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Summary for March 31, 2014 through April 4, 2014:
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Monday, March 31, 2014 Top StoryStriking and independent truckers at Port Metro Vancouver reach deal
Premier Christy Clark announced the port would be open for business Thursday after talks in the legislature involving several Liberal cabinet ministers and representatives from more than 1,500 union and non-union truckers. The port said Thursday that trucking activity at the Vancouver terminals will take up to two weeks to return to normal as truckers and companies resume their operations. Under the new deal, truckers who go back to the port will get more cash for container moves. Canada agreed to increase trip rates by 12 percent more than 2006 rates within 30 days. The government of Canada also agreed to regulate a benchmark minimum rate for hourly drivers — likely to be $25.13 for new hires and $26.28 for drivers with one year of service. Truckers will also get relief in the form of a new escalating fee deal to handle long wait times at the port. After 90 minutes of waiting, owner-operators will be paid $50. By two hours that fee increases by another $25. At two-and-a-half hours another $25 will go to the drivers, and every half-hour after that they'll receive $20. "The outcome is an outcome we'd been looking for all along," said Unifor president Jerry Dias. "It's not just a solution for the short term, it's a solution for the long term." There are financial wins in the plan for truckers," said port CEO Robin Silvester in the statement. "It is in all of our best interests that truckers come out of this dispute with their issues resolved because disruptions like this hurt each of us." For more of the Vancouver Sun story: vancouversun.com Port of Oakland in talks with business group over waterfront ballparkThe Port of Oakland will enter into exclusive talks with a business consortium that wants to build a waterfront stadium for the Oakland A's. The Oakland Board of Port Commissioners sanctioned the talks. Although the baseball team's co-owner Lew Wolff said he has no interest in a stadium at Howard Terminal, the port and the business consortium, which includes Clorox CEO Don Knauss, developer Mike Ghielmetti and former Dreyer's Grand Ice Cream CEO T. Gary Rogers, are interested in pursuing talks about a waterfront baseball stadium. The business consortium wants an additional two-to-three-year option period, during which they would apply for permits and conduct a $1 million environmental review of the site. The agreement, which was approved 5-0 with one abstention Thursday, requires the business group to deposit $100,000 with the port, half of which could be used for studies such as land appraisals and site surveys. For more of the Inside Bay Area story: insidebayarea.com Great Lakes shipping industry to spend $500M for infrastructure upgradesThe Great Lakes and St. Lawrence Seaway system is spending $500 million over the next four years to rebuild lock walls and gates and automate the system of 15 locks that connect the eastern Great Lakes with the St. Lawrence River. In addition, the shipping lines that move industrial and agricultural goods are investing a collective $1 billion for new ships that are larger and more efficient. "Manufacturing is picking up. Construction is picking up. So that should help exports," said Terence Bowles, CEO of St. Lawrence Seaway Management Corp. "We're not just rebuilding the locks and infrastructure, we're also introducing new technology to make the waterways more efficient, more safe and more reliable," Bowles said. The Canadian Coast Guard's ice breaking ships have been clearing paths through the St. Lawrence for about a week. Two smaller U.S. icebreakers were expected to reach Thunder Bay port this week. On Wednesday, ice in the Thunder Bay harbor was about three to four feet thick, about a foot thicker than usual. That might be too much for the small breakers, but will be simple work for the larger ships such as Canadian breaker Pierre Radisson, which is expected by this weekend, according to Tim Heney, CEO of Thunder Bay port. For more of the Globe and Mail story: theglobeandmail.com Survey: Virginia is top ship building employerA new survey shows Virginia is the top ship building state in the U.S. According to 2011 survey data released by the American Maritime Partnership and the Shipbuilders Council of America, more than 63,000 jobs related to ship building, repair and maintenance are located in the state of Virginia. The Virginia ship industry pours more than $5.5 billion into the state economy each year, the survey says. "It is no surprise that Virginia leads the nation in U.S. shipbuilding, because one in every ninety jobs in the state is directly or indirectly related to the industry," said Matt Paxton, president of the Shipbuilders Council of America. For more of the Daily Press story: articles.dailypress.com Zim reports 2013 lossesIsrael Corp, one of Israel's largest holding companies, reported a big loss in the fourth quarter due to losses from its shipping subsidiary Zim and less profits from its chemicals unit. The corporation announced a quarterly net loss of $406 million, compared with a $306 million loss a year earlier. Shipping unit Zim, negatively affected by the economic downturn, lost $282 million in the October through December of 2013. Not counting extraordinary expenses, Zim's annual loss was $113 million. Zim is in the middle of a financial restructuring. In January, the firm agreed to a deal with the majority of its creditors that will see part of its debt traded for shares and decrease Israel Corp's stake in the shipping company to less than one-third. For more of the Reuters story: reuters.com
Top StoryPort Authority of NY/NJ chairman David Samson resigns
Samson has been in the spotlight since January when emails were released that suggested he was more worried about Christie's political fallout than he was about people stuck in the traffic gridlock caused by the closures. Federal officials are investigating possible conflicts of interest between his port role and his position at his law firm. Gov. Chris Christie announced the resignation as he tried to separate himself from any involvement in the scandal, pointing to an investigation he commissioned that exonerated him from any wrongdoing. For more of The New York Times story: nytimes.com BMW announces $1B facility expansion in South CarolinaBMW announced Friday the company is spending $1 billion to expand its plant in South Carolina to manufacture two new X-series vehicles. The German carmaker will make the X7, a bigger SUV with three rows of seats similar to a Cadillac Escalade. The firm will also make the X4, a sportier version of the X3 coupe and plans to build a plug-in hybrid version of its smaller X5 SUV. The $1 billion will be spent through 2016 at the factory in Greer, just down Interstate 85 from Spartanburg. BMW said it would hire 800 additional workers, bringing total employment at the plant to 8,800 people. The Greer plant will make 450,000 vehicles a year by 2016, which will make it the largest BMW plant in the world. For more of the Bradenton Herald story: bradenton.com Long Beach harbor commission president calls out head of Pacific Merchant Shipping AssociationThe president of the Board of Harbor Commissioners, Doug Drummond, criticized the head of the Pacific Merchant Shipping Association for spreading "misinformation" about the Port of Long Beach. In a prepared statement, Drummond called out PMSA president John McLaurin, whose organization represents West Coast shipping lines and marine terminal operators, saying he "continues to spread misinformation and is encouraging an effort to create a statewide port authority." On Monday, McLaurin denied ever advocating for a statewide port authority. McLaurin has been a vocal critic of the politics that surrounds the operation of the Port of Long Beach. At his State of Trade and Transportation address in January, he stated the ongoing "political drama" between Long Beach city and harbor officials and within the Harbor Department is hurting the port. He was particularly critical of the port losing executive director Chris Lytle to the Port of Oakland. Drummond called McLaurin's attacks "detrimental to the reputation of the Port of Long Beach and ... undermine the goals of his own organization." Drummond noted the port's success in filling several key positions internally and an executive director search that is expected to be complete in June. He said the Harbor Department and City Hall have formed a more cooperative relationship, and highlighted the appointment of Commissioner Lori Ann Farrell, whose fiscal expertise will help rein in project construction costs. For more of the Press-Telegram story: presstelegram.com U.S. manufacturing accelerates in MarchU.S. manufacturing expanded faster in March, driven by gains in production and orders. The Institute for Supply Management's index increased to 53.7, up from 53.2 in February, and lower than the Bloomberg analysts' average of 54. "The weakness we saw in the very early part of this year is going to abate and we'll see better growth," said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York. "We're making our way back to something that's more sustainable." For more of the Bloomberg story: bloomberg.com Port workers suffer burns at Port of BrownsvilleTwo workers suffered second-degree burns Monday morning after an accident at the Port of Brownsville. The two men were using blow torches to cut metal at All Star Metals, when sparks ignited a flammable liquid causing an isolated explosion on one of the vessels they were working on, according to Port Director Eddie Campirano. Port Chief of Police Carlos Garcia said the men were taken to Valley Regional Medical Center in Brownsville. For more of The Monitor story: themonitor.com
Top StoryDrewry: Overcapacity will keep shipping industry down until 2016
The sharp spike in deliveries of new ships with capacities of at least 8,000 TEUs has resulted in big declines in spot freight rates, especially on the Asia to East Coast South America trade, according to the publication. Although larger ships may provide lower unit costs, the supply-demand imbalance and shipping lines' efforts to protect market share is a lethal combination for profitability, Drewry says. This is why all energy is concentrated on cutting costs and Maersk Line remains the "best in class." Drewry forecasts 5.7 percent global supply growth for 2014, followed by 6.7 percent in 2015, with the emphasis on the delivery of 115 more ULCVs and also a large number of ships ordered in the 8,000- to 10,000-TEU realm. The impetus of new ship orders is being fed by outside equity. Container Forecaster notes NYK and Cosco will soon announce new orders and CMA CGM will upgrade some of its ships to the 18,000 TEUs. Drewry is forecasting global demand growth of just over 4 percent, but they say there is not real chance for the industry to recover until 2016, and this is still depending on ship orders moving forward. Although the industry is scrapping ships at record levels, Drewry says the delivery profile over the next 24 months will continue to raise global fleet capacity and shipping lines will not have much long-term success with their general rate increase initiatives. "Two major fights will continue for the carriers this year to win contract and spot business," said Neil Dekker, Drewry's head of container research. "The larger battle will be waged in the spot market arena, which suggests that rate volatility will continue for the time being." Hamburg-Süd may reopen negotiations with HapagLloydHamburg-Süd's CEO Ottmar Gast said the shipping line might reopen negotiations for a merger with HapagLloyd, after a failed attempt earlier this year. At his company's annual media conference Tuesday, the CEO said a "three-way alliance may be on the agenda at some point" now that Hapag-Lloyd has successfully joined operations with Chile's Cia. Sud Americana de Vapores, also known as CSAV. "It would be good to offer a more global product portfolio, so we remain open and interested to manage at some point what we didn't manage last year," said Gast. The merger attempt between Hamburg Süd and Hapag-Lloyd failed because shareholders for both companies couldn't agree on terms. Hamburg Süd posted a 1 percent rise in volume to 3.3 million TEUs last year, while sales fell 3.9 percent to $7.3 billion on low freight rates, Gast said. The shipping line, which operates 103 container vessels and is owned by the Oetker family, does not disclose profits. For more of the Bloomberg story: businessweek.com Jamaica and China ink agreement for transshipment hubJamaica has signed a preliminary agreement with China Harbour Engineering to build a controversial transshipment hub off its southwest coast, in an ecologically protected area. The initial agreement with one of China's leading construction companies would develop the Portland Bight Protected Area, also known as the Goat Islands. The area functions as a breeding ground for fish and other marine life, and local environmentalists are fighting the project. "A project which does not harm the environment, and will improve people's living standards, must be explored," said Omar Davies, the cabinet minister responsible for the agreement. He reportedly called the deal a "win-win situation." The project will be an addition to the existing port of Bustamante in Kingston and is to facilitate quicker distribution of containerized goods, primarily from China, throughout Jamaica. China Communications Construction Co., the parent company of CHEC, has said the development will take five years to complete. For more of the Reuters story: reuters.com APM and China Shipping to collaborate on container terminal projectsOfficials from A.P. Moller-Maersk and China Shipping met in Belgium for a formal signing ceremony, intending to expand discussions to collaborate as joint venture partners on new container terminal projects, according to a statement from APM Terminals Management. China Shipping Group runs China Shipping Terminal and China Container Shipping Lines and reportedly wants to develop its European port network. Xi Jinping, the president of China, attended the signing with a Chinese trade delegation, the statement said, and was hosted by the prime minister of Belgium, Elio Di Rupo. In March, China Shipping Terminal signed a Memorandum of Understanding with APM Terminals Zeebrugge for a 24 percent stake in the terminal, according to APM. APM Terminals Zeebrugge remains the majority shareholder and operator of the terminal with a 51 percent stake, and Shanghai International Port Group has 25 percent share. Port operator China Merchant Holdings raising $2B to pay debtPort operator China Merchant Holdings International announced it intends to raise $2 billion through the issuance of mandatory convertible securities in order to pay its debt and expand construction. The port operator will sell between 505.4 million to 509.8 million units of mandatory convertible securities to shareholders, it announced on Sunday in a statement to the Hong Kong stock exchange. The company said it would use 55 percent of the net proceeds to pay off debt, 40 percent to spend on ports and related construction, and 5 percent for general working capital. For more of the Bloomberg story: businessweek.com Cargo ship sinks after hitting passenger vesselThe cargo ship Journey sank after crashing into the Lambelu, a passenger vessel that was berthed at Tanjung Perak Port in Indonesia on Tuesday. After the crash, 133 containers on their way to Lembar Port in West Nusa Tenggara entered the sea and could not be salvaged. Once the Journey pulled up anchor, ocean currents carried the ship toward the Lembelu, which was berthed at Tanjung Perak Port. No injuries were reported. For more of the Jakarta Post story: thejakartapost.com
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Striking Unifor truckers and independent truckers at Port Metro Vancouver went back to work Thursday, under a tentative deal brokered at the B.C. legislature.
David Samson, chairman of the Port Authority of New York and New Jersey, resigned his position Friday amidst an investigation into the 2013 lane closures of the George Washington Bridge.
Exacerbated by the steady delivery of new ships, the shipping industry will remain in a down cycle until 2016, with the global vessel gluy impairing the balance of the north/south trades, according to the first quarter Container Forecaster publication by Drewry Maritime Research.