Monday, March 11, 2013

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Report: Imports at U.S. ports forecast to rise 2.3 percent in March despite sequestration

Import cargo volume at major U.S. retail container ports is forecast to increase 2.3 percent in March year over year, even though federal spending cuts known as the sequester may slow down cargo processing, according to an industry report.

The monthly Global Port Tracker report, released Monday by the National Retail Federation and Hackett Associates, covers the U.S. ports of Long Angeles/Long Beach, Oakland, Seattle, Tacoma, New York/New Jersey, Hampton Roads, Charleston, Savannah, Port Everglades, Miami and Houston.

"Retailers are aware of the impact of the cuts on Customs operations at the ports and are working to plan accordingly so the impact on merchandise headed for the store shelves is minimized," said Jonathan Gold, NRF's vice president for supply chain and customs policy. "This is a situation the industry is monitoring very closely."

Ports followed by Global Port Tracker handled 1.33 million TEUs in January, the latest month for which hard data are available. That was up 0.9 percent from December and 3.7 percent from January 2012.

February, typically the slowest month of the year, was estimated at 1.16 million TEUs, up 6.8 percent from a year ago. March is forecast at 1.27 million TEUs, up 2.3 percent from last year. Moving forward, April is predicted to be up 3.5 percent at 1.35 million TEUs, May up 5.5 percent at 1.44 million TEUs, June up 4.2 percent at 1.44 million TEUs, and July up 3.2 percent at 1.46 million TEUs.

"At the port level there may well be a slowdown in customs clearance but trade will continue to flow," Hackett Associates Founder Ben Hackett said, referring to the sequestration impact. "It may cause terminal congestion if the backlog builds up, and that needs to be planned for in advance."

Port of NY/NJ makes tentative deal with local union longshoremen

A tentative agreement was announced Thursday night between local shipping companies and a group of International Longshoremen's Union locals that represent 4,500 dockworkers at the Port of New York and New Jersey.

The New York Shipping Association and a dozen ILA locals came to a deal regarding regional issues associated with the master contract deal reached February 1 between the national ILU and the United States Maritime Association.

Details of the agreement were not disclosed.

February's tentative agreement on the master contract prevented the strike of 15,000 longshoremen who work at ports on the East Coast and Gulf Coast, a strike that could have crippled the U.S. economy. The master contract cannot be ratified until ancillary agreements are negotiated between local employer groups and local ILU workers concerning regional labor issues.

"I understand that not all the ports have reached agreements," said Joe Curto, president of the New York Shipping Association, and a member of the USMX negotiating team.

"We are happy to announce that NYSA and the ILA have successfully concluded local contract negotiations on a six-year deal and have produced a settlement that both sides agree will protect ILA members into the future and will allow NYSA-member shippers and carriers to remain competitive in the marketplace," said the ILA and NYSA in a joint statement, issued after four days of intense negotiations.

For more of The Star-Ledger story: nj.com

Maersk chooses Suez Canal over Panama for big ships on the Asia-to-U.S. route

The largest global container carrier, Maersk Line, will start sailing its bigger ships though the Suez Canal over Panama on its Asia-to-U.S. shipping route in order to expand its bottom line.

Maersk will use the Suez Canal for vessels with a capacity of 9,000 TEUs, rather than sending two smaller 4,500-TEU-capacity ships through the Panama Canal, according to Soeren Skou, CEO of Maersk Line.

"The economics are much, much better via the Suez Canal simply because you have half the number of ships," Skou said. "One of the reasons for why this is happening now is that the cost for passing through the Panama Canal has gone up. At the end of the day, it comes down to cost."

Fees for ships to go through the Panama Canal have tripled in the past five years to $450,000 per passage for a ship carrying 4,500 containers, Skou said. The distance from China to the U.S. East Coast via the Suez Canal is approximately four to five percent more, he said.

Skou added that whether or not Maersk uses the expanded Panama Canal once it opens in June 2015 would depend on costs.

For more of the Businessweek story: businessweek.com

New Drewry website tracks impact of container sailing cancellations

Approximately 150 sailings were cancelled on the transpacific and Asia-to-Europe shipping routes between October 2012 and February 2013, reports Drewry's new Container Insight Weekly product.

The cancelled trips effect container rates and the reliability of service provided to shippers, according to the March 11 issue, The issue also tracks how shipping lines have increased vessel utilization and spot freight rates on the transatlantic and Asia-to-Europe trade lanes by up to 7 percent.

For example, February's canceled trips reduced capacity on the head haul Asia-to-North American West Coast route by 10,000 TEUs, meaning that it was only operating at 90 percent strength, according to Drewry.

The reduction in capacity boosted average eastbound ship use from the 72 percent it would have reached at full strength to a more respectable 79 percent, Drewry said.

"Although the strategy achieves the same result as the withdrawal of services at the end of the peak season – namely stopping average vessel utilization from falling to keep freight rates up – the effect on shippers is completely different," said Matthew Beddow, manager of Drewry's Container Insight Weekly.

"Shippers know where they stand with well managed service withdrawals, whereas sailing cancellations sometimes confront them with unexpected space shortages, roll-overs and shut outs, as surrounding vessels quickly fill up."

Beddow said uncertain cargo growth to Europe and the U.S. will encourage ocean carriers to continue with short-term vessel capacity planning, which means more sailing cancellations.

"The problem will be exacerbated as service upgrades enforced by newbuild deliveries and cascading gain momentum," concluded Beddow.

Injured man airlifted from cargo ship near Chesapeake Bay

A man injured from a fall was medavaced from a cargo ship Wednesday near Chesapeake Bay.

An official on the ship called the Coast Guard to help the 47-year-old man, who had chest injuries due to a fall, according to a U.S. Coast Guard 5th District press release.

A Coast Guard team was deployed via an MH-60 Jayhawk helicopter and an HC-13 Hercules aircraft. The man was airlifted off the 780-foot cargo ship, 200 miles east of Chesapeake Bay, and was taken to the hospital,

For more of the Daily Press story: dailypress.com

Wednesday, March 13, 2013

Top Story

Obama talks proposed trade pacts, doubling U.S. exports

President Obama, who set the aggressive trade goal of doubling exports by the end of next year, visited a meeting of his Export Council on Tuesday.

The administration aims to complete talks by October on the Trans-Pacific Partnership, a proposed free trade agreement that would cut duties on a broad range of goods and services in the fastest growing region in the world. Eleven countries are participating, including Australia, Brunei, Chile, Peru, New Zealand, Singapore, Malaysia, Vietnam, Mexico and Canada. Japan has also expressed interest to join in.

"The good news is we are well on our way to meeting a very ambitious goal that we set several years ago to double U.S. exports," President Obama said. "A lot of the new jobs we have seen in this country have been export driven." He mentioned significant job increases in the agricultural, manufacturing, high-tech and services sectors.

"The question now becomes how do we sustain this momentum?"

The President talked about "locking in" a proposed EU-U.S. trade pact he mentioned in this year's State of the Union address. The Transatlantic Trade and Investment Partnership would connect the globe's two largest economies in trade.

"In the past, because it had to deal with so many countries, the EU consistently had to pursue the lowest common denominator," the President said when asked about the chances of the stalled TTIP. "And there were certain countries whose agricultural sector is very strong, who tended to block at critical junctures, the kind of broad based trading solutions that would make it a good deal for us.

"What I think has changed is the recognition throughout Europe that it is hard for them to figure out a recipe for growth at this point, in part because of the austerity measures that have been put in place. So I think they are hungrier for a deal than they have been in the past."

The President said in terms of both deals, the partner countries are setting a "high bar that ensures that trade is fair and free. "

Obama said with both trade agreements, the countries are trying to craft policies that benefit not only Fortune 500 companies, but also small to medium businesses.

"We actually think that there's room for small and medium-size businesses to export directly -- not just supplying large businesses, but also to break open and enter into these markets," Obama said. "And that can make a huge difference in terms of our long-term prospects. "

For more of the White House Blog story: whitehouse.gov

Seattle port commission becomes sole salaried commission on West Coast

The Port of Seattle Commission voted 3-0 on Tuesday to raise their salaries from $6,000 a year to the same level of what state legislators are paid, which is approximately $42,000 a year. This makes them the only salaried port commission on the West Coast, according to the Seattle Times.

Commission President Tom Albro had proposed the increase in order to attract more candidates for open positions, although he said he would waive his own increase.

Commissioners Albro, John Creighton and Rob Holland all voted without comment. The five-person commission is down to four members right now, pending the swearing-in of appointee Courtney Gregoire on Friday.

Commissioner Bill Bryant, who was traveling, opposed the salary increase.

"I'm spending my time working on issues that generate jobs, not giving myself a raise," Bryant said recently.

"The Port Commission has long been dominated by rich old white men and individuals whose employers financially benefit from their position on the commission," Creighton said in a recent statement, calling the salary a "good government measure."

It was Holland's final meeting, as he is stepping down Friday.

For more of the Seattle Times story: seattletimes.com

China Cosco Holdings to sell logistics arm

China Cosco Holdings, operator of the largest dry bulk cargo fleet in the world, announced its plans to sell its logistics arm to increase earnings and reduce the risk of the firm being suspended from trading in Shanghai.

The shipping firm has been struggling amid weak demand and vessel overcapacity, issued a statement in January that it expected to post a loss last year for a second year in a row, which would put its Shanghai-listed A shares on a watch list. If losses extend to a third year, it could be suspended from the exchange.

On Monday, China Cosco said that it was in negotiations to sell its entire interest in Cosco Logistics to its state-owned parent company, China Ocean Shipping, for an amount to be determined later.

For more of the South China Morning Post story: scmp.com

Tampa port official dismissed under mysterious circumstances

Zelko Kirincich, the deputy port director of operations and engineering at the Port of Tampa, was mysteriously relieved of his duties in January after 17 years of employment and cannot set foot on Port Authority property without official permission, according to the language of the separation agreement.

The Tampa Bay Port Authority declined to provide an explanation of the dismissal.

There's also a "non-disparagement clause in the separation agreement signed by Kirincich in March that prevents him from making disparaging remarks about the port and vice versa.

Kirincich will continue to be officially employed for the next two months and drawing his salary, which is $210,000 per year.

The Tribune reported it was unclear why the port official had been let go, noting that people who were interviewed said only positive things about his work and personality.

One theory is reportedly that new Port Authority Chief Executive Paul Anderson wants to hire his own staff.

For more of the Tampa Bay story: tampabay.com

Longshoreman mechanic dies atop crane at Port of Tacoma

Operations at the Port of Tacoma were suspended Tuesday when a crane mechanic died in an accident while on top of a container crane at the Pierce County terminal.

"It's a long-standing tradition that when we have an accident like this, that we stand down," said Scott Mason, president of Local 23. The port reopened this morning.

46-year-old Jeff Surber was working atop the crane, making routine adjustments to the wire ropes used to raise the metal containers to and from the ship's deck, said Mason. He was working with one other mechanic atop the crane.

Authorities are investigating how the death occurred.

For more of the Tampa Bay Times story: blog.thenewstribune.com

Thursday, March 14, 2013

Top Story

Obama talks proposed trade pacts, doubling U.S. exports

A deal has been brokered for a new 6-year contract between the United States Maritime Alliance and the International Longshoremen's Association, a contract that covers 14,500 longshoremen at U.S. East and Gulf Coast ports, according to Federal Mediation and Conciliation Service Director George H. Cohen.

"I am extremely pleased to announce that today the parties have approved their tentative agreement for a successor Master Agreement," said Cohen in a statement released Wednesday. "In doing so, the parties have successfully concluded lengthy, complex and understandably sometimes contentious negotiations concerning a multitude of economic and job related issues. Mutual respect, good old fashioned 'roll up your sleeves' hard work and applying innovative problem solving skills ultimately prevailed." 

According to the New Jersey Star-Ledger, details of the six-year deal released by the two sides include a $1-an-hour increase in the shippers' contribution to health benefit funds, protection against job cuts resulting from new technology, and continued ILA representation of truck chassis maintenance workers.

"This monumental result, which will be submitted to their respective memberships for ratification, paves the way for six years of stable labor-management relations covering all the Atlantic and Gulf Coast ports," Cohen added.

The federal mediator thanked ILA President Harold Daggett and USMX Chairman and CEO James Capo for their contributions to the process, as well as members of his mediating team, Deputy Director Scot Beckenbaugh, Director of Mediation Services Jack Sweeney and Commissioner Pete Donatello.

"What this means in real life terms," said Cohen, "is that once again collective bargaining proved up to the task and played a major constructive role in helping to avoid a potential disruption that unquestionably would have had severe impact on the nation's economy—at the precise time that a significant recovery is in progress."

ILWU President marches "fair" contract to United Grain officials

Robert McElrath, the international president of ILWU, marched a copy of what he termed a "fair" contract for grain workers on Friday to United Grain employers, who have locked out 44 dockworkers in Vancouver, Wash. due to alleged sabotage of the terminal facility by a union official. The union disputes the charges.

"We believe it is time for the parties to return to the bargaining table and take the final steps to reach a collective bargaining agreement," said Leal Sundet, ILWU coast committeeman, in a letter to the employers.

Accompanied by several hundred ILWU members, McElrath delivered a copy of the contract several locals signed with TEMCO, an agreement the union hopes United Grain will ultimately emulate. TEMCO is an operator of grain export facilities in Portland, Tacoma and Kalama.

United Grain locked out the workers last month after alleging that a prominent union official had damaged equipment at the terminal, costing the company more than $100,000 to repair.

The ILWU has disputed the charges, asserting that the real reason for the lockout is to avoid signing a contract along the lines of TEMCO's agreement.

The lockout has inflamed ongoing tension over contract terms between the ILWU 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 of ILWU Locals 23, 21, 19, 8 and 4, which took effect on March 9, 2013.

Rickmers-Linie launches westbound service connecting Asia, South America and North America

Rickmers-Linie is launching a Westbound Round-The-World Service, connecting areas of economic growth in Asia and South America with North America. The America-Asia westbound service established in 2006 is a part of the new service.

Rickmers-Linie, which specializes in the global transport of breakbulk, heavy lifts and project cargoes by sea, announced the Westbound Round-the-World route on the first day of the Breakbulk China 2013 event in Shanghai.

"Having introduced our Round-The-World Pearl String Service with an eastbound rotation ten years ago, we are convinced that the time to start up a similar concept in the other direction has now come," said Ulrich Ulrichs, the firm's COO and managing director.

Ports to receive calls on this service will include Yokohama, Masan, Xingang, Shanghai, Singapore, Cape Town, Buenos Aires, Santos, Rio de Janeiro, Vitoria, Philadelphia, Savannah and Houston.

On her first voyage for the new service, Huanghai Glory will call at Bayuquan, Xingang, Dalian, Shanghai, Kaohsiung, Punta Quilla, Buenos Aires, Montevideo, Santos, Rio de Janeiro, Vitoria and Suape.

Two or three chartered multipurpose heavy lift vessels will launch what will become a monthly service. The first vessel, Huanghai Glory, has a lifting capacity of up to 160 tons and a dead weight of 28,300 tons. The second vessel is expected to enter service in May 2013, and the third vessel will be announced at a later date. 

Read more: sfgate.com

Port of Kalama appoints new executive director

Mark Wilson has been appointed as Executive Directors of the Port of Kalama, Wash., succeeding Lanny Cawley, who will retire next month.

Wilson, who currently serves as Deputy Director of the port, will take over his new role on April 1. He has been a port employee for 30 years.

Wilson has managed many port projects, including work on the annexation and zoning of East Port, in preparation for port's development there of the new Spencer Creek Business Park, a mixed-use commercial and light industrial facility. In addition, Wilson was in charge of the planning and construction of the infrastructure involved in the development of the 75-acre Kalama River Industrial Park, and also oversaw the remodeling of the port's grain terminal.

"Mark has helped lead the Port's growth and expansion, real estate purchases, improvement projects, relationship with the city, and our ability to maintain and develop the Columbia River to leverage our position as deep draft port," said Troy Stariha, Port of Kalama commission president. "We believe that with Mark's leadership the Port will continue to serve the region as a significant economic development hub."

Pirates release 3 sailors kidnapped from cargo ship

Three crew members, including two Russian nationals, have been set free after weeks in captivity following a pirate raid of the MV Esther C off the coasts of Nigeria and Cameroon, according to the shipping company.

Carisbrooke Shipping of the United Kingdom said in a statement Monday that the sailors had been released after the Feb. 7 attack on the cargo ship.

"The three officers were confirmed as being safe and in good spirits on March 11 after 31 days in captivity," the company said.

The company did not say whether a ransom had been paid.

For more of the Vancouver Sun story: vancouversun.com

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