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Today's Cargo News Archives
Summary for January 29 - February 2, 2007:

Long Beach breaks cargo record

Nearly 7.3mn cargo containers moved through Port of Long Beach (PLB) terminals in 2006 for a fifth straight year of record-breaking cargo movement.

PLB Port terminals moved 7.29mn TEUs in 2006 – an increase of 8.7% over the record of 6.71mn TEUs for 2005. Port terminals have increased the total number of TEUs, which includes import, export and empty containers, every year since 2001.

The 2006 cargo surge was driven by continued US demand for products manufactured in Asia and the increased vessel capacity of the new generation of 8,000-TEU container ships.

“Port cargo movement is a good barometer of what’s happening in the economy,” said J. Christopher Lytle, Managing Director of Trade Relations and Port Operations. “Consumer confidence has been high, unemployment is low, and in general the US economy had a very strong year.”

Inbound cargo at the Port increased by 11.2%, to 3.7mn TEUs, while exports increased by 5.7% to 1.3mn TEUs. The movement of empty containers, most sent overseas to be refilled with products, increased by 6.4% to 2.3mn TEUs.

Kingston container terminal acquires new cranes

The multi-million dollar fifth phase of the Kingston container terminal expansion project is almost complete with the arrival of two of six state-of-the-art cranes, which are expected to improve Jamaica's position as a trans-shipment port in the world market.

Valued at $7.5mn each, the Chinese-made super post-panamax cranes were unloaded at the port Jan 25, and will be commissioned within a month. They each measure 27m from bumper to bumper and have loaded hoist speeds of 174/194 feet per minute.

Expansion under phase five of the development plan will cost $240mn.

Phase five will be concluded with the arrival of the four additional cranes - due by August this year - and the completion of the paving of the area between the terminal and the new highway.

Once finished, the entire expansion will allow the port to handle 3.2mn containers a year, up from a current rated capacity of 1.5mn.

Maersk pulling out of Halifax

The Port of Halifax is losing one of its most visible clients, Maersk shipping line, which accounts for about 25% of the Halterm container terminal’s business and about 9% of port business overall.

Halifax Port Authority president and CEO Karen Oldfield said she was confident Maersk will return, saying that Maersk is in the process of restructuring.

Maersk’s business represents about 50,000 TEUs to the port of Halifax. Oldfield said the port will continue to pursue that cargo.

Meanwhile, Oldfield said the port will play up its room for expansion. It will also encourage ocean carriers to travel through the Suez Canal for easy access to lucrative central North American markets via Halifax.

The port authority last year opened an office in India to spur cargo trade. Halifax also plans to focus on large retail chains like Target, Walmart and Home Depot by opening retail distribution centers near the port.

Vietnamese container port starts expansion

The First Logistics Development Company started a new expansion stage for its Vietnam International Container Terminals (VICT) in Ho Chi Minh City on Jan 23. VICT said an additional investment of $15mn will facilitate the growth of its containerized cargo handling services.

VICT general director Joseph Wann Shang Jye said the money would go to the expansion of its wharf by 192 meters to allow the port to berth up to four container vessels at a time.

On completion, the wharf will have a total length of 678 meters and the port’s handling capacity will rise to 900,000 TEUs per year by 2008, he said.

VICT representatives also signed contracts Jan 23 with three partners: construction consulting firm CBM Co., UNICO, which supplies 27 high empty stackers for VICT, and NAVIS, which provides a terminal operating system.

SITC Logistics plans major distribution push in China

SITC Logistics announced Jan 26 that they will invest more than 100 mn yuan (about $13mn) over the next two years to acquire the latest technology to increase its distribution to 75% of China’s territory.

The company last year purchased Oracle’s Transportation Management System (TMS), used by major multinational corporations, in its push to become China’s leading supply chain management and integrated logistics service provider.

TMS is a web-based application which allows internal and external users with authorization to access it with a web browser. It enables shipment execution, such as booking/tendering, status updates and en route planning. The application also supports multiple currencies, languages and units of measures and can be used for inbound and outbound shipments.

Yang Shaopeng, chairman and CEO of SITC Logistics, said that when the first stage of the system is completed in April, SITC Logistics would become the first logistics company to utilize this technology in its daily enterprise resource planning (ERP) management in Asia.

China's Exim Bank focuses on imports

The Export Import Bank of China will focus on support of imports in order to narrow the country’s foreign trade surplus, state media reported Jan 29.

The bank, which chiefly finances exports of large machinery and electronics, "will speed up our business transformation," said its chairman and president, Li Ruogu.

For this year, a key government priority is to reduce the trade surplus, which hit $177.5bn in 2006, a rise of nearly 80% from 2005.

"The launch of the import credit business is an important measure to help achieve a trade balance, upgrade technologies and optimize the import-export structure," Li said.

He added that many domestic enterprises had filed applications for this service, which focuses on support for the purchase of key technologies, equipment and resources.

The bank had approved more than 18bn yuan worth of import credits by the end of 2006, including a $1.5bn framework agreement with Shenzhen Airlines for buying foreign aircraft and other equipment, the report said.

Cheaper crude may bolster Japan economy

The recent decline in the cost of crude oil will be "a plus for prices in the long-term," a Bank of Japan (BOJ) official said Jan 29, regarding the impact of lower energy expenses on the Japanese economy.

Cheaper oil "will be a negative factor for prices in the short term, but positive for the overall Japanese economy down the road," said Hideo Hayakawa, director general of the BOJ Research and Statistics Department.

If the economy manages to weather the decline in oil prices, "it will also be positive for consumer prices in the long run," said Hayakawa, underscoring the need for a comprehensive analysis of the overall impact.

"Consumer prices have recently been on a moderate upward trend," he said.

Since last December, the BOJ has been warning of weakness in consumer price indicators. Hayakawa failed to say whether those concerns had dissipated.

The Japanese economy's potential growth rate appears to be approximately 1.5%, according to Hayakawa. The central bank had pegged the rate at 1.5-2.0% in April 2006.

Global Cold Chain Alliance to launch in April

The Global Cold Chain Alliance (GCCA), a new resource for the frozen and refrigerated food industry, will debut this spring.

The GCCA is a formal partnership among four organizations that share common management and bring together vital elements of the food industry.

The organizations include: the International Association of Refrigerated Warehouses (IARW), the International Refrigerated

Transportation Association (IRTA), and the International Association for Storage Construction (IACSC), and the World Food Logistics Organization (WFLO).

The GCCA aims to develop partnerships and affiliations with other cold chain stakeholder organizations, providing a platform for the industry to share information about best practices, government affairs, trends, economic development, and investment opportunities.

The GCCA will launch at the IARW-WFLO-IRTA Annual Convention Apr 21-26, 2007, in Phoenix, AZ.

Shell agrees to sell Los Angeles refinery to Tesoro

Shell Oil Products US announced Jan 29 that it has signed agreements with Tesoro Corp to sell its Los Angeles refinery, Wilmington Products Terminal, along with approximately 250 retail sites and supply agreements in and around Los Angeles and San Diego.

The transaction is expected to close in mid-2007, assuming all regulatory approvals are obtained and other conditions to closing are satisfied.

The retail sites to be sold to Tesoro will remain Shell-branded, and Shell's commitment to further build on its strong branded presence in California and elsewhere will continue.

Ship chief, crew sentenced for vessel pollution

The US Department of Justice announced that Chief Engineer and Second Engineer of the M/V Sun New, owned and operated by The Sun Ace Shipping Co based in Seoul, South Korea, were sentenced Jan 29 for crimes related to vessel pollution.

Chief Engineer Chang-Sig O was sentenced to five months in prison and two months of supervised release during which time he may not return to US navigable waters serving as a ship's engineer.

Second Engineer Mun Sig Wang was sentenced to three years of probation during which time he is prohibited from serving as an engineer on board any vessel that comes into the navigable waters of the US.

The Sun Ace Shipping Co, which previously pled guilty, was fined $400,000, ordered to pay $100,000 as a community service payment, and prohibited from returning to the US for three years for similar violations in conjunction with this case.

China, Russia top piracy offenders

Business leaders regard China and Russia as the worst offenders in allowing product piracy, according to a survey of four dozen leading companies that has called on governments worldwide to do more to protect patents and other intellectual property.

The International Chamber of Commerce (ICC) survey, released Jan 29, did not give a figure for the companies’ lost potential sales to piracy. American officials say piracy in China alone costs companies worldwide as much as $50bn a year.

China is regarded as the world’s leading source of counterfeit goods, ranging from Hollywood movies to anti-AIDS medications, China abounds with fake products that have damaged public health, from liquor made of industrial alcohol to counterfeit milk powder that led to babies dying of malnutrition.

The survey, which said Russia is a growing producer of illegally copied products, also included India, Brazil and Indonesia, Vietnam, Taiwan, Pakistan, Turkey and Ukraine as offenders.

Respondents to the ICC survey ranked countries by the strength of their anti-piracy laws, government enforceability, and public attitudes toward piracy, the group said

The survey ranked the US as having the best protection for intellectual property, followed by Britain, Germany, France, Japan, Canada, Switzerland, the Netherlands, Singapore and Australia. Companies surveyed said they spent about half their research and development budgets on technology and strategies to thwart product pirates, the ICC said.

Kintetsu Express to build warehouses in Shanghai

Kintetsu World Express Inc. plans in May to set up two warehouses in Shanghai with a combined area of 85,000 sq m, giving the company one of the largest foreign-owned logistics bases in China.

The international air-cargo forwarder will use the facilities as a hub for linking its approximately 100 bases in the country. They will play an integral role in a planned new inventory-management system, as well as used to deliver parts and products, with the overall aim of expanding the firm's logistics operations of electric parts, copiers and other items.

The company seeks to boost sales of its Chinese subsidiary from the 24bn yen forecast for the current term by 20% in fiscal 2007.

Top fashion brands fail mainland quality tests

Clothes from top international labels have been declared substandard by Shanghai authorities, some containing excessive levels of chemicals that can cause respiratory and skin problems.

Chanel, Zara, Mango, Armani, Christian Dior, Burberry, Polo Ralph Lauren and Ermenegildo Zegna were among the brands whose clothes were found to be substandard.

Problems included high levels of formaldehyde, a chemical that can cause cancer, unacceptable acid levels and poor dyes, according to a Shanghai Administration of Industry and Commerce notice.

Most of the labels concerned said they were committed to respecting mainland regulations. China is the world's third-largest consumer of luxury goods, after Japan and the US.

The administration sampled 59 products of 27 labels, some costing 60,000 yuan. Twenty-five were substandard.

The municipal authorities vowed to regulate the market by ordering the removal of substandard items from sale and said penalties would be imposed.

Japan's spending slump continues

Japan's retail sales fell in December, signaling consumer spending may be slow to recover from its worst slump in almost a decade.

Retailers' revenue declined a seasonally adjusted 0.2% from November, the Trade Ministry said Jan 30. From a year earlier, sales decreased 0.3%, the biggest drop in eight months.

Bank of Japan Governor Toshihiko Fukui cited weak consumption as a reason why his policy board held interest rates at 0.25% in the past two months.

Consumer spending, which accounts for more than half of the economy, fell 0.9% in the third quarter, the biggest drop since 1997.

"The recovery has left consumers behind," said Akira Maekawa, an economist at UBS Securities Japan Ltd. "Real cash earnings are still negative and that's one of the major reasons spending is stagnant."

The yen traded at 121.67 at 9:47 a.m. in Tokyo, compared with 121.50 before the report was published.

Baosteel signs shipping deal

Baoshan Iron and Steel (Baosteel), China's largest steel maker, has contracted China Shipping Development (CSD) to ship iron ore to feed its growing steel output, the shipping company said.

CSD will ship 6mn tons a year of iron ore along the coast of China for three years starting in April 2007.

It will ship ore from Australian ports to Chinese ports for 15 years starting from 2010, it said in an exchange statement.

Baoshan Iron and Steel is expected to produce about 6% more crude steel, or around 22mn tons, in 2007 than in 2006 as it ramps up output to feed China's robust economy. Its parent, Baosteel Group, expects to double crude steel production to 50mn tons a year by 2012.

MHI to triple renewables capacity by '08

Mitsubishi Heavy Industries Ltd. intends to build new solar cell and wind turbine plants at home and abroad by 2008 to meet rising demand for renewable energy in Europe, the US and Japan.

MHI currently makes roof-mounted solar cell panels for homes and factories at its Nagasaki shipyard. The manufacturer will construct two more facilities there and a fourth at an as yet unselected site.

On completion, annual output capacity of the panels will be increased from 54,000kw to more than 150,000kw. Total spending will exceed 20bn yen.

MHI currently makes wind turbines at its Nagasaki shipyard and at its dockyard in Yokohama. MHI intends to expand the Yokohama facility and will also construct a plant in Canada, spending roughly 10bn yen. As a result, annual production capacity will triple the current level of 380,000kw.

In fiscal 2008, MHI aims to lift sales of wind turbines to about 150bn yen and boost global share to 10%, up from the current 2% or so.

MARAD okays Neptune LNG project

Neptune LNG LLC Jan 30 announced that the US Maritime Administration (MARAD) will issue it a deepwater port license to to build, own, and operate a liquefied natural gas (LNG) delivery system in Massachusetts Bay.

Neptune, a subsidiary of SUEZ Energy North America, is the first offshore LNG project on the US East Coast to win such a license.

Neptune LNG anticipates having a fully operational project by 2009, including a pipeline connection to the existing sub-sea pipeline, specially designed ships, and enough LNG to serve customers in Massachusetts and the rest of New England.

At its current rate of growth, New England could face a shortage of natural gas approaching 500mn cubic feet per day (cu ft/day) in 2010.

The Neptune project is being developed to provide 400-750mn cu ft/day of natural gas to the region -- enough to serve 1.5-3mn homes daily.

Portugal to distribute Chinese goods

Portuguese construction group Mota-Engil and the Chinese Nan Kwong Group have signed an agreement that will use Portugal as a distribution center for products shipped from China.

The Mota-Engil Poceirao platform in the Palmela district will receive the Chinese goods.

According to Prime Minister Jose Socrates and Mota-Engil, Portugal's geostrategic position is seen by Beijing as a good choice for the transshipment of Chinese exports to other countries in southern Europe, Africa and Latin America.

The Portuguese also hope to rival Rotterdam's current port domination ahead of improvements to the Panama Canal, which are expected to be completed in 2015 and will transform Portugal into a privileged European Atlantic port.

The Portuguese government thinks the use of the country as a distribution center could create new business centers connected with the processing and repackaging of products.

Japanese cars top sales in China

Japanese brands topped sales lists in the Chinese auto market in 2006 as Japanese carmakers increased their investment in the country and brought out a score of new models in a scramble for market share.

About 983,600 sedans were sold under Japanese brands in China in 2006, more than 25% of the country's sedan sales of 3.83mn, according to a report by the China Association of Automobile Manufacturers.

Sales of Chinese indigenous brands came close to their Japanese rivals with 982,800 units, followed by European and American brands.

2006 figures show Japan in front with 25.69% of the market, Chinese brands with 25.67%, European brands with 24.44% and American brands at 14.17%.

Advantech wins Saudi contract

Advantech AMT, Inc, Jan 31 announced that its wholly owned subsidiary, Advantech Satellite Networks Inc, won a contract to provide a new satellite communications network for Saudi Arabia’s national oil company, Saudi Aramco.

The DVB-RCS VSAT Satellite Communications System includes redundant hubs with geographic diversity and provisions for hundreds of fixed, maritime and auto-tracking terminals that will be used to support Saudi Aramco operations, especially exploration of new oil reserves in the Saudi Arabian desert.

The system also provides disaster recovery capabilities and backup communications services to remote areas and will enable timely use of information from rigs and field crews.

US economy grows 3.5%

The US economy grew at an annual pace of 3.5% last quarter, propelled by a rebound in consumer spending as gasoline prices fell and wages grew.

The growth rate was the strongest since the first quarter of last year and followed a 2% third-quarter pace, the Department of Commerce said yesterday.

A consumer-spending spree during the holidays helped the economy overcome slumps in home construction and car production that some economists predicted would derail the expansion.

A smaller trade gap also gave the economy a boost. The trade deficit shrank to an annual $581.4bn from $628.8bn in the third quarter. The deficit added 1.6% to GDP, the most in 10 years.

Russia seeking new oil, gas transit routes

Russia is planning new transit routes to Europe and Asia for its oil and gas to reduce dependence on transit countries and increase reliability of supply, President Vladimir Putin said.

Putin insisted his country was a reliable energy supplier and wants long-term agreements with European companies of the kind already reached with Germany's BASF and Italy's ENI.

Russia has been criticized by the European Union for endangering energy supplies to Europe by being too heavy-handed in relations with neighboring states.

“We are not obliged to subsidize the economies of other countries," Putin said, referring to recent price disputes with transit countries Belarus and Ukraine.

Russia will expand the Primorsk oil terminal on the Gulf of Finland by 50mn tons annually to increase direct exports via the Baltic Sea, Putin said.

He added that Russia would speed up work on the East Siberia Pacific Ocean oil pipeline system connecting Siberia to the Pacific coast and also would look at expanding a gas pipeline via the Black Sea.

HHI profits soar on pricier ships

Hyundai Heavy Industries Co., the world's largest shipbuilder, Feb 1 said its fourth-quarter and annual profits soared on increased orders and higher prices.

HHI earned 295.7bn won around $315mn in the three months ending Dec 31, the company said, more than quadrupling from 69.6mn won in the same period the year before. Sales rose 27% to 3.6 trillion won.

For 2006, Hyundai earned 712.8bn won, nearly quadrupling from 183.3bn won in 2005. Sales rose 21% to 12.5547 trillion won.

HHI spokesman Juno Kim said a the results were boosted by a doubling in prices for the industry benchmark ship, the very large crude oil carrier, to as much as $130mn between 2003 and 2005.

The company delivered 79 ships in 2006 compared with 69 in 2005, Kim said.

A change in safety requirements for crude oil carriers has also led to an increase in orders to replace older ships.

At the end of 2006, HHI had an order backlog of 278 ships valued at $23.1bn, enough “for the next three years,” Kim said.

Brazil to build 10 oil tankers

The Brazilian government Jan 31 signed contracts for the construction of 10 oil tankers at a cost of $1.16bn, aiming to modernize the fleet of state-run oil company Petrobras and revive the country’s shipbuilding industry.

The vessels will join the fleet of Transpetro, the transportation unit of Petrobras, which plans to acquire a total of 42 new ships between now and 2015.

The ships will be built by Astillero Atlantico Sur, a consortium formed by Brazilian construction companies Camargo Correa, Andrade Gutierrez and Queiroz Galvao, Norwegian shipyard Aker Promar and South Korean shipbuilder Samsung.

The first 10 Suezmax-class tankers will be built with 90% financing from state-owned development bank BNDES, which lent the consortium $1.16bn.

The new Atlantico Sur shipyard will have the capacity to build two new vessels every 18 months and an oil drilling platform every 36 months.

Become Inc. turning Japanese

US firm Become Inc., operator of a Web site offering product information and price comparison shopping, is bringing its business model to Japan.

The firm Feb 1 launched a Japanese-language site that shoppers can use to research information and compare prices on 10mn different products available at 10,000 different stores.

Become has proprietary search technology that ranks Web pages by relevance for shoppers in search of product information. A list of sites is displayed along with a list of online stores where the item in question can be purchased.

Become has partnered with shopping site operators and will collect fees tied to the number of people who visit the online stores from the Become Japan site. The company projects sales of 800mn yen in the first year.