Cargo Business Newswire Archives
Summary for May 3 - May 7, 2010:
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Monday, May 3, 2010

Top Story

“No frills” trans-Pac service arrives in L.A.

The Port of Los Angeles now has a no-frills shipping firm offering inexpensive shipping services between China and Southern California.

The Containership Co.'s inaugural shipment arrived Sunday aboard the Norwegian company's vessel Taicang Dragon. Dockworkers unloaded cargo containers at the TraPac shipping terminal.

Each of the company's five vessels will be rotated during the weekly service to Los Angeles. They will add an estimated 250,000 cargo containers annually at the port.
Port executive director Geraldine Knatz says it could be a boost for local jobs.

The company hopes to eventually expand to the Pacific Northwest ports of Seattle or Vancouver, along with China's Shenzhen province.

-A.P./San Jose Mercury News

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UAL-Continental merger worth $3.17 bil

United Airlines parent UAL Corp. will buy Continental Airlines Inc. for $3.17 billion to form the world's largest carrier, moving to better withstand the hazards that have battered airlines in recent years.

The merger, if approved by regulators, would create a sprawling global airline designed to lure more well-heeled business travelers.

The combined carrier, with over $29 billion in annual revenues, would carry the name United Airlines and be based in Chicago. The deal, announced by the companies on Monday, is expected to produce $1 billion to $1.2 billion in annual revenue and cost benefits by 2013.


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Canadian Trucking Alliance calls out rail counterparts

The Canadian trucking industry is calling on rail to get its act together so the two modes can work together and provide reliable intermodal service to shippers.

The point was made by the Canadian Trucking Alliance (CTA) in a submission to a panel formed by the federal government as part of its rail freight service review.

In a CTA survey, 82% of respondents said they were not pleased with the current level of service provided by Canada's Class 1 railways. Common complaints included: wait times at intermodal terminals, unreliable on-time performance and the application of demurrage fees.

-Truck News

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Greenbrier offers 4.5 mil shares of common stock

Railroad freight car maker Greenbrier Cos. said Monday it started a public offering of 4.5 million shares of its common stock.

The company plans to use the offering's net proceeds for general corporate purposes such as working capital, capital expenditures, or to pay back or buy back part of its debt or for potential acquisitions.

On Friday, Greenbrier and private equity firm WL Ross & Co. announced that their newly formed company purchased a lease portfolio of almost 4,000 railcars for about $230 million.

Greenbrier, based in Lake Oswego, Ore., builds new railroad freight cars and marine barges. It also repairs and refurbishes freight cars and provides wheels and railcar parts.

-Bloomberg BusinessWeek

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Georgia Institute of Technology to set up Panama logistics center

The Georgia Institute of Technology will soon finalize plans for a new logistics center in Panama that would provide training and research to help the country become a trade hub for the Americas.

The Panama center would be the latest in a network of Logistics Innovation Centers Georgia Tech is planting around the world. The first one went to Singapore 13 years ago. Last August, GlobalAtlanta was on hand when Tech launched another in San Jose, Costa Rica, to help that country build infrastructure and develop human capital in an effort to boost exports.

Unlike Costa Rica, though, the Panama center would focus less on sending out Panama's own products and more on leveraging the country's unique location and existing infrastructure to help companies from other countries funnel products to markets throughout the Americas.

-Global Atlanta

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Tuesday, May 4, 2010

Top Story

Hundreds of Oakland truckers fail to meet clean air deadline

About 500 truckers who have failed to meet an April 30 deadline to have new diesel particulate filters installed on their rigs were shut out of the Port of Oakland marine terminals Monday. But they weren't the only ones.

Many drivers whose filter deadlines were supposed to be extended until June 30 also were prevented from working because they had not yet received new compliance stickers for their trucks from the California Air Resources Board.

Several stayed home. But about 25 of them marched in an orderly and mostly silent protest past the marine terminals Monday morning and said they planned to continue the practice all week.

-Oakland Tribune

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YRC posts $274.1 mil Q1 net loss

U.S. trucking company YRC Worldwide Inc. posted a wider quarterly loss on Tuesday, though continued cost-cutting helped it largely offset a 30 percent drop in operating revenue.

The Overland, Kansas-based company reported a first-quarter net loss of $274.1 million, or 53 cents a share, compared with a loss of $273.8 million, or $4.61 a share, a year before.

Earlier this year, the company's auditors expressed doubts about YRC's ability to continue as a going concern.
Operating revenue fell 30 percent to $1.06 billion.

Analysts had expected YRC to post a loss of 48 cents a share on revenue of $1.11 billion, according to Thomson Reuters I/B/E/S.


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China manufacturing continues rebound at slower rate

China's manufacturing activity remained in expansion in April, indicating the industrial rebound is now well into its second year of growth, though there were indications the recovery may be losing steam, according to new data.

HSBC's survey, conducted in association with market research firm Markit, reported a Purchasing Manufacturing Index (PMI) reading of 55.4 in April, compared to 57.0 in March. The result, released Tuesday morning, ranked as the weakest reading in six months.

"We see this as good news because it means that Beijing's policy tightening is starting to cool the overheated economy, which will help to contain inflationary risk in the coming quarters," the bank's chief economist for China, Hongbin Qu, said in a statement.


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Dubai to open world’s biggest airport to cargo only in June

Dubai's second airport, designed to be the world's largest when completed, will open in June for cargo only, with plans to receive passengers in spring next year, Dubai Airports chief said Tuesday.

The airport, which is designed to have six runways and handle 120 million passengers when fully completed, was supposed to be operational by the end of 2008. Its runway has been ready since 2007.

The new airport is planned to cover 140 square kilometres (87 square miles), part of the 33-billion-dollar Dubai World Central development in Dubai's Jebel Ali area, home also to the region's largest port and its busiest free zone.

It is being built 40 kilometres (25 miles) away from the current airport -- already the busiest in the Middle East.

-Economic Times (India)

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Oil spill update: Gulf of Mexico shipping still proceeds

A giant oil slick in the Gulf of Mexico has not spurred shipping restrictions in U.S. Gulf channels like the vital Mississippi River, the head of the U.S. Coast Guard said on Saturday.

The oil slick from last week's deadly offshore oil rig explosion is creeping eastward across the Gulf, threatening the coasts of Louisiana, Mississippi, Alabama and Florida.

The spill's current trajectory is between the Southwest Pass, the main deepwater shipping lane into the Mississippi River, and navigable channels for vessels to Gulf Coast ports, Coast Guard Commandant Admiral Thad Allen said on a conference call with reporters.

The spill has not affected shipping lanes -- called fairways -- that giant oil tankers and barges follow to gain access to the Mississippi River or other important ports like Gulfport, Biloxi and Pascagoula in Mississippi, or Mobile, Alabama, Allen said.


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Wednesday, May 5, 2010

Top Story

Buffet’s BNSF bet paying off

Berkshire Hathaway Inc.’s Burlington Northern Santa Fe, the railroad Warren Buffett bought this year as an “all-in wager” on the U.S., said the economy is growing as the industry posted its first across-the-board increase in freight volumes since 2004.

The Association of American Railroads reported increases in U.S.-originated hauling of trailers, containers and each one of 19 carload commodity groups in the week ended April 24. It was the first time in more than five years that all categories rose, said Holly Arthur, a trade group spokeswoman. Berkshire swung to profit in the first quarter and Buffett, the firm’s CEO, told shareholders the economy “picked up steam.”

“We are seeing an uptick,” in businesses that serve broad industries, like railroads, said Buffett, who paid $27 billion for Burlington in February in his biggest takeover.

Union Pacific Corp., the country’s No. 1 railroad by sales, has advanced 17 percent this year on the New York Stock Exchange. CSX Corp., the third-biggest rail hauler, and No. 4 Norfolk Southern Corp. are both up 14 percent in 2010.

Hauling of metallic ores more than doubled, while metals and products loads jumped 80 percent. Waste and scrap material transport rose 60 percent, and rail shipments of farm products, excluding grain, gained 49 percent. The increases were calculated against freight volumes in the same period of 2009.

-Bloomberg BusinessWeek

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New CN chief touts Calgary as major hub

The new president and chief executive of CN says he chose Calgary to give his first public speech Tuesday because it's a city "in the middle of the action."

Claude Mongeau, a 16-year veteran of Canadian National Railway Co. who succeeded Hunter Harrison in the top job in January, showed he knows how to get an ovation as a Calgary Chamber of Commerce crowd responded with applause.

"I'm here to tell you that Calgary is a major CN city," he said. "In fact, before the recession hit, our Calgarybased revenues were growing at a double-digit rate. And as the economy recovers, we expect to continue at that pace of growth in the future."

In February, CN announced it would invest $100 million in a logistics park east of the city and close its cramped southeast Calgary train yard.

It said Calgary is considered the third-largest distribution centre in Canada and is becoming the logistics hub of Western Canada.

The new 272-hectare CN Calgary Logistics Park near Conrich in Rocky View County is expected to open in 2013 and will include an intermodal terminal with room for customers to custom-build facilities.

-The Calgary Herald

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Earnings leap 477 percent for Matson parent

Alexander & Baldwin Inc. ended last year with some recovery, and continued that momentum during the first quarter as its earnings jumped 477 percent.

The parent of ocean transportation subsidiary Matson Navigation Co. posted net income of $17.3 million, or 42 cents a share, compared with $3 million, or 7 cents a share, a year ago.

Revenue rose 9.4 percent to $345 million from $315.3 million.

Matson's revenue rose 14 percent to $229.5 million from a year ago's $201.1 million, largely due to an increase in container volumes for China shipping services. That gain offset declines in A&B's real estate leasing.

-Honolulu Star Bulletin

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Railroad group applauds “green jobs” report

Yesterday, the Association of American Railroads (AAR) lauded a report that found about 7,800 “green” U.S. jobs are created for every $1 billion of capital invested in freight rail.

Issued by the BlueGreen Alliance and Economic Policy Institute, the report — titled “Full Speed Ahead: Creating Green Jobs Through Freight Rail Expansion” — also determined that freight-rail investments can help reduce carbon emissions and the nation’s dependence on foreign oil. In addition, the report noted that freight railroads reinvest capital four times more than most other U.S. industries. The report’s authors cited standards used by federal and noted labor market analysts to define green jobs.

-Progressive Railroading

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Houston company halts Astoria LNG terminal development

A Houston natural gas company says it is halting development of a liquefied natural gas terminal near the mouth of the Columbia River in Oregon.

NorthernStar Natural Gas President Paul Soanes said Tuesday in a statement that extended delays in state and federal permits led to the decision.

The company started work on the Bradwood Landing project near Astoria six years ago with hopes of building the first deepwater port for LNG tankers on the West Coast and a pipeline to send it throughout the state.

The project won federal approval, but state officials opposed it, saying the new energy source was not needed and posed environmental problems.

-Seattle P-I

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Thursday, May 6, 2010

Top Story

CMA CGM scrambles to restructure after $1.4 bil loss

CMA CGM, one of the world's largest container shipping lines, is considering a public listing as part of a package of measures to turn the ailing Marseilles-based company round after it lost $1.42bn in 2009.

However, the company, which operates the third-largest container ship fleet, was unable yesterday to announce a badly needed restructuring package, amid disagreements over the Saadé family's continuing control of the company.

CMA CGM has been in discussions with its creditors since September on a potential deal to restructure the line's financial obligations to lenders and shipyards after the worst year in container shipping's history threatened its future.

In December, the company announced a preliminary deal, under which Philippe Soulié, a veteran French businessman, took over in January as chief executive from Jacques Saadé, the 72-year-old founder.

The company has since missed deadlines to finalize an agreement, which it hoped to announce in April.

-Financial Times

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Con-way narrows losses in Q1

Con-way Inc. said on Wednesday that its first-quarter loss narrowed from a year-ago period hurt by a huge charge.

The trucking company recorded a loss of $4 million, or 8 cents per share, in the latest quarter. In the year-ago period, Con-way posted a loss of $154 million, or $3.35 per share, including a goodwill impairment charge of $2.93 per share related to its Con-way Truckload division.

Revenue rose 20.7 percent to $1.16 billion from $962.9 million.

-Bloomberg BusinessWeek

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Savannah port cites China cargo for strong March

The Georgia Port Authority’s container port in Savannah recorded a 32.5 percent  increase in container traffic at  227,860 TEUs in March, attributing the spike in large part to commerce with China.

The port authority said its trade with China was 730,961 “loaded only” TEUs in 2009, and has grown close to 21 percent over the past five years.

The port said its exports to China jumped almost 44 percent over the past five years with imports from China having grown 12 percent over the same period.

The fastest growing export commodities from Savannah to China over the past five years were wood pulp up 137 percent to 48,700 TEUs; food, up 118 percent to 34,123 TEUs; and retail consumer goods, up 257 percent to 10,489 TEUs.

The port said the fastest growing imports from China were footwear, up 136 percent to 16,015 TEUs; retail consumer goods up13 percent to 77,947 TEUs; and automotive parts up 86 percent to 17,847 TEUs.

Justice Department joins freight forwarding lawsuit

The U.S. Justice Department said on Wednesday it joined a lawsuit against KBR Inc. that alleges employees of two freight forwarders provided unlawful kickbacks to KBR transportation department employees.

KBR has a contract for logistical support of U.S. military operations in Iraq, the department said. The lawsuit also alleged overbilling by a KBR subcontractor in the Balkans under a military contract.

The lawsuit had been filed in federal court in Texas under the so-called whistle-blower provisions of the False Claims Act by two individuals in the air cargo business -- the industry at issue in the case.

The lawsuit alleged the two freight forwarders, Eagle Global Logistics and Panalpina Inc, provided unlawful kickbacks in the form of meals, drinks, tickets to sports events and golf outings to KBR employees.


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Russian warship attacks hijacked tanker, frees crew, arrests pirates

The fortunes of a band of Somali pirates quickly changed Thursday when a Russian warship opened fire on a hijacked oil tanker, freeing the crew and arresting the bandits, who a day earlier had raced across the Indian Ocean to seize a cargo valued at more than $50 million.

The high-seas battle unfolded after 23 crewmen on the tanker Moscow University sent a distress call and hid from the pirates in a sealed rudder compartment. A Russian destroyer closed in and special forces stormed the vessel at dawn, after marauders shot at a surveillance helicopter, according to the anti-piracy European Union Naval Force.

-L.A. Times

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Friday, May 7, 2010

Top Story

UP chairman confident in economic recovery

More confidence in the nation's economic recovery and in the strength of Union Pacific Corp., even in a downturn prompted the railroad Thursday to increase its dividend by 22 percent and to resume a stock repurchase program.

“Two weeks ago Union Pacific reported record first quarter earnings, evidence that we are emerging from the challenge of last year's recession as a stronger, more profitable company,” U.P. Chairman and CEO Jim Young told about 100 shareholders at the company's annual meeting in Salt Lake City. “With business volumes continuing to grow, we feel very positive about the long-term fundamentals of our business as well as U.P.'s strategy to make the most of these opportunities.”

Union Pacific's board increased the dividend to 33 cents a quarter from 27 cents, payable July 1 to stockholders of record May 28.
The stock repurchase program authorizes the company to buy up to 32.6 million shares by March 31, 2011.

-Omaha World-Herald

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Pacer shares jump on better Q1 news

Shares of Pacer International Inc. leaped Thursday, a day after the freight transportation and logistics services provider said its first-quarter loss narrowed on higher revenue and lower costs.

Pacer shares climbed rose 64 cents, or 10 percent, to $6.94 in afternoon trading.

The company posted a loss of $500,000, or a penny per share, compared with a year-ago loss of $177.4 million, or $5.11 per share. Excluding a writedown on the value of assets and severance charges, adjusted net income increased to $400,000 from an adjusted loss of $12.5 million in the first-quarter of 2009.

Revenue inched up 1.4 percent to $363.7 million.

-Bloomberg BusinessWeek

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Greenbrier floats 4.5 mil shares of stock

After a rough 18 months of declining sales, layoffs and a feud with its largest customer, The Greenbrier Companies voiced optimism this spring that the railcar industry is beginning to turn around.

The Lake Oswego company announced Monday a plan to raise about $70 million in new capital to better prepare itself for those good times. Greenbrier will sell 4.5 million shares of stock in a secondary stock offering.

Greenbrier listed a grab-bag of potential uses for the proceeds --working capital, capital expenditures and repayment of debt among them. Greenbrier also might acquire complementary businesses and products, it said.

The company's stock closed Monday at $15.66 a share, down 3.81 percent.

-The Oregonian

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DFW’s Asia airfreight up 36 percent in March

In another sign that the economic downturn is easing, Dallas/Fort Worth Airport said the amount of airfreight to Asia rose 36 percent in March compared with the same month in 2009.

It was the best month ever for enplaned cargo and was higher than the amount of Asian airfreight in March 2008 as well, D/FW Airport Executive Vice President Joe Lopano told board members at their regular monthly meeting Thursday.

-Fort Worth Star-Telegram

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Video: University of Texas oil expert explains how oil dome works

A University of Texas oil industry expert says BP should know if a giant steel and concrete block, designed to contain the Gulf of Mexico oil spill, is working properly within 24 hours of deploying it.

– Courtesy: AP

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