Westbound trans-Pac carriers push seasonal rate hike for proteins, hides
Major container-shipping lines operating in the U.S. - Asia tradelanes have proposed a seasonal increase to existing freight rates for temperature controlled protein products and animal hides.
The members of the Westbound Transpacific Stabilization Agreement announced that the new proposed rates would go into effect July 1, increasing rates by $300 per forty-foot box for the frozen and chilled products that include beef, pork, poultry, shipping from the West Coast. For the same type of shipments departing the U.S. East Coast for the all-water route, or via intermodal, the increase would be $400 per-FEU. Rates for hides would increase $100 per container, the WTSA said in a statement.
Protein and hide cargoes usually fall under 12-month contracts that run from July 1-June 30 and have not been covered under previously announced general rate increases for 2012, the WTSA said.
Brian Conrad, executive administrator for the WTSA said "demand remains strong in Asia for U.S. exports of frozen and chilled meat, and.different trade lanes continue to compete for a limited supply of refrigerated equipment in circulation, particularly temperature-controlled container for carrying chilled commodities."
New $600 mil trans-shipment container terminal to be developed in Panama
The Panama Maritime Authority has granted a permit for a new 92-acre container terminal to be built in Colon, Panama at a cost of over $600 million, and is scheduled to open when the Panama Canal's $5.2 billion widening project is completed in late 2014, according to the project's advisor.
The four-berth Panama Colon Container Port will include the ability to handle up to 18,000-TEU containerships with an initial throughput capacity of 2 million TEUs per year, according to the PCCP website.
In a statement released by Jones Lang LaSalle, the development advisor to the project's consortium: "Numerous ports along the U.S. Eastern and Gulf coasts, South America and the Caribbean do not have the capacity to receive the larger ships. PCCP is designed to address this, so that Super Post-Panamax and other vessels can transit via the new locks, and transfer their cargo at the new PCCP terminal to and from smaller container ships capable of serving the existing ports of call."
The PCCP website states "a world class terminal operator will be announced in the coming months."
"We expect transshipment terminals such as PCCP to play an integral role in the long-term success of the Panama Canal," said Ricardo Quijano, Minister of Commerce and Industry in Panama.
"For such a large infrastructure project to be achievable by the private sector is a testament to Panama's concerted efforts over many years to create a stable and transparent operating environment," he said.
Ships slow down for fuel.and pirates
Shipping companies are slowing their cargo vessels down to save on high fuel costs during the current financial crunch for that sector, however it is reportedly at the risk of being easier targets in pirate-infested waters, such as off Somalia.
Ron Widdows, chief executive officer for shipowner Rickmers Holding told the Financial Times that security consultants have advised that carrying more guards on board.
Widdows said: "They're looking for just about anything that will allow them to save costs."
"The opportunity for exchanging shots out there very certainly increases if people start to do this," he said.
Pirates have reportedly never been able to board ships that travel at 18 knots or faster; however shipping companies can save $50,000 in fuel in a single day, which would pay for the security guards' entire trip.
For the full CNBC/Financial Times story: www.cnbc.com
Wednesday, May 9, 2012
Top Story
NOL Group posts $254 mil loss for Q1
Singapore's Neptune Orient Lines, parent to the seventh largest container-shipping company in the world, APL, reported a $254 million loss for its first quarter, the fifth straight quarter in the red for the company.
NOL posted a $10 million loss for the same period last year, and more recently lost $320 million in the fourth quarter.
Revenue for NOL's first quarter was at $2.38 billion, down from $2.44 billion for the same period in 2011.
High fuel costs and low freight rates had a negative impact on earnings, while reduced fuel usage and improved operational costs allowed for $100 million in savings, the shipping line said in a statement.
NOL said it is "on track to achieve $500 million worth of savings for 2012."
The shipping group said it is also undergoing an organizational restructure that will save the company $70 million annually beginning in 2013.
NOL's APL Logistics unit reported a 7 percent increase in revenue at $394 million that the company attributed to "strong demand for rail and land-based services from automotive customers."
"There were positive signs in the first quarter - the freight rate increases in March and growth in the Logistics business," said NOL Group CEO Ng Yat Chung.
"But we must continue to aggressively manage our operating costs, and streamline our organization for greater efficiency," he said.
Trans-Pac lines propose $600 per-FEU peak season surcharge
Trans-Pacific container lines serving the Asia-U.S. tradelanes announced their collective intention to levy a $600 per-forty-foot container surcharge for the peak shipping season that would take effect June 10.
The ocean carrier members of the Transpacific Stabilization Agreement attributed the surcharge to increased cargo demand based on forward bookings, U.S. consumer spending, retail sales trends, and the projected costs associated with the uptick.
"The lines see a strong outlook for the coming months, with utilization already in the 95 percent range," said TSA executive administrator Brian M. Conrad in a statement.
"At the same time, they continue to dig out after a long period of serious financial losses, and want to be sure they are well-positioned to ramp up services as the trade rebounds," Conrad said.
The TSA's statement went on to say the peak season surcharge "is intended to cover extraordinary seasonal costs associated with anticipated cargo surges that can require leasing of vessel and equipment capacity, routing or schedule changes, special port terminal or inland transportation arrangements, added staffing or other measures to cover short-term contingencies."
U.S. House reportedly set to pass Export-Import Bank bill
The U.S. House of Representatives is reportedly set to pass a reauthorization bill that would extend a lifeline to the beleaguered Export-Import Bank for another three years.
The Ex-Im Bank's charter expires this month as it is close to its $100 billion borrowing limit, which under the House bill, would be raised to $140 billion over the three-year period if the bank's default rates remain below 2 percent, the Washington Post reported.
Ex-Im Bank provides guarantees to commercial banks on behalf of U.S. exporters, in addition to offering export credit insurance.
House Republicans had opposed authorizing a higher borrowing limit to the bank, equating that to growing government during a time of budget cuts.
However, major business groups such as the Chamber of Commerce and National Association of Manufacturers have been strong supporters of the Ex-Im Bank, and the need to compete effectively with other countries and their, in some cases, more generous export finance schemes.
Under the House bill's provisions, the Treasury Department would have to submit regular status reports on negotiations with other countries regarding export and import subsidy cuts, the Post reported.
Senate Majority Leader Harry Reid said the Senate would move quickly to a vote on the reauthorization bill once the House approves it.
New Jersey container terminal plans "multi-billion-dollar" expansion
Global Container Terminals Inc announced its final plans for what the company termed a "multi-million dollar expansion project" for a 70-acre cargo-handling facility in the Bayonne, New Jersey.
Global Container Terminals, with facilities in British Columbia, New York and New Jersey, said the new terminal, scheduled for operation in 2014 when the widened Panama Canal is projected to open for business, would be designed to handle larger, post-Panamax container-ships at a greater throughput density per acre, and would feature "new container handling technology."
The total capacity for the Global Terminals operation after its expansion will be 1.7 million TEUs, the company said.
"The new Global development project, in addition to the many improvements currently underway, clearly demonstrates a long-term commitment from the Port Authority of New York and New Jersey to protect the port's preeminent position as a critical U.S. gateway for global commerce," said James Devine, president and CEO, Global Container Terminals USA, in a statement.
The Port Authority of New York-New Jersey acquired the land for the container terminal in 2007 and in 2010 pledged up to $150 million to assist in the development. The port had also agreed to develop an adjacent rail facility that could handle up to 250,000 containers per year.
Devine said Global Terminals is prepared to get its labor force up to speed with the planned new technologies at the terminal.
"We will provide the training as well as the job opportunities for ILA workers to transition into the next generation of container handling," he said.
Report: Radioactive container discovered at Port of Hamburg
A shipping container transiting from India to Germany was detected to be contaminated with radioactive cobalt-60, according to a report by Hamburger Adenblatt.
The radiation was sourced to empty tea boxes, and the container has been quarantined and will reportedly be sent back to India.
CAT to sell majority interest in logistics unit for $750 mil
Heavy equipment manufacturer Caterpillar Inc. announced an agreement has been reached to sell its majority stake in its CAT Logistics unit to Platinum Equity for approximately $750 million.
"The sale of the third party logistics business would be a key step in the execution of our enterprise strategy. This event enables Caterpillar to increase its focus on our core business that aligns with our strategic business model," said Stu Levenick, Caterpillar group president for customer and dealer support in a statement.
"We believe the transaction with Platinum will set the third party logistics business on a path for continued growth and success," Levenick said.
The 25-year-old CAT Logistics business will continue to serve more than 50 customers around the world, including non-CAT branded parts including FG Wilson, Perkins and Solar, the company said.
"We have a lot of experience owning and operating businesses that provide complex supply-chain solutions," said Platinum Equity Partner Jacob Kotzubei.
Platinum Equity claims it has made more than 130 acquisitions worth over $30 billion in combined annual revenue.
The pending sale will not impact Caterpillar's manufacturing logistics and transportation operations, nor Caterpillar brand parts distribution as they will continue as core businesses within CAT Logistics, the company said.
Caterpillar said it has, to date, added over four million square feet of capacity in new parts distribution centers in the U.S., Mexico, and the United Arab Emirates.
The transaction is expected to close in the third quarter of 2012, according to Caterpillar.
Evergreen, MOL to launch new Asia-U.S. East service
Taiwan's Evergreen Line and Japan's MOL announced a new joint service would launch between Asia and the U.S. East Coast via the Suez Canal in June.
Evergreen said in a statement that the Asia-U.S. East Coast Service 3 will add more direct calls to its service network, including Cai Mep, Singapore and Jacksonville, Florida.
The container-shipping lines said ten ships of 4,500-5,600-TEU capacities would be deployed in the service, with MOL operating nine of those vessels.
The first sailing is scheduled to depart Hong Kong on June 3, 2012 for a 70-day voyage with the following rotation:
Hong Kong - Yantian - Singapore - Suez Canal - Algeciras - Norfolk - Savannah - Jacksonville - Charleston - Algeciras - Suez Canal - Singapore - Cai Mep - Hong Kong.
Report: U.S. warehouse demand slipped in Q1
A slowly recovering U.S. economy took its toll on industrial warehouse absorption of space in this year's first quarter, falling by about a third, according to CoStar's quarterly Industrial Outlook and Review.
"We definitely saw a slowdown in demand during the first quarter of this year," said Rene Circ, director of industrial research for property and portfolio research, CoStar's analytics and economic forecasting division. Circ said the advance estimate of U.S. gross domestic product called for just 2.2 percent growth.
"[But] It was a slight slowdown and we do expect it to pick up," Circ said.
The better news, according to CoStar's report, is that the warehouse vacancy rate fell 20 basis points to 9.4 percent in the first quarter, down from the previous quarter's 9.6 percent.
"The increase in occupancy continues a trend of steady tightening of the warehouse market over the last few quarters, especially for the largest big box warehouses in the nation's most important national and super-regional distribution hubs," the CoStar report said.
CoStar's Circ said a scarcity of new supply, moderate positive demand and slowly declining vacancies, "net effective rents are gradually starting to rise as free rent and other concessions decline."
"Considering that we have 25 million square feet of all space that was vacated during the recession that has yet to be re-absorbed, that's pretty exciting and encouraging, in terms of occupied square footage returning to pre-recession levels," Circ said.
However, Circ said asking rents are not reaching a turning point as quickly as landlords would prefer.
"I think it's safe to assume we have hit the bottom, but the net asking rents we track are still showing flat performance," he said.
Tanker owners to pay almost $ 2 mil for SF Bay spill
The owners of a 600-foot tanker that spilled oil into San Francisco Bay during a fuel transfer from a barge on October 30, 2009 that reportedly spilled over 400 gallons and polluted 6 miles of shoreline, have agreed to pay an almost $2 million settlement with San Francisco and Alameda counties.
According to investigators, a crewmember of the Panamanian-flagged Dubai Star reportedly failed to shut off a valve once the fuel tanks had filled up and the ship's captain subsequently did not report the breach to authorities for close to half-an-hour.
The tanker vessel's owner is Panama-based South Harmony Shipping, and is operated by Dubai-based Pioneer Ship Management Services.
Over 200 acres were reportedly impacted by the spill, killing 113 seabirds.
The settlement includes $1.408 million going towards natural resource damage, spill costs, and $550,00 in penalties, the San Francisco Chronicle reported.
The U.S. Commerce Department reported Wednesday a 5.2 percent increase in imports and a 2.9 percent rise in imports in March. Widening the trade gap 14 percent to almost $52 billion, the import surge reflects a growing consumer demand for electronics, crude and cars, according to the report.
"It's hard to get nervous that imports are rising," said Dean Maki, head U.S. economist at Barclays Capital to Bloomberg. "It does suggest that consumer demand is strong."
After a 2.8 percent decline in February, the March figures brought U.S. import worth up to $238.6 billion.
Imports from China in March grew by 12 percent.
In February, the value of U.S. exports grew to $186.8 billion due to increased demand overseas for items such as aircraft engines, fuel oil and chemicals, according to the Commerce report.
Apple and Chinese supplier Foxconn to pay for factory upgrades
After a recent media storm exposed harsh working conditions for workers who help manufacture iPads and iPhones in Chinese factories, Apple and its main supplier Foxconn have agreed to pay for needed factory upgrades.
The issue came to a head when the New York Times published a scathing expose on the poor working conditions at the Foxconn factories in China, alleging that Apple was culpable for ignoring the plight of these workers.
Apple CEO Tim Cook, in an email to Apple staff, asserted, "Any suggestion that we don't care is patently false and offensive to us."
Partnering with the Fair Labor Association (FLA) in January, Apple agreed to abide by the association's code of conduct throughout their supply chain, according to CBS News.
Since then, the FLA has conducted a review of Foxconn's Guanlan, Longua and Chengdu factories.
"The Fair Labor Association gave Apple's largest supplier the equivalent of a full-body scan through 3,000 staff hours investigating three of its factories and surveying more than 35,000 workers. Apple and its supplier Foxconn have agreed to our prescriptions, and we will verify progress and report publicly," Auret van Heerden, FLA president and chief executive officer, reportedly said in March.
Apple must comply with FLA standards within two years. Foxconn must get its factories up to FLA's code by July 2013.
A contract was approved Thursday for the Port of Tacoma to ready a container terminal to accommodate the giant container ships that Maersk will launch in 2013.
BergerABAM will modify Pier 3 with cranes that can handle the cargo of the Triple E-Class ships, which, at 24 containers wide and 1200 feet long, will be the largest ships in the world. Currently being constructed by Maersk Line, each of the 10 ships will carry 18,000 TEUs.
Port of Tacoma cranes can now extend 18 containers wide, and Pier 3 is 1,190 feet long.
Industry insiders say that the Port of Tacoma is trying to get Maersk Line to return after moving two years ago to the Port of Seattle to join CMA CGM.
The Port of Rotterdam reported Thursday that the European Investment Bank approved its $1.16 billion USD ($900 million euro) loan, paving the way for a 20 percent port expansion.
The port area will be expanded from 10,000 hectare to 12,000 hectares via a $3.89 billion ($3 billion euro) land reclamation project that the 30-year EIB loan will partially finance, according to Reuters.
After the project is completed, the number of ships calling at Rotterdam will jump from 31,000 in 2006 to 57,000 in 2033, according to the port.
Baltimore feds seize Japanese cargo ship over lawsuits
The U.S. Marshall service took over a Japanese cargo ship at the Port of Baltimore on Tuesday, citing two federal maritime lawsuits filed against the owner.
Two shipping companies, Liquimar Tanker Management of Greece and Cobelfret Bulk Carriers of Belgium, filed separately in the U.S. District Court in Baltimore. Both suits allege that the Sanko Steamship Co. owes the companies money for ships it leased from them long-term. According to the lawsuits, Sanko Steamship owes Liquimar it $2.7 million, and owes Cobelfret over $13 million.
Heavy equipment manufacturer Caterpillar Inc. announced an agreement has been reached to sell its majority stake in its CAT Logistics unit to Platinum Equity for approximately $750 million.
The U.S. Commerce Department reported Wednesday a 5.2 percent increase in imports and a 2.9 percent rise in imports in March. Widening the trade gap 14 percent to almost $52 billion, the import surge reflects a growing consumer demand for electronics, crude and cars, according to the report.