Shanghai government lowers fees for striking port truckers
After three days of protests last week by several hundred independent owner/operators of trucks that serve the busiest container port in world, the Shanghai government reportedly agreed over the weekend to cut fees that along with rising fuel prices had been a principal reason for the drayage strike there.
Port traffic appeared to be back to normal according to a Reuters story, after reported slowdowns in containerized exports last week.
China's government has been faced with battling rising inflation and resulting concerns over fees, prices and taxes going up as a result.
"The government's response has been fairly reasonable, but this is largely a problem with the market. With so many drivers out there competition is tough, and it won't be so easy to fix. The strike is just a way to communicate to the government," said truck driver Li Wenbing in the Reuters story, who is from Henan province in Central China, where many of the protesting drivers were reportedly from.
The truckers' complaints include higher operational costs that stem from an increase to record high diesel fuel prices, low pay, government fines, and the charge that logistics firms have been in collusion to charge higher fees.
British Petroleum's shipping unit has reportedly added a "radiation clause" to freight contracts that mostly have to do with its vessel calls at Japanese ports in the wake of the radiation-leak scare after the March 11 9.0 earthquake there.
Other ship owners are reportedly doing the same thing, which allows for diversion of vessels from scheduled ports of call, according to a Dow Jones Newswire report.
Charterers could reportedly be required to pay for any radiation-related damage to ships.
"BP Shipping introduced the clause into vessel contracts...vessels on BP Shipping business are routed on a journey-by-journey basis, operating only so long as it is considered safe to do so," the company said in a statement.
China is going to start slowing down its high-speed rail network in an effort to lower ticket prices and improve energy efficiency as Asia's heavyweight deals with rising costs and corruption within its Ministry of Railways.
Sheng Guangzu, the Ministry of Railways new chief was quoted in an interview with the People's Daily newspaper that was cited in the Wall Street Journal, saying: "China is vast and there are regional differences in economic and social development, so railway construction norms can't be uniform."
According to the Xinhua news agency, $28.5 million was embezzled from the much-ballyhooed Beijing-to-Shanghai high-speed rail project. The embezzlement probe, which has already forced the resignation of the former Railways chief, has reportedly extended to Zhang Shuguang, a chief ministry engineer.
Ticket prices for high-speed rail between Wuhan and Guangzhou average $70, which is double the typical train ticket and a high cost to most Chinese.
The Beijing-Shanghai high-speed rail line's pricetag is reported to be approximately $33 billion.
HDR lands Arizona D.O.T. freight study on California, Mexico freight impacts
The consulting engineer firm HDR announced it has secured two studies from the Arizona Department of Transportation that will focus on how that state handles increased traffic, including freight impacts from ports in California and Mexico.
The California Border Multimodal Corridor Profile Study will delve into transportation planning needs within the 150-mile segment of the I-10 corridor between downtown Phoenix and the Arizona border, HDR said.
The I-10 has reportedly experienced large freight traffic increases from the ports of Long Beach and Los Angeles.
HDR said it is will also conduct a study that includes development of alternatives for highway and road improvements based on the forecast of increased traffic from the expansion of the Mariposa Port of Entry in Nogales, Ariz., one of the 10 busiest gateways along the U.S. -Mexico border.
World's oldest champagne from shipwreck to be auctioned off
Two bottles of 200-year old champagne that were salvaged from a shipwreck in the Baltic Sea, will be auctioned off in June by Finland's autonomous province of Aaland.
One of the bottles is the famed Veuve-Clicquot and the other is a Juglar, a label that no longer exists, according to an AFP report.
Either of the two bottles could reportedly hit bids up to $145K.
There were approximately 150 bottles found in the shipwreck of a two-masted schooner on the Baltic's bottom that dates from somewhere between 1825-1830.
Some of the champagne was tested for drinkability last November at a media event.
For the full AFP story: www.google.com
Wednesday, April 27, 2011
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Meet Ng Yat Chung – incoming CEO of APL
A top executive of Temasek Holdings, the Singapore-based parent company to shipping group Neptune Orient Lines/APL, will take over the reins at the beginning of next year of the major ocean carrier from the retiring chief executive Ron Widdows.
Ng Yat Chung, 49, will assume the post of group president and chief executive officer (CEO) of NOL after having spent 28 years in leadership positions that ranged from chief of defense for the Singapore Armed Forces to high-level executive positions for Temasek, including heading up its energy and resources portfolio.
Latin American ports scramble to meet cargo-handling demands
The American Association of Port Authorities is going to hold its 20th Congress of Latin American ports June 22-24 in Lima, Peru, and the event comes at a time where cargo is filling up in ports like Callao, that country's main container facility, amid productivity and technological challenges.
Container-handling at Callao up until this past year was performed via mobile cranes or from a vessel's own on board crane, according to a report in the Financial Times.
Since then, global terminal operator DP World has opened a new cargo-handling facility in Callao with six shoreside cranes. The result has been a container terminal that, according to Matthew Leech, DP World's managing director of the Americas, has improved productivity to the point creating a port that is almost at capacity.
Latin America's exports are on the rise, especially raw materials to Asia, along with surging Asian imports and larger vessels calling, leaving shipping industry operators there feeling the crimp from aging cargo facilities.
"There are cases where the existing infrastructures have already exceeded their limits today," said Henrik Pedersen, vice-president for business development in the Americas of APM Terminals, part of Denmark's A.P. Moller-Maersk in the Financial Times story.
Container-shipping volume for Maersk alone in Latin America grew 14 percent from 2009 to 2010.
DP World's Leech told the Financial Times that although infrastructure improvement cycles are not as long as Europe's, for example, it can still take five years in Latin America.
"The cycles are still long from an infrastructure perspective."
China Shipping Container Lines narrows Q1 net loss
Shanghai-based China Shipping Container Lines Co. announced this week its net loss for the first quarter of 2011 narrowed to 22.4 million from the same period last year at just under $30 million.
Total revenue for CSSL slipped 1.6 percent to just over $1 billion.
Hyundai terminal in Tacoma closed on Tuesday from HAZMAT leak
Hynudai's Washington United Terminal at the Port of Tacoma was closed for part of the day yesterday while an environmental cleanup ensued after a chemical leaked from a container onto both the dock and the hull of the Hyundai Oakland containership.
The leaking chemical is the highly flammable chlorobenzotrifluoride, a solvent used in commercial printing, according to a report in the Tacoma News Tribune.
Firefighters were reportedly on scene just before 4:AM, and two people were treated for eye irritation but no serious injuries were reported. The terminal operator contracted an environmental cleanup company, the Tribune story said.
The ship was scheduled to leave early this morning but its departure has been delayed due to the incident.
Female dockworker falls into ship's hull at Port of Houston
A female dockworker fell inside the hull of a cargo vessel at the Port of Houston on Tuesday, according to local television station KPRC.
The worker was reportedly pulled out of the inside of the hull strapped into a basket by an emergency team just after 10:AM Houston time and taken to LBJ Hospital for treatment. She was reportedly conscious and alert.
Food and agricultural exports are helping lead the U.S. economy out of the doldrums, as the Great Recession is "clearly past the worst point," according to a shipping industry economist.
Speaking at a recent breakfast meeting at the Port of Tacoma, Walter Kemmsies, chief economist for the consulting engineer firm of Moffett & Nichol, said strong export growth, particularly out of the agricultural sector, should help drive the next economic cycle.
"There are food shortages around the world," Kemmsies said.
"There are problems with food production and food freight movements to other parts of the world…and food shortages are what underlies a lot of the tensions in the world. It has to be dealt with," he said.
Robert Sinner, president of grain exporter SB&B Foods of North Dakota, told the industry gathering
that containerized grain exports have become an opportunity for ports like Tacoma.
"As of December 2010, 93 percent of the shipments were going to Asia, and this port is a gateway," he said. "This is huge for this region."
Sinner pointed to the weak dollar making export products cheaper, allowing it to compete favorably against global production issues.
"This is a big opportunity for us," he said.
However, Kemmsies cautioned the U.S. economy still has its weak points.
"We're clearly not at the best point in the cycle. It's a little too early to give the 'all clear' signal."
Employment growth and the depressed real estate industry in the U.S. are major factors towards real recovery, Kemmsies said.
"For the sectors related to real estate, it will take a few more years to recover, because they have a lot more cleaning up to do," he said.
Rising fuel prices eat into transportation's profits
Rising fuel prices are eating into the profits of transportation firms that have otherwise enjoyed a return to profitability since 2009's global economic collapse.
Diesel prices are getting close the record high levels of 2008 leaving shipping customers girded for fuel surcharges from their transportation service providers.
"When you see fuel at the pump going up, it is going to go up at the package, too," said Brandon Gale, president of Retail Shipping Associates, in a New York Times story.
The average price for a gallon of diesel in the U.S. has hit $4.09 a gallon, according to the Energy Information Administration. Diesel prices hit a high of $4.76 per gallon on July 14, 2008.
The Union Pacific Railroad in its most recent quarterly report said it paid $2.88 a gallon for diesel, 33 percent more than in the same period last year.
CSX Corp. said in its first quarter earnings report that it has added $119 million worth of expense due to higher fuel costs.
However, freight rail operators are more competitive with fuel pricing compared their trucking counterparts.
"Fuel costs are an important factor for us; it costs us more money to do what we do," said John T. Gray, senior vice president of the Association of American Railroads. "Fortunately, it costs our competitors typically more money than it costs us," he told the NY Times.
The trucking industry is projected to spend $142 billion on diesel this year, four times its fuel expenditures in 2010, according to Bob Costello, chief economist for the American Trucking Associations.
"This is hurting fleets that already have significantly lower profit margins than a railroad does," he said.
"Any time there is a change in fuel prices, eventually that will sink through to the shipper and perhaps to the consumer," said Pierce Myers, executive vice president of the Parcel Shippers Association.
Japan's Mitsui O.S.K. Lines reported a $700 million profit for its 2010 fiscal year largely on the back of its recovering container-shipping business.
"Both [containerized] cargo volume and the freight rate market improved greatly," the ocean carrier said in a summary of it earnings report.
For its fiscal 2011, MOL forecasts its profit to be almost half of 2010's, due in part to a drop in its dry bulk spot market business, Japan's earthquake and tsunami impacting the company's auto-carriage sector, and rising bunker prices in the container-shipping industry.
However, MOL forecasts a rebound year for its tanker business due to the rising global demand for oil.
Old Dominion shares soar after Q1 net earnings triple
Old Dominion Freight Line hit 38 cents a share on the news that the North Carolina-based trucking firm's first quarter net profit was $21.6 million – beating the estimate of 29 cents a share, and besting first quarter of 2010's 14 cents a share and net income of only $7.7 million.
The company said higher shipping volumes and prices accounted for its 33 percent rise in total revenue to $422.7 million.
Two New Jersey longshoremen charged with plot to traffic two tons of cocaine
Two New Jersey longshoremen who worked at the Port Authority Marine Terminal in Elizabeth, New Jersey were charged this week of a plot to traffic over two tons of cocaine from shipping containers into the New York-New Jersey region.
Dominic Guido, 47, and Robert Roselli, 44, were arrested on the heels of a six-month federal investigation, and face a minimum sentence of 10 years in prison with a maximum penalty of life in prison.
Friday, April 29, 2011
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.
