Summary for February 5 - February 9, 2007:
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S. Korea plans strategic port tie-ups with China, Japan
South Korea will form cooperative ties for its ports with ones in China and Japan in 2007 as part of a plan to transform the nation into a regional logistics and business hub, the government said Feb 2.
"We plan to initiate (port affiliations) with Chinese ports in Tangshan, Qinhuangdao, Lianyungang and Nanjiang, as well as the port of Niigata, Japan," the Minister of Finance and Economy said in a statement. South Korea should be able to secure nearly 2mn TEU worth of additional freight contracts by 2011, according to the ministry. The country also plans to introduce a logistics security scheme similar to the SAFE Port Act adopted by the United States last year that covers port security, the ministry said. The government plans to install around 50 new berths capable of processing 16.5mn TEUs of cargo in the southern ports of Busan and Gwangyang by 2011, according to the ministry. Port of Kobe upgradesTwelve years since the Great Hanshin Earthquake, the Port of Kobe is striving to bring back ships by upgrading its facilities and planning tax breaks for incoming vessels.In November 2006, construction began for one of the nation's largest container berths at the southeastern part of Port Island. The 16-meter-deep, 400-meter-wide berth, scheduled for completion in fiscal 2008, will be able to dock large cargo liners carrying up to 8,000 containers. Port officials hope that the new facility will help Kobe win back large vessels from Yokohama and Nagoya ports, which have comparable container berths. Kobe has been modernizing its container-handling and other facilities since 2004 under a central government project to improve competitiveness of Japanese ports. India to invest $130mn in Myanmar portNew Delhi will invest $130mn to develop Myanmar's Sittwe port, which will give India's landlocked northeast access to a new trade route to Southeast Asia, a senior Indian official said."We signed an initial agreement recently and we will begin the project as soon as the (Indian) cabinet gives approval," said the senior official, who declined to be named. "The proposal will be put up to the cabinet this month. Once cleared it will take about three to four years for the project to be completed," he said. The port will allow cargo vessels from India's landlocked northeastern Mizoram state to navigate the Kaladan River to Sittwe, which sits on the edge of the Bay of Bengal. "The project involves the development of roads, waterways and the Sittwe port," the official said. Callao's roads can't handle port activityPeruvian port city Callao's road networks have become insufficient to handle the amount of cargo transferred to and from the port.The president of Peru's association of port operators (Asppor), Carlos Loret de Mola, said the port does not have sufficiently developed infrastructure to handle the increasing amount of cargo it receives annually. The city's road network is not prepared to handle heavy vehicles. The thick flow of trucks affects the city's normal transit, causing serious congestion. The port is currently undergoing expansion. The concessionaire of its Muelle Sur dock, Consortium Terminal Internacional de Contenedores del Callao, is investing $617mn in its development, including $144mn for the common port area. By 2009, when Muelle Sur becomes operative, the port will handle a total of 18mn tons of cargo. This is without considering a 40% increase in movement if a free trade agreement between Peru and the US is approved, according to experts. Government, port and industry officials are considering building highways that connect the port directly to the country's expressways, thereby cutting down on truck traffic through the city. Analyst questions effectiveness of using Chilean portsUsing Chilean ports to export goods from Latin America's Atlantic coast may not be as effective as commonly thought, said independent port logistics and maritime transport consultant Antonio Zuidwijk."The importance of cargo traffic from Uruguay and Argentina to Asia is greatly exaggerated. This was highlighted by a study of ECLAC (the UN Economic Commission for Latin America and the Caribbean] in 2000," he said. "The question was raised if there would be an advantage in the use of Chilean ports for cargo to Asia,” he said. "The study pointed out that few people are aware that up to Hong Kong, the distances from Montevideo and Buenos Aires via the Cape of Good Hope in South Africa are nearly the same as from [Chilean ports] Valparaiso and San Antonio. “This means that Pakistan, India, Bangladesh, Thailand, Burma, Malaysia, Singapore, Indonesia, Cambodia and the Philippines are closer to Buenos Aires than to the Chilean ports. Only to the north of Hong Kong (China), the balance tips in favor of Chilean ports,” Zuidwijk said. China launches first navigation satellite China has launched its first navigation satellite in four years, moving to develop a positioning system intended to rival the US’s GPS and Europe's Galileo.The Jan 3 launch of the “Beidou” navigation satellite aboard a Long March 3A rocket underscores Beijing’s determination to develop its space industry. China’s plans for its satellite navigation system – known in English as “Compass” – have been shrouded in secrecy. Jan 3's launch appears to be an effort to augment a relatively imprecise system based on three Beidou satellites launched between 2000-2003. Two geostationary satellites would be launched early this year, allowing the system to cover all of China and parts of neighboring countries by 2008, according to the official Xinhua news agency. The system would expand to offer global coverage with the creation of a constellation of 30 medium earth orbit satellites, Xinhua said. More precise positioning would be an important asset for China's armed forces. Some analysts have suggested the expanded Beidou system will use the same radio frequencies as Galileo and possibly GPS, making it more difficult for adversaries to jam the network in case of war. While China is a partner of the Galileo project, investing €200m ($260m) with related facilities and research into commercial applications, it is shaping up as a potential competitor. Operation of the €3bn-plus Galileo, which will have 30 satellites, has been postponed until 2011 because of technical problems and delays in the public-private partnership needed to build it. Singapore airport buys 29% stake in Nanjing airportSingapore's Changi Airport will spend $138mn (HK$1bn) on a 29% stake in Nanjing Lukou International Airport, its first direct investment in China's booming aviation sector.Changi Airports International, wholly owned by Singapore's Civil Aviation Authority, plans to collaborate with local partners to develop Nanjing into a model airport, the company said. The Nanjing airport, one of China's top five cargo hubs, is Changi's first substantial direct investment in a mainland China facility, although it has consulting contracts with about 10 other Chinese airports. The Nanjing airport handled a record 6.27mn passengers last year, up 16.4% from the year before. Cargo traffic is growing at an average of 27% a year. Japanese firm ranked 7th in 2006 global marine financingSumitomo Mitsui Banking Corp. came in seventh in the 2006 global rankings of underwriters for marine financing, becoming the first Japanese bank to make the top 10.Sumitomo Mitsui also ranked ninth in terms of the value of loans arranged, according to rankings compiled by US trade publication, Marine Money. European banks usually dominate the list, as they have the knowledge-base to properly screen business plans for shipbuilding, a long and expensive undertaking. Sumitomo Mitsui handled $2.71bn in transactions as an underwriter last year, more than five times its 2005 amount. It also put together $3.21bn in loans, a 360% jump. The bank handled large deals last year, including a $4.26bn syndicated loan for the construction and chartering of liquefied natural gas (LNG) supertankers in Qatar. Sumitomo Mitsui is increasingly focusing on marine financing, having established a dedicated department last November, the first of its kind for a major bank. UPS orders 27 Boeing freight planesUnited Parcel Service Inc. (UPS), the largest parcel-delivery company, said Feb 5 it ordered 27 cargo planes from Boeing Co.UPS did not disclose the value of the contract, but based on previous disclosures by Boeing, the 767-300ER lists for about $133mn. At that price the total order would be valued at $3.6bn, although plane buyers rarely pay list prices for bulk orders. The Boeing 767-300ER planes are scheduled for delivery between 2009-2012. They can fly routes to and from Europe and Latin America, and they are capable of carrying 31 containers with a maximum payload of 132,200 lbs. UPS said the order is not related to its review of an order with Boeing's rival, Airbus SAS, for 10 A380 freighters. The A380 will be the largest passenger jet in the world, but its launch has been delayed several times because of design and supplier issues. Navios Maritime Holdings Inc. announces acquisition of Kleimar N.V.Navios Maritime Holdings Inc. (Navios) Feb 5 announced that it has acquired all of the outstanding share capital of Kleimar N.V. (Kleimar) for cash consideration of $165.6mn, subject to certain cash adjustments.The net cash consideration paid for the shares would likely be approximately $140.3mn, taking into account cash retained on Kleimar's balance sheet and proceeds from an asset sale triggered by the change in control of Kleimar. Kleimar has outstanding debt of approximately $21.3mn. Kleimar is a Belgian maritime transportation company established in 1993, and it is an owner and operator of capesize and panamax vessels. It also has an extensive Contract of Affreightment (COA) business, which largely involves transporting cargo to China. Kleimar currently controls 12 vessels, of which it owns three. One of the three will be sold as a result of the change in control. The long-term chartered-in fleet consists of five capesize vessels, chartered-in at an average daily rate of $17,477, three panamaxes, chartered-in at an average daily rate of $12,109, and one handymax chartered-in at $7,950 per day. Morgan Stanley adds COAs to shipping portfolio Morgan Stanley (MS) has added long-term cargo shipping contracts to its dry bulk ship chartering business portfolio to cut risks linked to long-term vessel chartering, shipping sources said on Feb 6."Recently, Morgan Stanley has booked ships for single voyages because it has picked up at least two or three contracts of affreightment (COAs)," a ship broker said. He added they have at least one COA for South America to Europe. A COA is a long-term contract to ship a specific number of cargoes such as grains or iron ore for a specific voyage. The latest single-voyage charter was for the 74,500-dwt, 2001-built Marilena D Amato for loading in El Ferrol and delivery to Europe. The hire rate was $31,000 a day. A MS spokesman declined to comment on the long-term cargo shipping contracts. MS's entry into the COA business was seen by shipping sources as a move to offset risks linked to ship rehiring. In a COA contract, MS is seen making profits by offering freight at a dollar-per-ton basis to shippers, and the bank would then take care of ship charters, sources said. MS could also use their own vessels to move these cargoes if their ships fail to find a suitable rate in the spot market, they said. "The rates have been on a slide in the past few weeks. The COAs will make sure Morgan Stanley is not stuck with idling vessels," the broker said. Sources estimate that MS’s total long-term vessel charter numbers anywhere from 4-8. Port of Tacoma builds cargo capacityOver three decades, the Port of Tacoma's containerized cargo has grown from 85,000 TEUs to nearly 2.1mn TEUs.In 2006, the Port of Tacoma set a new container record with 2,067,186 TEUs. The Port also recorded a banner year in non-containerized cargo, with 22% growth in auto imports and 11% growth in breakbulk cargo. In 2006 the Port focused on increasing system-wide capacity, including: completion of $10.5mn in near-terminal rail expansion projects; groundbreaking for a 22-acre expansion at Washington United Terminals (Hyundai Merchant Marine); completion of the Husky Terminal ("K" Line) redevelopment and expansion; widening the Blair Waterway; and demolition and cleanup the 96-acre former Kaiser Smelter – future site for new marine terminal development. Port of Tacoma Executive Director Timothy J. Farrell said the Port's top priority is to remain ahead of customer growth by expanding on- and near-terminal cargo capacity. "Our five-year capital plan calls for an investment of $336mn with the long-term objective of reaching 10mn TEUs by 2025," he said. FedEx Freight completes Watkins rebrandingFedEx Corp.'s new long-haul less-than-truckload (LTL) service, FedEx National LTL, launched Feb 5, along with direct LTL service in Canada through the newly-formed FedEx Freight Canada.The units were created through the Sep 3, 2006 buyout of Watkins Motor Lines and Watkins Canada Express. FedEx National LTL has also re-engineered its operations to focus on the long-haul market with a strictly scheduled network, similar to FedEx Freight's operations in the regional market, according to a company news release. FedEx Freight is enhancing its Canadian service offerings with FedEx Freight Canada and will handle LTL shipments moving into and out of Canada and intra-Canada shipments. This door-to-door service through FedEx companies will provide greater visibility for Canadian LTL shipments and trans-border pickup and delivery points in the US, the company said. Singapore's PSA to build container port in VietnamPSA International has won a deal to build a container port project in Vietnam's southern province of Vung Tau.The port operator gave no figures for the size of the investment, but the Singapore Sunday Times quoted sources as saying it would cost nearly $300mn over two phases. It is PSA's first project in Vietnam and gives the port operator, wholly owned by state-linked investment firm Temasek Holdings, a foothold in the fast growing Southeast Asian economy. The Vung Tau port will be developed by SP-PSA International Port Co Ltd, a joint venture between Saigon Port and PSA Vietnam, a wholly-owned unit of the Singapore port operator. The container port will be built in two phases, with a first section to be operational in 2009. When both are completed, it should be capable of handling 2mn TEUs of cargo annually. Kansas City Southern sees rise in net profitsUS railroad Kansas City Southern Feb 6 said its quarterly net profit rose sharply, beating estimates, as revenues climbed 14% on transportation of coal, chemical and petroleum products.The Kansas City, Missouri-based company reported fourth-quarter net income available to common shareholders of $35.7mn or 41 cents a share compared with $2.3mn or 3 cents a share a year earlier. Revenues rose 14% to $442.4mn on higher volumes and strong pricing. Wall Street analysts on average had predicted earnings of 33 cents per share, according to Reuters Estimates. UAE accounts for 25% of Middle East imports The United Arab Emirates is the largest importer in the Middle East accounting for 25% of imports, and the second largest exporter, with 22% t of exports, according to studies.Dubai's seaport, currently the ninth busiest in terms of container traffic, was growing at a rate second only to Chinese ports. Dubai's non-oil trade accounted for 80% of the UAE's total non-oil trade in 2006, paving the way for it to become the preferred destination for commodities trading in the region, according to Dr David Rutledge, CEO of Dubai Multi Commodities Centre (DMCC). The emirate's trade friendly infrastructure also ensured its position as the gateway to the growing consumer markets of the Middle East, North Africa and the Indian sub-continent. Speaking at the Middle East Trade and Export Finance Forum in Dubai on Feb 07, Dr Rutledge said Dubai is set to become the regional centre for commodities, backed by the UAE's growing role in regional and global trade. Aker signs agreement for six tankersAker American Shipping ASA (AAS) and Overseas Shipholding Group, Inc (OSG) Feb 7 announced that Aker Philadelphia Shipyard will build up to six additional Veteran Class MT-46 Jones Act Product Tankers (three fixed plus three options). They will then transfer the tankers to AAS’s American Shipping Corp, which will bareboat charter them to OSG for initial terms of 10-15 years.For Aker American Shipping the full transaction is valued in excess of $700mn (before profit sharing) reflecting the higher rates and longer terms. The agreement in principle is subject to, among other conditions, approval by the Boards of Directors of Aker American Shipping and OSG, preparation and agreement of final documentation, and relevant government approvals. OSG also said they signed a charter agreement with BP for ten 46,000 dwt Jones Act commercial product tankers being built at Aker Philadelphia Shipyard. To date, nine of the ten vessels due for completion in 2010 now have signed time charters in place. Port of Tacoma completes 22-acre expansionTo meet the growth needs of Hyundai Merchant Marine in the Pacific Northwest, the Port of Tacoma has completed a 22-acre expansion of Washington United Terminals (WUT), located on the 51-ft-deep (15.5-meter-deep) Blair Waterway."Throughout our history, when our customers have needed to expand, the Port of Tacoma has been able to be a partner in their growth," said Port of Tacoma Commissioner Jack Fabulich. "This expansion meets WUT's growth needs today and well into the future." Now 102 acres , WUT includes four post-Panamax cranes and a 2,000-ft wharf. The facility also includes a 23-acre on-dock intermodal yard with total trackage of 16,864 ft and ramp capacity for 52 doublestack rail cars. Gulf Navigation plans fleet expansionUAE energy shipping firm Gulf Navigation, which listed on the Dubai Financial Market (DFM) Feb 7, could spend Dh3.8bn on its fleet expansion in four years.At present it has seven vessels in operation and expects to receive delivery of 11 more in the next three years. Gulf Navigation's expansion plans include new orders for 13 vessels, chairman Abdullah Al Shuraim said. "Our current asset value is Dh2.1bn. We will spend Dh3.8bn on new orders. We are still discussing implementation of the expansion plan," he said. The company fleet consists of energy transport vessels such as very large crude carriers (VLCCs), oil product tanker and chemical tankers. One VLCC is scheduled for delivery in September 2007, while four chemical tankers are expected to join the fleet in 2008. The company has a 15-year ship charter contract worth Dh1.5bn with Saudi Arabian petrochemicals giant Sabic. Three trucking companies among 50 best managed in CanadaThree transportation companies have been named among the best managed companies in Canada for 2006.Maritime-Ontario Freight Lines of Brampton, Ont., H&R Transport of Lethbridge, Alta., and Armour Transportation Systems of Moncton, NB have each won a prestigious 2006 Canada's 50 Best Managed Companies award. “The 2006 Best Managed winners are an outstanding group of Canadian-owned and managed companies that have proven their remarkable ability and commitment to apply best practices to all areas of their business operations,” said John Hughes, national leader of the Best Managed program. The companies will be honored at the annual Best Managed gala in Toronto on Feb. 12. |