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Summary for July 8 - July 12:
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Monday, July 8, 2013 Top StoryAnalysts: Maersk-MSC-CMA CGM alliance could end price war
In a bid to cut costs and end five years of overcapacity, Maersk, Mediterranean Shipping Co. and CMA CGM pooled 255 ships on 29 loops last month, covering the globe's three busiest trade lanes. The P3 alliance, which begins the second quarter of 2014, could boost freight rates as early as this month, sending a "clear message" to customers that the price war is over, according to Deutsche Bank AG. ATP, Denmark's biggest pension fund, with $140 billion in assets, said it expects its Maersk stake to grow in value because of the deal. "The hope is that this will make a big difference and the industry has really needed something to happen," Jonas Bhatti, a portfolio manager at ATP, said in an interview. "This means that Maersk Line will become more profitable. This is positive for Maersk as an investment." Even the shipping industry's users have admitted rates may increase. The Asian Shippers' Meeting and the European Shippers' Council said in a joint statement that they have "deep concern" over the alliance. The Shanghai Containerized Freight Index, which fell 21 percent in the past three months, jumped 22 percent on June 28, a sign that container company announcements of July 1 rate increases will be successful. The P3 alliance still needs to win approval from competition authorities. According to Drewry Maritime Research, the partnership is not likely to damage competition since there are more than 15 rival carriers on most trade routes. For more of the Bloomberg story: businessweek.com Evergreen/OOCL/MOL/K-Line/NYK change joint service rotation in Asia PacificFive container carriers based in Asia have agreed to make rotational changes to the North East Asia Australia Service (AU2), adding Qingdao to the rotation to improve schedule reliability. Taiwan's Evergreen Marine, Hong Kong's Orient Overseas Container Lines and Japanese lines MOL, K-Line and NYK will jointly provide a direct link from Qingdao to Australia and shorten the travel time from Shanghai and Ningbo to Australia. The first vessel of the new rotation will call at Yokohama port on August 4. AU2's new rotation will be Yokohama (Sun/Sun), Osaka (Tue/Tue), Busan (Wed/Thu), Qingdao (Fri/Sat), Shanghai (Tue/Wed), Ningbo (Wed/Thu), Melbourne (Tue/Thu), Sydney (Fri/Sun), Brisbane (Mon/Tue) and back to Yokohama. China International Marine Containers signs $3.7B container ship contractChina International Marine Containers has contracted to buy seven 8800-TEU-container ships from Dalian Shipbuilding Industry. The price of each vessel is $85 million, making the total contract worth $3.69 billion. CIMC Financial Leasing also signed a 204-month container vessel financing lease contract with a subsidiary of Mediterranean Shipping Company. According to the contracts, CIMC Financial Leasing will first buy the seven vessels and then lease them to the MSC subsidiary. The container ships will be delivered in the second quarter 2015 at the earliest. CIMS will charge a one-day rental rate of each vessel for $25,000. The MSC subsidiary will buy out these ships at $21.50 million each when the lease agreement expires. For more of the MENA Financial Network story: menafn.com Some apparel manufacturing slowly reshoring to U.S.Some apparel manufacturing, which left in massive waves for mainly Asian locations more than 20 years ago, is "reshoring" to the U.S., with clothing designers and retailers citing rising labor costs, poor quality, and long lead times in China. Major retailers such as Brooks Brothers and Saks, plus dozens of other companies, have transferred some of their manufacturing back to the U.S., creating approximately 1000 jobs. While it's a tiny number compared with the 800,000 jobs lost to foreign clothing factories since 1990, it raises hopes that the trend will grow. Even though U.S. manufacturers still face stiff competition from low-wage countries in Asia and elsewhere, Asian factory wages are increasing fast and U.S. consumers have demonstrated an inclination to pay more for Made-in-America products. "We feel this is going to be the wave of the future — manufacturing in the United States," says John Martynec, who heads domestic manufacturing for Brooks Brothers. Martynec said if a style is popular, new orders can be filled from a U.S. factory in two weeks, versus up to seven weeks from an overseas factory. Making clothes in the U.S. also improves Brooks Bros.' global business. "A U.S. product is perceived as a luxury item in other areas of the world," he says. Margaret Bishop, an industry consultant and adjunct professor at the Fashion Institute of Technology, says most clothing brands and retailers are considering reshoring. She estimates that as many as 200,000 apparel-making jobs could return to the U.S. over the next decade. For more of the USA Today story: usatoday.com Canadian cargo train carrying crude derails and explodes, 5 dead, 40 missingThe death toll rose to five in Saturday's tragic train derailment in Lac-Megantic, Quebec, and officials say 40 are missing. A runaway train carrying crude oil reached a speed of up to 90 kilometers per hour before derailing in the small town, setting off a series of explosions. Fears remain that many of the missing may have been vaporized in the blast early Saturday morning, after the driverless train hurtled into the busy downtown core. Fire chief Paul Lauzon said fire crews worked all night to cool five tankers to make sure they did not explode. He said as of Sunday morning, two of the 73 tankers involved in the derailment remained a concern. The explosions destroyed around 30 buildings, sending large fireballs and mushroom clouds into the sky. For more of the Toronto Star story: thestar.com For more of the CTV News story: ctvnews.ca
Tuesday, July 9, 2013 Top StoryNRF: Strong retail import growth expected for fall 2013
"With the economy recovering slowly, retailers have been cautious with imports this summer but it's clear that they expect an upturn later in the year," said Jonathan Gold, NRF vice president for supply chain and customs policy. "Import numbers have been close to flat since spring, but we expect to see stronger increases this fall." Although cargo import figures count only the number of cargo containers brought into the country and not the value of the merchandise inside them, the amount of merchandise imported does provide a rough barometer of retailers' expectations. U.S. ports followed by Global Port Tracker handled 1.38 million TEUs in May, up 1.2 percent from April and 0.6 percent from May 2012. Global Port Tracker predicts June will be down 0.7 percent year over year at 1.37 million TEUs, July up 1.1 percent at 1.43 million TEUs, August up 1.7 percent at 1.45 million TEUs and September up 2.4 percent at 1.44 million TEUs. October is predicted to reach 1.46 million TEUs, up 9.1 percent, and November to reach 1.38 million TEUs, an increase of 7.3 percent from 2012. The first six months of 2013 totaled an estimated 7.8 million TEUs, up 1.2 percent from the first half of 2012 Hackett Associates Founder Ben Hackett said actual results will hinge on consumer confidence. "Consumer sales remain relatively weak compared with GDP," Hackett said. "If consumers do not turn their confidence into purchases then import volumes will drop." 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. Oregon AFL-CIO supports ILWU longshoremen in Columbia Grain lockoutAccording to the International Longshore and Warehouse Union, ILWU workers locked out by Columbia Grain at the Port of Portland recently received support from the Oregon AFL-CIO, which has 250,000 members statewide in more than 40 affiliated unions. The Oregon AFL-CIO executive board unanimously passed a resolution at its June 21 meeting to support the locked-out International Longshore and Warehouse Union Local 8 members in their efforts "to secure a fair contract with Marubeni-Columbia Grain and Louis Dreyfus Commodities, and calls for Marubeni-Columbia Grain to immediately cease its lockout." The AFL-CIO also called on its affiliate unions to take all necessary actions to support the ILWU in the conflict with the grain owners. Marabeni-Columbia Grain and Louis Dreyfus Commodities are two of four employers represented by the Pacific Northwest Grain Handlers' Association, and both own grain elevators in Portland. Columbia Grain locked out workers beginning May 4. A third company that owns an elevator in Portland is U.S.-based TEMCO, which broke off from the other grain terminal employers in March, separately negotiating and ratifying a new contract with its longshore workers. The fourth company in the Pacific Northwest Grain Handler's Association does not have a terminal in Oregon. Mitsui's United Grain terminal, located in Vancouver, Washington, locked out its union workers as of February 27. "The AFL-CIO has a long history of backing up other unions in their struggles," said Leal Sundet, ILWU Coast Committeeman. "That they are now backing us up as we're under attack by Marubeni is a good thing, and we look forward to getting our hardworking members back to work with a fair agreement that respects the many decades of service and profits we've provides to these companies." Cushman & Wakefield snags major S. Calif. property management contractCommercial real estate services firm Cushman & Wakefield has been awarded a 9.0 million square foot industrial property management contract by IndCor Properties, according to a company statement. The contract involves management of industrial properties in Southern California including San Diego, Irvine, Inland Empire and Orange County. Cushman & Wakefield's already manages 3.5 million square feet of IndCor's industrial properties in Chicago. China suspends release of PMI industry dataChina suspended the release of industry-specific data from a monthly survey of manufacturing purchasing managers, with an official telling the Beijing press there's limited time to analyze the large volume of responses. "We now have 3,000 samples in the survey, and from a technical point of view, time is very limited -- there are many industries, you know," said Cai Jin, vice president of the China Federation of Logistics & Purchasing, which compiles the data with the National Bureau of Statistics. The disappearance of data on industries adds to other issues that obstruct the analysis of the world's second-biggest economy, after phony invoices inflated trade numbers this year. No readings were released on export orders, imports and finished-goods inventories from the federation or the statistic's bureau, and no explanation for the omission was forthcoming. "Suspension of the monthly data, without prior notice, makes the research work difficult for us," said Xu Xiangchun, a steel researcher and chief analyst at Mysteel.com to Bloomberg. "The random absence of official data is disorienting." Cai said the suspension wasn't permanent. He didn't elaborate on the reason for the decision beyond rejecting the idea that it was because the data showed too much weakness. For more of the Bloomberg story: bloomberg.com Search for sunken tug in Mississippi River continuesOfficials continue to search for a tugboat that sank in the Mississippi River, which triggered the closure of a stretch of the river south of New Orleans over the weekend. The 48-foot tug C-Pec sank Saturday due to an unknown cause. Two people aboard were rescued. After navigational hazards were ruled out, the Mississippi was reopened from its mouth to mile-marker 10 on Sunday night to alternating one-way vessel traffic. The Coast Guard said in a statement it was unclear when the stretch would reopen to two-way traffic. For more of the Business Week story: businessweek.com
Wednesday, July 10, 2013 Top StoryILWU dockworkers picket Port of Oakland as terminal operators SSA and Ports America conflict over port settlement
The settlement would give control over two terminals to SSA Terminals, which provides fewer jobs to ILWU members. Starting at 7:30 a.m. Tuesday, longshoremen picketed in front of the APL terminal, blocking berths and causing a long line of trucks to wait through the afternoon to deliver and pick up supplies at berths 57-59, located along Middle Harbor Road. The proposed deal is being supported by Oakland stadium proponents because it would end maritime operations at Howard Terminal, which is seen as the most viable spot for the new Oakland A's ballpark. Mike Villeggiante, ILWU Local 10 president, said the two-hour Tuesday protest would not be repeated Wednesday. He said workers refused to adhere to the ruling and took their grievance to coast-wide arbitration. Retired ILWU workers picket Port of Long Beach MondayA conflict over medical benefits triggered a work stoppage at the Port of Long Beach on Monday, when at least 200 longshore workers picketed the downtown office of the Pacific Maritime Association. Scores of ILWU workers walked off the job in protest Monday morning at Pier B, where they were scheduled to unload Toyotas, according to Port of Long Beach spokesman Art Wong. The International Longshore and Warehouse Union workers said their medical benefits were being denied or delayed. "It's all about wealth before health," said Frank Ponce De Leon of San Pedro, adding that his credit rating is being destroyed because he can't pay his medical bills. The picket line at 300 Oceangate in front of the Molina Center drew about 50 retirees at about 9 a.m., but grew by midday to at least 200 picketers. Protesters said PMA has changed the operations of the medical carrier, leading to extensive delays in payments of medical bills or denial of payments. Retirees and spouses are being "hounded or harassed by collection agencies to pay medical bills that the PMA employer should be paying under vested health insurance." “International Longshore and Warehouse Union (ILWU) members are waging the wrong battle today," the PMA spokesman Wade Gates said in a statement Monday. "Rather than picketing employers and disrupting terminal operations as part of its 'Battle for OUR Benefits' work action, the ILWU members should join PMA in taking aim at tens of millions of dollars in fraud and abuse in the union's health care plan." For more of the Press-Telegram story: presstelegram.com Shanghai port container volume drops 5.7 percent in JuneContainer volume in Shanghai, the world's busiest port, dropped 5.7 percent in June from May, due to the weak global economy and the fall in China’s manufacturing, according to analysts. In Hong Kong, which is the world's fourth-busiest container port, container throughput declined 9.1 percent in the first five months of 2013 year over year. This is the worst performance since 2009, the Hong Kong Port Development Council said. Shanghai's container handling was 2.77 million TEUs in June, a 0.06 percent decrease year over year, according to the website of terminal operator Shanghai International Port Group. "Trade is likely to continue to stay slow, as reflected in the sharply deteriorating New Export Order Index [a component of China's purchasing managers' index], which usually leads container volume by one to three months," said Jefferies analyst Liu Boyong. For more of the South China Morning Post story: scmp.com Pirate: 4 crew and 7 pirates dead after cargo ship sinks off SomaliaFour crewmembers and seven Somali pirates were killed when a cargo ship seized by pirates off the Somali coast sank on Sunday, with 13 missing, according to a pirate who works with the gang.
Thursday, July 11, 2013 Top StoryGeorgia Ports signs inland port deal with Cordele Intermodal
CIS moves cargo through the inland port of Cordele, a Georgia shipping terminal south of Macon that's linked to the ports of Savannah and Brunswick via rail. CIS is located on 40 acres, with an option to expand up to 1,200 acres in the Crisp County Industrial Park. The facility is less than one mile from Interstate 75, Georgia Highway 300 and Georgia Highway 280. The memorandum of understanding, which guarantees a direct 200-mile rail route to and from GPA's Garden City Terminal in Savannah, will serve as a gateway to Southwest Georgia and adjacent regions of Florida and Alabama. It also provides truckers with the opportunity for shorter hauls, expanding the markets for regional businesses. "The GPA is one of our state's strongest job creators, supporting more than 352,000 jobs across Georgia," said Georgia Gov. Nathan Deal. "By more efficiently connecting businesses in this region to the global marketplace through our deep-water ports, the Cordele Inland Port is now part of that broader effort, supporting jobs and future development." By reducing the number of truck miles into Savannah, the Cordele operation saves on shipping and provides new service offerings, according to the port. "The new partnership provides our customers direct access to 38 weekly shipping services, connecting the region to vibrant global export markets," said GPA Executive Director Curtis Foltz. Cosco Shipping triples net lossCosco Shipping, part of China's largest shipping group, reported that its first-half net loss tripled, the latest indication that the country's slowed economic growth is impacting corporate earnings. Cosco's loss in the first six months was $12.7 million, widening from $3.8 million a year earlier, according to a company statement to Shanghai's stock exchange Wednesday. Chinese data that showed an unanticipated fall in June exports and imports Wednesday highlighted a slowdown as Premier Li Keqiang moves to reduce dependence on investments and overseas shipments for fiscal growth. This week UBS AG cut its 2013 growth forecast for companies listed in Shanghai and Shenzhen, saying earnings may worsen if state policies remain the same. "Corporate profitability is closely linked to economic growth," Ma Jun, Deutsche Bank AG's chief China economist in Hong Kong, said to Bloomberg. When economic expansion weakens by one percent, corporate profit growth may slow by 10 percent, he said. Cosco Shipping has dropped 23 percent this year, compared with 8.6 percent for the Shanghai Composite Index. For more of the Bloomberg story: businessweek.com Port of Virginia sets cargo volume recordsIn June, the Port of Virginia handled 175,864 TEUs, a 4.4 percent increases year over year. Export cargo volume in Norfolk rose 3.8 percent to 93,020 TEUs, while import volume rose 5.1 percent to 89,635 TEUs. "In terms of cargo volume, this June was the best June we have ever had," said Rodney Oliver, the Virginia Port Authority's (VPA) interim executive director, in a statement. "Our rail volume in June was 7.6 percent ahead of where it was at the same time last year, which shows us there is significant and continuing interest in utilizing rail to and from this port." The port also experienced its best ever cargo volume for the first half of the year at 1.054 million TEUs, a 6 percent surge over 2012 numbers. "There are a number of factors that we can attribute this success to: ocean carriers loading their vessels heavy to take advantage of our 50-foot deep channels, an increasing number of first-in and last-out vessel calls, our expanding rail service, our push into new markets like Greensboro and an improving economy," said Oliver. Port Metro Vancouver responds to city council ban on coal shipmentsPort Metro Vancouver announced it is "aware" of the Vancouver city council's recent ban on the handling, storage and trans-shipment of coal at its marine terminals and berths and says that there are no terminals proposed within city limits. The port is the second largest exporter of coal in North America, which has caused controversy over the planned expansion of its facilities. Though there are no existing coal facilities in Vancouver and council has no jurisdiction over the port, the city voted 9-2 late Tuesday night for the zoning and development bylaw amendment. Vision Vancouver council members said they wanted to send a "clear message" to the port that coal, whether metallurgical for steelmaking or thermal for power generation, is not welcome in the municipality, which is trying to have "the cleanest air of any major city in the world" by 2020. City staff said the city ban on any future shipments of coal was triggered by industry inquiries about shipping coal out of private lands on the city's northeastern waterfront. For more of the Vancouver Sun story: vancouversun.com Longshoreman hurt when container falls on truck at Charleston portA shipping container fell onto a truck at the State Ports Authority's terminal in Charleston on Monday, injuring a longshoreman, according to officials. The injured worker, a 63-year-old man who was driving a yard truck, was transported to Medical University Hospital in stable condition, said Charleston County EMS Director Don Lundy. The shipping container fell and struck the yard truck and the port's gantry crane around 9:30 a.m., according to SPA spokeswoman Allison Skipper. For more of the Post and Courier story: postandcourier.com Submit Your Press |
Maersk Line's recent alliance with two of its greatest rivals to form the biggest container alliance in history is viewed as their best chance to boost profits, according to European shipping investors and banks.
Import volume at major U.S. retail container ports will likely increase only 1.1 percent in July year over year, but significant increases are forecast for fall as retailers head into peak season, according to the monthly Global Port Tracker report released by the National Retail Federation and Hackett Associates.
Dozens of dockworkers at the Port of Oakland picketed Tuesday for two hours due to a prospective settlement that will go before port commissioners on Thursday that they say will cost union jobs. The settlement deal, designed to help Oakland build a waterfront baseball stadium, has also exposed the Port of Oakland to lawsuits from two port terminal operators seeking public concessions. 
A new inland port agreement was signed Wednesday by Governor Nathan Deal between the Georgia Ports Authority and Cordele Intermodal Services to create an inland port with a direct connection to the Garden City Terminal in Savannah, according to a GPA statement.