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Summary for May 24 - May 28, 2010:
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Monday, May 24, 2010

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Report: Many subsidized L.A. clean trucks not meeting trip requirement

Nearly 12 months into a program that paid dozens of trucking companies $44 million to upgrade vehicles serving the Port of Los Angeles, the vast majority of subsidized trucks have not made the minimum number of trips to the port.

In fact, port officials said this month, more than 390 of them have not visited even once.

And the biggest recipient – Swift Transportation Corp. of Phoenix – and two other Arizona trucking companies now face a boycott started by the city of Los Angeles that theoretically could excuse them from their obligations entirely. That would mean more than 16 million public dollars would be lost.

The plan began in 2008 when, under pressure from environmentalists to improve air quality, the port created the Clean Trucks Program requiring all trucking companies doing business there to aggressively reduce big rig emissions. The old fume-spewing diesel trucks were replaced with cleaner burning models, such as those fueled by clean diesel or liquefied natural gas.

Fearing there wouldn’t be enough low-emission trucks to go around, port officials went a step further. They committed $44 million in public funds as a financial incentive for truck companies to upgrade their vehicles, each of which can cost $150,000.

Specifically, each company participating in the program was given $20,000 for each low-emissions truck it bought. Each of those trucks was committed to make at least 300 pickups or deliveries annually at the Port of Los Angeles over the next five years. (The nearby Port of Long Beach also has a Clean Trucks Program, which is separately managed and has a different incentive program.)

All told, officials say, about 100 companies were given subsidies for some 2,100 trucks.

In all, 393 of the 2,100 subsidized trucks have not made a single call at the port.

Officials would not identify the companies that own those trucks.

Both the companies and the port characterize the main snag as the recession, which reduced port business 14 percent last year.

And they are quick to point out the apparent larger success of the Clean Trucks Program. Originally designed to achieve an 80 percent reduction in emissions by 2012, the program has nearly reached that goal now. A full two years before the deadline, about 90 percent of the trucks running in and out of the port are clean.

- Los Angeles Business Journal

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New Jersey Senate demands action on Bayonne Bridge fix

Add the New Jersey State Senate to the growing list of governing bodies demanding action to keep the Bayonne Bridge from hindering the travel of large container ships in the future.

The Bayonne Bridge is currently too low to allow the latest super-sized container ships to pass beneath it - a setback that could cost the region thousands of port jobs and millions of dollars, particularly when the expansion of the Panama Canal is completed in 2015 and a new breed of container ships that can carry double the load of current vessels is expected to become more common.

On Thursday, the State Senate passed a measure sponsored by Sens. Nicholas J. Sacco and Sandra B. Cunningham that calls for a study sponsored by the Port Authority of New York and New Jersey to determine the best solution to the problem and how it should be funded.

- New Jersey Star-Ledger

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Gazprom set to expand in Asia-Pacific

Russia's Gazprom plans to set up a shipping unit in Singapore and sees opportunities in expanding the trade of other energy products in the Asia-Pacific region.

The gas giant's move into Asia comes as the Russian government urged companies to re-route exports from low-growth Europe to other, faster-expanding markets.

- Reuters

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DHL to build $1.5 mil DC in Vietnam

DHL is investing more than $1.5 million to build a new DHL Distribution Center at Inland Clearance Depot Song Than, Binh Duong in Vietnam.

A 15,000-sqm built-to-suit multi-user warehouse, the development of the DHL Distribution Center, is part of overall plans to expand DHL Supply Chain's footprint throughout Vietnam.

Occupying a total land area of 60,000 sq.m, the site will be developed in three phases. In the first phase, the distribution center will feature an Integrated Packaging Center (IPC).

- Manila Bulletin

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Ship runs aground off Kalama, Wash.

A cargo ship ran aground in the Columbia River at Kalama on Sunday afternoon near the iconic totem pole in Kalama Marine Park.

The U.S. Coast Guard said "a steering casualty" caused the 197-meter-long Pacific Flores from Hong Kong to run aground. Petty officer first class Tom Zeiner said the Coast Guard is investigating to determine the exact problem.

Two tugboats efficiently guided the undamaged ship back out into deep water as a large crowd of onlookers lined the shore, despite the rain.

Zeiner said the ship had just left the Port of Kalama and was en route south to the Port of Vancouver. It carried no cargo, he said. No one was injured and there was no pollution, he said.

- Longview Daily News

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Tuesday, May 25, 2010

Top Story

Wal-Mart wants to take over more transport services

Wal-Mart Stores Inc., the world’s largest retailer, is seeking to take over U.S. transportation services from suppliers in an effort to reduce the cost of hauling goods.

The company is contacting all manufacturers that provide products to its more than 4,000 U.S. stores and Sam’s Club membership warehouse clubs, said Kelly Abney, Wal-Mart’s vice president of corporate transportation in charge of the project. The goal is to take over deliveries in instances where Wal-Mart can do the same job for less and use those savings to reduce prices in stores, he said.

The plan allows Wal-Mart’s fleet of 6,500 trucks and 55,000 trailers to carry more per truck and improve on-time delivery rates, said Leon Nicholas, a director at consulting firm Kantar Retail. Wal-Mart would also have more sway in negotiating fuel prices, he said.

The price cuts Wal-Mart is seeking are twice as much as the cost for transporting goods in some cases, said officials from two suppliers. In two instances, Wal-Mart asked for a 6 percent reduction in the price it pays for products based on its own cost calculation, while suppliers estimated the actual expense was equal to about 3 percent, the people said.


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Hanjin to sell terminal stake to help offset Q1 losses

Hanjin Shipping Co., South Korea's largest container-shipping line, plans to sell 49 percent of a terminal operator at the nation's busiest port and sell new shares to boost finances after posting a first-quarter loss.

The company expects to raise 200 billion won (US$177 million) by selling the stake in Hanjin New Port Co., which runs facilities in Busan, according to a regulatory filing today. The Seoul-based shipping line, which didn't identify the buyer, will retain 51 percent. The company also expects to raise 252 billion won by selling 10.9 million new shares next month for working capital, it said in a separate filing.

Hanjin posted a first-quarter loss of 135 billion won as it laid up ships and competition on transpacific routes capped rates increases. Container lines suffered industrywide losses last year as slumping trade and price wars hammered fees.


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Teamsters form committees to address pension funds with YRC

The International Brotherhood of Teamsters union is forming two joint labor-management committees to address YRC Worldwide’s re-entry into Teamster pension funds starting January 2011, as well as ways to enhance YRC's competitiveness in the freight industry.

"Thanks to the sacrifice and hard work of our members, YRC is rebounding from the impact of the economic recession and efforts by non-union companies in the freight industry to drive YRC out of business," said James Hoffa, the Teamsters’ general president, in a written statement.

-Fleet Owner

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Carriers levy extra $150-per container charge on South African exporters

Shipping lines are charging South African fruit exporters extra to handle containers as they start clearing a backlog from a two-week transport strike, an industry group said.

Citrus fruit sellers have to pay an additional $150 per container, adding to the 250 million rand ($25.1 million) they have already lost due to the strike at state-owned ports and rail operator Transnet Ltd., said Justin Chadwick, chief executive officer of the Citrus Growers’ Association of South Africa.


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Five Somalis on trial in Denmark for “sea robbery”

Five Somali men went on trial in a Dutch court for the 17th century crime of "sea robbery" Tuesday in Europe's first piracy trial since a surge of attacks on shipping off the Somalia's lawless coast. One defendant wept and shouted that poverty had forced him into his situation.

Scores of pirates have been detained and several have been brought to Europe, but many are released because of the cost and difficulty of bringing them to trial. Other European countries will be watching the Dutch case closely to weigh the merits of bringing piracy suspects to trial.

The five men were captured in January 2009 after allegedly attacking a cargo ship registered in the Dutch Antilles in the Gulf of Aden. The ship's crew held off the attack with flares until a Danish navy frigate intervened and sank the pirates' boat.

If convicted, they face a maximum of 12 years in prison.


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Wednesday, May 26, 2010

Top Story

Teamsters reject ABF-proposed pay cut

Teamsters employed at ABF Freight System rejected the company's proposed changes to the labor contract, which involved a 15 percent pay cut, while protecting pension, health care and welfare benefits.

In April, local Teamsters Unions from across the country endorsed the financial relief plan of the less-than-truckload carrier.

Mail ballots were sent out April 30 to about 7,000 active employees and about 1,000 workers with recall rights. With a final count of 3,764 to 2,936, the workers voted no on the plan with about 80 percent of the members affected participating in the vote.

According to a letter sent to clients, analyst group Stifel Nicolaus provided several reasons why the employees voted this way. Some workers may feel the company did not do enough to cut costs before asking employees to take a pay cut, while others may be concerned that lower wages will lead to more aggressive pricing to gain more volume. Another reason employees might have rejected the plan is because they believe they didn't get enough input in the process. Meanwhile, others may be looking at ABF's $138 million balance sheet and believe the company should exhaust those funds before turning to wage cuts.

-Trucking Info

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APL exec pushes for China intermodal rail expansion

China’s inter-modal rail system holds the key to opening the country’s interior to increased export production, according to APL North Asia President Ken Glenn during a recent logistics forum.

The expansion of freight rail service will attract increased investment to Western and Central China, regions coveted for their lower manufacturing costs, said Glenn.

“It is our belief that with expanded infrastructure, the rate of investment in these regions will accelerate and grow at a faster rate than China overall,” he told an audience attending the China Chongqing International Investment and Global Sourcing Fair.

APL pioneered intermodal rail transport for containerized cargo in the U.S. during the 1980s. In 2007, sister company APL Logistics introduced IndiaLinx, that country’s first private freight rail system. Since then it has also established intermodal rail service in Egypt.
-Manila Bulletin

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South African exporters turn to airfreight amid port disruption

South African fruit exporters are transporting their goods by more expensive air freight instead of shipping because of disruptions caused by the pay strike at Transnet Ltd., Business Report said, citing Wiedse Kruger, managing director at Afrupro Exporters.

It costs 50 rand ($6.36) to fly a carton of avocados compared with 10 rand charged by shipping lines, with costs being shared between producers and customers, the Johannesburg- based newspaper said.


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Shareholders approve Navios’ acquisition of 13 tankers

Shareholders of Navios Maritime Acquisition Corp. approved the SPAC's purchase of 13 tanker ships.

The official numbers of shares voted for and against the transaction were not included in a statement Navios issued today announcing approval of the acquisition.

Yesterday however, the SPAC had provided preliminary numbers that appeared then to indicate that the deal would not go through.

According to Monday's statement, about 9.2 million shares had been voted in favor of the acquisition and investors controlling about 13.6 million shares had elected to get their money back. The SPAC could have a maximum of about 10.1 million shares vote against the acquisition.

-SPAC Wire

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UPS to host “how to” export seminars across U.S.

United Parcel Service Inc. is to host a series of six “How To” export seminars for small- and mid-sized businesses featuring entrepreneur Jim Beach, a former professor at Georgia State University and University of Chattanooga, and Chris Hanks, director of an entrepreneurship program at the University of Georgia.

According to a May 19 news release, the seminars will concern practical approaches for small- to medium-sized companies to expand into international markets and benefit from international trade.

The first seminar is to take place in Atlanta on July 27, with future seminars taking place in Boston, Chicago, Cleveland, San Jose, Calif. and Dallas.

-Global Atlanta

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Tanker spills aprox. 18,000 barrels off Singapore after collision

A tanker spilled about 18,000 barrels of crude oil off Singapore's coast after a collision with another ship ripped a hole in one of its tanks, authorities said Tuesday.

The spill occurred when the Malaysian-registered tanker MT Bunga Kelana 3 collided with the St. Vincent's and The Grenadines-registered bulk carrier MV Waily early Tuesday in the Singapore Strait about eight miles (13 kilometers) to the southeast of the city-state's east coast, the port authority said. Both ships are currently anchored in the strait.

Cleanup teams from Singapore and neighboring Malaysia deployed about 40 tons of oil dispersants, 5,000 feet (1,500 meters) of containment booms and two skimmer boats designed to scoop up the crude, the port authority said.

Malaysian coast guard Commander Abdul Hadib Abdul Wahab said the oil spill was being contained and there was no danger it would hit the coast.


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Thursday, May 27, 2010

Top Story

Teamsters reject ABF-proposed pay cut

Hanjin Shipping Co., South Korea’s largest container line, expects a return to profit on its biggest routes as an economic recovery in the U.S. revives demand for Asian-made goods.
“The bleeding will stop as of May,” Chief Executive Officer Kim Young Min said in an interview yesterday in Hong Kong. “We were losing so much money on transpacific trade.”

Hanjin has secured close to 90 percent of its target for rates increases in new annual contracts and the company now plans to introduce peak-season surcharges about four weeks earlier than usual as demand rebounds. Overall traffic on transpacific routes may rise 10 percent this year and even more quickly on Asia-Europe lanes, Kim said.

Hanjin’s vessels are about full on all routes, which is prompting the Seoul-based shipping line to consider expanding its fleet by more than a planned 6 percent, Kim said. The company’s overall cargo volume increased 26 percent in the first four months, he said.
Hanjin, which carries about half its traffic on transpacific routes, may levy a $400 per 40-foot container peak surcharge on the transpacific routes next month, Kim said. Mediterranean Shipping Co. plans to levy a $500 peak-season surcharge next month on shipments traveling to the U.S. West from Asia, according to its website.

The rate increases may help Hanjin make an operating profit at its container business from the current quarter, Kim said. The business generated an operating loss of $8 million in the first quarter. Hanjin may post a companywide net income in the third quarter, excluding the impact of exchange fluctuations on some costs, Kim said, without elaborating.


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China Shipping and Evergreen to launch new trans-Pac service

China Shipping and Evergreen announced the launch of a new trans-Pacific service end of May between the ports of Los Angeles and Oakland and ports in central and northern China.

The China/South U.S. West Coast Service 2 (CPS2) rotation will be Oakland, Los Angeles, Qingdao, Shanghai, Ningbo, Oakland. The service will initially deploy five 4,000-TEU vessels by China Shipping and Evergreen Line with round-trip transit time projected at 35 days, the major Asia-based shipping lines said.

The first vessel to depart from Qingdao on May 29 is the Ever Develop, which is expected to arrive in Oakland on June 13, according to the shipping partnership.

Expeditors: Air and ocean volumes up in 2010

Expeditors International of Washington Inc. said Wednesday that air and ocean shipping volumes are up in 2010 compared with 2009.

Air freight shipping tonnage last month was up 49 percent compared with April 2009, and April ocean freight tonnages were up 18 percent compared with April 2009.

-Puget Sound Business Journal

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VPA plans special meeting in June over new APM lease

The Virginia Port Authority's board is planning a special meeting on June 24 to consider ratification of the $800 million, 20-year lease deal announced recently with APM Terminals in Portsmouth, port officials said Tuesday.

A date for a decision by APM Terminals was not available Tuesday.

The agreement calls for the Port Authority to pay $40 million a year for 20 years to lease APM's new $500 million terminal in Portsmouth.

-Virginian Pilot For the full story:

USCG Commandant : 24 more hrs required to measure “top kill” results in Gulf

BP Plc made progress toward plugging a leaking well that’s been spewing oil into the Gulf of Mexico for more than a month by temporarily stopping the flow, U.S. Coast Guard Commandant Thad Allen said.

“They’ve had some success overnight,” Allen said today in an interview on WWL radio in New Orleans. “Everybody is cautiously optimistic but there’s no reason to declare victory yet.”

The company began pumping mud-like drilling fluid into the well at 2 p.m. New York time yesterday in a procedure known as top kill. Robert Dudley, managing director for London-based BP, said on NBC’s “Today” show this morning it would require another 24 hours before the company can “be sure of success.”

The effort is aimed at tamping down the gusher of oil and natural gas and then sealing the well with cement. It has halted the flow of oil and gas and BP now must drop the pressure in the well to zero for the cement seal, Allen said.

-Reuters For the full story:


Friday, May 8, 2010

Top Story

TIGER II worth $600 mil

The U.S. Department of Transportation announced it would make $600 million available in the second round of its TIGER (Transportation Investment Generating Economic Recovery) Discretionary Grant Program.

Termed TIGER II, the funds are targeted for capital investment in surface transportation projects. The D.O.T. says TIGER II grants “will be awarded on a competitive basis to projects that have a significant impact on the nation, a region or metropolitan area and can create jobs.”

“The enormous number of applications we received for the first round of TIGER grants shows that we have a backlog of worthwhile transportation projects waiting for funding,” said Transportation Secretary Ray LaHood. “This money will go to the kinds of projects that will help spur lasting economic growth, reduce gridlock, provide safe, affordable and environmentally sustainable transportation choices and create jobs,” he said.

The D.O.T. said the first round of TIGER brought in 1,400 applications from all 50 states, territories and the District of Columbia requesting funding for almost $60 billion worth of projects – 40 times the $1.5 billion available under the program.

Pre-applications are due on July 16 and applications are due on August 23 from state and local governments, including U.S. territories, tribal governments, transit agencies, port authorities and others. The Federal Register notice is available here:

Port of Tacoma narrows top exec search to five

The Port of Tacoma Commission on Thursday narrowed its search for a new executive director to five finalists, including interim port director John Wolfe.

Commission President Don Johnson said the commission has targeted naming a new director by the end of June. The pay range for the job is $200,000 to $240,000 a year.

The five finalists are:

  • Brian Boyle is vice president of operational excellence and engineering with terminal operator Ports America in the San Francisco Bay Area. During his career, he has held several terminal operations leadership roles in both Northern and Southern California.

  • Bernard S. Groseclose served as executive director of South Carolina Ports Authority for 12 years before resigning in January 2009. His resignation came unexpectedly during his semi-annual review session with his board, according to media reports at the time.

  • Ned LaGoy is vice-president and general manager of Sea Star Shipping in Puerto Rico. The search firm praised his community involvement and sales background.

  • Ali Nikkhoo has an extensive background with shipping lines around the world. According to his online résumé, Nikkhoo worked as a senior manager for Sea-Land Service and its successor, Maersk Line, for 24 years. Sea-Land and Maersk were once major Port of Tacoma clients until Maersk moved last year to Seattle.

  • John Wolfe has served at the Port of Tacoma’s interim executive director since executive director Tim Farrell left day-to-day operations of the port in his hands Jan. 1.

The commission spent Thursday morning in executive session discussing the qualifications of a dozen semi-finalists before narrowing the selection to five in a public vote. Fifty-nine people applied for the job.

-Tacoma Tribune

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New York-New Jersey’s Q! seaport volume up 9.6 percent

In what officials say is a sign of economic improvement at home and abroad, the total volume of imports and exports rose 9.6 percent at the region’s ports during the first quarter of 2010 compared with the same period last year.

Imports for the year’s first three months, rose 9.8 percent above 2009 levels, while exports were up 9.4 percent, reported the Port Authority of New York and New Jersey.

The volume of imports continued to far outpace exports during the quarter, a persistent local imbalance representative of the nation’s ongoing trade deficit. Imports for the quarter totaled 564,207 TEUs, up from 513,950 units in the first quarter of 2009. Exports totaled 353,206 TEUs, verses 322,783 a year earlier.

-New Jersey Star-Ledger

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Plan to ship trash from Hawaii to Wash. State clears federal hurdle

The proposal to ship trash to the Mainland got federal approval yesterday, but it's still uncertain if it will happen.

Hawaiian Waste Systems received the OK yesterday from the U.S. Department of Agriculture to transport O'ahu's waste to a landfill in Washington state.

The company has been beset by a number of setbacks, including the long-delayed USDA clearance. As a result, the company asked the city to stop delivering trash to its Campbell Industrial Park baling facility and was fined $40,400 by the state Department of Health for storing waste at two off-site properties without permits. There are about 20,000 tons in shipping containers on the three sites.

Shipping trash to the Mainland is one way the city hopes to cut down on garbage going to the Waimanalo Gulch Sanitary Landfill, the only facility on O'ahu that accepts municipal solid waste. Hawaiian Waste's contract calls for shipping up to 100,000 tons of trash annually to a landfill in Washington state.

-Honolulu Advertiser

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Miami’s commercial maritime river gets some protection

Years of pitched battles over the future of a significant chunk of the Miami River could be drawing to an end under a pact between activists and the city that would preserve the working waterway while making it harder to build condos on its banks.

If approved by the state and adopted by the city commission, the agreement would mark a sharp turnaround from years of policy under former Miami Mayor Manny Diaz, whose administration aggressively sought to transform the gritty river into a high-rise residential corridor within city boundaries.

Under the agreement -- which the city commission gave a preliminary green light to on Thursday -- the city would enact explicit protections in its comprehensive development plan for existing maritime businesses along the river with a goal of protecting and expanding its marine and industrial economy.

-Miami Herald

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