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Summary for July 2 - July 6, 2012:
Monday, July 2, 2012 Top StoryHapag owner eyes Hamburg Süd as merger partner
"Only a merger can hoist the shipper (Hapag) back into the lead group alongside Denmark's Maersk and Switzerland's MSC," said Kuehne in an interview in Wirtschaftswoche magazine. TUI AG, which owns a 22 percent share of Hapag, tried to float a stake in Hapag-Lloyd last year but the effort failed due to market turmoil in the aftermath of the Fukushima nuclear catastrophe. Kuehne, owner of Swiss logistics group Kuehne and Nagle, voiced his plan to remain a long-term shareholder in Hapag-Lloyd after the shipping company's first public offering, scheduled for 2013. If the company gets an influx of cash, diluting his holdings, Kuehne said he would adjust his investment to maintain a blocking minority stake of 25 percent. "It is important to me to secure the long-term independence of the shipping company in Hamburg," Kuehne told the magazine. For more of the Reuters story: www.reuters.com China faces sluggish growth in manufacturing sectorChina's weak manufacturing growth in 2012 underscores its economic slowdown, with a marked decrease in both export demand and new orders. The Purchasing Manager's Index (PMI) dropped to 50.2 in June from 50.4 in May, according to the National Bureau of Statistics and China Federation of Logistics and Purchasing. A figure above 50 indicates growth. Based on the low PMI data, Chinese Premier Wen Jiabao may enact stimulus measures to jumpstart China's economy, the second biggest in the world. The central bank will adjust fiscal policies in a "timely and appropriate" way, according to central bank Governor Zhou Xiaochuan. "Although the PMI is slightly better than consensus, the underlying trend still indicates a deterioration in economic activity," said Shen Jianguang, chief Asia economist for Mizuho Securities Asia to Tapei Times. "Further monetary easing is warranted, with two interest-rate cuts and reserve ratio cuts in the second half increasingly likely. " "Tumbling export orders point to headwinds to exports in the third quarter, suggesting domestic demand needs to pick up to stabilize growth," Chang Jian, a Hong Kong economist at Barclays Capital, told the Tapei Times. For more of the Tapei Times story: www.taipeitimes.com Congress passes transportation billProving that they could actually get something done in a contentious election year, Congress passed a bipartisan two-year transportation bill on Friday. The final $127 billion package also included measures on student loan extensions and an overhaul of federal flood insurance, according to the New York Times. The $120 billion transportation bill, which will be touted as a boon for the U.S. job market, passed the Senate 373 to 52 and the House with a vote of 74 to 19. Only Republicans voted against. Federal highway, railroad and transit projects will be extended 27 months. The measure will be paid for with the current 18.4 cents-per-gallon gas tax and the 24.4 cents-per-gallon diesel tax. $19 billion in Treasury funds will also be transferred to the Highway Fund, according to Taxpayers for Common Sense. Compromise got the job done. House conservatives originally wanted to get rid of the taxes and let the states fund their own transportation projects. The GOP also let go of the Keystone Pipeline provision they had attached to the bill. Democrats agreed to drop $1.4 billion in land and water conservation allotments. Republicans did get some concessions in the package, including a streamlined transportation review process and allowing states to opt out of spending some transportation funds for bicycle paths and roadside enhancement. Senator Barbara Boxer, one of the primary creators of the bill, said the bill would generate one million jobs and save another two million. For more of the New York Times story: www.nytimes.com Portland union rift must be resolved by Tuesday, says judgeA federal judge declared Tuesday as the deadline to resolve a dispute concerning which union has jurisdiction over two reefer maintenance jobs at the Port of Portland. The union conflict has slowed work to a crawl, causing major shipping lines Hapag-Lloyd and Hanjin to circumvent Portland until the workflow returns to normal. On Friday, Governor Ted Kulongski, in charge of the arbitration, told U.S. District Judge Michael Simon that the ILWU, the longshoremen's union, and the electrical union were still at loggerheads over the disputed jobs. The judge is giving the unions one more chance to work out a settlement. If no settlement is reached by Tuesday, the judge may grant a temporary restraining order that would require ILWU workers to end the work slowdown that has upset port operations for the past three weeks. Alternatively, the judge may grant the longshoremen's temporary restraining order, giving them the disputed jobs. The electrical union has been plugging and unplugging reefers for more than 40 years under an agreement with the port. Now that the port's Terminal 6 has a new private lessor, ICTSI Oregon, the ILWU claims the jobs must switch due to the collective bargaining agreement they have with the Pacific Maritime Association that is in effect at all West Coast ports. For more of the Bloomberg story: www.businessweek.com 2 operators rescued after NJ crane collisionWhen two cargo cranes crashed into each other at New Jersey's Port Elizabeth on Friday morning, the two operators were trapped 50 feet in the air until rescuers arrived, reported Port Authority police. The fire department utilized an air bucket system to lower the drivers to the ground, a police spokesman said. One of the operators was taken to the hospital with back pain and the other refused treatment. The cabs of the straddle cranes were damaged in the incident. The large cranes are used to move container cargo at the port. For more of the Star Ledger story: www.nj.com
Tuesday, July 3, 2012 Top StoryMaersk snags $2.1 billion Defense Department contract
The Defense Department picked Maersk Line for the contract out of 22 proposals received, despite an overcharging dispute, according to Reuters. The Maersk group has been a shipping line for the U.S. military for decades, a relationship that was hurt when Maersk Line was accused of overbilling for transporting cargo to support American soldiers in Iraq and Afghanistan. In January 2012 the dispute was settled when Maersk said it would pay $31.9 million to settle the claim. The second biggest contract deal from the U.S. Transportation Command was awarded to American President Lines, an arm of Neptune Orient Lines Group (NOL), in the amount of $1.7 billion, according to the daily contract bulletin from the Pentagon. The seventh round of "universal service" contracts primarily involve maritime transport, though some ground shipping is included, said Cynthia Bauer, of the Transportation Command at Scott Air Force Base, Illinois to Reuters. For more of the Reuters story: www.reuters.com Port of Long Beach labor deal approvedThe Board of Harbor Commissioners for the Port of Long Beach on Monday approved labor agreements that will bring construction jobs to the local community. The commissioners unanimously approve a labor pact for replacing the Gerald Desmond Bridge and six Pier E projects at Middle Harbor, a $1.2 billion project redeveloping two older terminals into one large terminal. "Labor made this port," said City Council member Gerrie Schipske. "Labor made the harbor. Labor made Long Beach to be able to have middle income in our community ... to have a good wage with good benefits and be able to have a good living." The agreement involved approving PLAs. PLAs let union and non-union contractors to bid on projects, but all have to agree to union guidelines, so non-union workers would receive comparable pay and benefits, funded healthcare and workman's compensation, and other similar labor provisions typical in union agreements. All contractors would have to have a mechanism in place for arbitration, apprenticeships and job safety concerns. Opponents say PLAs are discriminatory. Just 14 percent of U.S. private construction workers belong to a union, according to Dave Everett, government affairs director of the Associated Builders and Contractors in Southern California. For more of the Long Beach Press-Telegram story: www.presstelegram.com Hyundai Heavy lands $1.2 billion container ship building orderHyundai Heavy Industries scored a $1.2 billion order to build 10 container ships for a Greek-based company, according to a Tuesday announcement from the company. This is good news for the shipbuilder, which is well under its goal for new orders in 2012. "These orders are noteworthy considering the current sluggish shipbuilding market," the company said in a statement. "We expect some orders to be realized in the second half to help achieve this year's order target." Of Hyundai Heavy's annual new order target of $30.55 billion, the company has only realized $7.32 billion thus far. The ships will be delivered to the undisclosed Greek ship owner by late 2014. For more of the Fox News story: www.foxbusiness.com Matson starts trading on NYSEOcean transport and logistics company Matson Inc. began trading on the NYSE Tuesday under ticker symbol MATX. Alexander & Baldwin Holdings, announced in early June that its subsidiary, Matson Navigation, entered into a series of debt financing agreements as part of a plan to separate the company's transportation and land businesses into two publicly traded companies. As of Tuesday, Alexander & Baldwin Holdings, Inc. was legally separated into Matson, Inc. and Alexander & Baldwin, Inc. Alexander and Baldwin Holdings changed its name to Matson, Inc. (MATX). "As an independent company, Matson will be well capitalized, with a strong balance sheet and credit profile, thereby providing stability and the financial flexibility to pursue future growth opportunities," said Matt Cox, president of Matson Navigation, in early June. "Matson has been serving Hawaii continuously since 1882, and has an integral role in supporting the state's economic activities," said Walter Dods, chairman of the board of directors. "We are proud that Matson will now be the state's 14th publicly traded company, and will remain committed to serving the needs of the Hawaii community." "With our board and executive team focused entirely on transportation," Cox said yesterday, "we are confident that Matson is well positioned to further strengthen and grow its ocean transportation and logistics services." Matson's executive management team will stay the same, with the exception of Matthew Cox becoming CEO and Joel Wine becoming senior vice president and chief financial officer. Port of L.A. police officer hospitalized from inhaling fumesA Port of Los Angeles police officer was hospitalized Friday after breathing in mysterious fumes thought to have been leaked by a cargo container in the harbor area, according to port officials. The officer was reported to be in fair to serious condition. The officer was exposed to fumes in an area on the border of the ports of Los Angeles and Long Beach, near a container carrying rail line and a major port terminal, reported Eric Scott on behalf of the Los Angeles Fire Department. Approximately 30 firefighters were on the scene to determine the source and content of the fumes and to cap any leak. For more of the Los Angeles Times story: latimesblogs.latimes.com
Wednesday, July 4, 2012 No Wire today.
Thursday, July 5, 2012 Top StoryPortland longshoremen ordered by judge, arbitrator to pick up pace
Although U.S. Judge Michael Simon ruled to end the illegal slowdown on Tuesday, on Wednesday an arbitrator reported ILWU workers were still moving cargo at a sluggish rate. The arbitrator likewise ordered that work speed up to normal. The Pacific Maritime Association arbitrator on Wednesday called witnesses, and ruled in favor of ICTSI Oregon, which runs the terminal. The slowdown has caused a work back-up at Portland's Terminal 6 that has resulted in major shipping lines circumventing the Oregon port until the union tussle has been resolved. The dispute concerns two reefer maintenance jobs that the longshoremen's union claim are in their jurisdiction because of new private terminal lease, although the jobs have been performed by the electrician's union for the past 40 years. "Trucks moving containers within the yard are driving slow," reports a port spokesman, "and having issues queuing up properly at the cranes." He said longshoremen unloaded 15 containers an hour on Wednesday, compared to their usual rate of 27 containers an hour. At that rate, moving almost 500 containers in one day would be impossible, according to the port, which means the ship's departure might be delayed. Union reps had no comment. Thursday is a holiday for longshoremen, since July 5 is when they memorialize the violent 1934 strike that led to the founding of their union. On Tuesday Judge Simon had granted a motion, filed by the National Labor Relations Board, to impose a 10-day restraining order on the longshoremen, effectively ordering them to get back to business as usual and halt the slowdown until the dispute is resolved long-term. For more of the Oregon Live story: www.oregonlive.com China's coastal domestic fleet seeks international tradeChina's coastal fleet, which have carried strictly domestic trade goods, are seeking international trade, indicating that the country is still in the midst of an economic slowdown. The ships are treading international waters, looking for new trade in Indonesian coal and further depressing the dry bulk shipping market. China's domestic coastal trade has slowed due to less demand from steel mills and utilities, leading to a glut of coal and iron ore. China is the world's biggest coal producer and largest single importer of coal and iron ore. Any change in its purchasing or freight utilization routine "sends ripples around the world," according to Reuters. Although China's economic growth is expected to decrease to 7 percent in 2012, the lowest growth rate since 2009, they are still set for record imports of coal, reports Reuters. However, stockpiles of coal at the ports have led to cargo delays and helped pushed coal prices to a two-year low. There are approximately 1,500 to 2,000 vessels in China's coastal fleet, with a deadweight range of between 10,000 and 50,000 metric tons. For more of the Reuters story: www.reuters.com First ship with Grand Alliance arrives at Port of TacomaThe first ship with the Grand Alliance, Hapag Lloyd's 66,000-ton Dusseldorf Express, arrived at the Port of Tacoma on Monday. The alliance, comprised of container heavyweights Hapag-Lloyd, NYK and Orient Overseas Container Line, has moved their business, as a collective unit, from the Port of Seattle to Tacoma. A ceremony marked the occasion, with officials from the port, Hapag-Lloyd, the port and the longshoremen's union gathering to exchange greetings, as maritime custom dictates. Vessels from the alliance, as well as ships from Hamburg Sud and ZIM, will now regularly call at Tacoma. The port expects at least four new moorings a week at their Washington United Terminal, which will bring new jobs to the region, according to a port spokesman. For more of The News Tribune story: www.thenewstribune.com FedEx expands global footprint with Brazilian logistics companyThe FedEx Express business unit has acquired Rapidao Cometa, one of the biggest transportation and logistics companies in Brazil, FedEx Corp. announced Wednesday. Purchasing Rapidao Cometa, which reported revenues of more than $500 million last year, is a key move in FedEx's expansion in the Latin American and Caribbean (LAC) sector. "Brazil is the sixth-largest economy in the world and its rapidly increasing middle class presents tremendous opportunity for FedEx Express," said Michael L. Ducker, CEO and president, International, of Memphis-based FedEx Express. "Our customers are our top priority and this acquisition is a testament to our commitment to expand our global footprint in the markets that most need access to the global marketplace." Freight train derails and collapses bridge in Chicago area (includes video link)A freight train carrying coal derailed on Union Pacific tracks in the Chicago suburbs by the Northbrook-Glenview border. Witnesses reported the collapse of a bridge overpass as a result of the accident. A Union Pacific representative reported the derailment happened at 1:45 p.m. as the train was on the way from Wyoming to a utility plant in Wisconsin. For more of the Chicago Tribune story: articles.chicagotribune.com
Friday, July 6, 2012 No Wire today.
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Rival shipping company Hamburg Süd would be an ideal merger partner to help Hapag-Lloyd jump into the top echelon of shipping companies, according to major shareholder Klaus-Michael Kuehne, head of the consortium that holds 78 percent of Hapag-Lloyd. Hamburg Süd is Germany's largest private shipping line.
Maersk Line, the largest global container line, has been awarded a $2.1 billion contract to ship U.S. military cargo internationally, according to an announcement released by the U.S. Defense Department on Monday. Shares of parent company A.P. Moller-Maersk rose by 4.1 percent as of 10:00 a.m. Tuesday. 
One day after a federal judge ordered longshoremen at the Port of Portland to pick up the pace, an arbitrator was called in to repeat the order to quit impeding the work of the port.