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Summary for April 11- April 15, 2011:
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Monday, April 11, 2011

Top Story

Walmart to re-stock shelves with 8,500 products

After seven quarters of sagging sales, Walmart, the world’s biggest retailer announced it is bringing 8,500 products back to its shelves representing an 11 percent increase in inventory on average per store, along with a re-tooled slogan and tagline: "Low prices. Every day. On everything…Save Money. Live Better.”

"We’ve listened to our customers and we’re bringing back the products and brands they want,” said Duncan Mac Naughton, Wal-Mart's chief merchandising officer.

The retailer said it is adding back products every day that will be labeled with “Its’ Back” and will include more grocery and general merchandise items from fresh products and consumables to electronics, sporting goods, apparel and outdoor living.

Walmart said it is “stepping up its efforts to provide low prices” to compete with other low-cost competitors, and that is “working even more closely with suppliers to lower the cost per item and pass those savings on to customers.”

The retailer reported 2011 fiscal sales of $419 billion.

U.S.D.O.T. to invest $300 mil in rail improvements

The U.S. Department of Transportation announced it would grant than $300 million to improve rail corridors that it says “will enable the expansion of high-speed intercity passenger rail corridors from coast-to-coast.”

“We have heard the call of the American people to build the safest, fastest and most efficient ways to move people and goods,” said U.S. Transportation Secretary Ray LaHood in a statement.

The D.O.T. released the following state-by-state breakdown of the grants:

California Department of Transportation – Four projects totaling more than $22 million. A $13 million grant will refurbish 15 locomotives and upgrade engines to reduce emissions. An $8.2 million investment will go for several coach cars on the San Joaquin Corridor and Capitol Corridor. $950,000 will provide for preliminary engineering and environmental work on the Pacific Surfliner to Ortega. And $200,000 will provide for planning of the Pacific Surfliner route from San Diego to Los Angeles and San Luis Obispo.

Connecticut – A $40 million investment to upgrade the New Haven-Hartford-Springfield rail corridor will provide for 10 miles of double track to be installed on the Amtrak-owned, New Haven-Springfield corridor.

Maryland/Baltimore Tunnel $60 million will fund a preliminary engineering and environmental analysis to study the replacement and augmentation of the 100-year old B&P Tunnel on Amtrak’s Northeast Corridor (NEC).

Missouri – Three projects totaling $3.8 million. A $500,000 grant to develop Missouri’s State Rail Plan, establishing priorities that enhance passenger and freight rail services. A $1.4 million investment will improve 13 highway-rail at-grade crossings between Sedalia and Kansas City. $1.9 million will provide for preliminary engineering and environmental analysis to design and construct a second main track from Lee’s Summit to Pleasant Hill delivering faster speeds and increased reliability.

New Jersey/Portal Bridge – $38.5 million will provide for the final design of the new bridge.

Washington – A $145 million investment will fund rail corridor improvements and new equipment for the Cascades route from Vancouver to Blain. This will ultimately provide more frequent and efficient passenger rail service between Portland and Vancouver, B.C. the D.O.T. said.

Northern New England Passenger Rail Authority – $600,000 will provide for a study to examine the feasibility of expanding the Downeaster line with increased service frequency, higher speeds, and reduced travel times. The study will also examine expanding the proposed service extension to Brunswick, ME, as well as Auburn, ME.

New York – A $3.3 million investment will add track and rail capacity in the congested Upstate New York area for Amtrak’s Adirondack and Ethan Allen Express services near the Village of Ballston Spa.

West Virginia –$1 million will create a State rail plan to establish strategies for rail services that benefit the public and businesses, while guiding priorities for the State’s investments in rail.

Kroger to source only certified seafood by 2015

The U.S. grocery store giant Kroger Company announced it would only source seafood worldwide that is certified by the Marine Stewardship Council by 2015.

The non-profit MSC certifies environmentally sustainable fisheries and offers an eco-label stamp of approval for seafood products at the retail level.

For the full story:

U.N endorses new anti-piracy legal system

The United Nations Security Council announced it voted 15-0 in favor of a Russian-drafted formation of new laws, special courts, and prisons for anti-piracy efforts, especially off the coast of Somalia.

“Today we have taken a big step ahead to fight piracy,” said Russian Ambassador Vitaly Churkin.

The U.N.’s Jack Lang, special adviser to the Secretary-General on legal issues related to piracy off the coast of Somalia, said that despite international naval cooperation, 90 percent of pirates captured by national navies had to be released because jurisdictions were not prepared to prosecute them.

Lang said that there needs to be a “Somaliazation” of the anti-piracy process that includes setting up specialized jurisdictions and prisons in Puntland and Somaliland, as well as a Somali court in Arusha, United Republic of Tanzania, which would later be transferred to Mogadishu, Somalia’s capital.

The U.N. also urged its member nations to criminalize piracy, cooperate in investigations and prosecute and imprison when appropriate.

The total cost of piracy, including ransoms and insurance premiums was estimated to be upwards of $12 billion in 2010.

M.O.L. ship cleared to call Hong Kong after third-party radiation inspection differs from original

Japanese shipping group Mitsui O.S.K. Lines, Ltd. announced its containership MOL PRESENCE was cleared to call in Hong Kong, arriving today after a third party inspection off the Port of Kobe for radiation levels differed from one conducted in March off the Chinese port of Xiamen.

The Port of Xiamen reportedly did not allow for a third party inspection after it determined: “A maximum of 3.5 micro sieverts per hour radiation was detected on board, which is a higher level than the allowable maximum under the present standard, therefore the vessel must be cleaned to reduce the radiation before it can be allowed to off-load its cargo at the port.”

M.O.L. said in a statement: “the MOL PRESENCE departed Xiamen on March 27, and was again inspected by Nippon Kaiji Kentei Kyokai off Kobe Port on March 30. Subsequent to that inspection, M.O.L. received a report that the detected radiation level was significantly lower than the level detected in Xiamen.”

Tuesday, April 12, 2011

Top Story

Shipping execs: Global container market to rebound in Q3

The global container-shipping market is poised for a rebound in the third quarter of this year on the heels of lower rates, overcapacity and lowered demand, according to shipping industry executives at a recent conference in Singapore.

Containerized freight rates in the Asia-European trade were recently trading at approximately $978 per TEU; down from the more than $1,800 per box in July 2010, according to a Reuters report.

The coming Peak shipping season, rising bunker fuel prices and tighter equipment capacity could push rates higher, said Eng Aik Meng, president of Singapore’s APL shipping line.

Another of Meng’s peers agreed: "I am optimistic on the second half. The availability of containers, the cost of fuels and liners looking for ways to reduce their consumption will cause a slowdown in transport times," said John Lines, chief executive of ANL Container Line.

Bunker fuel can range from 10 to 70 percent of operating costs depending on the type of vessel, the Reuters story said.

Bunker fuel is at a 2 ½-year high and it might help push freight rates upwards by the third quarter of this year, shipping executives said.

Container-shipping operators are “slow steaming” and adding more ship capacity in the process to maintain cargo levels.

"So you can understand why a lot of the shipping lines have moved towards adding additional ships in to reduce the amount of bunkers consumed. One of the problems that we're facing now in the industry is that terminal capacity is not keeping up with the growth in world trade, and in some cases you find that vessels have to queue and therefore are off schedule and required to speed up to regain schedule,” said John Lines, chief executive of ANL Container Line.

Bunker fuel can cost as much as $680 per ton, according to a Channel News Asia story.

"The supply equation is pretty simple, there's plenty of supply coming in. It's a matter of how the industry itself manages that supply, do we have to be tempted to fill those ships immediately? Perhaps not," said Randy Chen, special assistant to the president of Wan Hai Lines.

Kenichi Kuroya, president and chief executive officer of Japan’s "K" Line, said shipping lines typically want to their vessels to be 90 percent full, and so far this year, his container fleet has averaged 85 percent, according to a Xinhua report. Kenichi said he expects to get close to 90 percent full this year and to surpass that level next year.

"This year will be the toughest," Kenichi said. "Can we behave this year? This is a severe challenge for the CEOs of each container operator."

For the full Reuters story:

For the full Channel News Asia story:

For the full Xinhua story:

Freight rail carloads up 3.4 percent in March

The Association of American Railroads reported monthly rail carloads in March increased 3.4 percent compared with the same month last year at a total of 1,493,553 carloads.

Intermodal traffic increased 8.5 percent last month at a total of 1,111,301 trailers and containers compared with March 2010, the AAR report said.

The AAR’s senior vice president, John Gray, said “we are seeing intermodal traffic make larger gains with the containerization trend continuing. Containers accounted for 85 percent of intermodal traffic in the first quarter of this year."

The AAR also reported the addition of 1,198 Class 1 rail employees, bringing that total number to 154,502 in the U.S.

There are 283,649 freight cars, or 18.7 percent of the fleet, currently in storage, representing a decrease of 22,667 cars from March 1, 2011, the AAR report said.

General Mills looks at $36 mil investment for 1.5-mil sq.-ft. distribution center in Indiana

Food giant General Mills might invest $36 million to build a 1.5 million-square-foot distribution center in Fort Wayne, Indiana subject to an abatement request with the county council that would save the company 3.2 million over 10 years, according to a story in the Fort Wayne Journal Gazette.

General Mills has operations in over 100 countries with brands that include Cheerios, Häagen-Dazs, Nature Valley, Betty Crocker, Pillsbury and Green Giant. The company reported $16 billion in sales for 2010.

For the full Journal Gazette story:

Exxon Mobile’s half-million pound test module travels from Idaho to Alberta

Montana and Idaho’s departments of transportation cleared the way for Exxon Mobile’s Imperial Oil to haul a 500,000-pound test module of refinery equipment from the Port of Lewiston, Idaho to the Kearl Sands project in Alberta, Canada, according to news reports out of the region.

Several hundred more such trips are scheduled despite opposition from environmental groups that have sued in federal court to stop the shipments.

Video link: Air France plane clips Comair Bombardier at JFK

Video link below of an Air France Airbus A380-800 (F-HPJD) clipping a Comair Bombardier CRJ-700 (N641CA) at New York's John F. Kennedy International Airport.


Wednesday, April 14, 2011

Top Story

Bigger ships could mean more consolidation in liner ranks

A question facing the global container-shipping industry is not only if bigger is better, but if medium-sized to smaller players will be boxed out by the increasing economies of scale provided by larger ocean carriers?

Approximately fifty 10,000-plus-TEU ships are scheduled for delivery this year, accounting for about half of the total new 1.35 million TEU-capacity hitting the waves in 2011, according to the Paris-based consultancy Alphaliner. Another 59 mega-ships are due in 2010.

"As we drive these scales of economy, it will be difficult for the smaller carriers in these industries to compete. That will drive consolidation," said Thomas Knudsen, chief executive of Asia Pacific Region for Maersk at a recent shipping industry conference in Singapore.

Maersk announced in February it had ordered ten new 18,000-TEU containerships to be built for $1.8 billion, and this week the world's largest ocean carrier has indicated it would order 10 more.

Maersk has approximately 15 percent global containerized share and is expanding its fleet at roughly 8 percent annually to keep up with economic growth, according to a Reuters report.

"Bigger is better if you can fill the ship," said Randy Chen, special assistant to the president at Taiwan-based Wan Hai Lines at the event in Singapore. "If your ships are not full, you need to put the vessels away for the short period of time to make sure the revenue covers the costs."

According to the Reuters story, there is the reported concern from some quarters of the industry over a flood of mega-ships hitting the market, driving rates down to non-money-making levels in the rush to seize market share as happened during 2009's disastrous global shipping campaign, where shipping lines lost upwards of $20 billion.

There is already some market fallout including: Norway's The Containership Company suspending operations due to low cargo volumes and heated competition; U.S. -based Horizon Lines possibly headed towards to bankruptcy; and Chile's CSAV Lines S&P rating recently downgraded from "positive" to "negative," according to Reuters.

At least one major container-shipping line is not totally on board with the mega-ship trend.

"I don't fully support the notion bigger size is necessarily better. It depends on your shipping network," said Eng Aik Meng, president of Singapore's APL at the industry event there.

"Shipping lines are quite flexible. There are many other trades in the world, not just Asia-Europe and transpacific, but also Latin American and intra-Asia trades," he said.

For the full Reuters story:

South Carolina senator vows to block judicial nominations if Charleston port doesn't get $40K

South Carolina Republican Sen. Lindsey Graham said he would block votes on any pending judicial nominations unless his state can secure $40,000 this year for a harbor deepening study at the Port of Charleston.

The funds were not included in the government-funding agreement between President Obama and Congress last week.

"If you're a Republican and you want to create jobs, then you need to invest in infrastructure that will allow us to create jobs," Graham said. "So, for $40,000 or $50,000, we can keep on track the deepening of a port that is a huge economic engine for the southeast. We have lost our way. The Obama administration talks about export jobs, but if you don't invest in ports, how are you going to get the goods to go to other parts of the world?"

For the full Washington Post story:

Greek shipping company's shares drop in NYSE debut

Box Ships Inc.'s shares dropped in the Greek shipping firm's debut on the New York Stock Exchange today.

The container-shipping company's shares were at $11.38, or 5.2 percent below the IPO price, in early trading on the NYSE, according to Reuters.

On Wednesday, Box Ships raised $132 million in an IPO, selling 11 million shares for $12 each. The company sold 1 million shares over its forecast, but shares were priced $3 lower than was expected.

For the full Reuter story:

RailAmerica carloads up 1 percent in March

RailAmerica, Inc. announced its total freight carloads inched upwards at 1 percent in March to 76,732 units over the same period last year.

The U.S. short line and regional rail operator said seven out of 12 freight commodity groups were up over last year, including for non-metallic minerals, scrap metal and waste material.

Port worker trapped in shipping container for nine days with dead body

According to news reports out of Southeast Asia, on April 1, two port workers from the Port of Chittagong, Bangladesh were accidentally trapped and shipped in a container to Singapore, with one surviving the 9-day ordeal alongside his co-worker who died during the voyage – both of men were without food or water.

A report in the New Paper of Singapore said 30-year-old Din Islam and another dockworker were resting in the container before ending up trapped on board the vessel that sailed to the Pasir Panjong Terminal at the Port of Singapore.

A port worker at Pasir Panjong heard loud banging on the container. The survivor is reportedly in stable condition.


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