Cargo Business Newswire Archives
Summary for February 27 - March 2, 2012:

Monday, February 27, 2012

Top Story

Maersk Line profits drop 36 percent on plunging freight rates

Container shipping giant Maersk Line’s full year profits fell 36 percent due to sluggish market growth and low freight rates, especially on Asia – Europe routes.

Parent company A.P. Moeller-Maersk announced today that the line had a net loss in 2011 of 2.88 billion kroner ($521 million) last year compared with a profit of 14.9 billion kroner in 2010. The statement said the container line’s figures for 2012 will be “negative,” due to excess vessel capacity.

Maersk stock dropped up to 4.4 percent to 43,520 kroner in Copenhagen trading and was down 2.3 percent at 10:42 a.m.

- Bloomberg

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NYK, Evergreen, Hanjin, Hyundai launches US – S. America service

NYK Line, Evergreen Line, Hanjin Shipping and Hyundai Merchant Marine (HMM) announced they are partnering in a new service in March 2012 between the U.S. East Coast and South America.

The “Atlantic North South Service,” which will commence from Norfolk on March 22, marks a return to the North America-South America market. The carriers will deploy six 2,100 TEU vessels—NYK will deploy three, and Evergreen, Hanjin and HMM will deploy one each.

The port rotation for the 42-day voyage is:
Norfolk - New York - Savannah - Miami - Caucedo (Dominican Republic) - Santos (Brazil) - Navegantes (Brazil) - Rio De Janeiro (Brazil) - Vitoria (Brazil) - Caucedo (Dominican Republic) - Norfolk

CMA CGM to reshuffle its Asia to East Coast service

This morning CMA CGM announced revamped rotations for their Asia to US East Coast trade services, effective March 28, 2012.

Here’s the new line-up:

PEX 3: Asia – US Gulf Coast
CMA CGM operates the PEX 3 service, with 11 vessels of 5,500 TEUs. The rotation: Xiamen > Hong Kong> Chiwan > Shanghai > Busan > Punta Manzanillo > Houston > Mobile > Miami > Jacksonville > Xiamen.

China Shipping, Evergreen and UASC operates the Manhattan Bridge service, with nine vessels of 4,000 TEUs. The rotation: Shanghai > Xiamen > Yantian > Hong Kong > New York > Norfolk > Savannah > Shanghai.

COLUMBUS SUEZ: Asia – US East and West Coast
CMA CGM and Maersk Line operate the Columbus Suez service, which remains unchanged, with 16 vessels of 8,100 TEUs. The rotation: Shanghai > Ningbo > Hong Kong > Yantian > Tanjung Pelapas > Suez Canal > New York > Norfolk > Savannah > Suez Canal > Tanjung Pelapas > Hong Kong > Yantian > Shanghai > Pusan > Seattle > Vancouver > Yokohama > Shanghai.

New York drops ballast standards

New York environmental officials have backpedaled away from stringent ballast water regulations the maritime industry said would stop Great Lakes international shipping in its tracks.

The proposed standards limited the number of live organisms in certain volumes of water. They would have made cargo ships cleanse ballast water at a level 100 times stronger than current international standards before releasing it. The industry said that the technology does not exist to comply with this requirement, which would have been effective August 2013.

Shipping companies were concerned the new policy would disrupt operations at the NY/NJ port and totally shut down commercial traffic between the Great Lakes and the Atlantic, since the new policy would prohibit vessels without the mandated technology from traversing through New York and on to the St. Lawrence River, gateway to the Great Lakes.

Environmental groups assert the international standards are too weak, and that clean-water requirements must be 100 to 1,000 times stronger to kill all organisms in ballast water.

-CBS News

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NJ dockworker crushed to death in industrial accident

Officials have identified a 47-year-old female dockworker killed Wednesday night while working at Port Newark Container Terminal.

Earline Brundage of Phillipsburg was trapped between two shipping containers, crushed to death when something went wrong while a crane was lifting one of the containers, according to the Port Authority Police. Brundage was pronounced dead at 8:43 p.m. at University Hospital in Newark, shortly after the accident occurred.

Investigators are looking into the cause of the incident.


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Tuesday, February 28, 2012

Top Story

APM Terminals posts record 2011 results

Global terminal operator APM Terminals reported record-breaking revenue growth for 2011, with 10 percent revenue growth compared to 2010 and an EBITDA of $1.059 million.

The company said its profit in 2011, before gains and special items, was $649 million, 24 percent higher than 2010, and the return on invested capital reached 13.1 percent.

“If there were such a thing as a ‘market share’ for expansion, we believe that APM Terminals would be the number 1 global port operator in 2011 in that category,” said CEO Kim Fejfer in a statement.

“We committed more than 3 billion USD to infrastructure development and facility expansion in 2011 and expect to do something similar in 2012,” Fejfer said.

APM Terminals opened 5 new locations in 2011 as a result of the company’s port development efforts: Poti in Georgia, Moin in Costa Rica, Callao in Peru, Gothenburg in Sweden and Lazaro Cardenas in Mexico. APM also has upcoming investments in Izmir, Turkey.

The terminal operator’s total amount of containers handled increased by 8 million to 33.5 million TEUs.

Maersk’s Smith predicts increased cargo imports to China (video)

Tim Smith, CEO for North Asia at Maersk Line, talks about the outlook for the container-shipping industry. Smith is being interviewed in Hong Kong with Rishaad Salamat on Bloomberg Television's "On the Asia Edge."

Watch Smith interview:

- The Washington Post

WTSA April rate increases

Container shipping lines in the Westbound Transpacific Stabilization Agreement (WTSA) have announced April dry cargo rate increases in what they say is an effort to offset losses in the U.S.-Asia cargo market.

Effective April 1, the WTSA members said in a statement they want to raise dry commodity rate levels by $50 per-FEU from Pacific Southwest ports (Los Angeles, Long Beach and Oakland) to Asia, and by $100 per-FEU for all other cargo, moving via all-water or intermodal service from Pacific Northwest ports, from inland U.S. points and from the U.S. East and Gulf Coasts.

WTSA lines also announced higher bunker fuel surcharges to take effect on April 1 on top of the adjusted base rates.

“This is a moment of significant opportunity for U.S. exporters to Asia, and carriers want to ensure that service levels – in terms of schedule reliability, space and equipment availability, accurate and timely documentation, or other requirements – are in place to maximize that opportunity,” said WTSA executive director Brian Conrad.

Conrad said the westbound trade poses “unique challenges, such as the 2:1 cargo imbalance favoring eastbound imports from Asia, operational and cost challenges getting empty containers to remote inland load points, and capacity constraints due to the mix of heavier westbound cargoes and empty equipment on a typical sailing.”

Tanker rates may drop 42 percent on Japan’s low consumption

Japan’s oil consumption has dropped to the lowest rate since the tsunami, which may cause tanker rates to drop up to 42 percent next quarter. Japan, after China, is the second largest destination for supertankers in the world. Shares of shipping companies may rally on the news.

Demand in Japan will drop 19 percent in the second quarter, according to Paris’ International Energy Agency. Daily rates will drop to $17,000, compared to the current $29,280 rate, according to Bloomberg analysts. Investors could profit by purchasing forward freight agreements, used to bet on shipping costs, which anticipate $10,883.

The Bloomberg Tanker index rallied 11 percent this year, anticipating daily crude demand to top 90 million barrels for the first time ever. This is masking the slump in Japan’s demand and China’s weakest oil buying gain in six years.

Frontline Ltd, the largest shipbroker, on Feb 17 announced a fourth quarter net loss of $343.7 million after reorganizing to weather the lowest rate loss in 12 years.

- Bloomberg

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Hostages die as NATO fires on pirates off Somalia

Two hostages died as a Danish naval warship under NATO command opened fire on a pirate vessel in the Gulf of Aden.

There were 17 pirates and 18 hostages on board the ship, the navy announced today, without disclosing nationalities. Two hostages died after sustaining unspecified injuries when navy personnel boarded the vessel. A navy doctor at the scene was unable to save them.

The navy said its ship, the Absalon, had been monitoring the pirate ship near the Somali coast. As the pirate ship tried to leave the coast, the warship called on it to stop, firing warning shots. When the pirate vessel didn’t respond, the Danish warship opened fire, according to the statement.

- Bloomberg

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Wednesday, February 29, 2012

Top Story

Report: February CMI bodes well for economy

February’s Credit Managers’ Index is at 55.8, a full percentage point higher than January’s index, reaching its highest reading since April 2011. While 2011 figures were weakened by oil prices, a flagging economy and disasters in Japan, the ten month high is a positive economic indicator, according to a statement released Wednesday from the National Association of Credit Management.

“The mood of the country could best be described as cautious and perhaps a little encouraged as far as economic growth prospects are concerned,” said Chris Kuehl, Ph.D., economist for the National Association of Credit Management (NACM).

The recent hike in oil prices and gasoline would typically send the economy back into a recession, but so far consumers seems to be taking the hike cautiously in stride, able to focus on the positive trend dominating the start of 2012.

The sales number is one of the most watched and it reached a level not seen since last April (64.4). Dollar collections also jumped dramatically in February from 56.8 to 63, a sign of improved business conditions. The amount of credit extended rose slightly from 63.3 to 64.3. The only decline for the month was in new credit applications, which fell from 61.9 to 59.5.

The index of favorable factors rose from 61.4 to 62.8, marking the best reading since February 2011. The index of unfavorable factors has also shown improvement as it moved from 50.3 to 51.1.

GOP tries to save House transportation bill through mass transit deal

GOP leadership is trying to revive the House transportation bill by brokering a complicated agreement to appease both supporters and opponents of mass transit, in an effort to garner the votes it needs to pass.

The Republican led transportation bill was dead in the water when it reached the floor, due to warring factions in the GOP. Urban and rural representatives were split over a provision that would have halted dedicated federal funding for mass transit in favor of a one-time cash payout.

The provision caused transit proponents to foster strong opposition to the bill, due to concern that their mass transit projects would be imperiled once the one-time funding commitment expired. The bill was also criticized for ending bike and pedestrian project funding.

- Washington Post

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Maersk Line wagers against E.U. economic rebound

Maersk Line is shifting its business away from Europe, betting against European measures to avoid a recession in 2012.

A.P Moeller-Maersk CEO Trond Westlie said the negative prospects in Europe alter the company’s perspective on Europe-Asia trade, and think U.S. solutions to the economic woes will result in better growth than current E.U. measures.

Europe has reacted by imposing budget cuts on E.U. members that are in the greatest debt, which shows signs of stalling economic recovery. European imports dropped 0.9 percent in December.

Maersk is cutting 22,000 TEUs a week on the Asia to Europe route to respond to the downturn, which represents 2 percent of the region’s maritime trade.

Maersk’s container unit lost $521 million in 2011, compared with a $2.7 billion profit a year earlier. The division last year generated 39 percent of its volume from the Asia-to-Europe route, where container rates dropped 19 percent, Maersk said Monday.

Company shares, which decreased 25 percent in 2011, rose 0.4 percent as of Monday 12:14 p.m. local time to $7,905.12.

- Bloomberg

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Portland port expands overseas container service

Hapag-Lloyd and Hamburg Süd are offering an expanded container service between the Pacific Northwest and the Mediterranean, according to an announcement from the Port of Portland. The cargo route will include direct calls and fixed-day weekly service through the port’s Terminal 6.

Hamburg Süd vessels will be added to the service in March 2012, adding capacity and access to new ports overseas via direct and feeder connections.

The port also said it has been the first full year of operations at its container terminal under a 25-year lease to ICTSI Oregon, Inc.

In 2011, container volumes at the Port of Portland grew by 9 percent to nearly 200,000 TEUs. Containers import figures improved by 5 percent and container exports rose 27 percent, as the overseas demand for regional good grew.

Supreme Court won’t close Chicago locks to stem carp invasion

The U.S. Supreme Court declined to order emergency action to prevent Asian carp from reaching the Great Lakes on Monday, in the face of warnings that environmental and economic catastrophe looms if nothing is done to stop the advancement of the foreign species.

Scientists say if the large carp proliferate in the lakes, they could starve out native marine life and the region’s $7 billion fishing industry.

Michigan, Minnesota, Wisconsin, Ohio and Pennsylvania want the Army Corps of Engineers to set up nets in two Chicago area rivers, to facilitate a study of ways to stem the invasion of the bighead and sliver carp, which have been found in the Mississippi River within 55 miles of Lake Michigan.

This was the court’s fourth rejection of requests from the states for interim measures to be taken, including closing the navigational locks of the Chicago waterways, while their federal lawsuit against the Corps is pending.

- Huffington Post

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Thursday, March 1, 2012

Top Story

SC legislature overrides Haley veto on GA dredging permit

The South Carolina House voted 111-1 Tuesday to override Gov. Nikki Haley's veto on a bill that overturned a permit allowing Georgia to expand and dredge its port in Savannah, according to news reports out of the region. The Senate is reportedly expected to follow suit.

The bill will retroactively suspend the ability of the S.C. Department of Health and Environment Control's to make dredging decisions with regards to the Savannah River, shared with Georgia. Legislators hope it strengthens their case in court to reverse the decision.

Haley asserts the House measure is unconstitutional and overreaches into an agency's ruling.

Last fall, after meeting with Georgia Gov. Deal, Haley asked the DHEC board she appointed to hear Georgia's appeal to dredge the river, after agency staff initially denied the water quality certification. Immediately before the hearing, the DHEC reached a settlement with the Georgia Ports Authority and Army Corps of Engineers. Without debate, the DHEC board quickly approved the settlement in Georgia’s favor.

Legislators were reportedly outraged, saying Haley did an end run around the appeals process. They said she was effectively giving away the competitive trade edge to Georgia over her own state port of Charleston, since it would enable the Savannah River dredging project to be completed in 2016, while the Charleston deepening will not be completed in 2024.

- CBS News

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Fredricksen liquidates $5.6 bil stake in Seadrill to invest in shipping

Norwegian shipping magnate John Fredriksen has decided to cut his investment in Seadrill drilling firm to invest heavily in shipping commodities, taking advantage of severe industry overcapacity.

In a statement issued Thursday, Seadrill announced the stake is worth $5.6 billion, representing 63 percent of the Fredriksen Group’s portfolio.

Seadrill said the transaction gives the group the liquid capital it needs to exploit the oversupplied market, allowing it to buy distressed asset companies, order new buildings and seek opportunities for consolidation.

- Reuters

Group wants third state port in South Georgia

A group of business leaders in South Georgia are reportedly calling for a third state port on the St. Mary’s River, along the border with Florida. Supporters assert a new port will create new jobs in a region plagued by unemployment, according to the Atlanta Journal Constitution.

Property suitable for a cargo port has come available in South Georgia, sparking the current push for the new port. A former paper mill, formerly slated for a failed mixed-use development project, sits on coastal property that provides navigable water access and already has the needed infrastructure in place.

The Georgia Ports Authority currently operates two ports, in Savannah and Brunswick.

- The Atlanta Journal-Constitution

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India may make deal with Iran for oil, insurance

India is considering asking Iran to take responsibility for delivering crude to the Asian nation, so that domestic refiners can avoid the thorny problem of arranging insurance for the shipments, according to two unnamed insiders.

The Indian government reportedly wants to continue receiving oil shipments from Iran in the midst of stringent international sanctions against the Arab country, led by the United States and the European Union, due to suspected atomic nuclear program ambitions.

Another option is for India to provide sovereign guarantees to its own shipping companies hauling Iran crude, according to a Bloomberg report.

The E.U. ban, which affects the purchase, transportation, financing and insurance of Iranian oil, makes it difficult for Indian crude importers, since the London-based International Group of P&I Clubs insures 95 percent of the global tanker fleet.

- Bloomberg

Pirates kidnap 2 crew from cargo ship

On Tuesday pirates fired on a Dutch cargo ship off Nigeria's Port Harcourt, kidnapping the ship's master and chief engineer and stealing cash, according to anti-piracy group AKE. A demand for ransom is reportedly expected.

An AKE statement said the refrigerated cargo vessel was attacked around 4.10 p.m., continuing a rash of pirate attacks in the Gulf of Guinea.

Of the thirteen attacks that have been recorded off West Africa in 2012, seven have reportedly occurred off Nigeria.

Crews have been advised to maintain vigilant watch rotations in the region, as violence is escalating. Pirates killed the captain and the chief engineer on a cargo ship off the coast of Nigeria on February 13.

- Reuters Africa

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