Cargo Business Newswire Archives
Summary for March 25 - March 29, 2013:

Monday, March 25, 2013

Top Story

Virginia Port Authority to vote on port operator Tuesday

The Virginia Port Authority will vote tomorrow on how their Hampton Roads port will be run for the next few decades, making a decision between current nonprofit operator Virginia International Terminals or port privatization with APM Terminals or JP Morgan/Mayer Terminals.

Approximately one year ago APM Terminals sent an unsolicited bid to the state, offering $4 billion in exchange for taking over the operation of the port's container terminals. The deal also includes giving APM's $540 million container terminal in Portsmouth to the VPA, from which it could collect rents of more than $70 million per year when the lease expires in 2030.

Since the offer was made under the state's public-private partnership law, it triggered an open bid process. In addition to a bid from current operator VIT, Carlyle Group made an offer that was later withdrawn, and JP Morgan IIF Acquisitions and Maher Terminals also submitted a joint offer.

The port community, including the Virginia Maritime Association, reportedly thinks VIT is doing a good job at the port and should be retained. In 2012, there was a 9.8 percent increase in TEU volume year over year.

Nevertheless, early this year, the Joint Legislative Audit and Review Commission was charged to investigate allegations whether VIT was fiscally unsustainable. The commission report said the authority's "market performance and outlook appear to be more positive than suggested."

The privatization proposals would bring major private capital to Virginia's port for major improvement and maintenance projects.

Some opponents of privatization have said Gov. Bob McDonnell revamped the board in June 2011 as part of a strategy to turn the state's ports private, because of his past efforts to privatize state functions such as road construction and liquor sales.

Critics worry that if APM wins the bid, it would put the port in control of a terminal operator that is an arm of the same parent company that owns shipping giant Maersk Line. Competitor lines that call at the port worry about unfair treatment. Both Maersk and Maher Terminals also run other container terminals on the East Coast, and some critics have reportedly said that could affect their management decisions.

For more of the Virginia Pilot story:

For more of the Daily Press story:

Contract talks between grain terminal owners and ILWU break down on first day

Negotiations between the three members of the Pacific Northwest Grain Handler's Association and five ILWU locals broke down Friday during their first negotiating session in three months, according to an ILWU statement.

The employers would not consider the union's proposal, which was to adopt the terms of the contract the ILWU signed with TEMCO, an owner that separated itself from the other three grain terminal owners to make its own deal with the union.

Representatives of three grain-terminal operators — United Grain Corp., Columbia Grain and Louis Dreyfus Commodities — rejected the union proposal Friday and called on workers to provide a list of proposals based on the group's "last, best and final offer" of November 16, according to The Columbian.

TEMCO runs three grain elevators in Tacoma, Kalama and Portland and is owned by Cargill and CHS. TEMCO inked a five-year contract in March with the longshoremen of ILWU locals that work at TEMCO grain terminals.

Columbia Grain and Louis Dreyfus, two of the three employers involved in Friday's talks, implemented the owners' November 16 concessionary contract proposal. Dockworkers at these facilities have continued to work under these provisions, although the union membership failed to ratify the contract and further negotiations were expected to continue.

Mitsui, owner of United Grain in Vancouver, Wash., locked out ILWU workers on February 27, citing equipment sabotage by an ILWU official as the reason.

Union members have picketed United Grain's Vancouver terminal since the accusation of sabotage, according to The Oregonian. The union denies the allegations, which the Vancouver Police Department is investigating.

"The foreign employers refused to consider any proposal from the union other than complete acceptance of the employer's deeply concessionary 'last, best and final' offer that members rejected by more than 90% in December," said Leal Sundet, ILWU Coast Committeeman and co-chair of the union's negotiating committee. "That's not negotiating; it's outright bad faith bargaining."

Scheduled Saturday contract talks were canceled and no future negotiations have been scheduled, according to ILWU spokesperson Jennifer Sargent.

Maersk stock declines as container rates out of China drop

AP Moller-Maersk fell on the Copenhagen exchange on falling freight rates out of China, indicating the concerted effort of container carriers to boost rates may be unsuccessful.

Maersk Line and other container carriers had announced a rate increase effective Friday to fight freight declines due to vessel overcapacity. They also plan to raise rates again next month.

Maersk's B shares fell as much as 1.4 percent, the most since March 18. The Shanghai Containerized Freight Index, a measure of box rates out of China, fell 4.7 percent Friday, the most since November.

"The proposed rate increases are turning out to be a failure as there's too much overcapacity," Jesper Christensen, an analyst with Alm. Brand A/S in Copenhagen, said by phone to Bloomberg. "This isn't good for Maersk as today's data show that last week's gain -- to a large extent -- is disappearing already."

Besides vessel overcapacity and low freight rates, Christensen said uncertainty about a bailout for Cyprus is also hurting Maersk shares.

For more of the Bloomberg Businessweek story:

FedEx to transport two pandas from China to Toronto

FedEx is transporting two giant pandas from China to Toronto, a major diplomatic exchange between the countries in which FedEx is playing a primary role.

The FedEx Panda Express will be moving 5-year-old Er Shun and 4-year-old Da Mao from China to the Toronto Zoo. FedEx prepared the cargo plane destined to more the pandas by placing two huge panda decals on either side of the aircraft.

"The kids at the airports when they land, it's like a play date for them," said Phillip Berry, FedEx structures engineering.

"Each panda will have an attendant. One from the Chinese zoo and another from the panda base. And the Toronto Zoo will also have a vet on board," said David Lang, managing director of aircraft charter operations.

The 14-hour flight will also carry 200 kilos of bamboo, 100 kilos of bamboo shoots, 45 kilos of apples, and plenty of water to keep the pandas comfortable on the way to their new home.

For more of the KLTV story:

Vessels collide off coast of Taiwan

The Taiwan container vessel Chien Chang collided with Chinese cargo ship Minguang 68 four miles off the outlying island of Kinmen early Sunday, according to Coast Guard officials.

There were no injuries caused by the accident, but the Chien Change suffered a hole above the water line and other damage.

Twelve crewmembers from the Minguang 68 were brought to shore by a Chinese rescue ship after the captain gave the order to abandon ship.

For more of the Focus Taiwan story:


Tuesday, March 26, 2013

Top Story

PMSA and ILWU protest CBP overtime cuts due to sequestration

The Pacific Merchant Shipping Association and the International Longshore and Warehouse Union wrote a joint letter to California Senators Diane Feinstein and Barbara Boxer, protesting sequestration measures that would eliminate all overtime for the U.S. Customs and Border Protection staff because they will "negatively and disproportionately effect California's seaports as compared to other gateways around the country."

Coupled with CBP furloughs scheduled for mid-April, the elimination of overtime will "delay ship boarding by the CBP, limit personnel at radiation portal monitors at truck gates and rail operations, eliminate any flexibility to meet peak demand, and will mean limitations on timing of cargo inspections," said the letter. The missive added that the trains and trucks move 40 percent of cargo that enters the U.S., and processing delays will quickly pile up and become extreme during the CBP April furlough.

The PMSA and ILWU letter requested that the CBP be allowed to withdraw furloughs and restore overtime for its agents in order for California seaports to operate efficiently, noting that with no such flexibility, the net effect of sequestration will be congestion at the state's marine terminals.

"California's ports will ultimately choke on the volume of cargo resulting in a range of problems from congestion, additional pollution, spoiled food products and missed opportunities for agricultural exports," the letter said, asking the senators to intervene with the CBP.

NOL reveals first ship of newer, larger container fleet

Neptune Orient Lines unveiled its largest and most eco-friendly container vessel this week.

The APL Temasek can carry 14,000 TEUs and is the biggest container ship registered in Singapore.

The Temasek is the first of ten new NOL ships with a 14,000-TEU capacity, the initial deliverable of their $4 billion fleet renewal program.

"Today, we celebrate a landmark in NOL's history," said NOL Group chairman Kwa Chong Seng. "We are modernizing our fleet, improving our cost structure, and investing in the future. To compete successfully in today's marketplace, we must ensure that we have the most competitive product with the latest technology, design and sustainability features."

The APL Temasek will be sailing the Asia-Europe route.

For more of the Channel News Asia story:

Cosco Pacific profit drops 12 percent

Although container volume was up, Cosco Pacific, the container terminal subsidiary of China's biggest shipping group, reported a 12 percent fall in profits due to receiving a smaller gain from its stake in a container building firm.

Net income for 2012 fell to $342 million from $389 million a year earlier, the company said in a stock exchange filing Tuesday. Sales rose 23 percent to $735.5 million.

Cosco Pacific's terminals, mostly located in China, handled 9.8 percent more containers last year on a higher demand for Chinese goods.

Profit contribution from its 22 percent stake in China International Marine Containers Group, the world's largest container-maker, fell 48 percent to $61.9 million, Cosco Pacific reported.

For more of the Bloomberg Businessweek story:

Job seekers line up for dockworker lottery at Port of Tacoma

A jobs lottery to add a list of 226 workers to the Port of Tacoma's longshore work force has created great buzz among job seekers, but the lottery creators haven't released any details about the process.

Entrants had four days to join the lottery. Two job ads were placed in the March 17 Sunday issue of the News Tribune and on, and entries had to be postmarked by March 20 at midnight.

The joint committee of union officials and waterfront staff didn't offer a website or phone number for job seekers to call for details. The union received hundreds of calls for clarification of the ad. The port and the newspaper also received over a hundred calls.

There were questions regarding the size of the postcard requested, a nonstandard size that had to be custom cut.

According to the ad and conversations with lottery officials, the News Tribune reported that lottery entries will be rejected if the requested information is not complete, the card is not the correct dimensions, or if it was put in an envelope or dropped off at the union hall rather than mailed.

Entries submitted by friends and relatives of union members or waterfront employees are put in one bin, and 113 names will be chosen from that batch. Entries from the public will be put in another bin, and 113 names chosen from that batch as well.

Another drawing will be held April 8, and each of the 226 cards will be given a number that matches the order in which they are drawn. Based on that drawing, small groups will be processed and trained to join the casual worker ranks.

Casual workers are last in queue to get union work, but are gateway jobs to becoming a full longshore member, which commands a salary of over $100,000.

For more of the News Tribune story:

Another death shuts down the Port of Tacoma

The Port of Tacoma shut down Monday after the death of a longshore worker, reportedly in an industrial accident at a port terminal. The death is the second in two weeks at port terminals.

The worker who died was a Pacific Crane Maintenance Co. employee, according to longshore officials. The same company also employed the worker who died March 12.

No details of the accident were released. The accident happened at 8 a.m., according to port spokesperson Judy Collins, and as is typical in such situations, longshore workers stopped working for 24 hours after the work-related death.

An accident investigation is underway.

The port reopened at 8 a.m. Tuesday.

For more of the Seattle Times story:


Wednesday, March 27, 2013

Top Story

VPA rejects privatization, revamps Virginia Terminal Operations

Virginia Port Authority commissioners voted Tuesday not to privatize its port operations, and to instead keep its vessel and cargo operations with Virginia Terminal Operations, a nonprofit entity created by the VPA.

The commissioners voted to halt negotiations with the two privately held bidders, APM Terminals and JP Morgan/Mayer Terminals, noting that neither proposal “accurately reflected the potential net present value of the state's terminals and revenue potential.”

VIT, which has served as port operator for the past 30 years, will be restructured to improve its performance.

“We are transforming The Port of Virginia to meet a changing and increasingly competitive environment,” said William Fralin, chairman of the VPA board. “We will move forward as a stronger, leaner organization that is better-positioned to serve the ocean carriers and port customers, attract cargo to Virginia and be more accountable to Virginia taxpayers.”

This action follows an extensive 18-month review of port operations requested by Gov. Bob McDonnell, which subsequently included the evaluation of two private proposals to assume operations of the port.

According to the authority website, the board will convert VIT from a non-stock corporation to a single member Virginia limited liability corporation under more direct control by the VPA. The strategic plan will be altered to focus on advancing major capital improvements, reducing debt levels and attracting new distribution centers and manufacturers to drive cargo.

The board will also recruit a permanent executive director and chief commercial officer to lead VIT, and expects to have the leadership in place as early as fall 2013.

One year ago, APM submitted an unsolicited bid to run Virginia’s ports under the state's public-private partnership law, which triggered an open bid process. In addition to a bid from VIT, Carlyle Group made an offer that was later withdrawn, and JP Morgan IIF Acquisitions and Maher Terminals also submitted their joint offer.

Port of Long Beach launches major rail project

This week the Port of Long Beach launched the Green Port Gateway, a major rail expansion project, at a groundbreaking ceremony attended by David Matsuda, the U.S. Department of Transportation’s maritime administrator.

“Efficient trade requires up-to-date infrastructure for stability and growth,” said Matsuda. “With these improvements, we've greatly improved port infrastructure and our ability to export American products overseas. Projects like this one will help us achieve President Obama's goal of doubling our nation's exports by 2015.”

The project, funded in part by a $17 million TIGER grant, involves a major port-to-rail infrastructure expansion designed to help reduce traffic and lessen pollution near the Port of Long Beach by shifting more cargo from trucks to trains.

“Ports are critical for our country’s economic growth and success,” said U.S. Transportation Secretary Ray LaHood. “The Green Port Gateway will build on the progress we made during President Obama's first term, reigniting America's economic engine both here in Long Beach and throughout the country.”

When complete, the $83.5 million infrastructure project will improve the link between the Port of Long Beach and the Alameda Corridor rail line, which hauls about 15 percent of all seaborne containers entering or leaving the United States.

On-dock rail will lessen the number of trucks on city streets and highways since port workers will be able to move cargo containers directly from ships to trains at the port instead of using trucks to transport cargo from the port to the rail yards.

The Green Port Gateway project is expected to create 340 full-time construction-related jobs, according to the Port of Long Beach, and will add more than 30,000 feet of new track, including adding a new mainline.

Port of Seattle CEO Yoshitani named chair of American Association of Port Authorities

Tay Yoshitani, CEO of the Port of Seattle, was appointed chairman-elect of the American Association of Port Authorities during the group’s board of directors meeting last week in Washington, DC.

“This appointment says volumes about the work our staff is doing in Seattle,” said Yoshitani. “Our team has developed a reputation for generating new ideas on environmental sustainability, strategic foresight and financial stability of the port. I look forward to advancing the conversation on trade promotion and other issues critical to the future of ports throughout the Americas.”

AAPA is an alliance of leading ports in the Western Hemisphere that promotes its members’ interests through public advocacy and professional development. Yoshitani will assume the role of chairman, an unpaid position, this fall.

Yoshitani has served as CEO of the Port of Seattle since 2007. He is former chief executive of both the Maryland Port Administration and the Port of Oakland and served as deputy executive director of the Port of Los Angeles.

Cargo numbers at Georgia Ports Authority rise in February

The Georgia Ports Authority saw strong growth in February, including a 30 percent hike in roll-on/roll-off cargo at the Colonel’s Island Terminal at the Port of Brunswick.

Brunswick moved more than 50,000 auto and machinery units in February, 12,000 units higher year-over-year, according to GPA executive director Curtis Foltz. For the first eight months of the fiscal year GPA has moved nearly 416,000 units, a 21 percent increase over the same period in 2012.

“Increased roll-on/roll-off cargo among the 21 car manufacturers we serve indicates an improving market for auto sales,” Foltz said.

Overall cargo volume was also up last month, with total tonnage increased by nearly 7 percent.

Brunswick also saw growth in bulk cargo, which reached more than 124,000 tons in February, an increase of 282 percent over February 2012.

The Port of Savannah moved over 2 million tons of cargo, a 2.3 percent increase year on year. Savannah handled 242,425 TEUs last month, also up 2.3 percent over February 2012.

For more of the Savannah Now story:

Report: Prospective new LA-Long Beach shipping lane route created to protect blue whales will endanger other whales

New lanes for ships sailing in and out of the Ports of Los Angeles and Long Beach are set to be established later this year to protect feeding blue whales, but may need to be changed again to protect other whale species, according to researchers.

Although the proposed new lanes will pose less risk for feeding blue whales, a report published in the current edition of Conservation Biology indicates that humpback and fin whales may face higher risks unless shipping routes are changed again.

Evidently, in 2009 the state required that southern shipping lanes be moved further from shore to mitigate pollution, but that landed the ships in humpback and fin whale feeding grounds.

For more of the Daily Breeze story:


Thursday, March 28, 2013

Top Story

Shipping icon Luksic dies in the midst of saving South America's largest shipping line

Shipping magnate Guiellermo Luksic Craig, who spent more than $1 billion turning around Latin America's largest container shipping line, died Wednesday at 57 of lung cancer.

The Chilean businessman was the owner of the Quinenco holding company and the financial Luksic Group.

For the past two years Luksic has poured more than $1 billion into Cia. Sud Americana de Vapores SA, which had lost $1.25 billion in 2011. The purchase was added to his $16.8 billion family fortune, according to Bloomberg, a fortune that includes Chile's top bank and brewer as well as mining assets.

Luksic lowered SCAV losses to $314 million in 2012 by cutting the use of leased ships and routes that didn't add to the bottom line.

In the company's last annual report, Luksic said his plans for the line's future was to focus on South American routes in joint operations with other shipping firms, allowing CSAV to revert its losses this year.

"There could be some short-term volatility on CSAV's stock as the decision to buy was his," said Jorge Sepulveda, an analyst at brokerage Euroamerica Corredores de Bolsa SA. "He put people in charge and on the board who shared his vision, so the long-term strategy should remain intact."

Guillermo's stepmother, Iris Fontbona, who ranks 43rd on the Bloomberg Billionaire Index, controls the family fortune.

Luksic's father, Andronico, built up his family's wealth by buying up copper deposits and an unprofitable railroad in the Atacama Desert in 1980 and turning them into London-based copper mining company Antofagasta Plc. Company sales topped $6.7 billion in 2012. The family has banking interests as well, currently run by Luksic's brother Andronico.

"He was a fundamental pillar in our family," Andronico, said in an e-mailed statement. "We will miss his advice, his company and his intelligence."

For more of the Bloomberg story:

Maersk: China's drive to increase domestic consumption to aid shipping industry

China's efforts to increase domestic consumer demand and lower its dependence on exports will help the shipping industry by boosting the country's imports, said A.P. Moeller-Maersk CEO Nils Smedegaard Andersen in an interview.

North American and European demand for toys, electronics and textiles made China the largest global exporter in 2009. Now the government leadership reportedly wants to drive the economy up via domestic consumption.

"Increasing imports into Asia means that fewer container boxes will be moved empty, generating revenue for shipping lines," said Shin Ji Yoon, an analyst at KTB Securities in Seoul. "There has always been an imbalance in trade, where containers leave Asia full but return empty."

The percentage of China's imports may rise faster than exports in 2013, according to a Maersk email.

Maersk has made investments in seven of China's container terminals, including Shanghai and Guangzhou, through its terminal operating arm, APM Terminals. In June, it announced a $673 million deal to jointly fund and operate berths with the Ningbo Port Group.

"Terminal investments are a key focus for us," Andersen said in Singapore this week. "We're constantly following the opportunity. We want to invest in countries that really grow."

Following a $600 per-TEU increase this month, Maersk plans to raise freight rates on the Asia-to-Europe trade route by another $500 per-TEU on April 15.

Maersk said that Triple-E ships, with a capacity of 16,000 TEUs, would use 35 percent less fuel per TEU than current vessels on the route, emitting 50 percent less pollutants. The Triple-Es will have rounded hulls and a fuel-saving two-engine setup that's too wide for current ships.

"It's part of our overall drive to reduce costs and it's also part of our drive to reduce CO2 emissions," Andersen said. "The Triple-Es will be the largest we will see for a while."

For more of the Bloomberg story:

LA-Long Beach trade officials urge push-back against CBP sequester cuts

Trade leaders at a Port of Long Beach event this week encouraged stakeholders to protest sequestration cuts that affect U.S. Customs and Border Protection, fearing April furloughs and the elimination of agent overtime will significantly delay cargo movement at the Ports of Long Beach and Los Angeles.

"If goods can't get to market when they're supposed to be there, you're looking at potential lost opportunities for sales, which have an impact on your bottom line," said Jonathan Gold, vice president of supply chain and customs policy for the National Retail Federation.

Due to the sequester, CBP must cut $754 million from its budget by Sept. 30.

Port Executive Director Christopher Lytle said stakeholders have been working with regional officials at CBP on the issue.

"They're sensitive to the issues here because this is a 24-hour operation," Lytle said. "This is not an 8-to-5 operation as many ports are in other parts of the country. We don't want any slowdown because the business is starting to build as we get into the busier season, so we don't want to start from behind or at a disadvantage. "

Overtime for CBP agents is heavily relied on for the timely inspection of cargo, officials said.

"We need to be on top of it and we need to reach out to our senators (Barbara) Boxer and (Dianne) Feinstein" about the issue, said Michael Podue, president of ILWU Local 63 at Wednesday's Port of Long Beach's Peak Season Forecast event. "To be competitive in this port, we need to be on our officials to make sure we are effective. "

For more of the Press-Telegram story:

Finalists chosen for open seat at Port of Seattle Commission

Seven finalists have been chosen to fill the Port of Seattle commissioner seat vacated by retiring Rob Holland.

The finalists will participate in a public forum moderated by KUOW's Steve Scher at 6 p.m. April 2 at the port's Pier 69 headquarters.

The finalists are Stephanie Bowman, Darrell E. Bryan, Claudia Kauffman, Randy Loomans, Vicki Orrico, Keith Scully and Nancy Wyatt.

For more of the Seattle Times story:

Rickmers-Linie adds Philly stop to its service from Asia and South America

German shipping line Rickmers-Linie will add a monthly cargo delivery to the Port of Philadelphia on its service from Asia and South America to the Tioga Marine Terminal in Port Richmond.

Rickmers currently sails two ships a month into Tioga, according to Delaware River Stevedores President Robert Palaima.

The expanded service will add a third monthly vessel to call on ports that include Xingang, Shanghai, Singapore, Cape Town, Buenos Aires, Santos, Rio de Janeiro, Vitoria, Philadelphia, Savannah and Houston. Cargo carried will primarily be turbines, machine parts, air exchangers, and other large items used in building factories and major construction projects.

For more of the Philadelphia Inquirer story:

Former Crowley Liner executive indicted in freight price-fixing conspiracy

A federal grand jury in San Juan, Puerto Rico, indicted Thomas Farmer, a former executive of Jacksonville, Fla.-based Crowley Liner Services, for his participation in a conspiracy to fix rates and surcharges for freight transported by sea between the continental United States and Puerto Rico, the Department of Justice announced this week.

The indictment charges Farmer, the former vice president of price and yield management of Crowley, with "conspiring with co-conspirators to suppress and eliminate competition by agreeing to fix rates and surcharges for Puerto Rico freight services from at least as early as mid-2005 until at least April 2008," according to the U.S. Department of Justice. 

For more of the Department of Justice announcement:

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