Cargo Business Newswire Archives
Summary for May 27 - May 31:

Tuesday, May 28, 2013

Top Story

Port of Long Beach seeks leadership to replace Chris Lytle

The Port of Long Beach, the second busiest U.S. seaport, is seeking a replacement for exiting executive director Chris Lytle, who is leaving to take the same position at the Port of Oakland.

The Long Beach Board of Harbor Commissioners is starting the procedure to find a new leader since the port’s Executive Director Christopher Lytle announced Thursday that he is leaving in mid-July.

Lytle, who was reportedly paid at least $275,000 annually (plus benefits) as executive director under a Nov. 2011 contract with the Port of Long Beach, will be paid at least $325,000 annually in his leadership position at the Port of Oakland, according to Long Beach Report.

In a letter to Harbor President Susan E. Anderson Wise, John McLaurin, president of the Pacific Merchant Shipping Association representing port tenants and customers, wrote about his "growing concern about the port and the potential negative impact on our operations. " He said “Recent events, with the latest being the unexpected announcement of Chris Lytle, coupled with other key staff departures, are making us concerned about the future direction of the port.”

There has been some political enmity behind the scenes between city and port officials, some of which went public last year.

Wise expressed her disappointment in Lytle leaving, but lauded his work wooing global shipping lines Mediterranean Shipping Company and CMA-CGM to expand at Long Beach and leading $4.5 billion worth of projects, including the replacement of the Gerald Desmond Bridge and the redevelopment of Middle Harbor into one mega-terminal to be occupied by Hong Kong shipper OOCL for the next 40 years.

"Look at what's happened at the port in the last couple of years," she said. "We're really in a solid place. "

For more of the Press-Telegram story:

Port Miami added to rotation of Maersk trans-Pacific 7 service

Shipping giant Maersk Line, the container shipping arm A.P. Moller - Maersk, added PortMiami to its Transpacific 7 Service, according to a port statement.

"We are pleased to welcome what is now the largest regular container service to call at PortMiami," said Mayor Carlos Gimenez.

The first call for the TP7 Service started last week at PortMiami with the arrival of the Maersk Kristina, a 6,700-TEU cargo ship. The line up will include additional cargo vessels with a capacity of 8,700 TEUs. The South Florida Container Terminal Miami will handle the new service at their PortMiami cargo yard.

"The arrival of Maersk's TP7 Service underscores the importance of PortMiami's $2 billion investment in infrastructure improvement projects," PortMiami Director Bill Johnson said. "The deepening of our channel, along with new on-dock rail and the completion of the port tunnel are all critical for the new generation of larger container vessels."

The new weekly TP7 Service at PortMiami offers more transit times from South East Asia to the East Coast of the U.S. and will be the sole direct service to Yantian, China and Kaohsiung, Taiwan in the market.

Westbound rotation includes: Savannah - Charleston - Miami - Tangier - Valencia - Suez Canal - Jeddah - Kaohsiung - Ningbo - Shanghai - Yantian - Hong Kong

Eastbound rotation includes: Kaohsiung - Ningbo - Shanghai - Yantian - Hong Kong - Tanjung Pelepas - Suez Canal - Tangier - Savannah - Charleston – Miami

Hanjin Shipping chair accused of tax evasion

The chair of Hanjin Shipping Holdings Co., Choi Eun-young, has been accused of tax evasion by creating a shell company in a tax haven, according to an independent news media report.

The chairwoman of South Korea's leading shipping conglomerate, along with former chief executive Cho Yong-min, were among seven high-profile Korean business leaders named to have established a paper company in the Virgin Islands and the Cook Islands, according to the Korea Center for Investigative Journalism.

The KCIJ, a non-profit organization set up by former journalists, released documents showing details of the shell companies on its online news outlet,

The documents reportedly showed that Choi and Cho co-founded Wide Gate Group Ltd. in the British Virgin Islands in October 2008 and have remained the largest stakeholders.

While setting up a paper company in the tax-free countries is legal, there have been allegations that they may have been set up by big firm owners as safe deposit boxes to store off-the-book funds or avoid taxes via financial accounts created under that company's name.

For more of the Yonhap News Agency story:

Europe and China trade talks end badly

Trade negotiations between the European Union and China concluded on Monday on a sour note with mutual accusations. China called on the European Union to stop imposing tariffs on solar panels, and the European trade commissioner said China was pressuring individual countries to prevent Europe from reaching a consensus.

The EU says China is selling solar panels to European countries below cost, and has proposed anti-dumping tariffs of up to 50 percent on Chinese solar panels exports that are worth approximately $27 billion annually.

Germany has expressed its opposition to the tariffs. If a majority of the EU’s 27 member states oppose the tariff, the European Commission could be required to abandon them, and reportedly may lose some of their credibility to negotiate trade deals.

Zhong Shao, China’s vice minister of commerce and chief international trade representative, said “Such practices of trade protectionism are not acceptable to China,” and asked that the EU delay the tariffs.

European officials say they face statutory deadlines for trade cases and have little or no discretion to delay action.

For more of the New York Times story:

Two cargo trains collide and derail in Missouri

Seven people were hurt when a Union Pacific train hit a Burlington Northern train in southeast Missouri.

Clay Slipis, Scott County Sheriff's office dispatcher, said the two cargo trains accident collided early Saturday morning near Chaffee.

Several cars derailed and hit a pillar of the Highway M overpass, bringing it down, Slipis said. Two cars were on that stretch of road.

Seven people — five in the vehicles and both train conductors — were taken to a local hospital.

For more of the Bloomberg story:


Wednesday, May 29, 2013

Top Story

TSA lines recommend $400 per-FEU hike

Container shipping line members of the Transpacific Stabilization Agreement announced a recommended general rate increase for all commodities in the amount of $400 per-FEU to the U.S. West Coast, and $600 to all other destinations, effective July 1.

According to a statement, the TSA carriers claimed the increase is necessary to achieve financial viability and maintain service levels in the Asia-U.S. market. TSA executive administrator Brian M. Conrad said an increase from current levels is key to achieving profitability for the benefit of the trade.

"The revenue issue is not going away," Conrad said. "We have to make the case repeatedly that short-term, off-season rates cannot be extended for 12 months or longer in contracts, and that new capacity entering the Asia-U.S. market reflects global trends and an investment in productivity to meet future long-term demand. It does not somehow diminish service value and it does not justify moving cargo at unsustainable levels."

Despite small revenue gains in 2013-14 service contracts and subsequent increases applied by individual carriers in May, Conrad said, rates are staying well below target levels needed to maintain profitability and invest for future growth.

Conrad said increases to date have been offset by increasing port charges, labor and inland transportation costs in the U.S. and in Asia, including recent wage hikes for East Coast and Hong Kong dockworkers, surging Suez Canal costs and higher rail and truck rates for inland equipment repositioning.

Chris Lytle starts July 1 as Port of Oakland's new executive director

The Port of Oakland has chosen Chris Lytle, current executive director of the Port of Long Beach, as the Oakland port's new director, following a four-month search triggered by the spending scandal that forced out the former executive director, Omar Benjamin.

Chris Lytle, will take over on July 1 and is expected to focus on growing the port's maritime and aviation business.

Lytle will leave his post as the executive director of the Port of Long Beach, where he has worked since 2006 when he was hired as a managing director helping to oversee trade relations and the port operations bureau. He served as deputy executive director and COO at the Port of Long Beach from 2008 to 2011, when he became the executive director. Previously, he held positions at CMA CGM, P&O Ports North America, APM Terminals, and Sea-Land Service, where he was based in Oakland from 1992 until 1995.

Lytle will replace the acting director, Deborah Ale Flint, selected by port commissioners in November after Benjamin resigned over expenses charged at a strip club that were passed on to the port for reimbursement.

For more of the Mercury News story:

Virginia Port Authority approves restructuring plan

The board of the Virginia Port Authority voted to approve the corporate restructuring of the relationship between the VPA and its port operations arm, Virginia International Terminals.

In late March, the VPA chose to stick with VIT as its terminal operator, rejecting two bids from private concerns.

Under the new plan, VIT will transform from a company with its own board of directors to one entirely controlled by the VPA. VIT's board will serve in an advisory capacity only. The new organization will be led by an executive director and a chief executive officer, who will oversee chief officers for human resources, financial, operations, commercial and public affairs.

Joe Ruddy, who has been the president and CEO of VIT for about two months, will become the chief operations officer of the restructured organization, said William Fralin, the VPA board chairman.

Tom Capozzi, vice president for global sales and marketing at VIT, will become the chief commercial officer of VIT.

For more of the Pilot Online story:

Maersk: China's imports to increase global container volume

China's expanding imports are predicted to raise global container volume, helping to shore up a shipping industry struggling in a difficult market, according to Tim Smith, North Asia region CEO of Maersk Line, the container arm of AP-Moeller Maersk Group.

Smith said the industry's problems will likely persist due to overall weak demand, contracted freight rates and ongoing price wars.

China has shown "optimistic signs" in terms of global trade demand, with the income of its emerging middle class substantively increasing in recent decades, Smith said.

Maersk Line recently slashed its growth forecast for global maritime demand in 2013 to between 2 and 4 percent from above 4 percent previously.

"Europe is dragging down the global economy," Maersk Group CEO Nils Andersen said in a recent interview.

But for the shipping industry, weak demand has been further complicated by the vessel overcapacity. Industry insider forecasts estimate that the global container fleet will grow 7.5 percent this year, well above demand growth of around 5 percent.

This means that 2013 will be the fifth straight year to see vessel supply exceed demand, according to industry data.

The Shanghai Containerized Freight Index, which measures the cost of shipping containers from China, has fallen to one of its lowest points in recent years. The current price to transport a container to Europe is less than $700, far below the break-even point for shipping companies. Maersk has announced plans to more than double rates on July 1, from the current $731-per-TEU rate to $1481-per-TEU.

For more of the China Daily story:

CSX train derails and triggers explosion

A CSX freight train crashed into a truck carrying garbage and derailed in Rosedale, Maryland Tuesday afternoon, causing an explosion that shook the region and produced black smoke visible for miles.

Officials said the driver of the truck as John Alban Jr., a retired Baltimore County firefighter who owns a waste collection company near the scene. He was listed in serious condition at Maryland Shock Trauma Center Tuesday night, a hospital spokeswoman said. No other serious injuries were reported.

The two workers aboard the 45-car train — the engineer and a conductor — were not seriously injured, according to Gary Sease, a spokesman for CSX Corp.

County officials said 15 cars were involved. They said two rail cars that were carrying chemicals used to make plastic caught fire. Sease said at least one car that might have been involved in the derailment contained sodium chlorate, classified by the U.S. Department of Transportation as a hazardous material.

For more of the Baltimore Sun story:


Thursday, May 30, 2013

Top Story

Maersk uses reefers to bolster profitability

Maersk Line transported 8.4 billion bananas last year in the refrigerated containers that are keeping the company profitable despite industry losses.

Moving perishable food in reefers is expected to expand an average of 4.5 percent a year until 2016, according to Drewry Maritime Equity Research, twice the prediction for ordinary containers for this year.

Maersk and its competitors want to move more goods in reefers, which command freight rates 3.5 times higher than ordinary boxes, to mitigate losses from the shipment of other goods.

“Transport of refrigerated goods is one bright spot for shipping lines,” said Jay Ryu, an analyst at Daewoo Securities in Seoul. “Moving things like meat and wine will generate more earnings than wastepaper and hay.”

New cooling methods manufactured by United Technologies Corp. have enabled Maersk to work with farmers in the Philippines and apple growers in New Zealand to ship the fruits farther from the country of origin. Shipping lines are hauling $6 billion of computers and perishable goods in refrigerated boxes daily.

For more of the Bloomberg story:

Xeneta: Asia-Europe freight rates fell 18 percent since January

Container freight rates on the Asia-to-North Europe route fell 18 percent since the beginning of 2013 as overcapacity continues to plague the shipping industry, according to Xeneta, a Norwegian company that monitors transport data on 1,700 trade lanes.

Average rates for standard TEUs fell to $1,233 today from $1,498 on Jan. 1, while prices for FEUs dropped 20 percent to $2,163, Xeneta said. The company collects data from more than 50 freight sellers and buyers including logistic companies, food retailers and steel producers.

Rates per TEU slid 55 percent in May, year-over-year, while prices per FEU have fallen 44 percent in that time, states Xeneta.

“The current freight rate is loss-making for all players in the industry and certainly it cannot sustain rates like this forever,” said Peter Sand, the chief shipping analyst at shipping association Bimco in Denmark.

Mediterranean Shipping Co., the world’s second biggest container liner by capacity, announced a general rate increase of $750 per-TEU from July 1 on the Asia to Europe route, while Hapag-Lloyd, the world’s number six, announced a $1,000 increase for the same route and period.

For more of the Bloomberg story:

Port of Charleston sees 9 percent boost in April container volume

The Port of Charleston handled 134,718 TEUs in April, a 9 percent increase compared to April 2012, according to a statement from the S.C. Ports Authority.

The Port of Charleston moved 1.30 million TEUs during April, compared with 1.18 million TEUs in fiscal year 2012.

From the start of the fiscal year in July 2012 through April 2013, container volume at the SCPA rose 10 percent year-over-year, a higher throughput than for each of the past five fiscal years.

“Our volume continues to grow above the market, and we must continue our aggressive sales efforts as we heavily invest in our port's infrastructure,” said Jim Newsome, president and CEO of the South Carolina Ports Authority, in a statement.

The SCPA is creating an inland port in Greer, and a new container terminal in North Charleston.

“With new service deployments beginning in June, and additional large vessels calling our port this month, we expect a solid finish to the fiscal year,” Newsome said.

Port of West Sacramento goes private to avoid bankruptcy

A private operator, SSA Pacific of Seattle, will take control of the Port of West Sacramento in July, in an effort by the city to save the facility from bankruptcy, according to the Sacramento Bee.

SSA Pacific is the current manager of the 50-year-old port.

The five-year lease is expected to produce $650,000 a year. SSA also has agreed to forgive the $850,000 debt the city owes the company.

Mayor Christopher Cabaldon said the agreement is a "last chance" for the port.

The newspaper said the port has lost $6 million over the last five years. It almost declared bankruptcy before the city of West Sacramento took over operations in 2006 from a regional commission that included Sacramento and Sacramento County.

For more of the Sacramento Bee story:

Port Authority of NY-NJ okays $59M in hurricane funds

The Port Authority of New York and New Jersey will spend $59 million in preparation for the upcoming hurricane season. The Board of Commissioners approved the money at its monthly meeting this week.

Executive Director Patrick Foye says the funding is part of the agency's efforts to protect its facilities from severe weather events like Superstorm Sandy.

The money will go toward efforts such as the installation of pumps and flood barriers in the PATH train system and more pumps and generators for the World Trade Center site.

The agency says it has approved $450 million in Sandy-related recovery, cleanup and mitigation.

For more of the Bloomberg story:


Friday, May 31, 2013

Top Story

Yang Ming extends lease at Port of L.A. through 2030, port to spend $122M to expand facilities

Shipping company Yang Ming will lengthen its lease at the Port of Los Angeles by an additional nine years once its current lease at the West Basin Container Terminal ends in 2021.

The agreement now extends to 2030 and represents additional revenues of between $365 and $525 million, depending on cargo volumes.

In conjunction with the lease extension, on Tuesday Mayor Anthony Villaraigosa signed a Memorandum of Understanding in Beijing to develop the Yang Ming terminal facilities at the port.

“This agreement and lease extension ensures that West Basin Container Terminals will increase its global competitiveness with expanded facilities to handle more cargo,” said Port of Los Angeles Executive Director Geraldine Knatz. “The Port had been making progress on these negotiations, but it was this trade mission and the Mayor’s leadership that closed this important deal.”  

The port will invest $122 million in improvements at the terminal, including construction of a new 1,260 linear foot wharf at Berths 126-129, dredging to a depth of 53 feet at the newly constructed wharf, and expansion of the West Basin Intermodal Container Transfer Facility. The West Basin Container Terminal is a partnership between Yang Ming, China Shipping, and Ports America.

“I am happy this agreement will allow the largest, most modern ships to call at Yang Ming and provide cargo growth over the next 17 years,” said Mayor Villaraigosa. “The Port is an economic driver for our region, and its success translates to jobs here in Los Angeles. With two previous trade missions in 2006 and 2011, we worked to develop strong ties with our partners in China. With this latest trip, we have ensured our relationships remain vibrant.”

APM Terminals announces Q1 profits of $166M

The world’s largest terminal operator, APM Terminals, posted profits of $166 million for the first quarter of 2013.

The A.P. Moeller-Maersk subsidiary’s profits were down 26 percent year-over-year, mainly because the $226 million profit posted in the first quarter of 2012 reflected a gain of $73 million following the sale of Maersk Equipment Service Company and half of the company’s stake in the Port of Xiamen.

Container volume remained the same year-over-year at 8.6 million TEUs as emerging markets compensated for weaker throughput from North American and Western European countries.

Operational cash flow totaled $242 in the first quarter, and APM delivered a return on invested capital of 12 percent.

Higher California port volumes good news for trucking industry

An increase in import goods entering California is a good sign, signaling a rally in U.S. consumer spending and the trucking industry.

Container volumes at the Los Angeles and Long Beach ports have gone up 3.5 percent in the first four months of 2013 year-over-year, according to Bloomberg. Total imports grew 0.9 percent last year compared to 2011.

A volume increase of up to 5 percent is possible this year, according to Todd Fowler, vice president and analyst at KeyBanc Capital Markets. When shipments to the top retailers increase, large trucking companies benefit, he said.

“Containerized imports are a primary leading indicator of domestic transportation volumes, with about a three-month forward look,” Fowler said.

An index of U.S. truck loadings increased 3.9 percent to 120.95 in April year-over-year, based on data from FTR Associates, a transportation forecasting company.

“Trucking volumes are in a positive, but not extremely strong, stage of growth, and we expect that will continue through 2013,” said Starks, director of transportation analysis at FTR. FTR is predicting that truck loadings will rise by “just under 5 percent” this year, he said, compared with 3.2 percent in 2012.

For more of the Bloomberg story:

Dole funnels money into container ships instead of buyback program

Grower and food processor Dole Food Company has withdrawn an offer to buy back $200 million in outstanding shares in order to purchase container ships.

The Dole board approved spending approximately $165 million for three refrigerated container ships to update its 27-year-old fleet for West Coast operations. The new ships are more fuel-efficient, according to Dole, with a capacity to carry 770 FEUs, compared with older ships that carried 491 FEUs containers. They will also come equipped with gantry cranes.

The ships are scheduled for delivery in late 2015 or early 2016.

Dole said it was indefinitely suspending the buy back program to take advantage of the ships’ competitive pricing.

For more of the Ventura Star story:

Three treasury officials at Port Authority of NY-NJ fired for accepting gifts

The Port Authority of New York and New Jersey fired its treasurer, vice treasurer and risk manager after an internal investigation found they had accepted meals and other gifts from people doing business with the port complex, officials said.
"After learning the findings of an Inspector General investigation, the Port Authority immediately moved to terminate its top three Treasury employees,” Port Authority spokeswoman Lisa MacSpadden said in a statement. “The agency’s swift action demonstrates its commitment to ensuring its personnel adhere to the highest standards of performance, integrity and stewardship of the public’s trust.”

Treasurer Anne Marie Mulligan, Vice Treasurer Veronica Biddle, and Risk Manager Jon Huxel, helped manage the assets of the $7 billion agency that controls the region's sea ports, three major airports, bi-state bridges and tunnels, PATH commuter rail line, World Trade Center site and other facilities.

None of the three could be reached for comment.

For more of the Star-Ledger story:

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