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Summary for March 8, - March 12, 2010:
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Monday, March 8, 2010

Top Story

“K” Line, MOL to jointly launch two new loops to West Coast

Japan’s container-shipping competitors "K" Line and MOL, members of two different carrier alliances, announced they would launch two joint rotations from Asia to the northern and southern U.S. West Coast in early April.

The new PSW-3 service launches April 7 with the sailing of the Venice Bridge from Kobe, the lines said in a statement.

The service will utilize five 3,700-3,850 TEU vessels - two by "K" Line, and three by MOL. The rotation will be Kobe (Tue/Wed), Nagoya (Thu/Thu), Shimizu (Fri/Fri), Tokyo (Sat/Sat), Long Beach-Los Angeles (Tue/Sun), Oakland (Tue/Wed), Tokyo (Mon/Mon) and Kobe (Tue).

As of April 8, the Bremen Bridge sails from Xiamen, the K-PNW service will utilize six 5,200-TEU vessels - five from "K" Line, and one from MOL. The rotation will be Xiamen (Thu/Thu), Hong Kong (Fri/Fri), Shenzhen-Yantian (Sat/Sat), Shanghai (Mon/Tue), Nagoya (Thu/Thu), Tokyo (Fri/Fri), Tacoma (Sun/Wed), Vancouver (Wed/Thu), Tokyo (Mon/Tue), Nagoya (Wed/Thu), Kobe (Fri/Fri), Kaohsiung (Mon/Mon) and Xiamen (Thu).  

Global industrial metals market on path to recovery

As the global economy recovers from the worst recession in 70 years, industrial metals are expected to stay on a recovery path this year, but metal producers warn that the advance may be slow, as demand remains shaky.

Among the positives for demand are the impact of lean producer inventories, government stimulus programs and Chinese consumption, analysts said. Global economic growth is starting to pick up as a result.

"We're not expecting particularly strong growth in the world outside China, but we are forecasting global growth will move from a decline of 1 percent in 2009 to a gain of 3.7 percent in 2010. That's a strong inflection point," said BMO Capital Markets global commodity strategist Bart Melek.


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Report: Brighter future ahead for industrial real estate sector

It may not be considered the sexiest or most exciting property type, but industrial real estate’s stability and growth opportunities in 2010 put the sector head and shoulders above other types of commercial property.

There is a close historical correlation between industrial demand and economic activity. The ISM (Institute for Supply Management) index, which measures business activity for both manufacturing and non-manufacturing, is a key indicator of an expanding or contracting economy and is an especially relevant metric for the industrial sector. Since bottoming in November/December 2008, both the ISM manufacturing and non-manufacturing indices have increased, indicating an economic expansion.

While the IMF does not forecast global trade, one can expect that if the historical relationship holds going forward, global trade will exceed the mid-single-digit growth expectation for global GDP, according to Barclays.

In fact, analysts are anticipating a rebound in container traffic through U.S. ports during 2010.  After having contracted about 10 percent during 2009, U.S. container traffic is expected to grow about 6.5 percent in 2010 to 41 million TEUs. However, traffic is not expected to regain its 2007 peak until next year.

-GE Capital Real Estate Global Monitor Newsletter

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French Navy claims biggest pirate capture

French officials said four mother ships and six smaller boats had been seized in four operations since last Friday.
EU forces used helicopters and fired warning shots to capture the pirates, France's defence ministry said.


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Asia’s booming demand for coal could increase Somali pirate activity

Booming Asian demand for South African coal will put more ships at risk from Somali pirates operating in the Indian Ocean and raise insurance and freight costs already hiked due to seaborne attacks.

Emboldened by rising ransom payments, Somali pirates have stepped up attacks in recent months, making tens of millions of dollars by hijacking ships in the Indian Ocean and the Gulf of Aden.

While pirates have hijacked oil tankers, passenger ships and yachts, they have started to target slow moving coal bulk carriers, which are easier to overcome than a large tanker.

A Somali pirate who gave his name only as Hassan told Reuters that armed gangs can operate far out to sea and were able to dodge naval warships deployed to combat their activities.


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Tuesday, March 9, 2010

Top Story

Korean shipbuilder forecasts demand to drop one third

Hyundai Heavy Industries Co., the world’s largest shipbuilder, expects demand for vessels to fall for at least a third year in 2010 as shipping lines pare expansion plans to curb overcapacity.

Shipowners may order about 10 million tons of new vessels worldwide this year, Chief Executive Officer Min Keh Sik said in an interview today in Gwacheon, a city near Seoul. That compares with 18.6 million tons last year and 102.7 million tons in 2008, according to figures from Clarkson Plc, the world’s largest shipbrokers.

Industrywide demand may grow to 20 million tons next year, followed by an increase to 30 million tons in 2012, Min said.

Hyundai Heavy aims to win $4 billion worth of orders for ships this year, compared with the $444 million it received in 2009. The company, based in Ulsan, South Korea, had a backlog worth $28.1 billion for 241 vessels at the end of January.

-Business Week

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Deutsche Post forecasts slower earnings for 2010

Deutsche Post AG, Europe’s largest mail carrier, forecast slower earnings growth in 2010 than analysts estimated because of reorganization costs and the loss of a tax privilege in Germany.

Earnings before interest and taxes, excluding one-time gains or costs, will total 1.6 billion euros ($2.17 billion) to 1.9 billion euros, Bonn-based Deutsche Post said today. That compares with an underlying-Ebit estimate of 2 billion euros by Frank Skodzik, an analyst at Frankfurt-based Commerzbank AG.

-Business Week

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Gulfport readies for Canal expansion

The opportunity to increase South Mississippi’s share of cargo to and from Central and South America was bolstered by Hurricane Katrina and should get another surge from the expansion of the Panama Canal.

Mike Alise, president of Gulf Coast International Cargo, said a new air-cargo facility at the Gulfport-Biloxi International Airport and a $1 billion expansion planned at the Port of Gulfport put the Coast in prime position to compete when the expansion of the Panama Canal is done in 2014.

Last year Gulfport was ranked the 22nd busiest in the country by Zepol, which tracks the amount of cargo into ports nationwide.
It was the largest banana port in North America, handling 344 million pounds of bananas valued at $133 million, along with nearly $300 million in clothing.

-Sun Herald (Mississippi)

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Damco nets Michelin logistics contract in Vietnam

Damco announced it was selected by tire manufacturer Michelin to provide logistics and customs clearance in Vietnam on a three-year contract.

Damco said it would handle Michelin’s exports from Thailand to Vietnam, inland transportation, cross docking and distribution. Damco said it would also manage warehouse operations for Michelin in Hanoi and Ho Chi Minh City.

Port of L.A. begins $22 mil truck access improvement

As caravans of big rigs rumbled past, construction began Monday on $22 million worth of road improvements along a 1.3-mile, pockmarked stretch of Harry Bridges Boulevard in Wilmington.

The project, set for completion in January 2012, is expected to ease congestion along the north end of the Port of Los Angeles while also improving truck access to the TraPac container terminal, which is undergoing a separate $1.5 billion expansion.

-Contra Costa Times

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Wednesday, March 10, 2010

Top Story

Shipping IPOs debut on NYSE

About half a decade after the first maritime shipping concerns sold shares to the public on U.S. stock exchanges, another fleet of IPOs is preparing to set sail into the capital markets of New York.

Kicking it off on Wednesday is the expected pricing of two new issues -- an owner of dry-bulk vessels called Baltic Trading and an oil-tanker outfit called, straight-forwardly enough, Crude Carriers.

Both names have established provenances. Baltic, which will trade under the symbol BALT, was formed by Peter Georgiopoulos, the impresario behind the tanker operator General Maritime (the first shipping company to go public on the New York Stock Exchange, back in 2001), as well as the dry-bulk ship owner Genco Shipping & Trading and the ship-fuel transporter Aegean Marine.

Crude Carriers, which will trade under the ticker CRU, was formed by Capital Maritime & Trading, a privately held Greek company that owns and manages tankers as well as dry-bulk carriers. Capital Maritime is the baby of Evangelos Marinkais, who also took public Capital Product Partners in 2007 on Nasdaq. Capital Product owns 19 of the kind of tankers that carry wet cargoes other than petroleum, known in the industry as "product tankers."

-The Street

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Port of Seattle in the black despite 8.2 percent revenue drop in `09

The Port of Seattle ended 2009 in the black despite a sharp revenue drop, particularly in its aviation division, according to the port's annual performance report released Tuesday.

The port took in $449 million last year, a drop of $40 million or 8.2 percent compared with 2008, and 7.7 percent below budget.
Aviation operations, primarily at Seattle-Tacoma International Airport, accounted for $29.4 million of the fall-off, while seaport revenues fell $4.4 million.

-Seattle Times

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Freight Index rose 0.4 percent in January

The Freight Transportation Services Index (TSI) rose 0.4 percent in January from December 2009, rising after the index was unchanged in December, according to the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS).
The BTS reported that the Freight TSI index has risen 3.3 percent over the last eight months, starting in June. It has increased in six of the last eight months. The index began 2010 with an increase in January, after having declined 4.1 percent during 2009 and 12.4 percent in two years

The January Freight TSI of 96.6 is a 3.3 percent increase from the recent low of 93.5 reached in May, when the index was at its lowest level since June 1997. The Freight TSI is down 14.4 percent from its historic peak of 112.9 reached in May 2006.

Eurotunnel owner plans high-speed freight service

The company that operates the Channel Tunnel is working on plans to introduce high-speed freight trains through the sub-sea tunnel, as it pursues a series of initiatives to boost railfreight and passenger traffic.

Jacques Gounon, executive chairman of Groupe Eurotunnel, revealed the company's involvement with Carex, a consortium developing high-speed rail freight, as he announced only the company's third full-year profit since 1986.

-Financial Times

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Dutch Customs makes big cocaine haul in fake fruit cargo

First it was drugs among the flowers. Now, drug traffickers have stuffed real drugs into fake fruit in an effort to smuggle cocaine into the Netherlands, authorities said Wednesday.

On Monday, police uncovered euro25 million ($34 million) worth of cocaine hidden plastic pineapples that were scattered among a shipment of real fruit, prosecutors said.

The half-ton haul was intercepted when fruit packers unloading a consignment of pineapples saw some strange-looking fruit in the containers, said spokeswoman Marianne Goet.

While Dutch police tolerate soft drug use, they crack down on trafficking in hard drugs like cocaine and heroin.


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