Cargo Business Newswire ArchivesSummary for May 25 through May 29, 2015:
Tuesday, May 26, 2015
ILWU and PMA ratify W.C. dockworker contract
On Friday, International Longshore and Warehouse Union members ratified a five-year contract governing pay and work rules at 29 West Coast ports. The Pacific Maritime Association, which represents terminal operators, shipping lines and other employers at West Coast ports, announced Wednesday that its members had ratified the contract.
The new contract, which is retroactive to July 2014, was ratified with 82 percent of union members casting votes in its favor.
"The negotiations for this contract were some of the longest and most difficult in our recent history," ILWU International President Robert McEllrath said in a statement issued Friday.
The contract provides for some 20,000 jobs up and down the West Coast, according to the union. Statements from both sides of the negotiations reported the deal will include pay and pension increases for dockworkers. The deal also altered the arbitration system for labor-management disputes.
The two sides first agreed to the deal in late February after tense negotiations resulted in a major backlog of cargo ships outside the harbor.
"In the last 90 days, labor and management throughout the San Pedro Bay supply chain have made excellent progress eliminating the backlog of ships, getting services back on schedule, and improving cargo flow in and out of terminals. Our port teams are working with supply chain stakeholders on a series of initiatives that will take cargo efficiency and velocity to the next level here in San Pedro Bay," Port of Los Angeles Director Gene Seroka said in a statement.
"The disruptions that occurred during negotiations, and the inconvenience and hardship created by them, were regrettable," Pacific Maritime Association Chief Executive Jim McKenna said in a statement. "We look forward to building upon the incredible advantages West Coast ports offer and winning back the trust and confidence of the shipping community. This contract provides important tools to accomplish that."
If ratified, the contract will be retroactively effective as of July 1, 2014 and remain in force until the end of June 2019.
The first quarter reliability results by maritime analyst SeaIntel showed Maersk Line in second place while CSAV was number one, with a 0.6 percent point lead at 81 percent, according to a Maersk statement. Hamburg Süd came in third with 80.2 percent.
Maersk Line Head of Operations Execution Keith Svendsen said the decline was largely due to congestion on the U.S. West Coast impacting January reliability.
The SeaIntel report also indicated a global decline of reliability from 73.7 percent in the last quarter of 2014 to 69.7 percent for the first quarter of 2015, according to the statement. A number of incidents around the word contributed to the dip in results.
Svendsen explained that the global performance fluctuates based on seasons and unforeseen events.
On the Asia-North Europe trade lane now operating in a vessel-sharing agreement with MSC, Maersk Line posted an overall schedule reliability of 91.1 percent, putting the carrier in the top spot. In the Asia-Mediterranean trade lane Maersk Line came in second to CSAV with a recorded schedule reliability of 76.2 percent, the statement said.
Maersk Line said the 2M alliance posted a schedule reliability score of 79.3 percent in February but declined in March with an average of 67.5 percent. Despite the dip, 2M is still the most reliable alliance in the East-West trade lane, followed by Ocean Three and CKYHE.
Sen. Murray and Cantwell champion U.S. Export-Import Bank
Washington Senators Patty Murray and Maria Cantwell made a deal with Senate Majority Leader Mitch McConnell, essentially agreeing to vote for fast track trade deal authority for the White House as long as McConnell agrees to allow a vote in June to renew the U.S. Export-Import Bank.
"We want this vote to be on a viable legislative vehicle. We want to drag this issue out of the shadows and show the American people where the Senate stands," Cantwell said. "What is frustrating in America’s trade debate is that the far-right conservatives are trying to get rid of trade tools that allow American companies to compete."
"My point is that in a global economy, export is the way to go. We must have the trade tools to go along with opening markets."
The Export-Import Bank guarantees loans for U.S. exporters. The bank supports an estimated 164,000 jobs across the country. Ex-Im has consistently returned money to the U.S. Treasury. It has underwritten millions of dollars of Boeing aircraft sales, but is also important to a vast array of small exporters.
"The Export-Import Bank is critically important to Washington state workers and the economy, so it was great we were able to secure a commitment today from Senate Republicans to allow a vote next month," Murray said.
If the Senate votes to renew the Export-Import Bank — the votes are apparently there — the legislation faces intense right-wing opposition in the House of Representatives and by conservative lobbies such as FreedomWorks, the Heritage Foundation and the Club for Growth, and now Delta Airlines.
Delta, which is expanding services in the Pacific Northwest, is furiously lobbying for elimination of the Export-Import Bank — which supports thousands of Washington state jobs — on grounds that it helps Delta’s foreign competitors when they buy Boeing jets.
SC Ports Authority handled nearly 15 percent more pier containers in April year-over-year, with total box volume through April increasing to nearly 900,000 TEUs.
SCPA handled 168,182 TEUs in April, bringing total container volume to 1.6 million TEUs since the fiscal year began in July. Four months into the calendar year, TEU volumes are up 15 percent compared to the same period in 2014.
Breakbulk volumes fiscal year to date are strong, with 698,229 tons handled by the Port of Charleston and 460,209 moved in Georgetown. Total breakbulk tonnage reached 1.2 million pier tons fiscal year-to-date.
The Inland Port handled its highest ever monthly rail moves, with 5,513 moves completed in April. Fiscal year to date, the facility has handled 45,826 rail moves.
"The volumes announced today reflect significant growth across all business segments," said SC Ports Authority Vice-Chairman John Hassell. "Spring is typically a busy season for us, particularly on the containerized cargo side, and our sustained double-digit volume growth reflects the strong import-export markets we serve. The port's ability to handle increased container traffic with high productivity is a testament to our ability to handle rising cargo volumes both reliably and efficiently."
Small offshore oil platform catches fire off Louisiana
An offshore oil platform caught fire in shallow water near the coast of Louisiana Friday and some oil sheen was seen in the ocean following the evacuation of workers, according to U.S. Coast Guard officials.
All 28 workers aboard were taken from the platform, located about 20 miles east of Louisiana, onto a nearby supply vessel and taken ashore. There were no injuries reported, the U.S. Coast Guard said.
Texas Petroleum Investment Company, which owns and operates the platform, shut off production. A company spokesman said the platform can produce up to 2,200 barrels per day of crude oil from up to 60 wells.
The fire was still burning at midday Friday with response vessels on site. It was unclear how much oil had leaked, but the Coast Guard said it had seen a 1.4 nautical mile "rainbow sheen" drifting southwest of the platform.
Drewry: Against odds, Matson competes on East-West trade
Big East-West container trades have become almost closed to independent carriers, especially since the advent of the big carrier alliances such as 2M and Ocean Three. The share of Transpacific capacity controlled by the leading 10 carriers has surged from 65 percent in 2005 to just over 75 percent at the start of 2015.
One independent carrier, Matson Navigation, is defying the odds by running a very profitable service on the East-West trade route. Matson, owned by Hawaii’s Matson Inc., operates a single Transpacific service between China and Long Beach, Calif., with five ships with an average capacity of 2,700-TEUs.
In the age of big ships — the average is 8,000 TEUs on the route – the analysts say Matson shouldn’t stand a chance.
One reason is Matson has resisted slow-steaming and sails at full speed, enabling it to offer a market leading transit time of 10 days between Shanghai and Long Beach.
For the first quarter, Matson reported an operating profit of $44 million, up from $9 million in the same period last year. Even after subtracting the $3.4 million contribution from its 35 percent share in SSA Terminals, which manages Matson’s container stevedoring and terminal services on the West Coast, the company’s profit from shipping operations increased more than three-fold year-over-year.
The primary driver of the higher profits were the higher freight rates the company was able to charge shippers for its Transpacific service that was less affected by the U.S. West Coast congestion issues than other carriers were. Although now that Matson expects to perform "moderately" better than the $131 million operating profit it posted in 2014.
Matson started its China service in 2006 to complement existing services to Hawaii, Guam and Micronesia. In 2013 the company expanded operations to various South Pacific islands, New Zealand with Australia, the Solomon Islands and Nauru following later.
In conclusion, Drewry says Matson proves there is room for a niche player in the East-West container trades, as long as they offer a unique proposition that delivers freight premiums. Small lines cannot compete on costs so to thrive they have to remain modest in size to limit expense and offer a superior product.
L.A. trucking group to launch Trucker Chassis Connection
The Harbor Trucking Association announced it is supporting a new venture — the Trucker Chassis Connection — to reduce congestion around the ports of Los Angeles and Long Beach.
Difficulties related to the availability of chassis have been blamed as a major factor in congestion problems around the ports. The association is in accord with other business and government organizations in the area that are looking to improve the way port truckers get the equipment needed to move freight out of port terminals.
"It’s going to ensure reliability, because we’re going to be using an app, Chassis Finder, to make sure chassis are available," Harbor Trucking Association executive director Weston LeBar said.
The new program was announced as a partnership between HTA and Chassis Finder — a Kansas company operating an online system for trucking companies that want to lease available trailers. LeBar said the trade group’s member companies would be able to use the new chassis pool on June 1.
Initial plans call for 200 chassis to be set aside for trucking companies doing business at the ports of Los Angeles and Long Beach with another 50 chassis set aside for the Port of Oakland.
For now, the new chassis pool represents a small number of trailers when compared to the roughly 80,000 chassis that three major equipment-leasing firms have gathered into a "pool of pools" or "gray pool." Direct Chassis Link, Flexi-Van Leasing and TRAC Intermodal formed the new pool in March to allow truckers to use chassis interchangeably instead of having to worry about whether the equipment is contractually tied to a particular shipping line.
Val Noel, chief operating officer of TRAC Intermodal, said the three companies are still refining their methods of evaluating how well the pool may be improving flow of goods at local ports, but said developments so far have been encouraging.
"It’s been getting better and better, in our opinion, each and every week," he said.
The Long Beach Harbor Commission voted May 11 to seek bids from companies interested in operating another planned chassis pool intended to alleviate any persisting equipment shortages.
China’s national shipping lines have made deals with Brazilian miner Vale to transport ore to China.
Vale completed the sale of four very large ore carriers to China Cosco Holdings for $445 million and reached an agreement to sell another four to China Merchants Energy Shipping, according to a Vale statement.
The four ships sold to Cosco will be operated by China Ore Shipping, a newly formed joint venture between China Cosco Holdings and China Shipping Development, under a 20-year freight contract with an option to extend it for another five years, according to a knowledgeable source.
The deal is part of an extensive package of infrastructure and railway deals that premier Li Keqiang has made with the Brazil government.
China Ore Shipping was established last Thursday with $330 million in issued share capital. China Cosco Bulk Shipping, a subsidiary of China Cosco, and China Shipping Development each hold 51 percent and 49 percent stakes, according to records from the Singapore Accounting and Corporate Regulation Authority.
For more of the South China Morning Post story: www.scmp.com
APL to launch weekly Central America-U.S. East Coast service
APL has announced a new weekly service — the America Caribbean Express (ACX). The service links Central America and the U.S. East Coast, operating through a vessel sharing agreement with SeaLand, and is expected to launch in late June or early July, according to the shipping line.
Serviced by three 1700-TEU vessels, the ACX service will provide direct service with fixed day arrivals from Colombia and Panama to the U.S. East Coast.
"The introduction of the ACX expands APL’s suite of services to our customers," said Efraín Osorio, head of Latin America trade at APL. "We are confident that shippers, in particular those who are moving refrigerated cargo, will benefit from the new service, characterized by fast transits, a modern fleet of reefer equipment, and priority handling of reefer cargo."
APL says the ACX service will provide connections to its feeder network via the Manzanillo International Terminal hub in Panama, as well as integrated intermodal connections to inland U.S. East Coast destinations.
The ACX port rotation service will be: Manzanillo - South Florida – New York - Philadelphia - Savannah – South Florida – Cartagena.
John Nash’s contribution to supply chain logistics
Renowned mathematician John Nash Jr. (86) and his wife Alicia (82), the subjects of the book/movie "A Beautiful Mind," were killed this past weekend in a car accident in New Jersey.
According to Forbes blogger Paul Martyn, Nash’s work is significant to the practice of modern day strategic sourcing. Although he did not invent "game theory," Nash extended the analysis beyond zero-sum and won a Nobel Prize in the process.
His work is not only key to the logic that governs various auction designs, but is even more relevant in the context of complex and collaborative procurement environments. Martyn says just about every online marketplace benefits from Dr. Nash’s research.
Dr. Nash’s legacy will live on in the form of market clearing optimization algorithms that are becoming more common in today’s supply chain management, Martyn reports. These algorithms bring his research to life in everyday supply chain decision-making.
L.A./Long Beach ports collaborate to facilitate cargo movement
The ports of Los Angeles and Long Beach are making plans to alleviate congestion around the waterfront, according to Michael Christensen (pictured), the Port of Long Beach’s new senior executive for supply chain management.
Christensen, who was the keynote speaker this week the Long Beach Chamber of Commerce’s World Trade Week Luncheon, said the two ports plan to make a formal announcement soon revealing more specifics.
"My job is to facilitate, at the highest level, improvements to the supply chain," Christensen said.
Although the new labor contract was just ratified by West Coast dockworkers and employers, the port complex still faces other congestion-related challenges, such as the logistical problems of processing supersized ships in a timely manner.
Christensen said that carriers’ efforts to control their own costs, including forming shipping line alliances, using larger ships and divesting themselves of responsibility for the trailers needed to haul the containers have intensified the congestion problem.
Early this year, the Federal Maritime Commission approved the collaborations of Los Angeles and Long Beach on methods to improve the flow of goods in and out of the local harbor. That paved the way for the ports to begin to bring together the groups of experts to start tackling the problem.
Christensen also discussed previous steps Port of Long Beach officials have taken to deal with congestion. One idea is for the port to become transparent with their data, letting firms like the Walmarts and Home Depots of the world have a clear picture of how long it takes to get a shipping container out of the port.
Port of Long Beach officials are also seeking bids from companies interested in operating a pool of chassis that could be leased when the trailers are not available from the "pool of pools" operated by three firms that control roughly 80 percent of the 100,000 chassis available in the harbor area.
CMA CGM and apparel manufacturer return to Port of Baltimore
Shipping giant CMA CGM and a local apparel manufacturer both announced this week that they are returning to the Port of Baltimore after extended absences.
CMA CGM will begin calling the port of Baltimore this week, after adding the port to its Liberty Solo service between Europe and North America. The container service will call on ports in the Netherlands, Germany and France before crossing the Atlantic for calls in New York, Baltimore and Charleston, S.C. The shipping line hasn’t used the Baltimore port since its joint weekly service with China Container Lines was discontinued in 2008.
Under Armour is based in Baltimore but manufactures its products in 28 different countries. Under a newly signed contract with Evergreen shipping line, the clothing manufacturer will feed its shipments through the local port for the first time in eight years. Up to now, it has filled its Baltimore distribution center with cargo deliveries from other U.S. ports, including Miami and Long Beach, Calif. The company started reconsidering Baltimore after the West Coast cargo bottlenecks stalled its shipments in late 2014.
China Communications Construction Company will transform Cuba's Guillermon Maoncada port into a modern multipurpose terminal.
CCCC is in charge of the port's rehabilitation and modernization project, which is expected to be operational in three years. The Santiago de Cuba port, located in southeast central Cuba, is the second most important on the Caribbean island after Mariel port, according to Cuban publication Granma.
Valued at $120 million, the future multipurpose terminal will be able to handle ships weighing up to 40,000 tons with high-tech port equipment. The transformation will enable the port to handle around 565,000 tons of goods per year, the local authority said. Currently the port attracts ships with a general load of 20,000 tons.
The aim of the project is to build a multi-functional jetty capable of hosting ships in a dock larger than 231 meters, with 3 gantry cranes, two roofed warehouses and an open-air yard for containers, according to the company.
Mapletree Logistics REIT buys warehouses in S. Korea, Vietnam
Singapore-based real estate investment firm Mapletree Logistics Trust purchased a warehouse in Vietnam and another in South Korea for about $42.2 million, according to the company’s manager.
Chief Executive Ng Kiat said the Vietnam purchase "will establish our first presence in North Vietnam, tapping into the growing distribution network serving Hanoi and its surrounding markets."
The trust noted that the warehouse in Vietnam is in an industrial park about 20 kilometers from Hanoi city center, near a highway system that links to Hanoi, Noi Bai International Airport, Hai Phong Seaport and the Vietnam-China border.
"Given its proximity to the city center and good connectivity to major transport infrastructure," the warehouse is ideal as a distribution center, the trust said in a statement.
Mapletree Logistics Trust invests in income-producing logistics real estate as well as real estate-related assets in the Asia Pacific logistics sector.
Man dies after container falls off truck onto vehicle
A British expat died Sunday near Qatar’s Doha Port when a shipping container fell from a truck onto his vehicle, according to the British embassy in Doha.
The man was reportedly driving down the Corniche in Doha when a truck turned onto the street leading to the Ras Abu Abboud tunnel/Sharq interchange. As the truck turned, witnesses said the container overturned and fell onto the victim’s vehicle.
The Corniche is the primary access road to Doha Port, which has more than 100 vessel calls per month.