Hub Group acquires Exel Transportation Services for $83 mil; changes name to “Mode”
The Hub Group announced it has purchased Exel Transportation Services from Deutche Post DHL for $83 million, making the third party logistics firm a wholly-owned subsidiary with a new name: Mode Transportation.
"We are extremely pleased to welcome Mode's independent business owners, employees, and customers into the Hub Group family," said David Yeager, the Hub Group’s chairman and chief executive officer. "This is an important day in the history of Hub. We are bringing together two strong and successful companies with highly complementary service offerings. Mode is the strongest third-party agent network in the industry with outstanding customer relationships and a diverse portfolio of solutions, including temperature-protected services. We are looking forward to working with the Mode Transportation team to continue its growth and expansion in the years to come,” Yeager said in a statement.
The former Excel Transportation consists of approximately 300 independent business owners that sell and operate the logistics business throughout North America, with corporate offices in Dallas and Memphis.
Exel Transportation's sales for the year ended December 31, 2010 were approximately $717 million, according to the Hub Group.
The company’s intermodal revenue was $294 million; truck brokerage revenue was $279 million; and LTL revenue checked in at $85 million last year.
Hub Group’s 2010 revenue was $1.83 billion.
Exel’s leadership team, including President Jim Damman, will continue in their roles with Mode Transportation, according to the Hub Group.
Mode Transportation will remain headquartered in Dallas, Texas, the company said.
U.S. auto sales jumped 17 percent in March
Auto sales in the U.S. jumped 16.9 percent in March with the American economy continuing its rebound with 1,246,623 total cars sold.
Chrysler, Ford, Honda, Hyundai and Nissan led the sales growth, with Ford surpassing its rival General Motors for only the second time since 1998 with a 19 percent increase in sales at 212,295 cars.
According to a Wall Street Journal report, rising as prices have played a part in smaller cars selling better than large vehicles, especially full size trucks.
Cold Train Intermodal commemorates first year of PNW-Chicago service
The Pacific Northwest-Chicagoland Express Cold Train Intermodal Service announced its first year of refrigerated freight rail service between Quincy, Wash. and Chicago is under its belt.
Launched in April 2010, the Cold Train was spun off from Overland Park, Kansas-based Rail Logistics.
The service has been carrying primarily produce for Eastern Washington agricultural shippers in 53-foot refrigerated double-stacked rail cars hitched onto BNSF’s Z-train express service that runs from Seattle to Chicago. The train stops at the Port of Quincy’s intermodal facility on its way east that takes less than four days, according to Cold Train.
The eastbound service has doubled, according to Steve Lawson, vice president of intermodal for Cold Train with cargoes that include Washington State apples and potatoes. Westbound cargoes from Midwest shippers are increasing as well, Lawson said.
"In fact, for the past couple of months, the Cold Train has been completely full of cargo going both east and west ... we fully believe this trend will continue which is why we are adding capacity," Lawson said.
"We expect 300 percent growth this year over the operation in 2010," said Chris Mnichowski, president and owner of the Cold Train.
Mnichowski said his company plans to extend the service into the Southeast U.S. market this year.
"As the Cold Train service continues to grow, we plan on providing service to areas such as Atlanta and Florida, and then pivoting to Northeast markets in the future and eventually to the California market," Mnichowski said.
Maersk, Safmarine launch new intra-European shipping line
Maersk Line and its Safmarine have started up a new inter-European container shipping company to take over intra-European services.
The new subsidiary for common feeder services is called Seago Line and will include coverage of the Mediterranean, Russia and the Baltic States. The vessels deployed for Seago Line will be courtesy of Maersk's fleet, the company said.
Maersk stands ready to resume Ivory Coast shipping if EU lifts ban
Denmark’s Maersk said it would resume shipping services to the Ivory Coast “immediately” if the European Union lift lifts sanctions against the African country, according to Sonny Dahl, director of West Africa services at the company in a Bloomberg report.
“We always have vessels nearby the Ivory Coast ports,” Dahl told Bloomberg. “We therefore will be able to deploy vessels into the ports of Abidjan and San Pedro immediately after the EU sanctions have been lifted,” he said.
The EU announced a freeze on the Ivory Coast’s ports and of its state-owned oil company in January announced a freeze on the assets of Ivory Coast due to political unrest and the refusal of its president to step down after he lost an election in November.
Honolulu-based Pasha Hawaii announced today that when its second ship enters that trade in 2013, it will combine containerized capacity with the roll-on roll-off cargoes the shipping line has already been carrying on its M/V Jeanne Anne between the U.S. West Coast and Hawaii.
Pasha said the 692-foot “ConRo” vessel that is currently under construction at VT Halter Marine in Pascagoula, Miss., would provide fortnightly calls to San Diego, Honolulu, Kahului, and Hilo.
Pasha said the new vessel would “eliminate the need to trans-ship containerized cargo between Honolulu and the neighbor islands.”
The Marjorie C’s combo design will include 1,500-TEU capacity above and under deck, with space for 2,750 vehicles. The vessel design is licensed from the Uljanik Shipyard in Croatia, the company said.
“In addition to introducing our container capability and increased frequency to our existing clients we look forward to partnering with new clients, including the container shippers in the trade,” said Chuck Patton, Pasha Hawaii’s senior vice president.
Report: Omani group takes 15 percent stake in Hapag; Chinese could be next
German container-shipping line Hapag Lloyd reportedly has a new 15 percent owner from the southwestern Arab state of Oman.
According to a Reuters news report, an un-named source at Omani state-owned Onyx Investments Ltd said the investment group has taken a 15 percent stake from Germany’s TUI AG holding company in the world’s fifth largest shipping line.
"Onyx Investments has bought a 15 percent stake in Hapag-Lloyd," the official told Reuters.
No value for the deal was reported.
Meanwhile, Germanys Frankfurter Allgemeine Zeitung media outlet cited unnamed sources that HNA, China's fourth-largest airline, was also interested investing up to 15 percent from TUI in the shipping line.
TUI, owner of close to half of Hapag-Lloyd, has not confirmed either deal.
The shipping line is reportedly valued at between $3 and $3.5 billion.
American Airlines launches direct cargo services between L.A. -Shanghai, New York-Budapest, Dublin-Chicago
American Airlines Cargo announced it has launched a new direct service between Shanghai and Los Angeles in addition to Budapest and New York. The air carrier said it is also resuming seasonal service between Dublin and Chicago.
American Airlines said in a statement the new routes would support cargoes such as electronics from China, auto parts from Hungary and pharmaceuticals from Ireland.
EPA detects “very low” levels of radioactive materials in U.S.
The U.S. Environmental Protection Agency said this week its monitoring system has detected “very low levels of radioactive material in the United States consistent with estimated releases from the damaged nuclear reactors” in Japan.
The EPA said in a statement it has “stepped up monitoring of precipitation, milk, and drinking water in response to the Fukushima events.”
Drinking water samples from two locations, Boise, Idaho and Richland, Washington, showed trace amounts of Iodine-131 – about 0.2 picocuries per liter in each case, the EPA said.
“An infant would have to drink almost 7,000 liters of this water to receive a radiation dose equivalent to a day’s worth of the natural background radiation exposure we experience continuously from natural sources of radioactivity in our environment, the EPA said.
For the latest precipitation sampling data: pdf file
Floating houses and cars pose hazards in Japan’s shipping lanes
Shipping traffic off Japan’s coast has become a floating video game with vessels trying to dodge cars, houses and trailers that were washed out to sea by that country’s devastating tsunami from the 9.0 earthquake of March 11.
Japan’s coast guard has issued a warning to commercial and naval ships to keep up to 90 nautical miles from approximately 240-miles of Japan’s coastline that runs from close to Tokyo to Miyagi prefecture due the amount of floating debris, according to a Bloomberg report.
“Our forces have seen everything from cars to tractor- trailers to entire, intact homes floating in the ocean,” said Anthony J. Falvo, a spokesman for the U.S. Seventh Fleet in the Bloomberg story. “They have never seen anything like it.”
Japan’s NYK Line has said its ships are taking the long way around Northeastern Japan.
The floating debris can cause damage to ships such as to propellers that can take up to a week to replace at a cost of several million yen, according to Shuketsu Mizukami, general manager for MHI Marine Engineering Ltd. in Nagoya.
Gulf ports unite to woo shipping business from Asia
Container-handling ports on the U.S. Gulf Coast are united in a cause – to woo dedicated shipping business from Asia with the Panama Canal's widening for post-Panamax trade just three years away.
The ports of Houston, Mobile, and Tampa united in the effort to attract Asian service to the Gulf by traveling to Asia together and joining forces at industry events, according to a story in the Mobile Press Register.
France's CMA CGM currently has one weekly call at the Port of Mobile from Asian ports; however the service also makes several stops on the U.S. East Coast and takes a total of 51 days.
According to Alabama State Port Authority Director James Lyons, there is export shipper demand from his region to Asia but space is limited on the CMA CGM vessel.
Lyons told the Press Register that Mobile, Houston and Tampa have been in talks with several container-shipping lines, and despite some interest, he doesn't see anything tangible occurring until possibly next year.
"For an Asian service, you're looking at somewhere around 10 ships and a full complement of containers. That's a substantial commitment, and you don't do that lightly or quickly," Lyons said.
IMO says "steady progress" made in emissions meetings
The International Maritime Organization reported "steady progress" at the recently concluded third meeting in London of its working group on greenhouse gas emissions from ships.
The IMO said at the center of the emission talks was development of market-based measures that focused on "emission reductions or carbon price; revenues for mitigation, adaptation and capacity building activities in developing countries; incentives for technological and operational improvements in shipping; and offsetting opportunities."
The IMO said market-based proposals that were reviewed included contributions, or levies, "on all CO2 emissions from international shipping, or only from those ships not meeting the requirements of the Energy Efficiency Design Index (EEDI), via emission trading systems, to schemes based on a ship's actual efficiency, both by design (EEDI) and operation, based on the Ship Energy Efficiency Management Plan (SEEMP)."
The working group will report its conclusions to IMO's marine environment protection committee when it convenes for its 62nd session in July.
APL launches radiation scan procedure of Japanese exports
Singapore's APL container-shipping line announced it would commence radiation scanning on containerized Japanese exports as of April 6.
The decision to scan by APL comes in the wake of the March 11 earthquake-and-tsunami-damaged Japanese nuclear reactors north of Yokohama.
The ocean carrier said it expects to scan approximately 200 containers per day.
"We are taking this step to protect our people and to do what we can to ensure that our customers' cargo moves without delay," said APL President Eng Aik Meng. "We will continue to scan as long as it is necessary to ensure we are not putting our people or customers' cargo at risk," he said.
APL said it has also directed its ships to keep to 200 nautical miles from the reactor site and has refused bookings within the safety zone.
APL said it had commenced limited scanning March 26 with no radiation abnormalities detected on its vessels or containers.
APL said it has hired a Japanese surveying firm to scan export containers passing its Yokohama terminal in-gate. Portable detection equipment will be used to determine if boxes have been exposed to heightened levels of radiation, the carrier said.
Since the earthquake, APL said seven vessels carrying Japanese exports have been scanned at ports in Hong Kong; Los Angeles; Oakland, California; and Xiamen, China. All of the containers discharged at those ports have been cleared for delivery, the shipping line said.
According to APL, radiation scanning at Yokohama is not expected to disrupt vessel schedules and the carrier said all of its Japan services are operating normally and meeting arrival and departure times.
Cargill trades in steel scrap
Food producer Cargill traded a steel scrap swap that is tied to the May delivery of 1,000 tons of material to Turkish ports at $422 a ton, according to a Reuters report.
Steel derivatives are reportedly gaining interest among investors.
The Chicago Mercantile Exchange Group launched three steel swap contracts on Tuesday, Reuters said.
The London Metals Exchange is also reportedly considering launching new steel contracts.
Freight forwarders protest slow Customs process at Port Klang
Over 100 freight forwarders shipping through Malaysia's biggest cargo port have voiced complaints that Customs there is short on manpower, slowing down the documentation of import and export cargoes.
According to the media organization Free Malaysia Today's sources, freight forwarders held a protest at the entrance to Port Klang over the slow Customs process.
"Previously, it used to take us barely two hours to complete the documentation for goods but now it is taking two days or more. The reason given to us is that the department lacks manpower," a source told the FMT.
On March 28, 62 Customs staff was reportedly arrested on corruption charges, of which 40 were based at Port Klang.
The Port of Long Beach's home town newspaper ran an editorial on Richard Steinke, executive director of the big Southern California port, upon the news this week of his retirement at the end of September after 14 years in that position.
The editorial queried "Why would the CEO of the best-run port in the world take early retirement at the top of his game? Let us count the ways."
The editorial said Steinke has been "so gentlemanly and collaborative in his demeanor that it's hard to see how he could retain control during years of astounding growth, then a collapse of world trade, followed by the biggest increase in business in the port's history, all at a time when port pollution had become a potentially crippling theme."
The editorial goes onto reference his leadership of a "Green Port cleanup noticed round the world that is on its way, ahead of schedule, to cut total port pollution in half by 2014, and truck pollution 90 percent by next year. This is being done in a governmental environment that on paper looks unmanageable."
Panamax coal, iron-ore rates to Japan could jump 55 percent
Panamax rates for coal and iron-ore carriers to Japan could spike approximately 55 percent as that country buys more raw materials to rebuild from the large-scale damage at estimated costs of up to $309 billion, due to the devastating 9.0 earthquake and tsunami on March 11.
The forward freight agreements that are traded by brokers and used to hedge or bet on future transport costs will rise to $22,000 a day for the fourth quarter, from $14,200 today, according to Philippe van den Abeele, managing director of London-based Castalia Fund Management (U.K.) Ltd., a hedge fund trading shipping derivatives, cited in a Bloomberg report.
Japan is the biggest importer of coal and second-largest buyer of iron ore after China, estimates that the temblor and 23-foot tsunami on March 11 caused as much as $309 billion of damage.
N. Korean rice freighter sinks after collision near Bangladesh port
A North Korean-flagged ship carrying 13,500 tons of rice from Pakistan sank in the Bay of Bengal near the Port of Chittagong, Bangladesh port after a collision with another merchant vessel, according to news reports out of the region.
The entire crew of 41 was reportedly rescued.
The collision reportedly occurred around midnight on Wednesday as the vessel was approaching the estuary of the port's shipping channel.
Friday, April 8, 2011
CSX CEO: Passenger rail doesn’t make money
Passenger rail doesn’t make money nor does it make sense for it to share tracks with its freight cousin, according to the chief executive of CSX Corp.
“You can’t make money hauling passengers, so why would I want to do that? That wouldn’t be fair to my shareholders,” Ward said in a Bloomberg interview in New York.
President Barack Obama has been pushing a high-speed passenger rail initiative for the U.S. since he entered office and wants Congress to approve $53 billion more to be invested in the project over the next six years, with the goal of offering 80 percent of Americans access to this type of service within 25 years.
Ward told Bloomberg that Jacksonville-based CSX couldn’t be true to its shareholders if the third-largest U.S. railroad were to donate part of its infrastructure to the passenger rail effort where trains would travel at speeds in excess of 90 miles per hour.
Ward said existing freight tracks can’t physically support the proposed high-speed trains and building separate tracks for this type of passenger service could cost “tens of billions, if not hundreds of billions” of dollars.
United Parcel Service and its 1,136 aircraft mechanics, represented by the International Brotherhood of Teamsters, ratified a new labor agreement that runs through Nov. 1, 2013, the freight company announced this week.
The freight company’s mechanics voted in favor of the contract by a margin of 69 percent to 31 percent, UPS said in a statement.
"We are pleased that our mechanics have agreed to this contract offer," said Mitch Nichols, UPS Airlines president. "At UPS, we have a long tradition of rewarding our people while managing our business effectively. This is a great contract that meets both of those objectives."
Pier 1 Imports to invest $200 mil on infrastructure, stores, technology
Pier 1 Imports says it is going to invest approximately $200 million over the next three years on improving e-commerce, infrastructure, technology, and remodeling and opening stores.
The Fort Worth-based retailer said it has pushed up its timeline to launch sales online to early summer 2012.
The company said it would improve 90 percent of its existing stores, and plans to add 54 new stores over the next five years, taking it 1,100 total in the U.S. and Canada.
In addition to the e-commerce initiative, Pier 1 said it will also invest in technology including a new point-of-sale system, replacing older software systems and improving existing systems such as labor scheduling, merchandise planning, warehouse management and store analytics.
The company said the three-year investment plan would be funded by its cash flow from operations.
Industrial Income Trust acquires 1.3-mil sq. ft. distribution center in Atlanta for $34 mil
Industrial Income Trust Inc. announced it completed the acquisition on March 29 a 1.3 million square-foot distribution center in the Atlanta, Georgia for approximately $33.8 million.
The property is leased to the Solo Cup Company, a supplier of single use cups, plates and bowls.
"The acquisition of this distribution center strengthens our presence in the metro-Atlanta area as the I-20 East submarket is gaining popularity due to its low costs, easy access to I-20 and to the Port of Savannah," said Dwight Merriman, chief executive officer of IIT.
IIT also announced the completion of two other acquisitions in March 2011: a 235,000 square-foot distribution center in Baltimore, Maryland for $19.3 million, and 400,000 square feet of industrial warehouse space in Tacoma, Wash. for $20 million.
The industrial real estate company said the Tacoma property is considered a "value-add" acquisition because the building is currently vacant.
"The Baltimore market serves as a central location in the Mid-Atlantic corridor, providing the opportunity to reach 50 percent of the country within a 24-hour truck drive," said Mr. Merriman. "The Tacoma area continues to be appealing due to its access to the Port of Tacoma."
Ports in Europe tighten radiation checks on ships from Japan
Europe’s seaports have reportedly tightened safety checks on cargo ships calling from Japan due to the nuclear crisis there resulting from March 11’s 9.0 earthquake.
Major European ports like Rotterdam and Antwerp are screening for radiation, with the former planning to do so while a ship is still at sea, according to a Bloomberg report.
The Port of Antwerp is going to conduct radiation screening on board vessels.
Ships that departed Japanese ports after March 11 and the subsequent leaks at the Fukushima Dai-Ichi atomic plant are scheduled to reach Europe’s ports in mid-April after a 30-day journey.
“People working in the port and responsible for unloading ships and cargo from Japan are worried,” said Port of Antwerp spokeswoman Annik Dirkx.