Cargo Business Newswire Archives
Summary for February 17, 2014 through February 21, 2014:

Tuesday, February 18, 2014

Top Story

Asia food importers shift from dry bulk to container ships

Asian food importers are shifting from dry bulk cargo ships to container ships, as a way to import smaller amounts at a cheaper rate per ton.

Agricultural commodities have typically been shipped via bulk carriers that hold 70,000 tons of a single cargo, such as corn or sugar.

But the paradigm is changing as ships look to fill empty containers after offloading goods in Western countries and offer competitive rates for food going back to Asia.

Asian import demand for animal feed grains is increasing as higher incomes promote a change away from the rice-based diet to more meat and dairy products, which gives smaller importers more opportunities.

According to the U.N. Food and Agriculture Organization, China is expected to best the European Union as the world's top pork users on a per capita basis by 2022, and its dairy product consumption is expected to increase by 38 percent.

"As Southeast Asia develops economically, you have demand for better quality, high-protein diets, and ports don't (necessarily) have the infrastructure for bulk vessel receiving," said Brian Bickford, president of AgriLogistics, a U.S. company specializing in grain shipping.

U.S. containerized grain exports to Asia have more than doubled since 2006 to 470,832 TEUs in the first 10 months of 2013, up 10 percent year-over-year, according U.S. Department of Agriculture (USDA) data.

Analysts estimate that 12 to 15 percent of Australia's grain exports are now shipped in containers to Asia.

Future growth in food transported via containers depends in part on the global demand for Asian manufactured goods, which makes empty containers available in food exporting countries.

For more of the Reuters story:

CSAV raises capital for prospective merger with Hapag-Lloyd

Chilean container shipping firm Compania Sud Americana de Vapores will carry out two capital increases connected to an eventual merger with German shipping line Hapag-Lloyd, according to a CSAV statement.

The first increase to raise $200 million will be held in March and will complete the financing of seven container vessels currently being built in Korea, and will also fulfill some conditions for closing of the planned merger with Hapag-Lloyd, CSAV said in a filing to Chile's regulating body.

The second capital increase will happen only if the planned merger with Hapag Lloyd comes about, the statement said. This capital increase would be between $200 and $400 million, CSAV reports.

Raising $200 million would allow CSAV to participate in Hapag-Lloyd's own planned capital increase of $506 million, which it is conducting to fund the closing of the merger. CSAV said it had planned to contribute about 70 percent or $354 million to Hapag Lloyd's capital increase.

In January, the companies signed a memorandum of understanding to merge their sea transport businesses.

If successful, CSAV says the merger will create the world's fourth-largest container shipping company in terms of capacity, with annual revenue of around $13 billion. The two companies began talks in December.

Port of Long Beach names new environmental planning director

The Long Beach Board of Harbor Commissioners this week appointed Heather Tomley as the new Director of Environmental Planning in charge of the Green Port environmental initiatives, according to a port statement.

As Director of Environmental Planning, she will lead the division most directly responsible for the Port's signature environmental programs: the Green Port Policy and the San Pedro Bay Ports Clean Air Action Plan. The division coordinates programs to improve air, water and soil quality, preserve wildlife habitat and integrate sustainability into Port practices.

Tomley has served as the City of Long Beach Harbor Department's acting director of environmental planning since July 2013. She originally joined the Harbor Department as an environmental planning associate in 2005, was promoted to environmental specialist and then senior environmental specialist in 2006 and assistant director in 2008. Currently on leave, she is scheduled to return March 17 to her new role.

"Heather Tomley's work in the Environmental Planning Division has been instrumental to the greening of the Port. We are confident she will continue to ensure that the Port of Long Beach is a world-leading environmental steward in the industry," said Harbor Commission President Doug Drummond.

NYK ships more Middle East crude to Thailand

NYK has continued its contract with Thai Oil, and will be shipping oil from the Middle East to Thailand via a third very large crude-oil carrier, the Taizan, according to an NYK statement.

The company said Taizan, built in 2002 with a capacity of 300,000 tons, will shuttle oil mainly from the Arabian Gulf to Thailand for three years.

Thai Oil, which operates one of the largest refineries in Thailand, established a joint venture in 2011 that purchased the VLCC Tenyo from NYK, chartering it under a 10-year contract. The same process followed to conclude a long-term contract with NYK for the VLCC Tateyama in November 2012. This third vessel, Taizan, was added to Thai Oil's fleet in the same way.

NYK said its medium-term plan is to remain focused on meeting the growing demand for transport to and from Asia, and is seeking to further expand the transport of energy resources in the area.

Canadian National railway raises rates for older oil tank cars

Canadian National Railway is charging oil shippers more to transport crude in older tank cars, indicating that rail operators are actively avoiding the use of the type of cars involved in several tragic explosions.

The tiered fee structure for different models of tank cars comes after increased scrutiny on the safety of shipping light crudes by rail, triggered by a series of explosions including the Lac-Mégantic disaster that killed 47 people last summer, in which a runaway crude train exploded in the center of a small Quebec town.

North American railroads, shippers and regulators agree that older DOT-111s tank cars, created before higher standards were adopted in 2011, often fail during accidents, making them more likely to spill their cargo and catch fire.

"CN has structured its rates to create an economic incentive for customers to acquire, over time, more robust tank cars that meet the higher safety standard of the more recent CPC 1232 design," said Mark Hallman, spokesman for CN.

For more of the Globe and Mail story:


Wednesday, February 19, 2014

Top Story

Rickmers and Apollo buying used Hamburg Süd vessels in joint venture

German shipping line Rickmers and buyout group Apollo are buying used container ships five months after setting up a joint venture for the purpose, indicating that private equity interest in the sector is strengthening.

The venture, targeting a total investment of $500 million, purchased six container vessels for $176 million from Germany's Hamburg Süd. They will lease the refrigerated ships back to Hamburg Süd for three years.

Buyout groups and hedge funds are showing interest in the industry since recent forecasts of a recovery in global trade.

For more of the Reuters story:

MOL to invest $3.9B in deep-sea gas

Mitsuit O.S.K. Lines plans to invest up to $3.9 billion in deep-sea gas production and transport in an effort to bring the company back to profits amid overcapacity in the bulk shipping market.

MOL announced its first floating storage regasification plant in October and is planning up to five more by April 2020, according to Takeshi Hashimoto, a managing executive officer at the energy and offshore business.

The company aims to tap surging demand for liquefied natural gas as resistance to nuclear energy has increased after Japan's nuclear disaster, and pollution worries plague coal plants.

"Deep-sea investments are the new highlight of Mitsui O.S.K.'s strategy," Hashimoto said. "There's less competition because of the high investment costs, technical skills involved, and need for financing."

Mitsui O.S.K. has forecast a return to profited this fiscal year with net income of $557 million, after the line posted a loss of $1.7 billion in the 12 months ended March.

For more of the Bloomberg story:

CMA CGM extends service to more Black Sea ports

CMA CGM announced the extension of its FEMEX service on the North Europe – Mediterranean trade, becoming the only ocean carrier offering direct coverage into the Black Sea region from and to North Europe.

The container line will extend its FEMEX service in the Black Sea with the addition of 3 new calls in Samsun (Turkey), Novorossiysk (Russia) and Constanta (Romania).

The new service will also link, via its two hub ports of Malta and Tangiers, CMA CGM worldwide services with Black Sea ports. According to the statement, import transit time into Thessaloniki will be improved by 5 days, as this will be the first port of call of the southbound rotation beyond Malta.

The new rotation, as follows, will start from Hamburg on the 20th February with CMA CGM Lavender: Hamburg – Antwerp – Southampton – Tangiers – Malta –Thessaloniki – Gebze – Ambarli – Haydarpasa – Samsun – Novorossiysk – Constanta – Ambarli – Gebze – Gemlik – Aliaga – Malta – Tangiers – Casablanca.

Port of Los Angeles cargo up 2.5 percent in January

Cargo volume handled at the nation's busiest seaport in January increased by 2.5 percent year-over-year, based the latest number released by the port Friday.

Container imports surged by 6.7 percent to 360,037 TEUs, while exports increased 1.7 percent to 161,938 TEUs.

Overall, Los Angeles moved 685,550 TEUs in January, and port credited the heavier volume to the Chinese New Year holiday, also called the Spring Festival, which is Jan. 31 through Feb. 6 this year. During the long holiday, factories close and businesses slow down to celebrate.

Port of Long Beach figures were not released Friday.

Cargo vessel assists crew of fishing boat

The crew of Sea Star Line's vessel El Morro, on its way from Jacksonville, Florida to San Juan, Puerto Rico, received distress calls from a small fishing vessel in the Atlantic Ocean, according to a Sea Star statement.

The fishing boat was trying to reach the U.S. Coast Guard in Jacksonville with no success due to a weak transmission signal. The crew of El Morro intercepted the messages and began relaying information to the Jacksonville USCG.

Seastar said the U.S. Coast Guard requested that El Morro remain in contact with the fishing vessel and divert to its last known position until dispatched rescue vessels could reach the fishing vessel.

"We are proud of El Morro's crew for their ability to act quickly and assist another vessel that was in distress." stated Jim Wagstaff, vice president of operations for Sea Star.


Thursday, February 20, 2014

Top Story

COSCO and China Shipping Group form strategic partnership

China's two largest shipping lines, COSCO and China Shipping Group, have formed a strategic partnership in an attempt to retain market share during the chronic downturn in the industry.

The two lines announced last week they have reached a cooperative agreement - a resource-sharing alliance that covers shipping, terminal operation, logistics, shipbuilding and ship repair.

The COSCO Group website noted the agreement will help the companies achieve advantage complementation and better prepare for industrial changes

The Baltic Dry Index, a key indicator in the global shipping market for transporting dry bulk goods, dropped more than 45 percent in the past month, as of Feb 7, according to Yahoo News.

"International shipping magnates tend to form alliances during downturns to contend for market share, so it will be important for Chinese shipping companies to take the initiative and retain their market share," an analyst told Beijing Business Today.

For more of the ECNS story:

Head of Port Authority of NY/NJ orders probe in bridge scandal 

Port Authority Executive Director Pat Foye has ordered the bi-state agency's inspector general to investigate the role its police force may have played concerning the lane closures on George Washington Bridge for several days last September, according to anonymous sources close to the matter.

The infamous closing of access lanes to the George Washington Bridge created traffic jams and triggered a political scandal in New Jersey involving Gov. Chris Christie's administration.

Specifically, Foye wants the watchdog agency to investigate the actions of police after reports that officers told motorists stuck in traffic to send their complaints to the mayor of Fort Lee, or to call the borough of Fort Lee's offices to complain.

Several top Christie advisers and staff have been named in the scandal that suggests that state officials planned the gridlock to politically punish Fort Lee's Democratic mayor, Mark Sokolich, for not endorsing their Christie for reelection last year.

Christie said he didn't know about the traffic debacle until after it was over and media reports were issued, and he has denied knowledge of any political scheme.

MSNBC reported it appears that a Port Authority police officer with close family ties to Christie drove a key figure in the scandal - Port Authority executive David Wildstein - around bridge facilities at the time of the traffic jams to inspect the gridlocked roads.

For more of the KPAX story:

Stockton port approves $18 million UP rail-welding facility

Stockton port officials Tuesday approved Union Pacific's plan to build an $18 million rail-welding facility, where the railroad will produce ribbons of steel rail longer than four football fields starting in late 2014.

The new project will generate revenue for the port, including maritime service fees, land lease rents and port electric utility changes, estimated at more than $2 million a year, officials said.

"It's a good income generator for the port and a good jobs generator for the community," said Port Director Richard Aschieris.

"It's really a very promising addition to the port and the city," said Gary Christopherson, a port commissioner.

The Omaha, Neb.-based railroad is expected to invest $18 million in the welding facility, to include 17,000 feet of rail tracks, a rail storage yard, a welding and inspection building, and a gantry crane with a 200-foot span.

It would receive 480-foot lengths of steel brought in from Japan on a custom-built ship now under construction.

Those rails would be welded into single pieces running 1,440 feet, or a quarter-mile in length - so-called ribbon rail - at the Stockton facility.

The ribbon rails would then be carried on special trains to Union Pacific rail renovation and expansion projects throughout the West and Midwest.

Port commission members were told the facility would create up to 10 permanent jobs at an average salary of $50,000 a year, and help generate another 30 indirect jobs and 75 temporary construction jobs.

For more of the story:

Jones Act rule results in 40,000 tons of NJ salt stuck in Maine

New Jersey officials say the forces of nature combined with a nearly century-old maritime law have combined and stranded a 40,000-ton load of road salt in Searsport, Maine.

The salt is badly needed in New Jersey, where salt sheds are almost empty and a shortage has grown so severe that local officials have contemplated closing roads and canceling public bus routes.

State officials said they arranged on Feb. 7 to buy a stockpile of salt in Maine and ship it immediately to Port Newark on a vessel that had just unloaded its cargo in Maine and would have delivered the entire load to New Jersey by last weekend.

But then they learned that the 1920 maritime law, the Jones Act, requires that only ships with U.S. flags and crews can transport goods between American ports and the arranged vessel did not fit the bill.

Officials applied for the waiver on Thursday, but the Department of Homeland Security has not yet ruled.

Such waivers are issued infrequently but New Jersey officials argued that the state was facing a dire situation.

On Tuesday, Homeland Security officials said a waiver could be granted only if federal transportation officials confirmed that no vessels with United States flags were available to move the cargo, and if waiving the requirements of the statute was in the interests of national defense.

The state contracted an American owned barge to head to Maine, but had to take refuge in Providence because of a storm. The barge would have to make several trips to retrieve the 40,000 tons of salt, since its capacity is 9,500 tons.

The barge could reach Maine by Friday and bring the first shipment back to New Jersey by early next week, according to Joseph Dee, a spokesman for the state Transportation Department.

For more of The New York Times story:

Two Americans found dead on Maersk Alabama

Two American security officers have been found dead on the Maersk Alabama container ship, police in the Seychelles said Wednesday.

The vessel was moored at Port Victoria in the Indian Ocean archipelago. The men, both 44, were found dead on Tuesday. CNN first learned about the incident on Twitter.

The two men worked for Trident Group, a Virginia-based maritime security services firm. The company's president, Tom Rothrauff, said the men were former Navy SEALs.

Police said the two men were part of a 24-member crew that arrived on Sunday and were expected to leave Tuesday.

Kevin N. Speers, a senior director for Maersk Line Limited, said in a statement that the security contractors boarded the vessel on January 29, and that their deaths were "not related to vessel operations or their duties as security personnel."

"Contracted security is part of anti-piracy protection plans to safeguard crews and vessels," Speers said. "In Maersk Alabama's case, she is persistently in high-risk areas since she provides feeder service to the east coast of Africa. The vessel was cleared to complete cargo operations, and she is now at anchor awaiting further instructions."

"A postmortem will be carried out this week in order to establish the cause of their sudden deaths," police said, adding that the police investigation is ongoing.

For more of the CNN story:

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