Monday, April 14, 2014
Drewry: Box prices rise in early 2014, offsetting 2013 losses
Prices for new dry freight containers rose in the first quarter of 2014 for the first time in two years, according to Drewry's latest issue of Container Equipment Insight.
Drewry stated that standard box prices fell steadily last year, declining by late 2013 to the lowest price since 2009. They said that as of April 2014, container prices have "barely" managed to recover almost 10 percent with the current cost essentially the same as it was in April 2013.
"It is too early to say whether the equipment pricing trend has truly reversed, as the box equipment market remains volatile," said Andrew Foxcroft, a consultant with Drewry Maritime Research.
Last year's lack of any real peak season in the summer months pushed down dry freight container production for another year, the publication said, with the annual total for 2013 falling short of 2012 numbers, and well short of 2011.
The outlook for container manufacturers in 2014, according to the quarterly publication, won't be much different than last year, and so remains relatively depressed.
Drewry concludes that the global container equipment fleet growth is again forecast to fall short of 5 percent for 2014, with the box lease industry almost sure to account for most of the expansion and container carriers ordering a minority share of new containers.
Dry freight and reefer lease rates will probably remain under pressure in 2014, the researchers said, with little chance of any recovery in the initial cash returns generated from new equipment rental. Just as new pricing is expected to stay down and unstable, rental per diems also will continue to struggle to stay at their current rate.
Long Beach harbor officials say merging with Port of Los Angeles a bad idea
The L.A. 2020 Commission, an independent group of business, labor and civic leaders, issued a series of recommendations Wednesday that included advising the merger of the ports of Los Angeles and Long Beach.
"Simply put, this is a bad idea," said Doug Drummond, president of the Long Beach Board of Harbor Commissioners. "The Port of Long Beach is not interested in a merger with our neighbor.... I can assure you that the Port of Long Beach is better run by the citizens of Long Beach."
The 2020 Commission report stated that combining the ports makes sense because the combined market share at the two Southern California ports has fallen 5 points in the past decade, even though the two seaports remain the busiest in the nation.
"That drop in market share alone is the size of the fifth-biggest port in the country, Seattle-Tacoma, which accounts for more than 60,000 jobs and has in excess of $100 million in revenue," the commission said. "We should fight to bring those jobs and tax revenues back to Los Angeles."
In the report, the commission expressed concern that after the newly widened Panama Canal opens in 2015, the upgrade may shift business away from California and to ports on the East and Gulf Coast ports.
Outgoing Long Beach Mayor Bob Foster was upset at the recommendation, saying that no one from the 2020 Commission had asked for input from the city.
For more of the L.A. Times story: latimes.com
Louisiana leads U.S. in domestic maritime employment
Louisiana leads the United States in terms of domestic maritime employment, according to a recent report commissioned by the Transportation Institute and compiled by PricewaterhouseCoopers.
The report indicates that one out of every 83 jobs in Louisiana connect to the maritime industry. That's practically twice as much as that of any other state.
The state's domestic maritime industry contributed more than $11.3 billion in total economic output and posted 54,850 maritime jobs as of 2011, the report said.
As an industry that supports oil, gas, and agriculture sectors, maritime employment includes ship operators, terminals, shipyards and workers engaged in the movement of goods.
Across the country, the domestic maritime industry includes about 40,000 vessels, supports 478,440 jobs, and has an annual economic impact of $92.5 billion, according to the Transportation Institute report.
For more of the NOLA.com story: nola.com
Chinese trade down in March
China's March exports unexpectedly decreased, while imports fell even more.
The impact of the data on the Chinese economy is clouded by uncertainty over how many exporters and importers were timing shipments to gain from market shifts in the currency.
China's exports fell 6.6 percent in March 2014 year-over-year, as imports dropped 11.3 percent, according to China's General Administration of Customs. Economists had predicted both to yield small increases.
For more of the New York Times story: nytimes.com
Ship runs aground on ice chunk trying to navigate Great Lakes
The 20,000-ton bulk carrier Federal Nakagawa got stuck as it tried to navigate lock eight in the Welland Canal, a shipping channel in Ontario that connects Lake Ontario to Lake Erie.
The ship, loaded with agricultural products, ran aground on a huge chunk of ice that got wedged under its hull. It took hours before tugboats could get into position to drag the freighter out.
The ship reported no damage after it was freed, and headed for Cleveland, Ohio.
For more of the CHCH story: chch.com
Tuesday, April 15, 2014
NRF: Expedite labor contract talks at West Coast ports
The National Retail Federation encouraged port and the union officials on the U.S. West Coast ports to wrap up negotiations and come to an agreement on a new dockworker contract well before the current one expires June 30.
The NRF said a quick resolution to negotiations would give shippers and retailers the confidence they need to use the West Coast ports during the holiday shipping period, which starts in July. The pending contract covers almost 14,000 ILWU workers at 29 container ports on the California, Oregon and Washington coasts.
"We urge you to begin contract negotiations now and to attempt to reach agreement on a new contract before the June 30 expiration," said NRF President and CEO Matthew Shay. "These negotiations are important to all of the import and export and related industries who rely on these ports to move the nation's commerce."
According to NRF's Global Port Tracker report, major West Coast retail ports handled 11.2 million TEUs in 2013, or 69 percent of the total cargo processed at U.S. retail container ports covered in the report.
Shay asked for the parties to begin contract negotiations now in a letter to the International Longshore and Warehouse Union and the Pacific Maritime Association, who have scheduled talks for mid-May.
"NRF's members, as well as other stakeholders, have already begun contingency planning to ensure their cargo does not get caught in potential disruptions," Shay said. "Any kind of disruption at the ports would add costly delays to our members' supply chains and other industries relying on U.S. West Coast ports, and it likely further threatens the fragile economic recovery."
The NRF letter pushed the union and employers to publicly commit to stay in talks leading up to the June 30 contract deadline and to maintain service at the ports by continuing to negotiate even after the contract is signed.
Global impact of strike at Baltimore port affects contract talks
In the six months since a 3-day dockworker strike at the Port of Baltimore caused shipping lines to divert their cargo to other ports, the cost of the disruption and its global ripples have become key issues in current labor negotiations at the port of Baltimore.
The International Longshoremen's Association Local 333 and the Steamship Trade Association of Baltimore remain at a standoff in the same local contract dispute that triggered the October strike.
In January a federal mediator ruled that the ILA local violated a "no-strike" measure in the master contract that regulates container cargo at U.S. East and Gulf coast ports, ordering the local to pay shipping lines and port operators almost $3.9 million in damages. However, he also left some leeway for some other resolution.
The local went on strike over work rules and a prospective local contract that covered cars and other break-bulk cargo. Other ILA workers at the port honored the picket lines, shutting down the port.
ILA officials want to bargain down the damages. Dennis Daggett, ILA Atlantic Coast district president, recommended that Local 333 members reject the "best and final" local contract offered by the STA in a vote Feb. 10, in a bid for union leaders to use the outstanding contract as leverage to reduce the damages, which Daggett said would be financially devastating to the union. On Wednesday, he held a meeting with hundreds of Local 333 members to discuss where he and other union negotiators stand with the damages.
ILA spokesman Jim McNamara said officials could not comment on pending negotiations.
"They are still involved in trying to help Local 333 and help Baltimore with the whole negotiating issue, and of course the issue of the award," McNamara said. "It's still hot and it's still ongoing."
Michael Angelos, president of the STA, said in an email that the STA "is confident that we will be successful working along with United States Maritime Alliance," which represents the lines awarded damages, "to settle the arbitrator's damage award."
For more of the Baltimore Sun story: baltimoresun.com
Analyst: China's overblown trade data will skew analysis until June
The inaccuracy of China's trade data will skew the analysis of the country's imports and exports until at least June 2014, making it harder to accurately assess state of the globe's largest exporter and second-largest economy, Bloomberg reports.
In June China will provide figures that compare to what Royal Bank of Scotland Group economist Louis Kuijs says are "pretty clean" numbers from May 2013 that sprang from a crackdown on the use of exaggerated invoices to hide capital inflows.
Recent government data indicates that China's March exports unexpectedly fell 6.6 percent year-over-year marked the peak of distortions, RBS said.
China's reluctance to adjust the overblown figures leaves the job of explaining the trade distortions to analysts.
"It's frustrating because you have to do a lot of explanation," said Kuijs, chief Greater China economist, who formerly worked at the World Bank. "People see a very weak number and then you need to explain that the reality is not so bad because of very complicated reasons that included fake invoices and stuff. It makes all of us doubt more about what the reality really is."
For more of the Bloomberg story: bloomberg.com
ICTSI to invest $130M in Iraqi port
The Philippines' International Container Terminal Services Inc. announced a deal to run and develop Iraq's largest port and plans to invests $130 million in the first phase of the deal.
ICTSI signed a contract with the General Company for Ports of Iraq regarding container facilities at the Port of Umm Qasr, which features 21 berths, and handled 500,000 TEUs in 2013.
In a stock exchange filing ICTSI reported the deal grants it rights to operate the existing container facility at Berth 20 of the port for 10 years. The terminal operator will also build, under a build-operate-transfer scheme, a new container and general cargo terminal at the port for a 26-year concession period, and provide container and general cargo terminal services in both components.
The expansion project will involve an initial 200 meters of quay with an estimated capacity of 300,000 TEUs, the company said, and capacity will expand to 900,000 TEUs when the facility is complete.
For more of the Reuters story: reuters.com
Shipping container of refrigerators washes up in New South Wales
A broken shipping container washed up on Shelly Beach in New South Wales, strewing refrigerators all along the beach.
"Normally we see dolphins when we go for a walk, but this morning it was fridges," Debbie Krogh told The Newcastle Herald.
Seven Fisher & Paykel fridges found their way to shore. The town council is exploring the best way to remove the wreckage.
For more of the Brisbane Times story: smh.com.au
Wednesday, April 16, 2014
WTO predicts 4.7 percent global trade growth in 2014
The World Trade Organization adjusted its outlook for global trade on Monday, predicting that worldwide commerce will grow by 4.7 percent in 2014, adjusted up from its previous forecast of 4.5.
The WTO noted that economic recovery in wealthy economies is expected to offset risks in emerging nations.
This latest forecast indicates world commerce will more than a double the 2.1 percent growth it realized in 2013.
Asia will continue to prompt growth rates, the WTO said, although China's strong expansion is slowing. The organization expects Europe and North America's recoveries to be major drivers of both imports and exports.
"For the last two years trade growth has been sluggish. Looking ahead, if GDP (gross domestic product) forecasts hold true, we expect a broad-based but modest upturn in 2014, and further consolidation of this growth in 2015," said WTO head Roberto Azevedo to the media.
The WTO predicts that trade growth in 2015 would be even better, reaching 5.3 percent.
"Prospects for world trade and output in 2014 and 2015 are better than they have been for some time," said a WTO statement, "but leading economies remain fragile, including some of the most dynamic developing countries that until recently were propping up demand.
"Downside risks to trade abound, but significant upside potential also exists, as the U.S. economy seems to be gaining momentum and the European Union appears to have turned a corner."
For more of the China Post story: chinapost.com.tw
Port of Long Beach commissioners support national freight policy
On Monday, Port of Long Beach harbor leaders unanimously voted to support a national freight policy, with an eye toward luring federal funding dollars for port infrastructure projects.
Monday's vote follows a November report issued by the House Transportation and Infrastructure Committee's Panel on 21st Century Freight Transportation, which recommends establishing a national freight transportation policy and creating and finding sustainable funding for projects. The White House has requested a budget of $91 million for transportation projects.
"This is the right direction for us to head into today," said Commissioner Rich Dines. "We need to immediately start focusing on surface transportation and we need to make the issues that we support very clear and present them to our Congress so they know where the Port of Long Beach needs to go."
Supporting the policy will allow the port to weigh in on freight needs at a time when Congress is starting to draft legislation on surface transportation issues, according to a staff report.
Regarding the policy recommendation to create a grant program for regional and national freight projects, for example, the Port of Long Beach will recommend that Congress implement "a merit-based, competitive grant program to fund multimodal freight projects" and innovative financing options.
"I hope that by presenting policies such as this and showing our endorsement that Congress will find a way to identify a source of funds that will make these projects actually come to be," said Commissioner Susan E. Anderson Wise.
For more of the Press-Telegram story: presstelegram.com
Shipping alliance launches campaign against Miami stadium
An alliance of shipping interests and a billionaire car dealer ran an ad in the Miami Herald on Monday protesting plans for a football arena at the port of Miami, saying it threatens the port's intention to capitalize on the expansion of the Panama Canal.
Former soccer star David Beckham revealed plans in March for a 25,000-seat waterfront stadium on the island port with sweeping views of downtown Miami.
"We cannot jeopardize well-paying jobs, like crane operators, longshore workers, and mechanics, for low-paying stadium jobs, such as concession sales," said the Miami Seaport Alliance in its full-page ad that ran in the Miami Herald and its sister Spanish-language paper, El Nuevo Herald.
The group is led by Royal Caribbean Cruise Line's former head of governmental affairs, John Fox, and includes two chapters of the International Longshoremen's Association and two stevedore companies, as well as car dealer Norman Braman, the one-time owner of Philadelphia Eagles.
Developing the 36-acre property would cost about $200 million and include stores, hotels and offices that would be connected to the mainland via a pedestrian bridge.
"This is one of four sites under consideration, there's nothing concrete, there's no recommendation pending," Miami-Dade Mayor Carlos Gimenez said Monday.
For more of the Reuters story: chicagotribune.com
NYK orders 8 container ships
NYK announced it has ordered eight new 14,000-TEU container ships to be delivered between 2016 and 2018. The company said it had signed charter arrangements for the new vessels, but did not reveal the company behind the order or the amount.
The shipping line said Japan Marine United would construct them and that they were slotted for use on the Asia-Europe trades as replacements for existing ships, including four 13,000-TEU ships chartered from Orient Overseas Container Line.
Search on for man who fell off container ship in Hawaiian waters
The search is on for a man who fell from the container ship Hercules Highway on Monday, approximately 805 miles northeast of Oahu on Monday.
The U.S. Coast Guard is searching for the 23-year-old Japanese crewman, who was reported last seen around 7 p.m. on Sunday.
An HC-130 Hercules airplane crew was deployed to the site. The Hercules Highway is also searching for the young man, along with motor vessels St. Andrews, Anne Gret and UACC Masafi.
For more of the Star Advertiser story: staradvertiser.com
Thursday, April 17, 2014
Drewry: Shipping lines absorb capacity as shippers wait for goods
Shipping lines have done a good job of absorbing excess capacity lately using slow steaming and idling ships, which means shippers are waiting longer for goods to arrive, according to the latest issue of Container Insight by Drewry Maritime Research.
Slowing down means longer round trips, and longer round trips mean more vessels. For example, Container Insight said, approximately 250 ships with average capacities of 11,000 TEUs are needed today for 22 weekly westbound Asia-North Europe services.
Drewry said prior to the slow steaming trend, Asia-North Europe trades deployed an average of eight ships traveling at 24-25 knots. The researchers say that currently the average on this service is 11 ships that cruise at around about 17 knots.
If not for slow steaming, the publication said, that trade could run with eight ships rather than 11, and then only 180 ships total would be needed to run the same number of loops. This means that shipping lines have effectively absorbed 70 or so ships in that trade alone, according to Drewry.
And although shipping lines use it as a last ditch solution, idling ships is another tool being used to tame over-capacity. The Container Insight story estimated approximately 3 percent of the fleet is currently idled, with non-operating owners baring most of the burden.
The article asserts that although container carriers have done a good job at absorbing capacity, there are doing it through sub-optimal use of their assets, and the policy hurts shippers. The researchers conclude the growing number of new ship orders means that ocean carriers must strengthen efforts to address the vessel glut, and shippers must make peace with longer cargo transit times.
Maersk struggles to find ports to fully load massive Triple-Es
Shipping giant Maersk Line is having trouble finding places to load up its new Triple-E mega container ships to capacity since only two berths in Asia have the appropriate infrastructure.
The company will have to wait until the end of 2014 to begin to sail the world's largest ships with full loads, since central European harbors are also currently unable to handle fully loading the 18,270-TEU vessels.
"Right now there are only two harbors in our network, Yantian and Tanjung Pelepas, that can handle fully loading Triple-E ships," said Thomas Riber Knudsen, the head of Maersk Line's Asia and Pacific region. "At the moment we are only able to load about 16,000 containers on the ships."
For more of the Copenhagen Post story: cphpost.dk
Port of Charleston container volume up 10 percent in March
In March, the Port of Charleston handled the highest container volumes since 2008, at 150,516 TEUs, a 10 percent increase year-over-year, according to a port statement.
"March is traditionally a seasonally strong month," said Jim Newsome, South Carolina Ports Authority president and CEO. "We expect April to be a strong month as well."
In terms of non-containerized cargo, the statement notes the SCPA handled 9,654 breakbulk tons at its Union Pier last month for a total of 89,422 pier tons handled fiscal year-to-date.
Georgetown also saw gains in breakbulk tonnage, handling 22,757 tons in March, according to the SCPA.
Port of New Orleans unveils new logo
The Board of Commissioners of the Port of New Orleans revealed their new logo Tuesday.
The new logo is portrays a green and blue fleur-de-lis that appears to be floating on an ocean wave.
Port officials say the graphic will be a signature of the rebranded Port of New Orleans around the world, and the symbol be widely used in digital and social media. Public relations giant Edelman was hired to design the brand, taking input from port staff and board members.
"The Port of New Orleans is modern and prepared for the future, and this new logo reflects that," said Robert Landry, the port's chief commercial officer, in a statement.
For more of The Times-Picayune story: nola.com
280+ people missing after South Korean ferry accident
The 6,825-ton ferry Sewol was sailing from Incheon to Jeju, which is roughly 60 miles off the south coast of South Korea, when it sent a distress signal Wednesday morning and sank soon thereafter.
Even though a rescue operation was immediately launched, more than 280 people, most of them students, remained missing Wednesday night, as coast guard and navy divers searched for survivors.
Rescued passengers told media that they believed many people were trapped below deck. The ship listed and sank quickly after people on board heard a loud noise.
The ship, built in Japan in 1994 and operated by Cheonghaejin Marine, had a 920-passenger capacity.
For more of The New York Times story: nytimes.com