Cargo Business Newswire Archives
Summary for March 4 - March 8, 2013:

Monday, March 4, 2013

Top Story

Customs and Border Patrol makes major cuts to weather sequestration

Now that sequestration has gone into effect on March 1, it has triggered automatic spending cuts that will force Customs and Border Protection to furlough its employees for up to two weeks in 2013 as well as other reductions that effect trade and security, according to a letter the agency sent to union officials in late February.

Sequestration, adopted by Congress as part of the Budget Control Act of 2011, was designed to force Congress to come to an agreement to address the federal budget deficit. It triggers a series of automatic government spending cuts, totaling about $1 trillion over the next 10 years. These spending cuts, which started March 1, 2013, are split equally between defense and non-defense spending, according to the Department of Homeland Security.

According to DHS, "CBP Field Operations, the office responsible for securing the U.S. border at ports of entry, will experience budget cuts equating to the loss of several thousand CBP officers at these ports of entry, in addition to significant cuts to operating budgets and programs. Stakeholders in the travel and trade industries will see service impacts and CBP employees will be furloughed."

The DHS emphasized CBP priorities will remain focused on the primary anti-terrorism mission, processing and facilitating operations of cargo and travelers, and trader and traveler programs such as Global Entry and C-TPAT.

Service levels will reduce with regard to CBP cargo operations, according to the DHS website. There will likely be increased and escalating delays for container examinations of up to 5 days or more at major ports. There may also be significant daily back-ups for truck shipments at land border ports. CBP will continue to carry out border security operations consistent the law, but lowered resources means greater wait times.

CBP had notified the National Border Patrol Council president in mid February of its plans for $754 million in spending reductions, should the sequester be implemented, as reported in The Washington Post.

The letter said furloughs would be mandatory for all Customs and Border Protection employees, including management and workers without union representation. Notices would go out in mid-March, the agency said.

Other cuts would include an agency hiring freeze, contract adjustments or delays, and reductions in travel, training, supplies, facilities, overtime and relocation reimbursement, the letter said.

Figures included in the memo show that furloughs will save CBP about $234 million, while the remainder of the sequester savings would come through the other reductions.

In mid February, Department of Homeland Security Secretary Janet Napolitano warned that sequester reductions would roll back border security, increase wait times at ports of entry and airports, and produce a host of other consequences.

"Put simply, the automatic budget reduction mandated by sequestration would be destructive to our nation's security and to our economy," Napolitano said during testimony before the House Homeland Security Committee, according to The Washington Post. "It would negatively affect the mission readiness and capabilities of the men and women on the front lines."

As a result of sequestration, CBP may reduce hours of service at select airports, seaports and land ports of entry, and any changes to service hours will be port-specific and determined locally.

Coast Guard to struggle with sequester cost cuts

The Coast Guard, already struggling to do its job with inadequate resources, will be hard hit by sequestration.

Commandant Adm. Robert J. Papp said it goes against the Coast Guard's "can-do" ethic to admit it can't do more with less, but he is encouraging his units to do just that, according to the Navy Times.

"We can't keep giving this image that we can do more with less," Papp said. "We never do 100 percent of the missions the country's given to us all the time because we don't have the resources to do 100 percent. So whatever resources we have, we apply them to the highest priorities on any given day."

Search and rescue and port security missions will remain a top priority, he said. Fewer resources for patrols means that more drugs will cross the U.S. border and more illegal fishing in the country's waters, Papp said.

Another priority for Papp is keeping the entire Coast Guard workforce, including active-duty, reserve and civilian.

Papp was addressing the effects of sequestration, government-wide spending cuts which went into effect on Friday do to Congressional inaction. He also addressed how hard it is to operate under an ongoing resolution that means the Coast Guard service must run at 2012 funding levels, while trying to rebuild their aging cutter fleet.

For more of the Navy Times story:

United Grain lockout continues

The United Grain lockout of longshoremen marks its sixth day Monday at the grain terminal in Vancouver, Wash.

In the contract dispute that includes terminal owners United Grain, Columbia Grain and Louis Dreyfus Commodities, only United Grain has chosen to lockout workers, citing facility sabotage by an ILWU union representative. The union denies the allegation.

Vancouver police are investigating the possible crime.

"We have not brought in any replacement workers," said Pat McCormick, spokesman for the Pacific Northwest Grain Handlers Association on Sunday. "We are working with United Grain personnel only."

"Operations have resumed to a certain normality," he said. "We completed loading last night, and the ship departed last night without incident." After 44 longshoremen were locked out Wednesday, dockworkers had refused to unload a shipment of autos at the Port of Vancouver.

When asked if talks will resume, McCormick said, "I think we're (the three employer companies) meeting midweek to discuss the request from the union for a meeting."
"The folks down at the picket line are getting a lot of support from the community and people seem to really understand that the local workers are up against huge foreign corporations," said ILWU spokeswoman Jennifer Sargent in a statement Sunday. "The community appreciates the longshore workers' generosity over the years, and we're all hoping the foreign corporations will get back to the bargaining table and reach an agreement and get folks back to work."

Jaime Smith, a spokeswoman for Gov. Jay Inslee, said Friday the governor plans to speak with the grain terminal operators, but there was not indication of the subject matter.

For more of The Columbian story:

Singapore PMI for February drops below 50

Singapore's Purchasing Manager's Index fell to 49.4 in February from January's 50.2 reading, dropping below the vital 50-point level that indicates manufacturing growth for the seventh time in eight months, the Singapore Institute of Purchasing & Materials Management reported Monday.

In contrast, U.S. manufacturing activity grew at the strongest rate in 20 months and South Korea's February PMI was the best rate in nine months, according to the PMI formulated by HSBC and Markit.

"The dip in the overall PMI was attributed to lower levels in new orders and a first-time contraction in new export orders," said a SIPMM statement. "Whilst inventory and input prices continued to expand and posted higher readings, stockholdings of finished goods and employment reverted to contraction after having expanded in the previous month."

For more of the Reuters story:

Port of Stockton commissioner vacancies attract 11 candidates

A group of 11 Stockton citizens are vying for the two open positions on the Port of Stockton Commission. The Port is an economic hub of the Stockton region, conducting $2 billion in business and generating more than $25 million in taxes for the city and county over the last five years, according to the port. Commission Board members approve and set port policy.

The Port Commission is made up of seven members, of whom the city appoints four, with three assigned by the San Joaquin County Board of Supervisors.

The positions are unpaid, although commissioners enjoy international travel to attend conferences and meetings or to participate in overseas trade missions.

Former commissioners Ron Coale and Stephen Griffen are seeking another four-year term. The City Council will vote on Tuesday.

For more of The Record story:

Emergency response triggered by radiation at Newark port

Radioactivity wafting from a container prompted investigators at the Elizabeth Marine Terminal at Port Newark to take action on Thursday.

The container was loaded with recycled paper, and a metal wire that held the paper read positive for Caesium-137, a radioactive isotope formed during nuclear fission.

Emergency responders deployed and personnel from the FBI, the Port Authority of New York and New Jersey, Union County and Elizabeth converged on the terminal.

"After review and confirmation from (Customs and Border Protection) Laboratories & Scientific Services (LSS) and in conjunction with our federal, state, and local partners, the container was deemed safe," the Customs agency statement said.

For more of the Star-Ledger story:


Tuesday, March 5, 2013

Top Story

ILWU files suit against United Grain for unfair labor practices

Local 4 of the International Longshore and Warehouse Union filed an unfair labor practice charge Monday with the National Labor Relations Board against Mitsui's United Grain terminal for the lockout of dockworkers at the Port of Vancouver since Wednesday, Feb. 27.
"It's shameful that Mitsui-United Grain, a Japanese corporation that's profiting from the United States' infrastructure, natural resources and labor, has chosen to violate our federal law instead of negotiating a fair labor agreement with its American workforce," said ILWU International President Robert McEllrath, a Vancouver-based longshoreman.
The basis of the charge is the union's allegation that Mitsui-United Grain "took the extreme measure of locking out its entire bargaining unit even though by its own statements it had identified and terminated the employee allegedly responsible for the property damage [that the company claimed took place on December 22 – 5 days before its unilateral implementation of its final offer.]. This constituted loss of employment based on anti-union animus, and a sweeping unilateral change of terms and conditions of employment."
ILWU Local 4 members are actively picketing the Mitsui-United Grain terminal.

Grain handling firm Temco and the ILWU announced the ratification of a five-year interim agreement last week covering grain terminals in Portland, Tacoma, and Kalama, Wash.

The lockout inflames ongoing tension over contract terms between the International Longshore and Warehouse Union and the owners of grain terminals in Portland, Vancouver and Seattle, represented by the Pacific Northwest Grain Handlers Association.

United Grain, along with Columbia Grain and Louis Dreyfus Commodities, made a final contract offer to dockworkers in November 2012 that the membership voted down. Longshoremen continued working under the old contract terms, awaiting further talks. Columbia and Louis Dreyfus have not locked out workers.

Temco, formerly the fourth grain terminal owner represented by the association, broke with the group in late 2012 to negotiate its own deal with union workers.

No details were released about the agreement between Temco and ILWU Locals 23, 21, 19, 8 and 4, which will be signed and take effect on March 9, 2013.

Report: U.S. services sector on the upswing on new orders, exports

February's growth in the U.S. services sector expanded at its greatest rate in 12 months on new orders and export demand, according to today's report from the Institute of Supply Management.

The ISM reports that its services index in February increased to 56 from 55.2 in January, surpassing economists' predictions of 55. It was the highest level since February 2012. Any reading above 50 indicates growth.

The new orders index surged to 58.2 from 54.4, and orders for exports rose to 60.5, up from January's 55.5, representing the highest reading since May 2007.

The Dow Jones Industrial Average posted gains after the news.

"This was no question a positive number," said Michael Woolfolk, senior currency strategist at BNY Mellon, to Reuters. "It reflects improvement in reinforces the view that the economy continues to improve and should contribute to gains that have driven the stock market to a new record."

Issued last week, the ISM manufacturing sector report indicated U.S. factories grew at their fastest rate in 20 months in February 2013.

For more of the Reuters story:

Saudi Arabian line adds Jaxport to service

Bahri General Cargo, also known as the National Shipping Company of Saudi Arabia, will add the port at Jacksonville, Fla. to its East Coast calls in April 2013.

Roy Schleicher, interim chief executive officer for Jaxport, told the audience at the State of the Port luncheon last week that three other "international steamship lines" will also add Jacksonville to their line-up in spring.

Schleicher declined to name the three other shipping lines, but said they will coordinate with other lines to share space on each other's ships while rotating through Jacksonville.

Bahri's stops include India, the Mediterranean, Canada, New York, Baltimore, Wilmington N.C., Charleston, S.C., Savannah, Ga., and Houston. Schleicher reported Bahri would call at Jacksonville twice a month.

For more of the Florida Times-Union story:

Port of NY/NJ to see 5-hour container inspection delays due to sequester

Container inspections at the ports of New York and New Jersey will face five-hour waits due to the sequester, warned U.S. Customs and Border Protection on Monday.

Joseph Curto, president of the New York Shipping Association, said five-day delays would create a backlog of containers and consequences for shipping customers.

"Five-day delays would have pretty dire consequences for the terminal operators here," Curto said. "If the velocity is slow, the pipeline is narrowed, and it very quickly will back up. Ultimately, the consumer will be affected, whether it's just-in-time delivery, whether it's parts for manufacturing, whether it was time-sensitive delivery."

For more of the Star-Ledger story:

Container carrier requires aid to make it to Port Everglades, say witnesses

A container ship arrived at Port Everglades Monday night, escorted by two emergency vessels and at least three tugboats, report witnesses who viewed the scene from the Sky Harbour high-rise that overlooks the port.

At least 12 containers were at a 45-degree angle in the aft section of the ship, said witness Lou Gnandt.

"You can see all of the containers falling off and everything," he said.

The Broward County Sheriff's Office confirmed an emergency response team was deployed dockside at approximately 10 p.m.

For more of the Sun-Sentinel story:


Wednesday, March 6, 2013

Top Story

OOCL full-year profit surges 63 percent on higher freight rates

Orient Overseas, the parent company of Orient Overseas Container Line, announced a 63 percent increase in full-year profit on rising freight rates.

Net income increased to $296.4 million from $181.6 million year over year, OOCL said in a statement today. That tops the $275.7 million income average predicted by 20 analysts compiled by Bloomberg. Sales jumped 7.4 percent to $6.46 billion.

“Orient Overseas benefited from its bigger exposure to the more stabilized transpacific market,” said Lawrence Li, an analyst at UOB-Kay Hian Holdings. “It can also charge clients more by providing premium door-to-door services.”

Container shipping companies, including Maersk Line, the world’s largest, have begun raising rates to offset 2011 losses from vessel overcapacity. OOCL’s average freight rate increased by 2.9 percent in 2012 after dropping 6.7 percent in 2011.

OOCL handled 5.22 million TEUs in 2012, a 3.7 percent hike year over year. That included 1.25 million TEUs in the transpacific market and 885,323 TEUs on the Asia-Europe route.

For more of the Bloomberg Businessweek story:

New aircraft order to support 7,300 Boeing jobs in Washington

The Export-Import Bank of the United States has approved a final commitment of a $1.1 billion loan to finance the export of a fleet of Boeing 737-900ER aircraft to Lion Air, the largest privately owned airline in Indonesia. The manufacturing deal will support up to 7,300 jobs at the Boeing plant in Washington state.

The transaction will support an estimated 7,300 jobs at Boeing’s manufacturing facilities in Renton, Wash., and its suppliers in numerous states across the country.

The planes will be delivered to Lion Air, Malindo Airways of Malaysia and Batik Air of Indonesia.

Ex-Im Bank is providing a guarantee of financing provided by Apple Bank for Savings in New York, N.Y

"Ex-Im Bank is pleased to support part of Lion Air’s historic purchase order of Boeing extended-range aircraft. This is a tremendous opportunity for American exporters and will help to sustain thousands of jobs in the U.S. aerospace industry for years to come,” said Ex-Im Bank Chairman and President Fred P. Hochberg.

Courtney Gregoire appointed as new Port of Seattle commissioner

Microsoft lawyer Courtney Gregoire, daughter of the former governor of Washington, was chosen Tuesday as the newest Seattle port commissioner. Gregoire will fill the slot vacated by Gael Tarleton, who was elected to the state House of Representatives.

Gregoire was picked from a list of six finalists, and is currently the sole woman on the commission.

Gregoire, who holds a Harvard law degree, worked as deputy chief of staff to ex-Commerce Secretary Gary Locke, and was a senior aide to Senator Maria Cantwell. 

“Courtney brings unparalleled accomplishments and relationships that will advance the Port’s mission to create family-wage jobs by growing trade,” said Commission President Tom Albro.

The port commission will deal with important issues this year that will impact the future of the Port of Seattle, including competition from both West and East Coast ports for business after the opening of the expanded Panama Canal. Canada is also investing in Seattle’s port rivals in British Columbia, in Vancouver and Prince Rupert.

For more of the Seattle Post-Intelligencer story:

Study: North Pole poised to become major shipping route

Rapidly melting ice in the Arctic will open it to larger ocean vessels, according to a study published Monday in Proceedings of the National Academy of Sciences.

The shift could significantly increase trans-Arctic trade for at least a few weeks of the year, dramatically reducing travel time between Europe and Asia by opening up “supra-polar” routes, through which moderately ice-strengthened ships could sail directly over the North Pole.

The study is the first to combine Arctic sea computer model projections of September, the month when ice is typically at its thinnest, and projections of future shipping trends.

For more of the Huffington Post article:

22 containers domino off barge into Atlantic

The Atlantic Trader, a Navy barge on its way from Jacksonville to Guantanamo Bay spilled 22 containers into the ocean, according to the Coast Guard.

By about 10:15 p.m. Monday, three tugboats helped the tug and barge make it to Port Everglades “with some containers still hanging over the side, and some container stacks fallen over like dominoes,” a Coast Guard statement said.

The barge was delivering groceries and other household supplies to Guantanamo when it began listing, Port Everglades spokeswoman Ellen Kennedy said.

The Coast Guard said they would try to recover some of the containers, which held household goods, aerosols, and refrigerant gasses.

Workers were expected to start the careful removal of the containers from the barge Tuesday afternoon, Kennedy said.

For more of the Miami Herald story:

For more of the First Coast News story:


Thursday, March 7, 2013

Top Story

Drewry: Ocean freight rates up, airfreight rates down

Ocean freight rates rose as air freights plunged in January, according to Drewry Maritime's monthly Sea & Air Shipper Insight.

Drewry's East-West Freight Index increased by 2.6 percent in January, it's highest rating since August. Ocean shipping rates on the trade routes rose marginally in January due to the seasonal increase before the Chinese New Year and less blank voyages, Drewry said.

Airfreight rates fell in January, adjusting to post peak season traffic volume, the report said. Drewry's East-West Air Freight Price Index declined by 10.5 points from December, the largest monthly drop in the index since its inception in May 2012. The fall is attributed to lower pricing on trips from Asia to North America and Europe, as well as lower eastbound transatlantic rates, Drewry reported.

Horizon Lines shifts NE terminal operations from N.J. to Philadelphia port

Horizon Lines announced Wednesday it will move its northeast terminal operations in April from New Jersey's Port of Elizabeth to the Port of Philadelphia.

The shipping company said that Philadelphia will handle cargo arriving from Puerto Rico.

Horizon expects the change to result in "significant advantages," including faster transit times, quicker turnaround times, and expedited cargo inspections, said Richard Rodriguez, general manager of Horizon's Puerto Rican operations.

Horizon will bring 52 vessels a year to the Packer Avenue Marine Terminal in South Philadelphia, according to the Philadelphia Regional Port Authority, and will provide more work for longshoremen there, said PRPA spokesman Joseph Menta.

Although Horizon generated about $1 billion in annual revenue, the company has not turned a profit in five years.

Horizon container ships typically carry food, household goods, auto parts, building materials, and materials used in manufacturing for big retailers such as Costco, Lowe's, Safeway, Wal-Mart and Johnson & Johnson.

For more of the Philadelphia Inquirer story:

Panamax rates rise to 7-month high on South American grain exports

Rates to hire Panamax ships rose to the highest in seven months on increasing South American grain shipments.

Hire costs increased 2.2 percent to $8,463 a day, the highest since July 25, according to the Baltic Exchange. Rates have gone up for 19 consecutive sessions, the longest time period since July 2007, according to the numbers.

The Baltic Dry Index, a wider barometer of freight prices, went up 1.7 percent to 789.

The worldwide fleet of 2,320 Panamax vessels transported more than 40 percent of grains shipped by ocean last year, according to data from shipbuilding firms Clarkson and ICAP Shipping International.

The Baltic Exchange reported average rates for Capesize vessels, the biggest dry-bulk ships that transport ore and coal, declined 0.6 percent to $4,210 daily.

Supramax ships, which haul minerals and grains, rose 2.5 percent to $8,374. Handysizes, the smallest on record, advanced 1.7 percent to $6,783 daily, exchange figures show.

For more of the Bloomberg story:

DP World sells interests in HK ports and logistics firm for $742M

DP World, Dubai's state port operator, on Thursday announced the sale its interest in two container terminals and a logistics company in Hong Kong for $742 million.

DP World sold 75 percent of its stakes in both the ATL Logistics Center and CSX World Terminals to Goodman Group, an Australian warehouse operator, for $463 million, the statement said. Its Hutchison Port Holdings Trust bought DP World's stake in Asia Container Terminals for $279 million.

The Dubai port operator reported a net gain of $151 million in the deal, after repaying shareholder loans.

For more of The Miami Herald story:

Chinese cargo ship dead in the water off Philippines

A Chinese cargo ship, the M/V Tan An Ha, was stranded in waters Tuesday near Palawan after its engine died, according to the Philippine Coast Guard.

The agency deployed a search and rescue team to help the crew.

"Initial reports from the area disclosed that rough sea conditions continuously hammered the vessel and the ship captain is worried that it may cause the vessel to (run) aground along the shallow portions in the area," the Coast Guard said.

Coast Guard Palawan commander Enrico Evangelista said the ship was sailing from Singapore to Tagbilaran Port in Bohol carrying 5,900 tons of limestone.

For more of the GMA News story:

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