Cargo Business Newswire Archives
Summary for March 17, 2014 through March 21, 2014:

Monday, March 17, 2014

Top Story

Hawaii, Alaska and territories lobby for Jones Act revision

Legislators from Alaska, Hawaii, Puerto Rico and Guam have united to lobby the U.S. government to loosen or waive provisions of the Jones Act.

The law, created in the 1920s, was created to protect the U.S. shipping industry, and stipulates that only U.S.-flagged ships made in country can deliver cargo between U.S. ports.

Lawmakers from the states and territories met in a videoconference Thursday to voice their concerns.

"All of our areas are specifically impacted by the Jones Act," said Hawaii Sen. Sam Slom. "It is now known that the Hawaiian cost of living, primarily because of our additional shipping cost and because of the Jones Act, are now 49 percent higher than the U.S. mainland. And this is becoming unbearable. It's difficult for individuals. It's difficult for families. It's difficult for small businesses as well."

Hawaii legislators are asking Congress to revise the Jones Act or consider a waiver for noncontiguous states and territories.

Slom said it costs about $790 per-FEU to ship goods from Los Angeles to Shanghai, but costs a whopping $8,700 to ship the same container from Los Angeles to Honolulu.

"If we truly want to create jobs and boost our economic development, we need to eliminate the implementation of the Jones Act in Puerto Rico," said Puerto Rico Sen. Rossana Lopez Leon. She added that studies by the World Economic Forum and Federal Reserve Bank indicate that the Jones Act hinders economic development in the commonwealth.

The American Maritime Partnership, which represents ship owners and operators, unions, equipment yards and vendors, says the Jones Act is vital for economic and security reasons.

For more of the Idaho Statesman story:

COSCO Chair: Container carriers in for another rough year

Container carriers should prepare for another rough year as vessel overcapacity will continue to negatively impact profits and margins, according to the chairman of China's largest shipping concern, China Ocean Shipping Group Co.

"The industry turnaround will still take a long time," said Ma Zehua in a Reuters interview this week. "There are a lot of challenges ahead."

COSCO Group is one of China's top 100 state-controlled corporations, and operates more than 700 vessels with covering 1,600 ports. The group controls five listed companies, including China COSCO Holdings Co. and COSCO Corp.

COSCO Corp. reported a 71 percent drop in net profit last year, while China COSCO Holdings Co. said it should return to profitability after posting losses in 2011 and 2012 after selling its logistics business, container manufacturer stakes and office properties.

But the COSCO chairman said he wasn't sure China COSCO could make a profit this year due to the uncertainty regarding the global economy.

"We haven't announced any target (for China COSCO) because we can't say for sure it won't make losses in 2014," Ma said. "There aren't that many ways left to tackle losses through asset disposal."

A recent transport sector survey by global law firm Norton Rose Fulbright reported that 40 percent of those polled cited overcapacity as the biggest threat to the recovery of the shipping sector.

Earlier this year, COSCO Group and competitor China Shipping Group inked a strategic deal to share resources for terminal operation, shipbuilding and other areas.

For more of the Reuters story:

Korean credit ratings firm downgrades Hanjn, Hyundai Merchant Marine

Korea Ratings has downgraded the credit ratings for Hanjin Shipping and Hyundai Merchant Marine due to deteriorating performance.

Korea Ratings announced Friday it lowered the credit ratings of the two shipping companies' corporate bonds from BBB+ to BBB-, and changed their outlooks from stable to negative. BBB- is only one level above BB+, which is the speculation grade just above junk bond level.

Despite the companies' respective recovery strategies, their challenges include big liquidity pressure, lowered earnings from the weakened shipping industry, sluggish global competitiveness, and a dearth of long-term revenue resources.

Unlike Hanjin and Hyundai Merchant Marine, some of the other leading global shipping lines found ways to post profits in 2013 by enhancing their competitiveness and cutting costs, said analyst Kim Bong-kyun of Korea Ratings.

"They increased investment into fleets despite poor profits and liquidity shortages, resulting in financial troubles. At the end of 2013, Hanjin had 3.2 trillion won ($2.9 billion) in short-term loans, which would mature within a year, while Hyundai had 3.1 trillion won ($2.8 billion). Considering their cash flows, it is urgent for them to secure enough liquidity to repay them," Kim said.

Kim added that the two companies' recent plan to sell their core assets, including Hyundai's intention to sell its LNG transportation business, would help to ease their short-term liquidity problems.

For more of the Korea Times story:

Evergreen Line to terminate vessel-sharing agreement

Evergreen Line has informed vessel-sharing partners NYK, Hanjin and Yang Ming Line that it will terminate its Vessel Sharing Agreement on the ANS U.S. East Coast-Caucedo-Brazil service effective April 2014.

The last Evergreen ship to complete a round trip voyage on the service will be the Conti Harmony, scheduled to leave Norfolk on April 10, 2014.

Veteran NYK/Ceres maritime executive Mike DiVirgilio announces retirement

Michael DiVirgilio, veteran executive of NYK Group and Ceres Terminals, has announced his retirement effective March 2014.

DiVirgilio is currently the president of the Containerization and Intermodal Institute and is on the boards of the Maritime Association of the Port of New York and New Jersey and the Foreign Commerce Club of New York.

Prior to joining Ceres in 2006, DiVirgilio spent more than 30 years with NYK Line (North America). While building his career with NYK, he held many regional administrative responsibilities, including serving as head of NYK Line's Eastern Region.

He then served in corporate roles, first as senior vice president of North America sales, and later as senior vice president of NYK's Liner Trade Management Group, where he was responsible for the company's marketing and pricing for the liner trades in North America. He also served as a member of the board of directors.

As senior vice president of development at Ceres Terminals Incorporated, DiVirgilio cultivated new business prospects and expansion opportunities for the Ceres Group's North America Operations.

"Mike's vast experience in the maritime industry and people skills made him a valuable asset to both the NYK and Ceres Group. We wish him much success in the next stage of his life and a happy retirement!" said W. Patrick Burgoyne, president and CEO of Ceres Terminals Incorporated and Yusen Terminals Inc.


Tuesday, March 18, 2014

Top Story

Port Metro Vancouver truckers refuse port plan as strike continues

Port Metro Vancouver head executive Robin Silvester threatened to revoke the permits of container truck drivers if they don't return to work, following weekend talks between the government, the port, and drivers that failed to result in an agreement.

"A continued refusal by some truckers to provide such service is likely to result in suspension or termination of their permits by Port Metro Vancouver," said Silvester in a port statement released Sunday.

Container volume at the port's four terminals has reportedly fallen by 90 percent since independent truckers walked off the job February 26 and union drivers voted to follow suit, beginning their strike action early last week.

On Thursday the government and port officials released a 14-point proposal designed to end the strike that was rejected by both union and non-union truck drivers.

"The goal is simple, to get Port Metro Vancouver back to full operations,"the statement said. "The action plan was facilitated by both Transport Canada and British Columbia's Ministry of Transportation and Infrastructure. It addresses concerns raised by truckers in areas such as compensation and wait times, and is a means to get port operations back to normal."

Representatives from Unifor-Vancouver Container Truckers' Association, which represents approximately 400 port truck drivers, and the United Trucking Association, which represents about 1,000 independent, non-union truckers, both stated government officials would not negotiate during their Sunday meeting to discuss the government plan.

"We're prepared to negotiate around the clock to end this dispute,"said Gavin McGarrigle, Unifor's B.C. area director, in a statement released Sunday.

Truckers were told by representatives of the port and government to "to take it or leave it," according to Manny Dosange, spokesman for the United Trucking Association, which speaks for the independent drivers. "Our members are not prepared to do that."

The drivers are requesting standardized rates of pay to avoid under-cutting and decreased wait times at Port Metro Vancouver terminals, as well as better wages during wait times. 

Chronic wait times at the Canada's largest port has been exacerbated by increased Asian demand for Canadian products, leading to a cargo surge that saw Port Metro Vancouver handling a record 135 million tons of goods in 2013, including about 25 million tons of containerized cargo.

For more of the CBC News story:

For more of the Reuters Canada story:

U.S. and EU plan to eliminate duties on bilateral trans-Atlantic trade

President Barack Obama and European Union leaders will pledge to remove all tariffs on bilateral trade at a summit on March 26, in a bold move meant to advance the Transatlantic Trade and Investment Partnership, according to a draft statement seen by Reuters.

The joint declaration, if delivered as currently outlined in the draft, is designed to assuage tensions created after Washington offered to lower its duties by less than the Europeans had hoped for and after Brussels promised to remove almost all of its own tariffs.

"The EU and the United States are firmly committed to concluding a comprehensive and ambitious Transatlantic Trade and Investment Partnership," the draft statement reads, referring to U.S.-EU free-trade talks by their official name.

The summit hopes to new life to difficult talks on a trans-Atlantic trade deal that involves half the world's economic output in the hope that an accord can bring gains of approximately $100 billion a year for both sides.

For more of the Reuters story:

Port of Oakland staff paves the way for new Oakland A's ballpark at Howard Terminal

On Friday, staff at the Port of Oakland released their recommendation that the port enter negotiations to build a waterfront ballpark at Howard Terminal for the Oakland A's. The Oakland Port Commission will consider the recommendation at its March 27 meeting.

Under the port staff proposal, the agency would sign an exclusive agreement with Oakland Waterfront Ballpark, LLC, a group of city businessmen led by Clorox CEO Don Knauss, T. Gary Rogers of Dreyer's Ice Cream, and Michael Gheilmetti Signature Development Group, which is building a massive housing development near the proposed ballpark's location. Other OWB members include former Oakland planning commissioner Doug Boxer and San Francisco developer Seth Hamalian.

OWB reportedly sent a letter to port Executive Director Christopher Lytle in January, asking that the port enter into negotiations to build a 38,000-seat ballpark at Howard Terminal. The port could not agree to do so until the port commission had ruled out maritime uses for the site, which they did late last month when they declined a deal to ship coal through the terminal.

Under the staff's recommendation, OWB would make a down payment of $100,000 to the port for up to a year of exclusive negotiations. During that time, the port and OWB would begin to study the feasibility and costs of building a ballpark on the fifty-acre site.

Although A's co-owner Lew Wolff has said he does not believe Howard Terminal is a viable ballpark location, OWB thinks it is.

For more of the East Bay Express story:

Cosco Pacific and China Shipping Terminal Development buy stakes in Hong Kong terminal

Billionaire Li Ka-shing has sold 60 percent of Hutchison Port Holdings Trust's stake in Hong Kong Terminal 8 West to Cosco Pacific and China Shipping Terminal Development for $318 million.

Cosco Pacific purchased a 40 percent stake and China Shipping Terminal Development acquired a 20 percent share of the Hong Kong facility.

The deal will improve port operations, according to Gerry Yim, HPHT chief executive.

"Li has long lost confidence in the Hong Kong port business when he decided to spin off the operations of HPHT in the Singapore Exchange in 2011," an industry analyst said.

"The port business is still a cash cow but the ports in Hong Kong have turned mature and could register low growth," said Benjamin Lo, an analyst at Nomura International.

The Hong Kong port has been overtaken by Shenzhen, which has replaced it as the world's third busiest container terminal. Hong Kong's dockworker strike last year caused shipping lines to reroute cargoes to Shenzhen and most have not returned.

For more of the South China Morning News story:

Cargo ship and grain barge collide in Houston Ship Channel

The Coast Guard is investigating the cause of a collision in the Houston Ship Channel Friday between an oil barge and a cargo ship filled with grain, according to an agency statement.

The statement reported no injuries resulted from the collision and no oil spilled from the barge.

Both ships sustained damage but were stable following the Friday night collision of the Genius Star VII and the barge carrying 840,000 gallons of oil. The barge and the 394-foot cargo ship were taken for damage assessments, according to the Coast Guard.

"Due to the quick response of our marine safety professionals here at Texas City, a major environmental incident was avoided," said Lt. Cmdr. Zeita Merchant, executive officer of Marine Safety Unit Texas City. "We were able to direct the vessels to safe locations to assess the overall damage and ensure the safety of the maritime community."


Wednesday, March 19, 2014

Top Story

Feds subpoena Port Authority of NY/NJ for records on agency chair

This week federal prosecutors in New Jersey subpoenaed the Port Authority of New York and New Jersey, wanting records related to the private business interests of the agency's chairman, David Samson.

An inside source said the subpoena seeks records about Samson and two port authority bridge projects worth $2.8 billion - the replacement of the Goethals Bridge, and the raising of the roadway of the Bayonne Bridge. The port authority chair voted to award both contracts to construction companies represented by his law firm.

Samson, a Gov. Chris Christie appointee and former attorney general of New Jersey, has been under investigation since the governor's associates sparked a scandal at the authority by closing the lanes leading to the George Washington Bridge in September, an act that was allegedly politically motivated to punish the mayor of Fort Lee for refusing to endorse Christie.

Federal prosecutors have reportedly raised questions about the connection between Samson's public job as chairman of the authority and his private business activities as a partner in the law firm Wolff and Samson.

"We are not commenting on any investigations," said Samson's attorney Michael Chertoff in a statement.

For more of the New York Times story:

Rickmers inks two-ship charter with Maersk Line

Rickmers Maritime will charter two container vessels, Henry Rickmers and Richard Rickmers, to Maersk Line, according to today's statement from Rickmers Trust Management.

The charters are expected to generate an estimated $5 million in revenue for RTM over the initial 12-month charter period.

Maersk Line will take delivery of Henry Rickmers this week and Richard Rickmers will arrive in two weeks. The 3,450-TEU Panamax ships will be chartered at a floating rate based on an index agreed upon by both Maersk Line and RTM.

"We are proud to reintroduce Maersk Line to our portfolio of premier liner companies," said Thomas Preben Hansen, CEO of RTM. "Whilst the charter market continues to be under tremendous pressure, it gives us confidence knowing that our modern and well-maintained ships remain competitive to the extent that the world's leading liner company has chosen to charter our ships ahead of the many competing candidates."

DP World to invest in Suez Canal development

Dubai Ports World plans to invest in the ventures that will be offered as part of Egypt's Suez Canal Development Project, according to Ibrahim Alhammadi, DP World's CEO.

Alhammadi told Logistic that DP World is planning to make an international bid offer for the second berth of Al Sokhna Port, where the company intends to invest $600 million, in addition to building a logistics zone on a total area of 500,000 square meters for container storage.

The CEO added that DP World intends to fund work on the Sokhna's third berth at costs topping $200 million.

For more of the 4-traders story:

Port of LA cargo volume drops in February

Cargo volume was down February at the Port of Los Angeles, in part due to Asian factories closing for Chinese New Year, according to a port statement issued Friday.

The L.A. port said it handled 559,786 TEUS in February, down 8.9 percent year-over-year. Compared to February 2013, imports dropped 10.6 percent to 284,812 TEUs last month, and exports fell 6.2 percent to 146,925 TEUS.

Empties decreased by 8.3 percent year-over-year, according to the statement.

February cargo volume for the Port of Long Beach is not yet available.

8 missing, 1 critically injured after cargo ships collide

Two cargo ships crashed into each other near Tokyo Bay in Japan early Tuesday morning, resulting in eight missing crewmembers and one who is critically injured.

The Panamanian vessel Beagle III struck the South Korean-registered Pegasus Prime in the Uraga waterway, causing the Beagle III to sink.

Twenty Chinese crewmembers were aboard the ship when it sank, and "twelve have been rescued, but one of them is in a state of cardio-respiratory arrest," according to the Japan Coast Guard.

The Pegasus Prime crewmembers remained unharmed.

The Coast Guard is searching for the missing sailors and will investigate the cause of the collision.

For more of the JDP story:


Thursday, March 20, 2014

Top Story

NYK Line to stop providing chassis in LA-Long Beach, San Diego and Phoenix

NYK Line (North America) has announced, in line with its new policy, that it will no longer provide chassis to Long Beach, Los Angeles, San Diego, Calif. and Phoenix, Arizona markets, effective May 1, 2014.

The company said the change is meant to build efficiencies while lessening the environmental impact of having a large number of chassis used intermittently that then have to be stored and moved.  

NYK Line asserts the policy change will lower total costs and build greater flexibility for truckers, minimizing inefficiencies in the performance of their daily work. The company says the policy change will have an immediate positive impact on terminal congestion, reducing turn time and ultimately providing a better product for the customer.

NYK said timing of further extensions of the policy would be announced as they are decided.

TSA member lines move up proposed GRI from May 1 to April 15

Member container carriers in the Transpacific Stabilization Agreement move up their May 1, 2014 general rate increase recommendation to April 15, in an effort to offset the rate drop in February and early March.

The increase is $300 per-FEU for all commodities and origin/destination pairs, and follows similar increases applied on January 15 and March 15.

"The downward rate pressures we are seeing do not reflect the steadily improving cargo picture eastbound from Asia," said Brian Conrad, TSA executive administrator. "The Lunar New Year period was strong, with average vessel utilization numbers in the 95 percent range; while most people tend to focus only on the supply/demand imbalance, what is getting lost in the pricing discussion is service value."

"Competitive pressures to match the lowest short-term rate levels and lock them into 12-month service contracts across the board amounts to a significant deferred investment in the trade," Conrad explained. "Eventually we will have to stop pricing based solely on supply-demand and pay more attention to long-term service reliability and flexibility – hopefully before a crisis makes the problems more acute and the solutions far more costly."

TSA is a research and discussion forum of major container shipping lines serving the trade from Asia to ports in the U.S., and include APL, China Shipping Container Lines, CMA-CGM, COSCO Container Lines, Evergreen Line, Hanjin Shipping, Hapag-Lloyd, Hyundai Merchant Marine, K Line, Maersk Line, MSC, NYK Line, OOCL, Yangming Marine and Zim.

Port Metro Vancouver strike pinches retailers

Major Canadian retailers are being hurt by a truckers' strike at Port Metro Vancouver terminals that has essentially shut down the port and stalling the movement of goods, according to Transport Minister Lisa Raitt, and U.S. Customs and Border Patrol is receiving requests from container lines that was to divert to U.S. Northwest ports.

"Suppliers are feeling the effects right now in their stores," said Transport Minister Lisa Raitt in a Tuesday speech to the Toronto Region Board of Trade.

Raitt named a long list of businesses including Home Depot, Canadian Tire, Loblaw, Target and Hudson's Bay, noting that several corporate officials brought their concerns to her during Tuesday's lunch.

The strike by both non-union and union truck drivers who cover the port is entering its third week.

Ocean carriers are making plans to reroute cargo from Port Metro Vancouver, , according to a statement from U.S. Customs and Border Protection. The agency said in an automated message to importers and trade service providers that shipping lines have submitted requests to transfer vessel calls and offload cargo destined to Vancouver to ports such as Seattle and Tacoma, Wash. Cargo would then be moved up to Vancouver by truck or rail or carriers could make a request to redeliver the cargo directly to a U.S. destination.

"It's not a federal labor matter. Trust me, if it was a labor matter, I would be all over it," Raitt said. "The reality is that some truckers are not being paid what they need to be paid in order to have a livelihood. As a result, they have withdrawn their services." She compared it to a scenario where taxi drivers refuse to pick up fares, though they still have their licenses.

The port has warned that if truckers don't return to work, it may lead to suspension or termination of their terminal permits.

Raitt pointed to a 14-point plan last week reached with the federal government, the B.C. government, and the port authority, and urged truckers to get back to work.

For more of The Star story:

Lingering ice on Great Lakes delays shipping trade

The Canadian Shipowners Association, which represents six companies that control a fleet of 83 freight vessels, has called for more icebreakers to help open up the Great Lakes and St. Lawrence Seaway to trade as the worst winter in 20 years lingers on.

Association president Robert Lewis-Manning says a massive cover of thick ice is suppressing freighter traffic, delaying the opening of the St. Lawrence Seaway past opening dates achieved in recent years.

"Despite Canadian government efforts to encourage the movement of Canadian grain, it will remain stored in ports such as Thunder Bay until icebreakers open ports and support ship movements," he added, noting that the few freighters that are moving on some of the middle Great Lakes are going very slowly, and have to be escorted by Canadian or U.S. icebreakers.

The ice may also delay shipments of iron ore, construction materials, salt and petroleum products.

It's been a challenging year for the Coast Guard, according to its website which reads, "The Canadian Coast Guard's fleet of icebreakers is working hard to meet the increased demand for assistance this year as the result of severe weather conditions in many parts of the country in recent months."

For more of the Bay Today story:

Cargo ship runs aground off Newfoundland

A cargo ship lost power off the southwest coast of Newfoundland and ran aground Saturday.

The Joint Rescue Co-ordination Centre in Halifax said the bulk carrier MV John 1 ran aground Saturday afternoon near Rose Blanche.

All 23 people onboard were rescued safely.

The Canadian Coast Guard said the ship was on its way to Montreal from Spain when its engine failed and it lost power.

For more of the Metro story:

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