Today's Cargo News Archives mar 26

Japan's top shipping firms expand fleets

Japan’s leading three shipping firms will increase their fleets by some 30% over the next 3-4 years.

Mitsui OSK Lines Ltd (TSE: 9104) Mar 22 announced it will invest 1.1 trillion yen in the three fiscal years through Mar 31, 2010, enlarging its fleet by 24% or 1,000 ships.

MOL plans to buy 196 new vessels by 2010 and said it may boost its fleet by an additional 200 ships by fiscal 2012.

Nippon Yusen KK (TSE: 9101) will up its fleet to 930 vessels by 2010. Including ship leases, NYK plans to spend 1 trillion yen during 2008-11.

On Mar 19, NYK said it had agreed to order two 250,000-ton Wozmax ore carriers from Namura Shipbuilding Co (OSE: 7014).

The vessels, the first ore carriers of this size ever built, are to be completed by 2010 and 2011, and will be used to transport ore from Western Australia.

Kawasaki Kisen Kaisha Ltd (TSE: 9107) will add 500 vessels by fiscal 2008, with plans for further expansion after 2008.

New US access to Vietnam transport market

The US-Vietnam Bilateral Maritime Agreement, signed Mar 15 in Washington DC, will give US ocean carriers and logistics services "equal footing" in Vietnam’s growing transportation market, according to US Maritime Administrator Sean T. Connaughton.

“The agreement puts American ship operators on an equal footing in Vietnam, paves the way to forming US-controlled joint ventures, and sets a course to achieve wholly foreign-owned subsidiaries in Vietnam,” said Connaughton.

The agreement, signed by Connaughton and Vuong Dinh Lam, Vietnam's national maritime administration chairman, will allow US companies to hold a 51% share in joint-venture enterprises. Pre-agreement, US-based companies could hold only minority ownership in Vietnamese firms.

Five years from the date of the agreement’s implementation, US businesses will be able to operate without including Vietnamese partners.

The agreement also allows US companies to provide a wide range of maritime services including cargo agency, cargo documentation, cargo management, ocean freight forwarding, storage and warehouse services, and container station and depot services.

The new agreement builds on former US-Vietnamese trade initiatives that followed the US-Vietnam Bilateral Trade Agreement enacted in 2000.

MOL upgrades Vietnam container service

Mitsui OSK Lines, Ltd (TSE: 9104) Mar 23 announced a new container service called the Vietnam Hong Kong New Loop 3 (VH3) to help accommodate robust cargo trade to, from, and within Asia.

The VH3 service uses a space charter from Vietnam’s state-owned Bien Dong Shipping, which currently offers joint services with MOL.

The service started Mar 24, when the M/V Van Ly departed Haiphong. Initial service is from Haiphong to Hong Kong only.

Service from Hong Kong to Haiphong begins May 2007.

The rotation is: Haiphong (Fri/Sun) - Hong Kong (Tue/Wed) - Haiphong (Fri/Sun).

VH3 will also service ports in Japan, connecting to the Japan/Hong Kong Straits route at the Hong Kong HIT terminal.

The current RSK service will be discontinued in May 2007.

DHL opens new gateway in Mexico

DHL, a unit of Deutsche Post AG of Germany (XETRA: DPB), Mar 22 announced the opening of a new gateway in Merida,

Mexico, which is projected to increase the firm’s handling capacity by more than 87% in Southeastern Mexico.

The Merida Gateway will facilitate the transshipment of goods across the US-Mexico border, as it has been authorized by Mexico to operate as a customs facility for the consolidation of the area's imports and exports.

DHL will manage the customs clearance process through a local agent, which will reduce average international delivery service times from two days to one day into the cities of Merida, Cancun, Ciudad del Carmen and Campeche.

Prior to the gateway, shipments bound to the area from the US were processed by Customs in Mexico City.

Mexico is the second largest importer of US exports and the third country of destination of US imports.

Crowley transports airport boarding bridges

Crowley Maritime Corp Mar 21 safely unloaded five, three-tunnel airport passenger boarding bridges in San Juan, Puerto Rico.

The bridges will be installed in the new wing of the Luis Muñoz Marín International Airport in Carolina, Puerto Rico.

Crowley shipped them for TransGroup Worldwide Logistics, whose cargo division specializes in the movement of oversize cargos worldwide.

TransGroup said it chose Crowley because of the company’s specialized freight handling equipment and experience in transporting oversized project cargo.

The passenger boarding bridges exceed 53 feet in length and the total cargo volume was about 1,500 cubic meters.

The airport passenger boarding bridges and associated parts were carried aboard Crowley’s 580-ft ro/ro carrier El Rey.

The company is predominantly owned by certain members of the Crowley family and company employees, and its shares do not trade on any national securities exchange or in any market.

Japan want Tyson plant denied export approval

Japanese health and agriculture ministries have confirmed a US government report that a shipment of American beef last month violated Japan's import standards.

The ministries have asked the US to remove Tyson Foods Inc.'s (NYSE: TSN) Lexington, NE, plant – the facility that shipped the beef – to be removed from the list of sites approved for exports to Japan.

On checking a shipment arriving at the port of Yokohama from Lexington on Feb 1, warehouse personnel discovered two boxes not listed on export documents.

Animal quarantine officials could not confirm whether the beef contained in the boxes were from cattle aged 20 months or younger as per the rules set down by both countries, prompting the ministries to suspend shipments from the facility in question.

Tyson Foods has eight other meatpacking plants that are allowed to export beef to Japan, but no action will be taken on those facilities.

Cosco Pacific drops 13%

Cosco Pacific (HKE: 01199) reported a 13% decline in profit last year after expenses related to the share reform of a subsidiary and on costs that included transferring operations to Shanghai.

Net profit declined to $291mn last year from $334.9mn in 2005 after a $55.18mn expense related to reform of shares at A-share subsidiary China International Marine Containers.

Sales fell 14% to $254mn.

The management said growth would improve next year when the company's Nansha Port phase two and Antwerp Terminal start contributing profit.

Throughput at Nansha is expected to reach 800,000 TEUs this year, while Antwerp should break even by the end of this year, said deputy managing director Kelvin Wong Tin-yau.

New Orleans sees rise of breakbulk

General cargo handled at the Port of New Orleans rose 21% in 2006 over 2005, despite the continued decline in container cargo handled at the port.

The port handled about 9.4mn tons of general cargo in the year, up from 7.7mn tons in 2005.

Breakbulk cargo saw a sharp spike in 2006, driven by an increase in steel shipments to the port.

Longshoremen and stevedores handled about 7mn tons of breakbulk cargo in 2006, up from 5.2mn the previous year. The breakbulk figures are also up from 2004 and 2003.

The gains in breakbulk cargo helped to offset the steady decline in container activity at the port.

The number of containers handled at the Port of New Orleans has not increased since 2004.

The downward trend was worsened by Hurricane Katrina, which wiped out the port's container terminal at France Road on the Industrial Canal.

Last year, the port handled about 175,905 TEUs, a 14% drop from the previous year and a 32% decline from 2004.

Longview signs with Siemens

Washington’s Port of Longview has entered into a contract with Siemen’s (NYSE: SI) subsidiary Siemens Power Generation to offload wind towers and turbines for several energy projects in the northwest region during 2007.

"We chose the Port of Longview for its location and also because they had experience in handling. They have specialty equipment other ports do not have," said Clare Bertel, wind transportation coordinator for Siemens.

"This is the first time we've dealt with the port for wind business, and we're very pleased with the handling and looking forward to get these on the road," said Bertel.

During 2003-06, longshoremen at Longview unloaded about 1,600 windmill parts – mostly tower sections from South Korea and China. This year alone, the port expects to unload about 1,220 parts – a mix of tower sections and turbines.

In April and May, wind generation parts for the Cowlitz PUD's White Creek wind farm in Klickitat County are scheduled to start arriving at the port.

A ballot measure voters passed last year will likely encourage more wind energy investment in Washington, and the port is poised to take advantage of its experience handling wind energy parts.

Port Marketing Director Gary Lindstrom said that wind energy is a cutting edge market and one that a lot of people want to be involved in it as a business.

RFID cuts time in Thailand

Savi Networks and Western Digital (NYSE: WDC) have reduced time and costs from customs clearances while boosting security measures by automating shipment information from active Radio Frequency Identification (RFID) seals on freight transportation trucks in Thailand.

During the last four months, the "Secure Free Zone Project" has enabled Western Digital and Royal Thai Customs to monitor and validate in near real-time more than 11,000 trips of RFID-sealed truck trailers that transport high-performance hard drives from manufacturing and distribution facilities through Customs inspection points in Bangkok.

Having the ability to electronically validate the security and contents of a truck from origin through government inspection points has sped up Customs clearances of shipments destined for the United States.

The ongoing operation involves agreements with Royal Thai Customs and the Thailand-based TIFFA EDI Services Co Ltd, resulting in key benefits for Western Digital.

The benefits are said to include enhanced automation, a reduction in overhead, reduced waiting times for Customs clearance, less individual transaction cost and increased accuracy of shipment information.

Rhine closes to shipping

Germany’s Rhine River was closed to shipping as crews worked Mar 27 to remove more than two dozen containers blocking one of the country's major shipping routes. Some 200 ships are backed up awaiting the end of the recovery process, according to police.

The German ship Excelsior lost 31 of its 103 containers on the afternoon of Mar 25.

By Mar 27, one had been retrieved, but a 12-mile stretch of the Rhine around Cologne remained closed to shipping.

Removal efforts were focused on three containers loaded with industrial glue, although officials said there was no danger of significant environmental damage.

German Transport Minister Wolfgang Tiefensee, who visited the site Mar 27, said he hoped traffic could resume by Mar 30.

A crack in the cargo ship's hull is suspected to have led to the Mar 25 accident. Initial investigations suggest that water may have leaked in through the crack. The ship then listed and shed containers.

US, Israel to secure containers

The US and Israel signed a declaration of principles to help prevent smuggling of nuclear and other radioactive material.

Customs officials of both countries cosigned the declaration, which will bring the US Customs and Border Protection's Container Security Initiative to the ports of Haifa and Ashdod in Israel.

"Securing global trade is a major priority for CBP, so I am pleased to be partnering with Israel to expand the Container Security Initiative," said CBP Commissioner W. Ralph Basham. "We are committed to using high-tech equipment and smarter, more secure containers to safeguard the supply chain, and realize that cooperation from our friends around the globe is our most potent weapon."

Following the signing of this declaration, the two nations will work to fully certify the two ports during the next six months.

CBP also has signed a declaration with Panama and hopes to certify CSI operations at the ports of Colon, Manzanillo and Balboa this fiscal year.

Launched weeks after the terrorist attacks of 2001, CBP's Container Security Initiative is a cooperative effort with host country governments to identify and screen high-risk shipments before they leave participating ports.

Serco wins $64mn anti-terrorism deal

Serco Inc announced Mar 27 that it was awarded a 5-year, $64mn contract by the Space and Naval Warfare Systems Center (SPAWAR) to supply engineering and technical services for integrated surveillance and intelligence systems that protect ships and infrastructure at US Navy ports.

Under the contract, Serco will support SPAWAR in evaluating, integrating and installing domain awareness and anti-terrorism and force protection (AT/FP) systems at ports that have Naval, Coast Guard and critical commercial operations.

The systems, already deployed at several US ports, include sensors, surveillance systems and other technology, along with software that allows the information to be shared rapidly across several agencies.

Through the award, the company will support ship and shore sites of the US Navy, US Coast Guard, Military Sealift Command and other government agencies worldwide.

Serco has operated under a similar contract with SPAWAR since 1997.

Cypriot-registered ship aground

A cargo ship was beached Mar 27 off a Danish island in the Baltic Sea. There were no reports of injuries or oil spills, according to the Danish navy.

The Cypriot-registered vessel Skarpoe was empty when it ran aground in shallow waters off the island of Bornholm, the navy said, saying one of its environmental protection ships was heading to the area.

Port of Bridgetown secures with RFID

The Port of Bridgetown in Barbados is installing an RFID system to provide security as it prepares for the Cricket World Cup final games in April 2007.

The Cricket World Cup will bring increased passengers and cargo and with them greater security concerns.

The system includes AXCESS International's ActiveTag technology and infrastructure for tracking of vehicles and personnel around the port, in addition to wireless sensors and underwater cameras.

Using RFID, the port can monitor whether an individual has entered a secure area of the port, or an area where they are not permitted. In that event, the ActiveTag system sends an alert to security personnel by electronic means (e-mail, pager or visual alert on a PC).

Trucks, taxis and other vehicles that enter the port are being tagged with dual active-passive read-write RFID tags. The port security management system can monitor when a vehicle enters an area of the port that is off limits.

The Port of Bridgetown, managed and operated by Barbados Port, is a general services gateway used by cargo and cruise ships.

US indicts Clipper Group firms

THREE subsidiaries of the Clipper Group were indicted Mar 27 due to an alleged attempt by crew members to cover up the illegal dumping of oily waste in international waters, the US Department of Justice said.

The 11-count indictment, in connection with the MT Clipper Trojan, named as defendants Clipper Wonsild Tankers Holding and Clipper Marine Services, which operate and manage the vessel, as well as its owner, Trojan Shipping Co Ltd.

The indictment said tanker crew members dumped oil sludge overboard twice, routinely dumped oil-contaminated bilge water overboard, and obstructed an investigation by the US Coast Guard.

Each company was charged with one count of conspiracy, one count of violation of the MARPOL Protocol, one count of making and using materially false writings and documents, seven counts of obstruction of justice, and one count of concealment of a tangible object to obstruct an investigation.

If convicted, the companies face statutory maximum fines of $500,000 on each count of the indictment or twice the amount of any gain to the corporations that occurred as a result of the criminal conduct.

AAPA lauds pollution bill

THE AMERICAN Association of Port Authorities (AAPA) Mar 28 praised the passage of a bill in the US House of Representatives that would strictly limit air emissions from ships visiting US seaports.

The Maritime Pollution Prevention Act of 2007 (HR 802) would establish the legal changes needed to bring the US into compliance with the International Convention for the Prevention of Pollution from Ships (MARPOL Convention) Annex VI.

AAPA President and CEO Kurt Nagle said that while ports are making efforts to reduce land-based air emissions, they cannot control emissions from unregulated oceangoing vessels sailing under foreign flags.

Nagle said implementing MARPOL Annex VI will bring the US into compliance with the international standards for vessels that operate worldwide and, thus, should be subject to international requirements.

MARPOL Annex VI entered into force in May 2005. The international treaty sets limits on sulfur oxide emissions from ship exhausts.

Bush hampers trade Cuba says

CUBA signed up to import more US food products Mar 27 but said payment procedures introduced by the Bush administration in 2005 are still hampering trade and forcing it to make deals with other countries.

Cuba has been importing food from the US since 2000, when cash-only food sales were permitted as an exception to the US trade embargo.

Procedural rules imposed in 2005 made the US an unreliable supplier and forced Cuba to look to other suppliers, said Pedro Alvarez, head of Alimport, Cuba’s food import agency.

Cuba will import $1.6-$1.7bn worth of food this year from other countries, Alvarez said.

Alvarez said rules, including a stipulation that Cuba must pay before cargo ships leave US ports rather than before unloading in Havana, were an obstacle to increasing US food imports.

Cuba imported $340mn of US food products in 2006, and Alimport, recently signed $60mn worth of new contracts with a delegation from Nebraska for wheat, pork and soy beans.

Alvarez said that bilateral trade in goods and service could total as much as $21bn in just five years if the US embargo were lifted.

Eimskip USA starts new Maine run

EIMSKIP USA will begin weekly stops in Portland, ME in April 2007, resuming the firm’s weekly shipments to the port after eight months without service.

The 416-foot Westerkade, which can carry about 350 40-ft containers, will connect Portland each week to ports in Boston, New York/New Jersey and Halifax, Nova Scotia.

Eimskip USA Mar 27 said it will operate the service as a common carrier serving multiple steamship lines. The Westerkade is scheduled to make its first port call on Apr 11.

Officials say the new service should lower shipping costs for Maine companies and generate $1.5mn in direct and indirect economic benefits to the area.

The cargo ship previously used for the service, the K-Wind, stopped making port calls when it was seized in Canada because of a financial dispute between the ship's owner and a subcontractor.

Eimskip USA is the general agent in the US for Eimskip, a leading transportation and investment company in Iceland and one of the country’s largest privately owned firms.

Kingston Wharves plans $26mn expansion

KINGSTON Wharves Ltd (JSE: KW), looking forward to increased business after the widening of the Panama Canal, is spending $26mn to create space for larger ships.

The expansion will add 1,250 feet of berth space operated by subsidiary Kingston Container Ports.

The first phase of the new berth will be completed by May 2007 and the rest by the end of July 2007.

When completed, the berths will also allow for increased container storage capacity.

KW, which recorded net profits of approximately $500mn last year compared to $70mn three years ago, is also expanding its fleet of container handling equipment.

CKYH Alliance to restructure AWE Service

The CKYH Alliance – COSCON, K-Line, Yang Ming, and Hanjin Shipping – said Mar 30 it will upgrade AWE-1, AWE-4, and AWE-5 among 5 CKYH AWE loops by revising its routes to provide regionally differentiated service, such as North Loop, Central Loop and South Loop starting from May 2007.

CKYH partners will cooperate to run a total of three South/ Central/ North Express Services by deploying 24 4000-TEU Panamax ships.

Through the restructuring, the CKYH Alliance said it will be able to provide customers with direct calls to Xiamen and express service that links South/ North China to the US East Coast.

Transit time from Hong Kong to New York will be shortened to 22 days and 23 days from Shanghai to New York. With this more reliable schedule, new AWE service will then compare favorably with MLB service in terms of transit time.

The launch of direct link from Qingdao/ Ningbo/ Shanghai to Wilmington offers service variation as well as less transit time and schedule reliability.

The port calling of the five AWE Loops is:

New AWE South Loop: Chiwan, Yantian, Hong Kong, New York, Norfolk, Savannah, Chiwan.

New AWE Central Loop: Xiamen, Hong Kong, Yantian, Ningbo, Shanghai, Busan, Savannah, Norfolk, Charleston, Xiamen.

New AWE North Loop: Qingdao, Ningbo, Shanghai, Busan, New York, Wilmington, Savannah, Busan, Qingdao.

AWE2 Loop: Qingdao, Shanghai, Yantian, Hong Kong, Charleston, New York, Boston, Qingdao.

AWE3 Loop: Hong Kong, Yantian, Kaohsiung, Pusan, Savannah, Wilmington, New York, Kaohsiung, Hong Kong.

Bulk shipper sees 2.4% growth in profits

Profits rose 2.4% at China Shipping Development as volume growth helped ease the impact from falling freight rates and rising fuel costs.

The mainland dry bulk and crude oil carrier said its net profit rose to 2.75bn yuan from 2.69bn yuan a year earlier, in line with market expectations. Sales rose 12% to 9.8bn yuan.

CSD moved 14.4% more crude oil last year, giving it revenue of 5.4bn yuan, and 4.7% more coal for an income of 3.5bn yuan.

But CSD’s profit margin for coal and oil transport fell by 3-4% to 34% due to a drop in freight rates and an increase in fuel cost.

The firm expects the Baltic Dry Index to stay firm this year amid strong demand for iron ore, coal, steel and cement on the Chinese mainland.

CSD forecast additional demand for 30mn tonnes of coal annually up to 2010, and said it has secured contracts to transport coal for 2007 at a slightly higher rate than in 2006.

STX Pan Ocean orders car carriers

STX Pan Ocean is expanding its fleet of car and truck carriers, diversifying from its dry bulk business to lessen the impact of unstable freight rates.

STX commissioned major shareholder STX (Dalian) Shipbuilding to build four new carriers for around $300mn, banking on the current worldwide shortage of carriers and growth in the Korean and Chinese car export industry.

Each vessel has a 6,700 vehicle capacity. Two will be delivered in 2009 and two in early 2010.

STX plans to spend $800mn on 16 vessels in 2007.

The company says the car carrier business yielded gross margins of 27% for FY2006.

PGM engineers admit dumping waste

The chief engineers of the car-carrier ships M/V Tanabata and M/V Fideli and vessel operator Pacific Gulf Marine of Gretna LA pled guilty to charges related to the deliberate discharge of oily bilge waste through "magic pipes" that bypassed required pollution prevention equipment.

Stephen Karas, former chief engineer of the M/V Tanabata (renamed the M/V Resolve), pled guilty Mar 29 to conspiracy and making false statements. Deniz Sharpe, former chief engineer of the M/V Fidelio (renamed the M/V Patriot), pled guilty Mar 7 to violating the Act to Prevent Pollution form Ships (APPS).

PGM pled guilty to charges related to deliberately discharging hundreds of thousands of gallons of oil-contaminated bilge waste from four of its giant car-carrier ships used to transport vehicles, including the Tanabata and Fidelio.

In agreeing to plead guilty last June, PGM admitted that its shore-side management “failed to provide sufficient management resources and support to the ships, and also failed to exercise sufficient supervision and management controls to prevent or detect criminal violations by its employees.”

The motive for the criminal conduct was to save money, according to papers filed in court.

After learning of the federal investigation, PGM voluntarily disclosed to the United States the results of an internal investigation comprised of approximately 50 reports of interviews with various current and former employees who had worked aboard the from vessels used to transport vehicles.

Railroads test new brakes

Railway firms Norfolk Southern (NYSE: NSC) and BNSF (NYSE: BNI) will test a new braking system aimed at reducing stoppage time.

The project, authorized by the US Federal Railroad Administration, calls for NSF and BNSF to equip and test electronically controlled pneumatic (ECP) brakes on certain locomotives and freight cars.

ECP brakes, which can reduce train stopping distances by up to 50-70% over conventional air brakes, use electronic signals to apply and release brakes simultaneously throughout the length of a train.

By contrast, conventional brakes require each car to brake individually as air pressure moves from car to car.

If the tests succeed, they could improve railroad and public safety, network capacity and efficiency, asset utilization, fuel savings and equipment maintenance.

NSF plans to equip 30 locomotives and 400 rapid-discharge coal cars with ECP brakes during 2007 and use the equipment in dedicated coal train service.

BNSF will test the technology within its intermodal fleet, focusing on international business in the Ports of Los Angeles and Long Beach.