Cargo Business Newswire ArchivesSummary for January 26 through January 30, 2015:
Monday, January 26, 2015
Thousands march in support of ILWU dockworkers in L.A.-Long Beach
Photo credit: Stephen Carr/Daily Breeze
Last Thursday, about 6,000 community members and International Longshore and Warehouse Union workers marched from the Vincent Thomas Bridge to the Maritime Museum to support hundreds of dockworkers at the Port of Los Angeles and Long Beach who are in the midst of contract talks with employers.
Los Angeles City Councilman Joe Buscaino organized the march ó in reaction to the Pacific Maritime Association action last week that suspended night shifts for unloading ships in order to focus efforts on clearing cargo containers out of congested container yards. The decision affected more than 800 jobs, the ILWU said.
Buscaino, who represents the harbor area, said that cutting night shifts "is another step closer to a lockout" that would hurt residents and make port congestion worse.
"Nearly three months ago, the ILWU began a coordinated series of slowdowns intended to pressure employers to make concessions at the bargaining table," the PMA said in a statement Thursday. "Ever since, PMA and its members have worked hard to counter the growing backlog of cargo that threatens to bring our ports to gridlock."
"In Southern California, the ILWUís targeted slowdowns have severely worsened existing congestion by withholding the skilled workers who are most essential to clearing crowded terminals. All the while, cargo sits idle, the economic damage to our communities worsens and the reputation of West Coast ports is harmed."
Around 200 ILWU workers also rallied in Tacoma, Wash. on Thursday, saying theyíre being unfairly scapegoated for slowdowns at West Coast ports and protesting the suspension of dockworker night shifts.
Union Pacific fourth quarter earnings up 22 percent
Union Pacific Corp. announced fourth quarter profits that bested analyst estimates on a strengthened U.S. economy and growing construction market.
Earnings rose 22 percent to $1.43 billion, or $1.61 a share, from $1.27 a year earlier, according to a UP statement. That exceeded the average estimate of $1.52 from 26 analysts surveyed by Bloomberg.
The rebound of U.S. consumer demand and homebuilding has been a boon to the railroad, which posted the largest increase in carloads in the quarter among the four biggest U.S. railroads, according to the Association of American Railroads.
The AAR said traffic on all North American railroads grew 5.2 percent in the fourth quarter. Union Pacificís traffic rose 6.9 percent.
Maersk CEO: Shifting manufacturing patterns will impede shipping recovery
Nils S. Andersen, chief executive of shipping and oil giant A.P. Moeller-Maersk, cautioned that global trade will never return to pre-recession growth rates, in part because the U.S. and EU are moving manufacturing closer to home, according to an article in the Financial Times.
The Maersk CEO said changes in trade from Asia would have a substantive effect on the container industry, since EU and U.S. firms are shifting manufacturing bases to home countries or Mexico, according to an interview with the Financial Times. He also said in the FT interview that the diminishing size of electronics would require less and less container space, contributing to falling freight rates in coming years.
Andersen was fairly upbeat last week about the companyís prospects in the face of falling oil prices, according to statements he made while attending the World Economic Forum in Davos, Switzerland.
Maersk has significant operations in oil exploration, drilling and transport, and the recent drop in global oil has hit the company, Andersen said in an interview with the Wall Street Journal.
But he noted that those same price drops were helping the companyís own shipping costs, and unleashing global demand for the trade of goods. "The global demand for containers should go up," Andersen said. "As we see it, low oil prices should help the European economy generally."
CMA CGM adds Port of New Orleans to new weekly service
CMA CGM adding the Port of New Orleans to its Victory Bridge Service, which will be launched Feb. 2 when the CMA CGM Jamaica visits the Portís Napoleon Avenue Container Terminal.
The new weekly service will call on New Orleans, Antwerp, Belgium; Rotterdam, Netherlands; Bremerhaven, Germany; and Veracruz and Altamira, Mexico.
The French shipping giant has called on the Port of New Orleans since 2009 and operates its weekly Gulf Bridge Express to the Caribbean and South and Central American ports from New Orleans.
"Shippers will now have greater options, which will further strengthen our connections to not only Europe, but also the Mediterranean, Africa, India Sub-Continent, Middle East and Red Sea," said Port President and CEO Gary LaGrange.
10 missing after fishing boat sinks after collision with cargo ship
Ten people are missing after a Chinese fishing boat sank in international waters near the South Korean island of Jeju.
Thirteen people were on the boat when it sank about 100 miles west of the island on Thursday night, according to Jeju coast-guard official Koh Kwang-sick. Survivors said it collided with a cargo ship.
The official said crew members of another nearby Chinese fishing boat rescued three people from the sinking boat.
Coast guard crews have searched for the missing crewmembers since early Friday, but found only an empty lifeboat, officials said.
UP and BNSF worried about potential LA-Long Beach port shutdown
Now that last yearís grain backup is being resolved, Union Pacific and BNSF railroads say they are worried about a shutdown at the Ports of Los Angeles and Long Beach.
Intermodal traffic amounted to about 20 percent of UPís annual freight revenue in 2014, while BNSFís intermodal freight division accounted for 30 percent of its freight revenue.
A federal mediator has recently been called in to help spur a compromise between negotiators of the Pacific Maritime Association and the International Longshore and Warehouse Union, who have been in talks for a new dockworker contract at 29 West Coast ports.
"We have not seen anything to indicate the mediator has helped or not," U.P. CEO Jack Koraleski said in an interview Thursday.
If a shutdown of the port complex occurs, Koraleski said U.P. would enact an embargo, refusing to haul cargo destined for the Los Angeles and Long Beach waterfronts. He said that would prevent a domino effect that would delay rail shipments far inland.
"We will do everything we can to protect the integrity of our network," said Koraleski, whose railroad operates 32,000 miles of track in 23 Western states.
UP has invested heavily in the port, operating the closest rail cargo terminal to the docks, the Intermodal Container Transfer Facility, four miles away. BNSF spokeswoman Amy Casas said that "unresolved labor issues" at L.A./Long Beach could cut into business at its terminals in both Los Angeles and San Bernardino.
"There is so little slack in the global transportation system, the railroads canít risk having traffic backed up halfway to Omaha because of port problems," said Joeseph Schwieterman, a transportation professor at Chicagoís DePaul University.
Hundreds of Port Metro Vancouver truckers lose jobs due to new licensing system
Now that Port Metro Vancouver has granted access to just 68 companies under a new licensing system, more than 600 port truck drivers say they're effectively out of a job.
Port Metro Vancouver pledged to create a new system after drivers complained about long wait times and low rates, deployed a bitter work stoppage for almost a month in 2014.
Under the new system, 68 companies representing 1,450 trucks have been approved to serve the port. Last year the number of trucks working the port was estimated at more than 2,000.
"For years, the container trucking sector that serves Port Metro Vancouver has been unstable and drivers have found it increasingly difficult to make a living," said Peter Xotta, Port Metro Vancouverís vice-president. "There is widespread agreement there are too many trucking companies and drivers, which has resulted in undercutting and other problems."
"There was a broad range of criteria (in choosing who would be included in new systems), including the ability to pay fees to fund the provincial auditing program and the new provincial trucking commissioner, and minimum environmental and safety standards for trucks."
On Sunday, many of those who didn't make the list, were demanding to know why.
"Looking at the companies they accepted, it really contradicts what they're saying. Some of the companies have old trucks," said truck driver Tom Johnson. "Some of the company owners have been bankrupted in the past."
Port Authority of N.Y/N.J. considers $10B cross-harbor freight tunnel
Proponents of a prospective $10 billion cross-harbor freight tunnel from Brooklyn to Jersey City say it would take thousands of trucks off the region's congested roads and create jobs by moving cargo faster and cheaper.
Lawmakers, environmentalists, other stakeholders welcomed the tunnel proposal last week at the first of seven public hearings sponsored by the Port Authority of New York and New Jersey on how to better move cargo across New York Harbor.
A cross-harbor freight rail link has been considered by the Port Authority since its founding in 1921, and the idea was revived in recent years to address a projected 37-percent growth in cargo movement over the next two decades.
A Port Authority study estimated the cost of a tunnel at $7.4 billion to $10.2 billion, depending on the designótrains only, one track or two, trains single or double-stacked with shipping containers, or train tracks and truck lanes.
The tunnel would run about four miles under the harbor between existing rail yards at 65th Street in Brooklyn and the Greenville section of Jersey City, just south of Liberty State Park.
DB Schenker Logistics and Maersk sign deal to reduce emissions
Leading freight forwarder DB Schenker Logistics and shipping giant Maersk Line have inked a joint six-year deal to reduce CO2 emissions from the ocean freight sector, according to a DB Schenker statement.
Maersk Line will deploy a number of measures to reduce the CO2 emissions of every container it transports for DB Schenker Logistics between now and 2020 by 20 percent, compared to 2014 levels. According to the statement, strategies will include network and speed optimization, technical upgrading of existing ships, and deployment of new and more efficient ships in its network, such as the Triple-E ships.
"The partnership encourages greater transparency on sustainable container transportation which can drive significant sustainability improvements in the industry," said Vincent Clerc, chief trade and marketing officer at Maersk Line. "By integrating sustainability elements into the purchasing decisions, we jointly strive to change the procurement process in container shipping fundamentally."
DB Schenker said its pollution reduction program aims to cut specific CO2 emissions from transport services by an additional 20 percent worldwide between 2006 and 2020.
U.S. Navy cargo ship stuck on reef off Okinawa
Dozens of service members have debarked the USNS Sgt. Matej Kocak, which remained grounded Monday on a reef about six miles east of Okinawa, Japan, according to military officials said.
The 821-foot cargo ship remains stuck on a reef just outside of a deep-water shipping channel, where the open ocean is separated from Nakagusuku Bay, also known as Buckner Bay. How the cargo ship ended up outside of the channel remains under investigation, said Cmdr. Ron Flanders, the spokesman for Commander Naval Forces Japan.
The Navyís Supervisor of Diving and Salvage, and another from the Military Sealift Command which owns Kocak, are trying to determine the best way to get the ship off the reef.
A breakthrough was reported Monday in contract talks for dockworkers at 29 West Coast ports.
The negotiations have become contentious of late due to the chronic cargo backup at the Ports of Los Angeles and Long Beach, which has had a ripple effect, impacting the transport of containers by rail, truck and sea.
Steve Getzug, a spokesman for the Pacific Maritime Association, said Monday that the PMA and ILWU made a tentative deal on the chassis issue, although he didn't provide details.
Shipping lines used to provide the trailers to truckers, but have recently stopped providing that service, leaving the equipment to third party leasing firms. Since the changeover, which coincided with the advent of super-sized ships calling at the port, there has been a shortage of chassis Ė which has been a large factor in slowdowns in port cargo movement.
Unlike the shipping lines, the chassis-leasing firms do not negotiate a contract with the union, which have complicated negotiations. Under the previous contract, the union had a right to do much of the work maintaining and repairing the equipment.
A spokesman for the International Longshore and Warehouse Union declined to comment.
With a tentative agreement over chassis, "the hope is the negotiations pace will pick up and that we can get closer to a contract," Getzug said.
Drewry: Big shipping alliances compete in Asia-North Europe trades
In its latest issue of Container Insight, Drewry Maritime Research examines how things stand on the Asia-North Europe trades, especially services from China. They predict how things might develop by the end of the year, noting that every such service is now controlled by one of the four mega-alliances.
The analysts say Maersk and MSCís 2M is number one, controlling 31 percent of the "effective" weekly capacity on the trade, followed by the CKYHE and G6, which are both at 24 percent, and finally Ocean Three at 21 percent. The researchers define effective capacity as nominal capacity (the average size of ships per service) minus deductions for deadweight and high-cube limitations and then again for out-of-scope cargoes.
The main competitive battleground for the alliances is China, the origin of about 70 percent of all container traffic to North Europe. Collectively, Drewry says, the alliances depart from 10 mainland China ports every week to North Europe, with a total of 74 weekly voyages. The 2M carriers have an edge with 27 China to North Europe departures per week, besting Ocean Three (18), CKYHE (17) and G6 (12).
At the other end of the trade, there are now 84 weekly arrivals in North Europe, according to the researchers. Europeís largest container port Rotterdam has the highest number of arrivals from Asia at 18, followed by Hamburg on 17. The two combined amount to 40 percent of all calls to Europe from Asia. The UK has 19 calls in total split between Felixstowe (11) and Southampton (8), giving it a second-best 23 percent share of all calls into North Europe.
All four alliances are well covered in the main markets of Germany, Netherland, UK, France and Belgium, but 2M offers a few specialist calls to Scandinavia and Poland.
Drewry concludes the restructure of the Asia-North Europe trade, now that the four big alliances are operational, is well balanced in terms of geographical coverage with strong competition in the key lanes. The broad range of options made available to shippers demonstrates that criticisms of the industry being completely homogenized are untrue.
Marine terminals at Ports of NY/NJ open Wednesday after storm
All marine terminals at the Port of New York and New Jersey complex will open on Wednesday January 28th at 8:00 a.m., with the exception of GCT Bayonne, which will open at 6 a.m.
Due to a severe winter storm, all terminals at the ports were closed Tuesday, January 27th.
In order to keep traffic flowing on the roadways and for the safety of everyone, the port authority said no queuing on the public roadways would be allowed. Truckers should plan accordingly by not queuing in the early morning hours and staggering their arrival in the morning to help limit potential congestion.
Savannah River can accommodate another port, study says
Port officials from Georgia and South Carolina met this week to discuss the progress of the new $4 billion shipping terminal in Jasper County, S.C., across the river from Savannah, Georgia.
The $4 billion project will help alleviate traffic between the Port of Savannah and the Port of Charleston. The cost of the project, slotted for completion in 2035, is being shared between Georgia and South Carolina.
A study was made to make sure a second S.C. port could accommodate vessels without creating traffic delays. Study consultants presented their findings to the Joint Project Office, asserting that the Savannah River and environs could sustain a port, but there would need to be some infrastructure improvements, such as dredging, to make it viable.
"We're looking over a period of 15 years of both the Savannah area, Garden City as well as the Charleston area becoming at a capacity level that we need to expand, and therefore the Jasper Ocean Terminal will be the expansion area for the growth," said Joint Project Office Chairman David Posek.
Officials said they should have the permits to start building by this summer. The project is completely separate and will not cut into the budget or the plans for the Savannah Harbor Expansion Project. The cost of the project is being shared between Georgia and South Carolina.
West Coast congestion woes an opportunity for the East/Gulf Coasts?
By William DiBenedetto, CBN Features Editor
With labor-related congestion and cargo backups on the West Coast likely to drag on until well past the Lunar New Year in Asia, ports in other regions may have a golden opportunity to grab significant market share at the expense of the West Coast.
The stakes are high for both coasts. U.S. East and Gulf coast ports are poised for a prosperous year due to the disruptions in the West and, perhaps equally important, the nationís solid economic growth. The rising economic tide thatís supposed to lift all boats may have to wait for a while on the West Coast.
Although nothing is guaranteed, the cargo flow pendulum could swing back to the East and Gulf coasts, helped by a southward shift in Asian manufacturing, the pending completion of the Panama Canal expansion and by continuing questions about the reliability of West Coast ports, according to news reports.
The Global Port Tracker published by Hackett Associates and the U.S. National Retail Federation recently forecast that container volume through major gateways for retail imports would increase 4.6 percent on the East Coast and 3.2 percent on the West Coast during the first half of 2015. But there are variables to consider: on the East Coast thereís the possibility of a repeat of severe weather conditions, while on the West Coast the length and magnitude of the labor situation is a big wildcard.
No ports are exempt from the congestion bug: nationwide they are struggling with congestion because of increasing trade, the impact of the new generation of huge containerships and a shortage of chassis.
"There is generally a strong need for upgraded infrastructure in many parts of the world," said Kim Fejfer, CEO of Maersk's APM Terminals, in a recent Shipping Watch interview. Containerships keep getting larger: "The biggest ships of up to 20,000 TEUs will be deployed on the key trades from Asia to Europe. The ships that were used before will be cascaded to smaller trades, so there's a push going through the entire system which means that port operators have to service bigger ships."
That means a need for increased berth space, and bigger cranes with more reach. Also deeper port basins and more efficient inland logistics, Fejfer said.
Neil Davidson, ports analyst at London-based Drewry Shipping Consultants, said recently there are "some deeper issues that have to be addressed even after the [West Coast] contract is agreed."
One relates to a decision by terminal operators last year to stop providing truckers with the chassis on which they haul containers to and from ports. A lack of alternative sources created a shortage. That problem worsened when terminals started to fill up and operators refused to accept deliveries of empty containers.
It appears the Federal Maritime Commission intends to play a role in sorting through congestion and efficiency issues. FMC Chairman Mario Cordero this month said his priority for the commission in 2015 is to address the congestion issues plaguing the nationís ports.
Numerous ports across America have been affected by terminal congestion in 2014 and early 2015, he noted, and one of the commissionís major goals, outlined in the FMCís updated Strategic Plan for Fiscal Years 2014-2018, is to "maintain an efficient and competitive international ocean transportation system."
Cordero said the efficient operation of the nationís ports is "squarely within" the agencyís mandate and "paramount to the commissionís responsibilities."
He plans a "thorough review of the issues and views that have been provided from various maritime industry stakeholders." Cordero added the commission would continue its role in "protecting the shipping public and addressing unreasonable or unjust practices by carriers or marine terminal operators."
That may be good or bad news. Stay tuned.
B.C. ports gain from West Coast port cargo backups
B.C. ports such as Prince Rupert stand to benefit from chronic congestion plaguing the U.S. West Coast, according to industry analysts, as shippers seek alternate routes to get their products to market.
Prolonged and contentious contract talks for labor at U.S. West Coast ports, along with a chronic chassis shortage and the pressure of processing super sized ships, has resulted in months of cargo backlogs at the Ports of Los Angeles and Long Beach. In the past few weeks a federal mediator has stepped in to arbitrate negotiations between the PMA and the ILWU.
"Itís a mess, to be honest with you," said Cathy Roberson, a senior analyst at Transport Intelligence Ltd. "There is one issue after another, it just keeps building. At last count, I think there were ... 25 ships waiting to dock at the port of L.A."
The gridlock could be a boon for B.C., according to Roberson. Some freight has already has been rerouted through B.C., she said, while others have headed to Mexico to off-load.
"(B.C.) ports are noting some nice increases," she said. "Canadian west coast ports are very highly competitive and very friendly."
Vancouver is also experiencing an ongoing surge in shipping volume that has nothing to do with U.S. labor unrest, said John Parker-Jervis, the media and government affairs adviser for Port Metro Vancouver. Last year traffic increased by an estimated 4 percent and overall volume is expected to double within the next 10 to 15 years.
Since Vancouver traffic is already steady, Prince Rupert is better positioned to benefit from a boost in container volume, according to Peter Hurme, show director and editor with Cargo Logistics Canada and its Expo+Conference, being held this week at the Vancouver Convention Centre.
"Itís probably ideally better for the port of Prince Rupert, which is a port that has room to expand and is certainly, Iím sure, nowhere near capacity," Hurme said. "But nonetheless, they are served by a single railway. So at the end of the day, you can make that port as big as you want, but you still are reliant on that one railway."
Calls to Prince Rupert Port Authority for comment were not returned.
Executive deputy director hired at Port of Los Angeles
This week Los Angeles Mayor Eric Garcetti announced the appointment of Deputy Mayor Doane Liu to a newly created job at the Port of Los Angelesódeputy executive director and chief of staff.
Liu, 52, will start his position at the port on Feb. 1, reporting directly to port Executive Director Gene Seroka.
"The port has many strengths and many weaknesses," said Liu. "Gene saw a need for someone with a combination of ties to the community, a knowledge of port businesses and a knowledge of City Hall."
Serokaís expertise has been in the shipping industry, which is the portís core business.
Liu, as former top aide to several of the areaís leading political figures, has witnessed waterfront redevelopment since the 1990s. He has lived in San Pedro for 27 years, and brings strong community connections to the job.
Other top leadership appointments at the port included Mike DiBernardo, head of marketing and customer relations, and Tony Gioiello, director of development. Like Lie, both have local roots in the harbor area.
Georgia Ports Authority container volume up 10 percent
2014 for the Georgia Ports Authority ended with growth in all cargo categores, including a 10.2 percent increase in container traffic and a 7.4 percent increase in total tonnage, according to a GPA statement.
"In 2014, we saw phenomenal growth in every category," said GPA Executive Director Curtis Foltz. "Georgiaís ports benefited from an improving retail economy, renewed strength in manufacturersí orders of raw goods, and the expanding population of the Southeast."
The Port of Savannah handled 3.34 million TEUs for the year, an increase of 312,037 TEUs over 2013. The Port of Brunswick, which targets the auto and machinery trade, processed 688,575 units for the year.
Combined with roll-on/roll-off trade through Savannahís Ocean Terminal, the GPA said it moved 716,055 units in 2014, an 8.6 percent increase year-over-year.
Breakbulk cargo increased 12 percent to reach 2.74 million tons, according to the statement. Meanwhile, bulk cargo such as gypsum, wood pellets and agricultural products saw an increase of 5.7 percent for a total of 2.81 million tons.
Combining containerized, bulk and breakbulk cargo, total tonnage reached 30.39 million tons, up 2.09 million for the calendar year.
"Our deepwater ports are powerful economic engines for the state of Georgia and the nation," said Gov. Nathan Deal. "GPAís great performance over the past year is a testament to Georgiaís superior logistics network, starting with port terminals that have flawlessly taken on more business while still ensuring on-time, reliable delivery."
3 Plead guilty to extortion plot at Port Newark
This week a former ILA official, a former Newark police officer and a third man admitted to taking Christmas tributes from dockworkers in return for better jobs and wages, according to the state Attorney Generalís office.
The three pled guilty to demanding money from thousands of union members at the Port of New York and New Jersey, the state Attorney General's Office said.
The union members were required to make the payments out of their year-end bonuses in order to get higher-paying jobs, better shift assignments and overtime, all of which were determined by the criminal enterprise that exercised control over the terminals.