Monday, February 4, 2013
Tentative agreement struck between USMX and ILA
Four months after the initial expiration of a master contract, the United States Maritime Alliance and the 14,500 members of the International Longshoremen's Association came to terms on a new, tentative labor agreement.
It was announced late Friday night that the contract is six years in duration, although no details of the deal were released in a statement by the Federal Mediation and Conciliation Service.
"The tentative agreement is subject to the ratification procedures of both parties and, as well, to agreements being achieved in a number of local union negotiations," said FMCS Director George Cohen.
Cohen said, "local negotiations are ongoing and will continue without interruption to any port operation."
The retail sector, a significant customer base of container terminals on the U.S. eastern and Gulf seaboards, expressed cautious relief.
"We urge the parties to quickly complete any outstanding negotiations, including local negotiations at each of the individual 14 ports, and quickly ratify the new labor agreement," said Matthew Shay, the president and chief executive of the National Retail Federation.
Just before the new year, the two sides had resolved an issue regarding container royalty payments to dockworkers.
The focus now turns to the local talks, which involve issues specific to each port. Work rules at the Port Authority of New York and New Jersey had reportedly been the most recent key issue in the overtime negotiations, with terminal operators wanting to change legacy provisions that require excess staffing and pay for workers who aren't on the job. The ILA said the proposed changes were too extreme.
Nonetheless, the FMCS' Cohen said he was pleased with how the process worked itself out in the end.
"Again, collective bargaining has proven its worth by avoiding a potential work stoppage that would have had a severe negative impact on the nation's economy."
"On behalf of the FMCS, I want to especially convey my thanks to ILA President Harold Daggett and USMX Chairman and CEO James Capo for their leadership, patience, and persistence and to their respective hard-working negotiating committees," said Cohen.
Maersk looks to China for trade growth
Shipping giant Maersk Line, which holds a 16 percent share of the global container shipping market, is focusing on China as the country with the most promising trade growth.
Due to the global downturn and overcapacity, the container carrier decreased growth estimates from 4 percent to 3 percent.
"Shipping is a tough area to be in at the moment," said Nils S. Andersen, chief executive of parent company A.P. Moller-Maersk to CNN. "We make money, but not a lot." The company is diversifying, increasing its investments oil, drilling and port divisions, he said, noting that the oil company is the most established and largest activity the company has outside shipping.
Andersen said Maersk Line would focus on China, as it has "the most dynamic trade development in the world." A rise in consumer demand has led to an increase in the country's imports.
"We see exports out of Europe growing quite rapidly to China, and the same goes for the U.S.," said Andersen. "It could be branded products, food stuff, or even raw materials for production -- more and more finished products go to China."
Maersk Line is moving to mega-ships, Anderson added, and will introduce the first Triple E vessel this year.
"It's going to be four hundred meters long and will be able to carry 18,000 containers. It's by far the largest vessels in the container trade," Andersen said.
Maersk Line has ordered ten of the $190 million ships, betting that the purchase will ultimately lower costs.
"I'd say the most exciting part of it may not even be the scale, but the fact that we will be able to transport containers from Asia to Europe with far less fuel." Andersen said, adding that fuel consumption could be cut by 30 to 50 percent.
For more of the CNN story: cnn.com
China's January PMI indicates growth
China's manufacturing barometer indicated growth in January, with a Purchasing Manager's Index of 50.4 compared to 50.6 in December, according to the National Bureau of Statistics and China Federation of Logistics and Purchasing. Any reading above 50 signals growth.
The agency said they had more than tripled the businesses surveyed. A separate reading with fewer companies from HSBC Holdings Plc and Markit Economics increased to 52.3 from 51.5, a two-year high.
Chinese officials fast-tracked approvals for investment projects and implemented two interest- rate cuts last year, hoping no additional stimulus would be needed. Friday's official report showed export orders decreased, fueling worry about global consumer demand.
"China -- and most of the Asian countries except Japan -- is switching to a more-neutral policy stance," said Joy Yang, chief Greater China economist at Mirae Asset Securities in Hong Kong, to Bloomberg. In the second half, "growth momentum is going to lose support from the policy side and we have to rely more on the private sector as well as the global recovery," she said.
For more of the Bloomberg story: bloomberg.com
MSC expands presence at Port of Long Beach
Mediterranean Shipping Company, the world's second largest container carrier, is expanding its operations at the Port of Long Beach with a major long-term leasing partnership that will double its stake.
The MSC partnership with Total Terminal International at Pier T is considered a major coup for the port, which increasingly must compete for business with ports in Los Angeles, Panama, Canada and Mexico.
"MSC already has an interest in Pier A, but this decision makes Long Beach the carrier's West Coast hub, ensuring it will move more cargo through our port," said Executive Director J. Christopher Lytle, making the announcement at his annual State of the Port address Thursday.
MSC has been a partner in Long Beach since 2002. Last March, MSC brought its first megaship, the MSC Fabiola, to North America when it called at Long Beach. In fact, the port's ability to accommodate megaships was key to MSC's investment decision.
"These megaships originally were designed for trade from Asia to Europe, but since we have the ability and infrastructure locally to handle the vessels, we've been utilizing them more," said Stan Kablick, port operations manager of marine o perations for MSC.
The port has already reaped the benefits of increased business from MSC, which relocated its business from the Port of Los Angeles to Long Beach in late 2012.
Cargo numbers at the Port of Long Beach rose 18.9 percent from December 2011 to December 2012, which posted record imports.
CMA CGM also helped keep cargo volume up, announcing its purchase of an interest in Pier J in December.
World's largest container ship malfunctions in Suez Canal
The world's largest container ship, the Emma Maersk, reportedly had a malfunction while in the Suez Canal and started to take on water. Canal officials had to remove it from the traffic lane to ensure it stayed afloat.
The megaship, which carries 10,000 TEUs, was taken to the eastern terminal of Port Said on the Mediterranean end of the Canal, where water was pumped from the engine room.
For more of the Washington Post story: washingtonpost.com
Tuesday, February 5, 2013
TSA proposes April 1 GRI in anticipation of 2013-14 contract talks
Container shipping lines on the Asia-to-U.S. trade route want to maintain current rate gains as they approach the post-Lunar New Year shipping period and as 2013-14 contract negotiations begin in earnest.
Member lines in the Transpacific Stabilization Agreement are recommending an across-the-board GRI on all dry and refrigerated cargo, effective April 1, 2013, in the amount of $400 per-FEU to the U.S. West Coast and $600 per-FEU to all other destinations.
The TSA says freight rates remain below compensatory levels despite prior adjustments, and wants to ensure that 2013-14 contract rates contain meaningful net increases relative to 2012 contract levels.
"The week-long Lunar New Year factory closures in Asia tend to pull forward spring shipments, especially among retail customers," explained TSA executive administrator Brian M. Conrad. "This translates into slowing cargo demand after the holidays, and is one of many such inflection points that can erode revenue throughout the year. Carriers are committed to keeping market rates stable over the next 6 to 8 weeks, as the contracting season ramps up."
G6 Alliance expands partnership to Trans-Pacific trade
The member lines of the G6 Alliance, one of the largest vessel networks in the Asia-to-Europe trade lane, have agreed to expand their cooperation to the Asia-to-North America East Coast trade.
The new partnership is scheduled to begin May 2013 with six coordinated services connecting Asian and North America East Coast ports. Three of the services will sail via the Suez Canal while the remaining three via the Panama Canal.
The G6 Alliance will deploy more than 50 ships in on the Trans-Pacific trade routes to
"Our cooperation in the Asia-to-Europe market has successfully provided customers with comprehensive service coverage as well as operating efficiencies," member carriers said in a statement. "This new agreement will bring the same winning formula to the Asia-to-North America East Coast trade and benefit shippers trading in this key trade lane."
Member carriers said the new cooperation would offer competitive transit times, broad port coverage and efficient containerships. The six coordinated services will offer an increased sailing frequency compared to what is currently offered by both the New World Alliance and the Grand Alliance combined.
The G6 Alliance members are APL, Hapag-Lloyd, Hyundai Merchant Marine, Mitsui O.S.K. Lines, Nippon Yusen Kaisha and Orient Overseas Container Line.
Scoular named "Exporter/Importer of the Year" by trade association
The Scoular Company and its subsidiary TSC Container Freight won the inaugural Exporter/Importer of the Year Award from the Midwest Global Trade Association. The company was honored for its efforts to educate the industry about using hedging tools to manage container freight risk.
Jeff Mailhiot, Director of Scoular's TSC Container Freight business, and Mike Smith, Director of Scoular's Beneficial Cargo Owner business, accepted the award at MGTA's annual dinner in Minneapolis.
Over the past year, TSC Container Freight has used Scoular's commodity hedging experience to teach container freight industry stakeholders about container freight swap agreements. CFSAs are cash settled against the Shanghai Container Freight Index, and are used to hedge against price movements in the Asian containerized export markets.
Mailhiot said connecting indexation with hedging is the way to manage freight rate instability, because it allows parties to transfer risk between the physical and paper markets, offering the ability to truly fix prices. Linking contracts to an index allows clients to forecast more accurately as they plan, forecast, and budget their freight.
TSC has pioneered the introduction of these tools within the container freight industry, using them to provide fixed import rates for clients who are looking to manage their import contracts from Asia to the U.S.
Crowley opens cold storage and warehouse facility in Miami
Crowley Fresh, a new cold storage warehouse facility, recently launched its opening in Miami, according to an announcement from Crowley Maritime and Customized Brokers.
A joint offering from Crowley and Customized Brokers, Crowley Fresh features multiple humidity and temperature-controlled coolers and is open 24/7 to store and handle perishables arriving from Latin and South America, the Caribbean, Europe, Asia and the Far East in South Florida.
Crowley Fresh features advanced cooling and monitoring equipment, including forced air precooling. The high tech facility has 400,000 cubic feet of refrigerated space, along with additional storage space for non-refrigerated materials.
"Shippers of perishables need a reliable and committed cold-chain logistics partner who has specialized equipment and experience," said Crowley's Nelly Yunta, vice president of sales, marketing and customer care. "We can offer this and more, including a diverse suite of additional logistics capabilities, such as Customs brokerage, air freight and trucking services."
Three narrowly escape before cargo ship rams fishing boat
Three Ghanaian fishermen escaped death early Friday morning by jumping into the sea just before a foreign cargo ship sailing from the Lome Port in Togo rammed their fishing boat in the midst of heavy fog off the Aflao coast.
One of the fishermen, Eklu Sape, told the Ghana News Agency that they found out too late that a ship was tearing through the fog towards them and had to jump off their boat and swim away.
Sape said they swam back to the area and only found pieces of the boat, which they clutched for four hours until another fishing crew passing by came to their rescue.
For more of the Ghana News Agency story: ghanaweb.com
Wednesday, February 6, 2013
UPS expands healthcare shipping network
Taking advantage of surging demand for pharmaceuticals, United Parcel Service is expanding its healthcare shipping network space by 15 percent.
An additional 800,000 square feet will be added, bringing the healthcare distribution space of the shipping giant to six million square feet across 37 centers.
Health care is one of the fastest-growing sectors for UPS, with income increasing more than 20 percent in the fourth quarter, said company executives on a Jan. 31 conference call.
"We have been able to exceed our growth expectations in this particular segment despite some of the challenges we're facing in the global economy," Bill Hook, vice president of global strategy for UPS Healthcare Logistics, said in a telephone interview with Bloomberg. "We're getting very solid growth."
The new distribution centers are located in Atlanta; Louisville, Kentucky, Reno, Nevada, Mira Loma, California and Burlington, Ontario. The warehouses have temperature-controlled space and secure areas for handling controlled prescription drugs, Hook said.
For more of the Bloomberg story: bloomberg.com
Footwear trade organization protests proposed Illinois sales tax
The Footwear Distributors and Retailers of America, the largest U.S. footwear trade organization, sent a letter to an Illinois lawmaker this week, requesting he reconsider a bill that would raise state sales tax on shoes, according to an announcement released by the organization.
Illinois State Representative William Davis recently introduced HB 0978 in the Illinois General Assembly, which would add an additional 25-cent state tax on each new pair of athletic shoes sold in Illinois. It would also require shoe retailers in the state to file additional tax paperwork, which could impact retail worker hours or jobs, according to the FDRA.
"What Rep. Davis may not realize is footwear is taxed up to 67 percent BEFORE state sales taxes are tacked on to the cost of sneakers," said FDRA President Matt Priest. "These hidden taxes, accessed at the U.S. border, are one reason why shoe costs are increasing. Shoes are one of the highest taxed goods families and children need. We should be working to lower the cost of shoes for working moms and families, not increase them. That is why FDRA is asking Rep. Davis to reconsider pushing this bill in the Illinois General Assembly."
Virginia Port Authority holds last public hearing on port privatization
The last scheduled public hearing considering two port privatization bids in Virginia was held in Norfolk on Monday.
The Virginia Port Authority heard proposal overviews from APM Terminals and the group headed by J.P. Morgan Chase, both vying to run the port's terminal operations.
Current nonprofit port operator Virginia International Terminals defended its performance, making a case for retaining its position.
"We're efficient, we're successful and by definition we're profitable even though we're a non-profit," Larry Ewan with Continental Terminals told 10 On Your Side. "It doesn't make sense, that as profitable as we are, to turn it over to a company whose sole interest is to stockholders in another country."
The VPA is expected to make a decision in the spring.
For more of the WAVY.com story: wavy.com
Ruling: Port of Coos Bay to give Sierra Club coal export documents
The Port of Coos Bay will be required to give the Sierra Club of Oregon public records about its plans to export coal for free.
Circuit Judge Paula Bechtold ruled that the port violated public records law and the Sierra Club's constitutional rights when it demanded $19,000 to produce the records, according to The World newspaper.
The Sierra Club has been trying to obtain the records since 2011 as part of its efforts to stop coal exports from being shipped from the Oregon port to Asia, which opponents say would contribute to global warming.
The port wanted to be paid for the cost of an attorney blacking out confidential material on the 2,500 pages requested.
A port spokeswoman says port officials haven't yet decided whether to appeal.
For more of the Oregon Live story: oregonlive.com
Coast Guard frees cargo ship stuck in ice
The 731-foot cargo ship Algosteel was freed from ice Monday by Coast Guard cutter Thunder Bay.
The Rockland-based Coast Guard team completed a 16-hour operation to free the vessel from 10 inches of plate ice in the Straits of Mackinac in Lake Michigan.
The ship was then escorted to port through a path that Thunder Bay had precut, in order to offload its salt cargo.
For more of the Bangor Daily News story: bangordailynews.com
Thursday, February 7, 2013
Report: Asia Pacific logistics market transforms as trade dynamics change
The Asia Pacific logistics industry continues to develop at a fast pace despite continued economic weakness in the European Union and the U.S., two of its two largest trade partners.
Guy Tozzoli, former director of world trade at Port Authority of NY-NJ, dies at 90
Guy Tozzoli, who dedicated his life to international trade, died at 90 of natural causes Saturday at his home in Myrtle Beach, S.C.
Port trucking bill Introduced in Washington state
The Teamsters introduced a port trucking bill, HB 1719, in Washington State.
Haier chooses Savannah as southeast logistics hub
Global appliance company Haier America has chosen Savannah, Georgia as its logistics hub in the Southeast U.S.
Sandy repairs to cost $2B, says NY-NJ Port Authority
It will cost more than $2 billion to repair port damage from Hurricane Sandy, but the executive director of The Port Authority of New York and New Jersey said Wednesday at a monthly board meeting that the final fiscal impact should be small.
Friday, February 8, 2013
Clerical workers at ports of LA-Long Beach reject contract terms
Union clerical worker at the ports of Los Angeles and Long Beach have rejected the terms of the labor contracts negotiated by the International Longshore and Warehouse Union leadership in early December.
Clerical workers for three port employers—China Shipping, Evergreen and APM Terminals—did not approve their contracts on Wednesday night, a union source told the Press-Telegram. The union source also said that workers from the other terminals voted to authorize their contracts Wednesday, but a statement issued today by the Harbor Employers Association confirms that the entire unit rejected the agreement.
"Some media outlets have reported incorrectly that OCU workers at just three harbor employers had failed to ratify the tentative agreements that were reached on December 4, 2012, that ended the workers' seven-day ports strike," said he Harbor Employers Association in a statement released today. "In fact, the harbor employers were formally notified by the union today that, in voting on Wednesday night, all 16 OCU bargaining units failed to ratify the December 4 tentative agreements."
Both union and port officials were reportedly taken off guard by the rejections, since both sets of officials were publicly pleased by the deal struck on December 4, and believed all clerical workers at the ports would ratify it.
The workers could go back on strike, or they might work under the provisions of the new contract during a renegotiation process.
"We are extremely disappointed by this vote and strongly urge the parties to work through their differences without any kind of disruption," said the National Retail Foundation's Jonathan Gold, vice president for supply chain and customs policy in a statement. "Ratification of a contract is needed to give retailers and other industries that rely on these ports the predictability they need to make long-term plans and get back to growing their businesses and creating jobs. We can't afford to see another shutdown."
The November strike was precipitated by workers' concern that terminal companies had been quietly shifting jobs to lower-wage workers in other states and countries. Management denied the accusations and wanted the new contracts to abolish so-called featherbedding - or providing temporary and permanent jobs to workers even when there was no work to perform.
For more of the Long Beach Press-Telegram story: presstelegram.com
IANA: 2012 intermodal container volume up 5.9 percent
Intermodal container volume in 2012 rose by 5.9 percent year over year, reaching a record level of 13.1 million moves, according to an industry report. 2012 figures bested the previous benchmark year of 2007 by 9.8 percent.
The Intermodal Association of North America's "Intermodal Market Trends & Statistics" report notes that intermodal shipments in 2012 totaled 14.6 million units, up 4 percent compared with 2011. Domestic container volume surged 12.2 percent to 5.5 million units, all domestic equipment volume increased by 6.5 percent to 7 million units, international container volume grew 1.7 percent to 7.6 million units and trailer volume fell 10.1 percent to 1.5 million units.
"For the third straight year, domestic containers were the driving factor. Forty-eight-foot and 53-foot domestic boxes accounted for 38 percent of all container movements for the year," IANA officials said in the report. "Despite some year-end softening, international volumes continued to have the largest share of total intermodal loadings at 52 percent."
Russian ban on U.S. meat exports begins next week
Russia's ban on U.S. meat exports, set to begin next week, will trigger a "significant" loss of business in a market that was the sixth largest for beef sales, reports an industry group.
Russia imposed the ban on U.S. pork and beef after announcing in January that the meats may contain ractopamine, a feed additive used to add lean muscle in livestock. The U.S. government has asserted the meat is safe, and that the ban is not consistent with international trade standards.
On February 11, U.S. meat sales to Russia will stop, resulting in "a hard kick in the you-know-what," said Philip Seng, CEO of the U.S. Meat Export Federation, to reporters Thursday at a conference in Tampa.
"The loss in Russia is significant," Seng said. "This is a regrettable situation because everybody was hopeful that we could have improved relations with Russia, especially in agricultural trade."
The U.S. exported about $280 million of pork and about $305 million of beef to Russia in 11 months through Nov. 30, according to Joe Schuele, a federation spokesman.
Japan is allowing imports of beef from U.S. cattle less than 30 months of age, effective Feb. 1, easing restrictions. That may counter the loss from Russia, Seng said.
For more of the Bloomberg story: businessweek.com
U.S. lawmakers form Congressional Maritime Caucus
On Wednesday, U.S. Representative Cedric Richmond of Louisiana and co-chair Michael G. Grimm of New York announced the establishment of the Congressional Maritime Caucus.
"The maritime industry is the unsung hero of our nation's economy," said Rep. Richmond. "Every day this industry facilitates trade and delivers energy resources that support millions of jobs and pays billions in state and federal taxes every year. I also look forward to highlighting the role other industries play in supporting maritime commerce, be it in the fields of law, engineering, shipbuilding or insurance."
Today, international trade accounts for more than 25 percent of America's gross domestic product, according to the announcement. U.S. seaport activities generate more than $3.15 trillion in annual economic output, with $3.8 billion worth of goods moving in and out of seaports every day around the country.
The caucus will serve as an ally of all components of the maritime industry, the statement said, and will work to raise awareness among members of Congress on a wide range of maritime issues.
Cargo ship runs aground off coast of Philippine island
A cargo ship, the MV Ladylin, ran aground Tuesday night off the island of Dassalan, Basilan in the Philippines after its engine failed, officials said.
The MV Ladylin was headed for Tawi-Tawi carrying 20,000 bags of cement when it bogged down, according to Lieutenant Commander Eliezer Dalnay of Zamboanga coast guard.
The Philippine Coast Guard went to the site on Wednesday to rescue the seafarers. There were no casualties.
For more of the ABS-CBN News story: abs-cbnnews.com