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Summary for June 18 - June 22, 2012:
Monday, June 18, 2012 Top StoryU.S. footwear importers want big cut to tariff
For the full L.A. Times story: www.latimes.com Competitors appeal to state of Virginia over monopolistic concerns with APM Terminals bidOn the heels of a bid by Denmark’s APM Terminals to operate the container terminals at the Virginia Port Authority, rivals have voiced concerns over such a deal creating a potential monopoly for the terminal-operations arm of A.P. Moller-Maersk Group, owner of the largest container-shipping company in the world. "By allowing this concession to be held by one single, private, foreign entity we believe that you will be causing irreparable harm to the future of the Port of Virginia," wrote S.Y. Kim, managing director of Hanjin Shipping America LLC, in a letter to Governor Bob McDonnell as reported by the Virginian-Pilot. "This monopoly will clearly be an obstacle to transparency in port operations and competitive, market-based pricing,” Kim wrote. The president and chief executive of Japan’s “K” Line, Kazuhiro Matsuwaka wrote a letter to Virginia’s transportation secretary, Sean Connaughton that said: "We are gravely disturbed that assigning control of all of the container terminals in Hampton Roads to a division of the A.P. Moller-Maersk Group will result in a preference for Maersk Line and prejudice against its competition." The unsolicited bid by APM Terminals proposed a 48-year term worth $4 billion that would include up to $1.3 billion up front to the port authority and expansion of the Portsmouth cargo-handling facility. In return, APM Terminals would be the only container-terminal operator at the Virginia Port Authority, supplanting the private, tax-exempt entity created by the state - Virginia International Terminals. In response to competitors’ concerns, Eric Sisco, president of APM Terminals Americas, told the Virginia Pilot in an email that: “We intend to discuss this with [competitors] during the process and expect to be able to address their issues." Sisco said APM Terminals "has strong and long-term relationships with all of the world's major ocean carriers,” and that the company “handled 15 million containers from customers other than Maersk Line, which is more than seven times the amount of cargo handled in Virginia.” The bid made by APM is the second time in three years that the state of Virginia has received offers to take over its container port operations. In 2009, the port authority received three bids that were subsequently rejected by the state. This time out, other competing proposals to operate Virginia’s cargo terminals have until July 12 to submit, and state D.O.T. Chief Connaughtan said: “if a serious proposer needs additional time, we would definitely look to extend that." For the full Virginian-Pilot story: hamptonroads.com Hanjin $300 mil terminal at Jaxport on hold over channel deepening
A $300 million Hanjin Shipping container terminal project at the Port of Jacksonville has reportedly been on hold for several months amid concerns over when dredging will take place and how deep the shipping draft will be for the facility. However, in January 2011, the design phase of the project was postponed over ship-channel depth concerns and Hanjin Senior Vice President Mike Radak said last week his company is not yet ready to publically make a firm a commitment on the marine terminal deal. "So far, I haven't seen enough action on deeper water to make a comment. We need to know what the depth of the water will be." For the full Florida Times-Union story: m.jacksonville.com Seminar for sourcing apparel in Southeast Asia takes place in NYC June 19U.S.-based apparel importers can take advantage of a “Sourcing in Southeast Asia in 2012 & Beyond” seminar at 30 Rockefeller Plaza in New York City on June 19. The seminar’s agenda features content by Julia Hughes, president of the United States Association of Importers of Textiles and Apparel; Michael Blakeley, director of the Source ASEAN Full-Service Alliance; Tanjila Islam, CEO of TigerTrade; and Frances Zwenig, counselor at the U.S. -ASEAN Business Council. Agenda topics will include Vietnam and the Trans-Pacific Partnership and sourcing opportunities in Cambodia. "U.S. importers of textiles and apparel are increasingly looking to Southeast Asia as a region in which to find the best product at the best price," said Julia Hughes of the USA-ITA. Repairman falls to death on ship at New York Container TerminalAn elevator repairman reportedly fell 30 feet to his death off the top of an elevator on the cargo ship Rio De Janiero Express late last week that had arrived from Hong Kong. The repairman was, according to news reports out of the region, subsequently pinned between the elevator wall and the shaft and after his leg was amputated he went to cardiac arrest. For the New York Daily news source:
Tuesday, June 19, 2012 Top StorySurvey: $46 bill to be invested in U.S ports over 5 years
By comparison, the AAPA said in a statement that other countries have shown they’re up to the task of port infrastructure improvement as well, including India’s plan to invest $60 billion through public-private funds to develop new ports by 2020; Brazil’s mostly private sector funding level of $17 billion for port improvements by 2022; and global terminal operator DP World pumping $2.5 billion into London’s Deepwater Gateway project. The AAPA produced the following chart from its survey findings on U.S. port infrastructure investment
The $46 billion in infrastructure at U.S. ports would create more than 500,000 direct, indirect and induced domestic jobs, according to economist John C. Martin, Ph.D., president of Lancaster, Pa.-based Martin Associates, citing U.S. Bureau of Economic Analysis formulas. “Those are really significant job numbers,” Martin said. “From a dollars-and-cents perspective, it’s hard to over-emphasize the value of investing in ports, particularly when you factor in how much these investments help lower the cost of imports and make our exports more competitive overseas,” he said. According to the World Economic Forum’s index on global infrastructure competitiveness, the U.S. dropped from number one in 2005 to its most recent ranking of 16, while northern neighbor Canada is five spots higher at 11 and the developing nation of China has risen to the 44th spot. UPS shipping volumes benefit from more mortgage refinance document deliveriesUnited Parcel Service has reportedly been a beneficiary of the uptick in mortgage refinances; carrying more of those documents around the U.S. Loan approval documents tend to be time sensitive, oftentimes needing to be shipped overnight. “People want to move those documents around quickly, so a lot of next-day delivery occurs in the refinancing process,” said Art Hatfield, analyst in Memphis-based Raymond James & Associates in an interview with Bloomberg Businessweek. Hatfield said the increased loan document demand has been “good-priced product” for UPS and could also prove to have a “positive impact” on rival Fedex, too. Kurth Kuehn, chief financial officer for UPS, said in a conference call over his company’s first quarter results that there had been “an uptick in refinancing applications” that was “taking letters from being negative to positive” and that it was “the first quarter in some time we’ve seen that.” For the full Bloomberg Businessweek story: www.businessweek.com YRC Freight promises one day shaved off LTL networkThe freight subsidiary of YRC Worldwide Inc. announced it has implemented “significant improvements” to its North American less-than-truckload network that features “faster service into and out of every major U.S. city.” YRC Freight claimed in a statement that its services are now at least one day faster than before throughout what the company said were its “significant supply chain lanes in North America” or through more than 24,000 lanes. The freight line gave examples of its speedier services, including Charlotte to Seattle being 4 days instead of 5, Indianapolis to Los Angeles now down to 3 days, Milwaukee to Tampa at 2 days, and Salt Lake City to Denver at one 1 day. "We are continuously working to improve our North American LTL network and to ensure deliveries are made more quickly, efficiently and damage-free," said Jeff Rogers, president of YRC Freight. Port of Seattle to work closer with regional governmentThe Port of Seattle announced it was engaged in “an opening act” of increased cooperation with the council of the county it operates within. The commission of the Puget Sound port recently met with the Metropolitan King County Council in what both sides said was their first joint meeting “in recent memory.” “In our increasingly complex economy and society, I think it’s more important than ever that our bodies talk together and coordinate our efforts,” said Council Vice Chair Jane Hague in a statement. The port commission and county council said they discussed their strategic plans, agendas, including economic development and international trade issues. The two entities said they would form joint state and federal legislative agendas; environmental and transportation planning agendas; and collaborate on economic development. Russian ship carrying arms to Syria loses insuranceRussian shipping company Femco, the operator of the cargo vessel Alaed that is allegedly carrying attack helicopters and munitions to Syria’s military, has reportedly lost its fleet-wide insurance, according to the U.K.-based marine insurer Standard Club. "We were made aware of the allegations that the Alaed was carrying munitions destined for Syria and have already informed the ship owner that their insurance cover ceased automatically in view of the nature of the voyage," the insurance company told CNN on Monday. The vessel is now reportedly off the northern coast of Scotland, according to ship-tracking data. For the full CNN report: www.cnn.com
Wednesday, June 20, 2012 Top StoryOakland City Council approves $1 bil Prologis logistics center
"This is going to make a difference in the City of Oakland," said Councilmember Jane Brunner as reported by the Oakland Tribune. The City reportedly came in under the wire of a deadline the state of California placed on the project, protecting a $242 million grant. Additionally, The City of Oakland is pitching in $54.4 million towards the project that will come, in part, from the sale of army base land to two local recycling companies, the Tribune reported. Another $275 million worth of project funding could come from a county half-cent sales tax surcharge for transportation projects that is slated to be on the public ballot in November. The Port of Oakland also announced on Tuesday that it was awarded a $15 million TIGER grant from the U.S. Department of Transportation for the project's Outer Harbor Intermodal Terminal that is meant to improve rail capacity and access to the Army base development. "This grant is another giant step forward toward implementing a transformative project at the Port of Oakland, which will translate into thousands of jobs for our city and will spur economic growth for generations to come," said Mayor Jean Quan in a statement. In 1999, the Army vacated 366 acres; dividing it between the port and city. Subsequent proposals for how to use the city's land reportedly included building a movie studio, and later a casino. In 2008 the Prologis partnership presented its "Working Waterfront" proposal for a distribution and warehousing complex that could translate to over 2,800 construction jobs and over 2,000 permanent positions. The Tribune reported that one of the sticking points in the proposal between Prologis and community groups West Oakland had been over the level of jobs available to local residents culminating in developer concessions that will include using union labor for the construction phase, hiring at least half of the worker pool locally, and requiring future tenants to ease some of their hiring practices. The City of Oakland will in turn enforce more stringent residency requirements. For the full Oakland Tribune story: www.insidebayarea.com Hamburg Süd to leave Seattle for TacomaHamburg Süd announced that as of late July, it would move its container-shipping business from Terminal 18 operated by SSA Marine at the Port of Seattle to Hyundai subsidiary Washington United Terminals at the Port of Tacoma, following on the heels of the same announcement made by the Grand Alliance shipping consortium back in early March. Hamburg Süd is part of a vessel-sharing agreement with fellow-German shipping line, and Grand Alliance member Hapag-Lloyd. Hamburg Süd said in a statement that the first sailings of its Pacific Coast/Australia-New Zealand and Pacific Coast/Western Mediterranean services would commence at WUT on August 10th and 5th respectively. The weekly Pacific-Med service consists of eight Hapag-Lloyd and two Hamburg Süd vessels. Hamburg Süd said it "wishes to thank SSA Marine for its support and cooperation in Seattle over many years." The Port of Tacoma said in a statement that the Hamburg Süd and Hapag-Lloyd service originating from Italy, France and Spain would bring an additional estimated 32,000 TEUs to WUT. The port said the services imported cargoes would include wine, spirits, mineral waters, olives and olive oil, marble, flooring and tiles. Exports from the Pacific Northwest are to include seafood from Alaska and apples from Washington State, the port said. The news of another shipping line bolting from Seattle's port to its rival Puget Sound neighbor followed that of the Grand Alliance's announcement almost 4 months ago that it would leave T-18 and is now expected to commence operations at WUT by this month's end, bringing with it an estimated 400,000 TEUs worth of business. The Grand Alliance includes Germany's Hapag Lloyd, Japan's NYK Lines, Hong Kong-based OOCL, and associated partner ZIM of Israel. The cost of doing business was reportedly one of the reasons at play in the Alliance's decision to shift its box business, as global container-shipping lines, after enjoying a robust, profitable rebound in 2010 after 2009's record, money-losing year, were largely back in the red for 2011 and facing a 2012 campaign with too much vessel capacity and struggling freight rates. According to a Seattle Times report, Port of Seattle Commissioner John Creighton had estimated annual revenue from ocean shipments at his port equated to $130,000 per acre over 500 acres, but has been slashed to $70,000 per acre, or $35 million, due to rate competition with Tacoma. The Times reported the Port of Seattle's estimate was based on a comparison with Northern California's only true container-handling complex, the Port of Oakland, which reportedly produces $200,000 per acre. "The shipping industry has undergone dramatic change in the past three years in response to tremendous economic and competitive pressures. Shipping lines have formed alliances to share ship space, terminal capacity and reduce fuel costs," the Port of Tacoma said in its statement at the time on the Grand Alliance's move to WUT. The addition of the containerized volume the Alliance brings, could reportedly get Tacoma close to its peak box volume period of the middle of the last decade, before the global recession had a widely reported, significant impact on that port's shipping business, that included losing it's former top customer Maersk to a vessel-sharing agreement with France's CMA CGM at the Port of Seattle in 2009. Seattle has also lost business to its Puget Sound rival to the south before, including its former top customer, SeaLand (which Maersk acquired in 1999) in the early 1980s, Japan's "K" Line in the late 1980s, South Korea's Hyundai Merchant Marine in 1997, and in 2007, NYK Line signed a lease for a new container terminal project that was subsequently quashed by the global recession that followed soon thereafter. "It is important that the [Grand Alliance] business remains in Washington. Unfortunately, though many of the jobs will be preserved, others may not. Some who work in the Seattle harbor could see their livelihood impacted severely or in some cases, disappear," the Seattle port said in a statement at that time. The Port of Seattle went on to say that "trading customers" encourages "a downward competitive cycle" for infrastructure investments in the state of Washington. "As stewards of public infrastructure, ports are compelled to ensure that the investments made in our harbor are used. The short-term local gains for an individual port announced today could very well work to the to the detriment of the state's economy in the long run," the port said. The Port of Seattle handled a record 2.1 million TEUs in 2010, while the recession and losing business like Maersk had a widely reported negative impact on Tacoma's containerized fortunes, as that port recorded 1.5 million TEUs passing through in 2010 – an almost half-a-million-TEU drop from 2007. However, with a group of major shipping lines about to bring a significant amount of business to the Blair Waterway, Port of Tacoma CEO John Wolfe said in March that he was "confident" his port "will continue to realize new business opportunities." Jaxport, MOL land Disney cargo businessThe Jacksonville Port Authority and Mitsui O.S.K. Lines announced the latter's TraPac terminal is now handling most of the imported cargo for Walt Disney Parks and Resorts' theme parks in Central Florida thanks to a newly signed agreement. Jaxport referenced a Florida Chamber Foundation trade and logistics study in its statement on the Disney deal that found 53 percent of Asian imports to Florida were being shipped in through out of state ports. "We want the products our Florida citizens and visitors buy brought in through our ports, not brought by truck or train from somewhere out-of-state," said Jaxport CEO Paul Anderson at the ceremony celebrating the enhanced cargo business with Disney. "This is not only a smart business decision but will also enable us to continue to build on the positive impact we have on Florida's economy," said Anthony Connelly, senior vice president and chief financial officer for Walt Disney Parks and Resorts, U.S. "Today, the economic activity generated by Walt Disney Parks and Resorts accounts for 2.5 percent our state's gross domestic product and for more than one out of every 50 jobs in Florida," Connelly said. Post-Panamax cranes arrive in BaltimoreA specialized vessel carrying four post-Panamax container cranes for the Port of Baltimore's Seagirt Marine Terminal is scheduled to arrive there today from China. The 140-foot-high, 1,550-ton shoreside cranes have a reach of 22 containers and the port said are expected to be operational at the terminal operated by Ports America by September. Syria-bound ship from Russia with weaponry turns backThe Russian ship carrying alleged attack helicopters to help supply the Syrian government's brutal crackdown on civil unrest reportedly turned back home on Tuesday after its London-based marine insurer canceled coverage after the British government issued a warning that such a delivery would be in violation of European Union sanctions.
Friday, June 22, 2012 Top StoryMandatory weighing of containers ineffective solution says EU shippers council
Shipping industry interests, including the International Chamber of Shipping, BIMCO, International Association of Ports and Harbors, International Transport Workers' Federation and the World Shipping Council presented a formal proposal to the International Maritime Organization, asking that body to rule in favor of a requirement to accurately weigh loaded containers. Citing safety concerns the IMO proposal is asking that the port facility and the ship have a weight verification certificate obtained by officially weighing the container. The council voiced doubts that the IMO was the proper agency to regulate container safety issues, because "poor stuffing is a problem for all modes of transport, not solely the maritime industry," and that a better option was to update the voluntary UNECE/ILO guidelines for container loading. The ESC also noted that there is already an IMO regulation that states that shippers should correctly declare the weights of shipping containers. Maersk highlights punctuality but on-time delivery rates falterAlthough Maersk Line, a global leader in shipping trends, reportedly indicated that the key shipping benchmark would shift from rates to punctuality this year, shipping lines have been later than ever getting to their destinations. In the first five months of 2012, 63.7 percent of containers were delivered on time, compared to 65.9 year on year, according to the online container-booking portal INTTRA. If the trend continues, 2012 on-time delivery statistics may fall below 2011's 66.5 percent and 2010's 68.8 percent. Maersk, which started to guarantee departure times in October 2011, said on-time deliveries could reduce customer costs by up to 70 percent. Other lines have tried to follow suit with strategies such as pooling ships on the Asia-Europe route, but often opt for full loads over timeliness. For more of the BusinessWeek story: www.businessweek.com Hanjin calls at Seattle over Portland during union disputeHanjin will reportedly stop calling at the Port of Portland until the union conflict has been resolved, the company announced. Hanjin containers bound for Portland will be rerouted to Seattle, the second such detour since the dispute arose between two unions over which has jurisdiction over maintaining Portland's refrigerated containers, according to KOIN. The conflict has caused work to slow to a crawl at the port. Two federal hearings on the subject will be heard on Friday. One involves the National Labor Relations Board asking for a temporary order to stop the slowdown. In the second, the International Longshore and Warehouse Union is seeking an injunction to force ICTSI Oregon to give up the contested jobs, which have been held by electricians for the past 40 years, due to new ownership. For more of the KOIN 6 story: www.koinlocal6.com Top negotiators voice optimism over embattled transportation billOn Thursday, a ray of hope emerged in the battle over the funding of U.S. transportation projects, according to members of Congress. While key issues remain to be resolved, the tone of House and Senate members were a bit more upbeat. Top negotiators Senator Barbara Boxer (D) and Representative John Mica (R) issued a statement saying both parties are moving toward a "bipartisan, bicameral agreement on a highway reauthorization bill" and are working toward "completing a package by next week." According to Reuters, Senate Majority Leader Harry Reid said he remained hopeful that the surface infrastructure bill would be passed by the June 30 deadline, when the funding for road and rail projects will expire. Three million construction jobs are in the balance. House Republicans want to streamline environmental reviews of roadwork projects, consolidate federal transportation programs, and eliminate a proposal to use gas taxes for bicycle lanes and streetscape beautification. So far the negotiations have not handled the thorny issue of the $7 billion Keystone Pipeline, which would funnel oil from Canada to Texas. Republicans would like to fast track the proposed pipeline and the Obama administration wants to wait until the environmental review is completed. For more of the Chicago Tribune story: www.chicagotribune.com Ship with 200 passengers sinks in Indonesian watersA boat with 200 passengers capsized in Indonesian waters 120 nautical miles from Australia's Christmas Island. An Australian military aircraft saw 40 survivors "standing on the upturned hull of the boat," according to Reuters. Many of the passengers, thought to be Indonesian natives seeking asylum in Australia, were feared to have drowned. "We know from what we have been hearing from the aircraft there are not 200 life jackets on board," Western Australian police commissioner Karl O'Callaghan said in a local television report. For more of the Reuters story: www.reuters.com
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The U.S. imports over 90 percent of its footwear from overseas factories, and the Affordable Footwear Act movement is afoot to try and chop out approximately $800 million in annual tariffs on children’s and lower-cost shoes.
Public ports in the U.S. along with their partners in the private sector plan to invest $46 billion into capital improvements over the next five years, according to a survey conducted by the American Association of Port Authorities.
The Oakland City Council in a 7-0-1 vote gave the green light to a $1 billion logistics and warehousing project on close to 130 acres on a former U.S. Army base near the region's container port that will be leased to industrial real estate developer Prologis and the California Capital and Investment Group.
The European Shippers Council disagrees with the maritime industry's call for the mandatory weighing of containers.