United Parcel Service has come to terms to acquire the Dutch firm TNT Express, for $6.85 billion, a move that will reportedly elevate the Atlanta-based delivery company to market-leading status in Europe.
"This broadens UPS' global footprint," said Scott Davis, the chief executive for UPS.
The acquisition could reportedly also bring deeper market access for UPS in Asia and Latin America, increasing global sales by 36 percent to $60 million, and creating more distance from U.S. rival Fedex that only has approximately 3 percent market share in Europe.
The TNT board had reportedly been shaken up on the heels of its split from PostNL nine months in an effort to increase shareholder value, according to a Reuters report.
PostNL remained a 29.8 percent shareholder and was reportedly in favor of UPS buying TNT.
Germany’s Deutsche Post DHL, the biggest competitor in Europe to the new UPS-TNT juggernaut has asked the European Commission to make a closer review of the deal, according to Reuters.
Coast Guard announces new ballast water treatment regs
The United States Coast Guard announced its much anticipated ballast water ruling on Friday that includes the requirement for on board treatments that utilize methods such as chemicals or ultraviolet light as increased preventative measures against invasive species entering marine environments in the U.S. and potentially causing ecological damage.
Ships must currently exchange ballast water at sea, or by flushing tanks with salt water when they are empty, but the new regulation is intended to have a greater impact by killing off a much higher percentage of aquatic invaders.
"These new regulations will aid in controlling the introduction and spread of non-indigenous species from ships' ballast water," said Jeffrey Lantz, director of the Coast Guard's Office of Commercial Regulations and Standards, in a statement.
"This final rule establishes a ballast water discharge standard that is protective of the marine environment and is also consistent with the discharge standard adopted by the International Maritime Organization in 2004," Lantz said.
Environmental groups have waged an aggressive campaign over the course of several years advocating stricter U.S. ballast water standards in the wake of invasive species such as Zebra mussels wreaking havoc in the Great Lakes, to Asian clams getting into San Francisco Bay.
The reported responses from these groups to the U.S. Coast Guard’s new regulation has been mixed as a stricter two-phase ruling was hoped for that would require technologies installed on commercial vessels that produce a higher kill rate of microorganisms – up to 1,000 times stronger.
“It's a major milestone and a starting point, but it's not nearly as strong as it should be," said Jennifer Nalbone of Great Lakes United, a U.S. -Canadian advocacy group to the Associated Press.
However, the Coast Guard said it is putting off publishing a further review of second-phase ballast water standards until as late as 2016 in order to study the feasibility of more a more stringent ruling including when those types of technologies would be “practicable.”
Link this page to download the PDF of the full 386-page ruling:
www.ofr.gov
Canadian Pacific signs multi-year deal to ship frac sand from Wisconsin
The Canadian Pacific Railway Ltd. announced it signed a multi-year deal with Unimin Corp. to ship frac sand from a plant in Wisconsin.
Unimin’s Tunnel City, Wisconsin facility is slated to open in 2013 and will produce frac sand used in “fracking” where a combination of water, sand and chemicals are blasted into underground shale rock for the retrieval of oil and natural gas.
NYK Group cited as one of world’s most ethical companies
The NYK Group, which includes Yusen Logistics (Americas) Inc. and NYK Line Americas, announced it has been recognized by the Ethisphere Institute, a business ethics think-tank, as one of “World’s Most Ethical Companies” for 2012 for the fifth year in a row.
According to NYK, Ethisphere reviews several hundred companies each year and evaluates areas that include ethical leadership, compliance practices, and corporate social responsibility.
“We believe that successful business and ethical business are not exclusive, and companies are seeing this link more and more,” said Kazuo Ishizuka, CEO of Yusen Logistics (Americas) Inc. in a statement.
Active German WW II-era one-ton bomb excavated at Port of Marseille; locals evacuated
Approximately 1,500 local were evacuated near Southern France’s Port of Marseille as a one-ton World Two-era German bomb was removed from the area to be detonated at a military base, according to news reports out of the region.
Vessel traffic was reportedly halted and local roads were blocked as the bomb was taken out of the port area a week after construction workers accidentally pierced the explosive device with a back hoe.
According to reports, Government officials said the bomb’s ignition system no longer works but the 650 kilograms of explosive material made the situation dangerous, as the unit was deactivated after a 40-minute procedure.
The bomb was of a type left behind by fleeing Germans in the latter stages of the Second World War in hopes of blowing up the Port of Marseilles and denying viable access by the Allies.
Tuesday, March 20, 2012
Top Story
Gap widens between box and charter rates
Containerized freight rates have reportedly doubled in the past quarter while ship
charter prices have moved in the opposite direction with idled tonnage and fewer
vessel hires.
Freight rates have hit $1,379 per-TEU in the China-Europe trade, a 97 percent
spike so far this year, according to the world’s largest shipbroker, Clarkson Plc, in a
Bloomberg report.
However, the level that charterers are paying ship owners has fallen 4.2 percent
since the beginning of January, according to the Hamburg Shipbrokers’ Association.
The heightened level of idled ships and a lower level of ship hires amid over-
capacity in the container-shipping industry has reportedly driven charter prices
down.
Shipping companies were engaged in a price war and lost $11.4 billion in revenue in
14 months, according to Copenhagen-based SeaIntel Maritime Analysis.
Idled vessel capacity is projected to expand to the equivalent of 1.1 million TEUs
by the end of 2012 compared to 595,000 TEUs at the start of this year, according to
Paris-based consultancy Alphaliner.
Operators won’t renew some chartered ships when their leases expire, according to
Fotis Giannakoulis, an analyst at Morgan Stanley in Bloomberg’s report.
Freight rate increases could stick this time out, however, according to Stanley Shen,
spokesman for Orient Overseas in an e-mail to Bloomberg.
Others in the shipping industry concur with that sentiment and the potential for
charter rates to rebound.
“Freight rates are increasing like crazy right now, and there’s tremendous positive
sentiment,” said Gerry Wang, chief executive officer of ship owner Seaspan.
“When freight rates are good, charter rates always come up,” he said.
The Lloyd’s List Bloomberg Container Index of the Top 50 container-shipping
companies rose 22 percent this year.
Potential pitfalls to sustained recovery in the shipping industry reportedly exist,
though, with China’s targeted annual economic expansion slowing to its slowest rate
of growth since 2004 at 7.5 percent, and rising fuel costs.
Bi-state commission to study Jasper County port project
The fledgling, 16-year-old, Jasper County container port project on the Savannah River will get another look by a bi-state commission representing the rival seaport states of South Carolina and Georgia.
The commission that calls itself the Joint Project Office reportedly came to an agreement on Monday to move forward with a study of the $4-$5 billion proposed project amid a time of high tensions between the two U.S. Southeastern states on the heels of a dredging issue flare up involving the Savannah River.
The latest Jasper County news comes on the heels of the recent overwhelming votes by the South Carolina legislature to override Governor Nikki Haley's veto on a bill that overturned a permit allowing Georgia to expand and dredge its port in Savannah.
The bill retroactively suspended 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 asserted the legislature’s measure was unconstitutional and overreached 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 soon after the Panama Canal’s post-Panamax widening is scheduled for completion, while the Charleston deepening will not be completed in 2024.
There are also four pending lawsuits over the dredging permit regarding issues of oversight.
The Charleston Post-Courier reported the two states have managed to reach an agreement that each of their respective port authority chiefs would submit a name of a firm they prefer to conduct the Jasper site study.
Georgia and South Carolina have each committed $3 million to the Jasper project to date, the Post-Courier reported, however those funds could run out by this summer.
Hundreds march in D.C. over transportation funding
Ten members of Congress joined hundreds of marchers representing the transportation construction and supplier sectors in Washington D.C. today to support the passage of a multi-year transportation bill in Congress.
The second annual bi-partisan RALLY for ROADS, sponsored by 15 national transportation construction associations, included the Chairman for the House Transportation and Infrastructure Committee, Rep. John Mica (R-FL) and Democratic Chief Deputy Whip, Sen. Barbara Boxer (D-CA), among others.
“America’s infrastructure is vital to economic growth and job creation,” said Kerri Leininger, a RALLY for ROADS spokesperson and the senior vice president of Government and Political Affairs for the National Ready Mixed Concrete Association. “America’s transportation needs are too great, and its impact on the nation’s economic health and well-being are too substantial to delay passage of a surface transportation bill any longer,” Leininger said in a statement.
Prologis leases 270,000 square feet near L.A. -Long Beach ports
Denver-based industrial real estate firm Prologis, Inc. announced it has leased 270,764 square feet in Carson, California, a few miles from the ports of Los Angeles and Long Beach.
"The Ports of Los Angeles and Long Beach are the two busiest in the entire country and with LAX so close, this South Bay location is in high demand, particularly by customers seeking rarely available large, high quality facilities such as this one," said Kim Snyder, president, Southwest region, Prologis in a statement.
The facility is currently 100 percent leased to Global, LLC, a third-party logistics provider, according to Prologis.
Twenty-three years later: Exxon Valdez sold for scrap
Twenty-three years after one of the biggest tanker oil spills in U.S. history occurred in Alaska’s Prince William Sound, the Exxon Valdez, now called the Oriental Nicety, was reportedly sold for scrap to Maryland-based Global Marketing Systems, Inc. for $16 million.
The Exxon Valdez spilled 11 million gallons of oil in Prince William Sound in 1989, impacting 700 miles of coastline, resulting in a $3.86 billion cleanup and spurring the Oil Pollution Act of 1990 that enforced the phase-out of single-hulled vessels in favor of double-hulls.
China's manufacturing has, so far this month, slowed perceptibly amid sluggish global and domestic demand, according to a key indicator culled from survey data.
A preliminary look at HSBC's Flash China Manufacturing Purchasing Managers' Index for March based on approximately 85-90 percent of survey responses from that sector was at 48.1 as of Thursday out of a 100-point scale, down from February's 49.6.
"Growth remains on track of slowdown, despite the marginal improvement in the headline flash PMI led by quickened production after the Chinese New Year," said Hongbin Qu, chief economist, China, at HSBC in a statement.
"With a meaningful rebound of domestic demand not in sight, external weakness is starting to bite, adding more downside risks to growth" that Qu said "should step up policy easing as inflation pressures continue to ease."
Global markets responded negatively to the latest news out of China, including in the U.S., where the Dow Jones industrial average fell 66 points to 13,058 today. The Standard & Poor's 500 index fell nine points to 1,393, and the NASDAQ slid 11 points to 3,063.
A PMI indicator below 50 equates to contraction from the previous month, as anything above that mark indicates growth.
The March Flash PMI for China would mark the fifth straight month that index has been below 50, although leading economists have reportedly said the Asian giant's slower growth is a reflection of China's longer-term goal of re-balancing exports with domestic demand.
The second largest freight delivery company
beat estimates by analysts for third quarter earnings, reporting profit of $521 million, a big change from the $231 million posted for the same period a year earlier.
Fedex said in a statement that a strong holiday season and milder winter weather aided in the company's increased profitability.
However, Fedex lowered its forecast for the rest of the year as global economic growth is projected to slow down and rising fuel costs loom.
"We just don't have as strong an economy as we would have hoped it would be a year ago," said Fedex Chief Financial Officer Alan Graf on a conference call.
"The economic environment and the elasticity that we're seeing on our premium services due to high fuel costs are dampening momentum a bit," he said.
UTi Worldwide Q4 profit dropped
The Long Beach, Calif.-based global logistics firm UTi Worldwide Inc. posted fourth quarter net earnings of $12.4 million, down from $14.5 million for the same period a year ago.
"Volumes in freight forwarding were weak in our fourth quarter, particularly in the month of January, due to a soft market and the timing of Chinese New Year," CEO Eric Kirchner said in a statement.
UTi's revenue was virtually unchanged at $1.15 billion as the company's revenue from its airfreight sector declined approximately 1 percent to $389.6 million.
DHL launches new round-the-world next-day service
A new round-the-world next day service that links Hong Kong, Los Angeles and Leipzig was announced by DHL, and is scheduled to commence on March 27.
The global freight company said in a statement that the service would offer a "greater number of Asian origin locations, including key trade hubs Singapore, Kuala Lumpur, Bangkok and Manila and a significant number of cities throughout China benefiting from next-day connection into Los Angeles and much of Western U.S. and Canada."
"This represents the first time that customers in many Asian cities will be able to enjoy a one-day express delivery service with any carrier on this important intercontinental lane," DHL said.
"Thanks to a new onward connection from Los Angeles direct to DHL's European air hub in Leipzig, Germany, customers in California including the key cities of Los Angeles, San Diego, and San Francisco will be able to order a pick-up from a DHL courier up to 3 hours later for their European shipments," the company said.
The new service will deploy three Boeing 777F freighters, operated by Southern Air, DHL said.
In September of last year, DHL announced it had signed a multi-year agreement with Southern Air Holding Inc. to operate B777F freighters on intercontinental routes connecting the Americas, Asia and the Middle East.
The first round-the-world route from Hong Kong to DHL's hub in Cincinnati to Bahrain and back to Hong Kong is already in operation.
DHL said its total global fleet of B777F freighters will be at 12.
"Floating armories" on the increase in anti-piracy efforts
In what is being referred to as a "legal gray area," private security firms for hire are reportedly engaging in an anti-piracy tactic that is producing "floating armories" of weaponry in the waters off East Africa, the world's piracy hot spot.
The Associated Press reports that few, if any, governments have legal jurisdiction over the growing practice of using floating armories, such as tug boats, to cut costs, store firearms and evade stricter regulations.
Several of the private security companies the A.P. interviewed said countries in the Middle East such as Saudi Arabia, Egypt and Yemen are increasingly sensitive over foreigners bringing in weapons since the Arab Spring uprisings started last year.
Conditions on the floating armories reportedly run the gamut of more well-run operations, to situations where weapons are poorly stored and crew are sometimes forced to sleep on the deck in order to make room for the firepower that is being used with more frequency against pirates, or suspected pirates, such as with the recent case of Italian marines mistakenly shooting two Indian fishermen.
The boom in global piracy, particularly off Somalia, has reportedly accelerated faster than the regulatory environment and the only country that has jurisdiction over the armories at sea is the one whose flag is flown from that vessel.
"There's lots of calls - particularly from the shipping industry - for there to be more regulation," said Adjoa Anyimadu, a piracy expert at British think tank Chatham House.
Maersk Line suspends North Europe-to-Asia bookings
Maersk Line, the world's largest container-shipping company, has suspended all bookings on its North Europe-to-Asia routes as it deals with a post-Chinese New Year shipment backlog that has terminals up to capacity. The backlog, a result of higher demand and service cuts by other lines, may last until May, the company told Bloomberg Thursday. Asia-to-Europe shipments are not affected.
"Terminal density at some ports is nearing yard capacity," said a Maersk representative to Bloomberg News. "If bookings are not halted, this could negatively impact productivity, further slow down carriers' ability to clear the heavy backlog/overflow and impact other trades."
Maersk told Bloomberg other lines have also suspended bookings on the route to minimize losses, and that the route's demand is high despite rate increases in February and March.
Maersk Line raised North Europe-to-Asia rates by $100 per TEU February 1, and by $50 in March 1. Another $100 increase will occur April 1. Asia-to-Europe rates were also raised.
On Wednesday, Republicans in the House defeated an effort to force a vote on the bipartisan $109 billion transportation bill approved by the Senate last week. The House Republican leaders said will introduce a law to enable Congress to continue transportation funding for 90 days after the March 31 deadline. This would be the ninth such extension since long-term funding expired over two years ago.
The White House, Senate Democrat and Transportation Secretary Ray LaHood pushed for approval of the Senate Bill on Wednesday, and were defeated by a procedural vote on the House floor.
"We're talking about almost 3 million jobs, and the House is playing games," said bill sponsor, California Senator Barbara Boxer. The senators displayed a chart that showed how many jobs each state would lose if the bill was not passed.
The House Republican transportation bill failed due to bipartisan opposition to provisions written into the bill, such as ending dedicated funding for mass transit systems. House Transportation Committee Chair John Mica said Monday he hopes to revise the bill.
APM Terminals to invest $992 mil in Costa Rica port
APM Terminals, the port arms of A.P. Moeller-Maersk, announced Thursday that it won a bid to develop a port in Costa Rica, with an investment of $992 million.
The government of Costa Rica agreed on a 33-year concession with APM
that includes the design, finance, construction and operation of a container terminal in Moin, according to APM.
Moin, a ten-hour sail from the Panama Canal, handles 80 percent of the country's trade.
Lufthansa Cargo will sell its 25 percent stake in its Jade Cargo venture in China. Lufthansa Cargo owns 25 percent of Jade Cargo, Shenzhen Airlines owns 51 percent, and 24 percent is owned by German development bank DEG.
Jade Cargo's operations have been grounded since January as they
worked out financing options. In February, they announced that UniTop, a Chinese transportation group, will be a partner.
"As long as we get permission from the authorities, we intend to exit our stake," said Lufthansa Cargo CEO Karl Ulrich Garnadt to Reuters, reporting the company took a loss of $21.2 million from the joint venture last year.
The steamboat Arabia carried goods like Chinese silks, French perfume and South American coffee beans more than 160 years ago. The fully stocked steamboat sunk, disappearing under the mud, only to be discovered a century later.
The Arabia Steamboat Museum in Kansas City is a reminder of those days of trade. The 171-foot long Arabia sank in 1856. The passengers made it to safety but the cargo, destined for Parkville, Mo., was not recoverable. Over time, silt covered the wrecked ship. In 1988, a group of history buffs discovered tons of lost treasure in the steamboat, now buried in a farmer's field.
The Arabia Steamboat Museum tour starts with a 14-minute video of the boat's excavators telling their story. Then visitors can peruse literally the largest collection of antebellum artifacts in creation, including silverware, hats, Wedgwood pottery, tools, glass, toys, shoes, and more.
