Monday, January 27, 2014
Teamsters ratify new YRC labor contract, paving way for refinance
Now that its Teamster workers have ratified a new contract with labor concessions, trucking giant YRC Worldwide can now proceed to refinance $1.4 billion of debt, according to CEO James Welch.
Approximately 66 percent of union truckers voted in favor of extending their YRC contract until 2019, said union spokeswoman Leigh Strope. The contract concessions maintain pay cuts of 15 percent, 75 percent in pension contributions, and includes delays in raises and less vacation time.
Out of a total of 26,000 union workers at YRC, 18,581 participated in the vote and 12,267 favored the proposal, the union said. YRC had said the original, rejected labor proposal would have cut costs by $100 million a year. Welch didn't say how much the revised labor agreement would save the trucking firm.
YRC said creditors and investors mandated lengthening the current labor agreement in exchange for $1.15 billion of lower-interest loans and new shares to lower $300 million of debt. The company needs the financing in order to make payments due in September.
"It's a reset for the company," Welch said in a phone interview. "We've been working on this strategic process for a year to pay down the debt and to achieve a lower interest payment, and the labor agreement was the key ingredient to make all this work."
For more of the Bloomberg story: bloomberg.com
Jaxport awards $23M contract to local company for new rail yard
The Jacksonville Port Authority board awarded a $23.5 million construction contract last week to Jacksonville-based Dana B. Kenyon Company for the design and construction of a new intermodal container transfer facility, as part of its expansion plans to be finished by late 2015.
The rail yard, located next to the Dames Point Marine Terminal, will transfer cargo containers between ships and freight trains, giving the port faster access to markets since containers would no longer have to be trucked to and from the CSX or Norfolk Southern yards on the west side of the city.
The project is an "absolute requirement" to stay competitive, according to JaxPort CEO Brian Taylor, since most major ports already have on-dock rail in place.
The project is fully funded by a $10 million federal grant and $20 million from the Florida Department of Transportation. The remaining money will help pay for CSX to shift an existing railroad slightly east to service the future facility.
For more of the Florida Times-Union story: members.jacksonville.com
Hanjin discontinues two shipping services
Cash-poor Hanjin Shipping said last week it will discontinue two of its container shipping services that are losing money within the first half of 2014.
Hanjin said it will close its container service between Asia and the Black Sea in February and its New Trans Atlantic service linking the U.S. East Coast and Northern Europe in May.
"We have notified the shippers of our proposed pullout from the two lines," Hanjin said. "The closing of the two lines is part of efforts to streamline money-losing shipping lines."
Other members of the CKYH alliance – Cosco, "K" Line and Yang Ming – will continue their services on the NTA line, the company said.
Reportedly, Hanjin is proceeding with the sales of its bulk vessel business division and its investments in terminals worldwide.
For more of the Global Post story: globalpost.com
Zim makes a deal with creditors
Israeli container line ZIM Integrated Shipping Services agreed on terms with the majority of its creditors, according to an e-mailed statement. Parent company Israel Corp. will give control of its debt-ridden marine transportation arm to creditors, laying the ground for a split of its business.
As part of the deal, Israel Corp. will provide $200 million and give creditors a 68 percent stake in the company, while retaining the rest of the shares. The shipping company reached an earlier debt arrangement with bondholders in 2009.
"The company is lowering its exposure to this shipping activity," Roni Biron, an Israel-based analyst at UBS AG, said by phone to Bloomberg. "Once approved the debt settlement will pave the way for the company's spinoff plans."
Zim lost money in both 2011 and 2012, according to Bloomberg. Standard & Poor's Maalot lowered Zim's rating to CC on Dec. 12, citing the continued downturn in the shipping industry.
Zim's debt will be "significantly reduced" by the agreement, CFO Guy Eldar said today by phone. The company owes $1.82 billion to financial institutions and additional debt, the amount of which has not yet been disclosed, to other creditors, he said.
Israel Corp., performed badly on the benchmark TA-25 Index in 2013, said in June it will form a new unit that will own all of its businesses apart from Israel Chemicals Ltd. and Oil Refineries Ltd. The parent company's former chair Amir Elstein said in summer that Zim's restructuring should be finalized before the split.
For more of the Businessweek story: businessweek.com
UK mariners told to look out for ghost ship
Ships off the UK coast have been warned to be on the lookout for a drifting ghost ship that slipped its lines in 2012.
Britain's Maritime and Coastguard believe winter storms are pushing the 300-foot Lyubov Orlova towards England, Ireland or Scotland, and have informed all vessels. The deserted cruise ship has not been seen in a year since breaking free from a tugboat off the coast of Canada after running aground.
The 300-foot-long ship weighs 4,250-tons and is now believed to be full of rats.
For more of the Malaysia Sun story: malaysiasun.com
Tuesday, January 29, 2014
Drewry: Maersk sets out to expand
AP Moller-Maersk recently sold $4 billion worth of non-core and under-performing assets, raising questions of where it plans to reinvest, and how that will affect the container shipping industry. If the cash is funneled into the world's largest container line so that it can provide even more competitive services, its struggling rivals will be "quaking in their boots," according to the latest issue of Container Insight from Drewry Maritime Research.
Although Maersk Oil is currently their most profitable arm, APM Terminals and Maersk Line are also likely to be big recipients of the cash generated by its recent sale of non-core assets, Drewry says.
APM Terminals is focused primarily on higher growth emerging markets, with emphasis on developing deep-water facilities and the expansion of existing facilities. Drewry notes the company currently has 7 new terminals under development, and expansion projects at 16 existing terminals. All but 4 of these 23 developments are in emerging market locations.
Since MSC's overall fleet will soon be as large as Maersk Line's or possibly bigger, Drewry says, it is probably that Maersk Line will want to widen the gap again with MSC to maintain its competitive edge. Maersk is strong in terms of the very largest ships, but lacks vessels in the 13,000-TEU New Panamax size and may need to invest them, depending on its planned use of the Panama Canal after the end of 2015.
Drewry's view is that in addition to its oil business and APM Terminals, Maersk Line will likely receive an infusion of cash from its parent company to maintain its market share and balance its fleet.
Port Everglades embarks on $100M ICTF to link with FEC
Port Everglades is launching a $100 million project to build a new intermodal container transfer facility to facilitate containerized cargo transfer through the port to the main rail-line of Florida East Coast Railway.
The ICTF rail system will transfer cargo containers directly from ships to trains, and curtail the practice of trucking cargo from Port Everglades to an outside railway depot.
The total public-private endeavor will cost more than $100 million. Port Everglades will provide 42.5 acres of land worth $20 million, the state of Florida will contribute $18 million in grants, the Florida East Coast Railway is investing $35 million, and the Florida Department of Transportation will spend $42 million to extend Interstate 595 via an overpass into Port Everglades.
"The new ICTF will allow the FEC to efficiently and effectively deliver superior transportation service between South Florida and the southeastern United States," said Jim Hertwig, CEO of the railway. "This facility will be able to handle the additional cargo of larger ships that are coming out of Europe today and when the Panama Canal expansion is completed and beyond."
For more of the Examiner story: examiner.com
Compromise allows 225 new dockworker hires at Port of NY/NJ
The Waterfront Commission of New York Harbor and the New York Shipping Group, as a temporary compromise, have agreed to hire 225 new dockworkers out of the 682 requested by the group, both sides said Monday.
The New York Shipping Association, which represents port employers, and the International Longshoremen's Association have teamed up as co-plaintiffs in a federal lawsuit sparked by the association's intent to hire 682 new dockworkers at the Port of New York and New Jersey. The lawsuit claims the commission has interfered in the hiring process, which could result in a labor shortage that would have serious economic consequences.
The commission filed a motion to dismiss the suit last week in U.S. District Court in Newark, claiming that that it is within its authority to insure that minorities are included among the worker's ranks, and that it is holding the association and the union to the terms of a new hiring clause in their latest contract.
The commission and the shipping association agreed to an interim measure to hire 150 longshoremen and 75 union supervisors, effective Jan. 21.
Officials at Port Authority of New York and New Jersey, which operates the port and is the landlord of many port-based employers, said preventing a labor shortage that could hinder or discourage the loading or unloading of cargo vessels is critical.
For more of the NorthJersey.com story: northjersey.com
ICTSI expands in Africa, partners with CMA-CGM
Razon-owned International Container Terminal Services Inc. is expanding its operations into Nigeria, in a partnership with CMA Terminals, and also into the Democratic Republic of the Congo.
ICTSI has partnered with CMA Terminals of France, the world's third largest container shipping line, for its operations in Nigeria. On Monday ICTSI announced a share purchase agreement with CMA Terminals of France, a subsidiary of CMA-CGM Group. ICTSI had said in 2012 it would invest $225 million to provide cargo-handling equipment and information technology infrastructure at the Lekki container terminal in Tolaram Port in Lagos, Nigeria.
"The joint venture forged between ICTSI and CMAT in Lekki International Container Terminal Services LFTZ Enterprise is expected to further improve the viability of the project in the Lagos Free Trade Zone at Ibeju Lekki, Lagos State, Federal Republic of Nigeria," said ICTSI Treasury Director Arthur Tabuena.
ICTSI is also building a $100 million river port terminal in the Democratic Republic of Congo, partnering with a concessionaire of a parcel of port land to form ICTSI-DR Congo.
ICTSI-DR Congo will build a new terminal by the banks of the Congo River in Matadi. In addition to managing, developing and operating the port as a container terminal, the company will also provide container handling services and general cargo services in the port.
For more of the ABS/CBN News story: abs-cbnnews.com
For more of the GMA News story: gmanetwork.com
Hamburg-Süd and Hapag-Lloyd shift from Tilbury to London Gateway
Container shipping lines Hamburg-Süd and Hapag-Lloyd will move "some" of their services from the UK's Port of Tilbury to London Gateway.
The firms told Forth Ports, owner of Port of Tilbury, that they will use bigger vessels that Tilbury is unable to accommodate.
The pair will begin using London Gateway, designed to accommodate the biggest vessels in the world, starting on May 2014.
"Clearly we are very disappointed that Hamburg Süd and Hapag-Lloyd have decided to move some of their services from Tilbury," said a spokesman for Forth Ports.
For more of the Southend Standard story: southendstandard.co.uk
At least 21 dead after tourist boat capsizes
At least 21 people died on Sunday when a tourist boat capsized in the Bay of Bengal near Port Bair in the Andaman and Nicobar islands in India, according to officials.
The South Andaman district administration reported 21 deaths and that 13 people were rescued. One person is still missing.
The boat, which had the capacity to carry only 25 passengers, was overcrowded at the time of the accident, sources said.
The government has ordered a magisterial level inquiry into the disaster.
More at: indiatoday.intoday.in
Wednesday, January 29, 2014
Hanjin will pull services from Portland or another West Coast port
Hanjin Shipping plans to stop calling on one of four West Coast ports — Portland, Seattle, Vancouver, B.C., or Prince Rupert, B.C. — according to officials at the ports of Seattle and Prince Rupert.
Ever since Hanjin threatened in October to halt its weekly service at the Port of Portland due to high terminal charges and low dockworker productivity, the Oregon port has launched a full court press to keep its business. But as the smallest of the four West Coast ports up for the cut, it may be at a disadvantage.
If Hanjin pulls out of Portland, local shippers will pay $500 to $1,000 extra to send a container by truck or rail to and from ports in Washington or California.
Portland, the smallest of the four ports in terms of cargo volume, handled 179,000 TEUs in 2013, compared to the Port of Prince Rupert's 536,000 TEUs, and 1.57 million TEUs at the Port of Seattle. Port Metro Vancouver handled 2.6 million last year through November.
The Port of Portland's container terminal is 100 miles up a river, requiring a bar pilot to bring a ship across the Columbia River Bar and another to steer it upriver. Plus, the river channel is only dredged to a depth of 43 feet, while the other three ports can accommodate larger Post-Panamax vessels.
Perhaps worst of all, the port has had serious labor-management problems that have resulted in backed up cargo and caused container lines to bypass the port, while terminal operator ICTSI and the International Longshore and Warehouse Union blame each other for causing the chronic delays.
If the relatively small ports of Portland and Prince Rupert are the most likely to be cut from Hanjin's roster, Portland has some advantages. Because Portland is a strong export port with local goods producers, Hanjin doesn't have to spend money transporting empty containers back to Asia.
The Prince Rupert port is mainly a transit point providing rail connections to and from eastern Canada and the Midwest, but is closer to Asia by sea than the other three ports, offering shorter shipping times.
Drewry Maritime concluded a recent analysis of Hanjin Shipping's finances, predicting that other "financially troubled carriers will look to follow the example of Hanjin and pare back their networks, with their peripheral trades the first to go."
For more of The Oregonian story: oregonlive.com
AgTC clarifies Japan's new 24-hour documentation rule for exporters
Japan's new advance documentation rule for exporters goes into effect in March of this year, and the Agricultural Transportation Coalition is concerned that some ocean carriers may misinterpret the new regulation, adding unnecessary delays and costs to exports to Japan.
Japan Customs published the rule, which states that the carrier's master Bill of Lading (and the NVOCC's house B/L) must be submitted by the shipping company to Japan Customs 24 hours prior to departure, according to the AgTC statement.
AgTC says some carriers have gotten it wrong, erroneously thinking that the Bill of Lading must be submitted by the carrier 24 hours prior to loading rather than prior to departure.
The coalition is reaching out to all carriers, asking them to conform to the requirements of the Japan Rule. To avoid delays, it asks that carriers refrain from demanding earlier submission of documents from exporters in order to submit the B/L's earlier than is required by the new rule.
Port of Savannah on target to break cargo record in FY2014
The Port of Savannah is on its way to handling a record 3 million TEUs by the end of the fiscal year, according to Curtis Foltz, executive director of the Georgia Ports Authority.
Foltz told the GPA board that Savannah moved 1.54 million TEUs in the six-month period from July through December 2013, up 5.8 percent year-over-year.
It's the first sign of real growth at the Savannah port, after three years of volume holding steady at approximately 2.9 million containers, the statement said.
"We will exceed 3 million for sure in the upcoming year," Foltz told reporters after the board meeting Monday. "To me, all it means is we're on our way to 4 million."
Combined, Savannah and Brunswick handled 14.3 million tons of cargo since July 1, 8 percent higher than the same period last year. The GPA noted that automobiles and tractors were up 6.8 percent to 343,065 units during the first half of the fiscal year.
Georgia and federal officials have embarked on a $652 million project to deepen Savannah's shipping channel to accommodate larger ships. Robert Jepson, GPA board chairman, said work to deepen 30 miles of the Savannah River will be started by the middle of this year.
Matson Announces Closing of $100 Million Debt Private Placement
Matson, a leading U.S. carrier in the Pacific, announced it would issue $100 million in 30-year final maturity senior unsecured notes in line with a previously announced private placement in early November.
The company said the notes have a weighted average life of approximately 14.5 years and bear interest at a rate of 4.35 percent, payable semi-annually. The proceeds from the private placement of notes will be used for general corporate purposes.
"We are pleased to have closed this private placement transaction which provides Matson with long-term unsecured debt at an attractive fixed interest rate and demonstrates the company's continued strong access to external capital," said Joel Wine, Matson's senior vice president and CFO, in the statement.
Matson provides shipping services to Hawaii, Guam, Micronesia and select South Pacific islands, plus expedited service from China to Southern California.
Federal sentences handed down for truck heist perpetrators
A man who tried to steal a truckload of beef from a Kansas slaughterhouse has been sentenced to a year and a day in federal prison.
He is accused of trying to steal nearly $88,000 worth of beef from Tyson Fresh Meats in Holcomb by posing as a legitimate freight hauler.
U.S. District Judge Monti Belot sentenced Oganes Nagapetian on Monday for conspiracy to commit interstate shipment fraud. Tigran Nagapetian was given probation for the crime of hiding a felony because he lied to authorities to conceal his brother's actions.
For more of the KSWT story: kswt.com
Thursday, January 30, 2014
TSA lines recommend March freight rate hike on Asia-U.S. trades
Container carriers of the Transpacific Stabilization Agreement hope to raise rates on the Asia-U.S. trades in two steps — by $300 per-FEU effective March 15 and then another as yet un-quantified increase on May 1, according to a TSA statement.
This effort to boost chronically unprofitable freight rates is in addition to a Jan. 15 general rate increase by TSA member lines of $300 per-FEU.
Last week's spot rates from Asia to the U.S. West Coast were $2,110 per-FEU, according to the Shanghai Shipping Exchange.
Strong forward bookings indicate that the rate hike would hold through the Chinese Lunar New Year period, TSA reports.
Market overcapacity caused freight rates to drop to loss-making levels in 2013.
"There is now a growing sense that pent-up demand, depleted retail and business inventories, and a greater overall sense of economic security are converging in 2014," Lines are determined not to miss that opportunity," said TSA Executive Administrator Brian Conrad in the statement.
The members of the TSA feature 15 of the world's biggest container shipping lines, including Denmark's Maersk Line, Switzerland-based Mediterranean Shipping Company, French CMA CGM, China's COSCO, Korea's Hanjin Shipping and others.
ILA local ordered to pay $3.8M in damages over Port of Baltimore strike
A federal arbitrator has ordered a local of the International Longshoremen's Association to pay $3.8 million in damages following an October labor strike that resulted in lost revenue at the Port of Baltimore.
The damages awarded Friday provide the first estimate for how much the strike cost the port's employers. Further details of the ruling were not available. The arbitrator, M. David Vaughn, may have awarded the damages to account for ongoing revenue losses associated with questions about labor stability at the port, since cargo diversions have been reported in the past couple weeks.
Riker "Rocky" McKenzie, president of ILA Local 333, said the organization is looking for ways to appeal the ruling, which orders the union to pay about $3.8 million.
"We disagree with the arbitrator's whole handling of the entire process. That's our position," he said. "We're still in the discussion process as to how we're going to move forward."
The strike, which shut the port's terminals for three days in mid-October, began amid contentious contract negotiations between Local 333 and the Steamship Trade Association. The local contract covers automobiles, forest products and other break bulk cargo, along with working conditions.
Baltimore's three other ILA unions honored the picket lines.
Vaughn ruled the strike invalid because it violated a "no-strike" provision of a separate master contract for container cargo up and down the East Coast.
For more of the Baltimore Sun story: baltimoresun.com
Virginia Port Authority lambasted over $10.5M operating loss
The board of the Virginia Port Authority was taken to task Tuesday for its losses by the state's new transportation secretary, Aubrey Lane.
From July through December of 2013, the authority and its operations arm, Virginia International Terminals reported an operating loss of $10.5 million.
"I'm very concerned about where we are going forward," Layne said. "In fact, I've had a chance to go through the financials, and I want to make it clear I'm very concerned about the performance of this facility."
This was supposed to be a fiscal year of positive change for Virginia ports, with the authority forecasting a modest operating profit after five straight years of losses, including $15.5 million for the year that ended in June 2013.
Layne acknowledged that the port has had a hard two years, referencing its slow climb from the recession and Gov. Bob McDonnell's overhaul of the port authority board two and a half years ago, but said he wants to focus on the facts.
"While I will be an advocate for this port - I believe that is a big responsibility of my position - I will also hold us accountable," Layne said. "... If you look at the financial performance, we are nowhere near what we projected and, in fact, there's no confidence in the projections."
"You might think I'm coming off pretty strong, and you're absolutely right," he said. "It is our responsibility, if we're going to make this an economic generator for our commonwealth, that we have a handle on what's going on. And as an operations guy, I can tell you we do not, because every projection that comes up there, it's changed or we have some excuse as to why we didn't budget correctly. And quite frankly, that is unacceptable."
Layne tasked port officials to prepare two reports. The first, due March 15, will focus on VPA finances, providing solid projections for the fiscal year. The second, due July 1, is will address the port's current facilities and assets, essentially a review of what they are and how they are or are not being used.
For more of The Virginia-Pilot story: hamptonroads.com
Port of L.A. to embark on two major road projects
The Port of Los Angeles will begin construction in February on two major roadway projects that will improve the Harbor I-110 Freeway and nearby surface streets in San Pedro and Wilmington, according to a port statement.
Key segments of the Harbor I-110 Freeway are slotted for more than $100 million in improvements, the statement said, designed to make the port area easier to navigate for all vehicles.
The port said it will spend $46.6 million to widen the westbound transition from the SR-47 to the northbound I-110 and reconfigure the I-110/C Street interchange.
"These are significant public works projects that will improve the flow of traffic for thousands of commuters and truck drivers who use these roadways every day," said Interim Executive Director of the Port of Los Angeles Gary Lee Moore. "The I-110/C Street project will also help separate car and truck traffic near the port, making the drive safer and more manageable for everyone who lives and works in the harbor district."
Japan navy loses $5M submarine
Japan's navy lost a $5 million unmanned submarine during a survey last year after a nine-day search of the ocean floor failed to find it, the country recently admitted.
The Maritime Self-Defense Force was using the remote-controlled submersible in the Tsugaru Strait between Japan's main island of Honshu and Hokkaido in November, according to a defense ministry official.
The unmanned craft, which is three 10 feet long and about 6.5 feet wide and weighs about five tons, disappeared after the cable that connected it to a ship was severed.
"The ministry has set up a panel to investigate how it was lost," said the official.
For more of the Economic Times story: articles.economictimes.indiatimes.com