Monday, July 7, 2014
Drewry: EU ports fight backups due to carrier unreliability, bigger ships
European ports are experiencing a resurgence of freight back-ups, according to Drewry Maritime Research, similar to the boom in the early to mid 2000s. The cause of the back-ups is complex, but in part due to carrier unreliability, according to the latest issue of Container Insight.
The ports of Rotterdam and Hamburg are congested, Drewry notes, because work to upgrade existing facilities and volume spikes caused by the bigger ships are straining terminal capacity. The analysts say another big factor is worsening carrier schedule reliability.
The publication reports that average reliability across all carriers in the Asia-Europe trades has decreased from a high of 83 percent on time port calls in mid-2012 to 51 percent in the first quarter of 2014, with on-time arrival being defined as within 24 hours of the advertised date published before loading.
Some shipping lines are reacting to backups by diverting cargo. Drewry analysts point to the G6 Alliance, which intends to shift the German call of its Transatlantic?Transpacific Pacific Atlantic 1 service from Hamburg to Bremerhaven due to congestion in Hamburg.
Drewry says carrier reliability problems are partly due to weather, but also because of the implementation of alliances. Carriers in alliances are shuffling vessels and shifting to new service structures — including the expansion of the G6 Alliance into the Transatlantic, and the addition of Evergreen to the CKYH Alliance between Asia and Europe.
The report concludes that congestion is likely to continue in North European ports in coming months as alliance developments continue to impact schedule reliability. Longer term, Drewry asserts that much depends on the long-term reliability performance of the alliances once new arrangements are more firmly established.
Hanjin secures $1.5B by selling dry bulk business
Hanjin Group Chairman Cho Yang-ho's efforts to save Hanjin Shipping seems to be succeeding, judging by the group's announcement Wednesday that it secured $1.5 billion by selling its dry bulk business unit to a private equity firm.
On the same day, Hanjin Energy sold off a 28 percent stake in Korean oil refiner S-Oil to Saudi Aramco.
The group secured $3.5 billion with the two deals, which is likely enough to put Hanjin Shipping back on track, although analysts worry that the company will face a liquidity crisis its performance does not improve.
Hanjin Shipping has been struggling after posting losses for three consecutive years since 2011 as a result of declining overcapacity and low rates in the global shipping industry.
The company is implementing recovery plans focused on selling old ships and a shipping terminal in Spain, according to Park Eun-hye, a spokeswoman for Hanjin Shipping. She said a consortium of the Industrial Bank of Korea and Korea Investment Partners had been selected as a preferred bidder to take over the terminal and negotiations are underway.
"Hanjin Shipping has grown up with many difficulties. We had a tough time, but never collapsed," said Cho on April 29, taking over the firm's leadership from his predecessor Choi Eun-young. "I will make full use of Hanjin Group's human and financial resources to help the company overcome the ongoing crisis."
For more of the Korea Times story: koreatimes.co.kr
UPS to invest $1B on European logistics expansion
United Parcel Service will invest $1 billion in its European operations in the next three to five years, mostly to expand its logistics centers, according to CFO Kurt Kuehn.
A large part of the money will go to its business in Germany, a fast-growing market, Kuehn said in a Wednesday interview with daily newspaper Frankfurter Allgemeine Zeitung.
Kuehn reported that UPS would unveil a new strategy in November that includes acquisitions, especially in the healthcare sector where medicine transport has been a challenge due to temperature sensitivity.
For more of the Reuters story: reuters.com
Cuba completes rail link at Mariel port
On July 1, Cuba finished the construction of its first new railway for more than 20 years with the opening of the 65-kilometer link between Havana and the port of Mariel, connecting to the port's new container terminal.
The line uses sections of an abandoned railway between Havana and Guanajay and a new stretch between Guanajay and Mariel. It is is double-tracked and includes a link from Guanajay to Artemisa, where it joins the Havana – Pinar de Rio main line.
The new container terminal at the port of Mariel, which includes the establishment of a free trade zone, will replace existing facilities in Havana, which will release land in the capital for redevelopment.
A passenger service operates over the line, mainly to carry dockworkers from Havana to Mariel.
Cuban Railways hopes the new link will boost container movements by rail, since the port of Havana has a capacity of only 350,000 TEUs and the new Mariel port terminal will ultimately have the capacity to handle 1 million TEUs annually.
For more of the Rail Journal story: railjournal.com
OOCL found guilty of manslaughter in French court, fined
Hong Kong-based Orient Overseas Container Line has been fined $68,000 over the death of a top executive in France 11 years ago.
OOCL was found guilty on Wednesday by a criminal court in the French port of Le Havre of involuntary manslaughter over the July 3, 2003 death of Courtenay Allan.
Allan died after falling six floors down a lift shaft onboard the container ship OOCL Montreal, when the lift doors opened without the lift present.
For more of the South China Morning Post story: scmp.com
Tuesday, July 8, 2014
120 truckers walk off job Monday at L.A./Long Beach ports, picket trucking firms
Approximately 120 truck drivers who haul cargo at terminals at the Ports of Los Angeles and Long Beach walked off the job Monday morning and started picketing some harbor-area trucking companies, alleging widespread workplace violations.
Protest organizers say there is no scheduled end date to the walkout. Monday's picket lines, backed by Teamsters Local 848, targeted Total Transportation Services Inc., Green Fleet Systems and Pacific 9 Transportation.
This is the fourth and biggest protest over the last year against a number of regional trucking firms whose drivers haul cargo to and from the Southern California port complex. Drivers say they are erroneously classified as independent contractors, which means they have fewer workplace protections and lower pay than if they were company employees.
Drivers plan to picket at the truck company yards and then follow the rigs to port terminals. The protests had not disrupted operations at the Port of Long Beach as of 8:30 a.m. Monday, a port spokesman said. A spokesman at the Port of Los Angeles said operations there were also unaffected as of 9 a.m.
Companies directly employ only 10 percent of the region's 12,000 short-haul truckers, according to industry experts. In 2008, California started to go after trucking companies that misclassified employees as independent contractors, and the state is currently looking at more than 300 claims of wage theft related to misclassification.
It wasn't immediately clear whether Southern California dockworkers, whose contract just expired, would honor the truckers' picket lines if they demonstrated at the terminals. During the last trucker strike, dockworkers walked out in support for a few hours, but were ordered back when an arbitrator ruled it was unlawful. Without a contract, there is no legal way to order them back to work.
The International Longshore and Warehouse Union and the Pacific Maritime Association, which represents employers, are currently in talks to formulate a new agreement now that the former six-year contract at 29 West Coast ports expired July 1. Both sides have said they don't want to disrupt the flow of cargo.
For more of the Los Angeles Times story: latimes.com
Union truckers threaten another strike at Port Metro Vancouver
Union truck drivers are threatening to walk off the job hauling cargo at Port Metro Vancouver for a second time this year, alleging that some companies of underpaying workers.
Union truckers are frustrated that the federal and provincial governments have not made good on a promise to enforce a minimum pay rate for drivers, according to Gavin McGarrigle of Unifor.
McGarrigle asserts this has allowed some companies to underpay drivers and that if the government does not enforce minimum pay rates for all drivers soon, more than 400 unionized truckers will go on strike.
The Vancouver port authority responded on Sunday, saying it is already taking steps to enforce minimum pay rates. Port Metro Vancouver says it has created a complaint phone line allowing truckers to report companies allegedly underpaying their workers.
John Parker-Jervis of the authority says the province investigates the complaints, and then makes recommendations on penalties, which can be as severe as banning companies from the ports.
More than 1,000 independent truckers went on strike in February and 250 union truck drivers joined them in March, shutting down operations at Port Metro Vancouver and area ports for weeks.
Neither provincial or federal government representatives would comment on the strike threat.
For more of The Province story: theprovince.com
CMA CGM signs deal with Adani Ports to develop Mundra container terminal
CMA CGM Group said it signed a deal with Adani Ports and Special Economic Zone (APSEZ), India's largest port developer and part of Adani Group, to develop a new container terminal at Mundra Port in India.
The new 650-meter container terminal will feature 66 acres of back area capable of handling 1.3 million TEUs per year, according to the statement.
CMA CGM said the construction phase will be initiated right away with completion expected in 24 months, the statement said. The project includes the design and construction of a 710-yard jetty with a water depth of 54 feet, they said.
The shipping line says the terminal will initially have four rail-mounted quay cranes, each with a 65-ton capacity, capable of handling 18,000-TEU container vessels — by far the largest and first of their kind in India, the statement said. Yard equipment will include twelve 41-ton lift rubber-tired container gantry cranes that will accommodate seven rows of containers and one operational lane.
CMA CGM reports Mundra Container Terminal is the group's first port investment in India, where it intends to increase its presence.
Prologis boosts equity commitment to $588M for logistics venture in China
Global logistics firm Prologis announced a $588 million increase in the equity commitment to Prologis China Logistics Venture, including $500 million contributed by HIP China Logistics Investments Limited and $88 million by Prologis.
"The fundamentals of the Chinese logistics sector are very compelling, fueled by domestic consumption and the growth of e-commerce," said Gary Anderson, CEO, Prologis Europe and Asia. "This incremental equity commitment enables us both to continue to grow our joint business in China."
Prologis China Logistics Venture was created in 2011 with an aim to build, acquire and manage logistics properties in China, according to the statement. Prologis reports the venture has committed equity of more than $1.75 billion and a potential investment capacity, including leveraged funds, of $3.5 billion.
"We are delighted to re-up and build on our well established global relationship with HIP China Logistics Investments," said James W. Green, managing director, Global Client Relations, Prologis.
Prologis, a global provider and operator of logistics infrastructure, says it is focused on global and regional markets across the Americas, Europe and Asia. As of March 31, 2014, the firm says it owned or had investments in properties and development projects totaling 574 million square feet in 21 countries.
Tanker crewmember goes missing off coast of Texas
The Coast Guard crews and the crew of the tanker Elia are searching for Elia's chief engineer, who went missing off Port Aransas, Texas, on Sunday.
After searching the ship, the crew of the 800-foot Liberian flagged tanker called the Coast Guard for help at 1:55 p.m.
They reported that the chief engineer had been seen around 10:10 a.m., but did not show up after being requested twenty minutes later. They were about 20 miles offshore, on their way to the Port Aransas anchorage.
The Coast Guard Cutter Amberjack, an 87-foot patrol boat, was expected to search for the missing crewmember throughout the night.
For more of the KIII News story: kiiitv.com
Wednesday, July 9, 2014
ILWU and PMA take 72-hour break from West Coast labor talks
The International Longshore and Warehouse Union and the Pacific Maritime Association made a joint announcement Monday that they will take a 72-hour break from negotiating a new contract for nearly 20,000 dockworkers at 29 West Coast ports.
The parties said they have agreed to the 72-hour break so that the ILWU can address an unrelated negotiation that's taking place in the Pacific Northwest.
During this break, starting at 8:00 a.m. on Tuesday, July 8, through 8:00 a.m. on Friday, July 11, the parties have agreed to briefly extend the previous six-year contract that expired last week, the statement said.
The PMA and ILWU are in the midst of crucial negotiations to formulate a new labor deal to cover nearly 20,000 dockworkers at 29 West Coast ports.
TSA says Trans-Pacific freight rates holding, recommends second July GRI
Encouraged by the initial success of a July 1 rate hike and reassured by recent public statements that cargo will continue moving as U.S. West Coast labor negotiations extend past the contract deadline, container lines in the Transpacific Stabilization Agreement announced they are moving ahead with a second recommended general rate increase.
On July 15, TSA lines will recommend a previously announced second-stage $200 per-FEU general rate increase and peak season surcharge for cargo moving to Pacific Southwest ports in California, the statement said.
TSA says the increase follows a similar increase taken on July 1. While the revenue increase to the West Coast was split into two stages, TSA carriers say they applied a full $400 per-FEU in July for goods sailing to the Pacific Northwest, U.S. East and Gulf Coasts, and via intermodal to inland U.S. points.
Due to uncertain freight levels and optimism about continued strong demand through August, TSA is recommending another GRI on August 1, with the guideline amount to be announced in mid-July.
"With the overall uncertainty already seen in the eastbound freight market, the central issue for shippers and carriers alike is maintaining service and schedule reliability," said TSA executive administrator Brian Conrad. "All partners in the supply chain need to be able to respond quickly and cover contingencies in the event of cargo surges or bottlenecks. And they need to know that their costs are covered in the process."
Conrad said TSA members are pleased to hear that both sides in the West Coast longshore labor negotiations are committed to avoiding cargo disruptions now that the July 1 contract renewal deadline has passed and talks are continuing. "We respect the need for confidentiality in the negotiations, but it makes the kind of reassurances we have received all the more important to maintaining confidence in the market," he said.
TSA is a research and discussion forum of major container shipping lines serving the trade from Asia to ports in the U.S.
Port of Baltimore employers file suit against ILA local to recover strike damages
Two employer organizations at the port of Baltimore filed a lawsuit in U.S. district court to force a local longshoremen's union to pay them more than $3.8 million in damages from a three-day strike last year.
Last week, the United States Maritime Alliance and the Steamship Trade Association of Baltimore filed a complaint demanding the damages be paid. USMX said Local 333 had "not made any payments" related to the arbitrator's award and requested the court confirm Local 333's obligation to pay.
The lawsuit is the latest in an ongoing labor contract conflict that has hurt the port's reputation, forced the rerouting of cargo and brought union and employer representatives to Baltimore to negotiate in recent months.
USMX and the Steamship Trade Association filed the lawsuit to settle the damages and return to the contract negotiations free of its influence, according to Michael Collins, an attorney for the Steamship Trade Association of Baltimore.
The damages in question — $3,858,165.72 — spring from an October 2013 strike by members of the International Longshoremen's Association Local 333 over contract provisions, including control over job assignments and other issues that went beyond wages.
"Local contract negotiations are about to begin again and I think both sides are reasonably hopeful of a local agreement," he said. "This is all part of the same process."
ILA Local 333 has until July 22 to respond. How it would pay the damages were the court to force its hand is unclear.
Jennifer Stair, an attorney for Local 333, said she will be reviewing the lawsuit but otherwise declined to comment. Riker McKenzie, president of Local 333, declined to comment.
It is uncertain how or if the lawsuit will affect the ongoing contract negotiations. It could expedite a resolution to the standoff over damages, labor experts said, or distract officials from making a new contract deal before shipping lines divert more cargo in fear of more instability at the port.
Union and industry officials said contract negotiations are supposed to resume next week but did not provide dates.
For more of the Baltimore Sun story: baltimoresun.com
Nicaragua approves route for $40B canal
On Monday, a Nicaraguan committee approved a proposed route for a $40 billion shipping canal across the nation meant to compete with the Panama Canal.
The waterway would be more than three times as long as the 48-mile Panama Canal, and one of the largest infrastructure projects ever undertaken.
The committee of government officials, businessmen and academics approved a 172-mile route from the mouth of the Brito river on the Pacific side to the Punto Gorda river on the Caribbean.
Hong Kong-based HKND group, which is leading the project, proposed the route, which would pass through Lake Nicaragua, Central America's largest lake, and will be between 755 feet to 1,706 feet wide and 90 feet deep, according HKND engineer Dong Yunsong.
Environmental studies should be finished later this year to allow work to begin by December 2014, said committee member Telemaco Talavera, who added the plan is to finish the canal in 2019 and begin operations in 2020.
For more of the Reuters story: chicagotribune.com
Pirates board oil tanker off Indonesia
On Friday, pirates boarded a Honduras flagged product tanker, Moresby 9, which was hauling 2200 metric tons of marine gas oil, approximately 34 nautical miles from the Anambas Islands, Indonesia.
The shipping company managed to establish communications with the vessel and is currently conducting an investigation of what occurred.
Moresby 9 had a previous incident in 2013, when the siphoning of fuel was thwarted by the Malaysian Maritime Enforcement Agency, causing the robbers to flee.
For more of the Naval Today story: navaltoday.com
Thursday, July 10, 2014
Cargo surges at U.S. retail ports as West Coast longshore contract expires
As West Coast dockworkers and employers remain in talks to negotiate a new contract, holiday cargo is coming in at record levels to circumvent the supply chain disruptions of any possible strike action, according to the monthly Global Port Tracker report by the National Retail Federation and Hackett Associates.
The report said import volume at major U.S. container ports is forecast to total 1.5 million TEUs in July — the highest monthly volume in five years, as retailers imported merchandise ahead of any potential problems.
Some importers have begun shifting cargo to East Coast ports, NRF said, noting that West Coast ports handled 59 percent of U.S. retail container cargo in May, which was down from 62 percent in January.
"We're still hoping to get through this without any significant disruptions but retailers aren't taking any chances," said Jonathan Gold, NRF vice president for supply chain and customs policy. "Retailers have been bringing merchandise in early for months now and will do what it takes to make sure shelves are stocked for their customers regardless of what happens during the negotiations."
U.S. ports followed by Global Port Tracker handled 1.48 million TEUs in May, up 6.6 percent from May 2013.
June is forecast to be up 7.6 percent year-over-year at 1.46 million TEUs, and Port Tracker analysts predict that July volume will be up 4.3 percent at 1.5 million TEUs. August is forecast to be up 1.6 percent at 1.51 million TEUs, September up 1 percent at 1.45 million TEUs, October up 3.8 percent at 1.49 million TEUs, and November up 3.6 percent at 1.39 million TEUs.
NRF said it predicts 4.1 percent sales growth in 2014.
"The economy is on the upswing," said Ben Hackett Hackett, founder of Hackett Associates. "There's been a sharp drop in unemployment, consumer spending has seen solid growth over the last three months, and there's a strong level of consumer confidence."
Global Port Tracker covers the U.S. ports of Los Angeles/Long Beach, Oakland, Seattle, Tacoma, New York/New Jersey, Hampton Roads, Charleston, Savannah, Port Everglades, Miami and Houston.
Dockworkers at L.A.-Long Beach strike for 2 hours in solidarity with truckers
On Tuesday, three of 14 terminals were shut down at the Ports of Los Angeles and Long Beach for about two hours when dozens of dockworkers temporarily walked off the job in solidarity with striking port truck drivers.
Longshore workers walked off the job at APL and Evergreen terminals at the Port of Los Angeles around 9:00 a.m. Tuesday and at LBCT terminal at the Port of Long Beach before 10:00 a.m. after port truck drivers picketed the terminals, according to port officials.
The dockworkers went back to work around 11:00 a.m. after a federal mediator ruled the strike was against their contract, which had been temporarily extended to Friday by a mutual agreement between the International Longshore and Warehouse Union and Pacific Maritime Association.
Meanwhile, port truck drivers continued demonstrating Tuesday, targeting trucks from Green Fleet Systems, Total Transportation Services Inc. and Pacific 9 Transportation Inc. to protest the misclassification of drivers as independent contractors instead of employees, which they say is done deliberately to keep them from receiving fair wages and benefits.
The approximately 36 truckers on the picket lines attracted several unions that represent hotel workers, electrical workers and service employees such as the Teamsters, the Service Employees International Union, UNITE HERE Local 11 and the International Brotherhood of Electrical Workers. Many of the groups pledged support and nearly $50,000 toward a hardship fund for the port truck drivers.
The three trucking companies have said that the strikes are an attempt by the Teamsters to unionize drivers, many of whom prefer to be independent contractors.
For more of the Press Telegram story: presstelegram.com
COSCO Container Lines Americas announces major restructuring
COSCO Container Lines Americas has announced a major restructuring and relocation of its offices throughout the U.S. to improve "overall performance and efficiency," noting the plan to close eight offices and transition to a single operation center should be implemented by the end of this year.
The company said it would establish the COSCO North American Operation Center, through which most of its business will be funneled, and that they will announce the location once it has been selected.
The Boston, Charleston, Chicago, Henderson, New York, Norfolk, San Francisco and Seattle CCLA offices will be closed and all their functions will be transferred to the new operation center, the statement said.
Concurrently, the company reports most of the customer service and operations performed at CCLA headquarters in Secaucus, N.J. will also be transferred to the new operation center.
CCLA said its customer's service would remain uninterrupted throughout the restructuring process.
Business coalition pushes Congress to replenish Highway Trust Fund and reauthorize Export-Import Bank
A broad coalition of U.S. business groups, including the U.S. Chamber of Commerce and the National Association of Manufacturers, and labor unions such as the Laborers' International Union of North America are pressuring Congress this week to refinance the Highway Trust Fund before the fund dries up in August.
Strong resistance from conservative Republicans to replenishing the Highway Trust Fund and reauthorizing the federal Export-Import Bank has resulted in rare criticism from business leaders about how the Republican party's support for business has been undermined by Tea Party populist fervor.
Only 16 days remain on the House's legislative calendar before a five-week summer recess, and if nothing is done before that, federal highway funding will be cut 28 percent on Aug. 1, at the peak of the summer construction season.
The Export-Import Bank, which guarantees loans to foreign purchasers of American exports, will have to close by the end of September if Congress does not reauthorize it.
Business leaders are worried that inaction by Congress on these issues could endanger the nation's economic recovery.
Ned Monroe, the National Association of Manufacturers senior vice president for external relations, said business groups like his, the Building America's Future coalition, and labor unions will start a multi-layered advocacy effort this week.
The Laborers' International Union of North America started their efforts on the highways last week, including billboards and a school bus with part of a crumbled bridge on its hood. Advertising, lobbying in D.C. and pressure at home from construction firms and union members are to follow.
"Stopping the crisis facing the Highway Trust Fund will require Congress to take action," Jim Hoffman, president of Wisconsin-based Hoffman Construction Company, said Monday at an event in Madison, Wis.
Regarding the trust fund, the Chamber of Commerce and its Alliance for Transportation Mobility coalition have been applying pressure with daily commentaries and opinion pieces, compiling state-by-state statistics on infrastructure needs and the damage a shutdown could do. And for the first time in a while, business groups are looking for help from Democrats.
"We can't be reliant on just one political party," Monroe said.
For more of The New York Times story: nytimes.com
Broken crane puts Labrador cargo ship out of service
A broken crane is keeping a cargo ship from delivering crucial freight to coastal communities in Labrador, whose residents have been complaining about scarce food supplies at their local stores
Nunatsiavut Marine said Monday that the MV Astron had to be taken out of service, but was later on its way to Lewisporte for repairs to the crane.
The company said it was able to unload 90 per cent of the freight from the vessel before the crane broke, and that regular service should resume on July 12.
For more of the CBC story: cbc.ca