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Summary for July 18 - July 22, 2011:
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Wednesday, July 20, 2011

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Federal district judge rules against Long Beach-ATA clean truck agreement

A federal district court judge in Los Angeles on Friday ruled against an agreement between the Port of Long Beach Harbor Commission and the American Trucking Associations over a revision of the clean trucks program, claiming it skirted the California Environmental Quality Act (CEQA) environmental review process.

A lawsuit was brought against the port and ATA by the Natural Resources Defense Council and the Sierra Club over the CEQA issue, and Judge Christina Snyder ruled in their favor, ordering an environmental review.

"Nothing about the port's agreement with the American Trucking Associations was made with the public's health in mind," said David Pettit, director of NRDC's Southern California clean-air program in a statement.

"The agreement was a big giveaway to industry in hopes that ATA would drop their litigation against the port, and when they did, so did the port's commitment to a sustainable clean truck program and cleaner air for port residents," he said.

"Our Clean Trucks Program has been a major environmental success, reducing truck pollution by 80 percent so far," said Richard Steinke, the executive director of the Port of Long Beach, who is retiring this year, in a Long Beach Press Telegram report. "We've replaced thousands of older trucks with new, cleaner models," he said.

In October 2009, the Long Beach harbor commission entered into an agreement that authorized the ATA to oversee, and approve, any future updates to the clean trucks program, otherwise leaving open the risk of the trucking group filing a lawsuit.

The Press Telegram reported the Port of Long Beach is should have a response within a week.

For the full Long Beach Press Telegram story:

IMO agrees on mandatory emissions reduction standards for ships

Forty-eight member countries of the International Maritime Organization agreed on Friday at an environmental protection committee meeting in London to adopt a mandatory energy efficiency design index for new ships that will reportedly be instigated by 2013 in an effort to reduce global emissions.

Five countries voted against the measures, and another 12 abstained, according to a Reuters report.

Developing countries, including Brazil, China, Saudi Arabia and South Africa, said they need more time to get up to technological speed, and were able to secure a waiver for the new ship technology until 2019.

That also means EU shipbuilders could qualify for the 5-year waiver if they build a vessel for a developing country.

The European Commission had been putting on the pressure over implementing regulations like an emissions trading scheme if the IMO didn’t come up with something substantive from the recent environmental meeting. While the initial response from the EC was congratulatory, there were indications of possible, additional regulations.

"This does not mean that the Commission will not propose anything for maritime next year. We are looking at the options on how the maritime sector can further contribute to the emissions reduction efforts. Bringing shipping into the ETS is only one of the options," a Commission spokesman was quoted as saying in the Reuters report.

The EEDI will require new cargo vessel technologies built between 2015 and 2019 to improve emissions efficiency by 10 percent, and by 20 percent between 2020 and 2024, and cut by 30 percent after 2024.

Market-based solutions to control emissions were reportedly not seriously discussed at the IMO meeting.

For the full Reuters report:

FedEx Trade Networks expands ocean freight forwarding services

FedEx Trade Networks, a subsidiary of FedEx Corp. announced it is now offering three levels of global freight forwarding services through its “ocean choices portfolio.”

The company said in a statement the three services break down like this: the FedEx International Direct Economy Ocean option offers traditional freight forwarding services to and from major worldwide locations for products that have a flexible delivery schedule; utilizing distribution center bypass, the FedEx International DirectDistribution Ocean option offers what “speed-to-market” ocean shipping services to destinations in the U.S., Canada and Puerto Rico from origins in Asia, Latin America, Middle East, India and Europe; and a third, new service, FedEx International Direct Priority Ocean, provides ocean services for both less-than-container-load, and full-container-load cargo.

FedEx Trade Networks said the latter service operates between the ports of Los Angeles and Long Beach and Yantian, Shanghai and Hong Kong, and offers delivery for LCL shipments via FedEx Freight and delivery for FCL shipments via the FedEx Trade Networks preferred carrier portfolio.

AAPA joins Commerce on U.S. export initiative

The American Association of Port Authorities announced it signed a memorandum of intent with the U.S. Department of Commerce’s International Trade Administration at the Port of Oakland this week over what it termed the “Partnership with America’s Seaports to Further the National Export Initiative.”

At his State of the Union speech last year, President Obama announced the goal of doubling U.S. exports to overseas markets within five years.

Under the terms of the new MOI, the AAPA said it would “partner to coordinate communications, idea exchanges, activities and services that assist U.S. businesses in exporting; and to increase awareness of the available services, trade missions, programs and overseas events that involve U.S. export opportunities.”

Signatories to the MOI included the Francisco J. Sánchez, under secretary for the International Trade Administration and AAPA President and CEO Kurt Nagle.

“This partnership and investments in infrastructure will pave the way towards a prosperous future for all Americans,” said Nagle.

Historic glut of capesize vessels leads to record mining profits

An historic glut of capesize bulk vessels has pressured freight rates for iron ore shipping to their lowest levels in over a decade, leading to record profits for the major mining firms, BHP Billiton Ltd. and Riot Tinto Group.

According to a Bloomberg data, the cost of shipping iron ore to China from Brazil, the world’s largest trade route for that commodity, is currently equal to 10 percent of the value of the commodity used by steelmakers, compared to 64 percent in 2003.

Iron ore prices have reportedly reached doubled over the last three years, causing supply shortages and pushing capesize rates down by approximately 95 percent.

“It’s a dream for an iron-ore mining company: the highest commodity prices and the lowest freight prices,” said John Banaszkiewicz, of London-based Freight Investor Services Ltd. in the Bloomberg report.

Capesizes currently hire out at $11,314 per day for a single trip, compared to the peak of approximately $234,000 in June 2008, according to the Baltic Exchange.

Tinto Rio, the world’s second-largest iron-ore exporter behind Vale SA is reportedly on schedule to report net income of $18.9 billion this year, a 32 percent jump from 2010. Iron ore accounted for about 68 percent of the London-based company’s profit last year.

Melbourne-based BHP, the third-largest iron-ore exporter, reported profit of $22.3 billion for its fiscal year that ended last month, up a whopping 76 percent over the previous year. Iron ore made up 26 percent of BHP’s earnings in its previous fiscal year.

For the full Bloomberg report:

Oregon couple saved by OOCL ship in the Pacific (includes video)

Patricia Kelsoe, Douglas Merrell, their two adult sons, and the family cat were sailing back to their home in Oregon last month after several years of living on, and voyaging, on their vessel – the 30-foot Ka Em Te – when they hit something unidentified that knocked out the boat’s steering mechanism and stranded them approximately 630 miles southwest of San Diego.

The couple issued a mayday and the alert was reportedly broadcast to other vessels within a 20-mile radius.

Fifteen minutes later, they were contacted by the crew of the OOCL Guangzhou containership and they were soon climbing a rope ladder up the side of the huge cargo vessel.

The sailboat didn’t fare as well, sinking shortly due to damage sustained during the rescue, which had all of the couple’s belongings since they had live on the craft for 11 years.

Kelsoe told the Oregonian her family is "eternally grateful" to the crew of the Hong Kong-based shipping firm’s containership, where the family stayed on board for over three days before they were transferred a Coast Guard Cutter near Oahu, Hawaii.

For the full Oregonian story and a video taken of the rescue:


Thursday, July 21, 2011

Top Story

Post-Panamax ship calls East Coast ports

The widened Panama Canal is still a few years off, but a post-Panamax vessel has been making the rounds, and testing the channel depths, at East Coast ports this week.

The 9,200-TEU MSC Bruxelles (Brussels) is in the process of calling the ports of New York-New Jersey, Baltimore, Maryland, Hampton Roads, Virginia, Charleston, South Carolina and Freeport in the Bahamas as part of Mediterranean Shipping Company’s Golden Gate service that transits the Suez Canal linking Asia and the U.S. East Coast.

Asian port calls include Hong Kong, Chiwan, Yantian, Shanghai and Ningbo.

Joe Harris, a spokesperson for the Virginia Port Authority told the Virginia-Pilot that when 10,000-TEU-plus vessels start calling, "you're really going to begin testing your channel depths," as the VPA is currently the only U.S. East Coast port currently at the 50-foot depth required for the larger container-ships that will be able to pass through the wider Panama Canal from late 2014 and beyond.

UP Q2 profit up 10 percent; forecasts stronger H2

The Union Pacific Railroad reported a 10 percent rise in its second quarter profit and Chief Executive Jim Young said the Omaha-based rail carrier expects a stronger second half of the year riding on higher contract rates and freight volumes.

"Looking to the second half of the year, we expect stronger performance despite some economic uncertainties and ongoing flood challenges," said Jim Young, CEO, Union Pacific, in a statement.

The UP posted what it says was a record second-quarter from operations, with net income that climbed to $785 million from $711 million a year earlier, and revenues increased 16 percent to $4.9 billion, up from $4.2 billion for the same period a year ago.

The railroad said total revenue carloads were up 3 percent thanks in part to strong agricultural and chemicals freight performance.

Fuel prices were also up – way up – at a whopping 44 percent at an average of $3.29 per gallon, the railroad reported.

Hapag-Lloyd parent reportedly struggling with divestment of shipping line

The German tourism industry giant, TUI AG, is reportedly struggling with the divestment of its 38.4-percent share in the world’s fifth-largest container-shipping group, Hapag-Lloyd, as one bidder from Oman could drop out, leaving two potentially interested Chinese parties.

"We need a more stable market environment. At the moment it is impossible to get a fair valuation," a source close to TUI ownership told Reuters this week.

A volatile economic environment in the U.S. and Europe, in particular, along with depressed freight rates and high fuel prices, are reportedly factoring into the ability for TUI to divest, with a sale that could be pushed out as far as into next year, according to Reuters’ sources.

Prospective buyers reportedly include China's HNA Group, parent of Hainan Airlines, and Shanghai-based China Shipping Container Lines.

For the full Reuters story:

Matson rebrands logistics units as one

Oakland-based Matson announced the rebranding of its three logistics units under the single umbrella name of Matson Logistics.

The shipping company said in a statement that combining Matson Integrated Logistics, Matson Global and Matson America as a single brand would “better define the full range of services the Matson name represents outside of ocean transportation, including domestic and international rail intermodal service, long haul and regional highway brokerage, supply chain services, LTL transportation, specialized hauling, and company-operated warehousing and distribution.”

“To clarify and strengthen our position in the logistics industry, we will now promote our services using one brand name, Matson Logistics,” said Matt Cox, Matson’s president.

U.S. denies appeal of Kuwaiti logistics firm

A U.S. court of appeals this week denied a petition by Kuwaiti logistics firm Agility that reportedly could end an 18-month legal battle over whether the Justice Department’s indictment of the company was served correctly.

The U.S. has charged Agility with what would be one of the largest-ever military fraud cases, stemming from the company’s approximately $8.5 billion worth of contracts with the U.S. Army in the Middle East that occurred in the years after the September 11, 2001 terrorist attacks.

The U.S. Court of Appeals for the 11th Circuit denied Agility’s "Writ of Mandamus" petition that reportedly could now allow the Justice Department’s pretrial phase to commence.

For the full Reuters report:


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