NASSCO-General Dynamics, the last major shipbuilder on the West Coast, laid off 290 of its 4,100 workers in San Diego today due to a downturn in business and fluctuations in the repair work it does for the U.S. Navy.
The company, which is among San Diego County's 20 largest employers, also eliminated the jobs of 270 sub-contractors. The overall loss of 560 jobs was about half the number that NASSCO had earlier said it might have to cut.
The layoffs come one day before NASSCO delivers the Empire State, a 600-foot long commercial tanker that will be used by the Navy. And the shipyard is finishing work on Evergreen State, another commercial ship. But the company currently doesn't have any orders for other commercial vessels. The company also is building the last of the Lewis-and-Clark class dry cargo ships on order from the Navy.
Trend report: Strengthened truck freight volumes slackened in June
While truck freight volumes continue to strengthen, the pace noticeably slackened in June, causing concern among some industry analysts. According to Jon Langenfeld, associate director of research at Robert W. Baird & Co., though absolute freight volumes remained solid in June, above 2007 levels, trends notably flattened as well during a month that typically experiences a spike in spot demand.
The American Trucking Assns. (ATA) reported some slippage in freight demand, too, with its for-hire truck tonnage index decreasing 0.6% in May, which was the first month-to-month drop since February of this year.
By contrast, Baird's Domestic Freight Index inched up to 6.2% in May, vs. 6.1% in April, which Langenfeld believes reflects a continuation of accelerating freight trends experienced in April.
Europe’s biggest airline to pay $87 mil to shippers in U.S. market
Air France-KLM Group, Europe’s biggest airline company, agreed to pay a total of $87 million to hundreds of freight shippers to settle class-action lawsuits in the U.S. over its involvement in a global price-fixing cartel.
The deal, which must be approved by a judge in New York, will resolve claims by companies that purchased shipping services to and from the U.S. from Air France, KLM and its Martinair unit between 2000 and 2006, the carriers said today in a statement. Indirect buyers who used an intermediary to ship their goods are barred from such claims in the U.S.
Air France in 2008 agreed to pay a $350-million criminal fine in the U.S. and plead guilty to the government’s cartel claims. Last year, a former Martinair executive, Franciscus Johannes de Jong, also pleaded guilty in the case and agreed to serve eight months in prison.
The settlement announced today will reimburse direct buyers of Air France’s cargo services, including Kuehne & Nagel International AG, a Swiss freight transport intermediary and Volvo Car Corp., which ships parts both directly and indirectly.
World’s largest naval exercise continues in Pacific
RIMPAC, the world's largest naval exercise--involving 14 nations, 32 ships, five submarines, more than 170 aircraft, and 20,000 personnel--is now underway in the waters of the Pacific off Hawaii, according to the USN.
The multi-national maritime exercise began June 23 and will continue through August 1.
This year's exercise includes units or personnel from Australia, Canada, Chile, Colombia, France, Indonesia, Japan, Malaysia, the Netherlands, Peru, South Korea, Singapore, Thailand, and the U.S.
The Navy said there will be three observer nations: Brazil, India and New Zealand.
Three decommissioned ships will be sunk during live fire events.
China Shipping Container Lines Co. said Tuesday it will record a profit for the first-half, reversing from a loss in the corresponding period a year earlier, helped by a rebound in the international shipping and cost cutting. For the first half of 2009, the company recorded a net loss of 3.44 billion yuan ($507.5 million).
The shipping line, which is reportedly China's largest container line by capacity, said its net profit for the period "increased significantly". The company will report its first-half earnings in late August. The company's Hong Kong-listed shares were up 0.7% at midday.
Southern Cal clerical workers back to work; negotiations to continue
Nearly two weeks after launching a strike, port office workers have dropped their picket lines in favor of marathon negotiations with shipping companies.
The move comes after the union representing strikers was twice rebuffed by a labor arbitrator who ruled the walkout was illegitimate and "disingenuous" - preventing thousands of longshoremen from honoring picket lines.
By late Sunday, workers had ended round-the-clock protests at five terminals in Long Beach-Los Angeles ports to return to their jobs and the bargaining table, where they hoped to hammer out an agreement in coming days.
Still, the union said it was appealing the arbitrator rulings of July 1 and July 9, and warned another walkout was possible.
Because of this clause and the arbitration rulings, the 12-day strike was largely unable to disrupt operations at the nation's largest port complex, though at least two 8-hour shifts were skipped by longshoremen before the arbitrator could rule.
Kawasaki Heavy Industries threatens to import steel
Kawasaki Heavy Industries Ltd., Japan’s third-largest maker of heavy machines, may buy steel plates from China and South Korea for the first time to build ships if domestic prices rise too much.
“We wouldn’t deny the possibility of using imported steel,” Nobumitsu Kambayashi, the president of Kobe, Japan- based Kawasaki Heavy’s shipbuilding unit, said yesterday in an interview. “If we fail to agree with domestic mills on prices and we find overseas-made steel offers an advantage in terms of quality, delivery and price, we will have to turn to it.”
Kawasaki’s venture with China Ocean Shipping Group Co. in Nantong, eastern China, has already purchased a small amount of steel for use in vessel handrails and stairs from Shanghai- based Baosteel Group Corp. on an experimental basis, Kambayashi, 62, said.
The Westwood Victoria made its first stop in Portland Sunday, inaugurating the Port of Portland’s new cargo container service to Japan and South Korea.
Westwood Shipping Lines has agreed to an initial six-month contract to provide monthly shipping service with room for more than 200 containers.
The contract is part of a trial run for Westwood. If it proves successful, the port hopes Westwood will not only lengthen the terms of its service, but add another vessel and expand to bi-weekly service.
The service will carry non-refrigerated containerized agricultural products such as hay, as well as paper products and other commodities from the region.
It will reach four ports of call in Japan — Shimizu, Tokyo, Yokohama, Osaka and Nagoya — in addition to Busan, South Korea.
-Portland Business Journal
For the full story: Port kicks off cargo service to Japan - Portland Business Journal
Wednesday, July 14, 2010
Intermodal rail makes biggest-ever monthly leap
Intermodal rail traffic was up 19.2 percent in June over the same period a year ago, representing the largest year-over-year monthly gain since the American Association of Railroads (AAR) began recording such statistics in 1990.
Compared with pre-recession levels, however, the AAR said intermodal rail traffic in June was still down 1.4 percent compared with June 2008. In addition, seasonally adjusted AAR data showed month-to-month carloads in June dipped by 1.3 percent from May 2010, while intermodal traffic was also down 1.1 percent from the previous month.
Freight rail carloads for June 2010 were up 10.6 percent compared with last year, but still down 10.2 percent compared with June 2008, according to the AAR’s July Rail Time Indicators Report.
"While June traffic shows signs of an economy that is in better shape than it was a year ago, we still have a long way to go to see rail traffic levels associated with a full recovery," said AAR Senior Vice President John Gray. "For example, both the Purchasing Managers Index and consumer confidence fell in June," he said.
Average weekly container volume in June 2010 was the ninth highest since 1990, reflecting a years-long trend of domestic freight converting from truck trailers to containers on rail that can be double-stacked, the AAR said. Railroads also continued to bring freight cars out of storage, putting 3064 cars back into service in June, the AAR report said.
Expeditors shares up on stronger Q2 forecast news
Logistics company Expeditors International of Washington Inc. said it expects to post better-than-expected second-quarter earnings on volume increase in its airfreight and ocean freight businesses, sending shares up 9 percent.
For the second quarter, the company expects earnings of 38 cents to 40 cents a share. Analysts on average were expecting earnings of 30 cents a share, according to Thomson Reuters I/B/E/S.
The company said it plans to report second-quarter results on Aug. 3.
Shares of the company closed at $37.16 Tuesday on the Nasdaq.
Shares of the company were up by more than $3 in trading after the bell. They closed at $40.50 Tuesday on the Nasdaq.
China’s biggest grain trader buys 14th cargo of corn from U.S.
Cofco Ltd., China’s biggest grain trader, bought one more corn shipment from the U.S., bringing the company’s purchases this year to 14 cargoes, or about 840,000 tons, two executives familiar with the transaction said.
State-owned Cofco bought the shipment on July 9, the people said. The cargo is 60,000 tons with 10 percent variation either side, they said, declining to be identified as the transaction isn’t public.
The cargo is scheduled to arrive in China in September, with optional destinations including Guangdong, Jiangyin near Shanghai, and Shandong. Total corn purchases by China this year may total 1.1 million tons, with the bulk bought by Cofco, they said. A Cofco official declined to comment.
Before George Steinbrenner, the owner of the New York Yankees, there was Steinbrenner, the shipbuilder. Ships built his fortune, and brought him from the Great Lakes to Tampa. They funded his purchase of the Yankees. And even as American shipbuilding waned, Steinbrenner fought to keep his Tampa port businesses afloat — in his bombastic, controversial and sometimes soft-hearted way. As ships made him rich, the Yankees made him famous.
The family shipping empire started in the 19th century, hauling goods across the Great Lakes. In 1963, Steinbrenner bought a fleet of lake ore carriers from his family. Four years later, he took advantage of federal subsidies and joined an investor group that took over American Ship Building Co. and moved it to Lorain, Ohio. It reinvigorated the company, tripling annual revenues.
In 1972, a year before he and 13 partners bought the Yankees, Steinbrenner’s American Ship bought the Tampa Ship Repair and Dry Dock Co. A little more than a decade later, he would shut down his Ohio shipyard to move the work to Tampa, where the company could save 30 percent on labor.
Shipping was still big business. In the early ‘80s, the Associated Press valued American Ship at $200 million. The New York Yankees? A mere $30 million.
Last year, shipbuilding no longer part of his world, Steinbrenner was No. 341 on the Forbes list of richest Americans, with a net worth of $1.2 billion.
Evergreen to phase out its chassis business in Boston
The reported desire of ocean carriers to get out of the U.S. chassis business took a bold step with the announcement this week by Taiwan’s Evergreen Line that it would phase out providing chassis for cargo coming through the Port of Boston, Mass.
“The U.S. is the only country where ocean carriers provide chassis, and it is neither efficient nor economical to continue to do so,” Evergreen pronounced in a statement.
“Limited expansion real estate availability mandates that chassis can no longer be maintained by the shipping companies,” the company said.
The shipping line’s statement went on to say that it feels drayage companies and owner-operators “are fully qualified to manage and maintain chassis fleets with greater ease and cost-effectiveness, while providing the same standard level of service to the importers and exporters."
The company said the new program would start in the Boston area and gradually expand to other areas within the U.S.
Musical chairs with East Coast auto-handling ports
Less than a month after the Port of Baltimore lost 60,000 vehicles in Kia and Hyundai shipments to Philadelphia, port officials said Wednesday that Ford would ship its Fiestas here through the rest of the year.
The news comes after an up-and-down year for roll-on/roll-off cargo at the port, which lost Hyundai’s business but also signed a five-year deal with BMW to receive 50,000 new vehicles — business it took from Charleston, S.C.
Maryland Port Administration spokesman Richard Scher declined to say when the deal with Ford was struck, but called it “great news” after the 116 layoffs at Fairfield and Masonville auto terminals from the Kia and Hyundai losses.
Scher also declined to say how many Fiestas will come through the port, but a source with knowledge of the deal said the number was 17,000.
Ground breaking ceremony for Georgia’s inland port
Representatives of the State Transportation Board and Georgia Ports Authority traveled to Cordele, Ga., Wednesday for a groundbreaking ceremony for an “inland port” that will serve as a major transfer point for truck cargo.
The $8.6 million intermodal terminal will move containerized cargo trucked in from points west of Cordele onto freight trains bound for the Port of Savannah. The project’s goal is to convince shippers from parts of three states to pick Savannah over the port at Mobile, Ala.
Billions made from airline fees comes before congressional committee
U.S. airlines make billions of dollars in fees for check-on luggage, refreshments and other services formerly included in ticket prices, but consumers have a hard time figuring out how much they'll pay in total to fly, a congressional committee heard Wednesday.
The House subcommittee on aviation held the sometimes contentious hearing to consider a U.S. Government Accountability Office report on the fees airlines have charged in recent years on unbundled services that once were considered part of the ticket price.
Witnesses from GAO, the Department of Transportation and associations for air travel and travel agents all urged the government to require uniform pricing information from airlines to help consumers make easy comparisons.
Dave Ridley of Southwest Airlines, said it was up to individual airlines to decide what business model to use regarding fee structures. He noted that Southwest has been successful by resisting the industry shift toward unbundling fees and does not charge for checked bags, changing reservations or other services.
Cleanup of the first-ever oil spill in the St. Lawrence Seaway has begun and is expected to last a week, Canada Steamship Lines officials announced.
The cost of the operation is still unknown, said CSL spokesperson Jean-Francois LeBrun. Despite this, CSL, as the owner of the vessel which leaked the fuel, has committed to paying for the job.
Over the next week, boats equipped with special filters will push the fuel (a hybrid of diesel and heavy oil) onto the shore where it will then be collected manually and disposed of. Much of the fuel has already been carried to shore by waves and wind.
Officials do not yet have an exact figure for the amount of fuel leaked. The quantity is probably in the range of one to 20 tonnes.
It is not clear whether the seaway will open before the cleanup ends. By yesterday afternoon, 10 ships were waiting to go through the corridor.