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Summary for May 9 - May 13, 2011:
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Monday, May 9, 2011

Top Story

Maersk signs on to anti-piracy effort; raises fees

In the last six months, the "piracy zone" in the Indian Ocean has widened by almost four times to the tip of India, and the world's largest shipping line has responded with a joint industry statement on anti-piracy efforts and by raising its emergency risk surcharge.

"It is completely unacceptable that the crews onboard Maersk Line vessels are exposed to piracy. The general consensus that we share with our officers is that piracy is a growing concern, but there is simply not enough being done about it internationally," said Maersk Line's chief operating officer, Morten H. Engelstoft, in a statement.

For starters, the Danish shipping group is increasing its emergency risk fee on 40-foot containers that sail through high-risk waters from $100-$400 to $200-$500 per box.

Maersk also signed onto a joint-industry 13-point declaration that resulted from a piracy summit held in the United Arab Emirates at the end of April.

The statement proposes measures that include increased military presence, shadowing and potentially engaging pirate "mother ships," and sharing real-time piracy information.

"Piracy is not something that the shipping lines can or should solve alone; the international community needs to take the lead and step up its response," said Engelstoft.

» Click here to download Anti-Piracy Industry Statement

» Click here to download Final Declaration of the United Arab Emirates Ministry of Foreign Affairs highlevel Counter-Piracy Conference 2011.

Largest U.S. river transportation system approaches 74-year-old water level record

The Mississippi River, the largest U.S. river transportation network, is forecast to crest today in Memphis, Tennessee, at 48 feet, a shade below its 74-year-old record of 48.7 feet.

"Essentially it is beginning to crest right now," said Bill Borghoff, a weather service meteorologist in Memphis in a Bloomberg report. "We expect it should remain near 48 feet through Wednesday night or so," he said.

The Mississippi River is a major transportation system for commodities and petroleum product cargoes. Wheat, soybeans and related crops are harvested along the river's banks.

Approximately 900,000 acres could be adversely impacted in Mississippi, where corn, soybeans and cotton grow, according to Greg Gibson, spokesman for the Mississippi Farm Bureau Federation.

For the full Bloomberg report:

Amazon could double distribution presence in Tennessee

Online retail giant is reportedly poised to build three additional distribution centers in Tennessee at an approximate pricetag of $180 million.

The news of the big investment in the Volunteer state comes amid a push by state legislators there to force the Seattle-based firm to collect sales tax – a principal reason why Amazon pulled its distribution business out of South Carolina and Texas, according to the Chattanooga Times Free Press.

Other retail giants including Wal-Mart are complaining that they need to collect sales tax while Amazon does not given their lack of physical stores in states around the country.

Amazon contends its fulfillment centers are a separate entity from its retail business.

Amazon is reportedly targeting Knoxville or Nashville for its distribution expansion, employing around 1,700 full time workers.

For the full Times Free Press story:

Cheaper to hire a supertanker than a canal boat in London

It might not be good public relations for London's canal boat business, but according to a Business Week report, it will cost you more to hire one of those 57-foot pleasure crafts than a supertanker full of crude. To hire a barge to tour the Grand Union Canal that runs between London and Birmingham costs approximately $646 per day, compared to hiring a 1,000-foot-long supertanker of Saudi Arabian crude oil to Japan at $585 a day, the report said.

Overcapacity in the supertanker trades is the culprit as the supply of the specialized behemoths has reportedly more than doubled while fuel prices are up 28 percent in that sector.

Very Large Crude Carrier capacity could expand by 7.4 percent this year weighed against demand for such vessels hitting just 3.2 percent, according to Clarkson Plc, the largest shipbroker in the world.

For the full Business Week story:

Mutilated humpback whale washed ashore in San Pedro

There is reported speculation that the mutilated carcass of a humpback whale that was found washed ashore at White Point in San Pedro, Calif., near the Port of Los Angeles, could have been caught up in a ship's propeller.

The whale was found on Sunday, May 8, with the top third of its body missing, but marine experts said that it likely was up to 50 feet long and had been dead for 3 to 5 days, according to a report in the L.A. Times.

"A large 20-foot propeller can easily do a lot of damage to a whale, and in this case did remove the entire head," said Diane Alps of the nearby Cabrillo Marine Aquarium.

For the full L.A. Times story along a photo of the whale:


Tuesday, May 10, 2011

Top Story

Midwest river floods impact oil transportation

The rising floodwaters along the Mississippi and Ohio rivers are a threat to the significant crude oil supply chain out of the U.S. Midwest.

Close to 20 percent of the barge terminals along the Ohio River are closed, according to the U.S. Coast Guard.

Valero Energy Corp’s facility in Memphis, Tenn. produces 180,000 bbls per day, and is still operational despite the Mississippi River’s dangerous crest of close to 48 feet, according to a Reuters report.

Following is a list compiled by Reuters of oil terminals and pipelines on/near the rivers that are impacted or threatened:

* Alon USA Energy Krotz Springs, Louisiana: 80,000 bpd
* Chalmette Refining, Chalmette, Louisiana: 192,500 bpd
* ConocoPhillips Belle Chasse, Louisiana: 247,000 bpd
* Exxon Mobil Corp Baton Rouge, Louisiana: 504,500 bpd, second-largest U.S. refinery
* Marathon Oil Corp, Garyville, Louisiana: 436,000 bpd
* Motiva Enterprises, Convent, Louisiana: 235,000 bpd
* Motiva Enterprises, Norco, Louisiana: 234,700 bpd
* Murphy Oil Corp, Meraux, Louisiana: 120,000 bpd
* Valero Energy Corp, Memphis, Tennessee: 180,000 bpd
* Valero Energy Corp, St. Charles Louisiana: 185,000 bpd

Threatened Pipelines:

Colonial Pipeline, Colonial Pipeline Co, 5,519 miles Southern Natural Gas, El Paso Corp, 8,000 miles

For the full Reuters report:

Crowley christens two new petroleum barges for Alaska service

Crowley Maritime announced it has christened two new double-hulled petroleum tank barges for service in Western Alaska.

The two vessels were built by Dakota Creek Industries of Anacortes, Wash., and will join an existing petroleum barge that serviced the region since 2005.

The 165-1 and 165-2 depart this week to the homeport of Nome, Alaska. The vessels will be used for shallow-draft operations and beach landings for the delivery of fuel and cargo to the remote communities of Western Alaska, Crowley said in a statement.

President to tour El Paso border port today

President Obama is scheduled to tour the Bridge of the Americas Port of Entry today, the largest of the four crossings at the El Paso Port of Entry. The President is giving a speech today immigration reform and security at the Chamizal National Memorial; according to a report from local news station KVIA.

The Bridge of the Americas processes approximately 500 million inbound and outbound commercial, private vehicle, bus, and pedestrian traffic each year, constituting 10 percent of all border crossings into the U.S.

For the full KVIA story:

Florida’s loss is Vancouver, Wash’s gain for high-speed rail funds

The Port of Vancouver, Wash. is the beneficiary of $15 million in high-speed rail corridor development funding, thanks in large part to the Governor of Florida, Rick Scott, who earlier this year turned down $2.4 billion for such monies, preferring to focus instead on what he termed “other worthy infrastructure” projects.”

As a result, U.S. Transportation Secretary Ray LaHood announced $2 billion would be allocated towards 22 high-speed passenger rail projects in 15 states.

“We are happy to put Florida’s rail money to work in our state,” said Washington State Governor Chris Gregoire.

In April, the Pacific Northwest state pulled in $145 million in federal funding for high speed that was originally intended for Ohio and Wisconsin, after those states spurned the offer, according to the Columbian newspaper.

The Port of Vancouver says it will pair the $15 million along with $18.3 million in matching funds for its West Vancouver Freight Access project that is aimed at streamlining freight movement through the port and its surrounding rail network.

Construction for Vancouver’s rail project is scheduled for completion at the beginning of 2016.

For the full Columbian report:

New freight rail service connects Antwerp and Chongqing

A freight train loaded with chemicals departed Europe’s second-largest Port of Antwerp, Belgium on May 9, making the inaugural 20 to 25-day journey to Chongqing, the largest transport hub in Western China as the Eurasian Land Bridge reaches a new stage of development.

The People’s Daily reports the new rail service could be shortened to 15 to 20 days over time, as compared to the 36-day route that is the current average by water between ports in Western Europe and their counterparts in Eastern China.

Chongqing now has a freight rail terminal with capacity for approximately 2 million TEUs.

For the full Peoples Daily report:

Vessel with 600 asylum seekers sinks off Libya

An overcrowded vessel carrying 600 asylum seekers from Libya of various African and Arab nationalities capsized on Friday off of Tripoli, with 54 Somalis dead, or presumed dead.

One survivor was quoted in a CNN report as saying there were up to 750 people on the vessel.

“From what refugees are telling us, the Libyan authorities are facilitating the departures of non-Libyan citizens from Libyan coasts," said Laura Boldrini, spokesperson for the U.N. High Commissioner for Refugees in Italy.

"Refugees are not considered at all as humans. Trips are organized on unlikely vessels, and they leave Libya without considering the weather forecast," Boldrini said.

For the full CNN story:


Wednesday, May 11, 2011

Top Story

Maersk CEO: "We're on a winning streak"

The Danish shipping and oil conglomerate A.P. Moller-Maersk posted its third-highest all time net profit in this year's first quarter, skyrocketing 85 percent to $1.2 billion, prompting Chief Executive Nils Andersen's response in an interview that: "Now we're on a winning streak; we're very competitive."

"We're very pleased with the first quarter …parts of the container business did better than last year," Andersen said in an interview with Bloomberg Television.

Average container freight rates that include bunker surcharges climbed 2 percent for the first quarter at $2,908 per-FEU, according to statistics compiled by Reuters.

Maersk says it plans to put its five-vessel LNG fleet up for sale, and Andersen told Bloomberg the group would move forward with "organic growth."

"We have no plans for acquisitions… it's not our preferred route…we see a lot of opportunities still to invest in emerging markets."

Earlier this year, Maersk announced a $1.8 billion order for ten new 18,000-TEU megaships with options for 20 more, raising that total investment to $5.7 million.

Andersen said the year's second quarter should soften, depressing freight rates, but will pick up by the summer's peak shipping season.

"Going out of the quarter, we have seen spot rates and also our invoicing rates being below last year…when we look at the competitors, there is no doubt rates are low at the moment. The industry will have a tough second quarter, but I think that will lead to increasing rates during the quarter, so the second half should be better." "We're quite confident that rates will go up, if not for other reasons, because our competitors definitely need it," Andersen said.

Maersk says it projects containerized growth for 2011 to be in the 6 to 8 percent range.

Corpus Christi closes in on shipping terminal deal with U.S. -Dutch venture

The Port of Corpus Christi, Texas, announced its commission has approved a one-year lease option agreement with Global Terminal Advisors, an investment group composed of Dutch Terminal Management BV and U.S. -based Candlewood Partners, to finance, develop and operate a containerized shipping terminal at the La Quinta Gateway for a possible long-term lease deal.

The proposed, roughly half-a-billion-dollar 1,100-acre La Quinta Trade Gateway Terminal project had been marketed by the Port of Corpus Christi as a potential shipping facility for the last decade.

"La Quinta has been in the works for more than 10 years. We look forward to continuing to work with GTA in completing this project which will help us enter into the moving of containerized cargo business," said Mike Carrell, the port's commission chairman in a statement.

Under the terms of the current deal, the port said GTA would have the exclusive option agreement for one year and would be responsible for the design-build financing and operation of the terminal and the development of the business plan. The port authority said it would be responsible for the extension of La Quinta Channel and maintenance dredging, highway and rail connections and utilities to the site.

Suez Canal traffic hits eight-month high

The geopolitical strife in the regions surrounding the Suez Canal did not appear to impact cargo traffic there, as April's numbers were up 4.1 percent, reflecting an eight-month high to almost 57.8 million metric tons passing through.

Europe's growing containerized freight demand from Asia was cited as the principal driver of the Canal's uptick.

The Suez Canal reported it averaged 54.5 million tons of cargo per month for the first four months of 2011, up 7.3 percent over the same period a year ago.

U.S. freight index hits highest level in almost three years

The for-hire freight transportation services index climbed to its highest level in 33 months at 108.6 in March, according to the U.S. Department of Transportation.

The TSI for all modes of freight movement was up 4.8 percent over March 2010, and rose 1.9 percent over the previous month, the D.O.T. reported.

U.K. shipping group: Ships need armed guards

The London-based Chamber of Shipping reversed its previous position and now says armed guards should be used as a deterrent to piracy, particularly against Somali pirates.

The Chamber, which claims 900 members, now advocates that governments around the world should pave the way for private companies to able to provide armed guards and utilize them, if necessary, when Naval protection is out of reach.


Friday, May 13, 2011

Top Story

No bomb after threat reported in container at Long Beach

Police and security personnel descended upon Berth 94 at the Port of Long Beach at an early morning hour today after a message was discovered in an overseas container that was being offloaded that suggested there might be a bomb inside, according to news reports.

The terminal facility was evacuated early Friday morning and a bomb squad from the Los Angeles County Sheriff’s office reportedly did not find anything explosive or hazardous.

Berth 94 is part of a marine terminal operated by SSA Long Beach and serves container-shipping lines that include CMA CGM, Hapag Lloyd and Zim.

Normal operations reportedly resumed this morning.

NOL narrows Q1 net loss

Neptune Orient Lines (NOL), owner of APL, the seventh-largest container-shipping line in the world, posted a first quarter net loss of $10 million, narrowed considerably from losing $98 million for the same period a year ago.

NOL, itself owned by Temasek Holdings, a state-owned enterprise in Singapore, fell short of an expected net profit of over $31 million, said rising fuel costs and a weak Lunar New Year for its shipping business impacted earnings, despite revenue being up 16 percent at $2.4 billion compared to $2.1 billion for the first quarter of 2010.

Eng Aik Meng, president of APL, said in a statement that the shipping line’s “emphasis must remain on operating efficiency, as well as slow-steaming our ships to conserve fuel and counteract the effect of rising fuel prices."

Houston port’s CEO under fire from some commissioners

The Port of Houston’s chief executive, Alec Dreyer, is under fire from two of the agency’s commissioners.

"He truly is not the right man for the job," said Commissioner Janiece Longoria in the Houston Chronicle.

"The last year and a half, it has been total chaos," she said.

Longoria and fellow commissioner Elyse Lanier are reportedly questioning recent actions by Dreyer that include an agreement signed with Libya without commission approval; port budget issues; and a former spokeswoman Argentina James, who continues to be paid $15,000 per month for public relations consulting.

The two commissioners have urged Chairman Jim Edmonds to conduct discussions at the next board meeting over Dreyer’s future employment with the port.

Dreyer was hired to his current post toward the end of 2009. Longoria was appointed by the City of Houston, while Lanier was appointed by the Harris County commission. For the full Houston Chronicle story:

India to IMO: Don’t extend Piracy zone so close to us

India’s government opposes a plan to extend the piracy zone in the Indian Ocean closer to the country’s west coast.

The International Maritime Organization is conducting its 89th maritime safety in London, and representatives from India expressed displeasure over the “war zone limit” boundary had been pushed too close for comfort, near India’s territorial waters, according to a story in the Indian Express.

A statement from the Indian delegation said there are concerns that moving the boundary closer “has direct implication to the transaction cost of commodities to Indian ports”.

For the full Indian Express story:

Border patrol agents killed when SUV struck by freight train

Two U.S. Border Patrol agents were killed on Thursday after their SUV collided with a 90-car freight train near Gila Bend, Arizona while they were in pursuit of illegal immigrants, according to news reports.

The agents, Eduardo Rojas Jr., 35 and Hector Clark, 39, were reportedly assisting other officers in the chase when their vehicle was hit by the train at a crossing near Interstate 8.


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