Cargo Business Newswire Archives
Summary for July 27 - July 31, 2009:
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Monday, July 27, 2009

Top Story

Nippon Yusen, K-Line Forecast Losses

Nippon Yusen K.K. and Kawasaki Kisen Kaisha Ltd., Japan’s largest and third-largest shipping lines, forecast full-year losses as the recession in the U.S. and Europe slashed demand for transporting goods by container.

Nippon Yusen expects its first unprofitable year in 23 years, forecasting a loss of 5 billion yen ($53 million) compared with an earlier net income forecast of 18 billion yen. K-Line, as Kawasaki Kisen is also known, forecast a loss of 31 billion yen compared with an earlier profit prediction of 6.5 billion yen.

The recession has choked demand for furniture, building materials and consumer electronics in the U.S. and Europe, driving down shipping rates. Nippon Yusen has slashed its fleet expansion by 15 percent and laid up container ships this year to stem declines in shipping rates as demand slumps.

Mitsui O.S.K Lines Ltd., operator of the world’s largest merchant fleet, lowered its profit forecast by 25 percent to 30 billion yen.

- Bloomberg

GENCO strikes deal with Dell

Third-party logistics (3PL) services provider GENCO Supply Chain Solutions said this week it has acquired Dell’s North American remanufacturing operations.

The acquisition is comprised of Dell’s receipt and remanufacturing operations, including test, remanufacture, repair and refurbishment of desktop, notebook, server and storage systems that Dell then sells as refurnished product. The acquisition, in conjunction with GENCO’s exiting reverse supply chain services, provides Dell with a complete North American margin recovery offering. The deal increases Genco's reverse logistics business by 25 percent.

As a result of this deal, GENCO will be integrating its Dell operation in LaVergne, Tenn. into its 298,000 square-foot facility in Lebanon, Tenn.

Going forward, GENCO said it will extend similar offerings to other electronic device manufacturers in the Lebanon facility.

- Logistics Management

Sino-Global Partners with Forbes

Sino-Global Shipping America, Ltd., a leading, non-state-owned provider of shipping agency and forwarder services operating primarily in China, announced that it has signed an exclusive partnership agreement with India-based Forbes & Company Limited.

Under the agreement, Forbes will recommend Sino-Global as their exclusive business partner in China to all their existing clients in India and Sino-Global will serve all vessels in China that are appointed by Forbes. Sino-Global will recommend Forbes as their exclusive business partner in India to all their existing clients in China and Forbes will serve all vessels in India that are appointed by Sino-Global.

Forbes' three main businesses target engineering, shipping and logistics and business automation. Forbes' shipping business consists of container freight, logistics, liner agencies, tramp, ship broking and chartering business operations.

NOLA Port Shrinks Hours, Trucks Line Up

Ports America, one of two companies that run the Port of New Orleans container terminal, slashed its operating hours to deal with the recession. The company shaved five hours off of its 7 a.m. to 5 p.m. schedule on Tuesdays and Fridays, closing at noon on those days.

The decision, announced earlier this month, comes on the heels of a similar move by New Orleans Terminal LLC, the company that operates the other half of the Napoleon Avenue Container Terminal. That firm cut two hours from its daily schedule, opening at 8 a.m. instead of 7 a.m. and closing for lunch between noon and 1 p.m.

Since the terminal's hours have been shortened, truckers have been lining up early and trying to compress as many loads as possible into a short time period, causing delays.

The Port of New Orleans had its worst year since 1985 last year, moving just 6 million tons of general cargo. Containers were down 25 percent during the first quarter of this year.

- The Times-Picayune

Piracy surge expected off Somalia

Piracy is expected to pick up in the high seas off Somalia after a lull caused by monsoon season, maritime officials warned Monday.

The Combined Maritime Forces urged crews to take up safety measures, including using recognized transit corridors in the Gulf of Aden and reporting to the European Union's security center before transit

International forces made up of more than 30 ships and aircraft from 16 nations will continue patrolling the waters to help fight pirates, according to officials.

The waters off Somalia are rife with pirate activity, despite increased measures by military forces and shipping companies to ward off attacks.

The Gulf of Aden, off northern Somalia, has the highest risk of piracy in the world.



Tuesday, July 28, 2009

GTSI wins $7M to update Port of Oakland security

GTSI, which provides information technology products and services to the government, has won a $7 million contract to provide security upgrades at the Port of Oakland in California.

Under the new award, GTSI will update the port’s existing perimeter security system and install a fiber optic communications system. Work is expected to be complete by April 2010.

The Port of Oakland is the fifth busiest container port in the U.S.

GTSI had sales of $144.1 million in its most recent quarter ended March 31, and a net loss of $3.9 million.

- Washington Business Journal

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Port of Tacoma gets $1.5M EPA grant

The Port of Tacoma has received nearly $1.5 million from the Environmental Protection Agency to reduce diesel and greenhouse
gas emissions.

The port will use the funding to retrofit ships and add electrical plug-ins at the Totem Ocean Trailer Express (TOTE) terminal.

TOTE, an ocean carrier that moves cargo between Tacoma and Anchorage, has already spent nearly $900,000 to retrofit two ships to accommodate shore power connections, which allow ships to turn off their engines at the terminal.

The Port of Tacoma said the project will help create or sustain an estimated 50 manufacturing and local installation jobs.

-Puget Sound Business Journal

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Drybulk earnings in line with expectations

Most drybulk shippers are expected to report second-quarter earnings in line with Wall Street expectations, as a high degree of locked-in long-term contracts prevent them from taking advantage of the recent spike in charter rates.

Drybulk shipping companies were hit by the downturn in charter rates for their ships due to the slump in demand for commodities such as iron ore and coal. They have been looking at increasing the long-term contract coverage for their shipping fleet and reducing spot market exposure.

Charter rates have been rebounding from their lows.

This earnings season will be kicked off with Genco Shipping & Trading Ltd reporting its second-quarter results on July 29.

- Reuters

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Homeland Security pilot counters threat of small vessel attack on
U.S. ports

The U.S. Homeland Security Department is undertaking a pilot program aimed at countering the threat of a small-vessel attack on the nation's ports. The "West Coast Maritime Pilot" effort is based in San Diego and Washington state's Puget Sound region.

The program is slated to deploy and evaluate radiation and nuclear detection equipment, including human-portable and mobile, or boat-mounted, systems.

Program officials will develop a regional maritime concept of operations and provide naval-specific training on nuclear detection equipment. The program hopes to identify any security gaps in the existing maritime architecture.

National concern about the threats posed by small naval vessels appears to be on the rise. The dangers posed by small vessels were rigorously examined after the U.S.S. Cole bombing in 2000, when a small craft approached the port side of the destroyer and blew up.

The threat gained renewed attention last November with the attack on Mumbai, India, where a group of terrorists used small fishing vessels to gain access to the city.

-Global Security Newswire

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Green EU shipping rules to impact future fuel oil market

New regulations that will force the shipping industry to switch to cleaner fuel could lower the European demand for fuel oil by 25 percent by 2015.

Under legislation voted in by the United Nations' International Maritime Organization (IMO), new sulphur content specifications for ships operating in the Baltic, the North Sea and the English Channel will be revised down from 1.5 percent to 1 percent in July 2010.

Demand in the region for even the lightest fuel oil grades could collapse when a 0.1 percent cap is introduced in the original Emission Control Area (ECA) in Europe beginning January 2015, compelling shipping firms to switch to lighter gas oil.


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Wednesday, July 29, 2009

Top Story

Hapag-Lloyd receives $464M lifeline

Hapag-Lloyd, Germany's largest container shipping line, fell victim to the collapse of world trade amid a slowdown in global economic growth and recorded an operating loss of 222 million euros ($314 million) in the first quarter.

Hapag-Lloyd managed to secure a 330 million euro ($464 million) lifeline from its owners on Tuesday and sources told Reuters earlier this month Hapag-Lloyd could need up to 1.75 billion euros, of which the state may provide 1 billion.

Klaus-Michael Kuehne, one of the biggest shareholders in a consortium that bought a 57 percent stake in Hapag-Lloyd from German tourism group TUI AG earlier this year, is pushing for a tie-up of the German container shipping company with peers in Europe or Asia to secure Hapag-Lloyd's long-term survival.

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$247 million Jersey port plan gets approval

Ground may be broken for a new port in Paulsboro as soon as September, following approval Tuesday of design, funding, and land-acquisition agreements by the South Jersey Port Corp.

The new $274 million port would mean thousands of new construction and operations jobs.

The 190-acre marine terminal, with as many as four berths, is expected to be operational within 24 to 30 months after environmental permits are approved.

The board's directors yesterday approved borrowing up to $56 million through bonds to begin site preparation. They also approved a $3.5 million contract with the engineering firm CH2M Hill for final design and project management. And the board approved a lease with Paulsboro for 45 acres of land as part of the port.

- The Philadelphia Inquirer

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Crowley to Manage Five U.S.-Flag Tankers for American Petroleum Tankers

A U.S. Bankruptcy Court settlement became effective today, clearing the way for an investor group led by The Blackstone Group to terminate their relationship with U.S. Shipping and to retain Crowley Maritime Corporation to manage five U.S.-flag petroleum tankers for the newly renamed company, American Petroleum Tankers LLC.

The five tankers, two of which are in operation and three of which are due for delivery from shipbuilder NASSCO in San Diego through 2010, were to be owned by a joint venture controlled primarily by affiliates of The Blackstone Group and U.S. Shipping Partners. U.S. Shipping filed for bankruptcy protection under Chapter 11 earlier this year.

Crowley Maritime Corporation has been appointed as the construction manager for the three tankers still being built and vessel manager for all five vessels.

-Fox Business

Maersk Logistics & Damco merge

Maersk Logistics and Damco, of Maersk Group, Copenhagen, Denmark, have been merged into a single brand, which will now handle the companies’ supply chain management activities as well as its freight forwarding business. At present, Maersk Logistics brand deals with supply chain services and Damco handles the forwarding services. The merger will take place on September 7 and after that the unit will operate under the single brand name, Damco.

This new brand, Damco, will have a base of more than 10,000 global customers and will cover a range of logistics services from forwarding and time-sensitive reefer logistics to advance supply chain management solutions and consultancy.

$22M to help Oakland port clean up dirty diesel

On Tuesday, representatives from the Bay Area Air Quality Management District, U.S. Environmental Protection Agency, California Air Resources Board and the Port of Oakland announced a $22 million program designed to replace and retrofit about 1,000 of the 2,000 or so diesel trucks that service the port.

About 800 trucks will be outfitted with specially designed particulate filters and 200 more trucks will be replaced. Officials say the project should cut diesel truck emissions by about 85 percent at the port. By Jan. 1, state regulations require that certain high-polluting trucks be banned from the port.

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Thursday, July 30, 2009

Top Story

Preferred Freezer Services scores first US-China cold
storage development

New Jersey-based Preferred Freezer Services (PFS) marked its historic expansion into China with a groundbreaking ceremony yesterday in Shanghai.

The cold storage company will start construction on a new state-of-the-art facility at Lingang Logistics Park in Shanghai, China. The 280,000-square-foot refrigerated warehouse will be the largest and most advanced single-story cold storage facility in China, and the first ever US-China cold storage development.

China has the world's fastest-growing consumer market for perishable food and pharmaceutical products, but its per capita refrigerated warehouse space is less than one-tenth of most developed countries. The demand for cold chain facilities with improved quality is enormous.

Preferred Freezer Services has worked with Dalian-based Yida Group to jointly invest in the development of the cold storage market in China.

- Reuters

Horizon Lines reports second-quarter loss

Horizon Lines, Inc. reported results for its fiscal second quarter ended June 21, 2009.

Horizon reported a net loss of $31.1 million, or $1.02 per share, on revenue of $278.5 million. The results reflect a $20 million charge related to a previously disclosed class-action legal settlement in Puerto Rico, and $10.5 million tax valuation allowance. After excluding these and other charges totaling $35.2 million, adjusted net income was $4.1 million.

Adjusted 2009 second-quarter results also exclude antitrust-related legal expenses of $4.1 million, and $0.9 million for impairment and restructuring charges, as well as a loss on debt modification.

Container volumes were down 9.8 percent; container rates net of fuel were up 2.5 percent. The company's adjusted EBITDA for the quarter was $28.5 Million, compared with $35.8 million for 2008.

Net income for the second quarter of 2008 totaled $5.8 million, or $0.19 per diluted share, on revenue of $331.0 million.

Evergreen and COSCON launch China-South East Asia Express Service

Evergreen Line and Cosco Container Lines (COSCON) will launch a new joint endeavor, the China South East Asia Express Service (CSE). The initial voyage of the service embarked from Shanghai on 26 July 2009.

The service will operate with four 2,100 TEU vessels. Evergreen will deploy one vessel and three ships will be supplied by COSCON.

The port rotation is as follows:

Shanghai - Dalian - Xingang - Qingdao - Ningbo - Manila (south) - Jakarta -
Singapore - Tanjung Pelepas - Port Kelang - Shanghai.

MOL to call on Shenzhen's Da Chan Bay

Mitsui O.S.K. Lines, Ltd. today announced plans to add a call at Da Chan Bay in Shenzhen on its Japan-Hong Kong-Straits Service (CHS1) in August.

The weekly CHS1 route is served by three 3,500 TEU-class ships. The additional call at Da Chan Bay will meet increasing demand in Shenzhen, South China, a rapidly expanding region. It also allows MOL to offer direct service from Shenzhen to Japan in addition to current service.

MOL will be the first shipping company to offer direct Shenzhen-Japan service through Da Chan Bay terminal.

Port Rotation

Tokyo (Mon-Tue) – Yokohama (Tue-Tue) – Nagoya (Wed-Wed) – Kobe (Thu-Thu) – Hong Kong (Sun-Mon) – Singapore (Thu-Fri) – Port Kelang (Fri-Sat) – Singapore (Sun-Mon) –

Da Chan Bay (Thu-Thu) – Hong Kong (Thu-Fri) – Tokyo

Hawaii inter-island shipping rates increase

Hawaii's Public Utilities Commission has approved an average overall rate increase of 13.46 percent for Young Brothers Ltd.'s inter-island cargo services starting Saturday.

For containerized cargo, rates will go up 9.66 percent, which translates into 8 to 9 cents more to ship a 24-package case of saimin, for instance. For automobiles, rates will go up 9.22 percent.

Rates for less-than-container-load cargo will go up 21.26 percent, except for Molokai and Lanai, where rates will rise 12 percent.

This is the fifth straight year of rate increases for the company, which last raised rates in August.

Young Brothers, Limited has been providing inter-island cargo service since 1900 throughout the State of Hawaii with ports in Honolulu, Maui, Molokai, Lanai, Hilo, Kawaihae, and Kauai.

-Star Bulletin

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Friday, July31, 2009

Top Story

DP World port business drops 10 percent in 1H

Cargo handler DP World said Thursday business at its ports dropped 10 percent in the first half of 2009 as the shipping industry struggles through its worst slump in memory because of the global recession.

The Dubai-based port operator said it moved the equivalent of 12.3 million 20-foot (6-meter) shipping containers through ports it runs around the world between January and June.

That's down from 13.6 million containers in the same period a year earlier.

DP World has operations at 49 terminals on six continents, but its container throughput figures cover only the 26 ports it owns or where it has operational control.

Its biggest revenues come from Dubai's Jebel Ali port, the Middle East's largest, and other smaller ports in the United Arab Emirates. The company, part of state-controlled conglomerate Dubai World, said business at ports in the country were down 7 percent in the first half.

DP World's results were better than expectations for the industry as a whole.

- The New York Times

DryShips Q2 earnings beat estimates

Drybulk shipping company DryShips Inc reported better-than-expected quarterly earnings, helped by a recent rise in spot charter rates and increased contribution from its offshore drilling segment, sending its shares up as much as 6 percent.

Charter rates for drybulk ships, which ferry commodities such as iron ore, coal, and grains, have been rebounding from their lows over the last few months.

Dayrates for capesize ships -- the largest type of drybulk ships -- averaged about $40,000 a day for the second quarter, double the first-quarter average of about $20,000.

But drybulk shipping companies -- hit by the crash in charter rates from the highs of last year -- continue to be cautious and have been looking at increasing the long-term contract coverage for their shipping fleet and reduce their spot market exposure.

- Reuters

Pacer to sell off key assets to UTSI

Pacer International, Inc., a major North American freight transportation and logistics services provider, announced Thursday that it has entered into an agreement with Universal Truckload Services, Inc. and UTS Leasing, Inc. (collectively, UTSI) to sell certain assets.

The assets include customer, contractor and agent lists, and owned trailers of Pacer Transport, its specialized heavy-haul trucking operation. The sale’s closing is expected to occur in August.

Industry analysts said that the proposed sale suggests that more modal consolidation is being driven by a lagging economy and weaker profit margins. At the same time, the impact on shippers remains to be determined.

The Pacer Transport network comprises more than 125 agents, nearly 500 owner-operators, and 99 company trucks. UTSI said the acquisition may contribute approximately $30 million to $40 million of additional revenues, and that it will not have a material effect on net income for the third and fourth quarters of this year.

- Logistics Management

APM Terminals fined by EPA

One of the world's largest container terminal companies is being penalized $47,100 for violations of its storm water permit at the Port of Los Angeles over more than three years, according to the EPA.

APM Terminals Pacific Limited discharged industrial-activity storm water at its marine shipping container terminal facility between October 1, 2004 and January 17, 2008, the federal agency charges, in violation of the federal Clean Water Act and the California National Pollutant Discharge Elimination System.

The penalty action is part of a larger enforcement initiative focusing on ports to ensure their tenants comply with storm water requirements.

APM Terminals operates the Port's largest container terminal, the 484-acre Pier 400, where the largest on-dock railyard at the Port of Los Angeles is located.

- Environmental News Service

US group aligns against Mexico tariffs

The "Alliance to Keep U.S. Jobs," a group of more than 150 companies and organizations affected by trade tariffs with Mexico, is awaiting a meeting with transportation secretary Ray LaHood.

Mexico reinstated the pre-North American Free Trade Agreement tariffs in direct retaliation to Congress' move to stop funding the Department of Transportation's Cross Border Trucking Pilot Program.

In response to the tariffs, President Obama ordered the Department of Transportation, the Office of the U.S. Trade Representative and the State Department to come up with a new plan that would appease Mexico and address the safety concerns of Congress.

Representative groups from the apricot, apple, cherry, fig, grape, strawberry and tomato industries are part of the alliance, as well as regional and state groups like the Georgia Fruit & Vegetable Growers Association.

In the potato industry, shipments of frozen potato products from the U.S., which were hit with a 10% tariff in March, are down 29%. Canada’s frozen potato exports to Mexico are up 33%.

The Mexican government said it wants a plan similar to the one that was cut in order to drop the tariffs. U.S. groups like the teamsters union argue that safety concerns should keep Mexican trucks off U.S. highways.

- The Packer

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