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Summary for June 9 through June 13, 2014:
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Monday, June 9, 2014 Top StoryNRF: June cargo volume at major U.S. retail ports to rise 7.5 percent
"We don't want to see disruptions at the ports but retailers are making sure they are prepared in case that happens," said Jonathan Gold, NRF vice president for supply chain and customs policy. "Whether it's bringing cargo in early or other contingency plans, retailers will keep the shelves stocked for the back-to-school and holiday seasons." The Pacific Maritime Association and the International Longshore and Warehouse Union started West Coast contract talks in May to replace the agreement that expires June 30. NRF said it has encouraged both parties to avoid disruptions that might affect the flow of back-to-school or holiday merchandise. According to Global Port Tracker, U.S. ports followed by Global Port Tracker handled 1.43 million TEUs in April, up 10.3 percent from April 2013. May is forecast at 1.47 million TEUs, up 5.8 percent from year-over-year. June is predicted to be up 7.5 percent at 1.46 million TEUs, July up 4.4 percent at 1.51 million TEUs, August up 1.9 percent at 1.52 million TEUs, September up 0.8 percent at 1.45 million TEUs, and October up 3.4 percent at 1.48 million TEUs. The first half of 2014 is forecast at 8.3 million TEUs, up 6.5 percent over last year. NRF is forecasting 4.1 percent sales growth in 2014. "The weather is behind us and inventories are coming down as the consumer ventures out and West Coast dockworkers and management remain at the bargaining table," said Hackett Associates founder Ben Hackett. "The real question is how long can the economic expansion continue?" Global Port Tracker covers the U.S. ports of Los Angeles/Long Beach, Oakland, Seattle, Tacoma New York/New Jersey, Hampton Roads, Charleston, Savannah, Port Everglades, Miami, and Houston. Port of Los Angeles adopts $1B budget for FY 2015The Los Angeles Board of Harbor Commissioners has approved a $938.8 million Port of Los Angeles budget for fiscal year 2014-15. Almost $350 million or 37 percent of the approved budget will go toward capital expenditures help the port compete on a global scale, according to a port statement. "In the face of fierce and increasing competition from around the world, we must do whatever we can to maintain our position as the nation's premier trade gateway," said Ambassador Vilma Martinez, Harbor Commission president. "This budget will allow us to continue to modernize infrastructure, upgrade terminals and build a transportation network that can continue to successfully compete globally." Approximately $38 million of the operating and capital budgets will fund a wide range of projects to enhance the community, the statement said, such as development of the city waterfront. The port announced it expects to spend about $1.1 billion on its capital improvement program over the next five years. In the FY-2014-15 budget, $281 million will be allocated to specific capital improvement program projects, with 87 percent of that dedicated to terminal development and transportation projects. The commission allotted $136.3 million of the CIP budget to terminal development projects, with $100.4 million helping to fund the TraPac Terminal expansion, which includes backland improvements, stacking crane and automation infrastructure, an intermodal facility to provide on-dock rail capabilities, and other terminal-related construction. About $19.2 million will go toward upgrades at Yang Ming, APL, Evergreen, YTI and China Shipping terminals. The port said an estimated 38 percent of the proposed CIP budget, or $109 million, will be used for transportation improvement projects, including $35.5 million for the Berth 200 Rail Yard and $27.9 million for the South Wilmington Grade Separation project. About $40 million has been allocated to improve vehicle traffic flow to and from the Interstate 110 Harbor Freeway, according to the statement, along with the design of Sampson Way to improve access to and from the LA Waterfront. Schneider cargo theft down 20 percent, besting industry averageTrucking and logistics company Schneider reported its seventh straight year of declining cargo thefts and a 20 percent drop in truckload thefts. CargoNet issued its 2013 Annual U.S. Cargo Theft Report earlier this year. The report indicated that the overall number of stolen freight incidents in the U.S. decreased by 9 percent in 2013 – the first time the industry has seen thefts fall since CargoNet started tracking data in 2009. Since 2006, Schneider says it has seen a 91 percent decline of truckload thefts. The firm attributes its 7-year streak of beating the industry's average cargo theft rate to its security methods. Schneider said it has increased communication with shippers, Schneider drivers and owner-operators, and beefed up its standard operating procedures and technology, according to the company's director of safety and enterprise security, Walter Fountain. Another component of the company's security, Fountain said, is its flexibility to move high-value loads using driver teams, which creates speed in the supply chain. Freight that is continually moving is far less susceptible to theft. Fountain also stressed the importance of educating drivers and owner-operators. "Ours is a three-prong approach: We address expectations during onboarding, we regularly communicate the locations and types of thefts that are occurring, and we incorporate cargo theft preventable measures into our quarterly training sessions." Consequently, fewer Schneider drivers enter high-risk theft areas and instead fuel up and rest at Schneider operating centers or secure truck stops. It also means a 37 percent decrease in total value per load theft. "Schneider teaches you to do everything you can to keep people honest," says Schneider van-truckload driver Jim Bosma. "A lazy thief is just trying to get the easiest opportunity, so with these processes and technologies in place, we deter them from carrying out a theft." Rickmers-Linie changes executive line upGlobal heavy-lift liner company Rickmers-Linie announced a reorganization of senior management. Robert Sappio, head of Rickmers-Linie (America) since September 2012, will step down as president and CEO effective July 1, remaining as a member of the board of directors, according to a company statement. The shipping line appointed Waldemar (Val) Poulsen, who will be based in Houston, Texas, to succeed Sappio as president and CEO. Prior to joining Rickmers-Linie, Poulsen was director and country manager of Safmarine in the Americas. Ulrich Ulrichs, CEO of Rickmers-Linie, thanked Sappio for his role in improving the company's operations in the Americas and for staying on as a member of the board. "We are looking forward to Val Poulsen joining our team," Ulrichs said. "He brings a wealth of experience from Maersk Line and Safmarine to his new role as president and CEO of Rickmers-Linie (America)." IMB: Greek tanker possibly hijacked off GhanaA Greek tanker, the MT Fair Artemis, is believed to have been hijacked along with its with 24 crewmembers off Ghana in the Gulf of Guinea, according to the International Maritime Bureau. The Liberia-flagged tanker, transporting gas oil, lost contact with owners on Wednesday off Ghana's capital Accra, IMB's Piracy Reporting Centre said. The head of the piracy center, Noel Choong, said that while the fate of the ship is unknown, "it's an area where pirates hijack vessels, mostly for the cargo. It's an area of concern." For more of the Global Post story: globalpost.com
Tuesday, June 10, 2014 Top StorySomali pirates release 11 crewmembers kidnapped in 2010
Nicholas Kay, head of the UN Assistance Mission in Somalia (UNSOM), welcomed the release today of 11 crewmembers of the ship MV Albedo who have been held hostage since November 2010. The freed sailors hale from India, Iran, Bangladesh and Sri Lanka. The MV Albedo sank was taken by Somali pirates on November 12, 2010. The ship sank near the Somali coast in July 2013 due to mechanical failure and adverse weather, and the surviving crew have been held on shore by pirates since ever since. "For over three years the crew members and their families have suffered unimaginable distress. The crew underwent the trauma of piracy, their ship sinking and then being held ashore in very difficult conditions," said Kay, who heads UNSOM. Va. transportation chief: Default on $1B APM lease at Portsmouth?In order to pull the financially troubled Virginia Port Authority into the black, Virginia Transportation Secretary Aubrey Lane is floating the idea of defaulting on a 20-year, $1.16 billion contract with APM Terminals' Portsmouth facility, operated by Virginia International Terminals. In April, Governor Terry McAuliffe replaced five members of the Virginia Port Authority, but Layne said more is needed to turn the port around and make it profitable. "Maybe we're better off defaulting on the lease and saying we'll take the money and build out our own facility," Lane said during a meeting with the Daily Press editorial board. The port pays APM $50 million a year, which drains revenue and adds to losses, Layne said, adding "it doesn't revert to us." By law, the port is expected to be self-sustaining, he stated, and the $40 million it receives annually from transportation revenues is supposed to go toward capital improvements and economic development. Prior administrations allowed the state funds to fill holes in the operating budget. "They said that everything they did, they incurred losses because they were creating jobs, so technically that was economic development … but I didn't see a whole lot more jobs," Layne said. Although port officials produced a budget in January that would "break even" in FY2014, the transportation secretary said the port's December balance sheet showed $4 million in losses, and the morning of the board's January meeting he learned the port was going to be $24 million in the red by the end of the year. Layne ordered a third-party report on the port's finances and operations. Regarding the APM contract, Layne said the company is interested in selling the Portsmouth facility, and board members have worried about a competitor purchasing it. "I said, 'let them sell it,'" he said. "We've got the lease for the next 17 years." But the state may consider defaulting on the APM terminal management contract, Layne said. "Whether or not they can sell it or not, I don't know," Layne said. "I do know there is no way we are going to pay (the lease) and then pay the kind of multiple they're looking for." For more of The Daily Press story: dailypress.com UPS names new CEOOn Friday, the board of shipping giant UPS announced that it named Chief Operating Officer David Abney, who started at the company as a part time package loader in 1974, as CEO. "He's a UPS lifer, he's run the international business, and he's made acquisitions," Kevin Sterling, an analyst at BB&T Capital told the Wall Street Journal. "David's got international experience, and that's a real focus area of growth for them." Abney succeeds Scott Davis, who will stay on as chairman until he retires in September, the statement said. Abney has held several key positions at the company, including as president of UPS International from 2002 to 2007, when he expanded the company's global logistics. Over the course of his 40-year career, he held various operational positions leading to his current position, according to the UPS statement. As chief operating officer, Abney had responsibility for UPS logistics, sustainability, and engineering, leading the company's significant investment in alternative fuel fleets, and implementing programs to expand the company's total freight volume. He directed the UPS transportation network serving more than 200 countries and territories. Abney will take over at a crucial time, according to Bloomberg News, as UPS heads toward the peak of the holiday e-commerce rush that overwhelmed the company in 2013. Bloomberg said he led the team that reviewed UPS's response, which led to a $100 million, multiyear push to expand some parcel facilities and accelerate use of new technology to make delivery routes more efficient. ACL signs 10-year deal with Port of LiverpoolAtlantic Shipping Line has inked a 10-year agreement to continue to use the Port of Liverpool as its UK port of call. In order to accommodate ACL ships, Peel Ports Group has agreed to undertake a $16.7 million project to widen the Seaforth Passage and create a warehouse area with a capacity of housing up to 70,000 vehicles per year. ACL currently has five new G4 CONRO vessels, each with a capacity of 3,800 TEUs, being built in China. It currently operates with five G3 ships capable of carrying 1,850 TEUs. ACL has offered services connecting Liverpool to ports in North America and Europe since 1969. For more of the Liverpool Echo story: liverpoolecho.co.uk Cargo ship worker airlifted to hospitalA Coast Guard crew medevac'd an ailing Russian worker from the Saimaagracht, a cargo ship that was anchored 11 miles off of the coast of Cameron, Louisiana on Sunday. The man was coughing up blood and had a hard time breathing, according to the Coast Guard. After receiving an emergency call from the ship, the Coast Guard transported the to the Chennault International Airport via a MH-65 Dolphin helicopter with a crew from Air Station Houston and a rescue swimmer. The man was then taken to Lake Charles Memorial Hospital, where he is reported to be in stable condition. For more of the KPLC TV story: kplctv.com
Wednesday, June 11, 2014 Top StoryPresident Obama signs 2014 port infrastructure bill
BNSF, Union Pacific ask Oregon and Washington to keep oil routes secretBNSF and Union Pacific, under a federal order to tell Oregon emergency responders where and when they move North Dakota crude through the state, are asking the state to sign confidentiality agreements restricting notification to first responders in an effort to keep the information from the public. China exports up in May as imports fallChina's exports rose in May on stronger global demand, as a fall in imports indicated weaker domestic demand. St. Laurence Seaway traffic doubles in MaySt. Lawrence Seaway traffic spiked to more than twice the normal number of ocean-going vessels as shippers sought to clear Canada's bumper grain crop after longer than usual ice delays. Anchor lifted from Puget Sound could be from 1792 expeditionOn Monday off Whidbey Island, a crane lifted up a lost ship’s anchor that a group of history fans think is the only remaining relic of Capt. George Vancouver’s 1792 voyage into Puget Sound.
Thursday, June 12, 2014 Top StoryDrewry: Growing officer shortage to impact carriers' bottom line
Drewry reports owners and managers need trained, experienced seafarers, but don't have the money to fund substantial rises in pay due to years of weak freight rate rates and vessel overcapacity. Manning the vessels has become a natural go-to item for cost cutting in the industry, since it's the largest single element in ship operating costs, and officer recruitment is likewise impacted, the report said. Drewry notes the current officer supply is around 610,000, which leaves a shortfall of 19,000 personnel. The shortfall is predicted to grow to 21,700 by 2018 since an additional 38,500 officers will be needed by then. "While ratings (crew) remuneration packages tend to follow International Transport Workers Federation (ITF) standard terms, officer earnings are more market driven," explained Drewry's managing director Nigel Gardiner. "Manning costs look set to come under renewed upward pressure, putting a further squeeze on profitability unless owners are able to push freight rates higher." The report asserts there is less supply pressure with ratings and this will have a moderating influence on wage negotiations that are underway between the ITF and International Bargaining Forum, which represents employers. Another factor in owners' favor is that most seafarers are paid in U.S. dollars, which make seafarer salaries look good to compared with other occupations. "But the shortage of officers remains, especially among senior engineering ranks and for specialist ships such as LNG carriers," warned Gardiner. "There is also a general drift towards shorter working tours and increased benefits which is putting further pressure on supply." Port of Long Beach adopts programs to lure business and green the portIn order to offset a small decline in projected revenue, Port of Long Beach harbor commissioners approved two programs Monday aimed at luring additional cargo and promoting clean technologies in San Pedro Bay. The programs are designed to incentivize ocean carriers to bring more cargo volume through the port, as well as lower harmful ship emissions. "For ocean carriers, their biggest concern is cost containment and not making money," said Don Snyder, the port's director of trade development. "It's hard to predict what kind of revenue will be generated from these incentives. It's very competitive up and down the coast. This is designed to retain business and attract business." One program waives dockage fees for two years for big ships that comply with current shore-power rules or other emission reduction technologies for ships berthed at the port, Snyder added. The plan also waives dockage fees if ships reduce speeds within 40 miles of the port. If 75 percent of carriers participate, the port estimates program costs of $4.9 million in one year. If the program spurs an additional 250,000 TEUs annually, the port would make added revenue of $20 million in two years. Snyder said shipping lines that have complied with this year's shore-power rules have complained about high electricity costs versus what they paid for their own energy generation. "We are now reducing the parking fee," Snyder said. The second program would extend by two years ocean carriers incentives to lines that bring their discretionary rail cargo to Long Beach. If a vessel operator moves more on-dock rail cargo during 2014 than 2013, or more in 2015, the port will pay $5 for every 20-foot-equivalent container unit. The program would cost $3.3 million over two years but generate annual revenue to the tune of $22.7 million. "Economically, we are looking to attract business to Long Beach that creates jobs," Snyder said. For more of the Orange County Register story: ocregister.com Korean Air to become top shareholder of Hanjin ShippingKorean Air Lines will become the largest shareholder of Hanjin Shipping in mid June, giving its parent group access to comprehensive logistics services, according to company officials. Sources at Korean Air and Hanjin Shipping said the transaction would be achieved through a capital increase via a third-party allocation arrangement that was approved by the boards of both companies early Tuesday. Under the deal, Hanjin Shipping will undergo a capital increase of $393.6 million with the airline taking part in the purchase. "Korean Air will acquire more than 74.07 million shares in the shipping line on June 17, which will give it a 33.2 percent stake in that company," an insider at the airline said. This will give it control over Hanjin Shipping, potentially allowing both companies to become more competitive in the global logistics arena. Hanjin has been struggling with the global industry slowdown, as well tougher competition and poor management decisions that include the untimely purchase of new vessels. Company CEO Choi Eun-young stepped down in April to be replaced by Cho Yang-ho, who is president of Korean Air and the larger Hanjin Group. For more of the Global Post story: globalpost.com Port of Tacoma wins EPA grant to green Tacoma Rail locomotiveShort line railroad Tacoma Rail will repower its oldest locomotive, thanks in part to a $601,949 Diesel Emissions Reduction grant awarded to the Port of Tacoma from the Environmental Protection Agency. The 58-year-old General Motors-built GP-20 locomotive will undergo a revamp that will reduce diesel particulates by 62 percent, idling time by 50 percent and greenhouse gas emissions and fuel consumption by 25 percent. The port won the grant, to offset part of the $1.5 million cost of the repowering project, in a national competition. The port will also provide a $30,000 in-kind contribution to manage the project. Tacoma Rail, part of municipally owned Tacoma Public Utilities, will pay an additional $902,000. The utility has received a $200,000 grant from the State Department of Ecology to help mitigate that cost. In a typical repowering project, an outside contractor replaces the 2,000-horsepower '50s-era diesel that powers the generator that creates electricity for the electric motors that turn the wheels of the locomotive. Sometimes a small additional diesel engine is installed to keep warmed water flowing through the main engine, providing power to restart that engine after it has been shut down. Tacoma Rail's chief mechanical officer Alen Matheson said three of the railroad's 14 locomotives are equipped with modern emission controls. He said the new project would repower a fourth, scheduled for completion by the end of the year. For more of the News Tribune story: thenewstribune.com Local Canadian shipping company faces charges related to crew deathHalifax firm Miller Shipping was charged in in provincial court in connection with the death last year of a tugboat crewmember. The man died after a towline snapped and struck him while The Western Tugger was towing a barge loaded with steel bars, 70 kilometers southeast of Burgeo. The company faces several counts under the Canada Labour Code, including breaches resulting in death or injury, failing to ensure that each employee is aware of health and safety hazards, failing to make sure supervisors are adequately trained in health and safety, and failing to develop a prescribed program for the prevention of hazards in the work place. For more of the Telegram story: thetelegram.com
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Import volume at key U.S. container ports followed by the monthly Global Port Tracker report is expected to rise 7.5 percent in June, with retailers shipping higher than usual quantities of goods in early to avoid delays from possible labor disruptions once the labor contract with West Coast dockworkers expires, according to the National Retail Federation and Hackett Associates.
Today the United Nations envoy for Somalia announced the release of 11 sailors who were held by Somali pirates nearly four years, calling for the release of all remaining captives held by Somali pirates, according to the UN press release.
President Obama signed the 2014 Water Resources Reform and Development Act into law Tuesday, saying the bill "will put Americans to work modernizing our water infrastructure and restoring some of our most vital ecosystems," according to a White House statement. 
The shortage of mariners in the officer corps is expected to escalate, affecting carrier profitability, according to the Manning 2014 Annual Report published by Drewry Maritime Research. The report covers trends in seafarer availability, wages, and officer demand.