Cargo Business Newswire Archives
Summary for April 21, 2014 through April 25, 2014:

Monday, April 21, 2014

Top Story

Report: Container shipping vulnerable at Puget Sound ports

The container shipping business at Puget Sound ports is vulnerable to poaching by competitors on the East and West coasts and exacerbated by the lack of cooperation and the inter-regional competition between the ports of Seattle and Tacoma, according to a report by logistics advisers Mercator International.

KING 5 News recently discovered the report, conducted on behalf of an undisclosed terminal operator, through a Public Disclosure Request to the Port of Seattle. It gives new credence to the notion that the two Washington ports should merge.

Last month the Federal Maritime Commission sanctioned a request from the ports of Tacoma and Seattle to begin information exchanges aimed at boosting container traffic in the Puget Sound region.

The report suggests the marine operations at both ports are well below capacity, and must undergo major improvements to stay competitive.

Although Tacoma's container traffic has increased the past two years after luring the Grand Alliance shipping consortium away from Seattle, the Port of Seattle has noted that the competition between the two ports hasn't increased the overall volume of goods handled through the Puget Sound.

Mercator determined that discretionary intermodal rail traffic accounts for 47 percent of container volume at both Puget Sound ports, and since imports exceed exports in the region, import cargo flows determine the level of traffic that moves in each direction. (Since imports generate the empty containers returning to Asia, much of the "export" flow is driven by imports.) Consequently, the report concludes, Seattle and Tacoma must protect and improve their share of discretionary intermodal traffic to survive.

The 11-page report documents Mercator's analysis of the ports' maritime operations. For example, it says as of 2013, the Elliot Bay container terminal capacity utilization at the Port of Seattle is estimated "to be just 38 percent." The document says the port needs improved on-dock rail, but it has been limited in its ability to improve due to space limitations near Terminal 46.

The report goes on to say the ports need costly improvements to handle bigger ships. Ports in places like British Columbia, Southern California and the East Coast have been dredging and improving in hopes of handling bigger ships once the expanded Panama Canal is operational in 2015.

Recently, Port of Seattle CEO Tay Yoshitani suggested consolidation is something that ports like Seattle should consider.

"Nothing is off the table," said Yoshitani. "The shipping lines are consolidating to form alliances, and it might be worthwhile for the ports to look at it." He said the Seattle port's talks with the Port of Tacoma were confidential.

For more of the King 5 News report:

Industrial real estate market performance up in first quarter

The U.S. industrial real estate market made good progress through the first quarter of 2014, according to commercial real estate services firm Cushman & Wakefield, whose latest research findings indicate robust absorption, declining vacancies and rising rental rates.

The firm said although tightening supply slowed leasing through the first quarter ending in March, the country's industrial construction sector has increased activity to meet stronger demand.
"Domestic manufacturing continues to gain traction, driving increased production and shipments, and electronic fulfillment continued to expand," said Cushman & Wakefield's John Morris, head of industrial services for the Americas. "As a result, the economic environment for our sector is the best we have seen in many years."
Industrial space occupancy gains rose 31 percent year-over-year, with 30.5 million square feet of absorption, compared to 23.2 square feet in the first quarter of 2013.
Atlanta led the nation, with 5.1 million square feet of absorption, followed by California's Inland Empire, with 4.6 million square feet. The U.S. industrial vacancy rate ended the quarter at 7.4 percent, 80 basis points lower than a year ago.
"Availabilities are dwindling, especially in the highly competitive big-box market," Morris noted. "This is holding industrial leasing in check. Only 11 out of the 38 markets tracked by Cushman & Wakefield posted increased activity year-over-year."
Los Angeles continued to lead the nation in leasing volume, with 7.7 million square feet in activity through March, followed by Dallas/Fort Worth, with 6.8 million square feet.
Average rent grew in most major markets tracked by Cushman & Wakefield, with the national direct average rising from $5.73 per square foot to $6.03 per square foot over the past year.
"Moving forward, we are watching a number of private sector developments that will likely add near-term momentum to the industrial real estate market's positive trending," Morris said. "Among them, we anticipate a continuing revival of the housing sector, the activation of pent-up consumer demand and rising export volume. Most importantly, we are beginning to see a shift in business attitudes and a greater willingness to take risk, which will lead to stronger employment growth and increased investments in people and equipment."

Ag group: Documentation rules in Japan and EU imperil U.S. agriculture exports

The Agriculture Transportation Coalition has announced efforts to revise new export documentation rules that threaten the viability of U.S. agriculture exports via ocean carrier, especially perishable goods, according to a coalition statement.

The coalition said that Japan and the EU have imposed unrealistic deadlines for advance submission of export documentation. The new regulations can cause unforeseen delays, threatening the viability of such exports from the U.S., and the group said it will address these and other supply chain issues with agriculture exporters, ocean carriers and other stakeholders at its annual meeting in June.
In the wake of 9/11, ATC said no cargo is loaded on a ship in the U.S. unless Customs and Border Protection has had a chance to run the data through its computers to determine if it poses some risk.
More recently, a number of U.S. trading partners are imposing similar data collection demands on products exported from the U.S. Both the European Union, Japan, and China have programs requiring ocean carriers to submit data describing the identity of the exporter, the importer on the other side of the ocean, container number, description of the cargo, place of origin, destination, the statement said.

A problem arises because U.S. exporters of citrus and other perishables, although willing to provide such information, need expedited treatment in order for their products to be viable upon delivery, ATC says.
For example, cargo information must be provided to Japanese Customs authorities by the shipping line 24 hours prior to departure of the vessel. This means the vessel operator must have the info at least 24 to 72 hours earlier, the statement said, which adds several days to the outbound cargo movement. For perishable goods, this means the difference between fresh fruit or spoiled products that cannot be sold.
The Agriculture Transportation Coalition said is working with U.S. and Japanese, European and Chinese authorities to close the gap between the need for advance shipping data and the physical realities of the global trade of agriculture and perishables.

China union to mediate shoe factory strike involving 40,000 workers

More than 40,000 Chinese workers went on strike this week against the world's largest manufacturer of athletic shoes, which supplies companies such as Adidas and Nike. A government trade union said it would mediate the labor conflict.

Production was shut down at Yue Yuen Industrial after workers rejected a company proposal. The workers have been striking since April 5, demanding that the Taiwanese-owned company make social security contributions as required by Chinese law and meet other demands.

Police arrested around 20 workers Friday after 1,000 Yue Yuen employees demonstrated around the factory complex, according to Zhang Zhiru, an advocate for the workers.

In a statement issued Thursday, the company said it would make social security payments only if the workers would agree to retroactively pay their own required contributions into the fund. The statement said those who refused to return to work on Thursday would be punished, but did not give details.

While urging the strikers to act rationally, the Guangdong Federation of Trade Unions said it was "taking a clear-cut stand" that the workers' rights must be protected. The government trade union said it had instructed its municipal agency in the city of Dongguan, where the factory is located, to mediate.

For more of the Global Post story:

Container ship collides with rig vessel and bulker runs aground off Virginia

Two ships collided in a shipping channel off the Virginia coast, while a 751-foot cargo ship ran aground in high winds gusting up to 70 mph, according to the Coast Guard.

The collision happened between the 79-foot rig vessel Petite and the 1,065-foot container ship MSC Charleston Tuesday evening in the Thimble Shoal Channel.
No injuries or damages were reported.

In a separate incident, the Coast Guard said winds gusting to 70 mph at Cape Henry caused 12 ships docked in the vicinity of Lynnhaven to drag anchor. The bulk carrier Ornak ran aground near First Landing State Park.

For more of the Post and Courier story:


Tuesday, April 22, 2014

Top Story

Virginia Governor says APM wants out of port lease

After naming five new Virginia Port Authority board members on Thursday, Gov. Terry McAuliffe told The Pilot that APM wants to sell its terminal to the authority and that negotiations on a possible deal are about to commence.

Gov. McAuliffe had told the local chamber of commerce last month that the VPA's 20-year lease of APM Terminals' Portsmouth container facility was one of the worst lease deals he had ever seen.

"We don't comment on matters such as this involving our facilities," said Eric Sisco, president of APM Terminals North America.

"Listen, they want out of it," said McAuliffe. "They actually came to us recently and wanted us to buy it back from them. I don't want to get into the number, but the number was ridiculous, not even in the ballpark."

When he was asked if APM asked for more than $600 million, McAuliffe said yes.
"It was so unreasonable and unacceptable, we rejected it immediately," he said.
"Listen, it's got to make sense for us. I'd like it to make sense for them. I mean, we've got to get to a place - but we're nowhere even close today."

The lease agreement, almost 4-years-old, is projected to cost the authority more than $70 million a year by the time the deal ends in 2030, and more than $1 billion in total.

U.S. gives out $196.5 million to help boost ag exports

By Richard Knee

The U.S. Foreign Agricultural Service says it is giving out 84 cash awards totaling nearly $196.52 million to help 65 industry organizations to market their products abroad this year and the agency is inviting applications for funding assistance in 2015.

The FAS, part of the Department of Agriculture, is awarding roughly $171.87 million among 62 non-profit groups and cooperatives through the its Market Access Program, in which it shares overseas marketing and promotional costs with trade associations, cooperatives, state and regional trade groups and small businesses to build export markets for fresh produce, nuts, processed foods, and bulk and intermediate commodities.

The rest is being awarded among 22 agricultural producers' and processors' organizations through the Foreign Market Development Program, in which the groups work to maintain or increase the demand for U.S. agricultural commodities abroad. The organizations on average contribute nearly triple what they receive in federal resources, the FAS said.

Funding amounts range from $45,759 to the Mohair Council of America to slightly more than $18.6 million to the Cotton Council International. The latter comprises awards of $15.42 million through the Market Access Program and nearly $3.2 million through the Foreign Market Development Program.

The groups include 19 that are receiving cash under both programs.

Also among the 10 highest-amount MAP recipients are the U.S. Meat Export Federation, $14.07 million; the Food Export Association of the Midwest USA, nearly $9.64 million; the American Hardwood Export Council, APA – the Engineered Wood Association, Softwood Export Council and Southern Forest Products Association – nearly $9 million; Food Export USA Northeast, nearly $8.14 million; the Western U.S. Agricultural Trade Association, nearly $8.1 million; the U.S. Grains Council, $6.73 million; the Wine Institute, $6.32 million; U.S. Wheat Associates, $5.97 million; and the Southern United States Trade Association, $5.87 million.

Besides the cotton group's award, the top amounts through the FMD Program are going to the American Soybean Association, nearly $5.2 million; U.S. Wheat Associates, nearly $4.18 million; the hardwood export group, nearly $2.66 million; and the grains group, nearly $2.44 million.

The complete list of award recipients is available at

Shanghai International Port Group orders 4 newbuilds

Tsuneishi Group Shipbuilding has received orders for four 1,020-TEU ships from the Hong Kong-based subsidiary of state-owned Shanghai International Port Group. 

SIPG is active in port cargo handling and logistics at the Shanghai port. Two of the ships are scheduled for completion in 2016, while the other two are scheduled for 2017.

The four ordered vessels feature the latest improvements in fuel efficiency, reducing fuel consumption and NOx emissions in compliance with new international regulations. Fuel injection is controlled electronically rather than by the conventional mechanical method.

These four newly ordered vessels will be operated by Shanghai Haihua Shipping Co, a member of the SIPG Group. HASCO is a state-owned shipping company that handles regular container transport on shipping routes between China and Japan and between China and Southeast Asia.

Hampton Roads struggles to handle cargo from mega shipping alliances

Hampton Roads and other ports have already have been struggling to handle cargo surges and have begun to feel the cascade effect of mega shipping alliances.

The agreements formed by the largest ocean carriers are putting massive 18,000-TEU ships into service on the major trades.

"You have this big crunch through the terminal where you're trying to force more and more containers through the system," said Paul Avery, associate editor at World Cargo News, a trade publication based in Britain. "Terminals are struggling to manage this without congestion."

Cargo backups at Hampton Roads have been cited as a factor in the Virginia Port Authority's multimillion-dollar operating losses this year.

"Virginia's not unique in the challenge that it has," Avery said.

Preparing for the larger ships the alliances are bringing "is a critical aspect of any port's job," said John Reinhart, a former Maersk Line Ltd. chief executive who took over as the Virginia authority's CEO in February and is aggressively to streamlining the port's operations.

Just a few years ago, the norm for Hampton Roads was five ships calling per week on a typical trade lane, each carrying the equivalent of 4,000 TEUs and unloading 800 of them over five days, said Tom Capozzi, the Port Authority's chief commercial officer.

Now, he said, the report may get two 9,000-unit vessels, each discharging up to 2,000 containers – over two days.

The changes are creating "this huge surge of volume that's all being condensed," Capozzi said.

"For a number of the carriers, this is a matter of survival," said Lars Jensen, CEO of SeaIntel Consulting, regarding the big carrier alliances. At a maritime conference last month Jensen, a former Maersk executive, stressed there will be significant demands on ports and terminals.

"There's going to be a lot more bottleneck effects, and there's going to be a lot more strain on a port in terms of infrastructure," he said. "Not because the number of containers they have to handle changes materially, but the concentration changes. It's going to come much more in lumps – and that's much more difficult to handle."

The Port Authority recently set up a task force to address truck congestion. It plans to launch, in May, a new appointment system for truckers arriving at Norfolk International Terminals – a variation on a system already in use at APM Terminals in Portsmouth.

"We've come up with a plan that we think will work," Capozzi said. "It's just going to take some time; it's going to take some investment."

For more of the Virginia-Pilot story:

Chinese court seizes MOL container ship in dispute from WWII

A Chinese court ordered the seizure of the 226,434-ton Baosteel Emotion, a Japanese ship owned by Mitsui OSK Lines, to make up for the loss of two ships leased from a Chinese company before the two countries went to war in 1937.

The Baosteel Emotion was impounded on April 19 at Majishan port in Zhejiang province as part of a legal dispute that began in 1964, according Shanghai Maritime Court and MOL websites.

The confiscation of the ship echoes the strained relationship between China and Japan during a territorial dispute over an island chain and visits by Japanese politicians to a Tokyo shrine honoring their war dead.

"Many of the major Japanese companies like Mitsubishi or Mitsui have existed through back to the pre-war era and could all be implicated in one way or another," said Shogo Suzuki, a senior lecturer at the University of Manchester. "Japanese companies can't extract themselves easily at this stage so I think they'll be quite worried."

For more of the Bloomberg story:


Wednesday, April 23, 2014

Top Story

Hapag-Lloyd and CSAV close to signing merger deal

A majority of shareholders in Chile's Compania SudAmericana de Vapores are supporting the shipping line's merger with Germany's Hapag-Lloyd, in a deal that would create the world's fourth largest container line.

The Chilean company announced on Monday that dissident shareholders exercised withdrawal rights on only 2.7 percent of total shares, meaning that the deal is a go. The agreement was conditional on no more than 5 percent of CSAV's total shareholders exercising withdrawal rights by April 20.

"This is another step in the road to completing this transaction, which we're sure will be enormously beneficial for our company and our investors," said CSAC chief executive Oscar Hasbun.

The next step toward the merger process involves receiving regulatory approval, plus the approval of the City of Hamburg's Senate.

For more of the Reuters story:

U.S. petroleum product exports up in 2013

Exports of petroleum products from the U.S. rose 10 percent year-over-year in 2013, at an average 3.5 million barrels per-day, according to a statement from the U.S. Energy Information Administration.

In December 2013, the agency reports that U.S. exports of petroleum products reached 4.3 million barrels per-day, the first time ever exports exceeded 4 million barrels per-day in a single month.

Average exports of distillate fuels were more than 1.1 million bbl/d in 2013, the EIA reports, which is more than 110,000 bbl/d greater than 2012 totals. Domestic crude oil and natural gas reached refinery runs that were near record highs.

The agency said the largest increases in distillate export volumes were those bound for Central and South America, already the largest destination for U.S.-produced distillate fuel. U.S. distillate exports to that region increased by 60,000 bbl/d, reaching 550,000 bbl/d in 2013.

U.S. gasoline exports increased by 45,000 bbl/d in 2013, averaging 550,000 bbl/d for the year, according to the EIA. December 2013 gasoline exports set a monthly record of 770,000 bbl/d. Gasoline exports increased to Africa, Central and South America, and Mexico.

The U.S. continues to import significant amounts of petroleum products, including a 2013 average of approximately 2.1 million bbl/d. However, the EIA says that our imports are generally decreasing. Although the Gulf Coast is a large exporter of gasoline, due to current infrastructure constraints the East Coast continues to import substantial amounts of gasoline from Europe and Canada.

NY/NJ Global Terminal expansion nearing completion

Global Terminal recently announced delivery of the last five of its 20 Rail Mounted Gantry cranes on Thursday, doubling its terminal capacity to 1.1 million lifts annually. The expanded New York/New Jersey terminal, now open, is slated to be fully operational by the end of this summer.

Last May saw the completion of its 900-foot berth extension, allowing Global to accommodate the latest Suez Max vessels. In July, the streamlined truck gate complex equipped with optical character recognition and radio frequency identification tags was successfully launched, with the ability to handle more than 5,000 transactions per day.

Last month, Global became the first terminal in North America to launch Navis N4 version 2.5 without disruption to its customers and stakeholders.

The facility now includes a fleet of 17 shuttle trucks from Terex and 20 semi-automatic RMGs from Konecranes.

Global Terminal's new semi-automated terminal will boast the harbor's fastest processing and turnaround times.

"It is gratifying to see the achievement of the company's vision to develop a safer facility that meets the evolving needs of the industry while providing better working conditions for the workforce," said Jim Devine, president and CEO of Global Container Terminals USA. "We couldn't have met our target without the skill and dedication of our project team and the support of the Port Authority of New York/New Jersey."

For more of the Fort Mill Times story:

Genco Shipping files bankruptcy

Genco Shipping & Trading, dry-bulk cargo ship operator, filed for bankruptcy as weak charter rates made it hard for the company to pay its debtors.

Like the rest of the shipping industry, Genco has been suffering from the industry's vessel overcapacity that has been driving down rates and increasing debt, according to Erik Nikolai Stavseth, an analyst at Arctic Securities ASA.

"They were all victims of the exuberance we saw in the shipping market in the mid- to late-2000s," Stavseth said in an interview before the bankruptcy filing. "High leverage on expensive assets is what killed them."

Genco, which owns or operates vessels that transport iron ore, coal, grain, steel and other products worldwide, listed assets of $2.4 billion and debt of $1.5 billion in a Chapter 11 filing today in U.S. Bankruptcy Court in Manhattan.

For more of the Bloomberg story:

Captain in S. Korean ferry disaster arrested

The captain of a sunken South Korean ferry was arrested Saturday on suspicion of negligence and abandoning passengers in need. Investigators are looking into whether his evacuation order came too late to save lives.

Two crew members were also arrested, a prosecutor said.

The disaster three days ago left more than 270 people missing and at least 29 people dead.

The tragedy took another victim Friday when the vice principal of the high school whose students were among the passengers was found hanged, an apparent suicide.

For more of the WLTX19 story:


Thursday, April 24, 2014

Top Story

Port of Los Angeles container volume up 34 percent in March

Container volume through the Port of Los Angeles rose in March by the most in seven years as business rebounded after the Chinese New Year holiday and a harsh U.S. winter, said a port statement.

The combined number of loaded and empty TEUs that were handled in Los Angeles in March increased 34 percent year-over-year, from 385,825 TEUs in March 2013 to 515,323 TEUs in March 2014. This is the largest monthly volume the port has seen since February 2007, according to its website.

The surge of Asian goods coming into the top U.S. port in part reflects the timing of Chinese factory closings during its New Year holiday and the resumption of normal transportation routes that had been interrupted by freezing temperatures in the U.S. Midwest and Northeast.

Imports handled by the Port of Los Angeles, ranked the largest in the nation by container volume, surged 41.5 percent last month year-over-year, from 231,397 TEUs in March 2013 to 327,497 TEUs in March 2014.

Exports shipped out from L.A. increased 21.6 percent, according to the port, jumping from 154,428 TEUs in March 2013 to 187,826 TEUs in March 2014.

Port of Long Beach sells bonds to pay creditors

The Port of Long Beach is selling $59.9 million in revenue bonds to refinance debt used for upgrades, while cargo volumes continue to recover from the economic downturn.

Fitch Ratings said it assigned its second-highest grade, AA, to the securities, which will be used to refund $88.6 million in revenue bonds.

Fitch said the port, the second highest cargo volume in the U.S., is protected by long-term contracts with tenants. The rating company also noted container volume at the Port of Long Beach has risen since July 1, with container volume up 2.3 percent through February year-over-year, Fitch said.

The Port of Long Beach sits next to the Port of Los Angeles, the busiest U.S. port as measured by cargo volume. Combined, the port complex constitutes the seventh-busiest seaport in the world, according to Fitch.

For more of the Bloomberg story:

Hapag-Lloyd chairman to step down early

Juergen Weber will step down as chairman of the board of shipping line Hapag-Lloyd earlier than anticipated, with plans to hand over his role to Michael Behrendt in the autumn, according to a company statement

Michael Behrendt said he would step down as CEO of Hapag-Lloyd at the end of June.

Juergen Weber joined the carrier's supervisory board in June 2012 and was elected chairman. One of his key decisions was choosing Michael Behrendt as his successor as the head of the shipping company, the statement said. Weber said he also used his role to ensure that Hapag-Lloyd was well positioned in its business and that it continues to grow at a difficult time for the liner shipping industry.

"I believe these three tasks have now been fulfilled," said Weber. "Rolf Habben Jansen has been a member of the executive board since the beginning of April and will replace Michael Behrendt as CEO at the end of June.

"Despite the weak market environment, Hapag-Lloyd has been able to achieve results that outperform the level of its industry peers. The integration of the CSAV container segment will make Hapag-Lloyd the fourth-largest company in the industry. The closing of this transaction in the autumn is therefore the ideal time to hand over the chair of the Supervisory Board to Michael Behrendt. He can then continue to oversee the important phase of integrating the CSAV container segment into the Hapag-Lloyd Group with his expertise."

General Motors to spend $12B in China

General Motors Company, the world's third largest car manufacturer by sales, will invest $12 billion in China through 2017 and build more factories in 2015 as it tries to stay competitive, especially with Volkswagen AG.

GM forecasts sales growth between 8 and 10 percent in 2014, matching the overall growth of the Chinese auto market, while Volkswagen will aim at a 10 percent expansion from last year's record, which would be more than 3.5 million cars.

Outselling GM in China in 2013 helped the Volkswagen best GM as the world's second-largest car manufacturer.

GM announced Sunday it would open five new plants in China next year as part of a plan to increase manufacturing capacity by 65 percent through 2020.

China's domestic market is expected to expand by 8-10 percent this year, trailing 2013′s 13.9 percent growth when 21.98 million units were sold. In comparison, the U.S. market grew by 7.6 percent in 2013 to 15.6 million vehicles sold.

General Motors will build four new car assembly plants in Shenyang, Chongqing, Jinqiao and Wuhan and an engine plant in Shenyang. The company aims to sell 100,000 of its Cadillac sedans, which will be assembled in the Jinqiao plant, through 2015, up from 50,000 in 2013.

GM is betting on robust growth of its luxury brand and plans to launch two new models in 2014 and 2015.

For more of the Binary Tribune story:

Oil tanker raided, pirates kidnap 3 crew

Armed pirates raided an oil tanker off the coast of Malaysia and took three crew members with them, according to Malaysian maritime officials.

"We are very concerned," said Noel Choong, head of the International Maritime Bureau's Malaysia-based Piracy Reporting Centre. He said the ship was hijacked while sailing near Port Klang.

"It's the first time this has happened so far north in the Malacca Strait, and the first time they have kidnapped the crew. It's not an area where we have seen the modus operandi of ships hijacked for their cargo," Choong told Reuters.

Eight Indonesian pirates in a fishing boat boarded the Naniwa Maru No.1 at 1 a.m. local time on Tuesday of off the coast of west Malaysia, the Malaysian Maritime Enforcement Agency said.

The pirates pumped about 3 million liters of diesel from the tanker into two waiting ships and departed with three Indonesian crewmembers, including the captain and chief engineer, the agency said.

For more of the Reuters story:

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