration alleged violated whistleblower provisions of the Federal Railroad Safety Act and discouraged workers from reporting work injuries, according to an OSHA statement. Section 20109 of the FRSA protects railroad workers from retaliation for reporting violations of federal laws and regulations related to railroad safety and security. BNSF is also making settlement offers in 36 cases to employees who filed OSHA whistleblower complaints saying they were harmed by one or more of the company's previous policies. Pilot of oil tanker switched course right before hitting Bay BridgePrior to hitting the Bay Bridge last week, the pilot of the oil tanker Overseas Reymar changed course in a hazardous move that forced the vessel into a difficult in the strong current conditions that existed around the bridge towers. The new information indicates that pilot error was the cause of the Jan. 7 incident, although thick fog, a faulty beacon and dangerous currents also played a hand in the accident that raised new concerns about oil tanker safety in the bay. It is unknown why pilot Guy Kleess changed course as the vessel neared the bridge. With limited visibility, Kleess tried to sail between two towers near the middle of the bridge, and then switched in the middle of the act to go through a different opening. "He originally reported to go through Charlie-Delta and then changed," said Captain Peter McIsaac, president of the San Francisco Bar Pilots. "The Coast Guard is doing a full investigation. I can't speculate why." The Overseas Reymar hit the "E" tower at 11:18 a.m., causing a large scrape down the ship's hull and several million dollars damage to the bridge and the ship. The ship's pilot, captain and crew, passed drug and alcohol tests, according to the Coast Guard. For more of the San Jose Mercury News story: mercurynews.com
Wednesday, January 16, 2013 Top StoryHong-Kong-Los Angeles container rate benchmark rose 14 percent this week
This means the price on the Hong Kong-Los Angeles trade route is about 12 percent lower than 2012's highest rate, achieved in August. "Cargo demand and carrier load factors have strengthened in the run up to Chinese New Year," explained Martin Dixon, Drewry's research manager for freight rate benchmarking. "The wild card remains the threat of strike action at U.S. East Coast and Gulf Coast ports, which is also serving to strengthen rates." Drewry's Transpacific Eastbound Freight Rate Index, which averages rates between Far East Asia and North America, rose 8 percent at the end of the year to $3,357 per-FEU. Due to overcapacity, the increase in spot rates may be unsustainable, said Drewry. "The US East Coast and Gulf Coast strike threat notwithstanding, we expect spot rates to soften following Chinese New Year," added Dixon. "However, we caution that shippers should expect some increase in their 2012-13 contract rates on the eastbound transpacific, given the stronger state of the market compared to last year." Container volume down slightly at Port of Los AngelesCargo handled at the Port of Los Angeles dropped marginally in 2012, as the port recovered from the recession and faced the biggest dockworker strike in 10 years. Los Angeles handled 6.14 million TEUs in 2012, compared to 6.18 TEUs in 2011. Imports were up by about 25,000 TEUs year over year, while exports fell by about 66,000 TEUs. Overall, the port posted a 1.7 percent increase in volume compared to 2011, handling 8 million containers, wholly due to the number of empty containers handled. 2012 numbers for the Port of Long Beach will be released on Wednesday. For more of the Daily News story: dailynews.com Report: Economic consequences of aging U.S. infrastructureFixing our aging roads, bridges, ports and waterways is key to protecting 3.5 million jobs, according to a new report from the American Society of Civil Engineers. Between 2013 and 2020, investment needs across key infrastructure sectors totaled $2.75 trillion, compared to planned spending of about $1.66 trillion. This equals an infrastructure investment gap of $1.1 trillion, according to ASCE's "Failure to Act: The Impact of Current Infrastructure Investment on America's Economic Growth." Report: Emerging economies look good despite economic slowdownSluggish 2012 growth in the global economy has slowed emerging markets, but not the strong interest of investors, manufacturers and logistics executives in the fiscal potential of these countries, according to a new report. Forty-five emerging markets are covered in the "2013 Agility Emerging Markets Logistics Index," released by Transport Intelligence and logistics company Agility. The 45 markets grew at an average rate of 4.4 percent in 2012, compared to U.S. economic growth at 2.2 percent. EU growth contracted 0.2 percent last year. The index ranked Brazil (3) and Mexico (9) as the top-ranking emerging markets countries from the Americas. Others in the top 45 were Chile (11), Argentina (19), Uruguay (21), Peru (24), Venezuela (35), Ecuador (37), Paraguay (40) and Bolivia (44). Regarding container freight moving from the US or the EU to emerging markets, the EU-Brazil lane was the biggest volume gainer in 2012, the report said. Somali pirate attacks drop to lowest rate since 2007Somali pirate attacks on the shipping industry in 2012 dropped to lowest rate since 2007, due to the increased use of naval intervention and armed guards, according to the International Maritime Bureau. Attacks dropped to 75 in 2012 from 237 in 2011, the IMB said. Even though the number of ships hijacked fell from 50 percent to 14 percent, the bureau warned the danger of attacks remains from pirates wielding automatic weapons and grenades. Approximately 42,250 vessels a year, including 20 percent of crude oil traded, use the trade route where Somali pirates operate, costing almost $7 billion in 2011. "The continued presence of navies is vital to ensuring that Somali piracy remains low," IMB director Pottengal Mukundan said in the report. "This progress could easily be reversed if naval vessels were withdrawn from the area." For more of the Bloomberg story: bloomberg.com
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Cargill, which removed itself from a coalition of three other terminal owners, is having secret talks with the International Longshore and Warehouse Union, a company spokesman said Friday.
Up to 600,000 U.S. manufacturing jobs remain unfilled because of the lack of skilled workers, says a recent report from the Manufacturing Institute.
The Hong Kong-Los Angeles container rate benchmark from Drewry Maritime Research rose 14 percent to $2,524 per-FEU this week. That's about half of the $600 per-FEU increase sought by members the Transpacific Stabilization Agreement.