The Panama Canal Authority will determine over the next few months whether the canal expansion will meet its current deadline of October 2014. The $5.3 billion overhaul will allow the larger, bulkier post-Panamax ships to pass through the Panama Canal’s locks and gates.
Alberto Aleman, who heads the Panama Canal Authority, told Reuters Friday that in the next few months, “we will know whether we will complete at the stipulated time or not." Aleman went on to say any hold-up in the schedule would be due to delays in laying concrete.
Aleman told Reuters that if there is a delay, it would only be a few months. If the deadline is not met, there would be penalties added of up to $54 million, reported Aleman, while finishing the job early would result in a bonus of $50 million.
Construction is being handled by a consortium that includes Spain’s Sacyr, Italy's Impregilo, the Belgian company Jan de Nul and Panama's Constructora Urbana.
Shipping magnate Maersk Mc-Kinney Moeller dies at 98
Danish shipping giant AP Moeller-Maersk announced the death of partner and ship owner Maersk Mc-Kinney Moeller on April 16. Denmark’s richest man was 98.
The company's shares rose up to 6.4 percent today as industry analysts reported Moeller's death could result in a stock split or demergers.
Mc-Kinney Moeller, son and grandson of the founders of A.P. Moeller-Maersk group, took over the leadership of the company in 1965. He ran the shipping company for 38 years, building it into a corporation that boasted sales of $60 billion in 2011, employing 108,000 in 130 countries. He stepped down as chairman in 2003, but remained active in decision-making.
“Every week you would meet him on his way up the stairs to the sixth floor at the Esplanaden headquarters in Copenhagen, where he followed developments closely,” Chairman Michael Pram Rasmussen said in an e-mail received by Bloomberg today. “Should issues in the business require an opinion or comment, Mc-Kinney Moeller always made his position clear in no uncertain terms accompanied with wit and always based on a thorough knowledge of the company and the history.”
In an August 2010 survey by Denmark’s Berlingske Nyhedsmagasin, Mc-Kinney Moeller’s personal fortune was estimated at $1.46 billion. Assets under the family’s control amount to 125.4 billion kroner, or $22.07 billion.
Mc-Kinney Moeller’s wife Emma died in 2005 after 65 years of marriage. They had three daughters, Ane Maersk Mc-Kinney Uggla, Leise Maersk Mc-Kinney Moeller, and Kirsten Mc-Kinney Moeller Olufsen. Two of his grandsons, Robert Maersk Uggla and Johan Pederson Uggla, have worked at the company since 2004.
Maersk group’s 2011 net profit fell 36 percent as its container shipping line, which carries 15 percent of the world’s manufactured cargo, lost money. This year, Maersk Line has raised rates and cut supply to deal with rising fuel costs and overcapacity.
The ports of Los Angeles and Long Beach handled more than 1.1 million TEUs in March 2012, an increase of 9.8 percent year-on-year. Most of the growth was in imports, up 12.8 percent for both ports.
"Hopefully, it means that importers are starting to replenish their inventories" because they think that U.S. consumers will be in a buying mood, said Art Wong, spokesman for the Port of Long Beach, to the L.A. Times. "Overall, though, people here are still generally pretty cautious about the months ahead."
Both ports were strong March, with Long Beach imports up 18.3 percent, to 226,141 TEUs, and Los Angeles imports up 9.3 percent, to 324,758 TEUs. Long Beach exports grew 9.9 percent to 144,838 TEUs while exports fell 2.4 percent at Los Angeles to 188,156 TEUs.
House Rules Committee to meet this week on 90-day extension
GOP leaders are conferring with other Republicans to gauge support of the combination Keystone-transportation extension bill, which will go to the House Rules Committee Tuesday afternoon and might be considered on Wednesday, according to Politico. The goal of that measure, which includes a second 90-day transportation stopgap, is to conference with the Senate, where Republicans in the House hope they can convince GOP senators to attach the Keystone pipeline language to their transportation bill, MAP-21.
On the Senate side, to counter the Republican strategy, Politico says Senator Barbara Boxer and others are expected to urge the immediate passage of the Senate transportation bill, which is free of the Keystone pipeline proviso.
German ship suspected of carrying Iranian arms to Syria diverted
A German ship suspected of transporting Iranian arms to Syria was diverted to an unspecified port for inspection, a German government spokeswoman told Reuters on Sunday.
"The economy ministry has been in contact with the owner of the ship. The ship will now head for a safe port (in a different country). There the goods will be checked," a spokeswoman for the economy ministry told Reuters.
Exactly where the ship would dock for the inspection was not released.
On Saturday, the German government said it was investigating a report that the German-owned ship in the Mediterranean on its way to Syria was carrying Iranian weapons in breach of an arms embargo. Reportedly, according to German law, a breach of the embargo could lead to a maximum five-year prison sentence or a fine.
S.C. commission still against dredging Savannah River
The S.C. Savannah River Maritime Commission still opposes the deepening of the Savannah River, despite last week’s report by the U.S. Army Corps of Engineers that recommends the $652 dredging project, asserting it is in the best interest of the country.
Dean Moss, chairman of the South Carolina commission, which represents the state’s interests on the Savannah River, said the legal challenge, which has been strengthened by environmental groups, still stands. The case, which challenges the authority of the S.C. Department of Health and Environmental Control to give the corps and Georgia a dredging permit in November, will go before the S.C. Supreme Court.
The corps’ report asserts that the river should be dredged from 42 feet to 47 feet, with 10 years of environmental monitoring. S.C. Senator Larry Grooms, who serves on the maritime commission, said he’s opposed to Georgia’s deepening plans in part because dredging less than 50 feet will not be deep enough to allow larger vessels in, and therefore will not accommodate a bi-state port terminal in Jasper.
Great Lakes cargo shipping rises 14 percent on auto rebound
4,000 tons of steel was just unloaded at Detroit’s Nicholson Terminal and Dock Company, a sign of the economic recovery in the U.S. Midwest. In line with the country’s automobile rebound, commodities such as steel, iron ore and limestone have been in great demand. According to Bloomberg, Great Lakes shipping may be on its way to a third straight year of increased volume and revenue.
Great Lake states are reporting some of the strongest gains in the U.S. since the recession ended in June 2009. The region’s spending and job statistics are rising now that the government bailout has led to rising auto sales, spurring an increase in shipping and steelmaking.
At the end of the 2011 shipping season in January 2012, Great Lakes cargo on U.S. flagships rose 14 percent from a year earlier.
Drewry and CargoSmart partner on carrier assessment
Drewry Maritime Research and CargoSmart have formed a partnership to introduce a broader range of container key performance indicators (KPIs) to help shippers assess carrier service, according to a statement from Drewry.
The new KPIs will monitor the performance of the physical port-to-port shipping operation, adding commercial processes, regional inland transport performance and port dwell times to the mix.
“The new container KPIs will measure performance at the box-level, which is more important for shippers than at the ship-level,” said Philip Damas, director at Drewry. Further details will be released later this month.
Russia’s biggest port operator sees revenue rise 65 percent
Russia’s biggest port operator, Novorossiysk Commercial Sea Port, reported a sales boost of 65 percent in 2011 to $1.05 billion, from $635.3 million a year earlier. This was in large part a result of buying the Primorsk terminal, according to a company statement emailed to Bloomberg on Monday.
The port operator, which runs Novorossiysk harbor on the North Sea, bought Primorsk Trade Port in January 2011 for $2.15 million, taking on a loan to complete the transaction.
The India coast guard on Tuesday seized the cargo and arrested the crew of the cargo ship responsible for capsizing the MV Shariatpur-1, which resulted in the death of 147 people.
Six crew of the MV City-1 were arrested, according to a correspondent of The Daily Star. Reportedly, the coast guard received a tip that the cargo ship was heading toward Dhaka from Barisal, and intercepted the vessel in the Meghna river off Chandpur.
The MV Shariatpur-1 sank in the Meghna river in Munshiganj on March 13 after being struck by the MV City-1, which then sped away.
President threatens veto of funding extension over Keystone
The White House on Tuesday threatened to veto the House version of the 90-day extension of transportation funding, because House republicans added language to the bill to approve the controversial Canada-to-Texas Keystone XL oil pipeline.
The House is expected to vote on the bill on Wednesday. The Obama administration said the Keystone provision in the bill would circumvent the “proven process” of determining whether the oil pipeline is in the best interest of the country. A veto would further delay the passage of the transportation law, thought to be vital for the nation’s economy.
Obama put a hold on the $7 billion pipeline, which would funnel crude from Canada and North Dakota to Texas refineries, awaiting further environmental review in Nebraska.
Current U.S. transportation infrastructure spending ends in June.
U.S. grower group CHS to invest millions to increase exports
The biggest U.S. grain marketing cooperative expects to spend $250 million over three years to expand its presence in Brazil and in the Pacific Northwest. CHS, owned by 1,100 farmer cooperatives and 60,000 growers, is investing the funds to meet growing foreign demand.
CHS plans to buy a port terminal in northern Brazil and also expand capacity at the Kalama, Washington port terminal as part of a joint venture with Cargill to boost Asian shipments.
“Our customers have expectations that you have to have global sourcing so we can be in the market 365 days,” said CHS Chief Executive Officer Carl Casale yesterday to Bloomberg in a phone interview. “Increasingly, our business is going to become more export-oriented.”
U.S. grain exports comprised 24 percent of CHS’s $36.9 billion in sales for the 2011 fiscal year.
The debt crisis in Europe puts the container shipping competition truce on uncertain ground, since the E.U. is responsible for more than a third of global trade.
The recession in the E.U. puts more stress on shipping companies, including A.P. Moeller Maersk, the world’s largest container line. After a price war last year, the shipping companies raised rates. Maersk is expected to implement yet another increase in May.
Analyst Rikard Vabo at Fearnley Fonds told Bloomberg that when Maersk focused on profitability and raised rates again, it “basically saved the industry.” He went on to say that for the rates to stick, the economies of Europe and the U.S. will need to improve, but so far the outlook for the E.U. is not good.
The austerity programs of various European countries have resulted in slower government spending, cost cutting, a boost in unemployment and a lack of consumer confidence, reports Ben Hackett of Hackett and Associates, a maritime research company, in a Bloomberg interview.
Maersk Line raised the TEU rate on its route from Asia to North Europe and the Mediterranean by $750 on March 1 and by $400 on April 1, said company spokesman Hursh Joshi to Bloomberg. He said of those increases, about $1,000 has “stuck” and Maersk will add another $400 to rates on May 1. Joshi told Bloomberg only time will tell if the increases can be maintained.
March container traffic surges at Port of Charleston
The S.C. Ports Authority reported that the Port of Charleston’s March container traffic hit the highest level since 2008. This was seen as a good sign during a lukewarm fiscal year.
The authority had expected higher volume this year coming off the recession. So far, for the fiscal year, revenues increased 6 percent year on year and container traffic is up 1 percent. Container traffic for the January to March quarter was also higher, the highest since the summer of 2009.
Non-containerized cargo, including autos and industrial tires, is responsible for Charleston’s biggest gains, according to the SPA. Pier tons are up 20 percent compared to fiscal year 2010.
The historic icebreaker that forged a path to McMurdo Station on Antarctica, served as Rear Adm. Richard E. Byrd’s flagship and performed 39 Arctic and Antarctic deployments, currently sits in a Vallejo dry dock awaiting its fate as proponents try to save it from the scrap yard.
A letter written this week to the U.S. Department of Transportation’s Maritime Administration (MARAD) by Alaska Senator Mark Begich favors saving the vessel.
Although the non-profit Glacier Society has spent more that $3 million in repairs and studies to make the icebreaker into a museum, MARAD, responsible for the vessel’s fate, sold it for scrap and would have to approve any other plan.
An agency spokesperson told Juneau Empire that MARAD had supported the goal of the Glacier Society for 14 years, waiting for the society to garner the funds to convert the icebreaker into a museum. The spokesperson said “the Glacier’s condition deteriorated during this time to the point that it could not be donated and the ship was sold under a recycling contract in February.”
The Glacier Society disagrees on the condition of the Glacier, and plans its own assessment.
Moody’s Investor Service announced in a report on Thursday that dry bulk shipping, which has vessel overcapacity of up to 30 percent, will struggle to make a profit for the next year to 15 months. Moody’s projected that the delivery of new ships ordered pre-glut will compound the oversupply problem.
House approves transportation extension bill with Keystone
On Wednesday House Republicans approved a second 90-day federal transportation funding extension, which allows highway and transit projects to continue through September and includes language approving the controversial Keystone Pipeline.
President Obama has threatened to veto the bill due to the Keystone provision, asserting Republicans are trying to make an end run around routine procedures for assessing cross-border pipelines. The White House statement regarding the veto also noted the exact pathway of the pipeline has not yet been determined.
The bill is technically being considered in order to extend federal funding for transportation infrastructure projects through September 2012. According to the Huffington Post, the legislation’s primary goal is to set up a situation in which the House can formally debate with the Senate about a comprehensive transportation bill, even though it could not garner the votes to pass its own Republican-authored, long-term transportation bill.
According to the Huffington Post, this is a way for House Republicans, who refuse to consider the $109 billion bipartisan bill passed by the Senate, to prompt a formal legislative session without passing its own bill.
For the past six months, the Port of Coos Bay has been negotiating with investors as one of six Northwest ports pursuing a contract to develop a coal export terminal. Investors want to transport coal from mines in the Powder River basin in Montana and Wyoming to Asia.
Port CEO David Koch told Northwest Public Radio that three companies are drafting plans for a coal terminal on a sandy spit near the entrance to the port. Koch said the prospective deal is to annually ship up to 10 million tons of coal purchased by an Asian power utility company.
Although Koch is not naming companies due to confidentiality agreements, EarthFix, the environmental reporting arm of Oregon Public Broadcasting, has discovered that the Japan-based international trading company Mitsui and California’s Metro Ports are involved in the negotiations. No binding contracts are in place since other ports are also competing for the coal terminal.
American Airlines to slash 1,200 cargo and baggage jobs
American Airlines, under a bankruptcy restructuring agreement aimed to cut labor spending by $1.25 billion, will eliminate 1,200 airport and baggage jobs at seven U.S. and two Canadian airports and will close an Arizona reservations center.
American told union workers it would cut 13,000 of their jobs, freeze pensions and implement benefit changes. The changes are scheduled to go into effect within two to four months.
American will start presenting testimony on April 23 to convince a bankruptcy judge to allow the company to cancel existing union contracts and create new rules to facilitate spending cuts.
The airline’s jobs will be outsourced at facilities in cities with the fewest flights, including Ontario and Sacramento in California, and in Portland, Hartford, Columbus, Memphis, and Reno. American Airlines’ jobs in Calgary and Vancouver in Canada will also be outsourced.
Vomiting road workers in Australia were hospitalized Wednesday after being exposed to mysterious nuclear material, uncovered during the highway excavation.
The nuclear material uncovered on the highway in New South Wales was cesium, thought to be from the 1980 crash of a truck carrying radioactive isotopes from the Lucas Heights nuclear reactor in Sydney, according to the Daily Telegraph.
The project manager said the workers started getting sick after uncovering an unusual clay-like material.
Port of L.A. plans strategy to compete after Panama Canal expansion
The Port of Los Angeles announced a competitive strategy on Thursday in anticipation of the completion of the Panama Canal expansion, scheduled for late 2014. L.A. crafted the five-year plan to maintain its status as the premier U.S. port once the canal completion triggers a flood of post-Panamax Asian vessels to call directly at East Coast and Gulf Coast ports.
L.A.’s 2017 goals constellate the expansion of port technology, market share and infrastructure, and include terminal development, expanding Latin American and Vietnamese trade and implementing greener truck policies.
Infrastructure and tech expansion vital to U.S. export growth, says industry expert
In the near future, U.S. exports are expected to outperform imports and the country should be ready, said logistics expert Anne Landstrom, the opening speaker at the Heartland Shippers Conference in Des Moines, organized by Cargo Business News, International Traders of Iowa and several other Midwest-based shipper associations.
"We've been so focused on development of infrastructure to support imports,” said Landstrom, “we really haven't focused on infrastructure for exports."
Landstrom, a principal adviser with cargo and infrastructure firm Moffatt & Nichol, asserted that to remain competitive worldwide, the nation must amp up its freight infrastructure and technology development. She reported that last year, U.S. exports surged 7 percent while imports rose less than 1 percent.
Infrastructure challenges, she said, include enabling our ports to handle larger containerized loads to be competitive with emerging trade countries. For example, she said, Brazil will likely challenge the U.S. in soybean exports within the next four years. Logistical challenges must also be addressed, she noted, to facilitate U.S. trucking.
United Maritime Group announced Thursday it will sell U.S. United Barge Line to Ingram Barge Company. UMG, which runs companies in the dry bulk logistics and transportation sector.
UBL, based in Tampa, provides barge services for dry bulk commodities, including coal, grain and petroleum coke.
Reportedly the deal should be completed by the second quarter of 2012.
FESCO to add RO-RO export service at Washington port
FESCO Transportation Group, which uses the Port of Everett as its Pacific Northwest shipping core for Russian cargo, will add roll-on, roll-off ships to its Everett export services.
“Adding RO-RO capabilities to the port's portfolio, coupled with our new rail line, will allow us to focus on cargo segments we have not been able to target in the past,” said Dave Madill, the port’s terminals director.
16th century Spanish ship rebuild in San Diego park
In an empty San Diego parking lot, the city’s Maritime Museum is rebuilding the first known ship to land at San Diego’s beaches.
“It’s a huge undertaking,” explained project leader Bruce Heyman. “We’re using ten different kinds of wood. And then having the right team to be able to shape them and fit all of these pieces because the ship is literally a basket and they all have to sit and work together and be strong and stout.”
The 16th century Spanish San Salvador, a 100-foot sailing ship, landed in what is now San Diego in 1542, and was the European vessel to “discover” San Diego.
For $5, the public can watch as volunteers and Maritime Museum staff at Spanish Landing Park rebuild a historically accurate replica of the Spanish galleon.