Cargo Business Newswire Archives
Summary for May 21 - May 25, 2012:

Monday, May 21, 2012

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Shipping execs arrested, manhunt ensues in Vietnam

Two shipping line executives were arrested on Friday in Hanoi while another is the subject of a manhunt amid a developing scandal involving the largest state-owned shipping and port company in that country, according to news reports out of the region.

Duong Chi Dung, the former chairman of Vietnam Shipping Lines (Vinalines), and current director of the Vietnam Maritime Administration, reportedly fled his home before law enforcement arrived with an arrest warrant.

Dung, along with the other two arrested officials, Mai Van Phuc, deputy chief of Vietnam's Transport Administration, also a former general director at Vinalines, and Tran Huu Chieu, the former deputy general director of the shipping company, are charged with willful financial mis-management of Vinalines that includes defaulting on $1.1 billion worth of loans in addition to acquiring 73 mostly secondhand foreign vessels, of which 17 were too old for service and too costly to repair.

Two waterfront workers killed at Port of Seattle

Two waterfront workers were reportedly killed at the Port of Seattle last Thursday in separate incidents.

In one of the incidents, a longshoreman was crushed between a forklift and a container at Terminal 18, operated by SSA Marine, according to a Seattle Times report.

The ILWU worker subsequently died at Harborview Medical Center, and the terminal was subsequently shut down for 24 hours after the incident, the Times reported.

In another incident on the same day, a shipyard worker reportedly died while power washing a commercial shipping vessel at the Maritime Industrial Center on Port of Seattle property.

Local news stations reported carbon monoxide could have been the cause of the worker's death.

For the Seattle Times report:

Stricken bulker towed off Australia's Barrier Reef (incl. link to video of tow)

A Hong Kong-registered bulk carrier that broke down on Australia's Great Barrier Reef on Friday and was drifting in the Coral Sea was finally reached by three towboats and is being towed to a shipyard to a shipyard for repairs. The bulker is expected to reach port by May 24.

In 2010, the bulk carrier Shen Neng 1 ran aground on the Barrier Reef spilling over three tons of bunker fuel.

For a link to a video of the tow and the full ABC News (Australia) story:

"Big Stick" on its way to Port of Los Angeles

The battleship USS Iowa begins what could be its final journey today as it is scheduled to be towed from Richmond, Northern California to Berth 87 at the Port of Los Angeles where the vessel, nicknamed "Big Stick," will become a museum in San Pedro Harbor.

The 887-foot USS Iowa's illustrious past included heavy action in the Marshall Islands and Okinawa in World War II. The battleship was also one of the first warships to enter Tokyo Bay after Japan had surrendered.

For the full Long Beach Press Telegram story:


Tuesday, May 22, 2012

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REPORT: U.S. Retail rising again; driving market changes

The U.S. retail sector's well-documented bumpy ride to recovery in the wake of the Great Recession is now, according to a commercial real estate industry white paper, "speeding along faster than others, fueled by a flush of capital investment and smart marketing and branding strategies," that will include a tangible shift in intermodal transport trends in concert with the impending opening of the widened Panama Canal.

In a newly released white paper by real estate firm Colliers International entitled: "On the Road Again: What's Driving Retail Real Estate's Recovery and Who's Getting There First," retailers in the U.S. are reportedly regaining their footing via "sharp increases in 2012 capital expenditure budgets" that include technological improvements that integrate multiple channels such as brick and mortar, online, mobile, and catalog operations.

Retailers like Apple are opening new stores with in-store experiences that are "highly personalized" to contrast with online shopping by offering more interactivity with products in addition to using service as more of a selling point, according to the Colliers report.

Other factors that are contributing to an improving retail sector include a quietly improving housing market and jobs growth in U.S. manufacturing, where there is increased corporate demand for a more highly skilled labor force.

"As job and wage growth fuels consumer spending, retail properties benefit as revenues rise, and increased tenant demand leads to lower vacancy rates and higher rents," the report said.

Correspondingly, in the coming years, the widened Panama Canal will shift trade flows and drive demand for warehousing and increased proximity to intermodal transport infrastructures towards the U.S. East and Gulf coasts, the report said.

"Highly skilled labor in Midwest manufacturing facilities creates product that can then easily be transported by with rail cars loaded to Southeast port cities such as Charleston, Savannah, New Orleans, or Port Everglades," the Colliers report said.

Over the long term the white paper says intermodal trends will "completely flip the orientation of the container industry. Instead of most container traffic coming in from Los Angeles/Long Beach, Oakland, Portland, Seattle and heading east, it will likely enter from Charleston, Savannah, and Miami and head west."

China raises freight rail rates 10 percent

China has reportedly instigated a 10 percent across-the-board freight rail rate increase to cover rising operational costs.

The latest hike in rail freight prices is the seventh such increase by China since 2003, according to a Reuters report.

For the full Reuters story:

Damco posts 8 percent increases for net revenue, gross profit

Damco, the third party logistics unit of Denmark's A.P. Moller-Maersk Group, reported its net revenue rose 8 percent, or by $53 million, to $738 million, and gross profit also grew 8 percent to $190 million for the first quarter compared to the same period in 2011.

Damco said in a statement it posted profit of $7 million, equaling the same figure for first quarter of 2011.

Ocean volume increased 6 percent and airfreight tonnage more than doubled despite overall industry declines in that market, the company said.

Damco said its earnings before interest and taxes dropped 19 percent to $13 million compared to last year's first quarter due to restructuring in the company's European markets.

"We will absorb additional cost in the first two quarters because of the restructuring of our European region into East and West. This is the right thing to do to position us for the years to come. When the changes are all implemented at the end of Q2, Damco will be in a stronger position to address the very different needs of these diverse markets," said Damco CEO, Rolf Habben-Jansen.

SF Bar Pilot from COSCO Busan spill trying to regain license

The San Francisco Bar Pilot who pled guilty to crashing the COSCO Busan containership into the Bay Bridge in 2007 causing a 53,000-gallon bunker fuel spill, serving 10 months in prison as a result is reportedly trying to get his mariner's license back.

Through a Freedom of Information Act request by the San Jose Mercury News, the U.S. Coast Guard confirmed to the newspaper that Captain John Cota's license application appeal was denied on February 13, however the former pilot's attorney said: "He has full intentions of going back to work, either as a tugboat captain or something else."

The final conclusion of the COSCO Busan incident was that Cota was going to fast in heavy fog while under the influence of prescription drugs.

In its official denial of the reinstatement of the expired license, the Coast Guard said Cota's criminal conviction and involvement in the grounding of another ship in 2006 were contributing factors.

[Cota] "does not have the judgment, general knowledge, skill, and proficiency necessary to hold a merchant mariner credential," Capt. Brian McTague, chief of the Coast Guard's Office of General Law in Washington, D.C. in a summary.

Cota's bar pilot career in San Francisco began in 1981. Bar pilot salaries in the Bay are funded through shipping industry user fees and they each currently earn $451,000 per year. Cota voluntarily retired in 2008, and is paid a yearly pension of $228,864, according to the Mercury News report.

For the full San Jose Mercury News story:


Wednesday, May 23, 2012

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Freight service by the Canadian Pacific Railway has reportedly been shut down after over 4,800 employees went on strike at 12:01 this morning after management and the Teamsters Canada Rail Conference failed to resolve a contract dispute over pensions and non-union hires. Meanwhile, Canada's federal government said it is considering back-to-work legislation.

"We have put on the notice [paper] that we have the intention that, if we want to, we have the ability to introduction legislation at the first opportunity on Monday," said Federal Labor Minister Laura Raitt at a news conference in Ottawa.

Raitt said the estimated impact to Canada's economy is approximately $540 million per week.

"The government is concerned about the national economic significance this will have and we are prepared to act in the interest of the national economy," Raitt said.

The CP employee strike comes on the heels of a prolonged proxy battle involving activist investor Bill Ackman over the leadership direction of Canada's second largest railway that resulted in chief executive Fred Green resigning late last week.

"A strike by CP workers will have a serious effect on the industry," said Pierre Gratton, president and CEO of the Mining Association of Canada in a statement Wednesday morning.

"The shipment of fuel and other supplies to mine sites will be compromised as is the transport of mineral products," Gratton said.

The most recent five-year collective agreement between the CP and its more than 4,800 conductors, engineers, rail traffic controllers and yard workers expired Dec. 31, 2011.

The major reported points of contention during management-labor negotiations have revolved around benefit pensions and lower cost contribution plans for non-union employees hired after July 1, 2010, the Globe & Mail reports.

"Every union member knows how important the outstanding issues are. We will not walk away from the negotiation table," said Doug Finnson, vice-president at the Teamsters Canada Rail Conference in a statement.

Talks between the two sides were reportedly scheduled for Wednesday.

The CP's passenger services are reportedly running at close to normal operations.

For the full Globe & Mail story:


Thursday, May 24, 2012

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APM Terminals submits proposal to operate Hampton Roads and inland points

The terminal operations arm of Denmark's A.P. Moller-Maersk announced it has submitted an unsolicited proposal to Virginia's Department of Transportation to operate the Virginia Port Authority's cargo-handling facilities in Hampton Roads and related inland locations in a deal that the company said could be worth between $3 billion and $4 billion to the state over the term of the partnership.

APM Terminals currently owns its marine terminal in Portsmouth, Virginia, and the company now says it would transfer that ownership back to the Commonwealth of Virginia in exchange for the Hampton Roads deal.

"APM Terminals is committed to Hampton Roads through its significant investments and is a trusted partner to ports worldwide," the company said in a statement.

"APM Terminals successfully designed, built, and implemented the leading U.S terminal, one of the largest public port investments in U.S. history, right here in Portsmouth," the company said.

The financial return of between $3 and $4 billion in current dollar value to the state of Virginia would be through initial payments, fixed concession payments, revenue sharing, capital investments, and tax benefits, according to APM Terminals.

"We are excited about this potential next step in our relationship with the Commonwealth of Virginia and the Virginia Port Authority," said Eric Sisco, president of APM Terminals' Americas region.

"Our proposal provides for the lowest cost, long term solution for future growth at this time of a stabilizing economy and the eventual expansion of global commerce," Sisco said.

APM Terminals said the Hampton Roads proposal was submitted under the guidelines of the Virginia Public-Private Transportation Act that means it will undergo a detailed review in the coming months.

The website for Virginia's Office of Transportation Public-Private Partnerships said the deadline for alternative proposals would be July 12.

Here is the link to the official proposal documents:

L.A. City Council approves federal financing for Alameda Corridor

The 13-member Los Angeles City Council approved $83.7 million in federal financing via the Rail Administration to assist in funding the 20-mile Alameda Corridor that connects freight between Southern California's two big container ports with rail lines.

The Alameda Transportation Authority reportedly was struggling to pay its bond debt during the Great Recession due to declines in global cargo and a subsequent drop in user fee revenue.

The Corridor's Authority will sell the bonds to the Federal Rail Administration and in turn use those monies to retire bonds that were at a higher interest rate.

The Alameda Corridor has been in operation for 10 years and has reportedly moved approximately 20 million TEUs on 150,000 trains.

The Federal Railway Administration must now grant final approval.

For the full L.A. Times story:

Trucks from Mexico not crossing U.S. border

Last year's cross-border trucking agreement that ended a contentious trade dispute between the U.S. and Mexico that lasted for 17 years since the North American Free Trade Agreement came into effect, has reportedly yet to see much success due in part to strict vetting procedures on the U.S. side and high insurance costs.

A U.S. Department of Transportation pilot program was officially launched last October after the NAFTA trade dispute between the two neighboring countries was resolved as Mexico lifted trade tariffs in exchange for allowing that country's long-haul trucks into the U.S.

However, to date, only 33 trucks from Mexico have crossed into the U.S., and the Federal Highway Administration fears there is not enough data to cull from its pilot program to provide sufficient analysis for the potential of a broader cross-border program.

"Participation is not where we want it or need it to be to make it a viable program," said William Quade, the Federal Motor Carrier Safety Administration's associate administrator for enforcement and program delivery to Bloomberg BusinessWeek. "The agency is extremely concerned about not having sufficient data," he said.

A stringent application process for the trucking firms participating in the pilot program that includes a strict safety audit and a period of time allowed for the public to comment, combined with higher insurance costs, has reportedly contributed to the lack of trucking traffic heading into the U.S. thus far.

On the other hand, three U.S. companies have reportedly sent over 2,000 trucks to Mexico since the pilot program was instigated in October.

"If Mexican trucks effectively can't get into the United States, I'm sure the Mexicans would be tempted to go back to the same retaliation they had under the NAFTA rules," said Ed Gerwin, trade analysit for Washington D.C.-based research firm Third Way.

For the full Bloomberg Businessweek story:

Bulk of Japanese tsunami flotsam expected to hit Washington State coast this fall

The bulk of Japan's post-tsunami flotsam is expected to land on West Coast beaches, particularly in the Pacific Northwest, in the fall, according to an oceanographer.

"In my view, we're in a six-month countdown to October," said Curt Ebbesmeyer, an oceanographer with Peninsula College in Port Angeles, Wash. to a group of workshop attendees in that area earlier this week.

Ebbesmeyer said the floating debris that was jettisoned into the Pacific Ocean in the aftermath of Japan's tragic tsunami and earthquake in March 2011 is "going to keep arriving for the next several years.

Ebbesmeyer is co-creator of the Ocean Surface Current Simulator (OSCURS) that utilizes computer modeling to predict the movement and direction of the tsunami debris around the world.

Among the continued debris to hit the West Coast over the next two years in larger numbers would be approximately 100 Japanese vessels varying in length from 20 feet to 150 feet, Ebbesmeyer said.

For the full Peninsula Daily News story:



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