Tuesday, February 24, 2009
Top Story
Port of Long Beach offers rail cargo incentives
Facing a continued decline in global shipping traffic, the Port of Long Beach harbor commission announced on Monday it would lower some fees by 10 percent for cargo business connected to containers that ship via rail beginning April 1, and running for one year.
The port said it would also offer a $20-per-TEU incentive for what it termed “new rail-hauled cargo” that passed through the port.
"I believe that we have an obligation at this moment in history to demonstrate to our customers, partners and clients that we are actively engaged in the business of trade, that we understand the pressures they are under, and that we are responding as best we can," said James C. Hankla, president of the Long Beach board of harbor commissioners.
Long Beach’s cargo volume dropped approximately 25 percent in December 2008 and January 2009 compared to the same periods a year ago.
The port said it would offer the 10 percent rate reduction to its terminal operators on wharfage fees for all rail-hauled cargo, equating to $4 to $6 per container, costing the port about $11 million for the one-year program.
The port would offer $20 to ocean carriers, it said, for each additional rail-hauled TEU. The financial incentive would be $40 for every container longer than 20 feet.
The port said 30,000 people in Long Beach and 316,000 in Southern California work in international trade-related jobs, and the harbor commission felt the incentives would help to retain those jobs in the region.
Rail
Six-week report: Rail freight traffic still down
U.S. rail freight volume was down 12.2 percent for the week ended ended February 14 over the same period last year, according to statistics reported by the Association of American Railroads (AAR).
Carload freight totaled 281,533 cars, and loadings were down 9.3 percent in the western U.S. and 16.3 percent in the eastern half of the country, the AAR said.
A bright spot was carload volume, which posted its highest level so far this year, up 6.2 percent from the previous week.
Intermodal freight volume totaled 191,410 trailers or containers, down 12.9 percent from last year. Container volume fell 8.4 percent and trailer volume dropping 29.3 percent. Total volume was estimated at 29.9 billion ton-miles, off 11 percent from 2008, and up 6 percent from the previous week this year, the report said.
For the first six weeks of 2009, the U.S. railroads reported cumulative freight volume of 1,614,224 carloads, down 16.1 percent from 2008; 1,171,036 trailers or containers, down 13.2 percent; and total volume of an estimated 171.4 billion ton-miles, down 14.9 percent.
By contrast, The Canadian railroads reported volume of 66,488 cars for the week, down 8.4 percent from last year, and 43,302 trailers or containers, down 3.8 percent. For the first six weeks of 2009, Canadian railroads reported cumulative volume of 373,036 carloads, down 15.6 percent from last year; and 254,591 trailers or containers, down 10.2 percent.
The Mexican railroads reported posted volume of 11,688 cars, down 6.1 percent from the same week last year, and 5,596 trailers or containers, down 6.9 percent. Cumulative volume on Mexican railroads for the first six weeks of 2009 was reported as 63,822 carloads, down 13.0 percent from last year; and 27,855 trailers or containers, down 19.4 percent.
Combined North American rail volume for the first six weeks of 2009 from the 14 reporting U.S., Canadian and Mexican railroads, totaled 2,051,082 carloads, down 15.9 percent from last year, and 1,453,482 trailers and containers, down 12.9 percent from last year.
Infrastructure
Kansas DOT plans for future freight growth
The Kansas Department of Transportation announced at its first-ever freight summit this week that it projects by the year 2030, freight worth $1.7 trillion will pass through that state, including 15 thousand trucks a day. The KDOT said $894 billion worth of freight moved through Kansas in 2006.
The KDOT is to receive at least $120 million out of the state’s $380 million in federal stimulus money, with $91 million going towards a transportation corridor project in Overland Park. The KDOT said it would apply for further transportation funding.
The KDOT director, Deb Miller, announced at the summit: "We believe that Kansas City is going to be a major inter-modal facility. That means both rail and trucking activities are going to come together in Kansas City. And the other thing that's going to happen is that warehousing activities will just grow enormously in that area."
Ports
Four new container cranes for Georgia port
The Georgia Port Authority announced on Monday it took delivery of four new post-Panamax container cranes at the Garden City Terminal in Savannah.
The port said the Garden City facility now has 23 ship-to-shore cranes giving it the most of any single marine terminal in the U.S.
“Our efforts today will create opportunities to gain market share tomorrow,” said GPA Executive Director Doug Marchand. “These preparations will ensure that when the economy does turn around, our rebound will be that much greater.”
Marchand said the new cranes are part of the GPA’s long-term strategic growth plan to accommodate 6.5 million TEUs of capacity by 2018, doubling its current capacity.
The new cranes can handle super post-Panamax vessels the size of 22 containers wide and are to be operational by mid-summer this year, the port said.
The electrically powered cranes will cut the use of 500,000 gallons of diesel, the emission of 690 tons of nitrogen oxide, four tons of particulate matter and 12 tons of hydrocarbons every year, the port said.
Ports
British firm invests $161 million in India port
The British private equity firm 3i Group Plc. announced today that it would invest $161 million in India's Krishnapatnam Port Company Ltd.
The port company, set up by Hyderabad-based Navayuga Group, is to have a 30-year concession to develop, operate and maintain Krishnapatnam Port on India’s east coast. The port would be India’s largest by 2013.
Farewell
Fond farewell to Pacific Shipper
The staff at Cargo Business News bids a fond farewell to the 83-year-old, venerable Pacific Shipper magazine, which will now merge into the Journal of Commerce, along with other regional shipping titles around the U.S.
The Pacific Shipper was a good competitor to CBN (formerly Marine Digest), with both publications serving the trans-Pacific shipping industry since the 1920s.
While Marine Digest operated out of Seattle, Pacific Shipper published out of San Francisco for much of its history.
As with Marine Digest’s own founder, editor and publisher, Jackson Corbet, Jr., Pacific Shipper had the same in the visionary George E. Martin, who filled a vital need with West Coast weekly shipping schedules and timely industry news.
We salute the memory of Pacific Shipper.
For more on Pacific Shipper’s history:
www.pacificshipper.com/news
Thursday, February 26, 2009
Top Story
China’s logistics sector to share in over $14.6 billion of government stimulus
The Chinese government announced its latest stimulus package on Thursday, with plans to invest more than $14.6 billion over the next two years to help stimulate its logistics and non-ferrous metal sectors, according to various state media reports.
The government said it would aid logistics services companies in updating and enhancing information technology platforms.
The government also announced it would encourage consolidation in the logistics industry in order to better compete with foreign logistics rivals. China’s logistics sector includes thousands of small companies.
"Mergers of logistics companies can help avoid cutthroat competition, and the country may form regional logistics giants to compete with overseas companies," said Zhou Ning, an analyst at Dongxing Securities Co., in a Shanghai Daily report.
China’s government said it also plans to invest in logistics infrastructure, and that it would help spur demand and associated logistics services in the energy, mining, auto, agriculture and medical supply sectors.
Trade
Research report: Global container growth projected at 3.1 percent in 2009
A London-based research group reported it projects 3.1 percent global container growth in 2009, after 2008’s increase of 5.1 percent, which had lowered considerably by the year’s slow fourth quarter.
Clarkson Research said it cut back previous 2009 container shipping growth projections, due in large part to revised economic projections released by the International Monetary Fund, which reported global GDP growth of 0.5 percent in 2009, down from its last estimate of 2.2 percent.
In related news, the Organization for Economic Cooperation and Development, has reported U.S. import volume growth is projected to contract 2.1 percent in 2009 with U.S. export expected to slow to 2.8 percent.
Ports
Port of Longview reports record year in 2008
In 2008 operating revenue reached an all-time high of close to $23.5 million at the Port of Longview, Wash., the port authority announced on Thursday.
The port said it exceeded the $20 million dollar mark for the first time along with net operating revenue rising more than 100 percent to $2,854,692. Port of Longview officials attributed much of the revenue increase to its continued wind energy cargo handling business.
The Port of Longview handled 1.3 million metric tons of total cargo last year, up 16 percent from 1.1 million metric tons in 2007. The port’s 2008 imports by tonnage dropped 26 percent, however there was a 29 percent increase in exports of bulk cargos, steel, logs and wind energy cargo.
In 2008 Longview added a Liebherr LHM500S Mobile Harbor Crane to handle growing wind energy cargo handling operations and to attract additional heavy lift cargos, the port said.
The Port of Longview said it expects a new grain terminal to be operational this year, the first export grain elevator reportedly built in the U.S. in over twenty- five years.
Yang Ming orders 22 ARMGs from ZPMC for Kaoshiung port expansion
The Taiwanese shipping line Yang Ming has ordered 22 automated rail-mounted gantry cranes (ARMG) from Shanghai Zhenhua Port Machinery (ZPMC), at a cost of $50 million, according to China’s state media.
The gantry cranes will eventually be deployed as part of a $432 million expansion project at Taiwan’s Port of Kaohsiung, where four new cargo terminals are scheduled to come on line between 2011 and 2015, with an eventual total capacity of two million TEUs.
Technology
Delta Cargo to launch Unisys portal
Delta Cargo announced it would launch an online solution through Unisys Cargo Portal Services (CPS), an electronic booking and shipment management service for the air cargo industry. Delta said participation in CPS would be a free, web-based tool to manage bookings through a neutral multi-carrier portal.
“Cargo Portal Services gives every Delta customer a simple way to book and manage their shipments online at no charge,” said Neel Shah, vice president, Delta Cargo. “Our Northwest customers have already overwhelmingly adopted the service, and we’re delighted to build on that success and give our customers what we believe are industry-leading levels of visibility, service and efficiency across our combined networks.”
Delta’s recent merger with Northwest Airlines would allow them to extend booking beyond the more than 65 percent of NWA customers currently using CPS for their global bookings, the company said.
New users can register for Delta and once approved, gain access to CPS services, which includes regular space allocations, customs status, Transportation Security Administration (TSA) shipment authorization, and the printing of key documents, the company said.
“Delta Cargo and Unisys enjoy a longstanding relationship around air freight systems and services,” said Christopher Shawdon, vice president and partner, Logistics Solutions for Unisys. “We and the CPS community welcome Delta Cargo and their drive in promoting e-business automation and innovation in the air cargo industry."
Honors
California Maritime Academy honored for sea rescue
The captain and crew of Cal Maritime’s training ship Golden Bear were honored by the Women’s Propeller Club with the 2008 Mary Patten Valient Ship Award and a commendation for bravery and outstanding seamanship for the rescue of two fishermen adrift 80 miles off the Northern California coast in August 2008, according to an announcement by the maritime academy.
Captain Paul Leyda and crew responded to a U.S. Coast Guard distress call on behalf of the fishermen, whose single engine had failed. The 500-foot Golden Bear was in its way to homeport after a four-month-long training voyage that included 240 faculty, staff and students on board, Cal Maritime reported.
The Coast Guard ordered the Golden Bear, which was closest to the scene, to change course for the fishermen in plight in order to reach them before nightfall when visual sighting would be more difficult, the academy said.
Radar location was difficult due to the small size of the fishing vessel until the fishermen were asked to shoot off flares. The fishermen were rescued and their vessel towed back to harbor by the Golden Bear.
Friday, February 27, 2009
Top Story
UPS CEO to world: Don’t adopt protectionist measures
In his address to the U.S. Chamber of Commerce on Thursday, Scott Davis, the chief executive of United Parcel Service (UPS), advised the U.S. and its global trading partners to not adopt protectionist measures during tough economic times.
"The need to support global trade grows more urgent by the day. Global trade is one of the most important tools we have to help lift us out of the financial crisis. No argument against free trade can justify the negative impact to economic and human development," said Davis.
"Proponents of free trade find themselves with an increasing challenge these days," observed Davis. "The facts are clearly on the side of trade, but popular perception clearly is not . . . we simply must do a better job telling the story."
Davis said the traditional view that global trade adversely impacts U.S. jobs by taking them out of the country is not accurate according to Bureau of Labor statistics. According to the statistics Davis referenced, in the case of 50 or more people laid off between 1996 and 2004, fewer than 3 percent could be attributed to import competition or overseas relocation. Davis also cited U.S. Treasury Department statistics that show up to 57 million Americans work for companies involved in global commerce.
The big “myth” that is perpetuated, according to Davis is that nothing is manufactured domestically anymore. He said the U.S. is the world’s leading manufacturer, taking up one quarter of total world manufacturing output. The U.S. is also the world’s largest exporter of goods and services at $1.8 trillion, he added.
"In my own company, trade is clearly creating American jobs," Davis said. "Each time we add 40 new international packages in the United States - in other words, 40 packages imported or exported by our customers - we create another new U.S. job somewhere in our system."
Globally, several studies have shown a direct connection between the degree of economic freedom and the pace of economic growth, Davis said. "Many countries in Eastern Europe, Asia and Latin America are prosperous and stable societies in large measure because of their determination to be players in a free and open global economy,” he said.
"Will we have the foresight and courage to build on history's most powerful force for economic gain and human betterment?" Davis asked. "Or will we allow the financial crisis to cloud our judgment and threaten one of the most important tools we have to pull us out of this downward spiral?”
Read the full speech
Logistics
Supply chain study for shippers: Go “day-definite”
Shippers should expand their use of “day-definite” ocean container services to help counter the impacts of the global trade recession, according to a research report sponsored by APL Logistics.
The research paper “Managing the New Uncertainty” was published by the Olin Business School’s Boeing Center for Technology, Information and Manufacturing (BCTIM) at Washington University in St. Louis.
The findings of Dr. Panos Kouvelis and Dr. Jian Li concluded, “shipping full-container loads with specific delivery dates is the logical next step in ocean service.”
”Day-definite service” refers to the recently developed practice of delivering ocean cargo on a specific date agreed to by a shipper and carrier, according to the report. The service had been aimed at less-than-container load cargo (LCL).
The pressure of a global recession on supply chain managers to operate more efficiently has made the day-definite delivery option for full-container loads (FCL) a more viable strategy, the report said.
“The rapid slowdown in global markets is driving a renewed focus on tightly managing intercontinental supply chain costs,” the researchers said in their report. “Day-definite FCL service is a highly beneficial product innovation for progressive intercontinental supply chains and the managerial efforts to make them leaner.”
Dr. Kouvelis and Dr. Li said the benefits of day-definite service for full-container load cargo include: significant savings in total distribution cost; reduced supply chain variability; and a boost for the environment since shippers can replace reliable but highly polluting air freight with dependable ocean service.
“Reducing reliance on transport modes with heavy carbon emissions, such as air transport, is increasingly being viewed as a supply chain imperative,” the researchers said. “Using a day-definite service in lieu of air freight can contribute significantly to the greening efforts of carbon-sensitive supply chains.”
Day-definite ocean services can also fast-track containerized shipments due to priority handling and processing at load and discharge ports, the report said. These shipments are moved inland via expedited team truck service directly to the customer’s door.
Kouvelis and Li compared day-definite services for full-container load cargo with airfreight and standard FCL ocean services. Their findings where that day-definite service was 134 percent to 244 percent less expensive than air freight for total distribution cost, which includes transport, in-transit inventory and warehouse inventory costs. Day-definite service was even cheaper than regular FCL ocean services in many instances, especially when hidden costs such as penalties and charge backs for late deliveries were factored in, they said.
As for reliability, the researchers said day-definite products had become “virtually indistinguishable from traditional air freight.” Because of this, shippers can now reduce their reliance on costly inventory build-ups and safety stock. Instead, they can depend on cost-efficient day-definite ocean service to deliver cargo in time to meet consumer demand.
“For logistics managers, the ultimate objective is to minimize total distribution costs without impacting customer service levels,” said Kouvelis and Li. “As shippers have quickly embraced the advantages of a day-definite LCL service, the logical next step is to extend the viability and total cost benefit of a day-definite ocean service to FCL shipments as well.”
Green
Maersk reports 1000th West Coast vessel call for its cleaner fuel program
Maersk Line announced that the company’s environmental initiative to switch to cleaner fuel at North American West Coast ports reached a milestone with the 1000th vessel call.
The company said 111 vessels have participated since the program inception in 2006 and the initiative has reduced Maersk Line fleet’s vessel-related air emissions by over 2,400 tons when calling the ports of Los Angeles, Oakland, Tacoma and Vancouver.
Maersk Line said its pilot program “is part of the company’s on-going commitment to environmentally responsible operations. The program has been aligned with and supports the significant air quality improvement efforts by the Ports of Los Angeles and Long Beach, California’s Goods Movement Action Plan, the California Air Resources Board initiatives and the Northwest Ports Clean Air Strategy to improve air quality in these ports.”
Maersk said it has seen “substantial reductions in key pollutants.” achieving an 86 percent annual reduction in particulate matter, a 95 percent reduction in sulfur oxides (SOx), and a 12 percent reduction in nitrogen oxides (NOx). The company said its first vessel to utilize the fuel switch was the Sine Maersk in Los Angeles on March 31, 2006. Maersk said there were 212 switches in 2006, 351 in 2007, 425 in 2008 and 12 through January 20, 2009.
Maersk Line said it voluntarily switches from “bunker” fuel with relatively high sulfur content to low-sulfur distillate fuel in the main and auxiliary engines of its vessels while underway in port areas and in the auxiliaries while in California ports, and in the auxiliary engines while at dock in Tacoma and Vancouver. The company said the details of the program vary depending on geography and specific port programs.
Maersk’s view is that the fuel switch is meant to enable immediate emissions reductions at ports as opposed shore-side power programs such as cold ironing that take years to implement on this scale, the company said.
Maersk said the cost of the program is over $18 million dollars to date.
In related news, the Port of Long Beach announced ocean carriers are participating in the port’s newly expanded "Green Flag" vessel speed reduction program. The program now pushes the low-speed zone out to 40 nautical miles (nm) to increase the program's air quality benefits, the port said.
The new program experienced 63 percent participation in its first month in January, while the existing 20-nm program is at 93 percent participation, the port said.
In 2007, the 20-nm Green Flag program eliminated an estimated 678 tons of nitrogen oxides, 453 tons of sulfur oxides and 60 tons of diesel particulate matter, the port reported. The program also reduced greenhouse gases by more than 24,000 metric tons of carbon dioxide equivalents, the port said.
With all vessels participating at the 40-nm range, the amount of emissions reduced would more than double, the port said.
For complying with the 20-nm program, vessel operators receive a 15 percent reduction in dockage fees, known as the "Green Rate." For slowing down from 40 nm, the vessels receive the "Green-Plus Rate," which is 25 percent off.
Liner
Taiwan’s shipping lines in cross-straits China trade exempt from taxes
Taiwan-based shipping lines that ship across the straits to Mainland China are exempt from sales and income taxes, according to a report in the Chinese state media agency Xinhua.
The Chinese government said that those who have paid their sales and income tax for the period between December 15 2008 and the announcement date would be refunded.
MSC announces rate increase on Europe-to-U.S., WestMed-to-U.S.
Mediterranean Shipping Company (MSC), the world’s second largest container line, announced a general rate increase of $160 per-TEU and $200 per-FEU on all cargo moving between Europe and the U.S., effective April 1.
MSC said it would also institute an increase of $200 per-TEU and $250 per-FEU from April 1 on cargo that ships from Italy, Spain and Portugal (West Mediterranean) to U.S. ports.
