Cargo Business Newswire ArchivesSummary for June 29 through July 3, 2015:
Monday, June 29, 2015
Kuehne + Nagle to buy multimodal freight brokerage ReTrans
Kuehne + Nagel Group has made a deal to acquire ReTrans, a U.S.-based provider of multimodal transportation management solutions, according to a company statement.
Headquartered in Memphis, ReTrans is a leading U.S. non-asset brokerage provider of intermodal transportation, as well as full and less-than-truckload services in the U.S. and Canada. With more than 300 employees, the company operates in 68 locations and generates annual revenues that exceed $500 million, according to the K+N release.
"The transaction with ReTrans underlines our strategy to grow organically and through complementary acquisitions," said Dr. Detlef Trefzger, CEO of the Kuehne + Nagel Group. "Our customers will benefit from comprehensive end-to-end supply chain solutions in North America. Combined with our strong sea freight, airfreight and contract logistics operations, this transaction will accelerate our growth."
The transaction is still subject to approval by U.S. regulatory agencies. According to the statement, both parties agreed not to disclose the purchase price.
Kuehne + Nagel says the purchase will strengthen its overland strategy and its position as an end-to-end logistics provider in North America.
Ocean 3 cuts capacity on Asia-EU trades
The Ocean 3 shipping alliance formed by CMA CGM, CSCL and UASC is countering weak demand and critically low shipping rates by lowering capacity.
Ocean 3 announced it would withdraw one of their four Far East-North Europe strings for 12 consecutive weeks starting from the end of June.
The move is the latest sally in the ongoing Asia-Europe rate war, as carriers try to secure trade amid weak demand. The announcement is unexpected since it dovetails with the start of the summer peak season, which runs from late June to early September on the Asia-Europe trade.
The O3 withdrawal will remove around 12,000 TEUs weekly from the FENorth Europe service, representing about 20 percent of Ocean 3’s capacity and four percent of the total capacity on the route, according to Alphaliner.
Apart from the cost of idling the selected vessels, the carriers also risk losing market share to their competitors, who stand to benefit from the cargo shifts away from O3.
The alliance may be forced to make the capacity cut permanent, as cargo volumes are unlikely to pick up in September to support the resumption of regular services.
According to Alphaliner figures, the SCFI spot rate from Shanghai to North Europe fell to an all-time low of $205 per-TEU on June 19, which is not even sufficient to cover bunkering.
AAPA lauds freight focus of new DRIVE Act legislation
The American Association of Port Authorities praised the inclusion of several key port freight mobility priorities in new legislation that was approved this week by the U.S. Senate Committee on Environment and Public Works.
The Developing Roadway Infrastructure for a Vibrant Economy (DRIVE) Act of 2015 is a $278 billion, six-year transportation reauthorization bill that includes a national freight plan and a dedicated freight program, as advocated by AAPA.
According to an AAPA statement, key industry priorities included in the bill include:
A $13.5 billion program over six years for freight transportation
Inclusion of intermodal connectors to seaports in a re-designation of the National Freight Network
Expanded port eligibility in the Congestion Mitigation and Air Quality Improvement Program
$2.4 billion in competitive grants for a Major Projects Program to assist states and regions with large corridor and gateway transportation infrastructure projects
Requirements for MAP-21 freight planning provisions for state freight plans and state freight advisory committees, in which states may obligate up to 10 percent of their total annual apportioned funding for intermodal projects, using Highway Trust Fund dollars
A national freight plan that is to be revised every five years
AAPA President and CEO Kurt Nagle commended the bipartisan leadership and support provided by Senate EPW Committee Chairman Jim Inhofe (R-OK), ranking member Barbara Boxer (D-CA) and the other committee members in prioritizing freight infrastructure and proposing a dedicated program for freight.
"With port cargo activity now accounting for more than a quarter of the U.S. economy, America’s ports are the nation’s economic lifeline," said Nagle. "Bills such as this that prioritize freight movement and facilitate the efficient movement of goods into and out of ports help enhance America’s international competitiveness and provide enormous benefits to exporters, manufacturers and consumers across the nation."
Two crane accidents occur within a half hour at N.J. terminals
Two separate accidents involving cranes occurred within a half hour at New Jersey's port early Friday afternoon, resulting in minor injuries, officials said.
In both incidents, straddle carriers collided at separate shipping terminals.
The first collision occurred at 11:38 a.m. at the Port Newark Container Terminal, according to Port Authority spokesman Joe Pentangelo. The operator of one of the straddle carriers, a 30-year-old male from Rahway, was taken to University Hospital with back and neck injuries. The other operator refused medical attention.
While emergency personnel responded to that accident, the second crash between two straddle carriers occurred at Maher Terminals in Elizabeth at 12:05 p.m. A 28-year-old male from Staten Island suffered back injuries and was transported to Beth Israel Hospital.
"At this point, I can't see it as anything other than a coincidence," Pentangelo said.
COSCO orders 9 mega container ships for Asia-Europe
Chinese shipping group COSCO is planning to add mega-ships to its container carrier fleet, according to media reports.
COSCO has reportedly ordered nine 20,000-TEU ships, with an option for four more.
The vessels will be built at three different Chinese shipyards: Shanghai Waigaogiao Shipbuilding, Nantong Cosco KHI Ship Engineering and Dalian Shipbuilding Industry Co.
The ultra-large container ships were ordered just days after Maersk Line ordered 11 similarly sized vessels of 19,630-TEUs each.
The Maersk order came after CMA CGM announced it had ordered six 14,000-TEU ships, which came weeks after OOCL ordered six 21,000-TEU container carriers.
The rash of new orders will put more pressure on the already low rates on the Asia-Europe service, currently suffering from record low rates on over capacity.
In the period from May to late 2015, 630,000 new TEUs have been ordered in newbuilds of vessels of 10,000-TEUs or above, with the same level of newbuilds set for delivery in 2016 and 2017, according to a report from Drewry in late May.
The order books for 2018 and 2019 are also being filled, with the COSCO order representing the latest addition.
AAPA praises Senate for passing trade promotion authority
"The prosperity of the U.S. is inextricably entwined with that of the rest of the world and international trade agreements provide stability and equity enabling increased trade," according to Kurt Nagle, American Association of Port Authorities president and CEO regarding the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (TPA-2015).
The U.S. Senate just approved the trade bill that the House approved on June 18.
"AAPA believes this new trade legislation will help open the door to new markets for American goods and services, boost economic growth and generate additional well-paying jobs nationwide," Nagle added.
He said AAPA has strongly urged federal lawmakers to make TPA-2015 a priority so that the White House can begin finalizing global trade agreements that include the Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership.
TPA-2015 establishes rigid rules for international trade negotiations to help the U.S. deliver transparent, resilient and accountable trade agreements that will boost American exports, the AAPA statement said. Nagle praised Senate Finance Committee Chairman Orrin Hatch (R-Utah), Ranking Member Ron Wyden (D-Ore.) and House Ways and Means Chairman Paul Ryan (R-Wis.) for introducing the bipartisan, bicameral trade legislation, noting that ports provide critical transportation infrastructure for the movement of America’s exports and imports.
U.K.’s Peel Logistics aims to develop $1.5B in logistics facilities
U.K. property giant Peel has formed a new venture with Macquarie Capital with a goal of reaching $1.5 billion of managed logistics assets.
Operating under the Peel Logistics, the venture will be funded with capital from both partners and will target the development of logistics facilities for long-term ownership. It will also seek funding from institutional investors.
Peel Logistics has already submitted plans for a 175,000-square-foot speculative development at Liverpool International Business Park, and another 280,000-square-foot scheme at Port Salford.
Both developments are well positioned to benefit from Peel Ports’ $470 million investment in the new Liverpool2 deep-water container terminal at the Port of Liverpool, which is expected to drive more demand for logistics space in the region.
Plans to deepen and widen Port Everglades harbor won approval from the Army Corps of Engineers last week, clearing the way for the port to seek Congressional funding for the project, which will boost international trade in the region.
The Corps approved the plan to deepen the port's main channels from 42 to 48 feet, and also deepen and widen a section of the Intracoastal Waterway, in order to accommodate the super sized cargo ships that now navigate the world's trade routes.
"After almost two decades of study and research, we are confident that the Corps has developed a plan that keeps Port Everglades competitive globally so that jobs are sustained and created locally," said Broward County Mayor Tim Ryan. "The plan also uses innovative solutions to address valid environmental concerns that have been raised by environmental stakeholders."
An estimated $374 million will be funded through Port Everglades user fees, federal money and state funding.
Although the project awaits approval of funding from Congress, Port Director Steven Cernak said the port will move forward on design work, using its own funds. He said design would take up to two years and construction another three, although the job could well take significantly longer than five years.
Southeast ports boom would bode ill for some exporters
By Richard Knee
Southeastern U.S. ports stand to gain big-time from a southward migration of Asia’s manufacturing activity, which would strain container supplies for American exporters tied inextricably to West Coast gateways.
That message surfaced at an agricultural product shippers’ conference that took place in San Francisco in late June.
Traffic growth at Savannah and other southeastern ports such as Charleston, Jacksonville, Miami, Norfolk and Baltimore promises to accelerate because imports from Vietnam, India and Bangladesh – where many manufacturers have set up shop as labor and real estate costs in China have soared – typically move through the Suez Canal and across the Mediterranean and the Atlantic, according to a number of speakers at the annual gathering of the Agriculture Transportation Coalition, an advocacy organization based in Washington, D.C.
The Southeast also offers a "business-friendly" environment that shippers and their service providers find attractive, speakers said.
The southward flight of Asian manufacturing and thus of sourcing would cause shipping lines to shift vessels from West Coast to East Coast ports, which would make it difficult for shippers captive to the former to find containers, said Thorsten Meincke, senior vice president of global sea freight for Kuehne+Nagel, which offers transportation-related services such as freight forwarding, customs brokerage and logistics.
Increasingly, cargoes arriving in port are transloaded into 53-foot containers or trailers for overland movement so emptied ocean containers can be quickly repositioned to carry more goods to the U.S., said Meincke, whose company is globally active and based in Schindellegi, Switzerland.
The manufacturing and sourcing shifts are not the only factor driving traffic growth on the U.S. East Coast. Atlantic ports, most notably Savannah, have seen their volumes shoot up over the past 13 years, especially with episodes of congestion and labor-management tension out West prompting importers of Asian goods to shift some cargoes from the traditional ocean-land route via California, Oregon and Washington state to all-water movements through the Panama Canal.
Savannah has shot past Oakland and Seattle during that span to trail only Los Angeles, Long Beach and New York/New Jersey in container volumes among U.S. ports.
West Coast port officials, terminal operator executives and union leaders told the AgTC gathering that they know they must do better at serving their customers. Port executive directors Jon Slangerup of Long Beach, Gene Seroka of Los Angeles and Chris Lytle of Oakland vowed a more hands-on approach notwithstanding the landlord role (rather than operating status) of their respective port authorities.
One thing that shippers will watch closely is whether terminal operators and dockworkers on the West Coast will begin contract negotiations earlier than usual as their counterparts on the East and Gulf coasts are doing.
The current contract between the United States Maritime Alliance and the International Longshoremen’s Association, affecting dockworkers at Atlantic and Gulf ports, won’t expire until 2018—but they are reportedly talking about extending the pact through 2025.
The West Coast contract between the Pacific Maritime Association and the International Longshore and Warehouse Union will expire in 2019. Asked if the union would consider a similarly early start to talks toward the next contract, mainland vice president Ray Familathe at first said, "Absolutely," but later took a different stance, saying negotiations toward the next pact are four years away.
That didn’t seem to please shippers at the gathering but some of them, including AgTC executive director Peter A. Friedmann, noted that the ILWU deserved credit for sending high-level representatives to the conference while the PMA sent no one.
The two-day event drew about 450 participants, some 250 of them representing shippers with annual aggregate volume of 2 million TEUs of containerized cargoes plus untold millions of TEUs’ worth of products moving on bulk vessels, Friedmann said.
Port of Oakland adopts $470M budget
The Port of Oakland commissioners approved a $470 million port budget for FY2016, effective July 1, according to a port statement.
The budget includes $167 million for capital improvements at the Northern California harbor, to be focused in two areas:
$32 million for continuing development of port property at the former Oakland Army Base. The port is constructing a major West Coast transport and logistics center on land adjacent to its marine terminals designed to significantly increase cargo volume.
$73 million for Oakland International Airport runway safety improvements and Terminal 1 Renovations.
The port’s 2016 budget is 6.7 percent lower than the budget adopted for FY 2015, according to the statement. It anticipates a 4.9 percent operating revenue increase to $330.7 million. Operating expenses are expected to rise 3.7 percent to $193 million.
The Port of Oakland said it operates three business lines—maritime, aviation and commercial real estate (which includes Jack London Square). Port revenue is used to pay operating and capital expenses and for debt service.
In response to high customer demand, Crowley Maritime Corporation’s liner services group has placed orders for additional equipment, including hundreds of new chassis and containers for use in the company’s U.S., Puerto Rico, Caribbean and Central America trade lanes, according to a company statement.
This latest equipment acquisition includes nearly 400 gensets – both nosemounts and underslungs – which will begin arriving in Jacksonville between July and September, Crowley says. They are also buying 700 dry containers (45-foot) and 525 extendable chassis (40-45-foot), all expected no later than late September. Slated for delivery by November are 500 dry containers (53-foot); 500 chassis (53-foot); 325 chassis (20-foot) and 1,360 chassis (40-foot).
High-cube containers are also in the mix, including 75 reefers (40-foot), which will be delivered to Crowley in Limon, Costa Rica, by late September before the heavy Central America reefer season.
"Fulfilling the needs of our customers continues to be a top priority," said Crowley’s John Hourihan, senior vice president and general manager, Puerto Rico services. "As a whole, Crowley is working hard to improve its shipping and logistics services, first and foremost by delivering top-quality equipment in the trade lanes where it is most needed."
G6 Alliance announces service improvements on Asia-N. America route
Members of the G6 Alliance—APL, Hapag-Lloyd, Hyundai Merchant Line, Mitsui O.S.K. Lines, Nippon Yusen Kaisha and Orient Overseas Container Line—have announced service enhancements on the Asia-North America (Pacific Southwest) trade to meet a recent boost in demand.
The new G6 enhancements include:
Central China 2 (CC2) Service—additional Pusan call
The CC2 service will be upgraded to include a permanent Pusan call. Transit times from other origins remain unchanged. The new port rotation: Ningo - Shanghai - Busan - Long Beach - Ningbo. The OOCL Kuala Lumpur will launch the service, departing Ningbo on June 28 and is expected to arrive in Long Beach July 16.
South China 1 (SC1) Service—additional Kaohsiung call
The SC1 service will be upgraded to include an additional eastbound Kaohsiung call. The new port rotation: Xiamen - Chiwan - Yantian - Kaohsiung - Los Angeles - Oakland - Kaohsiung - Xiamen. The APL Houston will depart Xiamen on July 1, and is expected to arrive at the Port of Los Angeles July 20.
The G6 Alliance offers a variety of service between Asia and Europe, Asia and North America as well as on the trans-Atlantic, covering all major port pairs with weekly sailings.
Hampton Roads truckers oppose terminal appointment system
The Tidewater Motor Truck Association, a group representing local trucking companies, told the Virginia Port Authority it would oppose a container-terminal appointment system until truck turn times are consistently between 60 and 70 minutes or less.
"There's a lot of questions that we think need to be answered," said Frank Borum, president of the association.
The group sent a letter last week to John Milliken, board chairman, and Alan Diamonstein, chairman of the board's Growth and Operations Committee.
It seeks clarification on a number of issues, including limits to the number of appointments a company can get during prime hours, penalties and computer outages. The letter followed a closed-door "port productivity summit" on Monday.
"We are being very mindful of the concern of the motor carriers as it relates to the appointment system," Joe Harris, a VPA spokesman, said in an email Friday.
A voluntary appointment system is currently in place at Virginia International Gateway in Portsmouth, and a new appointment system is planned for Norfolk International Terminals.
The West Coast labor contract impasse is four months gone and cargo volumes are again rising, but a bitter aftertaste persists for shippers, at least those in the agricultural sector.
That became clear at an annual conference that the Agriculture Transportation Coalition, a Washington, D.C.-based advocacy organization for farm and forest product exporters and importers, held in San Francisco in late June.
The International Longshore and Warehouse Union, which represents West Coast dockworkers, marine clerks and foremen, drew perhaps the heaviest fire during the two-day gathering. But shippers also stressed they were less interested in pointing fingers than in seeing their goods hauled to port, loaded onto vessels and delivered to customers in timely, reliable fashion.
And, in fact, the animosity toward the ILWU seemed to dissipate over the course of the conference, especially when union officials took the dais and appeared to take to heart what the shippers had to say.
Ray Familathe, the union’s mainland vice president, said he was "quite moved" when Nina Solari, vice president of food safety and quality control for Avanti Nut Co., told of steep losses that port service delays caused to her company and to Washington state apple exporters. Avanti Nut is a family-owned and operated walnut producer in Stockton, Calif.
"Nina got to me. You’re a small farmer. You want to get your goods to market. Agriculture is not secondary to the ILWU," Familathe said.
"I don’t really care who shot the sheriff," said Perry Bourne, director of international transportation and rail operations for Tyson Foods, a poultry and meat products shipper based in Springdale, Ark. "We’re tired of diverting cargo. But we had to keep shipping, because we didn’t want to lose our customers."
Moreover, the newest member of the Federal Maritime Commission, William Doyle, noted that port congestion stretched from "long before the end of 2014 and into the first quarter of this year," and was attributable to such factors as chassis shortages, terminal closures and long truck lines.
He also took aim at shipping lines, saying their tariffs lacked clarity and shippers and truckers should not have to pay for cargo demurrage or detention not of their own doing. He drew applause when he called such surcharges "flat wrong."
Whether shippers get the service improvements they want, especially at the ports, is a long-term question. Just how long remains to be seen. As some speakers at the gathering noted, there are factors such as demographics, weather, politics, currency exchange fluctuations and even mainstream-press coverage that affect ports, terminal operators, dockworkers, carriers and others in the supply chain.
Port of L.A. to start $67M upgrade of Yusen Terminals
The Port of Los Angeles will start work this summer on a two-year, $67 million project to upgrade several berths at Yusen Terminals, according to a port statement.
The Los Angeles Board of Harbor Commissioners has awarded Manson Construction a $44.6 million contract to upgrade berths and backlands at Berths 212-224.
"This project consists of strategic improvements to make Yusen a more agile terminal and strengthen our competitive edge," said Executive Director Gene Seroka. "In addition to making the best use of port property, it incorporates green features and practices that further our commitment to the highest environmental standards."
The port notes the $67 million project cost includes funding for an on-dock rail project that will be completed under a separate contract in 2016. Additionally, Yusen estimates it could invest more than $60 million in support of the project. About $8 million of the port’s costs will be paid by California Proposition 1B Transportation Bond funds.
Yusen runs the 185-acre port container terminal under a long-term lease that extends through 2026. The project is part of the larger capital program at the Port of Los Angeles that’s aimed at enhancing berth, gate and rail efficiencies at all Los Angeles marine terminals. Over the next five years, the port plans to invest more than $800 million in its facilities, the statement said.
The project consists of upgrading wharf, and backland infrastructure within the terminal’s existing footprint to enhance Yusen’s ability to service the biggest ships in the trans-Pacific trade lanes. The improvements will allow Yusen to simultaneously work three container ships carrying up to 13,000, 11,000 and 6,500 TEUs respectively, and ensure cargo flows during peak periods when ships call at all three berths.
The project includes a number of enhancements, including dredging Berths 214-216 from 45 to 53 feet and Berths 217-220 from 45 to 47 feet. The port will add up to four new ship-to-shore gantry cranes, and raise some existing cranes to equip the terminal with up to 14 operating Post-Panamax cranes, including eight Super Post-Panamax cranes with a maximum outreach of 197 feet or 22 container rows across.
CMA CGM signs two deals with China to boost trade
French shipping giant CMA CGM will sign two deals with China, positioning itself to benefit from an expected increase in trade between Asia and Europe.
The carrier said it will sign a $1 billion financing agreement with Export-Import Bank of China (CEXIM) and an agreement with China Merchants (CMHI) to explore joint investments in the nation’s "One Belt, One Road" initiative to create an infrastructure network to boost trade.
One Belt, One Road involves approximately 300 major projects that link Asia to Europe via road, rail, electricity and Internet networks, gas and oil pipelines, and other sea and land infrastructure.
Chinese President Xi Jinping said in March he hoped annual trade between China and the countries involved in One Belt, One Road would exceed $2.5 trillion in a decade.
"One Belt, One Road is most certainly the world's most ambitious infrastructure development project," said CMA CGM in a statement on Tuesday.
CMA CGM, which opened its first office in Shanghai in 1992, says it has a 10 percent share of the container shipping market in China.
Quebec hopes to attract billions in private investment to develop its maritime infrastructure and create 30,000 jobs by 2030, according to Premier Philippe Couillard.
Couillard said his government's $9-billion maritime strategy is a core initiative of his plan to boost Quebec's economy and make it a primary international point of entry into eastern North America.
A major part of the plan calls for the creation of a maritime transportation logistics hub in Contrecoeur, about 60 kilometers north of Montreal, and another one in Vaudreuil-Soulanges, just west of the city.
"Quebec has a unique opportunity to establish itself as the international door of entry into eastern North America with regard to goods and transit," he said.
Couillard said he hopes $4 billion will come from private-sector companies that will invest in projects along the St. Lawrence River relating to industries such as tourism, fishing and transportation.
It is unclear what part the federal government will play in Quebec's maritime plan, as the country's ports fall under federal jurisdiction.
Cargo ships asked to slow down to prevent whale strikes
The Coast Guard is requesting that cargo ships slow down because more whales are making their way to the San Francisco coast.
Marine experts said the large schools of fish near the coast beneath the Golden Gate Bridge is a concern because whales are following them, occupying shipping lanes that large cargo ships pass through daily.
"Wherever the fish are is where you'll find the whales," said Mary Jane Schram with the National Oceanic and Atmospheric Administration.