Monday, July 1, 2013
Report: Mexico edges up on China as manufacturing power
Mexico is starting to edge out China as a manufacturing base for many companies, despite its higher crime rate, according to a new report from Boston Consulting Group.
This helps the U.S. because Mexican factories use four times as many American-made components as Chinese factories do, according to the consulting firm.
Mexico has four key advantages, according to the report. The first is that wages for Mexican manufacturing workers, adjusted for the country's superior worker productivity, are likely to be 30 percent lower than China's by 2015.
The second is Mexico has more free-trade agreements than any other country. Mexico has free-trade agreements covering 44 countries, more than the U.S. (20) and Canada (18) combined, the report said.
The group also notes that Mexican manufacturing has advantages in terms of energy costs, since their gas prices are tied the U.S. prices, and are very low due to a glut in supply.
And finally, Mexico has attracted industry clusters in autos and appliances, the report says. Because Mexico is a major auto manufacturer, 89 of the world's top 100 auto parts makers have production in the country, concentrated in five Mexican states for ease of transport. More than 70 appliance manufacturers have taken up residence in the country, ranging from components makers to assemblers of both small and large appliances.
The U.S. benefits from Mexico's manufacturing advantages in two ways, according to Harold Sirkin, the report's lead author. First, by selling more components to Mexican manufacturers. Second, by selling more consumer products to Mexicans, who will spend more money for imported goods if their living standards improve.
For more of the Business Week story: businessweek.com
U.S. Senate approves Foxx as Transportation Secretary
Senate on Thursday voted on Thursday to unanimously approve Anthony Foxx, the mayor of Charlotte, N.C., as U.S. Transportation Secretary.
Foxx will lead the federal Transportation Department, which has about 53,000 full-time employees and over $72 billion in budget authority.
For more of the New York Times story: nytimes.com
Shipping lines prepare for higher fees at Suez Canal as unrest continues in Egypt
Growing unrest in Egypt may disrupt shipments through the Suez Canal and increase the costs for shipping lines as the cash-strapped Egyptian government tries to bring in more revenue.
The country's economy has been in crisis since the overthrow of Hosni Mubarak in 2011. The government of Islamist President Mohamed Mursi is dealing with a decrease in tourism and lower foreign currency reserves as it tries to get a loan from the International Monetary Fund.
"The government will try to generate some income in the short term through various creative surcharges - including, most likely, on transit fees through the Suez Canal. These measures will be counterproductive over the intermediate and long term," said J. Peter Pham of the Atlantic Council, a U.S. thinktank.
The shipping industry, in the fifth year of one of the worst downturns on record, will get hurt by rising costs at the Suez Canal, since it relies on the 120-mile waterway as the fastest route between Asia and Europe.
The Suez Canal Authority raised tolls on the canal by 2 to 5 percent in May, after levying an increase of 3 percent in March of last year.
"The rate hike earlier this year is simply not going to make up for overall revenue losses," said Michael Frodl of U.S.-based consultancy C-Level Maritime Risks. "We think another rate rise is likely before the end of the year and could be applied almost immediately."
A standard container ship carrying consumer goods pays tolls of around $1.2 million for a return trip through the canal, or around a quarter of the overall costs of a voyage between Asia and Europe, according to analysts' estimates.
For more of the Reuters story: reuters.com
Port Jersey Logistics selected as Culinary Collective warehouser
Tyler Distribution Centers, a division of Port Jersey Logistics, has been chosen by Culinary Collective as the new home of its east coast warehousing operation, according to a company statement.
Containers that fell off ship in India a threat to shipping traffic
Seventeen containers on board a vessel slipped off into the sea, prompting an alert for ships approaching Gulf of Kutch, a major corridor for crude oil imports.
"About 17 containers slipped from M V Rajeev Gandhi, a vessel container of Shipping Corporation of India, off Okha West coast on June 27 when it was on its way to Mundra port," Chief Nautical Officer, GMB, S C Mathur said Sunday. "The containers are floating in the sea posing danger to vessel traffic."
According to the Gujarat Maritime Board, 16 of the containers that slipped off were empty, while one contains high-density polyethylene.
For more of the Indian Express story: indianexpress.com
Tuesday, July 2, 2013
TSA shipping lines announce $400 peak season surcharge
Container shipping lines in the Transpacific Stabilization Agreement are preparing for higher Asian imports during peak season due to positive consumer confidence signals for the second-half of 2013 combined with robust consumer Q2 spending data.
TSA carriers have announced a guideline peak season surcharge of $400 per-FEU from Asia to all U.S. destinations, effective August 1.
"It is hard to say at this point what the size and the timing of the peak will be, but lines are expecting a defined peak period and want to be prepared," said TSA executive administrator Brian Conrad. "That means having the necessary vessel and equipment assets in place, the right mix of services, and their costs adequately covered to quickly address contingencies."
TSA lines reported gains from the most recent round of Asia-U.S. freight rate increases taken on July 1, but as results fell short of overall revenue objectives for 2013-14 service contracts, they said they will consider further rate hikes in late summer.
TSA container shipping lines serve the trade from Asia to ports in the U.S. and include APL, Kawasaki Kisen Kaisha, China Shipping Container Lines, Maersk Line, CMA-CGM, Mediterranean Shipping Co., COSCO Container Lines, Nippon Yusen Kaisha, Evergreen Line, Orient Overseas Container Line, Hanjin Shipping, Yangming Marine Transport, Hapag-Lloyd, Zim Integrated Shipping Services, and Hyundai Merchant Marine.
U.S. manufacturing index rises to 50.9 in June
U.S. manufacturing rebounded in June as orders increased, indicating gains in the U.S. housing market and higher auto sales are helping stabilize industry.
Shares in the world's biggest economies, including the U.K. and Japan, rose as the numbers triggered optimism for a rise in global growth in the second half of the 2013. At the same time, China's lowered June PMI points to an economy losing steam in the second half of the year that could impact the positive global outlook.
"The pace of activity at the global level is moderate and stable," said David Hensley, director of global economic coordination at JPMorgan Chase. "We are not at a point yet where we are seeing a significant pickup in the growth rate. Our outlook is for growth to pick up a bit, though not extraordinarily so."
For more of the Bloomberg story: bloomberg.com
Maersk shares rise on successful rate hike for Asia-to-Europe trade
A.P. Moeller-Maersk, owner of the globe's largest container line, rose in trading on speculation that freight rate increases will restore profits on the shipping company's Asia-to-Europe trade route.
For more of the Bloomberg story: businessweek.com
U.S. Merchant Marine Academy welcome Class of 2017
The U.S. Merchant Marine Academy recently welcomed its incoming Class of 2017, comprised of 238 candidates from around the U.S. The future Midshipmen, nominated by Congress, began a demanding, 18-day schedule of academic, military, and physical training known as Indoctrination as they start their journey to become licensed maritime officers.
"The new plebe candidates make up one of the most diverse classes in Academy history," said Rear Admiral James A. Helis, Ph.D., superintendent at the U.S. Merchant Marine Academy. "I look forward to seeing entire Class of 2017 learn, grow and serve their country.
Once they graduate, the Midshipmen receive a Bachelor of Science Degree and government-issued merchant marine officer license. Kings Point graduates must serve five years on active-duty in the military or work in the maritime industry for five years, as well as eight years in the reserves.
Storm causes cargo ship to run aground
The Vietnamese cargo ship MV Minh Tuan 68 ran aground Saturday on the shore of Legazpi City in the Philippines after rough water brought on by Tropical Storm Gorio assailed the vessel, anchored near the coastline.
The Philippine Coast Guard said the Minh Tuan, which was confiscated by authorities in September last year for rice smuggling, was docked near Barangay San Roque when it was pushed by waves and drifted to the shallows of the sandy shoreline.
The ship was seized after it was used in the smuggling of at least 94,000 bags of rice at the Legazpi City port on Sept. 2, 2012.
For more of the Philippine Star story: philstar.com
Wednesday, June 3, 2013
Foss restructures its businesses under single name
Foss Marine Holdings announced it is restructuring and will immediately merge all operations and resources under the single name of Foss Maritime Company.
Today, Foss Marine Holdings' wholly owned subsidiaries, including Foss Maritime, AMNAV, Young Brothers, Hawaiian Tug and Barge, and Cook Inlet Tug and Barge, operate the largest coastal tug and barge fleet in the U.S. Effective immediately, Foss Marine Holdings will merge with Foss Maritime, whose businesses include two shipyards, harbor services, ocean towing, marine engineering and others.
"The unification is the next step to enable Foss to focus on new and growing markets, including potential business opportunities in Alaska, where oil and gas activity are gaining strength," said Paul Stevens, president and CEO of the newly unified Foss Maritime.
Stevens said the consolidation is a move to a more simplified operating structure that reduces layers of management and streamlines decision-making.
Foss Maritime will reorganize into four divisions.
Marine Transportation Services, headed by Gary Faber, will include the company's ocean towing and global services including project cargo and logistics. Faber will also lead Technical and Engineering Services, which includes marine engineering and naval architecture and the company's shipyard operations in Rainier, Ore., and Seattle, Wash.
Harbor Services, headed by Scott Merritt, includes all harbor services, such as ship assist and tanker escorts activities provided by the company.
Foss' Liner Barge Services, led by Glenn Hong, includes the services of Young Brothers, an intra-island freight and transportation company based in Honolulu, Hawaii.
China's manufacturing pace slows in June
China's manufacturing growth slowed in June, further indicating an economic slowdown as the state tries to control fiscal speculation and real estate prices.
The official Purchasing Managers' Index dropped to the lowest reading in four months, to 50.1 from 50.8, according to the National Bureau of Statistics. In addition, a private PMI score from HSBC Holdings and Markit Economics was 48.2, the weakest since September. Readings above 50 signal growth.
Weaker manufacturing expansion and a cash crunch in the banking system indicate that Li Keqiang will become the first premier to miss an annual growth target since the Asian financial crisis in 1998.
"Although new leaders have no intention to achieve a higher GDP growth, the current growth rate is quite close to the floor that new leaders have indicated to tolerate," said Lu Ting, head of Greater China economics at Bank of America Corp. in Hong Kong, in a note to Bloomberg. The lower official PMI "could worsen concerns that the liquidity squeeze in June will hit economic growth," Lu wrote.
For more of the Bloomberg story: bloomberg.com
Caterpillar to purchase marine propulsion manufacturer
Caterpillar is buying Johan Walter Berg AB, a Swedish manufacturer of marine propulsion systems and controls for ships, in a bid to expand from selling just engines and generators to providing complete marine propulsion package systems, according to a company statement.
The terms of the deal, expected to close in the third quarter, were not disclosed.
The century-old company will become part of Caterpillar's marine and petroleum power division. Berg Propulsion is one of the world's leading designers and producers of controllable pitch propellers for the shipping industry.
"Our team will now be able to provide worldwide Caterpillar support to marine operators for a complete, optimized propulsion package, including bow thrusters, gear boxes and shaft alternators," Tom Frake, vice president of Caterpillar's marine and petroleum power division, said in the statement.
For more of the Zack's story: finance.yahoo.com
Port of Baltimore seeks funding for channel widening, terminal expansion
The port of Baltimore has applied for a $10 million federal grant, to be matched by a state grant of $19.5 million, to facilitate increased rail access and storage for exports at Fairfield Marine Terminal and to widen the Seagirt Marine Terminal channel.
The proposal, approved by Maryland Port Administration commissioners this week, seeks funding from the $473.8 million in TIGER 5 grant monies slotted for distribution by the U.S. Department of Transportation this fall.
Plans include dredging the Seagirt access channel to accommodate the largest post-Panamax vessels and using dredging material to fill a World War II-vintage basin at Fairfield, creating 7.6 acres for car and heavy equipment storage. The rail route that serves Fairfield would be extended to the waterfront to serve the storage area.
Jim Dwyer, the port administration's deputy planning director, said that if the port is awarded the grant, work could start this fall. A priority is widening the channel to the Seagirt terminal, which recently received a $100 million upgrade that included a 50-foot-deep berth and four huge cranes.
"The ships are getting a little bit longer and a whole lot wider," Dwyer said. "There's too many doglegs on the approach," he said.
Dwyer is optimistic about the port's chances at receiving TIGER 5 funds, since it has permits and environmental reviews in hand, and the state is more than double the 25 percent minimum.
For more of the Baltimore Sun story: baltimoresun.com
Hazmat alert at Staten Island container terminal originates in N.J.
Reports of a leaking container at the New York Container Terminal at Mariners Harbor in Staten Island drew a response from the Fire Department of New York on Tuesday.
According to the FDNY, a hazardous materials unit was dispatched after the fire department received a report of a possible methyl iodide leak from one of the containers. Methyl iodide has been used as a pesticide, and is listed by the federal Center for Disease Control as potentially carcinogenic.
Bob Nixon, New York Container Terminal's vice president for operations, said the FDNY inspected and opened the container and found nothing wrong. He said the call to the fire department might have stemmed from an initial report that a worker had become woozy at a warehouse in Carteret, N.J.
Chief Mark Hruska of the Carteret Fire Department in New Jersey said a worker at Vanguard Logistics in Carteret started suffering from chest pains and difficulty breathing after he exited a container that was scheduled to be shipped to Staten Island.
The container held methyl iodide and other potentially toxic chemicals, and the worker told emergency medical personnel that he believed he was exposed, Hruska said.
The worker was hospitalized, but was improving, according to Hruska.
For more of the Staten Island Advance story: silive.com