Cargo Business Newswire ArchivesSummary for January 19 through January 23, 2015:
Monday, January 19, 2015
Seattle drivers frustrated by traffic triggered by port congestion
Due to port backups, drivers around West Seattle experienced unprecedented truck traffic that triggered slowdowns and safety hazards all the way from Harbor Island to Interstate 5 last week.
Truckers waited as long as five or six hours on South Spokane Street, just to reach the Port of Seattle.
Port spokesman Peter McGraw said demand surged at the port because of agricultural shippers trying to get their products loaded for export while they’re fresh. He said three container ships docked along Terminal 18 were taking loads on Harbor Island near the low West Seattle swing-bridge and bikeway.
"There were folks [shippers] who knew they couldn’t access Tacoma, so they try to access Seattle," he said. He said another busy day was likely Friday, with T-18 moving close to double the average volumes.
City police and Port of Seattle officials said they would try to reduce the lineups to Terminal 18 before the weekend.
City Councilmember Tom Rasmussen, of West Seattle, said Thursday, "I was shocked to see the lineup of trucks at 5:50 this morning, when I was going to the office," and appalled things hadn’t improved since Wednesday.
"Based on discussions with the port, starting Friday, morning trucks will be detoured off city streets into a holding area at nearby Terminal 5, where they will stage for entry into Terminal 18. Truck drivers will be directed to this holding area using fixed and variable messages signs," said the Seattle Department of Transportation in a statement.
Target unexpectedly pulls out of Canada on logistics woes
Discount chain giant Target Corp will leave the Canadian market after less than two years in a surprise withdrawal that will leave more than 17,000 employees without a job and generate a $5.4 billion quarterly loss.
The chain has struggled in Canada since its March 2013 launch. It faced huge supply chain challenges due to a range of problems at its warehouses, poor communication with headquarters and the use of inexperienced staff, which left stores poorly stocked. Reviewing the problem after the holidays, Chief Executive Brian Cornell said he didn't see the "step-change" in performance required to justify staying the course.
Target had hired Eleven Points Logistics, a subsidiary of Pittsburgh-based Genco, to run its Canadian warehouses. Genco could not immediately be reached for comment.
Former Target and Eleven Points employees had told Reuters about a long list of problems at the warehouses, stores, and headquarters, especially in the first year. They said a combination of new technology and systems, inexperienced hires and poor training all contributed to supply chain woes.
Barcodes on many items did not match what was in the computer system, they said, causing massive warehouse logjams, while store backrooms were stacked from "floor to rafters," making it difficult to locate products to put on shelves.
The company said on Thursday it is shutting all of its 133 Canadian stores and expects to report about $5.4 billion in pretax losses for its fourth quarter, which finishes at the end of January, mainly due to the write-down of the Canadian investment.
Port Metro Vancouver truckers threaten walkout unless pay rates resolved
Port Metro Vancouver truckers are asking the government to resolve a dispute about how the agreement that ended last March’s labor disruption is being implemented. They are pressing Transportation Minister Todd Stone, threatening another work stoppage if the issue is not addressed.
Organizations that represent drivers, including Unifor Vancouver Container Truckers Association and the non-union United Truckers Association, are fighting with the province and port over new pay rates and schedules being implemented. They argue the planned implementations don’t align with what was agreed to in the deal brokered by top mediator Vince Ready and adviser Corrin Bell.
"The bottom line is, we have an agreement or we don’t," said Jerry Dias, Unifor’s national president. "If we don’t have an agreement, we’re in a legal strike position."
The agreement sought to raise the pay rates for truck drivers and take steps to end undercutting of rates in the highly competitive transportation sector.
Virginia Port Authority 2014 cargo volume up 7.5 percent
The Virginia Port Authority, featuring terminals in Portsmouth, Newport News and Norfolk, announced that it handled a total of 2.3 million TEUs in 2014, a 7.5 percent year-over-year increase.
"We moved 169,000 more TEUs than we did in 2013, which until now was our most productive year on record," said John F. Reinhart, CEO and executive director of the Virginia Port Authority, in the statement. "The growth is a tribute to our team and our port partners, but our enthusiasm is tempered, as we are cognizant of the fact that we have much work to do on building infrastructure and developing processes to maintain the business and grow the port."
A total of 203,276 TEUs passed through the port in December, according to the report, a 12.3 percent increase from 181,091 container units posted in December 2013.
The port said it has made a $5.53 million profit during the first five months of the 2015 fiscal year starting July 1, up from a $7.8 million loss over the same period last year.
"The growth is significant, but it has created significant challenges as well, especially in service levels for our motor carriers," Reinhart said. "The focus is to continue to grow within reason, and within our capabilities, strive for consistency at our gates and operations, to maintain profitability and do these things with a sense urgency and responsibility."
UPS expands logistics market in Europe
UPS announced three European facility expansions driven by growing demand from retail and high-tech customers, adding nearly 220,000 sq. ft. to its global supply chain network.
The newly expanded facilities are located in Krefeld, Germany; Butzbach (near Frankfurt am Main), Germany; and Venlo, Netherlands, according to a company statement.
UPS, which recently announced it added 1.2 million sq. ft. to four North American locations, has 596 supply chain facilities, totaling more than 33 million sq. ft. globally.
"We continue to expand our contract logistics reach and capabilities in Europe to serve the growing demands of our B2B and B2C customers," said Harld Peters, vice president of UPS Contract Logistics Europe. "These facility investments are testaments to our continued commitment to supply our customers in Europe with solutions that allow their businesses to be more competitive."
Services and capabilities offered at UPS supply chain facilities include warehousing and order fulfillment; inventory, transportation and returns management; custom kitting and packaging; store-ready displays; critical parts repair; and same-day delivery.
UPS said the rationale for adding the new European locations was driven by high-tech and retail customer growth. The Krefeld, Germany facility added 53,000 square feet, the Butzbach, Germany location 75,000 square feet, and the Venlo facility expanded the company footprint by 91,000 square feet.
Cargo ship adrift near Great Barrier Reef
The Thor Commander, an Antigua and Barbuda flagged cargo ship hauling copper ingots, experienced mechanical difficulties on Sunday and issued a call to be rescued near the Great Barrier Reef.
The Australian Maritime Safety Authority deployed a tug from Gladstone to tow the vessel and prevent it crashing into the reef.
The Australian Marine Conservation Society said the incident highlighted the risks posed by the amount of shipping going through the Great Barrier Reef due to greatly increased exports of coal and liquefied natural gas (LNG).
Industry groups to PMA and ILWU: Resolve West Coast labor dispute
On Friday, approximately 175 U.S. trade groups representing retailers, manufacturing, and farmers, sent a letter to the International Longshore and Warehouse Union and the Pacific Maritime Association, asking them to get their act together and agree to a contract.
"As customers of your ports, and industries affected by their operations, our members desperately need this negotiation to be concluded and operations returned to normal levels of through-put," the business groups said.
"Supply chains across all of our industry sectors have already been adversely impacted due to events far beyond our control over the past several months," the letter said. "It is a black eye for the broader economy and some jobs have and will continue to be lost as a result of continued delays at the ports."
A federal mediator joined contract talks in early January. Over the past couple weeks, West Coast port employers have cut night shifts at the ports.
"Reducing vessel cranes during the night will help us continue to clear out the yards, where with ILWU has been withholding certain skills," said a PMA spokesman.
The union said the move was meant to deliberately worsen congestion problems to put more pressure on the talks.
"The employer is making nonsensical moves like cutting back on shifts at a critical time, creating gridlock in a cynical attempt to turn public opinion against workers," said ILWU President Bob McEllrath in a statement last week. "This creates an incendiary atmosphere during negotiations and does nothing to get us closer to an agreement."
The PMA said: "Unfortunately, despite our sense of urgency in resolving the contract talks and getting our ports moving again, the union's slowdowns continue and the resulting operational environment is no longer sustainable."
The ILWU countered: "The congestion problem at west coast ports pre-dates any accusations of slowdowns, and stems from industry decisions that are causing delays for customers and making work more difficult and dangerous for dockworkers. It is unfortunate that port employers recently decided to curtail port operations and reduce hours at a time when customers are already suffering from delays."
If the labor conflict at West Coast ports becomes a shutdown or strike, it will take a heavy toll on the U.S. economy. The Ports of Los Angeles and Long Beach alone employ about 15,000 full-time and part-time workers, according to Phillip Sanfield, a spokesman for the Port of Los Angeles.
In addition, nearly 900,000 truck drivers, dockworkers, warehouse employees and others throughout Southern California are directly or indirectly tied to operations at the ports, according to Robert Kleinhenz, chief economist for the Los Angeles County Economic Development Corp.
Despite congestion woes in the second half of 2014, the Port of L.A. netted one of its best years in port history in terms of cargo volume.
The port handled 8.3 million TEUs in 2014, a 6 percent year-over-year increase, according to a port statement. That made it the third busiest year at the Los Angeles port, behind 8.4 million TEUs in 2007 and 8.5 million in 2006.
"The 2014 numbers are an encouraging indication that the national economy continues to improve," Port Executive Director Gene Seroka said in a statement. "Beyond that, the second half of the year ushered in a mix of unprecedented challenges due to transformational changes in the shipping line business."
Seroka encouraged the International Longshore and Warehouse Union and Pacific Maritime Association to work quickly and in good faith toward a contract.
"We are working hard to help our customers and supply chain partners overcome those challenges and urge them to work together with us to find solutions," Seroka said.
Port Metro Vancouver container truck drivers say they will go on strike as early as Feb. 1 if Transportation Minister Todd Stone does not enforce compliance with the agreement signed last March that put an end a 28-day work stoppage.
Unifor, the Teamsters and the non-union United Truckers Association met with Stone and federal Transportation Minister Lisa Raitt Thursday to assert that trucking firms are not paying the rates agreed upon for container transport between facilities outside of port terminals.
The truckers have given the minister until Jan. 29 to respond to their complaints, and to make sure drayage companies honor the deal brokered by top mediator Vince Ready and Corinn Bell.
"There’s no question in my mind that if some key elements are not fixed that people are going to take action," said Jerry Dias, national president of Unifor.
Senator John McCain takes aim at the shipping industry
Republican Sen. John McCain has started a campaign to do away with the Jones Act.
McCain has filed legislation to repeal the law, also known as the Merchant Marine Act of 1920, which "requires that all goods shipped between waterborne ports of the United States be carried by vessels built in the U.S. and owned and operated by Americans."
McCain called the act "an antiquated law that has for too long hindered free trade, made U.S. industry less competitive, and raised prices for American consumers."
The American Maritime Partnership, an industry trade association, issued a press release claiming the repeal of the protectionist law would "gut the nation’s shipbuilding capacity, outsource our U.S. Naval shipbuilding to foreign builders, and cost hundreds of thousands of family-wage jobs across this country."
A recent study by the U.S. Maritime Administration found that the shipbuilding and repair industry provides more than 400,000 full-time jobs and adds about $36 billion to GDP.
West Coast port operators criticized for suspending Monday day shift
As vessels remained queued at sea Monday, waiting for their turn to be unloaded at the Ports of Los Angeles and Long Beach, the Pacific Maritime Association kept dockworkers from unloading ships in order to clear containers from overloaded terminal yards.
Canceling the Monday vessel shifts drew sharp criticism from Rep. Janice Hahn, D-San Pedro, who encouraged PMA to reverse its decision.
"At a time when cargo ships remain anchored, unable to dock because of a backlog at our West Coast ports, clearly there is much work to be done," Hahn said. "Our dockworkers are ready to do it. Unfortunately, it has come to my attention that they are not being given the opportunity to work on unloading these ships this Monday. This move by PMA stands only to worsen the container backlog and hurt the small businesses across the country that depend on these imports."
According to the Marine Exchange of California, nine container ships waited offshore to be processed at the ports on Monday.
PMA spokesman Steve Getzug said that ship operations during the day were suspended at West Coast ports Monday to focus on clearing containers from congested port terminals. Dayside vessel operations will resume today, he said.
Adan Ortega, spokesman for the ILWU Local 13, doesn’t believe PMA’s reason for shutting down unloading shifts to clear yards of containers. He said there is very little traffic inside the yards.
The animosity between the PMA and ILWU continues to grow as both sides returned to the contract negotiation table with a federal mediator Monday.
Washington exports will take time to recover after labor woes resolved
Washington state senators still don’t know how to address the export slowdown at ports after hearing this week how much it’s hurting farmers across the state.
Mid-Columbia farmers, processors and exporters continue to suffer significant losses because of the apples, potatoes, hay, dairy and other products that haven’t made it through the backed-up ports to Asia.
A federal mediator has stepped in to help resolve the West Coast port labor negotiations, but talks remain contentious between the employers and the union.
Eric Schinfeld, president of the Washington Council on International Trade, said he was optimistic there could be progress by the end of January in the labor dispute, but told the Senate’s Commerce and Labor and Trade and Economic Development committees that this won’t solve the problem.
He said we would probably be well into spring and summer before the backlog caused by slowed exports is cleared, and it could take years to regain lost business.
The 350 Washington dairies that own the Northwest Dairy Association have lost about $30 million in sales because containers of cheese, powdered milk and other milk products have not been able to get out of the ports, said Dan Coyne, the association’s director of industry and government relations.
"Washington dairy farmers are put at increasing risk," Coyne said. "If that risk is in the $60,000 per farm range now it will only grow in the coming months."
The 400 fruit growers represented by Chelan Fresh Marketing have lost about $14.4 million in sales during the last three months because of the port slowdown, said Marc Spears, the company’s export sales manager.
No. 9 Hay of Ellensburg has lost more than $7 million in sales since November, and prices for this year’s crop will be lower because the current crop hasn’t been able to move, said Bob Haberman, the company’s co-owner.
Business advocates told senators that investment in port infrastructure and critical roadways in a transportation package is what is needed to help keep Washington ports competitive as Canada and others seek to draw business away from the state.
Shanghai has kept its title as the world’s busiest container port for a fifth straight year, widening the gap with its closest competitor, the port of Singapore.
Shanghai said it expects 2014 cargo volumes totals to come in at around 35.2 million TEUs. Singapore handled 33.9 million TEUs last year, according to its port authority website. In 2013, the gap between the two ports was less - only about 1 million boxes.
Shanghai, Shenzhen and other ports in China are dominating the global container-shipping market. Ningbo port overtook South Korea’s Busan facility last year as the world’s fifth-busiest harbor. Seven of the world’s top 10 container ports in 2013 were in China, with Hong Kong coming in fourth.
Global containerized trade reached 124 million TEUs in the first 11 months of 2014, said Container Trade Statistics — up 4.3 percent from 118.9 million TEUS a year ago.
Thailand will start construction on a $12 billion rail project jointly with China in September, building a rail line from the Thai border with Laos to the ports in East Thailand, according to a Thai deputy prime minister.
China has ambitious plans for rail links from Kunming through Laos to Thailand, and Thailand wants to modernize its aging rail infrastructure.
"We expect it will cost about 400 billion baht ($12.2 billion) and will be completed within two and a half years," said deputy prime minister and transport minister Air Chief Marshal Prajin Junthong.
The project includes two rail lines. More than 430 miles of track would connect the city of Nong Khai on the Thai-Laos border with Bangkok and Thailand's eastern seaboard. Another railway would link Bangkok with the central province of Saraburi, an industrial hub about 67 miles away.
Obama asks for "fast track" powers to advance trade deals
Photo credit: Larry Downing/Reuters
Citing China as a formidable trade rival, President Barack Obama asked Congress to grant the administration the "fast track" authority to negotiate trade deals with Asia-Pacific and European countries and expedite them through Congress.
"I'm asking both parties to give me trade promotion authority to protect American workers, with strong new trade deals from Asia to Europe that aren't just free, but fair," said Obama in his State of the Union address.
The Obama administration is engaged in two ambitious and controversial trade negotiations, the Trans-Pacific Partnership (TPP) with 11 countries in the Asia-Pacific region, and the Transatlantic Trade and Investment Partnership (TTIP) with 28 members of the European Union.
The TPP would end tariffs among the U.S., Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, but would exclude China for now.
The trade promotion ("fast-track") authority allows the president to negotiate trade deals and then present them to Congress for up-or-down votes, with no amendments allowed.
Port of Seattle Terminal 18 back open after brief local job action
The Port of Seattle’s Terminal 18—the largest container terminal in the Northwest—reopened Wednesday after a conflict between terminal operator SSA Marine and the International Longshore and Warehouse Union caused its closure Tuesday at noon.
Ships could not be unloaded during the brief shutdown. SSA said longshoremen from ILWU Local 19 walked out after demanding that more people be hired at SSA’s Terminal 5.
Bob Watters, SSA Marine's senior vice president, said the walkout has nothing to do with an ongoing West Coast port labor dispute.
"These kinds of things happen periodically," Watters said in a KIRO Radio interview.
Although attempts were made, ILWU Local 19 was not immediately available for comment.
Transportation Secretary Foxx designated "president in waiting" during SOTU
The Obama administration’s transportation secretary, Anthony Foxx, was this year’s "designated survivor"—the cabinet member chosen to skip the speech in case there was a deadly attack on the U.S. Capitol.
Thirteenth in line for the presidency as transportation secretary, 42-year-old Foxx was the youngest mayor of Charlotte, North Carolina, before the president nominated him to the cabinet, according to the Charlotte Observer.
Viability of Nicaraguan canal uncertain as trade patterns shift
The proposed Nicaragua Canal may have a hard time finding private investors. Making the case for a second waterway connecting the Pacific and the Atlantic may be a hard sell due to current global trade patterns.
In 2013, the Nicaraguan government awarded a 50-year concession to Hong Kong’s HKND Group to build and operate the canal. HKND started construction on the gargantuan project last month, saying it said would cost $50 billion and be operational by 2019.
With the global manufacturing base shifting to South and Southeast Asia, more shipping lines are expected to transit via the Suez Canal to reach the U.S. East Coast.
Andy Lane, partner at Container Transport International Consultancy, doesn’t know why the canal would be a good bet for potential investors.
"Let's assume $25 billion is spent on the canal itself - the other half on hotels, roads, airports and free-trade zones that HKND also plans to build along the canal," Lane said. "Assuming global trade grows at 6 to 7 per cent per annum during the concession period, and also assuming that the Nicaragua Canal will in 10 years' time take more than 60 per cent of the expanded market share and the rest by the Panama Canal, the annual internal rate of return after 25 years would be less than 2 per cent."
He added that these assumptions were skewed in favor of the new canal and were highly unlikely in the real-world scenario.
For more of the South China Morning Post story: www.scmp.com
Crane operator rescued at Port of Los Angeles
Firefighters rescued a crane operator working 100 feet above the ground today at a container terminal in Wilmington at the Port of Los Angeles.
The worker, who had fallen ill, was lowered to the ground in a basket attached to a 100-foot aerial ladder by Los Angeles Fire Department Urban Search and Rescue Team members. He was then transported to a hospital.
Due to port backups, drivers around West Seattle experienced unprecedented truck traffic that triggered slowdowns and safety hazards all the way from Harbor Island to Interstate 5 last week.
On Friday, approximately 175 U.S. trade groups representing retailers, manufacturing, and farmers, sent a letter to the International Longshore and Warehouse Union and the Pacific Maritime Association, asking them to get their act together and agree to a contract.
As vessels remained queued at sea Monday, waiting for their turn to be unloaded at the Ports of Los Angeles and Long Beach, the Pacific Maritime Association kept dockworkers from unloading ships in order to clear containers from overloaded terminal yards.
Photo credit: Larry Downing/Reuters