Cargo Business Newswire ArchivesSummary for May 2 through May 6, 2016:
Monday, May 2, 2016
More than 1.7 million sf of warehouse space recently completed in Savannah
Industrial space is booming to meet growing demand in Savannah, with more than 1.7 million square feet of warehousing recently completed, more than 1.9 million square feet under construction, and a 2,700-acre development just announced.
"These commitments by the private sector on numerous commercial real estate projects show confidence in the continued success of Savannah as a cargo hub for the U.S. Southeast," said Georgia Ports Authority Executive Director Curtis Foltz. "As Savannah's logistical advantages continue to draw new customers to Georgia, demand should remain strong for additional industrial space."
Foltz said the market requires higher vacancy rates to ensure space on demand for customers that do not have time for construction. Currently, seven major projects are being developed.
Griff Lynch, incoming executive director at the Georgia Ports Authority, said the new developments provide an excellent market opportunity for the Port of Savannah. "In conjunction with the expanded Panama Canal opening this year, and construction on the Savannah Harbor deepening under way, this additional space off terminal will complement GPA's efforts to draw business to the region," he said.
Counting all industrial space, including manufacturing, the Savannah market features just over 46.4 million square feet, with 1.4 million square feet (3.04 percent) vacant, according to the Colliers report.
Some of the industrial announcements in the Savannah market include:
Rail provider and industrial real estate company OmniTRAX announced in March plans for a 2,700-acre industrial park within minutes of the Port of Savannah, to be served by both Norfolk Southern and CSX Transportation railroads. OmniTRAX will provide capital for infrastructure including a rail system to connect the tenants to the Class 1 rail operators.
OA Logistics/JLA Home will soon open its 1.1 million-square-foot e-commerce fulfillment center at Northport industrial park on Ga. 21 near Interstate 95. The company is currently building a 500,000 square-foot facility at the corner of Jimmy Deloach Parkway and Benton Boulevard, featuring 100 loading docks.
The TPA Group has a 475,000 square-foot warehouse under construction at Northport.
The Panattoni Development Company is building a 312,000 square-foot building in the Westport trade park, just off Ga. 307/Bourne Avenue in Garden City. Meanwhile, a 320,000 square-foot structure has been built at Centerpoint Industrial Park.
Nordic Cold Storage opened its new facility April 15, expanding by 200,000 square feet.
Port of New Orleans to appoint new head as longtime CEO LaGrange retires
The Board of Commissioners of the Port of New Orleans announced that president and CEO Gary LaGrange will retire at the end of his current contract in April, 2017. The board is expected to name Brandy Christian, the port's current COO, to succeed LaGrange.
"Gary LaGrange led the Port of New Orleans to great heights over the past 15 years as President and CEO," said William Bergeron, chairman of the Board of Commissioners of the Port of New Orleans. "The board is grateful for the many contributions he made to the port and to the maritime industry during his distinguished career in New Orleans."
LaGrange, a 40-year veteran of the maritime industry, served as President and CEO of the Port of New Orleans since 2001. During his tenure, the Port invested more than $500 million in infrastructure, opening state-of-the-art facilities including new container, intermodal, cruise and refrigerated terminals. Port revenues reached record heights for the fourth consecutive year in 2015, topped the half-million TEU mark for the first time and topped one million cruise passengers for the second consecutive year.
It was LaGrange's leadership that brought the Port of New Orleans back into operation 12 days after Hurricane Katrina, the most extensive natural disaster in U.S. history. He has also been a tireless industry advocate touting the importance of ports and waterways to the local and national economy.
The board is expected to authorize Chairman Bergeron to negotiate a contract with Christian to succeed LaGrange as President and CEO.
Bergeron praised Christian's background and her role as current Port of New Orleans COO. "Brandy Christian's background in strategic initiatives, civic relations, and cruise and cargo development will serve the Port well for many years to come." said Bergeron.
Christian joined the Port of New Orleans as COO in January 2015 after 14 years with the Port of San Diego, where she served for five years as vice president of strategy and business development. During her tenure there, Christian was the driving force behind securing major accounts for the cruise and cargo business lines. She was also instrumental in significantly improving operational processes and reducing costs for the public agency.
"Brandy Christian is the right person to continue our momentum and lead the Port of New Orleans to the next level of success," LaGrange said. He thanked the Board of Commissioners, port tenants and customers, and most importantly the port's employees for their support and hard work during his tenure in New Orleans.
CKYHE Alliance to revamp Asia-East Coast services
The CKYHE Alliance — COSCON, "K" Line, Yang Ming, Hanjin and Evergreen Line — will provide five Asia-US East Coast services (AWE1/AWE3/AWE4/AWE8/ NUE) starting in early June of 2016.
The alliance members have redesigned the services to provide optimum port coverage from Asia to the US East Coast with AWE1/AWE3/NUE services upsized and AWE4/AWE8 services restructured to boost competitiveness.
Meanwhile, CKYHE Alliance members reconfirm the current cooperation scheme on the related East and West Trade (Asia-North Europe services/Asia-Mediterranean services/Asia-US East Coast services/Asia-US West Coast services and Trans-Atlantic service) will remain unchanged until the end of March in 2017.
Port of Houston Authority ready to observe SOLAS container weight mandate
The Port of Houston Authority announced it supports the new requirement to verify the gross weight of a loaded container before it is accepted by an ocean carrier for transport.
The requirement, which goes into effect July 1, 2016, is an amendment approved by the International Maritime Organization (IMO) to the Safety of Life at Sea (SOLAS) convention. The change mandates the declaration of a verified gross mass (VGM) before a container is allowed to be loaded onto a vessel.
After the requirement goes into effect, The Port Authority said it will gather the VGM via Electronic Data Interchange (EDI) from the ocean carrier. Containers will be required to have a VGM on file prior to in-gate. The Port Authority will continue to work with various stakeholders and partners to ensure compliance and an uninterrupted flow of cargo.
The Port of Houston Authority will continue to monitor developments on the SOLAS requirements and will update stakeholders if any changes occur, the statement said.
Six kidnapped Turkish crewmembers released
Six Turkish members of a cargo ship's crew who were kidnapped by pirates off the coast of Nigeria two weeks ago have been released.
The shipping company said the crew members are safely back in Istanbul, but did not say whether or not a ransom had been paid.
"The six of them have been released and are back in Istanbul. All are in good health," Fehmi Ulgener, a lawyer for shipping firm Kaptanoglu Denizcilik, told Reuters.
The Turks, including the M/T Puli's captain, chief officer and chief engineer, were abducted some 90 miles off Nigeria on April 11. Other members of the crew were left on board, unharmed.
The Coast Guard has decided that existing U.S. laws and regulations for providing verified container weights are equivalent to the requirements in SOLAS Regulation VI/2.
The USCG sent a letter to the International Maritime Organization outlining its decision that its current regulatory regime provides for other entities within the container export chain to work with the shipper to determine and verify container weights.
This equivalency acknowledges the dynamic business relationships between players in the export chain, and provides flexibility for them to reach arrangements in order to ensure compliance with the SOLAS amendments beginning July 1, 2016.
Shippers, carriers, terminals, and maritime associations have outlined multiple acceptable methods for providing verified gross mass (VGM), according to the Coast Guard statement.
The USCG said two of those methods are: (1) the terminal weighs the container, and when duly authorized, verifies the VGM on behalf of the shipper, and (2) the shipper and carrier reach agreement whereby the shipper verifies the weight of the cargo, dunnage, and other securing material, and the container's tare weight is provided and verified by the carrier.
For the purposes of determining the VGM of a container, any equipment currently being used to comply with federal or state laws, including the Intermodal Safe Container Transportation Act and the container weight requirements in 29 CFR 1918.85(b), are acceptable for the purpose of complying with SOLAS, the statement said.
The Coast Guard, in the normal course of vessel inspections under its flag state and port state control authorities, said it will continue to verify that ships' masters receive the VGM of containers in order to ensure that ships are loaded safely and operate within their structural and stability safety limitations.
EU watchdog approves CMA CGM's purchase of NOL
The European Union on Friday approved French container-shipping giant CMA CGM's $2.4 billion acquisition of Neptune Orient Lines Ltd. on the condition the merged company withdraw the Singapore-based shipping company from a separate alliance.
Regulators have been cautious about approving deals that might give carriers concentration of market share in various alliances they have long had with competitors. The alliances, akin to code sharing in the airline business, help individual operators save costs by sharing ships and port operations.
The European Commission, the EU's antitrust NOL leave the G6 line shipping alliance.
"Today's decision ensures that the takeover will not lead to price increases for the many EU companies using these container shipping services," said EU antitrust watchdog Margrethe Vestager.
CMA CGM previously said it intended to withdraw NOL from the G6 alliance, but the formal commitment to do so was necessary to remove the risk of anti-competitive effects, the EU said.
China Cosco Shipping to take 1st trip through expanded Panama Canal
A China COSCO Shipping vessel won the drawing to be first to transit through the expanded Panama Canal, according to a statement from the waterway.
More than 100 neo-Panamax vessel reservations have been made for commercial transit. China COSCO Shipping will be the first to negotiate the expanded waterway at its opening on Sunday, June 26.
The container vessel Andronikos will be making the inaugural transit. The ship has a maximum capacity of 9,400 TEUs, is 8.25 meters in beam and 299.98 meters in length.
The draw took place this morning at the Panama Canal Administration Building, in which a Notary Public served as witness, among invited attendees. The Norwegian/Swedish shipping line Wallenius Wilhemsen Lines (WWL) and the Chinese shipping line China COSCO Shipping participated in the draw.
WWL participated with the car carrier Thalatta. The car carrier, which has a maximum capacity of 8,000 CEUs (car equivalent units), is 36.5 meters in beam and 199.97 meters in length.
"It is a great honor to have one of our top customers celebrate this historical moment with us," said Panama Canal administrator, Jorge L. Quijano. "We are excited and prepared to continue providing the same reliable and efficient service within the Expanded Panama Canal that our customers have come to expect through the years."
Ports struggle to gather funds for Columbia River project
A project designed to help prevent shipping bottlenecks on the Columbia River is in danger after the Port of Portland declined to contribute to the construction. But the Port of Kalama may be able to make up the missing share.
Four Lower Columbia ports had planned to each contribute about $167,000 toward construction of three new stern buoys at Rainier, Kalama and Vancouver. A local funding match was needed for the ports to qualify for a $1.4 million grant from the U.S. Army Corps of Engineers.
Stern buoys are chains linked on one end to floating buoys and the other end to steel plates embedded in the river. Ships waiting out in the river channel for an open dock can tie up to them and remain stable despite shifting tides and currents. A recent corps analysis found that the Lower Columbia needed the additional stern buoys, and supporters said the project would decrease air pollution because ships could remain stable without help from tug boats.
The ports of Longview, Vancouver and Kalama each approved the funding with the expectation that the fourth partner, Port of Portland, would do so as well. But the Port of Portland, struggling with lower cargo activity, said it couldn't spare $167,000 for the project.
That likely killed the project. On Tuesday, Port of Longview commissioners declined to offer more money on top of what it already has pledged.
However, the Port of Kalama commissioners Wednesday night agreed to pitch in up to $300,000 to the project, which would cover its share of the local match and all but about $34,000 of Portland's share. It will approach Vancouver and Longview in an attempt to rescue the project. It also would consider adding fewer buoys to reduce costs.
The ports have until Friday to come up with the funds; otherwise they will lose the Corps grant opportunity.
The container vessel MSC Fabiola, with reported engine trouble, ran aground Thursday at the southern end of the Suez Canal, reportedly blocking traffic.
The 153,514-DWT container ship grounded 144Km in the Suez Canal at about 1630 hours local time on April 28.
It was number 10 in Southbound Convoy (of 20 vessels). The rest of Southbound Convoy (8 vessels) were detained.
The Fabiola was refloated on Saturday.
Wednesday, May 4, 2016
U.S. Coast Guard weighs in on SOLAS methodology
A new Water Resources Development Act, or WRDA (S. 2848), approved 19-1 last week by the Senate Environment and Public Works Committee, includes key provisions recommended by the American Association of Port Authorities to maintain and improve America's port infrastructure.
AAPA President and CEO Kurt Nagle was upbeat when praising committee chairman James Inhofe (R-OK), ranking member Senator Barbara Boxer (CA) and Transportation and Infrastructure Subcommittee chairman David Vitter for their leadership in crafting the $9.4 billion bipartisan waterways bill.
"This is a very good bill that will aid our economy and environment, and the ability of America's ports to handle increasingly large cargo and passenger ships," said Nagle. "It reflects a great deal of advocacy by AAPA and our member seaports to authorize crucial funding to maintain and improve our nation's water and navigation infrastructure.
"The Senate EPW's WRDA bill includes modernization of the cost-share formula for deepening projects, extension of WRRDA 2014's Donor and Energy Transfer Ports funding authorization, and new language to improve the approach of appropriating annual Harbor Maintenance Tax (HMT) revenues until full use of those funds are achieved."
The bill also includes authorization for more than two dozen U.S. Army Corps of Engineers chief's reports, including navigation deepening projects for Port Everglades and Brazos Island Harbor in Brownsville, Texas.
Among the provisions contained in the Senate EPW's 2016 WRDA bill for which AAPA and its members advocated are:
An improved approach towards full use of HMT revenues. AAPA recommended that the annual HMT authorized target funding level be either the greater of the existing target, or 103 percent of the prior year's HMT appropriation until full use of HMT revenues is achieved in 2025.
Extending the authorization period for WRRDA Section 2106 Donor and Energy Transfer Ports.
Modernizing the construction cost-share depth. The Senate changed the cost-share depth to 50 feet.
"We continue to urge Senate leadership for quick action to bring this bipartisan bill to the Senate floor for a vote soon," said Nagle. "After waiting seven long years (between 2007 and 2014) for the last WRDA bill, we're hopeful that this legislation will return to an every-two-year process."
Hanjin Shipping asks charter owners for help in debt restructure
Hanjin Shipping Co. reached out to owners of its chartered fleet and terminal operators to say it can't survive unless they help with its debt-restructuring efforts, according to The Wall Street Journal.
In a letter to foreign owners, Chief Executive Suk Tae-soo said the debt-ridden operator faces serious challenges.
"Upon careful analysis of the business outlook and financial projections with the assistance of outside experts, our management has come to the conclusion that our own efforts alone may fall short of fully resolving the liquidity issues that we are facing," the letter said, according to Hanjin spokeswoman Min Park.
A critical condition for the creditors' bailout is a significant cut in charter rates that Hanjin pays to foreign ship owners, according to lenders and government officials. Hanjin now pays about $1 billion a year to charter ships.
Hanjin submitted a formal request last week to state-run Korea Development Bank, its main creditor, to restructure its debt and provide an aid package in return for asset sales and charter rate cuts.
KDB said it would review the proposal with other creditors and decide this week whether to offer assistance to Hanjin. Options include a debt rollover. If creditors reject the proposal, the company would be put under court receivership.
Hanjin had debt of $65.7 billion at the end of 2015.
Singapore, the world's second-busiest container port, has started building a new harbor to double the island-city's capacity to meet growing demand.
The first of a four-phase development of the deep-water port in the western part of Singapore started last week, the Maritime and Port Authority of Singapore said in a statement.
The initial stage would have 20 berths, with a capacity to handle 20 million TEUs a year when completed, the government said.
Singapore is one of many countries in the region spending billions of dollars to add port capacity as trade expands at a faster pace than between Asia and Europe.
The project is also aimed at attracting a growing number of large vessels plying the Asia-Europe trade lane. The city-state is building the new port west of the current site, and the annual capacity is set to double to 65 million boxes over about 30 years.
The first phase is slated to be completed in the early 2020s, the government said.
A venture between South Korea's Daelim Industrial Co. and Dredging International Asia Pacific Pte is undertaking the initial development, which will also include dredging and the construction of the wharf structure.
Singapore will redevelop the current port region into the Southern Waterfront City by 2027 when leases for the terminals expire, the government has said.
China denies U.S. aircraft carrier entry to Hong Kong port
China has denied a U.S. Navy aircraft carrier entry into a Hong Kong port, according to Pentagon spokesman Cmdr. Bill Urban.
"We were recently informed that a request for a port visit by a U.S. carrier strike group, including the USS John C. Stennis and accompanying vessels, to Hong Kong was denied," he said. "We have a long track record of successful port visits to Hong Kong, including with the current visit of the (command ship) USS Blue Ridge, and we expect that will continue."
It was not immediately clear why the Stennis was denied port access.
A spokesman for the Hong Kong Security Bureau declined to comment on the decision, saying the Hong Kong Special Administrative Region government wouldn't comment on the individual visit application of foreign warships.
The port access denial comes just two weeks after Defense Secretary Ash Carter visited the Stennis while the carrier was operating in the South China Sea. The area is at the center of heightened tensions between the U.S. and China, with Beijing building and militarizing man-made islands in the contested waters.
"We want to reduce tensions, but we also want everybody in the region to be able to rise and develop in their own way — including the Philippines, by the way, which happens also to be a longstanding and very staunch treaty ally of the United States," Carter said while addressing crew and reporters on board.
About 121 pounds of heroin found in shipping container at Red Hook
Around 121 pounds of heroin and eight pounds of cocaine stashed inside a shipping container of vegetables was seized by U.S. Customs and Border Protection officials in Brooklyn earlier this year.
According to officials, CBP officers found 257 boxes containing around 970 packages of heroin and 58 bags of cocaine while conducting a K-9 search of a shipping container that arrived at the Red Hook Container Terminal on Jan. 7.
The heroin was estimated to have a street value of around $3.5 million, officials said. The cocaine found was estimated to have a value of $135,000.
The shipping container originated in Ecuador and was heading to Miami at the time, officials said. No arrests have been made.
Maersk Line made a profit of $37 million in the first three months of 2016, compared with analysts' average forecast for a loss of $121 million in a Reuters poll. The bottom line improved through cost cutting and a pick up in volumes, it said on Wednesday.
That was still down from a $714 million profit in the same quarter last year, however.
"While market conditions remain challenging, we continue to adjust our cost base to the new conditions," said Chief Executive Nils Smedegaard in a statement.
The shipping giant plunged to a loss in the last quarter of 2015 for the first time in nearly three years, in an industry plagued by a weakened global economy and vessel overcapacity.
Maersk Group repeated its forecast for its container business to achieve an underlying result this year that's "significantly below last year," with global demand for ocean container transportation expected to grow 1-3 percent.
The Jasper Ocean Terminal is moving toward the permitting phase, and South Carolina Gov. Nikki Haley urged state lawmakers on Monday to start thinking about setting aside funds for the $4.5 billion port that South Carolina and Georgia will build along the Savannah River.
The new port could mean a million jobs and billions of dollars to the greater Jasper area. The price tag is an estimated $4.5 billion, which includes projects associated with the port, like widening Highway 17.
"So, that's why you're going to continue to hear me ask the Senate again, and ask the House again, you know, don't waste it," Haley said. "The years don't come by often, but let's put it in safety pockets.
"This Jasper Port is a priority in infrastructure just like the roads are. So, I think that we need to include that in that process so that everybody is ready for it."
The $4.5 billion would come partially from grant, and partially from the year-to-year building budget from the state.
In a luncheon meeting on Monday afternoon held by the Jasper County Chamber of Commerce, presenters suggested there would be one million jobs created by the year 2040, and $9 billion pumped back into the local tax base.
The ports in Savannah and Charleston are expected to be at capacity by 2025.
The project is currently in its contracting phase, as ports authority officials search for a third party developer.
Port of Oakland extends night and weekend operations
A $1.5 million subsidy program to stimulate night and weekend business at the Port of Oakland has been extended. The port's largest marine terminal operator responded today saying it will use the program to further expand weeknight operations. The announcement comes as the port abandons its traditional 8 a.m. to 5 p.m. operating model.
"The old way doesn't work any longer," said Port Executive Director Chris Lytle. "There's too much business; we have to stay open longer to get cargo in and out of Oakland."
Port Commissioners voted last week to continue through June 30 the fund that partially subsidizes extended gate hours. It had been scheduled to expire this week.
Oakland International Container Terminal (OICT), which handles 67 percent of Oakland's cargo, said it will tap the fund immediately. The terminal has operated nights and Saturdays for two months to ease pressure on busy weekday cargo operations. Now it intends to conduct additional nighttime transactions Tuesdays-through-Thursdays, 6 p.m. to 3 a.m., during a four-week trial.
The new transactions include accepting containerized export loads and receiving and releasing empty containers. The expanded-transaction trial begins May 10. Other nighttime transactions already in place include:
Refrigerated container handling;
Containerized import pick-up by customers using an express service known as the one-stop, free-flow program; and
Import pick-up for containers loaded on chassis for immediate drayage.
"We're counting on harbor drivers to take advantage of these added nighttime features," said Port of Oakland Maritime Director John Driscoll. "This is what cargo owners have been asking for and the terminal operator and Port have been listening."
Extra gate hours are intended to give harbor truckers more time to pick-up and deliver containerized cargo. Until recently, they had only been allowed through terminal gates on weekdays. By working nights or Saturdays, drivers can avoid lines that sometime build up on the dayside Monday-through-Friday. The upshot, the port said, is faster cargo delivery to customers.
Oakland International Container Terminal said it's conducting up to 600 transactions every night and 1,200 on Saturdays. The port said those numbers should grow as more business migrates from weekday operations.
Trapac terminal at JaxPort needs deeper water to compete
The big ships calling on TraPac's terminal ushered in a new chapter for Jacksonville's port when it opened in 2005. TraPac linked JaxPort to the fast-growing trade routes to Asia, forging a connection that port officials called a game-changer for the city.
A decade later, TraPac's terminal, which opened in early 2009, is operating at a fourth of its capacity.
TraPac might not stay at that site. The company is negotiating with the Jacksonville Port Authority about possibly leaving the 158-acre terminal and moving to a different authority-owned location.
Ultimately, TraPac's future in Jacksonville hinges on JaxPort's quest to deepen the ship channel from its current 40 feet deep to 47. The $684 million dredging project would be the most expensive public works project in Jacksonville history.
TraPac has said for years that in order to stay long term in Jacksonville, it must have deeper water for the much larger cargo-container ships now in operation. But there is no firm timetable for when the first underwater scoop would occur, much less how to pay for it. Nothing can happen until a legal challenge to environmental permits gets resolved.
While Jacksonville faces all those obstacles, other Southeast ports are pursuing deeper water, too.
In September, the Port of Miami was the first in the Southeast to deepen its port to be fully ready when massive ships begin using the expanded Panama Canal expected to open this year.
Savannah's dredging project for a 47-foot channel started last year. The state of Georgia is committing $266 million. The federal government has put forward $69 million with another $42.7 million proposed for fiscal 2017.
That puts Jacksonville in a race with Charleston, S.C., and Port Everglades to be the next port to break ground on their river bottoms.
"If we don't get deep water — and I can't emphasize this enough — we won't be in the game to be an international port," said Jacksonville Port Authority board member Jim Citrano.
Charleston expects to complete at least part of the deepening by the end of the decade, which at 52 feet would make it the deepest port on the East Coast, said Erin Dhand, spokeswoman for the South Carolina Ports Authority.
Port Everglades is pursuing a 48-foot channel at a cost of $374 million, which is considerably less expensive than the $684 million cost for Jacksonville.
Florida is willing to partner financially with Jacksonville and Port Everglades to help pay for dredging, but only on a 50-50 basis for the non-federal portion of the cost, according to the state Department of Transportation.
COSCO box ship crashes into gantry crane at Port Said
The Suez Canal Container Terminal in Egypt's Port Said had a big fire Tuesday night when a COSCO containership crashed into a gantry crane as it was leaving the port.
According to reports, several cranes collapsed or were damaged, with stacks of containers knocked over and some even on fire. The crane's boom fell onto containers on the berth, and local media suggests it also hit a fuel tank. Hazardous chemicals in one of the containers has been cited as the cause of the fire.
More than 20 containers burned and two people were injured in the accident.
The accident is believed to have happened shortly after midnight on Tuesday when the stern of the vessel somehow backed into the crane, causing it to topple and fall. The Suez Canal Authority deployed fire engines and tugs to the scene and the fire was under control by dawn.