Cargo Business Newswire Archives
Summary for May 13 - May 17:

Monday, May 13, 2013

Top Story

WTSA suspends original agreement in order to become TSA members

Members of the Westbound Transpacific Stabilization Agreement filed an amendment with the Federal Maritime Commission to suspend their agreement, a formality necessary to approve the move of the WTSA companies into the Transpacific Stabilization Agreement.

Concerning the amendment, Commissioner William P. Doyle of the FMC issued a statement Friday. As a part of the procedure for expanding the TSA to include westbound trans-Pacific trade, the WTSA agreement had to be suspended. The amendment expanding the TSA was effective April 14, 2013, according to Doyle.

Although the WTSA did permit its members to discuss and reach an agreement on restricting capacity, the expanded TSA will not have the authority to discuss and reach an agreement on restricting capacity, the statement said. The TSA can exchange and discuss capacity information, but cannot discuss capacity rationalization, Doyle said.

The FMC will continue to monitor the TSA, which has absorbed westbound trans-Pacific trade. Current TSA members are CMA-CGM Group, China Shipping North America, COSCO Container Lines, Hanjin Shipping, Evergreen Marine Corp., Hyundai Merchant Marine Company (HMM), Hapag-Lloyd, Kawasaki Kisen Kaisha, Ltd ("K" Line), Nippon Yusen Kaisha (NYK Line), Mediterranean Shipping Company, Maersk Line, Orient Overseas Container Lines (OOCL), Yang Ming Marine Transport Corp., and Zim Integrated Shipping Services.

Orient Overseas CFO steps down to join new shipping venture

Ken Cambie is stepping down as the CFO of Orient Overseas International Limited, the Tung family-controlled shipping, logistics and property company, on June 1 to join Singapore's Quantum Pacific Shipping Services, formed by Israel's richest man, Idan Ofer.

Other Ofer family's shipping interests include Tanker Pacific, Zodiac Maritime Agencies and container line Zim Integrated Shipping Services.

Industry sources reportedly said Quantum Pacific was being created to oversee the existing Tanker Pacific fleet along with ships transferred from Zodiac. Insiders said Quantum Pacific aimed to have a fleet of 104 ships.

Tanker Pacific operates 29 ships, including 300,000-dwt supertankers and smaller tankers of between 46,000 and 160,000 dwt, with 15 ships on order. Zodiac has a fleet of more than 130 ships.

The OOIL board announced that it has appointed Alan Tung as acting CFO, according to Sino Ship News.

For more of the South China Morning Post story:

Obama creates manufacturing institutes through executive order

The White House announced a new executive action on Thursday to create three manufacturing institutes to spur industry innovation, making good on one promise made in President Obama's State of the Union address in February.

The manufacturing innovation institutes will be partnerships between public universities and private companies. Last year the Obama administration established a manufacturing institute with dozens of academic and private sector members in Youngstown, Ohio.

Technology may have killed some manufacturing jobs, but the administration is counting on it creating new businesses and new growth. The new executive order would use $200 million, the majority coming from Defense and Energy departments, to create three new institutes. The president ultimately wants Congress to spend $1 billion to create 15 manufacturing institutes.

Obama is committed to "putting in place the policies that will make the U.S. a magnet for the strong middle-class jobs of the future," said Gene Sperling, director of the National Economic Council. "A big part of that has been our focus on manufacturing, particularly advanced manufacturing."

For more of the U.S. News and World Report story:

Great Lakes shipping industry continues to grapple with low water

The Great Lakes shipping industry is coming into another difficult shipping season, dealing with record low water levels and ongoing political conflict about how to pay for the dredging needed to keep trade moving.

Experts expect the waters of Lake Mighigan to rise by inches, after one of the rainiest Aprils in history, but sources reportedly said the increased depth might not be enough help Great Lakes freighters, who have been forced to light-load their cargo, reducing shipping efficiency and adding expense.

For each inch the water level goes down, cargo ships must carry between 50 and 270 tons less in freight, according to Glen Nekvasil, vice president of the Lake Carriers Association. Currently, vessels carrying coal must haul about 10,000 tons less per trip.

Companies that contract for space on a vessel are having to pay for full capacity even though the vessel can't be fully loaded, said Ron Matthews, president of Verplank Dock in Ferrysburg. "If you have a 21-foot harbor, it's to the point where you can only load for 19.6 feet," he said.

Since 1996, the Great Lakes water levels have been in a sharp decline, a drop that most affects Lakes Michigan and Huron, which are classified as one body of water because of their connection at the Straits of Mackinac.

The Army Corps of Engineers received $31.0 million in 2013 for dredging projects in 15 commercial harbors across the Great Lakes Basin. But Great Lakes shipping companies worry about whether the federal funding will continue to fund dredging projects.

In February, Sen. Carl Levin (D-Mich.) introduced legislation "to ensure that amounts credited to the Harbor Maintenance Trust Fund are used for harbor maintenance."

For more of the MiBiz story:

18-member cargo crew rescued before ship sinks

The Xinchuan 8 was transporting 12,500 tons of limestone from Tongling in east China's Anhui Province to Luoyuan, when it hit the Nanjing Yangtze River Bridge pier and later sank in the Yangtze River.

The 18 crewmembers of the vessel were rescued before it sank, according to local maritime officials.

The ship, owned by Rushan Xinchuan Shipping and Transportation Co., Ltd., was damaged in the collision and began to take on water. An accident investigation is underway.

For more of the Xinhua story:


Tuesday, May 14, 2013

Top Story

New U.S. legislation helps small exporters

President Obama is pushing his goal to double exports by 2015, even though less than 1 percent of U.S. businesses export goods and services, according to the Department of Commerce. Representative Sam Graves (R-Mo), chair of the House Small Business Committee, is introducing legislation to help small companies access foreign markets.

Graves introduced three bills last week to enhance federal programs that promote U.S. small businesses abroad.

"Although 95 percent of the world's market for products exists outside the U.S., many small firms do not have the resources and personnel to take advantage of these opportunities," Graves said in a statement.

Graves's legislation seeks to improve "the coordination of the federal trade promotion agencies." That translates into doing a better job of publishing up-to-date listings of foreign trade missions, tariff laws, and modifications in foreign regulations. It also means integrating the states' efforts at foreign trade promotion into federal programs.

However, small businesses will still need working capital to export their goods and services globally. Last month's survey from the Small Business Administration's Office of Advocacy found that small business exporters were especially dependent on working-capital loans because of the longer transportation times required when shipping goods abroad and the risk in foreign sales. The federal government does have an initiative in place to increase export financing for small businesses through the Export-Import Bank.

Although the lending atmosphere for small firms has gotten better since bottoming in 2009, better access to working capital loans for small exporters could be a key factor in the expansion of U.S. exports, according to Bloomberg.

For more of the Bloomberg story:

S.C. inland port project proceeds after settlement

South Carolina's new $25 million inland port in Greer should be open for business and moving cargo by the end of summer now that a settlement has paved the way for the project.

The inland port needed land leased by a company that operates a refrigerated warehouse at the site owned by the South Carolina Ports Authority, which the company initially refused to give up.

In an agreement reached last week, the Ports Authority and Nordic Cold Storage reached a settlement in which the authority will buy out the rest of Nordic's 11-year lease for about $2 million, clearing the way to finish the inland port work.

The Greer port facility, which will serve as a loading area for containers shuttled on trains to and from the Port of Charleston, is expected to open in September.

For more of the Charlotte Observer story:

Hong Kong faced with repercussions of docker strike

Nobody got what they wanted in the resolution of Hong Kong's bitter 40-day dockworker strike that ended last week, and the repercussions will be felt for years to come, according to the Asia Times.

The 450 dockers, now back on the job at Kwai Tsing Container Terminals, received less than half of the 23 percent pay hike they demanded.

The reputation of billionaire Li Ka-shing, once universally respected as the richest man in China, was tarnished as the strikers revealed the appalling working conditions at Hong Kong International Terminals, which he controls.

Meanwhile, the container business at the world's third largest port, Hong Kong, suffered as cargo business was diverted to a competing port across the border in the Yantian district of Shenzhen—business that may never return to the city. The Shenzhen port's largest shareholder is Li's Hutchison Port Holdings.

The strike's enduring theme - lowly dockworkers taking on Hong Kong's most powerful man – struck a cord with the people of Hong Kong. Winning considerable support among the citizenry may start a new chapter for labor rights in a city that just three years ago adopted a substandard minimum wage of $3.87 per hour. The city is currently discussing the merits of adopting standard working hours.

For more of the Asian Times story:

Japan, China and South Korea seek sway in Arctic as ice melts

Japan, China and South Korea want to join the Arctic Council in order to expand their influence in the region as melting ice offers potential profits through access to resources and shipping shortcuts.

The three countries are among in 14 applicants seeking observer status on the eight-nation Arctic Council, which will convene its biennial meeting in Sweden on May 15. Member countries include the U.S., Russia, Canada, Denmark, Finland, Iceland and Norway.

If their observer status is approved, the countries would have more power to affect the outcome of international discussions about a region that contains up to 90 billion barrels of oil, according to the U.S. Geological Survey.

The council is facing an increase in maritime traffic and environmental disruption, due to climate change that will result in an almost ice-free Arctic by the summer of 2050, according to a U.S. government study. Industrial activity in the region is triggering a debate in the body between exploration and environmental protection.

"China, Japan and South Korea say the Arctic will be important, and now is the time to set the table to allow them to do things there later on," said James Manicom, a research fellow at the Centre for International Governance Innovation in Toronto. "That starts with the Arctic Council."

For more of the Business Week story:

Container ship en route to rescue mariner

A container ship is on its way to rescue an Australian mariner who radioed for help from a remote part of the Pacific, according to the U.S. Coast Guard.

Late Monday the 58-year-old reported his ship's autopilot failed and he's become too tired to continue his voyage. His sailing vessel is about 400 miles from Christmas Island in Kiribati.

A 600-foot container vessel in nearby waters is expected to rescue the mariner, who was sailing from California. The container ship is registered with a network of ships whose crews volunteer to help with ocean rescues.

For more of The Republic story:


Wednesday, May 15, 2013

Top Story

NOL bets on new energy efficient ships to emerge from slump

Neptune Orient Lines, owner of the APL and APL Logistics brands, will add more fuel-efficient ships in 2013 to cut costs as vessel overcapacity continues to inhibit freight rates, according to a company statement.

Yesterday NOL reported a net income of $75.5 million in the quarter ended April 5, compared with a $254 million loss a year earlier. Neptune Orient had a gain of $200 million from the sale of its headquarters building. Sales slipped 0.4 percent to $2.37 billion.

The shipping line has said that cost cutting and new ships will help improve performance in 2013 after posting three annual losses in four years. The company said it expects 14 vessels to be delivered this year, after adding 10 last year and selling some of its older ships.

"The economic recovery in Europe is still very slow," said Lawrence Li, an analyst at UOB-Kay Hian Holdings. "Asia-Europe rates have fallen and you're in a better position if you have a bigger exposure on trans-Pacific like Neptune Orient."

The company's container shipping unit operated 125 vessels with a combined capacity of 605,000 TEUs at the end of the quarter.

For more of the Bloomberg story:

Port Logistics Group adds 1.1 million square feet to Calif. distribution center

Port Logistics Group has added more than 1.1 million square feet of warehouse space to its City of Industry, California retail distribution complex, opening two new facilities.

It opened a new 350,000 square foot facility on Rowland Street adjacent to an existing client operation. Another 775,000 square foot facility on Mayo Avenue will house three new customer accounts and also provide capacity for growth. The new warehouses, along with a 315,000-square-foot operation opened in January, bring the total retail distribution campus capacity to more than 2.5 million square feet, the company said.

Port Logistics Group provides retail distribution services to manufacturers and retailers. The company also operates drayage, trans-loading and cross-docking, and distribution operations facilities in Rancho Dominguez, California.

Port Logistics Group and its partners provide gateway logistics services in and around the ports of New York-New Jersey, LA-Long Beach, Seattle-Tacoma, and Savannah.

For more of the Area Development story:

Texas legislature passes major reforms for Port of Houston Authority

Major reforms at the Port of Houston Authority have passed both chambers of the Texas legislature and await the governor's signature.

PHA commissioners will be limited to 12 years on the port authority board, if Gov. Rick Perry signs the bill passed by the Texas House and Senate.

House Bill 1642 stipulates 12-year term limits and its passage will result in seven commission members having to resign, according to the Houston Chronicle. Additionally, the authority must implement new rules for public disclosure.

During the debate of the House bill, concerns were voiced about quickly replacing members rather than fazing them out.

"You don't want to do anything to jeopardize the interests of the port because this is a terrific business driver, not just for the region, but for the state as a whole," State Rep. Sylvester Turner, D-Houston, and chairman of the Greater Harris County Legislative Delegation, said in the Chronicle.

For more of the Houston Chronicle story:

HUD demands documentation of new jobs claimed at Port of Gulfport

The Mississippi Development Authority has documented only 50 of the 1,286 direct, full-time jobs it claims to have created at the Port of Gulfport with federal assistance, according to the federal government, which is requiring the authority to provide records to show that the 1,286 jobs actually exist.

If the MDA does not comply, the state may have to repay millions in HUD Community Development Block Grant money that was redirected from post-Katrina housing assistance to foster economic development at the port.

The letter from the HUD division of the U.S. Department of Housing and Urban Development gives the MDA until June to provide the job documentation. The report cites MDA for noncompliance in a number of areas, including inadequate oversight and recordkeeping, and demands corrective action.

Port workers and community members have long been questioning the number of jobs the port claims, as well as the 1,200 jobs it pledges to create with the $580 million in federal funding. The HUD-funded project requires 51 percent of port jobs go to low- to moderate-income residents.

Community advocates who monitor port expansion have been frustrated by the number of jobs the port claims. For example, members of the International Longshoremen's Association say the port employs only about 60 to 110 full-time workers to load and unload cargo, even though the port claims 388 ILA jobs.

For more of the Sun Herald story:

Five captives kidnapped from German container ship released

Five crewmembers kidnapped from the City of Xiamen container ship off the coast of Nigeria on April 26 have been released unharmed, according to the German ship operator.

Shipping company Sunship Schiffartskontor KG said the sailors, five Polish and Russian citizens, were released Saturday and are in good health.

No details were released about the kidnappers or whether a ransom was paid.

For more of the Washington Post story:


Thursday, May 16, 2013

Top Story

Major shipping lines partner on joint Asia-South America container services

CMA CGM will partner with Maersk Line, Hamburg Süd, CSAV, China Shipping Container Lines and Hanjin to launch of three new joint services, according to a company statement.

Due to "challenging trading conditions" effective from July 2013, CMA CGM, Maersk Line, Hamburg Süd, CSAV, China Shipping Container Lines and Hanjin will restructure their services between the Far East and South America East Coast by launching three new joint services. Additionally, CCNI and Hapag-Lloyd will join the services.

The new services will offer full coverage of the markets covered by existing services with three weekly departures from Shanghai, Ningbo, Hong Kong and Singapore to Santos and Itapoa, as well as coverage of East Coast South America to South Africa with two weekly departures and direct coverage of River Plate to South Africa.

The three new joint services are:

SEAS 1 - Eleven 8000-TEU vessels with the following rotation:
Busan – Shanghai – Ningbo – Yantian – Hong Kong – Tanjung Pelepas – Singapore – Sepetiba – Santos – Itapoa – Itajai – Paranagua – Santos (EB) – Sepetiba (EB) – Coega – Singapore – Hong Kong – Busan

SEAS 2 – Twelve 8000-TEU vessels with the following rotation:
Shanghai – Ningbo – Hong Kong – Chiwan – Singapore – Port Kelang – Santos – Paranagua – Buenos Aires – Montevideo – Rio Grande – Itapoa – Santos – Durban – Port Kelang – Singapore – Hong Kong – Shanghai

SEAS 3 – Ten 8000-TEU vessels with the following rotation:
Shanghai – Ningbo – Yantian – Chiwan – Singapore – Santos – Itapoa – Singapore – Hong Kong – Shanghai

The above new services will replace the following four services:

ASAS 2/NGX 2/SEAS 2/ASAX 2: Currently operated by Maersk Line, Hamburg Süd, CSAV, CMA CGM and China Shipping Container Lines.

SEAS 1/ASAX 1: Currently operated by CSAV, CMA CGM and China Shipping Container Lines.

ASAS 1/NGX 1: Currently operated by Maersk Line and Hamburg Süd.

ALX/ASE: Formerly operated by Hanjin, CCNI, Hapag-Lloyd and ZIM lines.

April cargo volume up at Long Beach, down at Los Angeles

The trend continues in April at the country's largest port complex, with container numbers at the Port of Long Beach trending up, while the Port of Los Angeles experienced disappointing volume for the month. The pattern reflects the move of Mediterranean Shipping Co. vessel service from L.A. to Long Beach, as well as larger ships calling at POLB.

Overall cargo volumes last month at the Port of Los Angeles fell 9.45 percent year over year, according data released Wednesday. April POLA imports fell 10.36 percent, from 364,555 TEUs in 2012 to 326,780 TEUs this year, while exports decreased 14.3 percent from 186,838 units April 2012 to 160,129 TEUs last month.

At the Port of Long Beach, overall cargo handling surged 12.5 percent last month to 519,464 TEUs, according to the port. April Long Beach imports increased 13.5 percent to 264,337 TEUs, while exports were up by 14.5 percent to 137,864 units.

For more of the Press-Telegram story:

Hapag-Lloyd Q1 losses halved on increased freight rates

European container line Hapag-Lloyd reported its first-quarter losses have been reduced by almost half on slightly higher freight rates rose, confirming its forecast of a 2013 operating profit.

The company's adjusted loss before interest and tax was $68.8 million, compared with $128 million a year earlier, according to a company statement. The average freight rate increased 4.2 percent to $1,546 per-TEU in the quarter.

"Liner shipping started 2013 on a higher level than in 2012," CEO Michael Behrendt said in the statement. The first quarter is typically the weakest for the liner shipping sector, the company said. "The competition remains extremely challenging."

The euro region's debt crisis has lessened the demand for goods as overcapacity has driven down rates. Freight rates have come under "tangible" pressure since April, especially on the important east-west routes, Behrendt said. "It is important that rates soon return to a sensible, profitable level."

For more of the Bloomberg story:

New York region manufacturing contracts in May

New York area manufacturing unexpectedly contracted in May, with factories receiving less orders and sales declining, pointing to lingering weakness in the economy.

The general economic index of the Federal Reserve Bank of New York fell to minus 1.4 this month from 3.1 in April. The median forecast in a Bloomberg survey called for an increase to 4.

Slowed inventory building and sluggish global markets are keeping orders down and inhibiting manufacturing, which accounts for about 12 percent of the economy. Strength in housing and auto sales may help keep the industry afloat.

"Sales growth is less than inventory growth, and when you're in that situation it tends to lead to flatness or declines in manufacturing," said Ken Mayland, president of Clearview Economics, the second-most accurate forecaster of the New York index in the past two years. "Manufacturing might see some regaining of momentum in the second half of the year."

For more of the Bloomberg story:

Containership rescues Aussie sailor near Christmas Island

According to the U.S. Coast guard, a 58-year-old Australian sailor was picked up by a containership approximately 443 miles from Christmas Island early Monday morning.

The mariner's sailing vessel Folly II reportedly experienced a failed autopilot four weeks ago and he had been manually navigating the boat since then on his journey from California to Christmas Island, and became too fatigued to continue when he radioed for help.

The Coast Guard said it deployed two HCC-130 Hercules airplanes from Air Station Barbers Point to establish communications with the sailor and to provide cover during the rescue.

The containership, Kota Wang, subsequently picked up the sailor and its crew reported he was in good condition.

For the story source:

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