Cargo Business Newswire Archives
Summary for March 26 - March 30, 2012:

Monday, March 26, 2012

Top Story

Maersk CEO Andersen faces another operation, extends leave

A.P. Moller-Maersk CEO Nils Smedegaard Andersen will remain on leave for another six to eight weeks, according to an announcement by the company on Monday. Until his return, the shipping company is being run by the executive board, which reports directly to Chairman of the Board Michael Pram Rasmussen.

The 53-year-old chief executive has extended his sick leave advice pending further surgery to fix a heart problem. Andersen has been convalescing since an operation to fix a leaky heart valve in late December. His return was expected on Monday, but his doctors decided on Friday he needed further surgery to resolve the problem.

Shares in A.P. Moller-Maersk, which owns Maersk Line, the world's biggest container shipping company, fell by 1.5 percent as of 11:54 GMT.

AP Moller-Maersk

- Reuters

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Congress argues over transportation bill with roadwork halt imminent

Congress continues to argue over the transportation bill less than a week from the expiration of the federal highway funding law on March 31.

If the impasse leads to a highway-program shutdown, construction workers would be laid off as soon as the states stop receiving federal funds for their pay. Up to 1.87 million jobs may be lost, according to a Senate fact sheet based on Department of Transportation data.

The Senate passed a two-year, $109 billion bipartisan bill on March 14, but Republicans in the House refused to ratify the bill, choosing instead to propose a temporary extension, which would be the ninth such extension of the highway legislation since 2009. Senate leader Harry Reid refused to discuss an extension when he urged the passage of the Senate bill last week.

Congress’ inability to pass a long-term bill has gone on for so long, the Highway Trust Fund is practically insolvent. According to the American Association of State Highway and Transportation Officials, federal road and mass transit construction monies may run out by October 2012.

The House version of the transportation bill, sponsored by Republicans only, failed to pass because majority Republicans were very conflicted over how to pay for the highway projects and over previously-committed mass transit funding.

- Bloomberg BusinessWeek Read the complete story:

DP World to pay $3 bil debt early

Dubai government port operator DP World will use cash reserves to pay back a $3 bil debt six months early, according to a company statement issued Monday.

Once the cargo handler pays off the outstanding balance on its revolving credit facility, shrinking their debt load by 40 percent, the company reportedly will still have $1.2 billion in cash reserves.

DP World became the third largest port operator in the world due to its ability to borrow billions to fund ambitious overseas expansion.

Dubai World, DP World’s parent company, last year penned a deal to restructure $25 billion in debt, one year after unbalancing world markets when it couldn't pay its bills on time.

- Google/Associated Press

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First direct cargo route from Chengdu to Paris

The Yangtze River Express will open the first direct cargo route to Paris in West China.

The new route, between Chengdu and the Paris Vatry Airport, will open on April 2, according to a company statement. A Boeing 747 total cargo aircraft will make three round-trip flights per week on the route.

"With emerging industries, such as IT, settling in Southwest China in the recent two years, Chengdu has attracted some express giants to open cargo routes to Chengdu," said DHL managing director, Wu Dongming, to China Daily.

In 2011, Korean Air, UPS, Evergreen International Airlines, Air China Cargo and Yangtze River Express all opened routes to Chengdu. The Chengdu Shuangliu International Airport's cargo handling capacity reached 406,000 tons by November 2011, a year-on-year increase of 9.1 percent, and its international cargo handling capacity reached 21,500 tons, increasing by a whopping 118.4 percent.

- China Daily

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Drifting “ghost ship” sighted off B.C.

The future of the Japanese squid boat floating of the north coast of British Columbia is uncertain. The Canadian government continues to monitor it for potential leaks or shipping lane obstruction, but is not required to do anything about the ship unless it is seen to pose a risk to other ships or the environment.

The boat went missing during Japan’s massive earthquake and tsunami last year.

Any party who retrieves the ship would have to arrange a salvage reward with the owner or owner’s insurance company if the Japanese owner still wants the damaged ship. If the owner doesn’t want it, the salvager could file a claim for an award in Federal Court.

The ship's owner in Japan confirmed to the Canadian Coast Guard that no one was thought to be on the ship when it was dragged out to sea by the tsunami.

The squid boat is part of the 18 million tons of debris thought by University of Hawaii scientists to be slowly drifting toward North America.

- Vancouver Sun

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Tuesday, March 27, 2012

Top Story

Report: EU to fine UPS, Expeditors, 11 others for airfreight price fixing

Thirteen logistics companies, including UPS, Expeditors and Panalpina, face fines stemming from airfreight price fixing charges made by the European Commission back in 2010, and those penalties are reportedly expected to be announced on Wednesday.

Reuters reports that Deutsche Post unit DHL Global Forwarding, took part in the cartel but subsequently alerted regulators about the collusion, and will not be fined.

For the full Reuters story:

Did FastShip take too long?

An almost twenty-year journey towards launching high-speed combination cargo ships between Philadelphia and Cherbourg, France could reportedly be coming to an end, with Chapter 11 filed, no vessels built and investors connected to the likes of Campbell Soup and DuPont who might not see a financial return.

The Philadelphia Inquirer reports FastShip Inc. has filed for bankruptcy and has launched a patent lawsuit against the U.S. Navy.

"It's a creative use of Chapter 11 to preserve our creditors and fund the litigation," FastShip Chief Executive Officer Roland K. Bullard said to the Inquirer.

FastShip raised its first $10 million in the mid-1990s, principally raised from the Delaware Port Authority and Philadelphia's prominent shipping family, the Holts.

The shipping firm's goal was to build at least three of the high-speed cargo vessels at a U.S. shipyard along with developing corresponding, specialized cargo-handling terminals at a total cost of $2 billion.

According to the FastShip website, the service would offer "time-definite portgate-to-portgate delivery in five days and enabling breakthrough door-to-door delivery times: for example, seven days Frankfurt to Chicago for full containers, eight days for partial containers (LCL); New York to Paris would be six days for full containers."

Many more investors were added over the ensuing years, including the aforementioned heirs to Campbell Soup and Du Pont, in addition to political support that included Sen. Arlen Specter (R-PA).

However, the global economic collapse, multi-millions of dollars in debt, and no vessels or port infrastructure to show for the effort, has reportedly left the fledgling shipping company with a last-ditch effort to sue the U.S. Navy over alleged patent design infringement with the new littoral combat ships.

For the Philadelphia Inquirer's full coverage of the FastShips story:

Georgia to use $99 mil settlement windfall on infrastructure

The state of Georgia reportedly plans to use the $99 million it will receive from the national mortgage fraud settlement to fund infrastructure improvements throughout the state in order to attract more business, manufacturing and jobs there.

The funds would be distributed through existing grants that reportedly have already been instrumental in helping to lure manufacturing business from heavy equipment giant Caterpillar.

For the full Atlanta Business Journal story:

Rickmers and TOTE join World Shipping Council

Hamburg-based Rickmers-Linie and U.S. domestic shipping operator TOTE Inc. have joined the World Shipping Council, an association for shipping lines, it was announced.

Rickmers offers breakbulk, heavylift and project cargo services throughout the world, and TOTE Inc., through its subsidiary units, operates ro-ro, containerized, among other freight types on dedicated routes to Alaska, Puerto Rico and the Virgin Islands.

Tuesday, March 27, 2012

Pirates make first-ever reported attack off Maldives

Somali pirates attacked and seized an Iranian-owned freighter and its crew of 23 in what has been reported to be the first-ever known such hijacking in the Maldives, an island nation in the Indian Ocean.

The MV Eglantine was seized off of Hoarafush Island in the Indian Ocean atoll nation of the Maldives, according to the Maldivian National Defense Force, who said they were alerted by a global maritime distress and safety system.

As of this report, Maldivian authorities had yet to reach the hijacked vessel.


Wednesday, March 28, 2012

Top Story

European Commission levies $225 mil in fines on airfreight cartel

The European Commission announced today it is handing down $225 million penalties on thirteen airfreight firms, including Kuehne + Nagel, Panalpina, Schenker, UPS, and Expeditors for what the regulatory body said was a "breach of E.U. antitrust rules" during the years 2002-2007.

"The freight forwarders colluded on surcharges and charging mechanisms concerning important trade lanes, in particular the Europe-U.S.A. and the China-Hong Kong-Europe lanes," the EC said in a statement.

The Commission segregated the cartels into four groups: New Export System, Advance Manifest Currency Adjustment, and Peak Season Surcharge.

Kuehne + Nagel was hardest hit with approximately $54 million in fines while fellow German rival Deutsche Post and its DHL and Exel forwarding units were granted immunity for being the informant in the collusion case that led to a surprise raid by the E.C. in late 2007.

Panalpina was close behind with about $50 million in penalties.

The U.S. companies hit with fines in the cartel case are United Parcel Service, fined about $10 million, Seattle-based Expeditors, penalized for approximately $5 million, and Long Beach-based UTi Worldwide at just over $4 million.

The Commission said that in most cases, the freight forwarding companies took specific measures to conceal the cartel behavior, such as organizing a so-called "Gardening Club" and using code names based on vegetables when referring to fixing prices, and using a specific Yahoo email account for exchanges between the cartel participants.

The European Commission's vice president in charge of competition policy, Joaquín Almunia, said in the statement: "In times of crisis, it is all the more important to stamp out the hidden tax that cartels impose on our economy. These cartels affected individuals and companies shipping goods on important trade lanes. Many European exporters and consumers of imported goods may have been harmed as a result. Companies should be aware that crossing the line and colluding on prices comes at a high price, as today's decision illustrates."

Oil consuming nations could pay record $2 tril this year

Countries around the world could reportedly pay a record $2 trillion this year for oil imports if crude prices continue on the current trajectory, negatively impacting global economic recovery.

The International Energy Agency said on Tuesday, undermining economic recovery.

Sanctions against Iran, a significant oil producing region has helped the price of crude rise 15 percent from January to $128 a barrel in March, $20 shy of the peak price in 2008.

"For the first time the world will pay $2 trillion of oil import bills," Chief Economist Fatih Birol of the International Energy Agency to Reuters.

The cost of crude imports around the world have risen from $1.8 trillion in 2011 and $1.7 trillion in 2008, and if current pricing levels hold for U.S. oil imports, oil import costs would be 3.4 percent of GDP, up from 3.1 percent in 2011, Birol said.

For the full Reuters story:

Multi-purpose vessel fleet recovers at expense of container transport.for now

The multi-purpose fleet of breakbulk and project cargo vessels experienced some recovery in 2011 as non-containerized volumes rose, and should continue to rise, although by 2014, containerized shipping recovery could again pose competitive threat, according to Drewry Maritime Research report.

"Rates have started to firm again and the demand outlook is steady for both breakbulk and project cargo, while the fleet supply is under control," the report said.

Global multi-purpose vessel market share has been on a steady rise this year as the container-shipping sector, in particular, is in a prolonged slump.

Drewry reports there has not been much incentive to utilize containers for low-value, low-freight, especially when boxes aren't full, unless the container rates are equally as low.

The multi-purpose fleet is forecast to grow at about 1.9 percent per year through 2016.

Drewry says the orderbooks of many of the major multi-purpose vessel operators show that average vessel size on order is greater than the average vessel size currently operated.

"An important sign in the development of the fleet is that of increased lift capacity, where investment in new ships with greater specifications enables owners to create a niche sector for project carriers," the report said.

However, the Drewry report forecasts rising competition in the next few years for the general cargo sector rising again from container-shipping and roll-on, roll-off transport.

"Over the past year we have heard more and more stories of [general] cargo moving in containers," said Susan Oatway, the author of the Drewry report.

"A number of the major lines have invested in open-top or flat-rack containers, designed specifically to carry the heavy, awkward cargoes that used to be the preserve of the project carrier fleet. And a number of lines have told us they are aggressively marketing this service," Oatway said.

OPIC to hold small business export workshops in U.S. cities this year

The U.S. Government's Overseas Private Investment Corporation announced it would hold four workshops at cities around the U.S. this year with a focus educating small businesses and investors on expanding into overseas markets.

The "Expanding Horizons" events will include presentations on political risk insurance, accessing capital for overseas projects, and how to gain special support for renewable and clean tech projects, OPIC said in a statement.

The workshop schedule is:

For more information or to register go to:

Greek shipping firm fined $2 mil by U.S.D.O.J for pollution cover-up

Greece's Ilios Shipping Company S.A. will have to pay a court-ordered criminal penalty of $2 million for violating U.S. oil pollution law.

The Department of Justice released a statement this week that said the bulk carrier MV Agios Emilianos consistently discharged oily waste at the Port of New Orleans from April 2009 to April 2011 without using prevention equipment and that the crew intentionally covered up the illegal activity.

The National Fish and Wildlife Foundation will receive $250,000 out of the fine marine habitat restoration projects.


Thursday, March 29, 2012

Cargo Business News Breaking Story

U.S. House forces Senate's hand and passes 90-day transportation funding extension

The House of Representatives voted to extend transportation funding two days before the deadline that would have caused highway and related projects to close down around the U.S., leaving the Senate little to no room to maneuver with a final decision needed by Saturday night.

"They run off on their vacation and leave the people twisting in the wind," said Sen. Barbara Boxer (D-Calif).

Boxer was instrumental in the Senate bill that to date, had failed to gain enough traction in the House, in part due to Republican House leaders' attempts to push an offshore oil-drilling proposal through.

As the Washington Post reports, the House vote comes on the eve of the launch season for highway projects.

For the full Washington Post story:


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