Today's Cargo News Archives feb 12

DPW wins green light for Qingdao terminal

Dubai Ports World has received approval to build a container port in Qingdao, Shandong, an officiaL news report said Feb 9, a year after the UAE company's planned purchase of US port operations caused a political uproar.

DPW will invest 3.5bn yuan in the facility in Qingdao, Xinhua News Agency said. The terminal was scheduled to begin operating next year or in 2009, the report said.

DPW is one of the world's largest port operators, with terminals in 24 countries.

It last year dropped a plan to buy terminals at six US ports after critics said US security might be endangered.

They cited the UAE's history, noting that money to finance the Sep 11, 2001, terror attacks moved through its banking system and the government's past support of Afghanistan's Taliban government before the attacks.

Shanghai container throughput up 25.8%

Shanghai International Port (Group) Co Ltd said it handled 2.05mn TEUs of containers in Jan 2007, up 25.8% year-on-year. Total cargo turnover stood at 28.3mn metric tons for the month, up 22.7% from a year earlier, the port operator said.

Cargo handled for imports and exports increased 23.9% year-on-year to 18mn tons, the company added.

Shipping giants keen on China's largest bonded harbor area

Three shipping giants are planning to move containers via northern Tianjin city's Dongjiang Bonded Harbor Area, which aims to become an international free trade zone, local authorities have revealed.

Sweden's Mediterranean Shipping Co, French Compagnie Maritime d' Affretement, and Korean Hanjin Shipping, three of the top ten, signed an agreement with Tianjin Port on Feb 7, hoping to take advantage of free economic policies granted to the mainland's largest bonded harbor area.

The 10-sq km area of Tianjin Port is expected to be operational by the end of 2007.

It will enjoy preferential taxation and foreign exchange policies and focus on international distribution, global procurement and export processing, said Yu Rumin, president of the Tianjin Port Co. Ltd.

Tianjin Port, the largest of its kind in north China, aims to put through 270mn metric tons of freight traffic in 2007 as the city's Binhai New Area starts to take off.

It also hopes to reach 7mn TEUs of container turnover, Yu said.

Lawmakers question background checks on railroad workers

At least three dozen railroad workers may have been fired unfairly because they failed background checks recommended by the Homeland Security Department, Democratic congressmen said Jan 8.

Civil rights activist Jesse Jackson and House Judiciary Chairman John Conyers, D-Mich., said they’re investigating why railroad workers were told they were dismissed because of directives from the Transportation Security Administration, which is part of Homeland Security.

“We want to determine whether these TSA policies are being imposed properly,” Conyers said. “Without uniform rules and a fair appeals process, we cannot stand by while these companies take away the lifeline of hardworking, honest people.”

The use of background checks as a security measure has grown since the Sep 11, 2001, terrorist attacks. Hundreds of thousands of airport workers, longshoremen, mariners and haz-mat drivers are subject to background checks before they’re issued the security badges or licenses necessary for them to do their jobs.

TSA spokeswoman Ellen Howe said the TSA hasn’t ordered railroads to conduct background checks on their workers, but does recommend them.

Ship with explosive cargo under tow

A flag of convenience ship carrying volatile ammonium nitrate is being towed back to Newcastle, Australia, after its engine room caught fire overnight.

The Australian Transport Safety Bureau Feb 9 said the engine or wiring of the Bahamas flagged Baltimar Boreas had caught fire, disabling the ship, after it left the Newcastle Port the previous night.

The fire had been extinguished and a tug had been sent to tow the ship back to Newcastle, where it was expected to arrive later Feb 9, an ATSB spokesman said.

Dean Summer of the International Transport Workers Federation, said the federal government had to explain what the ship was doing plying the eastern coast of Australia with such a dangerous cargo.

“We want to know why a foreign vessel is allowed to carry such high-risk cargo on the Australian coast, putting Australian port communities, our national security and the environment at risk,” Summer said.

The ATSB spokesman said the ship had been heading for Port Moresby with its cargo of ammonium nitrate. He said two investigating officers had been sent to meet the ship on its return to Newcastle to establish the circumstances of the incident.

China expands trade surplus

China's trade surplus remained high last month as exports rose 33% year-on-year to $86.62bn (HK$676 bn), official data showed Jan 12, boosted by seasonal holiday factors. Imports reached $70.74bn in January, up 27.5% over the same period 12 months earlier, the customs bureau said on its website.

Based on the Jan 12 data, the trade surplus stood at $15.88bn, up 67.3% from $9.49bn in January 2006 but down 24% from $21bn dollars recorded in December.

Analysts attributed the rise compared with the same period a year ago due to seasonal factors involving the Chinese Lunar New Year, which this year falls in February instead of January.

"The Spring festival this year is in February and that's why both exports and imports have increased year-on-year," said Sun Mingchun, chief economist at Lehman Brothers based in Hong Kong.

Last year, China's trade surplus soared to a record $177bn, prompting Commerce Minister Bo Xilai to warn that the country’s mounting trade surpluses were becoming more problematic as time wore on.

Pacific island states meet for maritime boundary talks

Pacific island leaders are hopeful an extension of their sea boundaries can improve security and wealth in the region. Delegates from seven island nations will meet this week in Brisbane to discuss enlarging their maritime boundaries.

More than 40 delegates at the three-day meeting will examine assessments by the Suva-based Pacific Islands Applied Geoscience Commission (SOPAC). The assessments suggest wider boundaries could improve wealth for small struggling nations such as the Solomon Islands, Tuvalu and Papua New Guinea.

SOPAC director Cristelle Pratt said extending the jurisdiction beyond the current 200 nautical mile zone could help poorer nations secure exclusive rights to deep-sea minerals, oil, gas and fishing opportunities.

"Established claims to an extended continental shelf beyond 200 miles will bring real benefits to Pacific island states and will help raise local community living standards by enhancing the capacity for income generation, self-reliance and sustainable development," Pratt said.

Development partners from Australia, France and Japan also will attend the meeting to help the Pacific nations examine the legal and economic implications of the proposal. The meeting also aims to develop a strategy to strengthen their proposals before the United Nations' November 2009 deadline.

Tanker sales

London-based Clarkson shipbrokers said shipowners ordered new vessels worth a record $105.5bn in 2006, led largely by tanker owners seeking to upgrade their fleets ahead of single-hull tanker deadlines set by the International Maritime Organization (IM0).

Clarkson said tanker owners increased their spending on new ships by 122% to $49.2bn in 2006. It said the largest increase was on Suezmaxes – ships with a capacity of 1mn bbl, the biggest class of vessel to pass fully loaded through Egypt's Suez Canal. Clarkson said owners spending on Suezmaxes rose by 10 times to $5.6 billion.

The IMO phase-out schedule was first established in 1992, and revised in 2001 for existing single-hull tankers. It says that tankers which are single hull should be phased out or converted to a double hull by 2010 at the latest.The IMO is the United Nations specialized agency responsible for improving maritime safety and preventing pollution.

BG Group and Nigeria LNG (NLNG) enter agreement for LNG supply

BG Group plc today announced that it has signed a Sale and Purchase Agreement with NLNG for the acquisition of 2.25mn tons per annum (mtpa) of LNG for a 20 year term from the planned Train 7 project in Finima, Bonny Island, Nigeria.

Cargoes will be delivered on an ex-ship basis to BG Group's North American marketing business at Lake Charles, Louisiana.

Martin Houston, BG Executive Vice President and Managing Director, North America, Caribbean and Global LNG, said: "This agreement with NLNG adds to our existing supply arrangements through Trains 4 and 5 which came into effect last year."

Dubai's tea trade experiences record growth

Dubai's total tea trade increased 9.21% to a record 105.5mn kg in 2006, up from 96.6mn kg the previous year, according to the Dubai Tea Trading Centre (DTTC).

During the same period, 4.3mn kg of multi-origin teas were traded through the DTTC, an initiative of the Dubai Multi Commodities Centre (DMCC), almost doubling the trade figures for the previous 10 months.

The growth in the tea trade through both Dubai and the DTTC is particularly impressive when viewed in light of the severe drought Kenya suffered last year, which led to a 25% increase in global tea prices.

DMCC COO Ahmad bin Sulayem said, "The DTTC was conceived as a vehicle to facilitate the participation of regional tea markets in international trade, and strengthen Dubai's role as a focal point for the tea trade in the region.

“The increase in the number of tea-producing countries trading through the DTTC and the growing volumes of trade are proof of the success of our business model. We plan to work closely with tea producers and buyers to further grow the volume of trade through the region."

Hong Kong exports grow

Hong Kong's exports increased 13.4% in volume in December 2006 compared with the same period in 2005, according to government data released Feb 13.

The volume of re-exports rose 17.6% year on year but domestic exports fell significantly, by 39%, figures from the Census and Statistics Department showed. Concurrently, imports increased 12.2% in volume, the figures revealed.

In terms of prices, re-exports rose 2.5% while domestic exports decreased 0.8%. The prices of all exports and imports grew 2.3% and 3%, respectively.

For 2006 as a whole, Hong Kong's exports grew 10.2% in volume compared with 2005. Prices increased 1.1%.

During the period, re-exports rose 10.8% in volume and by 1.1% in prices. The volume of domestic exports grew 1.1% but the prices dropped 2.1%.

Sharjah container terminal throughput falls 9%

Throughput at Khor Fakkan Container Terminal (KCT), a leading regional trans-shipment hub, dropped almost 9% in 2006 from the previous year, while Sharjah Container Terminal (SCT) saw an increase of 24%. Both terminals are located reside in the United Arab Emirate of Sharjah.

KCT achieved a throughput of 1.73mn TEUs in 2006 compared with about 1.9mn TEUs in 2005, while SCT's container volumes grew to 282,082 TEUs from more than 230,000 TEUs in 2005.

Gulftainer, which operates both KCT and SCT on behalf of the Sharjah Port Authority, attributed the drop at Khor Fakkan to the termination of two services, but it expects container traffic to rise this year due to new services.

The Super Galex service was terminated in mid-year and there was a cut back in Senator services that affected Khor Fakkan.

New services being introduced this year include a service from CMA-CGM shipping line in March.

World LPG Market Outlook released

Purvin & Gertz Feb 13 announced the release of the World LPG Market Outlook. The study provides an in-depth analysis of world and regional LPG markets within a framework of world energy/economic activity.

Supply outlook is based on expected production levels of crude oil, natural gas, LNG and refining in each major producing country.

The study considers the operating/commercial constraints of existing LPG facilities, as well as capacity and start-up dates for new LPG projects, in determining overall supply capacities.

The prospects for future world market developments are examined, and the likely impact on LPG trade and pricing are assessed.

The world demand for LPG has grown significantly and new markets have emerged with LPG consumption increasing in virtually every region of the world.

Kansas City Southern to spend $300mn in Mexico

US railroad operator Kansas City Southern (KSU) said Jan 12 it would invest $300mn this year in its rail freight business in Mexico.

Kansas City, Missouri-based KSU said it would spend an additional $80mn on a new rail and port terminal at the Pacific coast port of Lazaro Cardenas.

The company took over full control of its Mexican unit, Kansas City Southern de Mexico SA, when it bought the 51% stake of Mexican logistics company Grupo TMM SA in April 2005.

Congress members reintroduce regional shipping act

Monday, Representatives Stephanie Tubbs Jones (D-OH) and Phil English (R-PA), Senior Members of the House Ways and Means Committee, reintroduced H.R., 981, the "Great Lakes Short Sea Shipping Enhancement Act (GLSSSEA) of 2007."

The legislation is designed to improve the efficiency of commerce in Cleveland (Ohio), Erie (Pennsylvania), and the surrounding Great Lakes region and ports.

Under current law, the Harbor Maintenance Tax (HMT) is assessed on cargo transported between US ports, and cargo imported to US ports from other countries.

Because the HMT is only assessed on cargo if it moves by ship, the tax serves as a disincentive to move trucks and their freight by water. As such, the tax actually contributes to greater highway congestion which results in choked border crossings, increased fuel consumption, and increased air pollution.

The Great Lakes Short Sea Shipping Enhancement Act would provide a narrow exemption to the HMT for the movement of non-bulk commercial cargo by water in the Great Lakes region. This includes the movement of freight and people between US ports on the Great Lakes and between US and Canadian ports on the Great Lakes.

By removing the HMT as a disincentive, this legislation will encourage the development of new shipping services on the Great Lakes.

This could lead to the creation of new jobs in the maritime sector and enable commerce, such as steel and automotive parts, to flow more efficiently in and out of Cleveland and Erie.

Chinese economic growth continues, slows

The rate of China's phenomenal economic growth will be lower in 2007 but should still expand by nearly 10%, driven by exports and investment, the World Bank said Feb 14 in its quarterly report on China's economy.

But the country's bulging trade imbalance remains a concern as exports continue to outstrip imports, the bank said.

The World Bank estimates grow at 9.6% in 2007, down from last year's 10.7%, its highest rate since 1995.

Exports are likely to expand by 19.8% in 2007, while imports are projected to grow 17.5%, it said.

China has been under pressure to shift the engine of its economic growth to domestic consumer demand from an over-reliance on exports and investment, which makes the country vulnerable to sudden drop in demand for Chinese goods or a global slowdown.

China’s trade surplus hit a record $177.5bn (HK$1.4 trillion) in 2006, up 74% from the previous year - that has strained ties with Washington and other trade partners who say Beijing has not done enough to let its currency appreciate.

China has allowed the yuan to rise gradually against the dollar since cutting a direct link to the dollar 18 months ago and raising the yuan's value 2.1%. Since then, the yuan has appreciated about 4.3%.

DHL to boost international parcel delivery ops in Japan

Deutsche Post AG Feb 13 said its DHL unit will spend 11bn yen over 2-3 years to beef up the Japanese operations of its global express delivery business, including constructing sorting facilities at airports.

Under the plan, DHL is to build automated package-sorting facilities at Kansai International Airport and Central Japan International Airport, in addition to a distribution center in Chiba Prefecture.

DHL has held the largest share in Japan's global express delivery market since 2003, but aims to enhance competitiveness through the large investment because US rivals FedEx Corp. and United Parcel Service Inc. are adding facilities in Japan.

In particular, DHL aims to bolster its handling of freight shipments from Japan to China, according to Klaus Zumwinkel, cob of management at Deutsche Post.

While indicating that Japan will be positioned as the strategic location in Asia, Zumwinkel dismissed the possibility of corporate acquisitions here.

Hong Kong port unit to build new terminal in Vietnam

Hutchison Port Holdings (HPH), a unit of Hutchison Whampoa Ltd, has agreed to form a joint venture with Saigon Investment Construction & Commerce Co Ltd to set up and operate a new container terminal in Ba Ria Vung Tau province in Vietnam.

Hutchison Port said in a statement the new container terminal is expected to come on stream in 2011. Financial details were not given.

The joint venture, to be called Saigon International Terminals Vietnam Ltd, will build the terminal with a quay length of 730 meters and with depth alongside of 14 meters and a total yard area of 33 hectares.

It said HPH will provide modern container-handling facilities throughout the 50-year concession for the project.

Dutch Trafigura settles toxic waste case

A Dutch-based oil trading company paid $197mn to secure the release of three executives from an Ivory Coast prison and settle claims that it dumped toxic waste that killed at least 10 people in the West African nation.

Greenpeace and other environmental organizations said the case is an example of how Africa is routinely used as a dumping ground for waste generated by wealthy nations.

Trafigura Beheer BV continues to deny wrongdoing, saying the waste unloaded in August 2006 from a ship in the Ivory Coast port city of Abidjan was not toxic. But a UN report found it contained chemicals that are lethal in high concentrations.

The Dutch government is investigating whether the Probo Koala should have been allowed to leave Amsterdam in July after authorities found the ship's cargo was larger than expected and appeared unusually noxious.

Officials in the Ivory Coast Feb 13 said Trafigura agreed to pay the government $197 million to settle the dispute and obtain the executives' release. The company confirmed the settlement in a statement Feb 14 that announced its executives had been freed.

Claude Dauphin, Jean-Pierre Valentini and Nzi Kablan had been jailed in Abidjan since Sep 18, 2006.

S. Korean cargo ship missing off Japanese coast

A South Korean cargo ship with 11 international crew members on board disappeared in the sea off Japan Feb 14 amid bad weather conditions, the Korea Coast Guard said.

It was not immediately known whether the boat had sunk or whether the seamen -- four South Koreans, five Myanmarese and two Indonesians -- are alive, the guard said.

The 1,994-ton ship carrying 3,000 tons of steel plates was on its way to South Korea's southeastern port of Pohang when it disappeared 9 miles off Nagoya, Japan, it said.

The ship sent an SOS radio message to its company in Busan, Daeho Maritime Shipping Co., at about 3:20pm, shortly before it went missing, citing bad weather conditions, the coast guard said.

The Japanese Maritime Safety Agency said it dispatched an airplane and three patrol boats to the scene for search operations and discovered a life raft there, believed to be from the ship.

Japan's economy grows

Japan's economy grew for the eighth straight quarter in the Oct-Dec period of 2006, expanding an annualized 4.8%, the government said Feb 15.

That corresponds to a 1.2% gain in gross domestic product from the previous quarter, the Cabinet Office said in a preliminary report.

The growth rate figures were higher than the average market forecast of an annualized 3.8% rise or 0.9% quarterly increase.

In 2006, Japan's economy grew for the seventh straight year, up 2.2%.

Nominal GDP, which does not adjust for price changes, rose 1.2% in the fourth quarter of 2006 from the previous quarter, or an annualized 5.0%.

According to the report, consumer spending, which accounts for about 55% of Japan's GDP, increased 1.1%.

Exports expanded 1.1% and imports were flat.

AIG hits snag in port assets sale

Dubai Ports World, the company whose planned takeover of major port operations in New York and other US cities ignited a political firestorm in 2006, may be headed for a new squall in its plan to sell off those operations to a US-based company.

The Port Authority of New York and New Jersey is seeking tens of millions of dollars from the prospective new owner, AIG Global Investment Group, for improvements the port agency has made to the Port Newark Container Terminal in Newark, NJ, which AIG would operate.

Port Authority spokesman Stephen Sigmund Feb 14 said he could not put a precise figure on how much the agency should receive in cash payments or future work at the facility, but he said the agency has spent $30mn in infrastructure developments since 2000.

Sigmund said Dubai Ports World has "made a pretty substantial profit here, and we want AIG to make a commitment to reinvest money in the capital projects so that we're sure they're going to operate the terminal responsibly."

Dubai Ports World is the world's largest marine terminal operator with 51 terminals in 24 countries.

Report calls for improved ocean cargo services

Two freight transport experts have called for the creation of "fast track" ocean cargo services that can provide shippers reliable and timely delivery of Asian imports.

Brian Clancy and David Hoppin of Arlington, VA-based MergeGlobal issued a research paper concluding that innovative concepts are needed to take the variability out of international supply chains and ease the pain caused by a congested US freight transport system.

Their report, "Coping with Uncertainty," urges transportation providers to use existing technology and business models to create faster, more reliable ocean transportation products — especially in the less-than-containerload (LCL) market.

Their research was sponsored by supply chain services provider APL Logistics and Con-way Freight. The two firms launched OceanGuaranteed in 2006, a day-definite guaranteed LCL product for shipments from Asia to the US market.

To access report, see www.apllogistics.com or www.con-way.com/ocean.

UP, GE promote green technology

Union Pacific railway and General Electric Feb 13 announced the Green Locomotive Technology Tour to showcase current and experimental technologies that are helping reduce locomotive emissions.

The environmental rail tour will wind through California Feb 20 - 28 with planned stops in West Colton, Fresno, Stockton, Roseville, Oakland, Los Angeles and Long Beach.

At each stop, UP and GE representatives will brief federal, state and local air quality officials, regulatory and elected officials, and high school students on the companies' leading-edge emissions reduction technologies.

Guests will also receive an overview of fuel conservation initiatives and railroad safety practices along with an on-board tour of environmentally friendly locomotives.

Winds again delay cranes' arrival at Portsmouth

For a second day, winds on Feb 15 delayed the arrival of the ship bearing six gigantic cranes for APM Terminals' new $450mn cargo facility.

The vessel, the Zhen Hua 10, is now likely to arrive the morning of Feb 16, said Thomas P. Host III, senior vice president of T. Parker Host Inc., the ship's local agent. It was to dock at about noon Feb 15 at the terminal, off the Western Freeway.

"We're waiting on the weather," Host said.

Because of the cranes' large size, the Zhen Hua is easily slowed by wind, said J. William Cofer, president of the Virginia Pilot Association.

On Dec 4, the ship began its voyage to Portsmouth, leaving from Shanghai, where the cranes were manufactured.

The cranes' arrival will mark a major milestone for the 291-acre terminal, which opens in July 2007.