Cargo Business Newswire ArchivesSummary for January 18 through January 22, 2016:
Monday, January 18, 2016
Mega-Ships: Ready for the New Normal?
By William DiBenedetto, CBN Feature Editor
The questions for port operators and for ship operators go like this: are mega-ships too large for most ports? And will ports ever be large enough in terms of terminal space, equipment and infrastructure to handle the mega-ships?
Even though these issues have been around for some time, there are still no clear-cut answers as mega-ships come on line in large numbers over the next two years.
Shipping lines have taken delivery of 20 mega-ships with a capacity of more than 18,000 TEUs each and another 52 are on order, according to the Organization for Economic Cooperation and Development (OECD). The largest ship delivered so far has a capacity of 19,200 TEUs, but vessels with capacity up to 21,100 TEUs have been ordered and will be in service by 2017.
This generation of huge, highly efficient mega-ships is credited with cutting the cost of shipping due to economies of scale and for lowering greenhouse gas emissions. But the OECD has questioned whether mega-ships are contributing to unsustainable overcapacity and imposing unintended costs on shippers, ports, freight forwarders, logistics firms and insurers.
"The growth of containerized seaborne trade is no longer in line with the growth of the world container fleet," Olaf Merk, administrator of ports and shipping at the OECD's International Transport Forum, said last year in an economic policy article for OECD Insights. "We found a disconnect between what is going on in the boardrooms of shipping lines and the real world."
According to industry analyst Drewry, West Coast ports have much work to do to improve productivity before being in a position to see mega-ships call on "anything other than an ad-hoc basis."
In a recent weekly market analysis, Drewry said: "In truth, the arrival of one 18,000 TEU ship, which may not even be full, won't meaningfully test the West Coast terminals' ability to deal with such ships, but at the very least it raises the question of what the West Coast ports need to do to get there."
The analyst said that despite productivity solutions such as terminal automation and running ports as 24/7 operations, their implementation would demand more flexibility from union dockworkers, which he claimed "seems a long way off."
According to Drewry, letting too many mega-ships call at West Coast ports before they are fully ready could worsen productivity and add days to the load and discharge time at terminals. This would undermine the West Coast ports' competitiveness compared to the U.S. East Coast ports, which are soon likely to enjoy the benefits of the Panama Canal's expansion that is expected to almost triple the maximum size of vessels being able to call there.
The rise of the mega-ships is forcing ports to invest heavily to attract and handle the new megacarriers. Port channels must be dredged to greater depths and docks must be raised and strengthened to handle the increased forces when a mega-ship is tied up. But the biggest problem comes from the scramble to unload a mega-ship quickly — the average turnaround time for a container ship is now just 1 day, and less in Asia. The arrival of fewer vessels but with larger numbers of containers is creating intense peak time pressure on ports.
Expanding infrastructure and upgrading ports to handle the bigger ships could amount to roughly $400 million in additional annual transportation costs, the OECD said.
The Port of Los Angeles has a $510 million project underway to expand its cargo-handling capacity at the TraPac terminal. Two Long Beach port terminals are in the midst of a $1.3 billion expansion that will create one of the country's most automated docks. A separate $1.3 billion plan in Long Beach will replace the Gerald Desmond Bridge, which is too low for the mega-ships expected to arrive over the next five years.
On the U.S. East Coast, port operators are also modernizing. The Georgia Ports Authority, which owns the Port of Savannah, is spending about $1.5 billion in the next decade to improve crane operations, storage facilities and other infrastructure. The state of Georgia is spending $120 million more to improve roads near the port this year. And the Port Authority of New York and New Jersey has undertaken a $1 billion project to raise the Bayonne Bridge, which connects Staten Island and New Jersey, in order to accommodate the height of the super-sized ships.
Mega-ships also add extra expense when in port: they stay, on average, 20 percent longer in ports than conventional ships, requiring port authorities to spend more time and provide more services to accommodate the longer-staying vessels, Merk said. Insuring and salvaging unprecedented loads of cargo is another strain for operators. And congestion at ports is already rising as trucks and trains scramble to load and offload tens of thousands of containers at a time.
Still, Merk said the mega-ships — which account for about an eighth of the total global shipping fleet — are on track to become the "new normal" for many major ports around the world. "One thing is sure: this will lead us to a decade of port gridlock if nothing is done," he wrote.
Amazon registers with FMC as ocean forwarder
Amazon.com is now eyeing the high seas as it strives to conquer the logistics of package delivery, according to The Wall Street Journal.
The Seattle retailer registered itself with a federal agency, the first phase of a process that would allow the e-commerce giant to serve as an intermediary for suppliers shipping merchandise to or from the U.S.
Flexport Inc., a startup that offers similar services and discovered the registration, said Chinese companies are most likely to work with Amazon to use freight forwarding, as the service is known.
Amazon registered with the Federal Maritime Commission using the name of a subsidiary, Beijing Century Joyo Courier Service Co., which is based in Beijing. The registration, which was filed in November, would potentially allow Amazon to begin helping to arrange cargo shipments into or out of the U.S. immediately, said Peter King, director of the Federal Maritime Commission’s bureau of enforcement.
For more of The Wall Street Journal story: blogs.wsj.com
2015 Port of Long Beach volume up 5.4 percent, L.A. up 2.1 percent
Propelled by rising cargo in the final two quarters of 2015, Southern California ports recovered from systemic congestion and cargo diversion in the first quarter. Long Beach topped 7 million TEUs during the year, a 5.4 year-over-year increase, and Los Angeles moved 8,160,457 TEUs, a 2.1 percent increase compared to 2014.
"We’re gratified to see the business growth — we worked diligently over these past 12 months to recover from a very challenging start to the year, resulting in record volume and productivity gains and the strong and steady return of diverted cargo," said Port of Long Beach CEO Jon Slangerup. "We credit terminal operators, labor, shipping lines, cargo owners and our local community with pulling together to turn things around."
The Port of Los Angeles moved a total of 8,160,457 Twenty-Foot Equivalent Units (TEUs) in 2015, a decrease of 2.1 percent compared to 2014. Current and historical data is available here
"I’m pleased that the Port of Los Angeles has surpassed the 8-million TEU threshold for the fifth time in our history," said Port of Los Angeles Executive Director Gene Seroka. "Despite the soft start to the year, our terminals, labor force and supply chain stakeholders rebounded strongly. With bigger ships and the ongoing work to increase supply chain efficiencies, we look forward to building on this momentum in 2016."
In December, the Port achieved 5.1 percent overall growth, compared to December 2014. Imports increased 7 percent to 296,002 TEUs, while exports fell 4.1 percent to 126,118 TEUs. In December, empties rose 9.5 percent to 174,328 TEUs.
In December 2015, total cargo volumes for the Port of Los Angeles were 626,276 TEUs, a decrease of 4.9 percent compared to the same period last year. December 2015 imports dropped 4.5 percent to 321,407 TEUs compared to the previous year. Exports fell 13.7 percent to 131,239 TEUs in December. A cargo terminal was offline for several weeks in December in order to install new software, which was the primary reason for the drop in December cargo.
For 2015, a total of 7,192,066 TEUs moved through Long Beach. Imports rose 3.1 percent to 3,625,263 TEUs, while exports dropped 4.9 percent to 1,525,560. Empty containers rose 20.2 percent to 2,041,243 TEUs. The strong dollar continues to favor imports and discourage exports, resulting in more empties being sent back overseas to be refilled with goods.
During July and August, Long Beach achieved record cargo volumes resulting in the Port’s biggest quarter in its history — more than 2 million TEUs moved through the Port in the third quarter.
Port of Long Beach CEO Slangerup will present information about the port’s 2015 accomplishments and plans for 2016 during the annual State of the Port address on Thursday, Jan. 21.
CMHI becomes the second largest shareholder of China’s Dalian Port
China Merchants Holdings announced that, on 12 January 2016, it would take a 21.05 stake in Dalian Port for approximately $555 million, making it the second largest shareholder for the East China port.
"The entering of a share subscription agreement, which allows CMHI to become the second largest shareholder of Dalian Port after the completion, is one of the key strategic investments for CMHI to further improve the layout of existing ports network and to position the company to become a global leading comprehensive port-service provider going forward," said Li Jianhong, chairman of the Board of Directors of CMHI. "Dalian Port, being a major shipping center in Northeast Asia and a hub in Northeast China, is of great strategic significance. The strategic and economic value of Dalian Port will gradually materialize, with, on one hand, the government’s plan of implementing measures to revitalize the economies of Northeastern region of China, and on the other hand, the establishment of China-Japan-South Korea Free Trade Area."
One of the flagship enterprises in the port industry in Liaoning province, Dalian Port has high tech infrastructure, operational technology and management, and is situated in a superior geographical location. Dalian Port also has a wide range of dedicated terminals, including a 450,000-ton crude oil terminal, a 400,000-ton ore terminal, a container terminal that can accommodate mega vessels, and an automobile terminal. There are currently 13 international direct lines calling at Dalian Port, covering and connecting to more than 160 countries and 300 terminals around the world.
Chemical fire blocks truck access to one side of Brazil's Santos port
Trucks carrying exports could not reach the Guaruja side of the Port of Santos in Brazil on Friday, one day after containers filled with chemicals caught fire and sent poisonous gas into the air.
A port spokeswoman said access would be restricted while firefighters put out the blaze that affected up to a dozen containers at the terminal operated by Localfrio logistics company.
The fire, which caused dozens of people to go to the hospital after breathing the noxious smoke, is considered under control, according to the port.
With trucks unable to reach the Guaruja side of the port, terminals there may have to rely on stocks, although some products are arriving by train.
Santos is Brazil's main commodities exporting port, but is still a few weeks away from receiving new crop soybeans to export. Brazil is the world's top exporter of soybeans, sugar and coffee and the No. 2 corn exporter.
Capitol Watch: FAST Act Promotes Innovation and Investment for Bright Future
By Anna Denecke, Associate, Blakey & Agnew, LLC
Congressional action this winter, resulting in a swift passage of the Fixing the America’s Surface Transportation (FAST) Act, was met with sighs of relief from transportation interests around the country. For the first time in nearly a decade, Washington was able to pass a long-term surface transportation bill, thereby guaranteeing stabile funding to the entities responsible for maintaining and improving our surface transportation.
Freight interests, in particular, had reason to pull out the streamers and pour the champagne. The legislation included $10.8 billion for investments in freight infrastructure, distributed over the next five years through a competitive grant approach and a formula program. The FAST Act also created the first-ever national multimodal freight policy and required the U.S. Department of Transportation identify a national multimodal freight network, inclusive of all modes of transport.
Freight, however, wasn’t the only area of focused investment and innovation in the FAST Act. The bill also establishes the National Surface Transportation and Innovative Finance Bureau, a one-stop shop for state and local governments in need of technical assistance, financing, or federal funding. An executive director, appointed by the Secretary of Transportation, will oversee the bureau and is authorized to pull staff and resources from other offices within the department.
The bureau will enable USDOT to coordinate among the modes to ensure expeditious and thorough consideration of freight projects. Staff will provide public-private partnership and NEPA expertise, as well as administer the Railroad Rehabilitation and Improvement Financing (RRIF) and Transportation Infrastructure Finance and Innovative Act (TIFIA) programs. Once established, the bureau will oversee the newly-created Nationally Significant Freight and Highway Projects competitive grant program.
In addition to the bureau, the FAST Act creates a new competitive grant program aimed at incentivizing the exploration of alternative user-based revenue mechanisms. The current revenue mechanism – a per-gallon gas and diesel tax – no longer sufficiently supports the Highway Trust Fund, due to declining spending power and increasing vehicle fuel efficiency.
The FAST Act’s Surface Transportation System Funding Alternatives program provides states and multi-state groups the opportunity to compete for grants that can go towards projects that demonstrate a user fee structure and have the ability to maintain the long-term financial health of the Highway Trust Fund. The Surface Transportation System Funding Alternatives program is funded at $15 million in FY16 and $20 million for the remaining four years of the bill.
The five-year surface transportation authorization bill also attempts to improve the environmental impact statement and permitting processes that often bog down large infrastructure projects. The FAST Act creates a Federal Permitting Improvement Steering Council comprised of an executive director appointed by the president and council members designated by heads of the federal agencies typically involved in infrastructure projects.
The steering council is charged with examining best practices for enhancing early stakeholder engagement, ensuring timely decisions, improving federal and non-federal governmental coordination, increasing transparency, reducing information collection requirements, and in other permitting and environmental process areas. Additionally, the council will develop recommended performance schedules, based on the average time it takes to complete an environmental review or authorization of a project.
Blakey & Agnew, LLC is a public affairs and communications consulting firm based in Washington, DC.
U.S. Coast Guard moves forward to acquire two new icebreakers
The U.S. Coast Guard announced a proposed acquisition timeline and requirements for two new heavy U.S. icebreakers that will cost up to $1 billion each, saying it would meet with interested companies during an industry day in March.
Coast Guard Commandant Admiral Paul Zukunft told an event hosted by the Center for Strategic and International Studies that notice was intended to get information from companies about their ability to build and develop icebreakers that would be in use for 40 years and to explore options such as leasing.
Key requirements for the new ships include the ability to break through ice with a thickness of at least 6 feet at a continuous speed of three knots, and the ability to break a single-pass channel through ice to a width of at least 83 feet.
The agency said the ships would also have to operate for at least 80 days without replenishment of food or fuel, and have a minimum range of 21,500 nautical miles at 12 kts in ice-free waters.
The Coast Guard said it had not finalized an acquisition strategy, but hoped to release a draft request for proposals in the first quarter of fiscal 2017, awarding a contract in the last quarter of fiscal 2018 or fiscal 2019.
Huntington Ingalls Industries, which built the newest U.S. icebreaker and delivered it in 1999, said it was "absolutely interested" in building icebreakers for the U.S. Coast Guard.
General Dynamics Corp, the other large U.S. military shipbuilder, has also expressed interest in the program, as have other shipyards, the Coast Guard said.
President Barack Obama in September called for the U.S. to accelerate plans to buy at least one new heavy icebreaker for the U.S. Arctic by 2020, instead of the previous goal of 2022. Each ship is likely to cost around $1 billion.
Melting sea ice in the region has increased traffic and could open the Arctic to more shipping, mining and oil drilling, increasing the potential for ships to be stuck in ice that still covers the region for much of the year.
Fast new GT USA container service connects Florida and Central America
The new Blue Stream service, operated by StreamLines, part of the Seatrade Group, will provide refrigerated and dry container service to and from GT USA’s cargo terminal at Port Canaveral, focusing on fresh produce and perishable cargoes. The Blue Stream service rotation employs five ships with 1300 TEU capacity and 250 reefer plugs, on a weekly rotation.
The new line will serve Central America to Port Canaveral in just three days and will offer the one of the fastest transit times between Florida and Europe, just 11 days. The service includes direct calls to the United Kingdom.
"We are excited about the opportunity to provide our signature world-class service to StreamLines and to be its U.S. port of call. The new Blue Stream service can showcase Port Canaveral as an ideal gateway, opening markets in Central America to Central Florida, and providing our local exporters the most efficient route to Europe," said Peter Richards, CEO of GT USA, and managing director and CEO of the Gulftainer Group, a privately owned, independent terminal operating and logistics company. "This will undoubtedly lead to even more growth in coming months for Canaveral Cargo Terminal, building Port Canaveral’s reputation as a key U.S. cargo port."
Blue Stream’s maiden call at GT USA’s Canaveral Cargo Terminal is expected on January 31 with the arrival of the M/V NORDEROOG. From Canaveral, the vessel will proceed directly to Rotterdam, Netherlands, with calls in Tilbury, United Kingdom, and Radicatel, France. After departing Europe, the schedule loop takes the vessels to the French West Indies ports of Fort de France, Martinique, Pointe a Pitre, Guadeloupe and Phillipsburg, St, Maarten. From St. Maarten, the vessels then proceed on to Moín, Costa Rica; Puerto Cortés, Honduras; and Santo Tomas, Guatemala and from there directly on to Port Canaveral.
EU investigates Belgium container terminal operators
The European Commission said it has opened an in-depth investigation into alleged state aid to two container terminal operators in Europe's second busiest port, Antwerp in Belgium.
The commission said concession agreements for PSA Antwerp NV and Antwerp Gateway NV contained a requirement for the handling of a minimum tonnage. The two did not reach this between 2009 and 2012, meaning they would have to pay compensation to the publicly-owned port authority.
However, the Antwerp Port Authority decided in 2013 to reduce the minimum tonnage retroactively, reducing the compensation to be paid by some 80 percent.
The commission said it received a complaint from a competitor and opened an investigation to determine whether a private investor would have acted in the same way to reduce the compensation due.
If not carried out on market terms, it would constitute state aid. The commission would have to determine whether to authorize such aid under rules allowing member states to grant state aid for certain public interest goods.
The concession contracts were concluded in 2004 for a period of 42 years related to the transhipment of containers in the Deurganck dock.
A worker was killed at a Port Tampa Bay site when a giant pile of sulfur collapsed on his front-end loader.
Hillsborough County Sheriff's Office spokesman Larry McKinnon told the press that the Gulf Coast Bulk Equipment employee was moving sulfur to a semitrailer at the Port Redwing site when the 30-foot pile collapsed.
Hillsborough County Fire Rescue spokeswoman Nacole Revette said the man, who wasn't immediately named, likely died from inhaling the sulfur, but no official cause of death has been released. She said firefighters had to work carefully to remove the body so they wouldn't cause another collapse.
The Occupational Safety and Health Administration will investigate.
The long-delayed expansion of the Panama Canal is now expected to be finished by May 2016, rather than April as previously announced, said Panamanian President Juan Carlos Varela in the new year.
In a speech directed to the citizens of Panama, Varela urged the Spanish-led consortium behind the expansion, Grupo Unidos por el Canal de Panama, to focus on completing the project and to leave legal disputes to the "competent authorities," according to Agence France-Presse.
The comments came after an adjudication board ordered the state-run Panama Canal Authority to award the consortium $17 million for budget overruns and extra labor costs.
"I am calling on the contractors for the expansion project to hold dialogue with the Panama Canal Authority, to allow work to be completed, to leave legal disputes in the hands of the competent authorities and to avoid mediatized differences that in no way help the image of the contractors," the Canal Authority and the Republic of Panama, AFP quoted Varela as saying.
The project is already behind schedule. Work started in 2007 and the goal was that the project would be completed by 2014, the centennial of the Panama Canal. The deadline was subsequently pushed back to April 2016, and now Varela’s recent comments indicate builders won’t finish the project until May. Some in the industry have speculated that the expansion may not open until the second half of 2016.
For more of the International Business Times story: www.ibtimes.com
China and Algeria to build $3.3B mega port
Algeria and China signed a $3.3 billion deal on Sunday to build a new center transshipment port in Cherchell, a seaside town in the province of Tipaza, Algeria.
The agreement was signed by officials from Algeria's Transport Ministry, China Harbour Engineering Company (CHEC) and China State Construction Engineering Corporation (CSCEC).
Under the deal, the two sides will create a consortium company to build the port, which will lie 55 miles west of capital city Algiers. The company is expected to be finalized in March 2016, with approval from the Council of State Shareholdings.
The mega port will feature 23 docks capable of processing 6.5 million TEUs and 26 million tons of goods per year.
According to forecasts by Algeria's Transport Ministry, port traffic in the country's central region is expected to hit 35 million tons or two million TEUs per-year by 2050.
The project is planned to be completed within seven years, and gradually put into service within four years with China's Shanghai Ports Group managing the port.
Bringing in Shanghai Port Group "would help driving international shipment traffic coming from Southeast Asia and other continents to pass from this Center Port, under transshipment process to continue sea transport to elsewhere, or use the Algerian highway and railway networks to carry shipments to Africa," said Algerian Transport Minister Boudjemaa Talai.
Wen Jingfei, CHEC representative at the signing ceremony, told Xinhua that this project is important for the whole Mediterranean region and Africa.
Kuehne + Nagel and Glaxo SmithKline signed an end-to-end global logistics partnership through 2020 that will see Kuehne + Nagel run the core business of transporting products from the raw materials supplier to trade customers for the leading global healthcare company.
Kuehne + Nagel said it would provide skills and strategic capability to improve GSK’s global supply chain operations.
GSK’s supply chain features numerous suppliers, a large number of manufacturing units and a variety of specific routes to patients and consumers in over one hundred countries. Kuehne + Nagel was selected in part due to their existing relationship with GSK, and their expertise in pharmaceuticals and consumer product logistics.
"Our focus is to leverage existing experience and industry-specific solutions serving the pharmaceutical and consumer sector which will deliver incremental benefits to GSK," said Detlef Trefzger, CEO of Kuehne + Nagel International. "Our integrated logistics approach, comprising air, sea, overland services and logistics control centers in four regional hubs will enable GSK’s global supply chains to move to the next level of performance."
MOL launches new China-West Coast India service
Mitsui O.S.K. Lines has announced launch of the new China/West Coast India service (CIS).
This new service is in addition to MOL’s existing Nhava Sheva Karachi Express (NKX) service which the company says together will enhance their coverage between fast growing ports in India and China, Singapore, Malaysia and Sri Lanka.
The CIS port Rotation (turn around in 42 days) is as follows: Qingdao – Shanghai – Ningbo – Shekou – Singapore – Port Kelang – Nhava Sheva (JNPCT) – Mundra – Colombo – Penang – Port Kelang – Hong Kong – Qingdao.
Customs seizes hundreds of counterfeit hoverboards at Port of Miami
U.S. Customs and Border Protection seized about 300 counterfeit hoverboards last week at the Port of Miami.
Officials say the total estimated retail price of the counterfeit boards is $94,000. Officials say they arrived from China and contained batteries with a fake LG trademark logo.
Customs and Border Protection Port Director Dylan DeFrancisci says the seizure of the fake two-wheeled motorized scooters helps ensure that a product has genuine parts and is safe.
The Consumer Product Safety Commission said it has received dozens of reports of hoverboard-related injuries across the country.
Labor Secretary: Unions and ports must work together on automation
Photo credit: Bloomberg News
U.S. ports must consider the interests of organized labor as they move towards automating jobs performed by dockworkers, said U.S. Labor Secretary Thomas Perez to The Wall Street Journal.
Perez, who toured automated operations at the Port of Hamburg over the weekend, said as the U.S. tries to boost exports, they could learn from more advanced operations. That includes Hamburg, which he called "one of the most modern ports in the world."
"The whole issue of technology and automation is an important part of that discussion," he said. In Hamburg, automated technology includes robotic cranes that organize containers into stacks and automatic vehicles that move containers around the yard.
Perez added that Hamburg’s success has depended largely on the direct involvement of dockworkers and labor groups throughout the automation process.
"You can’t impose by fiat automation and expect it to succeed," he said.
Both the West Coast-based International Longshore and Warehouse Union and the East Coast’s International Longshoremen’s Association union allow for automation technology in their contracts with port employers.
Port automation has hit snags in Los Angeles and most recently in Rotterdam, where earlier this month workers staged a 24-hour strike at the port’s container terminals over concerns that automated operations would replace hundreds of dockworker jobs.
The president of the ILWU Local 13 in Los Angeles, Bobby Olvera Jr., said there was a "huge loss" of jobs when one L.A. terminal introduced automation technology two years ago because the need for many truck drivers and container gangs was eliminated. But Olvera said that automation doesn’t have to mean job losses, as long as port terminals and labor groups innovate together.
Port of Los Angeles officials and other port leaders are conducting a "sector review" to understand what jobs will be needed at high-tech ports and how to best train workers, said port Director Gene Seroka, who traveled with Perez to Hamburg.
If automation means fewer workers are needed to move each container, but also makes it possible for more containers to move in and out of a port, that wouldn’t necessarily eliminate jobs, said Paul Bingham, an economist with the Economic Development Research Group. "They may come out as a whole with higher-skilled job categories getting paid more money," Bingham said.
"There is a right way to do it and a wrong way to do it," Perez said on the phone from Germany after his tour. "The way to make sure you do it right is to have meaningful dialog and a legitimate seat at the table for everyone."
For more of The Wall Street Journal story: www.wsj.com
Ports America leaving Oakland
Ports America, which runs operations at dozens of ports in the U.S., said it would terminate a 50-year lease with the Port of Oakland and cease cargo operations within 30 days.
In a statement, Ports America said its joint venture in Oakland’s Outer Harbor Terminal would be terminated and it would be returning the leased property back to the port. The company will instead focus on investing in terminal operations in other cities, according to the statement: "Ports America is active in planning its expansion and investment opportunities in its existing locations at both the Port of Tacoma and the ports of Los Angeles and Long Beach."
"We're disappointed when a tenant leaves," said Michael Zampa, a spokesman for the Port of Oakland. "But it also presents opportunities for the port."
The port, which is trying to rebound from a labor dispute that hobbled West Coast ports early last year, is already engaged in talks to lease the terminal when it becomes idle in about 60 days.
Oakland port officials also said they’d consider other uses for the soon-to-be-vacant terminal apart from container operations — a new prospect for the port, which has exclusively operated container operations for 50 years.
Port officials believe the shutdown won't disrupt the handling of containers at the complex.
"Oakland has excess capacity," Zampa said. "We can move ships and cargo from the terminal that is winding down operations and shift them to adjacent terminals with room to spare."
Outer Harbor Terminal has operated at the Oakland port for the past six years. The partners said the venture made a joint decision to transition out of Oakland.
"Ports America has used that as an opportunity to refocus its West Coast strategy on the locations where it has multiple, larger sites," said Peter Ford, chief strategy officer for Ports America. Those future locations are key rivals of the Oakland port: the ports of Tacoma, Long Beach and Los Angeles.
For its part, the Oakland port has been testing the operation of its gates at night and on weekends so that truckers and shipping lines would gain much more flexibility to move cargo in and out of the port.
"By the end of the first quarter, the Saturday gate program will become permanent," Zampa said.
The Oakland port also hopes to soon finish negotiations with an unidentified company or companies that could become a tenant at the soon-to-be-vacated terminal.
"Talks are far along with potential tenants," Zampa said. "These would be maritime uses. But what those are would be open to a wide range of possibilities."
Maersk struggles to deal with long-term shipping slump
A.P. Møller-Mærsk, parent company of Mærsk Line, made a big gamble when it decided to order mega-ships and depend on economies of scale to help survive the worldwide recession, according to The Wall Street Journal.
In 2011, it ordered 20 of the world’s largest container ships, the Triple-Es — featuring new designs at $185 million apiece. Shipping executives termed the move as part of a shipping-industry "arms race."
By buying bigger ships with more efficient engines, Mærsk and its major competitors hoped to squeeze out costs — and smaller competitors. They hoped to winnow down the massive overcapacity of shipping tonnage built up after the crisis, and position themselves for profit when growth picked back up again.
Five years later, the wager looks far from a sure bet. Global shipping demand cooperated at first, climbing between 3 percent and 5 percent annually from 2011 to 2014, according to analysts’ estimates.
Small shipping firms, however, managed to stay in business. In mid-2014, they started to benefit from fast-falling fuel prices, enabling them to cut their own shipping prices.
As overcapacity swelled to about 30 percent, shipping rates per-container on the Europe-Asia loop fell from about $1,765 at the start of 2014 to as low as $934 by November of that year.
Then global demand vanished. Going into 2015, Mærsk Chief Executive Nils Andersen was expecting another year of about 3 to 4 percent growth in demand. Instead, it came in at 1 percent, he said in an interview. Demand on Asia-to-Europe routes fell by as much as 5 percent, and freight rates fell to an average of $620 a container for the year.
Suddenly, the industry was reeling even more than it was in the depths of the global recession. "In 2009, we saw volumes collapse by 30 percent, and freight rates fell," he said, "but not as much as in 2015."
The struggles of Mærsk, the world’s largest container shipping line by volume, highlight the uneven recovery in the global economy since the crisis. Many parts of Europe remain stalled by high debt and unemployment, slowing growth and trade. Asia — particularly China, which helped power the global economy amid the worst of the crisis — is now petering out, too.
Andersen says he expects a pickup this year, thanks to the weaker yuan, which should boost Chinese exports, and "reasonable economic growth in Europe." That should translate into shipping-demand growth of about 3 percent this year, he says. "With both oil prices and freight rates down you tend to get very worried with all lines pointing down," he said. "But this is not the way the world works. We have to prepare ourselves for the time that things normalize."
Despite some fresh signs of consolidation, the industry remains dominated by just over a dozen European and Asian operators. They have scrambled to seal operating alliances — and in a few cases, full-blown mergers — to help reduce capacity.
But big ship purchases are making capacity reduction harder to pull off. New ship deliveries will boost overall capacity this year by 1.3 million containers, or 5 percent, figures Jonathan Roach, at brokerage Braemar ACM Shipbroking. He expects demand growth, however, to max out at 1.5 percent, the lowest since 2009.
"It’s a grim picture for container shipping," said Mr. Roach. "And it won’t change in the near term."
Mærsk hasn’t canceled any of its firm Triple-E orders, from 2011 and others made last year. But it said in November that it was passing up options to buy six more of them, and it was putting off plans to purchase eight slightly smaller vessels.
For more of The Wall Street Journal story: www.wsj.com
NileDutch launches new East Coast U.S. – West Africa service
NileDutch has launched a new service to meet growing demand from exporters in the East Coast of the U.S. to have better access to markets in West Africa. The new service will be operated by NileDutch in cooperation with Turkon Line.
The port rotation will be: New York – Norfolk – Savannah – Tangier. In Tangier the cargo will be transferred onto the NileDutch WEWA (West Europe – West Africa) service, which calls on Abidjan, Pointe Noire, Luanda, Lobito and Namibe. All cargo towards the U.S. out of West Africa and Europe will be facilitated as well, according to the NileDutch statement.
NileDutch serves these key West African ports and also operates a network of feeder vessels in the region which carry cargo between regional ports (Matadi, Soyo, Boma, Bata, Malabo, Cabinda, Douala and Libreville).
NileDutch Africa Line, headquartered in Rotterdam, is a container shipping company that focuses on links between West Africa and the rest of the world. Norton Lilly International is NileDutch’s representative in the U.S.
Disabled cargo ship delays grocery deliveries to Anchorage
A cargo ship that had mechanical troubles is responsible for some empty store shelves in Anchorage. Tote Maritime’s Grace Greene said the ship that was supposed to arrive in Anchorage on Sunday never made it further than the Port of Tacoma.
"Fortunately this doesn’t happen very often and so when it does we dedicate resources to getting the ship back on line and that’s what we’ve done this time," Greene explained.
Roughly 85 percent of all the goods that arrive in Alaska come through the port of Anchorage. The port receives four major cargo shipments a week. But when even one is out of service, it can make a difference.
"If there’s something — you eat it, wear it or use it — it comes here on the ship," Greene said. "So sometimes during delays like this, you can see some issues with getting enough products on the shelves."
Emergency officials said one cargo ship out of service isn’t a crisis, but it’s a reminder of what Alaska could face if the port were cut-off during an emergency or natural disaster.
By William DiBenedetto, CBN Feature Editor
By Anna Denecke, Associate, Blakey & Agnew, LLC
The long-delayed expansion of the Panama Canal is now expected to be finished by May 2016, rather than April as previously announced, said Panamanian President Juan Carlos Varela in the new year.
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