Heartland Shippers Conference: Infrastructure and tech expansion vital to U.S. export growth
Midwest-based shippers and supply chain professionals listened to presentations and participated in discussions with representatives from organizations that included APL, BNSF, Bridgestone Tires, CSX, Florida East Coast Railway, Holt Logistics, Moffatt & Nichol, Scoular Company, Union Pacific, and Vermeer, among several others.
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 last week at the Heartland Shippers Conference in Des Moines, Iowa 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.
Report: Port of Melbourne to develop third, $1.2 bil container terminal
The Port of Melbourne, Australia will participate in the public-private development of a third, $1.2 billion container terminal at Webb Dock in Port Phillip Bay, the Herald Sun reports.
In another report by Lloyds List Australia, Hutchison Port Holdings managing director for Australasia and North Asia, Raymond Law, confirmed his company's interest in being the third Melbourne container stevedore.
An official announcement for the project that would be completed in 2016 is reportedly scheduled for Tuesday.
Maritime piracy dropped 28 percent in Q1; Nigeria, Indonesia on uptick
Piracy on the high seas dropped 28 percent in this year's first quarter, while pirate activity rose in Nigeria and Indonesia, according to the International Maritime Bureau's piracy reporting center.
The volume of overall piracy incidents dropped from 142 to 102 for January through March, including a big drop off Somalia from 97 attacks for the same period last year to just 43 in 2012's first quarter, the IMB reported.
The IMB attributed the drop-off in sea piracy to "disruptive actions and pre-emptive strikes" by navies and patrols, including a significant presence by the U.S. in Gulf of Aden and Indian Ocean.
However, pirate activity rose in Indonesia from 5 attacks for 2011's first quarter to 18 for the same period this year, and 10 incidents were reported off Nigeria, equaling the total number of attacks there for last year.
Human torso shipped BJ's Wholesale Club
A package containing the torso of a dead woman was mistakenly shipped to BJ Wholesale Club's headquarters in the Boston area.
The package containing the human torso was reportedly meant to be shipped from New Jersey to a research facility in Florida, however there was a shipping label snafu.
The package was reportedly opened but the dead body was not actually seen since it was wrapped in gel.
Should shippers be worried about health of their ocean carriers?
Container-shipping lines collectively lost around $6.5 billion last year and while they have announced a series of general rate increases so far in 2012, a leading shipping industry consultancy advises cargo customers to be wary of accepting low prices from a financially struggling service provider.
In its April logistics briefing for shippers, Drewry Supply Chain Advisors published a "Carrier Z-score financial stress index" that features 11 major ocean carriers, with most of them having finished in a critical red zone for 2011.
After 2010's $21.8 billion record rebound from the historically disastrous recession year in 2009 for the shipping industry, Drewry reports profits were eroded once again last year amid higher operational costs and "a savage rate-war that only benefited cargo owners."
"The fact the demand increased [in 2011], usually a positive, actually compounded the misery as it meant more cargo was shipped below the break-even line," the Drewry briefing said.
Of all of the shipping firms included in Drewry's stress index, only two ended last year with "safe" Z-scores: Denmark's AP Moller-Maersk and Hong Kong's OOIL, the parent to OOCL.
The shipping lines that were scored with the highest risk as per their final 2011 financial results were led by Chile's CSAV, South Korea's Hanjin, China COSCO, parent to COSCO Container Lines, and China Shipping Container Lines. The remaining box carriers on Drewry's list that were in the red zone from last year were Japan's NYK Group, Singapore's NOL (APL), Germany's Hapag-Lloyd, Taiwan's Evergreen Line, and France's CMA CGM.
While the GRIs that carriers have been rolling out this year "are a testament to the collective will of carriers to stop the cash drain and make money again," Drewry says that for several container-shipping lines "the support of shareholders is perhaps more crucial than ever," and so raising cash, whether it be through asset or equity sales.
Exporters and importers should also keep close tabs on the financial health of their ocean carriers, too, Drewry says.
"From a cargo owner's perspective, obtaining low prices from an ailing carrier is an unsustainable position that will require a strategic review at some stage."
"Carriers in this state of financial distress will either be forced to drastically alter their operations or disappear altogether," the report said.
NASDAQ OMX acquires freight clearing house
NASDAQ OMX announced it has added to its global commodities portfolio by acquiring Norway's NOS Clearing ASA, a clearing house for tanker and dry cargo freight, seafood derivatives, and electricity certificates.
NOS Clearing ASA has been a clearing house for the freight market since 2001 and, according to a statement, "has invested significant resources in building a cleared ship freight derivatives market."
"The acquisition fits perfect into our strategy to grow globally within the energy space, since freight is a key part of the energy supply chain. In addition to that, we are entering a new product range, clearing of seafood derivatives, with a large global potential," said Geir Reigstad, senior vice president, NASDAQ OMX Commodities.
NOS Clearing ASA currently has 30 employees.
C.H. Robinson Q1 profit up 10 percent
C.H. Robinson Worldwide Inc. reported first-quarter profit was up 10 percent due to growing demand in its trucking sector.
The Eden Prairie, Minn-based logistics provider
said profit could have been greater had it been able to raise rates enough to keep up with demand.
The company said it earned $106 million compared to $97 million for the same period a year ago. Revenue gained 8 percent to $2.55 billion, with the trucking division's revenue up 7 percent, and truckload shipments rising 8 percent.
C.H. Robinson's less-than-truckload business was up 13 percent, the company said.
The global marine cargo-handling facilities operator APM Terminals announced it has added Martin Poulsen to its new position entitled "Safety Advisor."
"The sole purpose of this new and unique type of executive assignment is to drive the company's safety culture forward to a new degree of excellence. And we have found the best person possible for this task," says Kim Fejfer, APM's chief executive in a statement.
The Hague-based terminal operator described the new position as focusing on "the constant safety challenges in the port operations."
Our ambition at this point is to eradicate fatalities and severe incidents. What we need is the mindset of an activist, fighting for a just cause. And Martin Poulsen is the person to fully mobilize the organization in the daily battle against dangers in the workplace," said Fejfer.
Paulsen spent the past six years as CEO of APM Terminals' Europe region and his employer said his new job is "a temporary strategic assignment of a complex nature," and that "part of Mr. Poulsen's internal activist duties will be to work closely with - and potentially develop - the existing safety team."
No weapons were reportedly found on board a German cargo vessel that had been sailing for Syria after was towed to the Port of Iskenderun in Turkey last week and searched by authorities there.
The German magazine Der Spiegel had previously reported the German-owned Atlantic Cruiser was violating European Union sanctions against civil war-torn Syria by carrying a suspected cache of weapons that were allegedly loaded at the Port of Djibouti.
"The Turkish foreign ministry informed the German government on Tuesday that the inspection of the cargo of the Atlantic Cruiser has been completed and the Turkish authorities have not found any weapons or munitions for Syria on board the ship," a Turkish government source told Reuters.
Fifty-six years ago on this day, April 26, 1956, the converted tanker Ideal X departed Port Newark with 58 containers destined to be loaded on 58 trucks at the Port of Houston, and ocean containerization was off to the races.
The Ideal X sprang from the mind of a trucking magnate from North Carolina, Malcolm McLean, who wasn't the first person to attempt such a concept - the Seatrain shipping line, for example, carried railroad boxcars topside in 1929 from New York to Cuba. There were other early pre-McLean examples.
However, McLean launched an actual working system that stuck, and it sprang largely out of his desire to avoid paying state fees imposed for excess truck weight when transiting from one state to another.
McLean had the container separated from the truck and trailer where it could subsequently be loaded, stacked, and unloaded from a post system on the ship.
Five days after the Ideal X arrived in Houston, the vessel's space was booked for the return journey and McLean's SeaLand container-shipping line would go on to revolutionize how global cargo moved around the world.
China COSCO Holdings Co Ltd posted a $429 million net loss for its first quarter, primarily a result of record low bulk shipping rates, according to the company's filing with the Hong Kong stock exchange.
The Chinese conglomerate operates the world's biggest ocean-going bulk carrier fleet and fifth largest container-shipping line.
The uptick in COSCO's containerized freight rates were reportedly not enough to offset the bulk losses.
The Baltic Dry Index for shipping commodities like iron ore and grain hit a record low of 647 in February, although it has rebounded since, hitting 1,137 this week, Reuters reported.
United Parcel Service reported a 6 percent gain in first-quarter earnings thanks in part to upticks in the company's U.S. freight, package, and supply chain sectors.
The Atlanta-based shipping giant's international operational profit dipped 9.9 percent with a slumping global airfreight business, particularly in Asia, the company said.
Revenue for UPS increased 4.4 percent to $13.14 billion, with profit of $970 million, up from $915 million for the same period ago.
UPS forecasts its U.S. package volume to improve over 2011, with an increase of between 2 and 3 percent this year.
UPS acquired Dutch delivery company TNT Express in March for $6.8 billion, creating the largest package-shipping company in Europe.
Importers of U.S. meat continue to buy after mad cow scare
Foreign buyers of U.S. meat are reportedly continuing to import those products despite the first reported American case of mad cow disease in six years.
The U.S. Department of Agriculture has made assurances to major buyers in export markets like Canada, the European Union and Japan that rigorous safeguards are in place with no threat to humans.
A cow in California reportedly tested positive recently for bovine spongiform encephalopathy, or mad cow disease, and U.S. authorities have said that the tainted meat has not entered the food supply chain.
The California cow was the fourth to have ever been tested for the BSE disease in the U.S. - a disease that can fatally infect human brains if the tainted beef is ingested.
The top foreign buyers of U.S. beef: Canada, European Union, Japan, Mexico and South Korea, have all reportedly claimed no issues as yet from tainted imported meat and no specific measures have been instigated by those countries thus far.
Bulk ship assists in rescue of fishermen off Guam
On April 21, the bulk vessel Semirio, operated by Diana Shipping, was reportedly alerted by the volunteer-based Automated Mutual-Assistance Rescue System (AMVER) about a burning fishing vessel that was just over 1,100 kilometers off Guam in the Pacific Ocean, and subsequently sailed to the spot of the incident, deploying a boat to rescue all of the ten crew.
A U.S. P-3 Orion marine patrol aircraft had already been on scene after the initial alert was sent by the U.S. Coast Guard, and deployed two life rafts to assist the crew.
The U.S.C.G. says more than 22,000 ships from 100 countries participate in the AMVER program, which originated with the sinking of the Titanic 100 years ago.
Friday, April 27, 2012
Top Story
COSCO posts net loss of $77 mil for Q1
China COSCO Holdings Co Ltd posted a net loss of 77.3 million in the first quarter of 2011 despite 12 percent growth in cargo volume and a net profit of $136 million for the same period last year.
China's biggest shipping group, and fifth largest container-shipping line in the world by capacity, said fuel price increases, the Yuan's appreciation, lower freight rates and a glut in the global bulk-shipping market in particular were factors in the group's 5.6 percent drop in revenue for the quarter to $2.5 billion.
Norfolk Southern Q1 profit up 26 percent
Norfolk Southern reported a first quarter net profit of $325 million, up 26 percent from the $257 million profit margin for the same period a year ago.
Rising fuel costs have reportedly driven more intermodal truck freight to the railroads where transportation costs are lower. Norfolk Southern's intermodal revenue was up 18 percent.
The Norfolk, Virginia-based railroad's total revenue rose 17 percent to $2.6 billion, topping forecasts that averaged $2.48 billion.
The railroad's coal freight revenue was the leader with a 30 percent over the same period in 2010, with 7.4 million tons of coal moved due to high demand in Asia, Europe and South America, the company said.
Norfolk Southern said it plans to add approximately 1,100 more jobs in 2011, getting the company back to 2008 levels.
Russian Prime Minister wants higher export taxes on gasoline
Russia's Prime Minister, Vladimir Putin, is pushing for higher taxes on gasoline exports due to domestic shortages.
According to a Bloomberg report, Putin informed Russia's Energy Ministry to develop a plan that could include compensation for oil producers via a reduction of excise duties or extraction taxes.
There are reported motor fuel shortages around the country, including Sakhalin Island.
Russia's three biggest oil companies reportedly said they typically don't export motor fuel that meets domestic quality standards, but at least one of these firms - TNK-BP - said it has been offering 10 percent of the lower-grade fuel type to the domestic market due to the shortage.
New York-New Jersey port authority to hire outside security consultant
The Port Authority of New York and New Jersey announced it would hire an outside consultant to conduct a comprehensive review of security at its facilities, according to a story in the New Jersey Star-Ledger.
The port authority is responding in the wake of the past decade's 9/11 tragedy when 84 of its employees were killed, the United Flight 93 aircraft that took off from Newark Liberty International Airport and crashed in Pennsylvania, and the recent news of a large-scale cocaine smuggling ring through one of its cargo-handling facilities.
"We live in a changing world," Port Authority Chairman David Samson was quoted as saying in the Star-Ledger story.
The port operates four interstate bridges, two tunnels, the PATH system and a group of shipping terminals.
A container-load of 689 Peroni beer kegs that went missing at New Jersey's Linden Airport earlier this month was found on Sunday in Newark, sans the beer.
The kegs alone are worth $52,000, according to a news report by New York's CBS affiliate.
