Monday, May 31, 2010
Tuesday, June 1, 2010
Tuesday, June 1, 2010
Caterpillar agreed to acquire a locomotive manufacturer for $820 million in cash from a pair of private-equity investors as the world's largest heavy-equipment maker looks to beef up its railroad business.
Caterpillar's target this time is Electro-Motive Diesel, which, as its name would suggest, specializes in building electric-diesel locomotives. The company had revenue of $1.8 billion in 2009, according to Caterpillar, which announced the purchase Tuesday in a filing with the Securities and Exchange Commission.
The deal, which requires regulatory approval, isn't expected to close until the end of 2010.
The sellers, Berkshire Partners and Greenbriar Equity Group, acquired EMD from General Motors in 2005 for an undisclosed sum.
Since 2006, Caterpillar has invested $2 billion in the rail industry, including its purchase of Progress Rail. Like Warren Buffett, whose Berkshire Hathaway holding company closed its acquisition of the freight line Burlington Northern Santa Fe earlier this year, Caterpillar clearly views railroads as a smart play.
For the full story: www.thestreet.com
“Greek Disease” and service sector dip impact credit index
The mounting economic crisis in Greece that is being termed the “Greek disease,” and a dip in service sector sales, has helped cause a drop in May’s Credit Managers’ Index (CMI), according to the National Association of Credit Management (NACM).
“Over the last few years the CMI has tended to be a harbinger of things to come as far as the overall economy is concerned as it presages the activity in the credit and financial communities,” said Chris Kuehl, Ph.D., NACM economic advisor, who prepares the CMI report each month.
According to the NACM’s report, the CMI dipped in 2008, three months before the rest of the economy started to react to the banking crisis that impacted the U.S. and the rest of the world. The May report indicates the CMI is dipping precipitously again.
“The sense among observers has been that the Greek crisis and its implications would soon have the same kind of impact on the credit environment that the sub-prime crisis had in 2008. Last month’s data seems to bear this out,” said Kuehl.
In the report, Kuehl pointed to growing signs of recent distress in credit circles, including the rise of the London Interbank Offered Rate (LIBOR) to a level not seen since July 2009. The LIBOR is the benchmark for banks making short-term loans to one another and, according to the NACM report, often determines the rates that drive the rest of the economy, more so than the interest rates set by central banks.
“A growing concern among bondholders, about the viability of the European economy, has caused some wild swings in both bonds and equities,” said Kuehl. “The data from the CMI is both reflecting this and anticipating some more trouble in the future.”
The CMI reported service sector sales slipped from 65.7 to 64.5 in May, which is not a big drop, although it came after five months of steady increases. The level of dollar collections fell from 62.1 to 59.as some business sectors struggled to keep pace with the recovery, according to the report. There was also a reduction in the level of credit as the financial system tightened again, the report said.
“There is not the level of panic that existed in the months leading up to the credit meltdown, but there is far more concern about what is happening in the global markets than existed even a few weeks ago,” said Kuehl. “The fact that the major concern is rooted in Europe is slightly better news than if it were motivated by another meltdown in the U.S., but it is entirely possible that the Greek disease will spread.”
Canada’s top port and railroad announce supply chain agreement
Canada’s biggest seaport and railroad announced a supply chain collaboration this week.
Port Metro Vancouver and the CN Railroad said in a statement that their joint agreement would “drive further efficiencies at the port and recognize the importance of balanced accountability.”
The British Columbia port and the CN said the agreement allows all of their stakeholders “to develop mechanisms to define, measure, monitor and evaluate the performance of each participant at the port against established benchmarks.”
They said the initiative “also establishes processes to proactively communicate on service-related matters and resolve disputes between CN, the port and port supply chain participants on a commercial basis.”
Claude Mongeau, CN’s president and chief executive officer, said: “CN is encouraged that CN and Port Metro Vancouver reached this innovative pact through commercial negotiation. The agreement will focus stakeholders on working together to achieve continuous improvement in supply chain performance at the port.”
Port Metro Vancouver and CN announced in the statement that the latest supply chain collaboration “is the best way to help increase Canada's commerce with the Asia-Pacific region, enlarge the Gateway's share of Asian containerized imports to North America, and improve Gateway competitiveness for Canadian and North American exports.”
More specific details of the agreement were not released in the statement.
NAFTA surface transport trade up 37 percent in March
Surface transportation trade between the United States and its North American Free Trade Agreement (NAFTA) partners Canada and Mexico was 37 percent higher in March 2010 than in March 2009, reaching $69.9 billion, according to the Bureau of Transportation Statistics (BTS) of the U.S. Department of Transportation.
The 37 percent increase from March 2009 to March 2010 is the largest year-over-year rise on record but freight value in March 2010 still remained 1.2 percent less than the value in March 2008, two years earlier, the BTS said.
The value of U.S. surface transportation trade with Canada and Mexico rose 17.6 percent in March 2010 from February 2010, the BTS said.
U.S.–Canada surface transportation trade totaled $42.1 billion in March, up 35.6 percent compared to March 2009. U.S.–Mexico surface transportation trade totaled $27.8 billion in March, up 39.1 percent compared to March 2009, according to the BTS.
Recession blues: Where will funds for Bayonne Bridge fix come from?
The Bayonne Bridge crisis is fairly well known by now: the structure’s 151-foot clearance above the surface of the Kill Van Kull will be too low to accommodate the colossal container ships from Asia, expected to begin putting in at East Coast ports when an expansion of the Panama Canal is completed in 2015.
Now, while the bridge owner, the Port Authority, grapples with solutions such as jacking up the bridge another 65 feet or replacing it with a new span at a cost of $1.3 billion, new problems are arising - and time is wasting.
Paying for a solution, it seems, could be as complicated as the engineering that has to be done. In the latest curve in a long saga, recession-related declines in Port Authority revenues have curbed the bi-state agency’s ability to finance big projects on its own, raising doubts as to where the Bayonne Bridge money might come from, and when the project will be able to move forward. For example, bridge and tunnel traffic, which generates crucial toll revenues for the agency, is now anticipated to be 6.1 percent below previously projected levels for 2010.
-New Jersey Star-Ledger
For the full story: www.nj.com
Wednesday, June 2, 2010
Report: Evergreen to order 100 new ships
The chairman of the Evergreen Group, a Taiwan-based shipping conglomerate, has confirmed that its maritime shipping unit will order 100 new ships to modernize its fleet amid the global economic recovery.
"It will take at least 10 years to have the 100 boats built, but the first will be delivered in 2013, " said Evergreen Group Chairman Chang Yung-fa in an interview with the Chinese-language United Daily News published Wednesday.
Chang said Evergreen Marine Corp., Asia's second largest container line, hopes to order 32 container ships this year with a capacity of 8,000 20-foot equivalent units (TEUs) each.
The company is thinking of purchasing 10 of the vessels from South Korea and another 12 from Taiwan's CSBC Corp., Chang said, but their prices have yet to be finalized. The remaining ships may be ordered from either Korean or Japanese shipyards.
The report said that at Chang's insistence, the new ships will be environmentally friendly and not cost more than US$10,000 per TEU.
-Focus Taiwan News Channel
For the full story: focustaiwan.tw
FMC and EU scrutinize shipping lines over potential price fixing
A U.S. regulator and the European Union's competition watchdog are monitoring the world's top container shipping lines for any evidence of price fixing.
The scrutiny comes as the prices shipping lines charge have kept rising even as the industry's supply of new ships has continued to increase sharply.
The shipping lines, including industry leader AP Moeller-Maersk AS, deny they are operating a cartel.
The Federal Maritime Commission in the U.S., where carriers enjoy broad antitrust immunity, has opened a "fact finding" investigation into shipping rates.
For the full story (subscription required): online.wsj.com/article
Maersk Canada selling drayage company to Toronto bank
Maersk Canada announced it has entered an agreement to sell its drayage and container storage services division - Bridge Terminal Transport Inc. – to Rouge River Capital Ltd., a Toronto based merchant bank. The financial terms of the sales agreement were not disclosed.
Rogue River Capital will change the name of the business to Seaport Intermodal Inc. and the company will be headquartered in Toronto, with a branch office in Montreal, according to the press release. Seaport has also entered into a long term supply contract with Maersk to provide drayage and container storage services in Toronto and Montreal.
Inchcape Shipping bidders start to drop off
The auction of Inchcape Shipping Services, Istithmar's port and shipping agent, has hit an unexpected hitch as it enters its final phase, people familiar with the matter say, with some bidders dropping out and others expressing confusion about the information provided by the vendor.
At least two bidders for the company are believed to have dropped out, while those remaining in the auction are seeking more detailed information from the vendor and the vendor's advising banks, these people say.
Istithmar, part of Dubai's sovereign wealth fund, hired Merrill Lynch and Royal Bank of Scotland to run the sale process of ISS.
Five short-listed bidders were expected to submit offers ahead of a final bids deadline of May 28, including Cinven Group Ltd.; CVC Capital Partners Ltd.; Carlyle Group L.P.; General Atlantic LLC; and Canadian pension fund Omers.
General Atlantic has withdrawn from the process, people familiar with the matter say. Omers is also thought to have indicated its no longer interested in bidding, although its final intentions remain unclear.
-WSJ/Dow Jones Newswire
For the full story: online.wsj.com
Twenty-thousand metric tons of stinky food rots in Venezuelan port
President Hugo Chavez urged prosecutors on Tuesday to bring charges against those responsible for the putrefaction of roughly 20,000 metric tons of food inside a seaport under the administration of the federal government.
The rotting food was discovered on May 25 inside a warehouse within Puerto Cabello, the country's busiest port, according to a statement released by the prosecutors office.
Intelligence agents confirmed that the expiration dates on many of the decaying foodstuffs, including rice, flour, milk, sugar and cooking oil, were "presumably expired," it said.
Critics of Chavez have pointed to the decomposed food as an example of costly government inefficiency.
For the full story: www.forbes.com
Thursday, June 3, 2010
Report: Container-shipping to grow 6 to 8 percent by year’s end
Container shipping volumes are expected to rise only six to eight per cent by the end of this year despite companies in the industry showing double digit growth in the first quarter.
Experts said trans-Pacific routes and those between Europe and Asia are likely to slow the most while intra-Asia services remain stable.
Container shipping seems to be coming back after a tough 2009. According to shipping consultants Drewry Maritime, volumes have risen some 40 per cent on-year in the first quarter of 2010.
Market watchers said that's largely because of last year's low base.
But they said, going forward, there are still risks like Europe's debt crisis and unemployment in the US, which may affect consumption.
-Channel News Asia
For the full story: www.channelnewsasia.com
General Mills and Rockefeller wrap up 1.5 mil sq. ft DC in Georgia
Rockefeller Group Development Corp. announced today it has wrapped up work on its 1.5-million-square foot distribution center built for General Mills in Social Circle, GA. The New York-based real estate owner and developer says the building located about 45 miles east of Atlanta is the largest LEED Gold certified industrial building in the U.S. and the second-largest in the world.
The building on a 130-acre site on Hightower Trail in the Walton County community is the largest industrial building in Rockefeller Group’s portfolio, said Les Smith, executive vice president for development.
Rockefeller and General Mills originally sought Leadership in Energy and Environmental Design (LEED) Silver certification.
For the full story: http://www.costar.com
Global infrastructure lenders flock to Australia
International lenders are seeking out Australian infrastructure projects built with the government as they offer returns amid a “flight to quality,” according to Royal Bank of Scotland Group Plc.
About 30 banks, including ones from Singapore, Japan and Europe are willing to lend to public private partnership projects in Australia, Steve Hughes, RBS’s head of corporate debt capital markets and syndicate, said at a briefing in Sydney yesterday.
Australia’s economy skirted recession and policy makers expect growth to almost double in the next two years as China’s resources demand spurs mining investment. The nation has an infrastructure backlog of more than A$770 billion ($654 billion), industry body Infrastructure Partnerships Australia wrote in a May 11 statement.
Exports excluding farm goods surged by the most in almost three decades in April as shipments of iron ore and coal to China pushed the trade balance to a surplus for the first time in 12 months, the Bureau of Statistics said in Sydney today.
For the full story: www.businessweek.com
BP’s “flotels” are forty-foot containers
With no Marriott, Hilton or Holiday Inn hotels nearby, BP is housing hundreds of oil-spill clean-up workers on the Louisiana coast in "flotels" - 40-foot-long corrugated steel boxes that contain dormitory style beds, the Associated Press reports.
The white boxes that resemble giant shipping containers are stacked atop a barge at Port Fourchon, the story says. The 1,300-acre shipyard that serves as the oil industry's Gulf hub is surrounded by sensitive marshes, the story says.
BP is installing flotels as it ramps up coastal clean-up efforts, since the latest "top kill" solution failed last weekend and relief is at least two months away, the AP reports. More than 125 miles of Louisiana's coastline has already been hit with oil, including the resort of Grand Isle near Port Fourchon, the story says.
For the full story: travel.usatoday.com
Puntland soldiers storm hijacked ship after pirates kill captain
Soldiers from Somalia's semi-autonomous Puntland region have stormed a Panama-flagged cargo vessel held by pirates, a Puntland minister has said.
The pirates, who refused to surrender, killed the captain of the ship, he said.
There was a brief shoot-out with the seven pirates before they were captured, he added.
The pirates seized the 15,000-tonne ship, MV QSM Dubai, in the Gulf of Aden in the early hours of Wednesday.
The vessel has a crew of 24 made up of Ghanaian, Egyptian, Pakistani and Bangladeshi nationals, and was taking supplies to northern Somalia.
It was sailing from Brazil in the "internationally recommended transit corridor" in the gulf when it was seized.
For the full story: news.bbc.co.uk
Friday, June 4, 2010
Vancouver B.C. drayage truckers organize
The Vancouver, B.C. port trucking community has formed a new organization in order to, “address the critical issues currently plaguing the sector, the new Port Vancouver Container Drayage Association (PVCDA) said in a press release.
The new group said it held its first meeting in Richmond, BC on May 28 and elected a board of directors for the new association, naming Gordon Payne as its founding chair, and naming Frank Pasacreta, formerly the president and CEO of the B.C. Maritime Employers Association, as president.
Pointing to what it termed have been “well intentioned” efforts by the Canada’s federal government and British Columbia’s provincial leadership for the past five years to deal with port trucking issues, the PVCDA said “these activities have not produced the intended results and the sector has continued to struggle to realize operational stability and the economic efficiencies enjoyed by other sectors of the container transportation business.”
The trucking group said in its statement that it would address critical issues that it feels plague the port trucking business in the Vancouver area by having its interests represented with the government and “other key stakeholders,” such as shipping lines, freight forwarders, brokers, importers, exporters and regulatory authorities.
Issues the PVCDA says it wants to address include: the Port Metro Vancouver container reservation system; the port truck licensing system and truck fleet sizes; compliance and application with regulatory tariffs imposed by government on the container drayage sector; engaging directly with all stakeholders on improving service and operational performance for container drayage; and achieving a health and benefit plan.
The group said it membership controls a truck fleet of more than 2,500 trucks and 10,000 chassis, handling approximately 35 percent of Port Metro Vancouver’s container trade, which, in 2009 was about 2.5 million TEU’S.
Moody’s: U.S. port pressure could lower ratings in next year-and-a-half
Moody's Investors Service said Thursday that U.S. ports are operating in challenging conditions that could result in lower credit ratings over the next 12 to 18 months.
"While economic conditions are stabilizing, negative credit pressures will continue in the sector due to the slow, fragile, and uneven recovery in cargo movement, which is not expected to return to its historic highs until 2012," Moody's Analyst Baye Larsen said in a report.
Larsen expects competition for limited trade activity will accelerate, especially since customers remain financially constrained and are looking for rate deals.
The expansion of the Panama Canal, which is expected to be completed in 2015, is also putting pressure on U.S. ports to modernize their facilities, she said.
Larsen said that in the long term, U.S. ports will continue to see cargo growth, although below the historic trend of 6 to 8 percent annually.
For the story source: www.abcnews.go.com
Charleston port encourages trans-loading
The S.C. State Ports Authority is teaming up with the region’s rail-served warehouses to change how cargo is moved from warehouses to cargo ships, which could help target specific export accounts for the Port of Charleston and cut down on truck traffic.
The new business development program aims to build new business through the port and 14 warehouses that are directly served by rail access using a process called transloading. The warehouses account for 2.7 million square feet of space in the Charleston area.
Transloading involves moving cargo on rail directly into these warehouses where equipment is used to containerize the cargo. Trucks then dray the containers from the warehouses to the port where they are loaded onto ocean vessels.
Jim Newsome, president and CEO of the ports authority, said in a news release that Charleston’s deep channels and rail-served warehouses are generating and meeting “significant export demand.”
He said the program will cut down on emissions by taking heavy trucks off of the region’s highways. He said 20 warehouse and distribution companies that have this capability met with the S.C. State Ports Authority last week to gauge interest and how to implement the program.
In April, Charleston’s loaded exports increased 36% year-over-year and were up 6% from March.
-Charleston Business Journal
For the full story: www.charlestonbusiness.com
UTi posts better-than expected Q1
Freight logistics company UTi Worldwide Inc. said Thursday its fiscal 2011 first-quarter earnings rose a better-than-expected 2 percent as higher costs were offset by stronger airfreight and ocean shipping volumes.
The company said that first-quarter shipments for air and ocean were "very close" to pre-recession levels in the same quarter two years ago. However, UTi said its freight forwarding results were constrained by yield pressure caused by very tight capacity and higher transportation rates.
For the quarter ended April 30, the company earned $10.1 million, or 10 cents per share, compared with $9.8 million, or 10 cents per share, a year ago.
For the full story: www.businessweek.com
Rickmers launches North Asia-LatAm-U.S. East Coast service
Hamburg-based Rickmers-Linie announced its new NCS breakbulk service linking North Asia with South America and the U.S. East Coast with four vessels of heavy-lift and rolling cargo capability.
The port rotation is to be Moji, Kobe, Yokohama and Nagoya in Japan; Guayaquil in Ecuador, Cartagena, Santa Marta and Puerto Bolivar in Colombia and Guanta in Venezuela; Port-au-Prince in Haiti; and Savannah, Charleston, Philadelphia on the U.S. East Coast.
The shipping line said Asian ports could be added in Northern China and South Korea.
Rickmers said it sees the new service complementing its existing Pearl String vessels, which sail eastbound and primarily link Japan, China and Korea with the U.S. Gulf on the trans-Pacific leg of their fortnightly round-the world schedule.
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