China's banks extend credit to global shipping industry
Chinese banks are loaning money to the shipping industry, filling the gap left by European lenders, said the Chinese ambassador to the United Kingdom, Liu Xiaoming, on Monday at a London conference.
Such lending by the Chinese reportedly led to a 7.3 percent credit increase in the fourth quarter of 2011 for the shipping industry worldwide.
"Chinese banks have adequate funds to provide support for foreign owners who want to build ships in China, given the large number of ships built in China every year," said the ambassador. "There's great potential in further raising China's status in international markets of ship finance."
For the first time in four years, the largest global shipping hedge fund is bullish on very large crude carriers, or VLCCs. VLCCs carry 2 million barrels, and rates will be up 81 percent from last year, commanding $40,000 per day, according to Andreas Vergottis of shipping fund Tufton Oceanic Ltd.
China is getting the lion's share of the world's crude oil supply, as the demand for U.S. crude imports decline to a 13-year low, said the research director of Tufton Oceanic Ltd., which manages about $1.3 billion of assets, to Bloomberg.
China's demand has reportedly risen 29 percent over the last three years. Because China buys crude from a different range of suppliers, from Angola to Venezuela, the evolving trade routes call for the largest carriers. Vergottis' projected rate is twice that projected by freight forwarding agreements.
"No one has yet woken up to this new regime," Vergottis told Bloomberg. "The reduction in U.S. oil imports is actually good, because VLCCs will take that oil to Asia long-haul from the Atlantic."
Longshoreman awarded $5.6M from Georgia Ports Authority
On Thursday a jury awarded longshoreman Kirk Deweese $5.6 million for medical expenses, lost wages and the pain and suffering he experienced because of an April 2005 wreck at the Port of Savannah.
Deweese's truck jackknifed after a top lift backed into it, according to his lawyer. His subsequent nine surgeries attempted to fix injuries to his neck, back and hip, and reportedly rendered him unable to work.
The Georgia Ports Authority is deciding whether or not they will appeal the decision.
AP Moeller-Maersk stock shares plunged 8.7 percent today to the lowest rate in nine months after the company announced that Maersk Line would fall short of analyst profit projections, reports Bloomberg. The stock was down 5.8 percent by late afternoon in Copenhagen.
Maersk announced today that at best, the company will not lose money in 2012, and that it expects the container line to post a "negative to neutral" net outcome for the year. According to Maersk, a 9 percent drop in freight rates and 31 percent hike in fuel prices negatively impacted its first-quarter.
"Right now container rates are at a level where we're at break-even," CEO Nils Smedegaard Andersen said to Bloomberg in a phone interview. "Rates obviously need to go higher if we're to be at break-even for the full year as we had a loss in the first quarter. But I do think that this could happen."
Maersk Line is maintaining a 16 percent market share this quarter, the company reports. Andersen notes that Maersk won't attempt to grow its current market share, since it wants to avoid a recurrence of the container carrier price war.
The Port of Los Angeles saw its best April ever this year, growing imports by 16.7 percent year on year to364,556 TEUs. Exports increased 11.6 percent to 186,838 TEUs.
Including empty containers, the Port of Los Angeles handled 707,182 TEUS in April, an increase of 14.6 percent.
"Any time we see more than 700,000 containers, it's a very good month for us," Port of Los Angeles spokesman Phillip Sanfield said to the Los Angeles Times.
The Port of Long Beach did not fare well in April. Its imports dropped 13.8 percent to 232,963 TEUs and its exports dropped 16.2 percent to 120,452 TEUs. Long Beach lost 10 percent of its cargo volume this year, running with six terminals instead of seven after losing California United Terminals to Los Angeles.
Together, the ports saw only a 1.8 percent increase in cargo in April 2012, probably due to the slowing Chinese economic growth combined with sluggish U.S. recovery, reports the Los Angeles Times.
IWLA wants CA legislature to rethink fuel regulation
On Wednesday, the International Warehouse Logistics Association asked the California legislature to hold a hearing on the effect of tax hikes on job creation in the state. The tax increases are a result of a proposed fuel regulation and California's cap and trade program, according to a statement from IWLA.
"The California Air Resources Board's actions are driving logistics jobs from the state," said IWLA president and CEO Joel Anderson in a press release. "IWLA has been vocal about this issue since 2009, when CARB's actions threatened to substantially increase the price of diesel fuel in California."
IWLA referred to recent research by Stonebridge & Associates, commissioned by the California Trucking Association, which asserts that the Low Carbon Fuel Standard would raise the cost of California diesel fuel by up to 50 percent, projecting that prices might rise to $6.69 per gallon by 2020.
The ILWA said diesel costs would be passed on to the state's middle class consumers due to the higher cost of transporting goods via rail and truck.
Chinese consumers want American goods
Chinese consumers are high on American goods and proved it by purchasing $104 billion in U.S. exports in 2011. U.S. exports to China have increased by 542 percent in just the past decade, according to the U.S.-China Business Council.
Huge U.S. companies such as Pringles and Coca-Cola are taking note of this enormously lucrative Chinese market. Pringles, which ships every third can overseas, crafts soft-shell crab, grilled shrimp and seaweed flavors to suit the Chinese palate. Coca Cola makes a sweet orange beverage targeted directly to Chinese consumers.
And it's not just food items. The majority of make-up in China bears U.S. labels. And Export Now, an "Amazon-like company," helps small and medium businesses get their products to the Chinese market, reportedly selling $60 billion in U.S. goods to our Chinese counterparts in 2011.
E.U. executes first Somali pirate raid on the mainland
The E.U. navy conducted the first ever attack overnight on a Somali pirate base on the mainland, according to the BBC.
The multinational team was helicoptered in to Haradhere, a notorious pirate base, and along with two warships destroyed five of the pirate's attack boats. The night attack hurt no Somalis, reports the BBC.
"The focused, precise and proportionate action was conducted from the air and all forces returned safely to EU warships on completion," read a statement from the E.U. mission forces.
Pirate leader Bile Hussein told the AP news agency that "speed boats, fuel depots and an arms store" had been targeted, according to the BBC.
Maersk Line $600m first quarter loss means trouble for industry
The globe's biggest container carrier, Maersk Line, faced an operating loss of nearly $600 million in the first quarter, losing more in one quarter than it did in all of 2011.
On Wednesday, AP Moller-Maersk downgraded its previous projections of a modest increase for the line in 2012, changing expectations for the year to "neutral." The parent company's overall net profits were dragged down by the container business to $1.05 billion, only topping expectations because of a one-time tax settlement concerning Maersk's oil production in Algeria.
Since Maersk Line controls 16 percent of the world's container shipping market, the company's downgraded expectations for this division dashes hopes for a big industry recovery in 2012. One analyst told Market Watch that Chinese growth may be slowing due to the E.U.'s debt crisis, putting further downward pressure on freight rates.
Maersk said Wednesday that industry-wide container shipping demand might increase by only 4 to 6 percent this year, lower than an earlier projection. The tepid rise in demand may put a damper on prospective shipping rate increases, according to Market Watch.
On Wednesday, a group of foreign, defense and maritime officials from China and Japan started negotiations in Hangzhou on maritime issues, including a dispute over which country controls a group of islands located in the East China Sea.
According to the BBC, there are rumors of harsh words between Chinese Premier Wen Jiabao and Japanese Prime Minister Yoshihiko Noda regarding the islands and human rights at a meeting in Beijing over the weekend.
The islands, rich in natural resources, are currently controlled by Japan, according to the BBC, but claimed by China. The island chain is known as Senkaku in Japan and Diaoyu in China.
The dispute became contentious when Japanese coast guard officials arrested a Chinese fishing boat captain after a crash in September 2010.
Another dispute involves Japan allowing the World Ulghur Conference to meet in Tokyo. China regards the WUC as a terrorist organization that wants to separate the Xinjiang region from China. The WUC asserts it supports a democratic resolution.
The Port of Los Angeles may be the first to benefit from an electric freight trucking system designed by Siemens, which the company debuted last week at the 26th Electric Vehicle Symposium.
More than 10,000 trucks currently serve the ports of Los Angeles and Long Beach, which handle 40 percent of all shipping containers that come through the U.S. each year. The new technology is designed to significantly lessen carbon dioxide emissions caused by freight transport, projected to increase by 30 percent by 2030.
Siemens wants to conduct a pilot project to transport cargo from the ports of Los Angeles and Long Beach to inland distribution centers via Interstate 710. The Siemens eHighway System would use overhead electrical connections in select lanes, similar to those used by streetcars.
Diesel hybrid trucks would be fitted with software that can detect when an electrical line is available and will automatically connect or disconnect to the line as needed.
NOAA explores rare 19th century shipwreck in the Gulf
A 200-year-old wooden ship was discovered in the northern region of the Gulf of Mexico, theU.S. National Oceanic and Atmospheric Administration announced Wednesday.
"Some of the more datable objects include what appears to be a type of ceramic plate that was popular between 1800 and 1830, and a wide variety of glass bottles," said Jack Irion, a maritime archaeologist with the Bureau of Ocean Energy Management, to CNN. "A rare ship's stove on the site is one of only a handful of surviving examples in the world and the second one found on a shipwreck in the Gulf of Mexico."
The researchers on NOAA's Okeanos Explorer were able to see inside the wreck, located 200 miles from the U.S. Gulf coast, through new technology that combines multi-beam mapping sonar technology and the remote-control underwater vessel, Little Hercules.
Maersk Line to hike Latin American freight rates 30 percent
Maersk Line, the largest container carrier in the world, announced yesterday it plans to raise its Latin America freight rates 30 percent in 2012 to mitigate the costs of building 16 new ships in the region.
Fuel costs have tripled over the past five years while cargo rates plunged 10 percent, leaving the cargo carrier giant struggling to make a profit, said Robbert Jan van Trooijen, Maersk Line's chief executive for Latin America, to Reuters Thursday.
Trooijen told Reuters that the increased cargo rates will help the line recover $2.2 billion from building 16 SAMMAX container ships, which each have a carrying capacity of 7,500 TEUs. Ten of the vessels are operational and the remainder will be delivered in 2013, he said.
Maersk Line lost $580 million in the first quarter of 2012, compared to a profit of almost $400 million during the same period last year. Maersk stock fell 6.1 percent in Copenhagen on Thursday after the company reported first quarter results.
APS Stevedoring of Long Beach recently announced the addition of Hyundai's Terminal 6 - Berth 601 auto terminal in Portland to its portfolio of stevedoring and terminal locations.
APS is responsible for terminal receiving and vessel stevedoring at Berth 601. In June, the company will take over terminal operations at Berth 607 for Honda, which rents the terminal from the port. Ben Thamert will be the APS manager for Portland operations.
The major car carriers that call at Terminal 6 are Eukor and Glovis, plus occasional MOL and K Line charters. Hyundai imports approximately 80,000 units through the facility, and Ford uses Portland as a port of departure for its auto exports.
Port of Seattle added to MOL's PSX service to Asia
Mitsui OSK Lines and the New World Alliance recently announced the implementation of a new service at the Port of Seattle designed to expedite exports to Asia, according to a port news release.
"We appreciate MOL's business, as their containers mean more jobs for our region," said Linda Styrk, managing seaport director at the Port of Seattle.
Starting May 21, Seattle's APL Terminal 5 will be added to MOL's PSX service, providing expanded capacity and quicker transport times for Northwest cargo bound for Asian ports. The MOL ships, which have an average carrying capacity of 6,300 TEUs, will also add new stops at Vancouver, BC, Tokyo and Yantian.
This will be the first time MOL ships have called at Seattle since 2008.
China Cosco revisits trading freight derivatives
China's largest ship owner, China Cosco, wants to resume trading freight forward agreements (FFAs) after resolving 2009 losses of $166.7 million. The government has forbidden its shipping companies from trading FFAs since the market downturn in 2008 led to alarming first quarter losses in 2009.
"A number of Chinese companies were heavily engaged in the FFA market in the buildup to the 2008 collapse and that caused quite a lot of political fallout," said Jeremy Penn, CEO of the Baltic Exchange, at a London conference on May 15.
China Cosco and other major state shipping firms are now in talks about trading FFAs, but Penn said they need the blessing of China's State Owned Administrative Enterprise Committee, which "is not being granted at the moment."
USS Iowa to be first battleship museum on the West Coast
The USS Iowa, a 1943 World War II battleship famous for transporting Franklin Roosevelt across the Atlantic for the first "Big Three" alliance meeting with Churchill and Stalin, will soon make its final journey to its new home at the Port of Los Angeles.
The Los Angeles Harbor Commission voted Thursday to give the warship, which served the U.S. Navy well for over 60 years, a permanent home.
As a result of the decision, the 887-foot Montana-class warship will be towed to the port and on July 7th will open as the first battleship museum on the West Coast.
"There's no more ships like this in existence in the active navies anywhere in the world," said Robert Kent, president of the Pacific Battleship Center, to Reuters.