Cargo Business Newswire Archives
Summary for May 26 through May 30, 2014:

Tuesday, May 27, 2014

Top Story

PMSA case establishes that Port Agent is subject to Public Records Act

The Pacific Merchant Shipping Association announced that it won a Public Records Act lawsuit against the State of California, stemming from a refusal to release records to the trade association that documented pilot assignments on the San Francisco Bay. PMSA was awarded more than $260,000 in attorneys’ fees and costs, the statement said.

PMSA said the case established that the Port Agent is a public official subject to the Public Records Act, according to the San Francisco Superior Court ruling. As a result, the records the agent uses regarding working hours and rest periods for state-licensed pilots who navigate ships in and around the San Francisco Bay must now be made public.

"Our goal is to ensure that cargo vessels are safely and legally navigated in the San Francisco Bay, and for this to happen we need transparency and accountability in our state pilotage system," said Mike Jacob, PMSA general counsel. "When assignment documents are made public anyone can see when state-licensed pilots are dispatched to ships, evaluate pilots’ actual working conditions, independently confirm pilots’ work hours, or verify minimum rest period violations. We are pleased that as a result of this action we have ensured the public’s right to access records used by the Port Agent and that the Superior Court has vindicated our efforts."

The original case was filed in July 2012 in San Francisco Superior Court. The question of the Port Agent’s status as a public official was resolved in PMSA’s favor by the 1st District Court of Appeal in Board of Pilot Commissioners et al. v. Superior Court (2013) 218 Cal.App.4th 577.

"Our efforts were supported by the ACLU, the California Newspapers Publishers Association, 1st Amendment Coalition, LA Times and McClatchy newspapers," said PMSA spokesman John McLauren in an email.

Importers angry over Port Metro Vancouver storage fees during trucker strike

Local Canadian importers are upset over millions of dollars in unanticipated container storage fees charged by terminal operators at Port Metro Vancouver during the 28-day port truck driver strike/walkout earlier this year.

The import companies approximate that terminals collectively charged over $20 million in storage fees for containers that were stranded on the docks during the truckers strike.

For example, furniture retailer The Brick had 129 containers stuck at the docks and was billed nearly $500,000 in storage fees.

"The fees are there to ensure importers don’t use the dock as a storage place,” said Ruth Snowden, executive director of the Canadian International Freight Forwarders Association. "But there was a labor dispute going on and very few containers could be moved. This just adds insult to injury.”

Snowden said Port Metro Vancouver terminals typically charge a storage fee for containers that have been on the dock for more than three days, using a sliding scale that tops out at $460 per-FEU that remains on the dock after 10 days.

She says the terminal operators should refund at least a portion of the storage fees, pointing to a CIFFA survey that found shippers are paying an average of about $3,000 in extra costs for each container.

Snowden said TSI, operator of the Vanterm and Deltaport terminals, made two offers to mitigate the fees but she hasn’t seen any offers from the operators of Centerm and Fraser Surrey Docks, who could not be reached for comment.

For more of the Port Metro Vancouver story:

Maersk CEO to WSJ: Overcapacity to pressure shipping market through 2017

The chief executive of A.P. Møller-Maersk MAERSK said Wednesday that he believes that overcapacity will continue to plague the shipping industry over the next three years.

"There is lingering overcapacity, so there will be pressure in the market in 2015, 2016 and probably 2017," Nils Smedegaard Andersen told The Wall Street Journal. "So we can't talk about a sustainable recovery in the short term."

Earlier Wednesday, Maersk Line, the world's largest-capacity container-shipping company, reported a 62 percent increase in first-quarter net profit, as intense cost cutting mitigated falling freight rates.

Maersk Line is depending on the planned P3 Alliance with France's CMA CGM SA and Switzerland’s Mediterranean Shipping Co. to cut costs further. The alliance has passed muster with U.S. regulators, but is still awaiting the verdict from EU and China officials.

"We expect the Chinese and the Europeans to deliver more or less around the middle of this year. We haven't had any negative feedback. There has been some delay because we are trying to add some smaller jurisdictions to the network," Andersen said.

Analysts predict that Maersk Line would cut costs by $1 billion a year if the new network is approved.

For more of the Wall Street Journal story:

Port of Charleston posts highest container volume since 2008 in April

April container volumes at the Port of Charleston set a six-year record, posting the highest numbers since May 2008, according to the South Carolina Ports Authority. Last month’s box volume increased by 12.3 percent year-over-year at 151,790 TEUs.

For the 2014 fiscal year to date (with two months remaining), the port handled 1,374,066 TEUs, up 5.5 percent compared with 2013 volume.

"April reflected strong export growth at the Port of Charleston as we shipped 10.6 percent more containers overseas than the same month last year," said Jim Newsome, president and CEO of the South Carolina Ports Authority. "These growth figures stress the importance of our deep water harbor as American manufacturers and exporters look for efficient, expedient ways to send their goods overseas."

The SCPA noted its board approved a $1.2 million contract for routine maintenance dredging at Union Pier Terminal and Columbus Street Terminal to accommodate break-bulk operations 

The SCPA also voted to contribute up to $12 million to construct a building expansion for New Orleans Cold Storage to boost cold storage and freezer space in the Charleston area, according to the statement, and also approved the sale of a portion of the Coal Tipple Property for $3 million to support an economic development project.

33 injured after cargo ship and ferry collide in Hong Kong

April container volumes at the Port of Charleston set a six-year record, posting the highest numbers since May 2008, according to the South Carolina Ports Authority. Thirty-three people were hurt when a ferry and a cargo ship collided late Wednesday in Hong Kong, officials said, the latest accident on the city's packed waterways.

Authorities said the collision occurred just off the island of Cheung Chau between a mainland Chinese vessel and a high-speed ferry.

"A Macau ferry collided with a vessel from the mainland," a government spokeswoman told AFP. "Thirty-one injured are at the pier and two with comparatively more serious injuries have been sent to a hospital in Cheung Chau.”

For more of the Global Post story:


Wednesday, May 28, 2014

Top Story

APL's Gene Seroka named Port of Los Angeles executive director

Los Angeles Mayor Eric Garcetti has appointed Gene Seroka, a top executive at American President Lines, as executive director of the Port of Los Angeles, according to a city statement.

Seroka, currently head of commercial in the Americas Region for APL, will lead a city department with a $1.1 billion budget and approximately 1,000 employees. Nearly 900,000 local jobs and almost 3 million U.S. jobs are linked to the Port of Los Angeles.

"I'm proud to nominate Gene Seroka to be the next executive director of the Port of Los Angeles, the nation's top container port," Garcetti said in a statement. "I'm confident that Gene will be a strong leader who will enhance our international trade agenda, increase reliability and efficiency through effective management and labor relations, and ensure our port is a sustainable and positive neighbor to the Harbor community."

"I'm thrilled that Mayor Garcetti has tapped me to lead the Port of Los Angeles — the busiest container port in the United States," Seroka said in a statement. "I look forward to focusing our operations to provide world-class customer service while continuing to invest in a healthy and vibrant harbor community."

Seroka replaces Geraldine Knatz, the first woman to run a major port complex in the country when she was appointed in December 2005.Gary Lee Moore, the port's acting executive director, will return to his role as city engineer.

Seroka, who has been with APL since 1988, has more than 21 years of experience in container shipping and logistics, according to a bio on Bloomberg Businessweek.

He joined APL in 1988, previously serving as president of Americas at APL Limited. He also was vice president in the Middle East for APL, vice president of APL Logistics for Asia and the Middle East, managing director for APL and APL Logistics businesses in Indonesia, director of sales and marketing in China, and held sales management and marketing roles in the U.S.

Garcetti's nomination of Seroka will likely be approved by the Los Angeles Board of Harbor Commissioners and confirmed by the City Council in June.

For more of the Press-Telegram story:

CMA CGM reports modest Q1 profit, appoints chairman's son to #2 spot

French shipping giant CMA CGM reported first quarter profits of $97 million, a 1.2 percent increase year-over-year.

The company also announced that Rodolphe Saadé, the son of Chairman Jacques R. Saadé, has been appointed as vice-chairman executive officer of CGA CGM, and is now second in command. The younger Saadé, 44, will ascend to chairman when his father decides to retire, the statement said.

Revenues for the first quarter grew 2.7 percent to $3.94 billion, the report noted, and container volumes grew 5.8 percent in the first quarter to 2.8 million TEUs.

CMA CGM said it had limited the drop in average freight rates to 2.9 percent, compared to the average drop, according to the Shanghai Containerized Freight Index, of 8.6 percent.

The company said that after "a dip" at the beginning of the second quarter 2014, "freight rates are now back at supportive levels, but should nevertheless remain volatile."

American Association of Railroads: Rail traffic trending up

U.S. rail traffic is trending up in 2014, according to the American Association of Railroads.

AAR reports that for the first 20 weeks of 2014, U.S. railroads reported collective volume of 5,680,070 carloads, a 2.7 percent increase year-over-year, and 5,053,519 intermodal units, up 5.5 percent from 2013.

Total combined U.S. traffic for the first 20 weeks of 2014 was 10,733,589 carloads and intermodal units, a 4 percent increase over last year, the statement said.

AAR noted that Canadian railroads reported cumulative volume of 1,518,821 carloads for the first 20 weeks of 2014, down 3.6 percent from the same point last year, and 1,090,676 intermodal units, up 5 percent year-over-year.
For the first 20 weeks of the year, Mexican railroads reported cumulative railroad volume of 303,412 carloads, up 2 percent from the same period last year, and 193,129 intermodal units, up 2.5 percent from last year, according to the AAR statement.

Combined North American rail volume reported to AAR for the first 20 weeks of 2014, which includes 13 U.S., Canadian and Mexican railroads, totaled 7,502,303 carloads, up 1.3 percent compared with the same point last year. AAR said 6,337,324 intermodal trailers and containers were reported by these 13 North American railroads, up 5.3 percent year-over-year.

Virginia Port Authority profits hurt by rail incentive deal

A major reason the Virginia Port Authority is losing money is because of a deal made in spring 2012 by port operator Virginia International Terminals, which had offered discounts to ocean carriers as an incentive to drive more rail cargo through the port.

The incentives were paid in addition to long-term contracts that provided "tiered" discounts for rail containers once certain benchmarks were met.

"The incentive was costing the port money with each box that went out on rail," said Scott Bergeron, former vice chairman of the VPA.

Last year, the port posted record volumes and projected a modest profit after five consecutive years of losses. This seemed to validate the VPA's rejection of privatization of its terminals. It stayed with VIT as its port operator, but regained tighter control by turning it into a limited liability company.

Then in late February, John Reinhart, the new CEO and executive director, revealed that the port had lost $15.7 million through the first seven months of its July-to-June fiscal year.

Bergeron asserts the rail incentives – granted during the state's review of the port privatization proposals – were part of a "triple whammy" that hit the port.

The discounts "contributed to higher cargo volumes, which were effectively being subsidized," Bergeron said. Two other factors boosted incoming cargo: the rebounding economy and gridlock in New York, which led to diverting cargo to Hampton Roads. Together, these trends accelerated the port's losses, putting it into a financial tailspin, he said.

Another key factor in the port's financial loss is the VPA's 20-year lease of APM Terminals' Portsmouth facility. Rent payments currently around $50 million a year could grow to over $100 million a year by 2030, when the lease is up, according to a June 2013 report.

For more of the Virginia-Pilot story:

Marks & Spencer pulls out of distribution hub deal at London Gateway

U.K. retail giant Marks & Spencer announced it is pulling out of a deal to open a 900,000- square-foot distribution facility at the London Gateway port.

In June 2013, the retailer made an agreement to become the port's first major tenant, declaring its intention to invest $311 million in the 1,500-acre site.

The project was supposed to begin earlier this year, after the completion of the London Gateway construction last year. The M&S distribution hub was to eventually employ 700 people.

But in a statement published beside its annual results last week, Marks & Spencer said: "Following a thorough review of our plans, we have taken a decision not to proceed with the site at London Gateway and have developed an alternative plan."

M&S said that it now plans to operate from two national distribution centers in the Midlands and the North, supported by four regional distribution centers. The statement said the plan would save the company $219 million.

For more of the Construction Week story:

3 die from mystery illness on cargo ship

Police are looking into whether three men might have died from carbon monoxide poisoning while aboard the German cargo ship Suntis anchored at Goole docks in the U.K.

After becoming ill aboard the vessel on Monday, the three men – one from Germany and two from the Philippines – were taken to Hull Royal Infirmary, where they later died.

Authorities are now working with the Health and Safety Executive and the Maritime Agency to determine the cause of the deaths.

For more of the Hull Daily Mail story:


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