Cargo Business Newswire Archives
Summary for June 30 through July 4, 2014:

Monday, June 30, 2014

Port of Long Beach taps former FedEx exec to lead port

The Long Beach Board of Harbor Commissioners announced it will vote Monday, June 30, to appoint Jon W. Slangerup, a former president of FedEx Canada, as the Port of Long Beach's new chief executive.
"The Port of Long Beach is investing billions of dollars in advanced technology and infrastructure development, and I look forward to working with our team to flawlessly execute our capital plans and deliver exceptional value to our customers and community stakeholders to ensure the continued growth and expansion of our port," said Slangerup.
Slangerup, who the board says has extensive experience in global logistics and green technology, will succeed former executive director Chris Lytle, who left the port nearly a year ago to lead the Port of Oakland.
During the last seven years of a 20-year career with FedEx, the veteran executive served as president of FedEx Canada from 1993 to 2000, transforming it from a small regional operation into Canada's leading international express logistics firm, the statement said.
Since FedEx, Slangerup has served as a CEO and sometime investor of environmental technology companies that specialize in marine ballast water treatment, renewable energy, and distributed power generation. He currently serves on the board of directors for Mxi Technologies and AgraSystems International, on the board of trustees for Embry-Riddle Aeronautical University, and on the executive advisory board for Moelis Capital Partners.
"After an extensive, nationwide search, the Board of Harbor Commissioners is very pleased to recommend the appointment of Jon Slangerup as the Port's new Chief Executive," said Doug Drummond, president of the Harbor Commission. "He's an extremely capable leader, proven team-builder and expert at managing a world-class organization. In our highly competitive, quickly changing industry challenged by major environmental and energy issues, he's the perfect person for the job."
The Slangerup appointment follows on the heels of the Port of Los Angeles hiring its new executive director, Gene Seroka, a shipping executive who recently led the Americas region for American President Lines.
With the imminent opening of the expanded Panama Canal and the after effects of the 2008 recession, the port says it faces pressures to grow business and "green" operations.
Along with the Port of Los Angeles, the Port of Long Beach forms the country's busiest port complex. More than 140 shipping lines call at the port, with connections to 217 seaports worldwide. The port handles trade valued at more than $180 billion each year and supports hundreds of thousands of Southern California jobs.

NRF/NAM study: West Coast dockworker strike could cost $2.5B per day

A new study indicates the U.S. economy could lose as much as $2.5 billion a day if contract talks on behalf of more than 13,600 West Coast dockworkers break down before the contract expires on July 1 and a West Coast port shutdown occurs.

Conducted jointly by the National Association of Manufacturers and the National Retail Federation, economist researchers at the Interindustry Forecasting Project at the University of Maryland found that the economic consequences of a port shutdown would grow with time.

The Pacific Maritime Association and the International Longshore and Warehouse Union are currently negotiating a new contract for West Coast longshore workers to replace the one that expires Tuesday. Since talks are often contentious, retailers and manufacturers are worried that a strike may be imminent.

"A protracted dispute between the negotiating parties could lead to reduced or shuttered terminal operations for an extended period," the joint study warned. "If such disruptions occur, the economic impact would be significant and widespread."

The report said a five-day strike would decrease GDP by $1.9 billion a day; disrupt 73,000 jobs; and cost the average household $81 in buying power. It said a 20-day work stoppage at West Coast ports would cause the GDP to fall by $2.5 billion a day;
disrupt 405,000 jobs; and cost the average household $366 in purchasing power.

ILWU spokesman Craig Merrilees said in a CNBC article on Friday that the figures released by NRF this week are "simply a re-hash of exaggerated and discredited figures that are part of a PR effort sponsored by low-wage, anti-union companies who are hoping to generate public fear and anxiety."

"In fact, the negotiations are proceeding normally with talks characterized by both sides as 'positive' and 'productive.' Historically, previous labor agreements between port workers and employers have not been reached prior to contract expiration dates, but agreements have always been resolved as soon as possible afterward," added Merrilees.

The PMA told CNBC it expects talks to continue past Monday's deadline, possibly until mid-July.

Canadian cargo ships could face higher fees at U.S. Great Lakes ports

The U.S. Department of Agriculture has proposed a big increase of inspection costs and the end of annual inspection caps on Canadian cargo ships sailing the St. Lawrence Seaway and Great Lakes.

The USDA has proposed to raise the fees for agricultural quarantine and inspection services of ships from $496 to $825 per inspection. The agency would also eliminate the annual fee cap of charging a maximum of 15 times per vessel.

According to Canada's Chamber of Marine Commerce, the proposed fee could increase a ship's annual cost of doing business by as much as 238 per cent.

"They are unjustified on the grounds of environmental risk and would make Canadian Great Lakes vessels less competitive against U.S. Great Lakes ships carrying the same products in the same waters," said the chamber's president, Stephen Brooks, in a statement.

The United States Department of Agricultural Animal and Plant Health Inspection Service says the hike is needed to recover the costs of performing the inspections. The fee increases were proposed in April and with the comment period ending Tuesday; a final ruling is expected in December.

The Chamber of Marine Commerce has filed an official complaint with the U.S. Department of Agriculture, the agency behind the proposal. It says Canadian ships should be exempt since they never leave the bi-national Great Lakes area.

For more of the CBC News story:

News survey updates the number of containers lost at sea

This week the World Shipping Council released an update to its survey and estimate of containers lost at sea.

The council says the current survey adds data for years 2011, 2012 and 2013 to the earlier 2011 WSC survey, which covered years 2008, 2009 and 2010.  
The WSC approximates that for the six-year period from 2008 to 2013, 546 containers were lost at sea on average each year, excluding catastrophic events. The report said that 1,679 containers were lost at sea each year counting catastrophic events, such at the MOL Comfort disaster.

The report calls out years 2011 and 2013, noting each saw rare tragic events that resulted in complete and total ship losses.
"Every container loss is one the industry would like to avoid," said Chris Koch, WSC president and CEO. "The updated report not only provides more accurate and up-to-date data on the issue, but also identifies those initiatives the industry is supporting to increase container safety and reduce such losses. While nobody can eliminate the challenges of bad weather or the risk of vessel casualties at sea, care and cooperation amongst all those who pack, handle, weigh, stow and secure containers is needed to improve safety."

Cargo ship sinks of Chittagong Port

A lighter ship carrying around 1500 tons of steel coils sank in the outer anchorage of Chittagong Port, the main port of Bangladesh.

The vessel MV Sunderban-1 capsized around 7:15 a.m. on its way to Narayanganj from the port, according to radio control operators at the Chittagong Port.

Nabi Alam, general secretary of the Nabi Alam Bangladesh Lighterage Sramik Union, said the vessel started to it lean to one side as the goods in it shifted after being hit by a big wave.

All 12 crewmembers jumped in the waters when it started to sink. Four, including the master, swam to a nearby port-bound lighter vessel and eight swam to another vessel, he said.

For more of The Daily Star story:


Tuesday, July 1, 2014

Port of Charleston dockworkers authorize strike, stay on job

Members of an International Longshoremen's Association local that represents approximately 14,500 workers voted to approve a strike at Port of Charleston docks last week, but workers have not yet walked off the job, officials said.

The local labor contract is separate from the master contract ratified last year by the ILA and U.S. Maritime Alliance.

Local 1422 ILA President Kenneth Riley said it is not unusual for a union to authorize a strike at this point in the process and there is not imminent threat of a strike, and that it has requested federal arbitration.

"The strike vote gives us the authorization if it comes to that," Riley said. "We don't anticipate that, and we are nowhere near that. The ILA remains optimistic and is hoping for similar outcome this time around. With that in mind, the ILA has invited the Feral Mediation and Conciliation Services to assist to break the stalemate."

The longshoremen's union has not taken action to halt cargo movement at the local marine terminals, according to Billy Adams Jr., executive director of the South Carolina Stevedore Association.

Adams said that ILA workers have threatened to walk off the docks in the past.

Credit Managers' Index from NACM drops to 56.1 reading in June

The Credit Managers' Index reading from the National Association of Credit Management in June was 56.1 down from May's 56.8, but still solidly in the expansion zone, according to an NACM statement.

The services sector experiences a sharp decline, dragging the index down, and the manufacturing sector was flat, for the second month in a row.

"The drop was unexpected, which has suddenly become a common refrain as some other data releases are starting to show similar trends," said NACM Economist Chris Kuehl, Ph.D.

"It now appears that the economy contracted by far more than originally reported," Kuehl said, referring in part to the latest revision of first quarter GDP. "Add to this the latest data on durable goods and there is something amiss. Consumer confidence numbers have recovered to levels not seen since the start of the recession, but that renewed level of enthusiasm has not been enough to pull the economy forward, or so it would seem."

The combined index of favorable factors weakened slightly from 62.7 to 62.4, NACM reports. The biggest drop was in sales, which fell from 65.6 to 63.9.

The most troubling sign is that companies seem to be getting into more distress and that might affect future performance. The unfavorable factor index slipped by almost a full point, from 52.8 to 52, but the bigger news was the change in some of the individual factors. Rejections of credit applications shifted from 52.7 to 52, suggesting the existence of more desperate applicants.

"When there are more applicants and more rejections," Kuehl explained, "it is a signal that more companies in financial distress are seeking credit in the hopes that somebody will help them survive."

Port Metro Vancouver to shift container truck traffic with expanded hours

Port Metro Vancouver is trying to shift its truck traffic to non-peak hours, since it just extended the hours at its Vanterm, Deltaport and Centerm terminals to 1:00 a.m., five days a week, according to a port statement

In a further effort to reduce daytime traffic, the port will also charge a $50 fee to truckers who continue to offload cargo before 4:30 p.m.

The new daytime reservation fee will encourage truckers to move containers at night, according to Maksim Mihic, the general manager of DP World, the terminal operator at Centerm.

The amount was set after an analysis of operating costs by third-party firm KPMG, the statement said.

Eric Waltz, president of TSI Terminal Systems, which runs Vanterm and Deltaport, said the change will "create more capacity for container activity, create long-term prospects for growth and will add more jobs over time."

Manny Dhillon, a spokesman for the United Truckers Association, said the fact the port operators have decided to double their working hours indicates just how bad waiting times are at the terminal.

Dhillon said the $50 fee was "discouraging for the customers and the trucking companies."

These initiatives were included in a list of possible responses to the strike in the spring of container truckers, who were frustrated over with long wait times, pay and claims of intimidation on the job.

Meanwhile, non-unionized container truckers called Sunday for a change from being paid per trip to being paid hourly.

The "cooling-off" period is soon to expire, as both sides anticipate the recommendations of federal mediator Vince Ready.

For more of the Vancouver Sun story:

Great Lakes ports group weighs in on USDA-proposed fee hike on cargo ships

Laura M. Blades, the director of public affairs of the American Great Lakes Ports Association, sent a rebuttal to our coverage of a CBC article regarding the possible impact of higher inspection costs proposed by the USDA on Canadian cargo ships sailing the St. Lawrence Seaway and Great Lakes.

Blades points out the proposed amendment pertains to ALL commercial vessels, commercial trucks, commercial railroad cars, commercial aircraft and international air passengers regardless of country of origin. The commercial vessels include U.S. and Canadian Lakers, as well as international ships, she said.

The proposal would not affect the competitive nature of U.S./Canadian vessels carrying the same products in the same waters, Blades said, since all vessels would be affected by the fee increase. She emphasized that the fee hike is flag neutral, although Canadian Lakers will pay more - in total - than American Lakers because they command more than 90 percent of the Cross-Lakes trade.

Blades says American vessel operators are just as against this change as Canadians. On June 12, she says, the Lake Carriers' Association also issued a statement regarding the changes, noting that their vessels do NOT leave the Great Lakes. Both associations state that their dry bulk cargoes would be unlikely to nurture invasive pests.

The LCA letter request that the fee remain at the current level and ONLY be collected when an actual inspection is performed, Blades reports. The LCA states that due to the composition of their cargo base, their vessels are not inspected, but the fee is still assessed.

Blades writes that as of June 11, industry stakeholders have formed an international coalition to address the fee increase/cap elimination, and points to a follow-up CBC article.

(Ed. Note: Please link to above bolded words:

Kentucky sues Foss Maritime employees over bridge destruction

A federal judge ruled Friday that a case filed by the Kentucky Transportation Cabinet against Foss Maritime employees would be heard by a state circuit court.

KTC has sued seven current or former employees for their part in the crash of the Delta Mariner, a cargo ship owned by Foss Maritime, into the Eggners Ferry Bridge on the night of Jan. 26, 2012.

An entire span of the bridge was destroyed and was replaced.

KYTC is suing to recover more than $7 million in damages on behalf of the state.

For more of the Lane Report story:


Wednesday, July 2, 2014

Vancouver B.C. port cargo rises on U.S. West Coast contract talks

Port Metro Vancouver, Canada's largest port, is experiencing higher-than-normal cargo volumes since some shippers have diverted cargo there prior to the July 1 expiration of the dockworker contract at U.S. West Coast ports.

Both the International Longshore and Warehouse Union, representing labor in the talks, and the Pacific Maritime Association, representing employers, have pledged to keep negotiating the new contract past 5 p.m. PDT on Tuesday, when the prior six-year contract ended.

Labor negotiations at the West Coast ports usually extend beyond the contract expiration date, and this year is no exception. No resolution is expected for weeks as the talks seek to resolve contentious issues, such as whether workers should carry more of the high cost burden of premium health care plans. However, the uncertainty issue has some shippers rerouting more containers through Canadian ports, particularly Port Metro Vancouver.

"What's been happening over the last few weeks is shippers have been diverting cargo into Canadian ports," Stephen Brown, president of Chamber of Shipping of British Columbia, said on Monday. "So the regularly scheduled ships coming into West Coast ports here, ... they've got quite a heavy load on them."

The extra volume, which is being offloaded in Canada and transported across the border by truck and rail, is coming only three months after Port Metro Vancouver’s four container terminals were shut down after truck drivers walked off the job over low pay and long wait times. Brown said the backlog has been cleared, but there’s not much room for more volume should U.S. labor negotiations stall and lead to a ILWU strike.

"We don't have a lot more capacity to offer at the moment and certainly if there were some cargo diversions they'd have to be on ships already coming to Canadian ports," he said. "There's not the capacity to start diverting ships scheduled for U.S. ports into Canadian ports."

For more of the Reuters-Canada story:

Army Corps of Engineers: Some locks on Upper Mississippi closed due to flooding

Eleven locks and dams will likely become impassable on the mid- and upper-Mississippi River due to rising flood waters this week, which could force the closure of the river from Bellevue, Iowa, to Saverton, Missouri, according to the U.S. Army Corps of Engineers.

As of Tuesday afternoon, the locks at Muscatine, Iowa; New Boston, Illinois; and Gladstone Illinois were shut down to commercial and recreational traffic, according to the website of the Army Corps’ Rock Island district. It said the locks are inoperable due to the high water impacting machinery or overtopping the miter gates.

At least 80 barge tows could be affected since they are anticipating the most extensive shipping shutdown on the river since 2008, said Ron Fournier, public affairs officer for the Corps’ Rock Island district. A shipping source said barge loadings could be delayed for seven to 10 days.

"The river levels will increase where the river goes over the miter gates and that makes them inoperable. This new water that’s coming could cause some problems," Fournier said, adding there was no estimate for when the locks would be reopened.

The Mississippi River is the main shipping artery to the U.S. Gulf Coast, from which 60 percent of all U.S. corn, soybean and wheat exports leave the country.

Near-record rains caused extensive flooding last week in parts of Minnesota, Iowa and the Dakotas. The high water caused lock closures at Minneapolis and St. Paul, which prevented barges from being loaded and slowed the shipment of grain and scrap metal.

For more of the Reuters story:

UPS widens reach with China-Europe rail offering

UPS announced the addition of a Full Container Load rail solution to its China-to-Europe service, another step in its goal to expand its global freight forwarding services.

The package-shipping giant said it now offers rail service from Chengdu, China, to Lodz, Poland, and from Zhengzhou, China, to Hamburg, Germany. Linking the rail transport with a truck network, UPS can provide service to customers throughout China and Europe, the statement said.

The company notes its new rail service is up to 50 percent faster than ocean freight and up to 70 percent less costly than airfreight.

"We are excited to add our rail option for our customers in one of the world's largest freight lanes to complement our existing ocean and air freight and package capabilities," said Keith Andrey, UPS vice president of ocean freight and multimodal services. "This gives customers access to a broader transportation portfolio to better meet their business needs."

According to a recent Seabury survey, 71 percent of customers expect a moderate to strong swing to lower cost modes in the next 1-3 years, and UPS says the service is timed to exploit the cost-saving shift.

In 2013, UPS expanded its Preferred Less-Than-Container Load ocean freight service from Asia to Mexico and from Europe to the U.S. and Canada, and introduced UPS Worldwide Express Freight service to and from the UAE.

OOCL ranks highest in 2014 AgTC Ocean Carrier Performance Survey

The Agriculture Transportation Coalition just released the results of its 2014 Ocean Carrier Performance Survey and its top ranked carrier for 2014 is OOCL (USA), Inc.

The recognition was accepted last week at the coalition’s annual meeting by OOCL’s Edward Zaninelli, vice president of Westbound TransPacific trade and Andy Lumley, vice president of customer service in North America, according to an AgTC statement.

Hamburg Sud and Evergreen both ranked just behind OOCL, and AgTC also recognized their 2014 performances at the meeting.

AgTC surveyed its members — basically U.S. agriculture and forest products exporters and importers of dry and refrigerated products, that ship via dry and refrigerated containers — to judge which shipping line exceled in service performance in 2014. The complete rankings are not released publicly, but carriers can contact AgTC to receive the complete survey results.

The survey collected data on cargo origins in the U.S, and Canada, global cargo destinations and the volume of cargo/containers shipped each year.

Participants in the Ocean Carrier Performance Survey rated ocean carriers in 11 categories of service, including availability of correct sizes/types of container equipment; availability of slots on vessels and equipment needed each week by port and service string; overall document accuracy and efficiency; accuracy in shipment rating and bill of lading release/turn time; willingness to accept shippers' export documentation as close to cargo cut-off as possible; and advertised vs. actual vessel schedule and transit time.

18 crewmembers sick on cargo ship anchored off Cape Canaveral

U.S. Coast Guard helicopters were en route Tuesday afternoon to a 584-foot cargo ship that reported 18 of 21 crewmembers were suffering from severe food poisoning-like symptoms.

The plan is to medically evacuate the ailing crewmembers from the South Korean-flagged bulk carrier. The JS Comet is anchored 3 nautical miles off the coast Cape Canaveral.

For more of the Bay News 9 story:


Thursday, July 3, 2014

PMA and ILWU continue talks after existing contract expires

Negotiations for a new labor contract covering almost 20,000 dockworkers at 29 West Coast ports will continue even though the six-year labor agreement expired July 1, according to a joint statement from the Pacific Maritime Association and the International Longshore and Warehouse Union.

Although there will be no contract extension, both parties said cargo will keep moving and normal operations will continue at the ports until an deal can be hammered out between the employers and dockworkers.

"Both sides understand the strategic importance of the ports to the local, regional and US economies, and are mindful of the need to finalize a new coast-wide contract as soon as possible to ensure continuing confidence in the West Coast ports and avoid any disruption to the jobs and commerce they support," the joint release said.

The parties have been negotiating West Coast collective bargaining agreements since the 1930s.

Drewry: Shipping lines must cut more costs on falling freight rates

In terms of the top 20 container carriers, the gap is widening between those few that are employing strict cost cutting measures and those that are not, as the industry continues to struggle with decreasing freight rates, according to Drewry Maritime Research.

Drewry's latest quarterly issue of Container Forecaster forecasts that average freight rates will decline year-over-year. Looking at trans-Pacific trade alone, the analysts say shipping lines have lost approximately $1.25 billion in annual revenue due to the lower annual contracts signed with Beneficial Cargo Owner clients in May. And new annual contracts on the Asia-Europe trades signed this year are about $150-$200 per-FEU lower than deals made in 2013.

Drewry said lines that are cost cutting through strategies such as slow steaming and redesigning networks are more likely to be able to offer lower rates to their customers. Although industry unit costs per TEU are predicted to drop by 2.5 percent this year, carriers will still have to fight to make a profit since Drewry is also projecting unit revenues will decline by a similar amount.

Container Forecaster said the demise of P3 Alliance is unfortunate in that it was a chance for carriers to stabilize capacity and boost efficiency on the main trades.

"It could be that the huge task of adequately matching supply and demand at the global level and on a consistent basis – which ultimately helps to drive freight rates - is simply beyond the industry, and we do not mean this as a condescending remark," said Neil Dekker, Drewry's director of container research. "This is an industry where accurate volumes on many trade lanes are unknown – simply because there is no unified and agreed system of accounting. This is an industry where relatively few shippers can provide accurate volume forecasts. This is an industry where the constant desire to launch bigger ships in order to reduce unit costs can only ever logically be at odds with the aim of matching supply and demand." 

U.S. DOT set to cut Highway Trust Fund monies to states as of August 1

If Congress doesn't find a way to replenish the Highway Trust Fund within the next few weeks, states can expect rationing of available funds starting in August, according to a U.S. Department of Transportation statement released July 1.

The Highway Trust Fund has a projected shortfall of more than $15 billion per year, the statement said, with the demand for the money far exceeding its revenues allotted from federal gas taxes.

The DOT noted the fund will be far too depleted to cover all the approved projects, and said that letters have gone out to each state outlining the funding cuts that will start August 1. The letters emphasize the need for Congress to act in this matter.

Each year, the U.S. Department of Transportation apportions funding to the states for their highway programs based on formula established in Federal law. Starting in August, DOT will use those same percentages to determine how much each state will receive of what is left in the Trust Fund. 

Reimbursements to states will be limited to the available cash in the trust fund, and new revenues will be added every two weeks as money from the gas tax flows into the Fund.

"There is still time for Congress to act on a long term solution," said Secretary Foxx. "Our transportation infrastructure is too essential to suffer continued neglect, and I hope Congress will avert this crisis before it is too late."

The political parties want to resolve the issue, but haven't come to a consensus on how. One new bipartisan bill in the Senate reportedly calls for raising the gasoline tax, but Republicans in the House are opposed to tax increases.

N.J. Senate Committee has concerns about new chair of port authority

Members of the N.J. Senate Judiciary Committee are bringing up questions about whether John Degnan is qualified to chair the Port Authority of New York and New Jersey, voicing concerns about the nature of his ties to Governor Chris Christie, who nominated him for the position in late April.

On Tuesday, Democrats vetting John Degnan questioned his independence from the governor, who hired Degnan's son on two occasions — formerly as a federal prosecutor and currently as the head of the state Commission of Investigation. Additionally, members of the Senate Judiciary Committee said they were worried about Degnan's involvement in a 2010 controversy regarding judicial independence.

Degnan served as a replacement on the governor's judiciary advisory panel after the whole committee resigned in protest after Christie refused to reappoint state Supreme Court Justice John Wallace, whom the governor accused of liberal activism.

Degnan, a retired chief executive of the Chubb Corp. who was state attorney general from 1978 to 1981, said he would address lawmakers' concerns during his confirmation hearing, scheduled for July 10.

"I'm aware of the concerns, and I look to forward to having the chance to respond to them at the hearing," Degnan said.

State Sen. Raymond Lesniak (D-Union), a Judiciary Committee member, said that by accepting a seat on the judicial advisory panel in 2010, Degnan helped give the appearance of legitimacy to Christie's refusal to renew Wallace's appointment on ideological grounds.

"John Degnan gave cover to Governor Christie by joining his Judicial Advisory Committee after its members resigned to protest Christie not re-nominating Justice Wallace," Lesniak said in a statement.

For more of the story:

Brazilian customs officers find $4.5M worth of artwork in container

Upon inspecting a shipping container sent to Rio de Janeiro from the US, Brazilian customs officials found 20 works of contemporary art worth an estimated $4.5 million, the AP reports.

The two containers, shipped from Florida, were marked as containing the belongings of a 75-year-old Brazilian woman.

Brazilian authorities allege that a company was using the woman's move to evade import and sales taxes on the artworks.

Among the 20 pieces are works by Rio de Janeiro–based artist Beatriz Milhazes, São Paulo–based street art duo Otavio, and Gustavo Pandolfo. One work is a $900,000 sculpture by Rio-based postwar artist Sérgio de Camargo, who died in 1990.

For more of the story:

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