Cargo Business Newswire Archives
Summary for July 9 - July 13, 2012:

Monday, July 9, 2012

Top Story

Calif legislature approves $8 bil towards bullet train

The California state legislature narrowly approved approximately $8 billion to be allocated towards the first phase of a $68 billion passenger bullet train project.

The high-speed rail project that is slated to end up stretching 130 miles from Sacramento and the San Francisco Bay Area running as far south as San Diego reportedly faces several regulatory hurdles and lawsuits from agricultural interests in the Central Valley – a key thoroughfare for the passenger train.

The state senate’s 21-16 vote included authorization of $2.6 billion in state bond funds for trackage from Madera to Bakersfield, with $3.2 billion coming from the federal government.

"The Legislature took bold action today that gets Californians back to work and puts California out in front once again," said Governor Jerry Brown said in a statement.

The bullet train project was initially pegged at a cost of $33 billion with completion by 2020 state voters approved borrowing $9.9 billion in 2008 before the U.S. recession hit its lowest point. The pricetag has since more than doubled with a finish date of 2028.

A Los Angeles Times poll in May revealed that 59 percent of voters would reject the plan if it were placed back on the ballot.

For the full L.A. Times story:

U.S. files complaint with WTO against China’s auto tariffs

The United States government filed a complaint with the World Trade Organization against China last week over tariffs on American auto exports that can reportedly exceed 20 percent in some cases.

The bulk of autos sold in China by the Big Three U.S. automakers are built there, while luxury and larger vehicles destined for the Chinese marketplace tend to be built in the U.S.

The U.S. exported approximately 92,000 of those types of vehicles to China last year, at a value of about $3 billion, according to the Office of the U.S. Trade Representative.

The latest U.S. trade complaint was the seventh the Obama administration has made against China.

An unnamed official in the Obama Administration reportedly said China’s high auto import tariffs are a retaliation the to U.S.-imposed taxes on Chinese tires from 2009 that the WTO upheld.

For the full Washington Post story:

China faces merchant mariner shortage

China is reportedly not turning out professional mariners fast enough to meet the country’s growing merchant fleet demand.

The China Daily reported that more than 10,000 college graduates there have joined the merchant mariner ranks since 2006 as part of a government-funded program that supports the country’s shipping industry.

However, China’s colleges are not able to keep up with the country’s expanding trade demand, with only a few thousand merchant seamen coming on line each year, the Daily reported.

"It takes just months to build a large boat, but at least four to five years to train a qualified seaman to operate it," said Li Enhong, director of merchant seamen management at the Ministry of Transport.

The government program includes subsidizing one year of merchant mariner training for college students who are majoring in non-maritime-related disciplines.

College graduates in China can reportedly earn significantly higher wages than many other professions.

"A helmsman can earn $2,000 a month after several years working in China," said Chen Fuhan, deputy dean of Dalian Maritime University. "This is definitely a good wage compared with many jobs for graduates," he said.

For the full China Daily story:


Tuesday, July 10, 2012

Top Story

Retailers urge ILA-USMX to avoid work stoppage; cite possible re-routing

A group representing U.S. retailers urged longshoremen and their employers operating on the East and Gulf coasts to reach a contract agreement "well in advance" of the September 30 deadline, saying any disruption through work stoppage would be "destructive" to supply chains and could cause re-routing of cargo, as the two sides prepare to meet again in Florida next week for a new round of negotiations.

"This potential disruption would be devastating to the retail industry as it would disrupt the flow of goods, resulting in lost sales and aggravated customers," said Sandy Kennedy, president of the Retail Industry Leaders Association in a statement regarding a letter her group copied to ILA President Harold Daggett and James Capo, chairman and chief executive of the United States Maritime Alliance.

The ILA and USMX both recently confirmed they are heading back into negotiations in Delray Beach, Florida next week after a return to discussions in early July where both sides claimed to their respective members that there were "significant discussions" on "critical items of importance" and that "substantial progress" was made over areas such as terminal automation, chassis pools, wages, and benefits.

"The ILA is hopeful that a tentative agreement can be reached during the next round of talks in late July," said Daggett in a notice to his members.

The USMX's Capo wrote to his members: "While clearly there are many issues to be resolved, I am confident that both sides recognize the importance of reaching an agreement."

Prior to July, there were heated public exchanges amid on-and-off talks that centered on the contentious issues of new technology implementation and chassis jurisdiction.

Fears of a possible work stoppage by the over 14,000 union workers from Maine to Texas operating at 14 ports have rippled throughout the shipping industry.

RILA's Kennedy said her retailer members have been hedging their bets by working on contingency plans that could include re-routing cargo through other gateways in the event of a potential shutdown of waterfront labor in the eastern half of the U.S.

"Indeed, some of our members advise that they are beginning to redirect their supply chains in order to allow adequate lead time to ensure that customer needs can continue to be met, regardless of whether the negotiations are successfully concluded by September 30," she said in her letter to the ILA and USMX.

However, she also said altering the flow of cargo is not a simple thing to do.

"Supply chain changes of this magnitude are not desirable to retailers because they take time both to implement and to reverse."

South Carolina port to go inland

The South Carolina State Ports Authority announced it plans to develop, and operate, an inland port in Greer, South Carolina, and has allotted $23.5 million in its 2013 fiscal budget towards the 100-acre site.

The port said in its statement the inland port would be a public-private partnership and that upon land permit approval, it would apply for Transportation Investment Generating Economic Recovery (TIGER) grant funds "due to the multimodal characteristics of the project."

"The successful growth of intermodal container movements in our state and the region requires the development of state-of-the-art container handling facilities in the interior able to ground loaded and empty containers and leverage the efficiency and sustainability of rail transportation," said Jim Newsome, president and CEO of the SCPA.

The inland port project is akin to the Virginia Inland Port in Fort Royal, Virginia in that the SCPA, like the Virginia Port Authority, would operate the facility, Newsome said.

The facility's proximity to the I-26 and I-86 corridors will be a "game changer" and encourage the further development of a distribution hub, Newsome said.

The port said it is negotiating a preliminary engineering contract with Patrick Engineering to "define the land footprint required to support the facility, the final cost, and key operational aspects and will be performed on a fast-track basis consistent with the aggressive overall timetable for the project."

GE Capital sells chassis unit

General Electric Capital Corp. has sold its Transport International Pool Inc. unit of 27,000 U.S. -based over-the-road trailers to the consortium of Wood Creek Capital Management, Bowman Sales, and Milestone Trailer Leasing, according to an announcement.

The financial terms of the deal were not disclosed.

The consortium said the majority of the trailers would be owned by Wood Creek affiliates and managed and operated by Trailer Leasing Alliance and Quest Capital Group.
"Our acquisition of the TIP trailer fleet expands Wood Creek's transportation footprint beyond existing investments in U.S. intermodal and commercial aviation markets," said Wood Creek President Jonathan Rotolo in the statement.

"The industry fundamentals, driven by a historically small U.S. trailer fleet, offer attractive returns to our investors and complement our existing transportation investments," Rotolo said.

Neiman Marcus to lease distribution center in Pennsylvania for East Coast ops

Retailer Neiman Marcus plans to enter into a 10-year lease for just under 200,000 square feet of distribution space in Jenkins Township, Luzerne County, Penn to support its East Coast operations, according to an announcement.

The company said it would invest over $12 million in leasehold improvements to the project that could create over 150 jobs.
Neiman Marcus received an $895,950 funding offer from the Department of Community and Economic Development, that included a $375,000 Pennsylvania First grant, $67,950 in job training assistance and $453,000 in job creation tax credits, the statement said.

"After a long and thorough study of our future supply chain needs, we are very pleased to be opening a new East Coast Distribution Center in Pittston," said Neiman Marcus Group Executive Vice President, Chief Operating Officer and Chief Financial Officer Jim Skinner.

"The new facility is strategically located to allow us to better serve our customers and stores in the northeast. After successfully operating stores in Pennsylvania for over 15 years, we look forward to expanding our presence in the state," Skinner said.

Costa Concordia survivors deal with Carnival's limited liability agreements (video link)

Video link to MSNBC report on survivors of the Costa Concordia cruiseship tragedy off the coast of Tuscany, Italy six months ago, and how they have learned that they signed agreements before their trip with Carnival Cruise Lines that limited the vessel operator's liability in the event of a shipwreck.


Wednesday, July 11, 2012

Top Story

Trans-Pacific carriers look to August rate increases for earnings boost

Container-shipping lines serving the Asia-U.S. eastbound trans-Pacific trade say they will "stay focused" as they look to the month of August for a collective earnings boost as announced freight rate increases are supposed to take effect.

Ocean carrier members of the Transpacific Stabilization Agreement recently announced dry cargo rate increases that range from an average of $500 per-forty-foot container to $700 per-FEU from Asia to the U.S. West Coast to mostly be implemented during the first week of August.

The TSA members have also announced recommended increases to refrigerated container rates that range from $1,000 per-FEU to $1,250 per-FEU for Asia-West Coast services that would take effect by August 15.

"While refrigerated cargoes such as seafood represent a relatively small share of total cargo eastbound, they make an important contribution to the round-trip cost of managing expensive equipment that is in high demand on the U.S.-Asia return," the TSA said in a statement.

"Carriers across the entire trade are determined to maximize yield from ships they expect to approach full utilization throughout the summer months," said TSA executive administrator Brian M. Conrad.

"Too much is at stake in 2012 for the lines, their investors, their creditors and their suppliers and vendors to leave money on the table after sustaining heavy losses in two of the last three years, and amid strengthening demand," Conrad said.

The TSA members said they also want to "establish a more compensatory baseline for subsequent negotiation of 2013 longer-term contracts."

China trade slowed down in June

China's imports grew at a slower-than-projected rate in June, while exports beat year-over-year numbers, but dropped from May's 12.7 percent gain to 11.3 percent, prompting speculation that the Asian giant might inject more stimulus measures while waiting for the U.S. economic recovery to strengthen.

Imports into China grew 6.3 percent according to trade data released this week; 5 percentage points lower than industry analysts' projections.

"This will reinforce the expectation [that] another required reserve ratio cut will come, but I think that what the market really wants is more direct stimulus," said Piper Jaffray principal sales trader Andrew Sullivan in a statement on the trade data.

Bank of America Merrill Lynch analysts said the trade data is better than the late 2008 through first half of 2009 global recessionary period that resulted in massive factory layoffs in China.

"Based on trade data of upstream economics like [South] Korea and Taiwan, we see strong headwinds for China's exports in the second half," the analysts, headed by Ting Lu, said in a note as reported by Marketwatch.

Lu said the central government would likely introduce more policies to stimulate slowing exports and declining property investment.

The following Marketwatch and Reuters sources were used for this report: and

Hamburg Süd to leave Savannah for Charleston

Hamburg Süd announced it would move its U.S. East Coast to Australia/New Zealand and Latin American services from Savannah, Georgia to Charleston, South Carolina.

The move would be effective by mid-September, the German container-shipping line said in a statement, with the first ship call Charleston, the Bahia Grande on September 21 of this year.

"Hamburg Süd wishes to thank the Georgia Ports Authority for its support and cooperation in Savannah over the past years," the liner said in its statement.

Hamburg Süd announced a similar shift of its Pacific Coast/Western Mediterranean services recently from the Port of Seattle to the nearby Port of Tacoma as part of its vessel-sharing agreement with fellow-German shipping line, and Grand Alliance member Hapag-Lloyd. The Port of Tacoma had announced the service shift would bring in additional 32,000 TEUs to its Washington United Terminals operation.

Report: Airbus and Boeing could create supply chain backlog in coming years

Airbus and Boeing could be ramping up production bigger and faster than suppliers can keep up with over the next 10 years, according to a new report by Forecast International.

The report says 14,655 large commercial airliners will be produced by the two aero giants from 2012 to 2021 at an estimated value of $2.04 trillion, the Connecticut-based market research firm reported in its "Market for Large Commercial Jet Trasports."

"The potential for bottlenecks among suppliers means that Airbus and Boeing need to tread cautiously when it comes to future production increases," said Forecast International's senior aerospace analyst Raymond Jaworowski.

The report cites a new environment for the two companies that could leave a number of suppliers "unable or even unwilling to support continual production increases."

"Adding to the pressure on suppliers is the fact that Airbus and Boeing are shifting their focus from manufacturing to integration, and are looking to outsource more design and production responsibilities," the report said.

A second major concern that is referenced in the report is the health of the airline industry with several individual airlines experiencing financial difficulties, including some that have hundreds of new aircraft orders in their respective pipelines.

"At the same time, Airbus and Boeing have considerable incentive to keep production rates high and growing," the report said, with both companies holding large numbers of unfilled orders.

"But this means long waiting times for customers to take delivery of their aircraft, which often results in considerable frustration for these customers. A lack of early delivery slots could also tempt potential buyers to take a serious look at new aircraft emerging from manufacturers outside of the Airbus/Boeing duopoly," the report said.

Norfolk Southern train carrying ethanol derails in Ohio causing explosion and fire

An area one-mile-wide was evacuated in Columbus, Ohio early Wednesday morning after a Norfolk Southern carrying ethanol reportedly derailed causing an explosion and subsequent fire.

Two people were reportedly injured but drove themselves to the hospital to receive treatment.

According to news reports, Norfolk Southern said it appeared that 11 cars of a 98-car southbound train derailed at about 2:AM today southeast of Ohio State University.

The cause of the crash and what was being carried in the derailed cars has not been officially reported.


Thursday, July 12, 2012

Top Story

USDA launches weekly export container availability report

The U.S. Department of Agriculture released the first weekly edition of a new report that identifies the availability of shipping containers for export shippers of agriculture products.

The Ocean Shipping Container Availability Report includes voluntary, anonymously-supplied aggregate data by the 10 ocean carrier members of the Westbound Transpacific Stabilization Agreement, and will be published every Wednesday at:

"Agricultural exporters, particularly those in the U.S. heartland, often face great difficulty in finding available marine shipping containers," said Arthur Neal, the USDA's transportation and marketing deputy administrator in a statement.

"This new report was developed to provide more information to help facilitate the exporting of agricultural products. The industry's collaboration in this effort was vital to making this report a reality," Neal said.

The report charts five types of shipping containers at 18 intermodal locations around the U.S. and will provide carriers' estimates of equipment availability for the current week and projections two weeks out, according to the USDA.

"The data will offer a more transparent view of container flows, increasing efficiencies and providing additional information to help U.S. exporters of all types of cargo locate equipment to move their products," the USDA said.

The debut report's weekly overview includes information such as a three-week forecast that says the most container availability is at the ports of Long Beach, New York-New Jersey, and Oakland.

Inland locations in the three-week time frame with highest container availability are Dallas and Chicago, especially for twenty-foot, and forty-foot high cube boxes, the latter of which has the greatest availability of the container types at over half of the 18 locations, according to the report.

The WTSA said its role in the reporting project grew out of discussions that began in 2010 when there were widely reported equipment shortages in the trans-Pacific trade with tighter vessel capacity and curtailed container manufacturing due largely to idled ships from the 2008-2009 global recession even though demand for U.S. exports was surging.

"Agriculture exporters face particular equipment challenges in the U.S. -Asia freight market, where they account for about 20 percent of total waterborne shipments," the WTSA said in a statement.

"Many products are perishable, with short lead times to market; shippers need equipment in rural areas far from where import containers are unloaded and stored; heavier agricultural cargoes generate demand for more equipment because containers reach their weight limits before they are fully loaded; a historic 2-to-1 ratio of higher-value import traffic versus return export loads forces export shippers to compete for vessel space with empty containers being repositioned to Asia," the WTSA said.

Shippers of farm products rely on specialized refrigerated and temperature-controlled equipment that is not in general use for import boxes coming into the U.S. from Asia, according to the WTSA.

Brian Conrad, the executive administrator for the WTSA said the anonymous carrier equipment data supplied to the OSCAR program shouldn't be construed as an "exchange where specific, named carriers advertise surplus containers in a particular location and are put in touch with customers."

"The main purpose behind OSCAR is to provide visibility into how equipment flows trade wide on a week-to-week and seasonal basis, so that exporters are able to work with their carriers to access containers in the most efficient way possible," Conrad said.

"In its current form the report strikes an important balance, identifying areas in the U.S. where potentially surplus equipment accumulates throughout the year but also retaining an accurate, real-world understanding of what the container surplus and deficit data actually represent," the WTSA statement said.

Virginia International Terminals, Inc. challenged by state D.O.T. chief to prove itself

The private company operating container terminals at the Virginia Port Authority's Hampton Roads cargo-handling location has reportedly been challenged by that state's Department of Transportation chief to prove it can do a better job than other potential operators.

Amid an evaluation process that the state of Virginia is going through after receiving an unsolicited proposal by Denmark's APM Terminals in May, the D.O.T. there has also asked current, and longtime operator Virginia International Terminals to submit its own proposal.

"VIT has never had to compete for its current arrangement with the Virginia Port Authority and this is an opportunity for VIT to demonstrate why it should remain the sole container terminal operator in the Port of Virginia," wrote Transportation Secretary Sean Connaughton this week in an email to the Virginian-Pilot.

Connaughton said VIT would not be subject to the exact same proposal process as others because they don't "require additional capital or funding since they are already on and operating the terminals."

The transportation secretary said he would like to see a long-term plan and budget submitted.

The state D.O.T. extended the deadline another 30-days to August 13 for other terminal operations proposals.

Meanwhile, V.I.T. claims that after meeting with its legal counsel, the company has decided not to submit a proposal along the lines of APM Terminals but would provide the state volume and revenue projections "so they can compare that against any other proposals they have," said Joe Dorto, CEO of the V.I.T.

Three years ago, industrial real estate developer CenterPoint Properties and two other companies submitted proposals to operate the VPA's container terminals but the port ended up sticking with V.I.T. at that time.

The APM Terminals proposals include a $540 million container terminal in Portsmouth as part of its overall $4 billion plan.

For the full Virginian-Pilot story:

South Carolina port gets good news on channel deepening

The South Carolina State Port Authority's container port in Charleston says it can get its shipping draft down to 50 feet faster than originally projected and at less cost as the countdown continues for East Coast container ports readying for the widened Panama Canal in 2015.

The port announced that the Army Corps of Engineers' feasibility study reveals that the Charleston harbor can be deepened in less than four years as opposed to a range of 5-8 years, and that the cost of the study will be $15 million instead of $20 million.
"The deepening of Charleston Harbor is the number one strategic priority for this port community," said Jim Newsome, president and CEO of the South Carolina Ports Authority in a statement.

"We are encouraged by today's news that Charleston's deepening project will be considered a national example for completing studies more expeditiously," he said.
The Corps' news this week arrives on the heels of last month's announcement that the South Carolina Legislature pledged $300 million in state funds towards the harbor-deepening project that would cover the entire estimated cost upon authorization from U.S. Congress.

"Today's announcement is a step in the right direction, but there is more that needs to be done," said Senator Lindsey Graham in a statement.

"We still need a national vision that ensures Charleston, and other ports, are ready to meet the biggest change in international shipping in the last hundred years. So while I appreciate today's announcement, I also know Congress has to step up and provide the regulatory relief and funding we desperately need to push this process forward. Time is of the essence and we have to get this done," Sen. Graham said.

World Shipping Council elects OOCL chief to board

The World Shipping Council announced Andy Tung, chief executive officer of Hong Kong's Orient Overseas Container Line, would fill a seat on its board previously held by his predecessor at the same shipping company, the retired former CEO, Philip Chow.

The other board members of the WSC, an association focused on being a voice for the global container shipping industry, are:  Thomas Crowley, Jr., Crowley Maritime Corporation; Rafi Danieli, Zim Integrated Shipping Services; Morten Englestoft, Maersk Line; Ottmar Gast, Hamburg Sud; Y.M. Kim, Hanjin Shipping; Ulrich Kranich of Hapag-Lloyd AG; Tadaaki Naito, NYK Line; Ng Yat Chung, NOL Group; Wan Min, COSCO Container Lines; and, Ron Widdows, Rickmers-Linie.


Friday, July 13, 2012

No Newswire today.


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