Westbound trans-Pac lines want new round of rate increases
Shipping lines engaged in the U.S. -Asia westbound trade announced recommended freight rate increases ranging from $50 to $200 per-forty-foot container.
The latest proposed round of what the Westbound Transpacific Stabilization Agreement referred to in a statement as "incremental rate increases" would be effective as of May 15.
The WTSA said its scheduled rate hikes would be: $50 per-FEU for Asia-bound dry commodity shipments departing Long Beach, Los Angeles and Oakland; $100 per-FEU for all other cargo via intermodal services through the Pacific Northwest ports or all-water; and $200 per-FEU for frozen vegetables and miscellaneous refrigerated cargoes not covered under commodity-specific programs, for all origins and Asian destinations.
The WTSA's executive administrator, Brian M. Conrad, said in a statement, "successive rate adjustments taken in recent months have been modest and aimed at incrementally restoring rates in the trade to compensatory levels after a period of significant erosion."
"The diverse and often seasonal nature of westbound traffic makes it necessary to adopt multiple increases for cargo moving under contract throughout the year," he said.
Rotterdam port group enters joint venture in Brazil
The Port of Rotterdam Authority announced it would develop an almost 2,500-acre greenfield port for oil and dry bulk cargo handling with Brazilian partners in Espirito Santo state, north of Săo Paulo and Rio de Janeiro.
Rotterdam's principal partner in the Porto Central cargo-handling complex is Brazil's Terminal Presidente Kennedy.
The Port of Rotterdam sad in a statement that its primary role in the project would be its "expertise and knowledge in the field of port management."
"The port authority's foreign policy is geared towards strategic joint ventures and new international participations, such as that realized in recent years in the port of Sohar, Oman," the port said in a statement.
In 2010, the Rotterdam port group said it was asked by the Brazilian government to review a comprehensive strategic study into remodeling of Brazil's 34 ports.
Porto Central could be open for business within a few years, the Port of Rotterdam said.
Horizon Lines terminates five vessel charter agreements
Horizon Lines reached an agreement with Ship Finance International Ltd. to terminate five charter vessel contracts, according to statements released by both companies.
The deal will offer Ship Finance, the owner and operator of the 2,824-TEU vessels that were built in Korea in 2006, warrants exercisable into ten percent of the common stock of the restructuring Horizon Lines, Inc and $40 million in second lien notes, the companies said.
"Ship Finance will become a large stakeholder in the restructured Horizon Lines and expects to benefit from both the interest on the notes as well as the value of securities received," said the chief executive of Ship Finance Management AS, Ole B. Hjertaker.
"The redelivery of the five vessels to Ship Finance will enable Horizon Lines to focus entirely on its core domestic U.S Jones Act container market, and Horizon Lines should be well positioned to deliver positive results going forward," Hjertaker said.
Charlotte-based Horizons Lines says it has completed transactions with over 99 percent of its noteholders that will slash $188.4 million worth of the shipping company's debt.
"The significant deleveraging resulting from these transactions greatly improves the company's cash flow and liquidity, allowing for greater financial flexibility and stability," said Michael T. Avara, executive vice president and chief financial officer for Horizon Lines.
South Carolina Supreme Court to rule on Savannah River deepening permit
A lawsuit filed by environmental groups last month against a controversial permit approved by South Carolina's Department of Health and Environmental Control that green lighted dredging of the Savannah River has reached South Carolina's Supreme Court, which said Monday it would rule on the dispute.
The Southern Environmental Law Center on behalf of Savannah Riverkeeper, South Carolina Coastal Conservation League, and the Conservation Voters of South Carolina filed the lawsuit.
Iran's Navy exchanged fire on Friday with 9 suspected Somali pirates who had reportedly hijacked a Chinese freighter and its crew of 28 in the Sea of Oman.
Some members of the Chinese crew reportedly managed to shut the engines of the freighter down and subsequently jumped into the sea, leaving the pirates with no one on board who could effectively restart the ship, forcing them to surrender to Iranian authorities.
Wednesday, April 11, 2012
Corps approves Savannah deepening to 47 feet
The U.S. Army Corps of Engineer released its final report this week, approving the deepening of the Port of Savannah's harbor to a foot shallower than what the port had originally intended, and at a total cost of $652 million.
"Today's release culminates 14 years of intense study, analysis, and coordination with state and federal agencies, stakeholders and the general public," said Col. Jeff M. Hall, Commander of the Savannah District in a statement.
"The Final Report represents the most comprehensive study for harbor deepening in the nation's history," Hall said. "We are confident that our report is thorough and strong, and that the project will enhance the nation's global competitiveness while sustaining the natural environment."
The Corps' final report comes amid lawsuits and intense political bickering in both Georgia and neighboring South Carolina, where the Port of Charleston is Savannah's long-standing seaport rival.
A lawsuit was filed by environmental groups last month against a controversial permit approved by South Carolina's Department of Health and Environmental Control that green lighted dredging of the Savannah River, and has since reached South Carolina's Supreme Court, which said Monday it would rule on the dispute.
"The depth, along with an average seven foot tide, strikes the right balance between the needs of our industry and the environment of the Savannah River," said Curtiz Foltz, executive director of the Georgia Ports Authority in a statement regarding the Army Corp's final report.
"Nearly 40 percent of the project cost is dedicated to environmental mitigation, preservation of cultural resources or the improvements to river access for the public," Foltz said.
The Corps says that based on its analyses in the report, "the 47-foot plan would bring $174 million in annual net benefits to the nation, with a cost-to- benefit ratio of 5.5 to 1. Essentially, for every $1 invested in the project, the nation would yield nearly $6 in returns."
The estimated total cost of $652 million for the project, based on fiscal year 2012 levels, is $652 would be shared between the Federal government and the State of Georgia.
The Corps also said the 47-foot draft coupled with a high tide should be able to accommodate larger post-Panamax containerships expected to come calling East Coast ports once the Panama Canal widening project is completed in a few years.
Report: MSC considering $1 bil IPO listing in Singapore for MTO business
Geneva-based Mediterranean Shipping Company is reportedly considering a Singapore listing for its marine terminal operations business, which according to a report in IFR Asia, could either be as a corporate IPO or a business trust.
The size of the deal is reportedly valued at $1 billion, although it is still in an early stage. IFR Asia reports that an investor could materialize and negate the need for the IPO.
BNP Paribas, CLSA and Deutsche Bank are reportedly managing the deal. MSC is primarily a shipping company, but also owns and manages several ports.
City of Oakland proposes removing port's personnel autonomy
The City of Oakland has reportedly proposed an amendment to its charter that would end the Port of Oakland's autonomy with regard to how it handles personnel decisions.
"The port needs flexibility to respond to market conditions to compete with other ports around the country," said Port of Oakland spokesman Isaac Kos-Read as reported by the Oakland Tribune.
However, representatives of the local Service Employees International Union believe the port's employees should be more in line with the city's civil service rules.
"We want a civil service system based on merit, not cronyism, racism, sexism or anything else," said Millie Cleveland of SEIU Local 1021.
The Tribune reports the proposed amendment would require the port to be "subordinate to" city laws, and adds another layer of oversight over the port's personnel practices via a Civil Service Board.
Toyota Logistics Services recognized Union Pacific Railroad as the top rail transportation provider with its 2011 President's Award, according to a statement.
Union Pacific announced it also received Toyota's Logistics Excellence Awards for on-time service performance and customer service.
Union Pacific said it transported more than half a million Toyota vehicles in 2011.
Thursday, April 12, 2012
Maersk Chairman: “Can’t accept the low rates”
Maersk Line achieved 15.5 percent global-leading containerized market share, but that’s not enough
for the Danish shipping company’s chairman, Michael Pram Rasmussen, who said successful freight rate hikes this year will not be enough to sail back into the black in 2012.
"We had gotten too far behind in terms of market share, and we succeeded in winning it back in 2011,” and that "with all probability has added to the downwards rate pressure," Pram Rasmussen said as reported by Dow Jones News Services.
Container-shipping rates reportedly declined by an average of 8 percent in 2011.
“We have now decided that we can't accept the low rates," Pram Rasmussen said.
Maersk Line has attempted to implement rate hikes of $750 and $400 per-TEU in March and April, and the shipping line says it has been successful gaining $1000 of that total with customers, with plans for more.
However, container vessel tonnage is reportedly projected to outpace global shipping demand by about 2 to 1 in 2011.
Pram-Rasmussen said supply-demand balance should improve in the long term “because the vast losses made by the industry in 2011 means there won’t be financing available to build new ships.”
UPS launches U.S. -Mexico cross border ground service with “near sourcing” in mind
United Parcel Service announced the launch of its CrossBorder Connect ground freight service between the U.S. and Mexico that the delivery company said in a statement is “designed to significantly ease heavyweight freight supply chain challenges for companies investing in cross-border trade.”
The CrossBorder Connect is a contractual service that utilizes the trucking network that supports UPS’s North American airfreight service, the company said.
“That network has been connected with trusted carriers in Mexico at eight important points along the U.S. -Mexico border,” UPS said.
The Atlanta-based company claims the new service is designed to help reduce customs delays associated with border regulations, inspections, lengthy paperwork, and also offers the option for bonded movements.
“With the global rise in fuel and labor costs, near-sourcing has become an increasingly viable option for many businesses looking to reduce their production and supply chain costs and expand their market share,” said Steve Flowers, president, UPS Global Freight Forwarding.
“For example, we’re seeing more high-tech and automotive companies now moving production closer to consumption points in North and South America,” Flowers said.
The CrossBorder Connect is a premium service that UPS said can “often [deliver] in a timeframe of 3-to-4 days between most major U.S. cities and Mexico.”
Ross Stores, Michelin invest big in South Carolina
California-based discount retailer Ross Stores Inc will invest $150 million in a new 1.2 million square-foot distribution and warehousing center in Rock Hill, South Carolina.
The company said the facility would create 600 jobs over the next five years and be the distribution hub for merchandise to its retail stores in 30 states.
The news from Ross followed on the heels of the announcement by Frances’s tire manufacturer Michelin that announced it would invest $750 million to expand its manufacturing and distribution footprint in South Carolina and create another 500 jobs.
Ross reportedly received $2.5 million in state incentive grants and conditional job development credits. Michelin will reportedly receive $9.1 million worth of incentive grants.
CAT to unload Australia-based distribution subsidiary for $400 mil
Caterpillar Inc it has reached an agreement to sell its Bucyrus mining industry distribution and support business based in Western Australia to WesTrac Pty Limited, a wholly owned subsidiary of Seven Group Holdings Limited, for approximately $400 million.
"We are pleased to announce this agreement with WesTrac today as we continue to make excellent progress in the transition of the product distribution and support of former Bucyrus machinery to Cat dealers around the world," said Steve Wunning, Caterpillar group president with responsibility for Resource Industries, in a statement.
The companies said the deal could formerly close by end of June, with approximately 430 former Bucyrus employees and contractors expected to transition to WesTrac. Subject to customary closing conditions, it is anticipated that the transaction will close by June 30, 2012.
Somali pirates release vessel after two months; ransom reportedly paid
Somali pirates have reportedly released the Panama-flagged breakbulk vessel MV Leila that was hijacked two months ago near Oman and subsequently sailed to Puntland in Somalia.
A ransom was reportedly paid according to the ship’s Somali agent that he said included a $250,000 “down payment.”
The vessel had been en route to Somaliland, which broke away from Somalia in 1991 and, as of February, outlaws piracy. Somaliland is not an internationally recognized state.