Monday, July 6, 2009
Oil markets remain volatile despite weak economy
The extreme volatility that has gripped oil markets for the last 18 months has shown no signs of slowing down, with oil prices more than doubling since the beginning of the year despite an exceptionally weak economy.
Volatility in the oil markets in the last year has reached levels not recorded since the energy shocks of the late 1970s and early 1980s, according to Costanza Jacazio, an energy analyst at Barclays Capital in New York.
At the close of last week’s trading, oil futures fell $2.58, to $66.73 a barrel, after rising above $72 a barrel last month.
For the full story: www.nytimes.com
Hamburg Süd and Aliança increase bunker surcharges $25 per-TEU
Hamburg Süd and Aliança announced today they would increase bunker surcharges on the lines’ East Coast Americas trade routes by $25 per-TEU, effective the beginning of August. Company officials said the changes were necessary in the face of a renewed rise in bunker fuel costs.
Julian Thomas, Aliança’s Sao Paulo-based managing director, said carriers have been caught in recent months between a market climate of deteriorating rates and rising costs for fuel.
“We cannot continue to absorb these increases and maintain the service quality our customers demand.”
Frank Larkin, senior vice president for Hamburg Süd Region North America, said intermodal service providers, including truck and rail, have also had to raise rates.
“Bunker increases are never a welcome event, but we hope our valued customers will recognize the challenges we face given current market conditions, and that these changes are necessary to maintain the service quality and reliability they expect.”
Survey: Truck fleet owners more optimistic on recovery
Fleet owners are becoming more optimistic about a trucking recovery in the next 12 months, according to an article in the July edition of The Roemer Report. A survey of about 150 fleets conducted by Nashville consulting firm Transport Capital Partners (TCP) found 37% now expect freight volume to rise over the next 12 months-- compared with 21% in a survey just two months earlier.
- Fleet Owner
For the full story: fleetowner.com
Deutsche Post AG sells off all bank interest
Deutsche Post AG has sold its entire stake in Deutsche Bank AG, the logistics group said on Monday, ending a brief period when it was one of the bank's biggest shareholders. Post Chief Executive Frank Appel said in a statement the move cleared the way for the German post office turned global logistics group to concentrate on its core business.
Deutsche Post briefly had a stake of as much as 8 percent in Deutsche Bank, as part of a deal to sell German retail bank Deutsche Postbank AG.
For the full story: www.reuters.com
Great Lakes shipping traffic down 40 percent
Freighter traffic on the Great Lakes is down about 40% this summer.
There were 47 freighters plying the lakes last month compared with 75 during the same time last year, said Glen Nekvasil, vice president for corporate communications for the Lake Carriers Association.
It's the economy, Nekvasil said.
The demand for transporting limestone, coal and especially iron ore (used heavily by the auto industry) are all on the decline this summer.
- Detroit Free Press
For the full story: www.freep.com
Tuesday, July 7, 2009
Report: Infrastructure spending to fall in 2009
Federal stimulus funds won’t be enough to raise the level of infrastructure spending in 2009, according to the U.S. Infrastructure Market Analysis for the second quarter of 2009, prepared by IHS Global Insight's construction division.
Infrastructure spending in the U.S. is expected to decline 4.3 percent this year with the infrastructure sector falling victim to large state government deficits and funding shortfalls to cities and towns, the report said.
If there is a lack of infrastructure spending in the power segment on several new oil refineries and pipeline construction, total infrastructure construction would slip 6.8 percent in 2009, the report said. Otherwise, the power market would the only non-declining infrastructure sub-sector.
IHS Global Insight said it expects infrastructure spending to decline 1.6 percent in 2010 with growth of 2.4 percent in 2011 as tax receipts improve for state governments, and the federal stimulus package, totaling approximately $120 billion for infrastructure, is fully implemented.
For the full report: www.ihsglobalinsight.com/constructionoutlook
Japan submits bill to allow inspections of North Korean cargo ships
Japan submitted a bill to parliament Tuesday that will allow its coastguard to inspect North Korean cargo ships, in line with a U.N. resolution, the top government spokesman said.
he U.N. Security Council in June approved wider sanctions against North Korea, in response to its May 25 nuclear test, including authorising its member states to inspect North Korean sea, air and land cargo.
Japan's new law would close a legal gap that has kept Tokyo from putting some of the U.N.-led sanctions into practice because of restrictions related to its pacifist constitution.
For the full story: uk.reuters.com/article
Daewoo Logistics files for receivership
Daewoo Logistics, a mid-sized South Korean shipping and logistics company, has filed for court receivership after struggling to pay back maturing debts.
The filing came after its rescue talks with Posco, the steelmaker, fell through.
Daewoo was also hit hard by the failure of its deal to lease a huge tract of farmland in Madagascar, which fell through because of a military coup in the African nation
For the full story: www.ft.com
Greenbrier third quarter loss due to goodwill charge
Railroad car manufacturer Greenbrier Cos. Inc. said Tuesday that it swung to a fiscal third-quarter net loss of $50.5 million, or $3 a share, from a profit of $8.1 million, or 49 cents a share, as a disagreement with General Electric continues. Total revenue dropped 36% to $244.4 million. The group said its loss was caused by a goodwill impairment charge of $55.7 million.
For the full story: www.marketwatch.com/story
LaHood pushes marine highway program during Oakland stop
U.S. Transportation Secretary Ray LaHood made a brief stop at the Oakland waterfront Thursday to talk up support for "marine highways" - a program to move more cargo over the nation's waterways to reduce truck traffic and air pollution.
The idea has particular resonance in Oakland, where the diesel trucks that move goods to and from the Port of Oakland foul the air and add to health risks of nearby residents.
The port's governing board voted last month to ban so-called dirty trucks starting next year. Up to $10 million was made available by the port and the Bay Area air quality district to equip diesel trucks with special filters to cut down on diesel pollution.
-San Francisco Chronicle
For the full story: www.sfgate.com
Wednesday, July 8, 2009
Pacer initiates service through Ports America Puerta México inland port
Ports America announced Pacer International is a customer of its Puerta México intermodal facility, an inland port located in the industrial zone of Toluca, 65 kilometers west of México City.
In May, Pacer initiated six-day-per-week direct rail service to and from the terminal in Toluca to handle shipments, including automotive and third party domestic traffic (FAK) northbound and southbound. The new service parallels Pacer’s existing PacerMex ramp points throughout its U.S. and Eastern Canada network and provides through non-stop, in-bond service.
“Pacer is excited to combine the productivity, security and professionalism of the new Ports America facility with Pacer’s already extensive service network in Mexico," said Michael E. Uremovich, chairman and CEO for Pacer.”
"Together we are creating an even better product for customers looking to maximize security, high-quality service, and the cost-effective trans-border movement of freight into and out of Mexico from the U.S. and Canada,” he said.
Stephen Edwards, Ports America president and CEO, commented on some of the facility’s advantages.
“The Puerta Mexico terminal offers multi-modal terminal services and on-site customs and bonded warehousing facilities to ocean carriers, railroads, intermodal and other logistics service providers with its on-dock direct access to rail line “N” of Kansas City Southern de México (KCSM),” Edwards said. “Puerta México is quickly becoming the terminal of first choice for service to and from the central valley, the ports of Lázaro Cárdenas and Manzanillo, and Laredo at the U.S. border. It is helping to lower logistics costs, thereby lowering prices and bringing greater choices to consumers.”
Ports America said the estimated capacity of its intermodal facility exceeds 150,000 containers and 2 million tons of cargo per year on more than 130 acres. In addition to storage, cross-dock and transloading, the company said the terminal would be a vehicle distribution center.
Trans-Pacific carriers to initiate $500 per-FEU increase for Asia-U.S.
Neptune Orient Lines Ltd.’s APL Ltd. unit, China Cosco Holdings Co. and 12 other container lines agreed to raise rates on Asia-U.S. routes, seeking to end a price war caused by slumping demand, overcapacity and “panic.”
The lines decided on a $500 increase for carrying a 40-foot box from Aug. 10 as a “voluntary guideline,” the Transpacific Stabilization Agreement said in an e-mailed statement yesterday. The companies will also raise fuel levies and may add peak season surcharges, the group said.
For the full story: www.bloomberg.com
Report: Container trade on track to drop 10 percent in 2009
Trade at international ports is on track to drop more than 10% this year, one of the steepest declines ever, according to a new maritime industry report.
Cargo ships will carry 27 million fewer containers by year's end than they did in 2008 -- a reduction roughly equivalent to all of the cargo containers handled by the five busiest U.S. seaports in a typical year, according to London-based Drewry Shipping Consultants' Container Forecaster Report.
For the full story: www.latimes.com/business
India estimates $8 bil cost over-runs on infrastructure projects
India estimates about 423 projects in industries such as coal, petroleum, railways and ports will cost 386.6 billion rupees
($8 billion) more because of delays in completion.
Of the 925 infrastructure projects costing 200 million rupees or more being monitored by the government, about 423 projects are running behind schedule, Sriprakash Jaiswal, minister of statistics and program implementation, said in a statement in parliament. The cost overrun in these delayed projects amounts to a 15 percent increase in the last approved cost of 2.5 trillion rupees, he said.
For the full story: www.bloomberg.com
Schneider Logistics sells unit in Czech Republic
Schneider Logistics has sold a 200-employee operation in the Czech Republic that handles back office work for the Green Bay firm's transportation customers in Europe and the United States. Terms were not disclosed.
he sale of the unit to ExlService Holdings Inc. will save money for Schneider, spokeswoman Janet Bonkowski said. Schneider will now contract with New York-based EXL for the services, which include such things as collecting payments for clients and auditing freight invoices.
For the full story: www.tradingmarkets.com
Qantas fined by Canada for air cargo cartel involvement
Qantas has been fined $C155,000 ($168,000) by Canada's Competition Bureau after it pleaded guilty to participating in an air-cargo cartel.
The bureau said Qantas admitted that its freight division had fixed surcharges on air cargo exported on certain routes from Canada between May, 2002, and February, 2006.
During most of this period, Qantas Freight trucked cargo from Canada to the US for onward shipment to Australia and other destinations, the Canadian watchdog said.
For the full story: www.theaustralian.news.com.au
Thursday, July 9, 2009
CSAV secures $145 mil capital increase on road to $710 mil
Chile’s shipping group, CSAV, announced yesterday it secured the completion of a $145m capital increase thanks to a group of German ship owners, as the liner continues towards its $710 million re-capitalization strategy.
“CSAV has achieved great success in its capitalization process, with current shareholders demonstrating great confidence in the company by underwriting 100 percent of this capital increase, the company said in a statement.
The successful completion of this first stage of the capitalization process represents an important step forward towards the consolidation of CSAV as a first class partner for our customers and suppliers,” the company said.
YRC reaches tentative, modified labor contract deal with Teamsters
Struggling No. 1 U.S. trucking company YRC Worldwide Inc said on Thursday it has reached a tentative deal with the Teamsters union on a modified labor contract that will help cut costs and preserve operating capital, doubling the value of YRC stock.
The new deal must be approved in a vote by the Overland Park, Kansas-based company's Teamsters-represented workers.
YRC said details of the modified agreement should be available next week.
This is the second cost-cutting deal struck by YRC with the Teamsters. In the first, approved in January, the company's unionized workers agreed to a 10 percent wage cut in return for a 15 percent stake in the company.
For the full story: www.reuters.com
MARAD announces $17.1mil in shipyard grants
The U.S. Department of Transportation’s Maritime Administration today announced $17.1 million in grants to 14 small shipyards in 10 states. The grants are part of the Assistance to Small Shipyards program.
“Small shipyards are vitally important for the health of the maritime industry, and for the nation’s economy,” said Secretary of Transportation Ray LaHood.
MARAD said the purpose of the grants is to make capital and infrastructure improvements” that facilitate the efficiency, competitive operations, and quality in ship construction and repair.”
Small shipyards fall into two categories: those with fewer than 600 employees, and those with between 600 and 1200 employees. All but two of today’s recipients have fewer than 600 employees.
Recipients, amounts, and purposes of grants are as follows:
• Pacific Ship Repair & Fabrication, Inc., San Diego, California: $319,365 for waterjet cutting machine, press brake, shear
• North Florida Shipyards, Inc., Jacksonville, Florida: $3,312, 369 for waterblast equipment and a 600-ton travelift
• Bollinger Shipyards Lockport LLC, Lockport, Louisiana: $1,146,596 for a press, plasma cutting table, 6” mill
• Total Marine Services of Jefferson, Inc., of Harvey, Louisiana: $640,264 for 100 ton crawler crane and welding equipment
• Duclos Corporation dba Gladding-Hearn Shipbuilding of Somerset, Massachusetts: $629, 675 for lifts, skylights, lighting upgrades, overhead cranes, and two 22-ton cranes
• Basic Marine, Inc., of Escanaba, Michigan: $1,376,187 for a cutting table, press brake, and welders
• VT Halter Marine Inc (Pascagoula), Pascagoula, Mississippi: $1,565,587 for a 450-ton transporter and portable retractable platen cover
• VT Halter Marine Inc, Moss Point Marine, Moss Point, Mississippi: $868,011 for a CNC burning table
• VT Halter Marine Inc, Halter Moss Point, Mississippi: for $436,406 for press brake and CNC burning table
• Zidell Corporation, Portland, Oregon: $454,042 for plasma cutting machine, welding equipment, vacuum plate lifter
• Aker Philadelphia Shipyard, Inc., Philadelphia, Pennsylvania: $1,951,022 for thermal machining center
• William E. Munson Co., Inc, Edmonds, Washington: $150,585 for welders, shear, press
• Bay Shipbuilding Co. (A Division of Fincantieri Marine Group LLC) of Sturgeon Bay, Wisconsin: $2,894,972 for 220-ton transporter, micro panel line, burning machine, magnetic lift beam, brake press
• Marinette Marine Company of Marinette, Wisconsin: $1,404,919 for bridge cranes, deck straightener, cable system, panel line jib cranes
The Department of Transportation said it is using the Small Shipyard Grants program to administer grants to be made under the American Recovery and Reinvestment Act (ARRA). Those grants will be for a much larger total, $98 million, and are expected to be announced shortly, the DOT said.
Shell might ship 195,000 metric tons of jet fuel to Europe
Royal Dutch Shell PLC (RDSB.LN) may ship about 195,000 metric tons of South Korean jet fuel to Europe in July, according to shipbrokers.
A survey of shipping fixtures indicates Shell is the only company shipping Asian jet fuel to Europe this month, as the arbitrage window remains closed for most traders.
For the full story: online.wsj.com
Singapore investor, China bank, in talks for $1 bil to $2 bil China infrastructure investment
Singapore's state investor Temasek TEM.UL is in talks with a unit of Bank of China to launch a $1 billion to $2 billion investment fund to focus on fast-growing infrastructure projects across China, sources said on Thursday.
Talks between Singapore's sovereign wealth fund and BOC International, the investment banking arm of Bank of China, were in the early stages but both had agreed on the general idea of the fund plan, said the sources, who had direct knowledge of the plan.
For the full story: www.reuters.com
Friday, July 10, 2009
DOT grants Continental anti-trust immunity, approves Star Alliance joint venture
The U.S. Department of Transportation (DOT) announced today that it has granted final approval for antitrust immunity to Continental Airlines for its participation in the Star Alliance, and approved a new joint venture among four of the alliance’s members. Antitrust immunity allows airlines to coordinate their services and act as a single carrier for international air services covered by the immunity.
“I believe that the Department’s decision will benefit consumers, enhance competition, and preserve jobs in the airline industry,” said U.S. Transportation Secretary Ray LaHood.
Now, Air Canada, Deutsche Lufthansa Airlines, United Air Lines, and Continental Airlines can utilize a portion of their international air services within the new Atlantic-Plus-Plus joint venture. Under the venture, the carriers will jointly arrange capacity, sales and marketing, as well as share revenues in international markets, the DOT said.
The DOT said it concluded that granting antitrust immunity to Continental to join the alliance and approving the joint venture was in the public interest because it would support increased levels of service in international markets served by the carriers, give consumers more travel options and shorter travel times, and reduce fares. The U.S. has open-skies aviation agreements with all of the home countries of the carriers involved in the new joint venture. Open-skies agreements provide for international market access to all home-country airlines.
Following comments from the Department of Justice and other parties on DOT’s April 7 tentative decision, the DOT said it placed new limitations on the immunity in several markets to preserve competition. These limitations, also called “carve outs,” affect four trans-Atlantic markets, four markets between the United States and Canada, and all markets between the United States and Beijing, China. The Star carriers may continue to serve these routes, but they will not be covered by the grant of immunity, the DOT said.
The DOT said it has required the carriers to implement the new joint venture within 18 months. The carriers must provide annual reports to the DOT about the implementation of their alliance agreements. The DOT said the carriers would remain subject to antitrust laws with respect to domestic service.
The DOT first granted immunity to Star Alliance partners in 1996, when it approved an alliance between United and Lufthansa. Other members of the alliance are Air Canada, Austrian Airlines, British Midland Airways, LOT Polish Airlines, Scandinavian Airlines System, Swiss International Air Lines, and TAP Air Portugal.
China Shipping, COSCO heads preach capacity cuts; H2 recovery
The heads of China Shipping and COSCO stressed reduction capacity as crucial to global ship market recovery at a recent international shipping conference in Shanghai.
China Shipping’s Captain Li Shaode warned against other obstacles such as protectionism, but he stressed carriers should strengthen their discipline, and control the deployment of new vessels and accelerate the reduction of lower standard ships.
COSCO Captain Wei Jiafu agreed that overcapacity was the big problem, but he also said the Baltic Dry Index (BDI) has been rising since its historic low of 663 points in December to reach 4,291 in June. Captain Wei said that the rise of BDI is a reflection of real demand.
Captain Wei was optimistic about market growth in the year’s second half, saying that China's higher export tax rebates are working and American and European consumers will soon need to start buying necessities again, generating real demand.
Capt Li described the current economy as the "dark before dawn" and said the industry will return to prosperity in 2010-2011.
Capt Wei also advised carriers not be too quick suspending services at the risk of losing market share, which he said would be hard to recover once the market has been restored.
Beijing wants direct rail to Shanghai’s Yangshan
Beijing plans to initiate a new strategy to turn Shanghai's Yangshan Port into a global shipping center via direct rail access by 2020, rather than the port being the originally planned regional center catering to North and East Asia traffic, according to China’s state media organization Xinhua.
The plan to this point has been moving containers along the Yangtze River and from coastal points to Yangshan berths with the railway playing smaller role.
With manufacturing shifting inland, moving cargo down the Yangtze and by rail to Yangshan will become vital, according to China's State Council in Beijing in the Xinhua report.
"We will optimize the handling and distribution of containers and link the deep-water berths to a ground network comprising road and rail," said Huang Rong, director of the Shanghai Urban and Rural Construction and Communications Commission.
JFK’s busiest runway to close for four months next year
Kennedy Airport’s busiest runway will be closed for about four months next year as part of a $204-million, three-year makeover, a prospect that airline industry officials are viewing worriedly at the huge airport that ranks near the top nationwide in flight delays.
More than 2.75 miles long, Kennedy's Runway 13R-31L is one of the longest commercial runways in North America - second only in the United States to a runway at Denver International Airport. Last year, it handled more than 143,000 takeoffs and landings.
Aviation and airline officials say delays stemming from the construction are inescapable, though no one can say now how much delays will increase.
For the full story: www.newsday.comy
Oil prices decline on weaker recovery hopes
Oil prices briefly fell under $60 a barrel on Thursday after nearly two weeks of uninterrupted declines, as traders and investors acknowledged that a global economic recovery would take longer than hoped.
At the end of a volatile trading session, crude oil futures pared their losses, settling at $60.41 a barrel, up 27 cents, after falling as low as $59.25 a barrel during the day in New York. The price of oil has fallen by about $10 a barrel in the last six trading days, or nearly 17 percent. Oil rose to $72.68 a barrel in June, its highest trading close this year on optimism about a fast recovery.
For the full story: www.nytimes.com