Cargo Business Newswire Archives
Summary for June 23 through June 27, 2014:

Monday, June 23, 2014

Top Story

NLRB charges L.A. port trucking firm with 50 labor violations

Photo credit: Beatrice de Gea/Los Angeles Times

Last week the National Labor Relations Board filed a complaint against Green Fleet Systems, a firm where approximately 150 truck drivers work hauling cargo at the ports of Los Angeles and Long Beach.

The Carson trucking company is accused of more than 50 labor law violations, including allowing anti-union employees to harass and assault pro-labor drivers, terminating drivers for union activity, and placing an anti-union operative into its workforce to put union organizers under surveillance.

The company denied all the charges and said it has complied with federal labor laws, and that most its drivers do not support the Teamsters Union’s "heavy-handed" organizing efforts.

"Unfortunately, it appears that the NLRB wants to put a full court press on Green Fleet in an effort to advance the union's otherwise failing campaign," said Thomas A. Lenz, the company's attorney.

Lenz said the NLRB and union leadership have ignored evidence that the union has threatened Green Fleet’s drivers and engaged in unlawful picketing at Green Fleet's offices and elsewhere.

Green Fleet "has been undaunted in its effort to circumvent the National Labor Relations Act, including flagrantly violating a prior NLRB settlement agreement," said Julie Gutman Dickinson, the lawyer for the Teamsters Union port division and the two terminated drivers.

"I feel good about the complaint," said Mateo Mares, one of the two drivers who were fired by Green Fleet. "We've been standing up for our rights for so long. Finally we are getting justice."

The NLRB complaint will be heard in August before an administrative law judge.

For more of the Los Angeles Times story:

FedEx Q4 revenue and net income climbs on ground and freight divisions

Package shipping giant FedEx reported higher revenue and net income in the fourth quarter for the fiscal years ending May 31. Revenue increased 4 percent and net income surged 141 percent when compared to the fourth quarter of 2013.

FedEx attributed the huge net income increase to adjustments made to FedEx Express in the fourth quarter of fiscal year 2013, which resulted in zero net income from the division. The adjustments included business realignment and aircraft impairment charges.

In the fourth quarter of 2014, the company said the FedEx Ground division revenue grew 8 percent on strong e-commerce demand and rate increases.

The FedEx Freight division reported 12 percent growth in revenue in Q4, reaching $1.55 billion, according to the statement. The division’s less-than-truckload volume grew 12 percent due to 14 percent growth in its Priority service.

FedEx Express revenue remained static at $6.9 billion in the fourth quarter, the statement said. 

Overall, FedEx posted a profit for the fourth quarter of $730 million, or $2.46 a share, more than doubling from $303 million, or 95 cents a share year-over-year. The company reported a rise in revenue of 3.5 percent to $11.8 billion.

For the new fiscal year, the company said it predicts earnings of $8.50 to $9 a share, expecting no year-over-year fuel impact along with continued growth of the economy.

"Fiscal 2014 was a good year for FedEx and we expect fiscal 2015 to be even better," said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer.  "With continued modest economic improvement, our results in fiscal 2015 should benefit from base performance improvement and ongoing execution of our profit improvement initiatives at FedEx Express, continued profitable growth at FedEx Ground and FedEx Freight, and our share repurchase program."

The company also said it expects to increase capital spending to $4.2 billion, to include planned aircraft deliveries to support fleet modernization and the continued expansion of its ground network.

For more of the Forbes story:

Chinese premier: Piraeus port can become China's entry gate into Europe

Chinese Premier Li Keqiang touted the success of the Piraeus Container Terminal project on Friday, calling it a "pearl" in bilateral cooperation during his visit to the port with Antonis Samaras, the prime minister of Greece.

China's shipping giant COSCO, a state-owned company, won the terminal operation lease for Piers No. 2 and No. 3 of the Piraeus port, the largest in Greece, in 2008.

Li said that since 80 percent of China’s trade with Europe is seaborne, the use of the Piraeus port has reduced average voyage time using the Suez Canal by between seven and 11 days.

"The port of Piraeus can become China's entry gate into Europe," Li said. "The port of Piraeus is like the pearl in the Mediterranean."

Li vowed to make Piraeus one of the world's most competitive ports by cooperating with Greece in such industries as ship repairing and equipment, and actively participating in reconstructing the rail linking the port to inland Europe.

Li and Samaras inaugurated a rail link that will transport goods from the COSCO terminal to central Europe, with Li describing Piraeus as "one of the most competitive ports in the world."

Greece, which has been struggling to emerge from a deep recession and has been dependent on international rescue loans since mid-2010, is eager to attract investment.

Samaras, calling the project a paradigm in Greece-China practical cooperation, said Chinese investment not only created jobs and increased incomes for the Greek people, but also boosted Greece's economy and promoted its position in the Europe and the world.

For more of the Bloomberg story:

B.C. port to invest in $10M breakbulk terminal

The Prince Rupert Port Authority plans to invest millions to build a breakbulk terminal on Ridley Island.

"Yesterday at the first part of our board of directors meeting, a $10 million investment was approved for the relocation of the RORO — roll-on, roll-off — ramp. It was initially stationed on the north part of Fairview Terminal and it will be relocated to a location right near Prince Rupert Grain," announced PRPA president and CEO Don Krusel during the group's June 19 annual general meeting.

The announcement comes four months after the 185-ton floating RORO ramp at Fairvew Terminal started to sink due to pontoon corrosion.

For more of the Northern View story:

Crewman found dead aboard cargo ship at L.A. port

A Filipino crewman was found dead aboard a cargo vessel at the Port of Los Angeles Wednesday night, authorities said today.

The victim was a crewmember of the container ship Cap Posada, according to Phillip Sanfield, the director of media relations for the Port of Los Angeles. He said the man’s death seemed to have happened when containers were moved on and off the ship.

The victim’s body was discovered around 10:45 p.m. Wednesday with blunt force trauma to the head, Sanfield said.

For more of the Press Telegram story:


Tuesday, June 24, 2014

Top Story

Drewry: P3 termination a setback, but carrier alliances will continue

The cancelation of the alliance of Maersk, CMA CGM and MSC known as the P3 Alliance will likely be a slight setback for the recovery of the shipping industry, but that won't halt further development of mega-alliances on the seas, according to this month's issue of Drewry's Container Insight.

China's regulators have blocked the P3 mega-alliance on the grounds that it would break the country's competition laws on the trades between Asia and Europe, especially since the shipping alliance would have commanded a 46.7 percent market share on that route.

The unexpected decision nixes the carriers' plan to reduce costs by pooling assets. But it will be good for ports and for rivals of the container carriers, Drewry said, and doesn't keep the three container lines from working together in other areas.

Container Insight notes the industry will continue to struggle to control capacity. Now that P3 is off, for example Maersk, MSC and CMA CGM no longer plan to reduce their weekly Asia-North Europe services from 9 to 8, or their Asia-Mediterranean services from 6 to 5.

For shippers, it means that the three largest shipping lines will continue to provide separate services and keep the same product differentiation.

For ports and terminals, P3 was seen as both a risk and an opportunity. There was a huge opportunity for new business, but also danger that the P3 would have leveraged its huge volume to dominate commercial negotiations with terminals.

So now, Drewry says Maersk, MSC and CMA CGM will have to find new ways to reduce their operating costs.

Secondly, Drewry says the three lines will be allowed to continue their existing bi-lateral and tri-lateral vessel-sharing agreements and slot-exchange agreements on the trans-Pacific and Asia-Europe routes. They might even be allowed to form a tri-lateral consortium in the trans-Pacific, as their current 20 percent market share of effective eastbound vessel capacity to the West Coast alone is well below the G6's 34 percent.

The article says that because the U.S. and the EU have not blocked the alliance, the three carriers could decide implement joint services on the trans-Atlantic route, but because it is such a low-volume route, merged operations in this trade would provide little compensation.

Finally, the article notes that filling the new 18,000-TEU ships without the ability to pool assets and volumes will be much harder for the three biggest container lines, so other solutions will have to be found, such as the more use of pendulum services.

TSA lines want to push back suggested peak season surcharge

Container carriers the Transpacific Stabilization Agreement have announced they will move the effective date of a suggested June 15, 2014 peak season surcharge of $400 per-FEU to July 1, to sync with the expiration of various market rates on June 30.

TSA said would like to raise overall revenue levels by an average $400 per-FEU for Pacific Northwest and U.S. East Coast ports and gateways. For Pacific Southwest ports in California, the objective is to raise overall revenue levels by $200 per-FEU on July 1 and then by a further $200 per-FEU no later than July 15.

Ocean carriers are committed to improving revenues during strong year-over-year cargo gains through June 2014, and the statement said future bookings indicate the trend will continue through shipments of back-to-school retail merchandise, and then peak season.

"Our members are seeing steady vessel utilization ranging from mid-90% to full despite new capacity coming into the transpacific market," reports TSA executive administrator Brian Conrad in the statement. "This is a pivotal point for them in planning ahead for the peak months to provide space and equipment availability, schedule reliability and service differentiation. After facing serious operating losses across the trade in recent years, carriers' strategic choices will be decided in large part by available revenue."

TSA is a research and discussion forum of major container shipping lines serving the trade from Asia to ports and inland points in the U.S. TSA lines include APL, China Shipping Container Lines, CMA-CGM, COCSO, Evergreen, Hanjin Shipping, Hapag-Lloyd, Hyundai Merchant Marine, K-Line, Maersk Line, MSC, N.Y.K. Line, OOCL, Yangming Marine, and Zim Integrated Shipping Services.

SC Port Authority approves new budget

The board of South Carolina's State Ports Authority approved a budget for the coming fiscal year starting July 1 that predicts almost $173 million in operating revenue and its ports handling 975,000 containers.

The budget for fiscal 2014-15 includes capital improvements, including more than $38 million to upgrade wharves and to pave existing terminals. It also has more than $17 million for work on a new shipping terminal being built at the old Navy base in North Charleston. The first phase is expected to be operational in four years.

The SPA approved more than $1 million for scales, light poles, telecommunications and other equipment for the inland port near Greer that opened in 2013.

Republican Sen. Lindsey Graham, a member of the Senate Appropriations Energy & Water subcommittee, said the panel passed an appropriations bill with money for Charleston. The bill includes almost $700,000 for the Army Corps of Engineers study of deepening the Charleston Harbor shipping channel, $1.5 million for the deepening work itself and $13 million for ongoing harbor maintenance.

For more of the Post and Courier story:

Coast Guard rescues injured man from Caroline Maersk

On Saturday a U.S. Coast Guard boat crew evacuated a man with a severely injured hand from the container ship Caroline Maersk far off San Diego.

Crewmembers aboard the 1,040-foot Maersk vessel contacted the Coast Guard Friday to request a medical evacuation. A 52-year-old Filipino man had injured his hand during a drill, the Coast Guard said.

A 45-foot Coast Guard response boat from Station San Diego met the ship five miles off the coast and transported the man to San Diego for emergency medical treatment.

For more of the ABC 10 News story:


Wednesday, June 25, 2014

Top Story

EU extends special competition regulation for vessel sharing until 2020

Yesterday the European Commission announced an extension of the consortia block exemption regulation a framework that exempts certain shipping line alliances from antitrust rules for an additional five-year period until April of 2020, according to an EC statement.

Under European competition law, the statement said the regulation approves vessel-sharing arrangements between container carriers that have a combined market share of up to 30 percent.

The EC said consortia or joint cargo services at that level usually allow shipping lines to achieve economies of scale. If consortia face sufficient competition and are not used to fix prices or share the market, users of services are usually able to benefit from improvements in productivity and service quality.

The EC's extension of the exemption until April 2020 will provide legal assurance to shipping companies regarding their agreements and compliance with EU competition rules.

The World Shipping Council issued a statement praising the European Commission for continuing to recognize both the benefits of vessel sharing and the importance of the consortia block exemption regulation to those operational agreements.

"Vessel sharing arrangements are an established and essential part of the liner shipping networks that carry the international trade of the European Union and the rest of the world," said Christopher Koch, WSC president and CEO. "Consortia allow carriers to provide their customers with better services at lower cost, with improved environmental performance."

The Commission said it would continue to closely monitor market developments and the conduct of shipping carriers to make sure that markets remain open and competitive.

Markit: U.S. manufacturing grows at highest rate in 4 years

The U.S. manufacturing sector grew faster than expected in June, with the rate of growth and key sub-indexes reaching their highest levels in more than four years, an industry report indicated Monday.

Financial data firm Markit said its preliminary U.S. Manufacturing Purchasing Managers Index rose to 57.5 in June, the highest reading since May 2010. The flash PMI was also above the predictions of economists polled, which averaged 56.5. In May, the reading was 56.4. Any number above 50 indicates economic growth.

The output sub-index in June jumped to 61 and new orders rose to 61.7. Both marked the highest level for the indexes since April 2010.

For more of the Reuters story:

Local grand jury raps Port of San Francisco

By Richard Knee

San Francisco's port authority does some things very well but is mismanaging waterfront development, according to a report released on June 19 by the city's Civil Grand Jury. The report says the port authority should to rely less on City offices such as the mayor's office and the Planning Department, and more on public outreach for policy guidance.

The port needs to revisit the 17-year-old plan for its 7.5-mile-long waterfront, increase its maritime focus, brace for a likely sea-level rise and ensure full public engagement in setting guidelines for its future, and the system of appointing the port commission's five members should be changed, the 58-page report said. The mayor currently picks all five commissioners; and the report advises the city charter be amended to shift the appointing authority for two commissioners to the Board of Supervisors.

The report, which the panel said was triggered by "a citizen's complaint regarding politically connected developers seeking to override the Waterfront Land Use Plan for profit," drew fire from the mayor's office.

An article in the San Francisco Examiner quoted a spokeswoman for Mayor Edwin M. Lee as saying, "There is more transparency, public input and public process when it comes to San Francisco's world-class waterfront than at any other time in our city's history."

Maritime operations account for only 25 percent of the port's revenues, the port and the mayor's office rely too much on funds from major real estate developers, and there are other potential sources, the report said.

Other possible funding sources include general obligation and revenue bonds, federal support for certain projects, Infrastructure Finance Districts and "additional tenant uses" for cultural and entertainment events on vacant piers.

Federal funding was recently approved for a freight rail service extension on a surface street into Pier 94-96 and was used in 2005 to build a bridge affording vehicle and rail access to Pier 80, the report said. Those piers hosted regular containership calls until the mid 1990s, when carriers shifted their business permanently to Oakland.

The report said the Waterfront Maritime and Land Use Plan "has served the port and the public well but is now falling short of current needs." It said a revised plan should remain flexible enough to meet future unknown requirements while attempting to foresee opportunities, and should emphasize maritime use, especially along the southern waterfront cargo hub.

On the plus side, the report said, the port's Real Estate Division does "an excellent job" managing lease terms for a variety of tenants and finding new tenants; transformed the Ferry Building, the waterfront's hub, from "a somewhat rundown building that commuters passed through to walk downtown" to "a vibrant destination in itself;" expanded the Pier 2 ferry terminal to Pier 14, boosting traffic capacity beyond the current 130 daily vessel calls; and developed or planned more than 20 parks, plazas, open space and fishing piers as well as a shoreline bicycle and pedestrian trail that will eventually circle the bay.

In addition, Anchor Brewing "is expanding its operations to Pier 48 to take advantage of water transport for its raw materials and waste products."

Also on port property, the report noted, are the Exploratorium, a hands-on display museum at Pier 15; the West Coast's largest commercial fish processing facility at Pier 45; affordable and supportive housing developments; and AT&T Park, a stadium and cultural events venue.

3PL Damco launches container freight station operation in Myanmar

Third-party logistics provider Damco has started operating the first international standard warehouse and container freight station (CFS) facility in Myanmar.

The new high tech 4,000-square-meter facility is C-TPAT compliant and located within 15 kilometers from Yangon ports and major industrial locations. It is suitable for import/export activities for fast moving consumer goods, electronics, apparel, components, machinery, and project cargo.

"Damco is the first global logistics company in Myanmar. After acquiring an operating license in 2013 and opening a new office in Yangon, we have strengthened our position in Myanmar by being the first international logistics company in the country to start offering own-operated CFS/warehousing services," says Kiattichai Pitpreecha, managing director of the Thailand, Malaysia and Myanmar cluster. "This state-of-the-art, international standard CFS facility enables us to provide superior service to our customers through direct control and management of the entire operation and service delivery process."

Since international sanctions were lifted in 2012, Damco says Myanmar has established itself as a new market, benefiting from its unique location between China, India and Southeast Asia.

"Emerging markets have always been one of Damco's focus areas and core strengths, with many of our key customers sourcing their products from or operating in these markets," said Pitpreecha. "These customers can now rely on Damco as their logistics partner in Myanmar.

Damco is one of the world's leading third party logistics providers specializing in customized freight forwarding and supply chain solutions.

Greek Coast Guard seizes 2 tons of heroin and arrests tanker crew

The Greek Coast Guard announced Sunday they had seized a record two-ton haul of heroin and arrested 11 crewmembers of a Togo-flagged tanker that they think had brought it into the country.

Officers working with U.S Drug Enforcement Administration seized 987 kilograms of the drug, but the coastguard did not give details on where it was found.

The tanker called Noor One was suspected of bringing in the heroin, the agency said in a statement, noting that the ship had sailed through Oman and Pakistan before it was seized off the port of Elefsina near Athens on Sunday.

For more of the Reuters story:


Thursday, June 26, 2014

Top Story

U.S. importers stocking up in case of West Coast labor disruption

Importers in the U.S. are building up stock to offset a possible West Coast labor disruption at the ports once the current contract expires July 1, according to the most recent issue of Container Insight by Drewry Maritime Research.

Drewry reports that Asian cargo imported through the West Coast of North America surged by 13 percent in March at 884,000 TEUs, and then on to 1,021,000 TEUs in April.

Most of the westbound volume increase in March was normal, since China’s factories were closed the first two weeks of February and ordering after the holiday is typically heavier, researchers said. Growth in 1Q 14 was 4 percent year-over-year.

Drewry’s analysts found April’s climb in cargo volume to be more surprising, noting that U.S. importers have been stockpiling more goods than usual in preparation for possible strike action in USWC ports at the end of June.

Contract talks between the International Longshore and Warehouse Union, which represents the dockworkers, and the Pacific Maritime Association, which represents the employers, are still said to be delicate, Drewry notes, with the contract expiring on 30 June.

Container carriers shifted in response to the cargo increase, reducing sailing cancellations, bringing back services withdrawn over the winter period, and revising alliance structures, the report said.

Drewry said because most of the current cargo surge from Asia to the West Coast of North America is only due to the threat of strike action in USWC ports after 30 June, so there is an expectation that third quarter imports will be correspondingly less, whether there’s a strike or not. The report said since this will be during the peak season, average vessel use will likely remain healthy through Q3.

BNSF, CP must provide timeline for shipping grain backlog

U.S. officials have given BNSF Railway and Canadian Pacific Railway a Friday deadline to their submit their plans to clear a backlog of grain cars after months of service delays blamed on severe winter weather and high demand.

Grain storage bins in states like Montana, Minnesota and North and South Dakota are still brimming with last year's harvest because of poor rail service.

The U.S. Surface Transportation Board decision also ordered that the two class I railroads provide a timeline for resolving the backlog and submit formal weekly status reports on grain car orders and deliveries.

The STB said although there has been some improvement in service, the railroads need to step it up.

"The board remains very concerned about the limited time period until the next harvest, the large quantities of grain yet to be moved, and the railroads' paths toward meeting their respective commitments," said the rail-dispute mediator.

BNSF spokeswoman Amy Casas said the company, which has been voluntarily reporting some grain car service statistics on its website every week since February, will provide the requested information.

CP spokesman Ed Greenberg said Canadian Pacific is still reviewing the order and will respond directly to the agency later this week.

For more of the Reuters story:

Gulftainer expands into U.S. with $100M container terminal in Florida

Port Canaveral has entered a 35-year, $100 million agreement with Gulftainer, a global port terminal operator based in the United Arab Emirates, to help increase cargo operations with a new terminal at the Central Florida port.

"We're looking at 500 permanent jobs within the port, and we think the knockdown effect will be about 2,000 jobs for the entire community," said Gulftainer spokesman Peter Richards.

Port Canaveral CEO John Walsh and the chairman of Gulftainer inked the deal at a port ceremony on Monday. It's the first U.S. location for Gulftainer, a UAE company that wants to enter U.S. markets.

For more of the WESH Orlando story:

2nd bridge inquiry dogs Christie administration and port authority

Investigations into the administration of New Jersey Governor Chris Christie and the Port Authority of New York and New Jersey are targeting possible securities law violations regarding a $1.8 billion road repair agreement in 2011, according to sources briefed on the issue.

Although the investigation was instigated over allegedly politically motivated lane closings at the George Washington Bridge in September 2013, the new investigations are focusing on the Pulaski Skyway, the crumbling elevated roadway connecting Newark and Jersey City.

The Manhattan district attorney and the Securities and Exchange Commission are conducting the Pulaski Skyway inquiries.

The inquiries into securities law violations focus on a period of 2010 and 2011 when Christie’s administration pressured the Port Authority to pay for significant repairs to the Skyway and related road projects, redirecting money that was to be used on a new Hudson River rail tunnel that Christie canceled in October 2010.

Port Authority lawyers had warned against the move, noting the skyway is owned and operated by the state, which puts it outside the agency’s purview, according to a long paper trail of memos and emails.

Ultimately, the Port Authority justified paying for the Skyway repairs by calling the bridge an access road to the Lincoln Tunnel, even though they are not connected. In bond documents, they called the Skyway repair one of the “Lincoln Tunnel Access Infrastructure Improvements” projects.

The inquiries could lead to criminal charges under the Martin Act, or the investigations could result in civil action under the Martin Act or by the S.E.C., under federal securities laws.

For more of the New York Times story:

Four arrested in Halifax port for cocaine smuggled in container

Four men from South America were arrested in Montreal for trying to smuggle more than 46 kilograms of cocaine into the country, according to the Canada Border Services Agency.

Officers found the cocaine on a Montreal-bound container from Panama on May 2.

The goods in the container had been declared as suitcases, which investigators said was a high risk. After scanning them and finding irregularities, officials found vacuum-sealed packages containing cocaine hidden within the back wall of 10 suitcases.

For more of the CBC news story:

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