Cargo Business Newswire Archives
Summary for June 06- June 10, 2011:
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Monday, June 06, 2011

Top Story

China Maritime Policy Worries Neighbors

Ministers from Viet Nam and the Philippines protested China's maritime policy on the South China Sea, claiming Chinese harassment of their vessels. China's recent upgrade of naval ships and anti-ship missiles concerns the U.S. as well, as conflict builds between competing territorial stakeholders over the control of oil deposits beneath the sea, where oil giants Exxon Mobil, Talisman Energy and Forum Energy Pic have standing exploration agreements.

Vietnam has reported that Chinese vessels sliced the cables of a an oil company survey ship in May and threatened fishermen, while the Philippines complained of Chinese ships sailing waters close to the islands and chasing away one of their oil survey vessels. China claims "indisputable sovereignty" over most of the South China Sea, a claim disputed by its neighbors.

- Reuters

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Crude Oil Shipping Resumes at Keystone

TransCanada's Keystone pipeline resumed shipping crude oil one week after operations had shut down due to a leak found at a Kansas pumping station, according to company officials. Shipping resumed the day after approval from the U.S. Pipeline and Hazardous Materials Safety Administration, which required the Calgary-based company to meet a series of safety standards to prevent future leaks. -Reuters

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Port of Pensacola Wins Turbine Contract

The Port of Pensacola has finalized a contract to export turbines that could bring up to $300K to the Florida port. The deal involves shipping wind turbines from the local GE Wind Energy Plant to Brazil. GE's Scenic Highway plant began assembly in February and can now complete approximately ten nacelles per week. The nacelles (enclosures for engines) will be trucked to the port via specialized trailers. Pate Stevedore Co. will direct cargo handlers and loading at the port. Export vessels will begin arriving at the port in June.


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Oil Tanker Spill at Indian Port

A private oil tanker at India's Chittagong Port that sank on Saturday is spilling oil into the Karnaphuli River. The Moon, which supplies fuel to other ocean vessel, was loaded with almost 150 tons of fuel. Three waste cleaner vessels were deployed to the area around noon on Monday. Officials say the vessel was not over capacity, and the reason it capsized is currently unknown.

-The Peninsula (India)

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Shipwrecked Champagne Auctioned at $78,000

Two bottles of champagne recovered from a Baltic Sea shipwreck were auctioned for $78,000 on June 3. The 200-year-old champagne, one Veuve Clicquot and one Juglar, won by a Singapore buyer, are thought to be the oldest surviving examples of both brands. Divers found 145 bottles on the sunken ship, which sank just south of the Finnish Aland Islands in the early 1800s.

- Boston Globe

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Tuesday, June 07, 2011

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Frontline chairman predicts tanker collapse

Billionaire John Fredriksen, Chairman of Frontline Ltd., anticipates the biggest crash in the price of oil tankers to occur within a year. The head of the largest supertanker operator in the world, whose personal fortune tops $10 billion, plans to use the collapse to grow his fleet of tankers at a discount. If true, the downturn may be bad news for investors.

There is a glut of vessels in the tanker industry, as the fleet expands twice as fast as the demand. Even with cost saving measures, earnings were down 81 percent. On the route from the Middle East to the U.S., owners have been paying customers to use their ships since early spring. The slump is further exacerbated by unprofitable charter rates and surging ship to fuel costs.

Although Frontline will lose $1.95 million this year after netting over $160 million in 2010, the company is predicting a rally in 2012.

- Bloomberg

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KGL to drop $1B on Egypt port

Kuwait and Gulf Link Transport will spend $1 billion on Domiat Port in Egypt, according to a company official.

KGL also intends to expand its investments in the Sudan on marine and railway transport projects.

The company recently won a five-year U.S. Army logistics contract worth $870 million, along with three other companies.

- Reuters

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Maersk CEO calls for change

On Tuesday, Maersk Line CEO Eivind Kolding told the container shipping and logistics stakeholders that the industry needs to change if container shipping is to secure its future. He was the keynote speaker at the TOC conference in Antwerp, Belgium.

He said despite its vital role in connecting producers and consumers across the world, container shipping is a business model that often disappoints customers: one in every two containers is late, the complexity of shipping lines makes doing business more difficult, and the industry lacks transparency and common goals.

With examples from the automotive, aviation, and other industries, Kolding said the container shipping industry may only be a “few years from being completely overtaken” by new technology. And that market and customer behavior forces companies to consider the needs of their customers more closely. He asked the audience to look at this as a defining moment and to consider the challenges as opportunities, including cargo timeliness, making shipping orders easier, and beating environmental expectations. Concluding, Kolding invited the industry to engage in a debate about needed changes. Those who would like to participate can follow the following link:

- Maersk press release

Crew torture by pirates kept quiet

Ship owners will not disclose details of the crew torture perpetrated by Somali pirates off the East African country’s coast. The owners want to avoid scaring seafarers who transit the area, reported a maritime security adviser at a London conference.

The pirates are ratcheting up the torture quotient in order to receive ransoms more quickly. These attacks add $7 to $12 billion in extra transportation costs, including course alterations, insurance and security.

- Bloomberg

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Naked adventurer saved by cargo ship

A naked Irishman, attempting to be the first of his countrymen to row solo across the Indian Ocean, was hit by a large wave on June 6. After he made a satellite SOS call to the UK, a cargo ship was diverted to pick him up in waters 218 km off the coast of Australia.

- Herald Sun

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Wednesday, June 08, 2011

Top Story

Louisiana pushes D.C. to pass emergency bill for Mississippi River dredging

On Tuesday, a Louisiana congressional delegation urged the White House to pass a $95 million emergency appropriations bill to ensure adequate dredging of the Mississippi River.

High water levels from heavy rains have abated, but heavy sediment necessitates dredging in the main shipping channel to avoid sand bar formation, according to maritime officials. Due to an inadequate budget, the Army Corps of Engineers has not been able to dredge as much as needed, resulting in intermittent channel restrictions because larger ships were unable to navigate the river.

The Association of Branch Pilots will enforce a draft restriction of 43 feet on June 9. The restriction could sharply raise shipping operation costs, as large ships could be required to carry less cargo or unload to smaller ships before attempting the channel. ABP officials said without additional dredging, the draft restriction could go down to 38 feet by mid summer.

- Times-Picayune

FedEx, Cathay predict pickup in freight demand will offset fuel prices

Fedex Corp and Cathay Pacific Airways predict an upturn in freight demand in the second half of 2011, which may offset heavy fuel costs for airlines.

Fedex officials noted strong cargo sector momentum, and Cathay, the largest global cargo carrier, said its clients expected a rally in the second half. IATA doubled its forecast for 2011 cargo yields to 4 percent.

Cathay will receive six Boeing 747-8 freighters by October, which will up its full-year cargo capacity by 10 percent.

While spending in the U.S. and Europe is higher from July to December due to back-to-school and holiday shopping, a boost in oil prices could dampen the predicted cargo surge. -Bloomberg

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BSNF, Union Pacific predict intermodal game change

BSNF and Union Pacific anticipate the conversion of millions of truckloads of cargo to intermodal rail service, primarily in service areas west of the Mississippi.

UP says 11 million truckloads shipped within its territory are candidates for the transition, and BNSF claims 7 million in its service area are ripe for conversion. Due to improvements in infrastructure, rolling stock, and terminal capacity, the railroad giants predict they can now compete with trucks on most traffic lanes and on hauls as short as 700 miles.

Challenges like fuel costs, traffic and driver shortages are forcing truck shippers to reconsider domestic intermodal rail as an alternative. An APL Logistics official said with the improved speed and reliability of their intermodal service, trains can compete with trucks better than ever before; however, their intermodal service in secondary markets still needs work.

- DC Velocity

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$5 million trucks stay parked at POLA

The Port of Los Angeles program to use electric trucks to reduce pollution at the port has sputtered. The port's 15 electric trucks, purchased for approximately $5 million, have been sidelined due to inadequate battery life. Because the batteries lasted only 5 hours, not even enough to last through one shift, only one of the trucks is currently in use.

The trucks are being retrofitted with a new generation of battery that can run for 10 hours on a one-hour charge.

Port pollution has been cut in half since 2005, according to POLA officials.

-ABC Los Angeles

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Chinese cargo ship and crew released by pirates

A Chinese cargo vessel and its 29-member crew, taken by Somali pirates in November, were released on Wednesday, according to the pirates and a maritime official.

Owned and managed by Ningbo Hongyuan Ship Management Ltd, the cargo carrier Yuan Xiang and its crew were held for seven months off the Horn of Africa.

- Reuters

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Thursday, June 09, 2011

Top Story

APL president resigns

Neptune Orient Lines (NOL) announced Wednesday the resignation of the president of its APL shipping company. Kenneth Glen, the current president of APL's North Asia region, will replace Eng Aik Meng, who will leave in September to take a position outside the industry.

Glenn will head APL's global container transportation business, which includes shipping and rail operations. He will also oversee APL's marine terminals in the U.S, Asia and Europe.


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Baltex completes first day of trade

Baltic Exchange’s Baltex, the new electronic marketplace for dry freight derivatives, began trading June 7.

Some of the market's biggest traders jumped in the first day, including AM Nomikos, Cargill, CTM, Morgan Stanley, M2M, Pacific Basin and Toepfer.
 Baltex users can trade dry bulk voyage, dry bulk time charter trip, and dry bulk time charter average FFAs.

Regulated by the UK’s Financial Services Authority (FSA) as a Multilateral Trading Facility, Baltex provides live Forward Freight Agreement (FFA) prices and on-line implementation. The clearing status for each transaction is displayed in real time.

The system is currently available to participants throughout the European Economic Area, Switzerland, Singapore and Monaco. Other jurisdictions are expected to follow shortly.

"The shipping, financial and commodity sectors now have a centralized, transparent and regulated marketplace in which dry freight derivatives can be traded," said Baltic Exchange Chairman Mark Jackson. "We expect Baltex to attract new companies in the coming months and support greater liquidity in the FFA market.”

Both brokers and principals can use the digital marketplace. Baltex screen members can view all live prices, but the trader’s identity is kept anonymous to all except the nominated broker.

Maersk only shipping line with 1Q profit from Asia-Europe trade

A.P. Moeller-Maersk A/S could be the sole shipping line to score a first quarter profit from growing trade between Asia and Europe as rates slump to a two-year low, according to an official of Clarkson Plc, the world's largest ship broker.

Other carriers may not have the same sunny outlook. The cost of transporting containers from Shanghai to northern European ports has dropped to $874 per standard box, the lowest since July 2009. The peak was $2,164 in March last year, data from the Shanghai Shipping Exchange shows.

Maersk is in better shape because they have the lowest costs per transported container.

In February, Maersk ordered 10 vessels able to carry 18,000 containers from Daewoo Shipbuilding & Marine Engineering Co. It has an option to order 20 more. The new container ships will be about 30 percent bigger than the largest vessels now in use.

Taiwan’s Wan Hai Lines Ltd. and China’s Pacific International Lines Private Ltd. will stop service on the Asia-to-Europe route. CMA CGM SA, the world’s third-largest container line, plans to raise rates.

Last year, Maersk made almost $100 more than its rivals per each transported 40-foot container, based on earnings before interest and taxes, according to Chief Executive Officer Eivind Kolding.

- Bloomberg

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Port of Vancouver seals land deal with Farwest Steel

The Port of Vancouver finalized the sale of 22 acres to fabrication company Farwest Steel.

Farwest, based in Eugene, Oregon, will pay $5 million for a 20-acre site near Northwest Lower River Road and Gateway Avenue, where it will build a $40 million distribution, processing and fabrication facility. The plant should be operational in 2012.

According to Farwest, the new facility will bring 225 jobs to the area, paying an average of $40,000 plus benefits.

- The Oregonian

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Cooked hulls reduce drag

Superheating the hulls of ships could result in faster cargo delivery.

Researchers in Australia and Saudi Arabia have determined that a hot object moving quickly through water forms an insulating vapor layer, which insulates the object from friction. The drag on the object is reduced to nearly zero, which means less energy is required to overcome the drag.

The research is based on the Leidenfrost effect, in which a liquid creates an insulating vapor layer when it comes in contact with a solid object that is hotter than its boiling point. This vapor layer prevents the rest of the liquid from boiling quickly.

Early experiments indicate this could have a meaningful impact on the shipping industry or high-pressure pipelines, researchers say.

Problems to overcome include figuring out how to keep ship hulls above 212 degrees F. Heat also escalates corrosion, so ships and pipes could get rusty more quickly.

-Popular Science

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Friday, June10, 2011

Top Story

OOCL is ag shippers’ favorite

Orient Overseas Container Lines emerged as the favorite among 19 shipping lines in an annual survey of agricultural-products shippers conducted by a group representing their interests in Washington.

American President Lines, which had drawn top marks the previous two years, finished second this time in the rankings compiled by the Agriculture Transportation Coalition and announced Thursday at the organization’s annual conference in San Francisco.

Shippers rate the carriers on performance in such areas as documentation, ease of booking, booking fulfillment and customer service.

Only the top 11 vessel operators were publicly identified this year, instead of all 19. Rounding out the list in order of ranking are Evergreen Line, Hyundai Merchant Marine, Nippon Yusen Kaisha, Hamburg Süd, Kawasaki Kisen Kaisha, Mitsui O.S.K. Lines, Yang Ming, Hanjin Shipping Co. and Maersk Line.

– Richard Knee for CBN in San Francisco

Long Island’s washed-up whale: Likely hit by ship

The dead male 30-ton finback whale that washed up on Atlantic beach in Long Island, New York this week was likely killed after being hit by a ship, according to several news reports citing Kim Durham of the Riverhead Foundation for Marine Research and Preservation.

A necropsy was reportedly performed on the whale on Thursday that concluded the whale, that might have been feeding close to shore, had been dead for a week, and died from blunt-force trauma.

Construction begins on $98 mil Norfolk Southern intermodal facility in Alabama

Construction is underway on Norfolk Southern Corp.’s $97.5 million Birmingham Regional Intermodal Facility.

The 316-acre inland terminal site is located in McCalla, Alabama and is scheduled to open towards the end of 2012.

The new facility is part of Norfolk Southern’s $2.5 billion, 2,500-mil Crescent Corridor, a double-stack intermodal route that runs from New Jersey to Louisiana.

Lloyds tries to sell shipping loan portfolio

The largest U.K.-based mortgage lender, Lloyds Banking Group Plc, is trying to sell its shipping loan portfolio,

“We are still in discussions with various parties about a potential sale,” said the firm’s spokesman Emile Abu-Shakra in a Bloomberg interview. “No decision has yet been made, and we will only sell if we decide it is in the best interests of the group.”

Lloyds is reportedly dumping assets after its $32 billion bailout that resulted from the Great Recession’s financial crisis, which leaves the banking giant 41 percent owned by the U.K. government.

For the full Bloomberg BusinessWeek story:

Long Island’s washed-up whale: Likely hit by ship

The dead male 30-ton finback whale that washed up on Atlantic beach in Long Island, New York this week was likely killed after being hit by a ship, according to several news reports citing Kim Durham of the Riverhead Foundation for Marine Research and Preservation.

A necropsy was reportedly performed on the whale on Thursday that concluded the whale, that might have been feeding close to shore, had been dead for a week, and died from blunt-force trauma.

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