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Summary for June 13- June 17, 2011:
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Tuesday, June 14, 2011

Top Story

U.S., California proposals draw ag shippers' fire

By Richard Knee for CBN in San Francisco

Relations between U.S. agricultural product shippers and carriers appear to have warmed but the former still have their battles, the adversaries being agencies or officials in Washington and Sacramento, and at some California ports.

To be sure, carriers and shippers still have issues to work out, including export container availability, controlling chassis supplies as carriers join a trend to sell off their fleets, and improving shipment documentation accuracy.

But discussions at the annual conference in San Francisco of the Agriculture Transportation Coalition – which lobbies on freight issues for agribusiness – on June 9-10 made it apparent that communication between the two sides has significantly improved, which was underscored by the fact that top executives from a number of vessel, railroad and truck operators stayed the entire event instead of merely putting in brief appearances.

What now has farm- and forest-product shippers hopping mad are a proposal to shorten the deadline for post-sailing filing of export documents with the Census Bureau, and continued support by some California legislators and port authorities of Teamsters Union efforts to organize independent truck drivers taking cargoes to and from the docks. Shippers are also fighting a Department of Transportation proposal to lower the hours-of-service cap for truck drivers.

The proposal to halve the filing time window to five calendar days, which Census floated last January, is at least temporarily on hold, largely because of objections raised by AgTC and other shippers' organizations.

"I can tell you: We will not implement those changes," William Bostic, assistant director for economic programs at Census, told AgTC members near the close of the conference.

Many exporters must file their documents, known as Shipper's Export Declarations, at least 24 hours before their goods are loaded onto a vessel or plane, under a rule enacted to tighten supply-chain security after the devastating 9/11/01 attacks on New York and Washington.

The so-called 24-hour rule created a big problem for shippers of chilled and frozen foods and other time-sensitive items, which are often sold within an extremely short time frame. So the Bureau of Customs and Border Protection created an "Option 4" category allowing frequent, high-volume shippers with good track records and adequate supply-chain security to file their documents up to 10 days after their goods leave port.

AgTC has warned Census that the proposed Option 4 deadline change would make U.S. exports less competitive, impede the flow of outbound goods and work directly against President Obama's National Export Initiative aimed at boosting foreign sales of U.S. products.

A number of shippers and freight forwarders at the conference said that even with the current deadline, they must file some export documents a second time because data for the first filing were incomplete. Shortening the deadline will exacerbate the problem, they said.

Even if Census doesn't change the deadline, filing 24 hours before loading will remain a requirement for all Europe- and China-bound shipments because those governments insist on it. "Those regulations will impact your ability to use Option 4," Robert C. Rawls, outbound program branch chief with the Bureau of Customs and Border Protection, told the gathering.

Census received 53 position statements from freight interests by the formal-comment deadline of March 22 and is encouraging the trade community to continue direct communications with the bureau, said Dale C. Kelly, the agency's assistant division chief for data collection. She displayed her e-mail address on screen: HYPERLINK ""

Attendance at this year's gathering topped 300 participants "and we had to cut off registration," Peter A. Friedmann, AgTC's executive director, said at the start of the conference. Accordingly, next year's gathering will be locked out to shippers that aren't members of the organization, he said. The welcome mat will remain out for other freight-community sectors, he said. AgTC members at this year's event control about 1.4 million 20-foot containersful of cargo among them annually, he said. Other conference highlights:

? A California measure (Assembly Bill 950) to classify independent drivers as employees of their client drayage companies is dead for the current legislative session, president John McLaurin of the Pacific Merchant Shipping Association, reported. Freight interests represented by the association say such a mandate would triple drayage costs. The Teamster-backed bill is co-authored by Assembly Speaker John Perez (D-Los Angeles) and member Sandré Swanson (D-Oakland). McLaurin said it was "curious" that the International Longshore and Warehouse Union, which represents West Coast dockworkers in labor contract negotiations, took no position on the legislation.

? The outcome of Teamster efforts to get driver working time shortened and break time increased is at this point uncertain, said Kevin Knight, chief executive officer of Knight Transportation, a $730.7 million-a-year trucking firm. Knight said the proposed hours-of-service rule changes are "draconian" and would be costly because they would cut productivity. While the changes are purportedly aimed at making roads and highways safer by reducing driver fatigue, they would in fact do just the opposite by heightening traffic congestion, he said. Furthermore, statistics show that highway accident rates have been at their lowest ever in recent years, he said.

Clean-truck programs at the ports have produced good news and bad news, Knight said. The cleaner emission systems required for trucks carry costs "for our customers and for us," he said. The good news is that the air is "much cleaner" at the Long Beach and Los Angeles ports, he said. "The air coming out of a stack is cleaner than the air going in," he said.

? The premium for daytime pickup or delivery of shipments at the ports of Long Beach and Los Angeles will go up 20 percent on July 4, to $60 for a 20-foot container and $120 for a 40-footer. Bruce Wargo, president of PierPass, which collects the fee, said the increase is necessary to move the agency's bottom line toward the black.

Wargo said efforts to reduce truck turn times from their current, 51-minute average and to encourage more cargo pickups and deliveries during off-peak hours were in progress. One problem, he said, is that drivers tend to arrive en masse at 8 a.m., 1 p.m. and 6 p.m., creating long gate lines and road congestion. Operators of four marine terminals have established appointment systems to try to spread the traffic more evenly, but the results have been mixed, he said. Of the 30,000 truck visits a day, about 16,000 are during off-peak hours, he said.

? Several speakers said economic signs point to continuing growth in U.S. exports. Eugene Seroka, Americas president at American President Lines, said April trans-Pacific traffic rose 9.7 percent westbound and 12.5 percent eastbound. Particularly with the dollar weakened, export traffic should "continue strong through fiscal 2011," he said.

Chanda Beckman, director of the U.S. Department of Agriculture's Agriculture Trade Office in Chengdu, China, said that country relies on grains and produce from abroad because only 10 percent of its land is arable and much of its water is polluted. Agriculture accounts for 9.6 percent of China's gross domestic product and 38 percent of its labor force, she said. Sino-U.S. agricultural trade amounted to $6.65 billion westbound and $14.32 billion eastbound in 2009, she said. A lot of infrastructural development remains to be done in China, she said.

China and India are building highways, railroads and electric power plants but are 10 to 15 years away from becoming the world's economic engines, said Walter Kemmsies, chief economist at the globally active engineering firm Moffatt and Nichol. While he is "very bullish" on U.S. agricultural exports, competitors such as Brazil have gained an advantage that appears set to widen, especially if the dollar rebounds, he said.

More ships at U.S. Ports

Vessel calls in the U.S. were up by 13 percent in 2010 after dropping 8 percent the previous year, according to a report by the U.S. Maritime Administration.
"Although challenges remain, this encouraging rebound in oceangoing vessels is a sign that President Obama's economic policies are working," said U.S. Transportation Secretary Ray LaHood in a statement.
In 2010, 7,579 oceangoing vessels made 62,747 calls at U.S. ports. Of those 2010 calls, 35 percent were by tankers carrying energy products; 31 percent were by containerships; 17 percent were by dry bulk vessels carrying iron, coal and grain for export; 9 percent were by roll-on roll-off vessels, and 6 percent were by general cargo ships, the MARAD report said.

In 2010, 97 percent of the tanker calls were by double-hull vessels, up from 78 percent five years earlier, the report said.

"As our economy recovers, maritime can play even more of a key role in the affordable, efficient and environmentally sustainable transportation of goods, both within our borders and across oceans," said U.S. Maritime Administrator David Matsuda.

Port Everglades, Florida East Coast Railway cleared to negotiate agreement on intermodal facility

The Broward County Board of County Commissioners unanimously approved a proposal for Port Everglades to negotiate a memorandum of understanding with the Florida East Coast Railway company to develop a near-dock intermodal container transfer facility on the port authority's property.

"Florida East Coast Railway is excited to partner with the state of Florida and Broward County to deliver an intermodal container transfer facility at Port Everglades. This project has been identified by the local community as a need for future growth and the ICTF will ensure South Florida is a hub for international trade for future generations," said Jim R. Hertwig, president and CEO of Florida East Coast Railway, L.L.C. in a statement.

The proposed ICTF would handle both domestic and international cargo.

Meanwhile, the Florida Department of Transportation will break ground in July for the $54 million Eller Drive overpass project, which would allow for at-grade rail connection directly into Southport, according to Port Everglades. The four-lane overpass project is fully funded by the state, the port said.

Crowley vessels awarded for safety by Chamber of Shipping

Thirty-nine Crowley Maritime Corporation vessels and their crews were awarded the 2010 Jones F. Devlin Award for safety during this month's Chamber of Shipping of America (CSA) Annual Safety Awards Luncheon, according to a press release.

Together, the vessels account for 160 total years without a lost time incident.
"We have been holding these annual award ceremonies since 1958," said Joseph Cox, president, CSA. "For that initial year, we honored six vessels having a total of twelve years operation with no Lost Time Incidents. This year, we gave awards to 1,288 vessels that operated 7,284 years without a lost-time incident. This extraordinary record is directly attributable to the professionalism of our seafarers and the dedication of shore-based company personnel to safe operation."

California shipwreck diver to search for bin Laden's remains

Osama bin Laden was reportedly killed by U.S. Navy Seals on May 1 of this year in a compound near Islamabad, Pakistan and subsequently buried in the North Arabia Sea

However, Bill Warren, a shipwreck diver based in Oceanside, Calif. has a two-week mission planned to recover his remains from the sea bottom.

Warren says that if he locates the corpse of the once most wanted terrorist in the world, he will photograph it and get DNA samples for all of the conspiracy theorists out there.

For the full L.A. Times story:



Tuesday, June 15, 2011

Top Story

NOL embarks on $1.54 bil ship orders, upgrades

Singapore’s Neptune Orient Lines Ltd. announced it would invest $1.54 billion in ship orders and upgrades for its APL container-shipping unit that is to include bigger vessels for the Asia-Europe trade with others destined for the trans-Pacific market.

The shipping group said in a statement it has ordered 10 ships of 14,000-TEU capacity from Hyundai Samho Heavy Industries, two 9,200-TEU vessels from Daewoo Shipbuilding, and has upgraded ten ships already on order with Daewoo from 8,400 TEUs to 9,200 TEUs.

The 22 ships are scheduled for delivery between 2013 and 2014.

Would the Bar be set too high in SF Bay Area?

There is a battle being waged in Northern California between the Pacific Merchant Shipping Association on behalf of cargo ship owners, operators and a California legislator’s bill to raise the pay of the San Francisco Bar Pilots by 1.5 percent per year over the next four years.

Currently, the 55 pilots who assist in the navigation of commercial ships into San Francisco Bay and throughout its inland delta region averages $400,000 per pilot.

Assemblywoman Fiona Ma’s (D-San Francisco) bill, if passed, would mean the SF Bar Pilots would earn on average $530,000 per pilot a year by 2015.

The PMSA has attempted, so far unsuccessfully, to reverse the direction of pilots’ pay.

"If the bill doesn't pass, they're still going to be making a boatload of money," said Mike Jacob, the shipping association’s vice president in an Associated Press report.

"You don't need to further increase their pay to have (San Francisco Bay) be an attractive place to work," he said.

The pilots contend their costs have risen significantly such as with higher costs of fuel, and that their profession is a highly skilled one in environmentally sensitive waters.

The last raise for the Bar Pilots was in 2006.

For the full A.P. story:


Port Newark terminal to get $500 million upgrade

The Port Authority of New York and New Jersey announced it has restructured a lease with Port Newark Container Terminal that is to include a $500 million derived from private capital to upgrade the facility.

The new terms includes a 20-year extension of PNCT's existing lease through 2050, provided PNCT makes the half-a-million-dollar investment.

Officials say the agreement will guarantee an annual increase in cargo container volume from Mediterranean Shipping Company, the world's second-largest shipping company. It's scheduled to increase from 414,000 to 1.1 million containers by 2030.

Port officials said on Tuesday the terminal is scheduled to expand from 180 acres to approximately 287 acres including a boost in containerized volume from Mediterranean Shipping Company, more than doubling its current volume to over 1 million TEUs by 2030.

L.A. -Long Beach box volume increased for May

The ports of Long Beach and Los Angeles collective shipping volume increased just over 1 percent for the month of May over the same period last year at 1.23 million TEUs, despite the slow recovery of a major Asian trading partner.

Japan’s economy reportedly continues to recover from the devastation that resulted from the massive earthquake, tsunami and nuclear plant leaks in March.

Meanwhile, the Port of Los Angeles reported handling 360,969 imported TEUs in May, up 5.5 percent from May 2010, with exported boxes at 184,275 TEUs, up 14.7 percent from the same month in 2010.

Port of Long Beach cargo-handling figures show 275,100 import TEUs passing through for May, up 4 percent from the same period a year ago. Long Beach’s exports dropped 6.1 percent to 130,161 TEUs compared to last May.

The Port of Los Angeles is up close to 6.6 percent year-to-date at over 3.1 million TEUs, with Long Beach up 6.1 percent at approximately 2.4 million TEUs.

Over $1 million seized at U.S.-Mexico border

This week, U.S. Customs and Border Protection (CBP) reported a seizure of over $1 million in undeclared U.S. currency at the Port Nogales, Ariz. Border with Mexico.

The seizure is the third-largest outbound cash bust in Arizona since 2007, the CBP said in a statement.

Officers were inspecting a mini-van due to what they observed were “discrepancies in the vehicle’s structure,” the CBP said.

The CBP officers, with assistance from a canine unit, reportedly found 47 bundles the undeclared currency and the driver and passenger, both from Mexico, were taken into custody.

The CBP says its officers involved in outbound operations at Arizona’s ports have seized more than $9.5 million fiscal year 2011 to date and close to $20 million since the agency launched the Southwest Border Initiative in March 2009.

Thursday, June 16, 2011

Top Story

Union Pacific refuses to pay $400 mil in U.S. -Mexico border fines

The Union Pacific Railroad has been hit with border security fines totaling almost $400 million due to drugs found in its rail cars at the border with Mexico, and the largest U.S. freight rail carrier refuses to pay.

"Our actions should be applauded, not punished," said U.P. Vice President Bob Grimaila in an Associated Press report.

Grimaila contends the Union Pacific invests over $76 million per year on a police force; security infrastructure, technology and supporting U.S. border initiatives.

The railroad’s fines are over $388 million this year, a big jump from the $37.5 million it was hit with three years ago when the border security program was initiated.

Union Pacific is now in federal litigation over the U.S. government-imposed fines.

In addition, the U.S. Justice Department is trying to make the case that the U.P. is responsible for the rail traffic it controls in Mexico since it is the 26-percent owner of Mexico’s Ferromex railroad.

The Omaha-based railroad countered that it cannot "send unarmed personnel into Mexico to battle Mexican drug cartels that maliciously murder and wage a war against the Mexican military," according to the A.P. report.

Mexico's drug cartel bring an estimated $25 billion a year from their drug business in the U.S where 8,000 trains transit between the two neighboring countries each year via 8 border crossings, the A.P. report said.

For the full A.P. story:

U.S. beef exports continue momentum

U.S. beef exports in April were not quite up to March’s record-breaking levels, but were still 38 percent ahead of the previous year’s numbers at 227.5 million pounds worth $427.7 million, according to the U.S.D.A. and U.S. Meat Export Federation.

Beef exports from the U.S. were at $203.70 per head in April, up 45 percent, or $63.00, from the same period last year.

So far this year, beef exports are equal to $190.80 per head.

April’s exports accounted for 14.5 percent of total U.S. production compared to 11.2 percent last year.

The strongest U.S. beef exports markets so far this year have included: South Korea, which has increased 150 percent year to date at 145 million pounds with value of $284 million; Mexico, with imports of U.S. beef up 7 percent at 181.9 million pounds, and up 27 percent in value at $313.3 million over the same period last year; Canada took third place in volume at 122 million pounds - rising 15 percent - and value, up 37 percent at $272.3 million; and Japan took 97.8 million pounds of U.S. beef valued at $245.2 million; a 66 percent jump in volume, soaring 73 percent in value over April 2010.

For the full Cattle Network story:

Pacer expands Mexico intermodal service

Pacer International, Inc. announced it has expanded its double-stack intermodal service between Guadalajara and the U.S., Canada.

The service commenced operations on June 6, and operates five days a week on Ferromex and Union Pacific intermodal trains, said Pacer in a statement.

Pacer said the new service a fleet of more than 17,000 high cube intermodal containers and a newly established chassis pool located at the Ferromex rail ramp in Guadalajara.

PANYNJ: Bayonne Bridge will be raised by 2016

The Port Authority of New York and New Jersey announced this week it would raise the Bayonne Bridge so post-Panamax containerships can sail beneath it by 2016.

The port authority’s announcement of when the bridge would be raised, the first time a definitive timetable has been officially put forth by the agency, means it will not be ready by the time the widened Panama Canal is scheduled to open towards the end of 2014.

Fire rages through cargo ship held by Somali pirates

A fire tore through a Panama-flagged cargo vessel on Wednesday night held by pirates just off the coast of Somalia, according to a news report by All Headline News.

A Somali pirate reportedly told a local radio station that all 19 crew, including those from Bangladesh, Egypt, Pakistan and Syria - were evacuated from the ship.

The pirate also said the UAE-registered vessel laden with coal had been in the pirate’s hands since December 2010.

For the full All Headlines story:


Thursday, June 17, 2011

Top Story

The United Kingdom’s Department for Transport announced it has restricted where United Parcel Service can deliver its inbound air cargo in that country until the parcel giant’s security procedures are improved.

"It just means they cannot do their own screening -- they can use a third party for instance (to carry it out), that will be up to them," a spokesman was quoted as saying in a Reuters report.

"The safety of the traveling public is paramount and our security regime is kept under constant review," the U.K. government said in a statement.

"We've had some delays to packages but we have freight moving in and out of the UK," a UPS spokeswomen said in the Reuters story.

Last October, Britain launched a security review on all inbound air cargo after the a bomb was found hidden inside a printer cartridge on board a UPS plane at East Midlands Airport in central England.

For the full Reuters report:

Maersk CEO not so bullish on Asia-North Europe trade

Maersk Line’s chief executive says freight rates in much of the world are “developing quite well,” however Asia-North America “remains tough” and that “most of the Pacific is flatter.”

In an interview with Dow Jones Newswire, Maersk CEO Eivind Kolding said excess capacity in the Asia-Northern Europe trade has put pressure on short-term and spot market contracts there, where those rates are at a two-year low for the world’s largest container-shipping line.

Kolding was slightly more optimistic about the year’s third quarter.

"Obviously we expect more freight volumes coming in for the third quarter because of the usual peak season, so there is a chance to see a turn, although it's quite difficult," Kolding said.

-For the full Dow Jones story:

Washington State niche port’s log exports booming

Olympia, Washington is home to the state’s capitol as well as a cargo port that sits at the furthest southern tip of the Puget Sound shipping lane, where business is booming again with log exports to Asia.

For 12 months ending May 31 of this year, the small port reported it moved 124 million board feet of raw logs.

From the late 1980s throughout the 1990s, "you could've shot a rifle on the dock and not hit a log," said Port Commissioner Bill McGregor in a Seattle Times story.

The Port of Olympia is benefiting from a few important developments, such as Russia’s decision to dramatically raise its export tariffs on wood from Siberia, spurring more Asia buyers towards North America, and forest product giant Weyerhaeuser moving export business from nearby Port of Tacoma to Olympia two years ago.

"All ports on the West Coast have seen an increase in export activity in the last year to year and a half," said Anthony Chavez of Weyerhaeuser in the Seattle Times story.

For the full Seattle Times story:

China flexes maritime muscle in Singapore over South China Sea dispute

China has dispatched a patrol ship to Singapore as tensions mount over a maritime territory dispute in the South China Sea.

The Haixun-31 departed Wednesday and reportedly will be in Singapore for two weeks for what has been described as search and rescue, anti-piracy, and port management exercises, according to China’s own state media.

The latest development comes on the heels of recent claims by China, Vietnam and the Philippines over the vast resources and islands in the South China Sea, that has included the Vietnamese Navy firing live rounds there, calling them “exercises.”

For the full Bloomberg Businessweek story:

Chief engineer of ship sentenced to six months over oil dumping in Baltimore

According to news reports, the chief engineer of the Liberian cargo ship M/V/ Capitola was sentenced to six months in prison for dumping waste oil overboard at the Port of Baltimore.

Dimitrious Grifakis pled guilty after initially denying he ordered the oil waste to be pumped overboard.

Grifakis has also been court-ordered to be under supervised release for two years.



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