Cargo Business Newswire Archives
Summary for July 30 - August 3, 2012:

Monday, July 30, 2012

No Newswire today.


Tuesday, July 31, 2012

Top Story

U.S. drought, global heatwave deal blow to Supramax shipping sector

Global grain trade could reportedly drop 4.9 percent for the 2012-2013 amid a historic U.S. drought, unusually dry weather conditions in other global regions, and money-losing rates for Supramax commodity vessels.

The largest Supramax carrier, Eagle Bulk Shipping, will experience a 30 percent plummet in shares over the next 12 months as forward freight agreements reveal a forecast of ship-hire rates of $9,117 per day in the usually busy fourth quarter – 17 percent below current Baltic Exchange data, according to statistics compiled by Bloomberg.

Supramax vessels need to earn $5,000 to $6,000 to cover operating expenses and $12,000 to $14,000 once financing costs are included, according to RS Platou Markets AS.

"Those droughts are very bad news for the shipping industry," said Marc Pauchet, analyst at London-based shipbroker ACM Shipping Group Plc, to Bloomberg. "It seems grain production is going to be worse than even we had anticipated," he said.

While U.S. farmers deal with the worst drought since 1956, dry and very not weather has reportedly damaged crops across Australia and Europe as well.

The United States Department of Agriculture reported corn and soybean conditions "further declined" in its latest USDA/NASS crop condition report. 

"The most significant crop deterioration occurred across the southern and western Corn Belt, where little or no rainfall accompanied temperatures that averaged 5 to 10 degrees above normal," the USDA reported.

"U.S. soybeans, rated 37 percent very poor to poor on July 29, 2012, have matched lowest conditions observed during the drought of 1988," the USDA report said. 

"That year, soybeans rated very poor to poor peaked at 37 percent on July 10, with a secondary peak of 35 percent on August 21. Nearly half (48 percent) of the U.S. corn was rated very poor to poor on July 29, 2012. In 1988, corn rated very poor to poor peaked at 53 percent on August 21," the report said.

The following Bloomberg source was used for part of this news report:

Maersk exec: "Current rates are not able to cover our costs"

The largest container-shipping company in the world is reportedly losing $217 per forty-foot container transiting between Melbourne, Australia and Qingdao, China.

"Current rates are not able to cover our costs and we cannot sustain continual losses," said Gerard Morrison, director of sales for Maersk Line at an industry conference in Melbourne.

Morrison said the global shipping industry averaged a rate of return of 2 percent in 2011 – one fifth of its 10 percent goal.

For the Wall Street Journal source report:

Crowley Logistics adds LCL services to Colombia

Crowley Maritime's logistics unit announced the expansion of less-than-containerload services from distribution points in the U.S., Puerto Rico and Panama to Cartagena, Colombia.

Crowley said in a statement the LCL services would include ocean, airfreight, and customs brokerage.

Crowley's U.S. distribution centers utilized in the new Colombia service include its Miami, San Juan, and Colon locations.

Houston-based Crowley freight forwarding subsidiary Jarvis International Freight will also service Colombia, the company said.

Was at-large Vinalines chief tipped off over impending arrest?

Was the fugitive Vietnam Maritime Administrator who ran the financially embattled state-owned Vinalines shipping firm tipped off in advance of his impending arrest?

According to Lieutenant General Phan Van Vinh, director of the Criminal Police Department at the Ministry of Public Security, in an online interview on Friday with the Cong An Nhan Dan newspaper: "there's no information that Dung had paid a lot of money to be notified in advance so he could save himself."

The Vinalines director, Duong Chi Dung, remains the subject of a manhunt since May 18 when it was made public that he would be arrested for alleged multi-million-dollar financial mismanagement during his leadership of the firm from 2005 to early this year.

Thirteen Vinalines officials are, according to media reports out of the region, under investigation as Vietnam's government investigates findings by auditors who turned up evidence of fraud and other irregularities that reportedly included the acquisition of old ships that were not operational.

Vinalines lost 24.7 million last year despite what has been reported were falsely reported profits by the company.

Vinalines debts are reportedly over $2 billion.

For the full Than Nien News story:


Wednesday, August 1, 2012

Top Story

APM Terminals inks $900 mil Mexico port deal

The terminal operations arm of Denmark's A.P. Moeller Maersk announced it has signed a 32-year concession contract to design, finance, build, and operate a container terminal at the Port of Lazaro Cardenas, located in the southern part of the state of Michoacán, Mexico on the Pacific Ocean.

APM Terminals said in a statement it would begin construction in September on the first $300 million phase of the box terminal that at full build out, will reach a cost of $900 million and encompass over 250 acres.

The first phase is scheduled for completion in 2015 and will feature on-dock intermodal rail, 7 super post-Panamax ship-to-shore cranes, and electrically powered rubber tired gantry cranes, the terminal operator said.

"This agreement shows our confidence in the future of the Mexican market. Our investment and expertise will help transform the nation's competitiveness through an efficient, integrated port and inland service network," said JD Nielsen, managing director, APM Terminals Lazaro Cardenas SA de CV.

Two-hundred-mile Emission Control Area off North America starts today

The so-called Emission Control Area that is aimed at reducing air pollution from commercial ships off of the coastlines of North America is in effect as of today, August 1.

The new air emission measure has officially launched two years after the International Maritime Organization approved an application from the U.S. and Canada for the creation of a lower pollution zone that lowers nitrogen oxides, sulfur oxides and particulate matter from ships over 400 gross tons that are within 200 nautical miles of the coasts of the two countries.

The ECA requires ships to use fuel with sulfur content of 1.0 percent or less, and a much more stringent 0.1 percent beginning in 2015.

A civil penalty of as much as $25,000, or more, per day, can be assessed to ship operators not complying with the new emissions standard, although Transport Canada announced in March it would not enforce the regulation as of August 1 pending "further discussions with the domestic marine industry."

California senators call for L.A.-Long Beach clerks-employer agreement

The Local unit of the International Longshore and Warehouse Union that covers 600 clerical workers at the ports of Los Angeles and Long Beach, Calif. is reportedly back at the negotiating table today with the employer group that represents the 14 marine terminal operators there, and California Senators Barbara Boxer and Diane Feinstein are pushing for the oft-stalled contract discussions to get resolved sooner than later, fearing either a partial, or complete shutdown of the nation's largest cargo complex.

"With the fragile state of California's economy and growing competition from other U.S. ports, it is essential that both parties reach an agreement that will protect these important jobs and allow the ports of Los Angeles and Long Beach to continue operating without disruption," the senators said in a letter sent to John Fageaux Jr., president of the ILWU's Local 63 Office Clerical Unit, and to Stephen Berry, the lead negotiator for the Harbor Employers Association.

The two sides have been operating without a contract for over two years.

The clerical workers elected to bargain with each HEA member company one at a time on the heels of a coast arbitrator's ruling that ILWU members could honor an OCU picket line. The HEA has since offered up four options for a new contract agreement.

However, the HEA says jobs and technology are the sticking points with the L.A. -Long Beach OCU. The clerical workers group wants new hires despite management's contention there is no current business need, and insisting vendors call, fax or email rather than use an employers' websites, according to the HEA. The terminal operators have also contended OCU workers prefer to manually enter data instead of utilizing automated data transfers.

China's freight rail dropped 3.1 percent in June

China's government has released statistics that show its rail freight volume dropped 3.1 percent to 315 million tons in June compared to the same period a year ago.

The negative showing for China's rail freight in June marked the first time it has dipped since September 2009.


Thursday, August 2, 2012

Top Story

CAT completes $750 mil majority interest sale of logistics unit

Caterpillar Inc. announced the sale of 65 percent of Caterpillar Logistics Services to Platinum Equity for approximately $750 million.

"The sale of the third party logistics business was driven by the strategic focus on the significant growth opportunities in our company's core businesses," said Steve Larson, vice president of Caterpillar and chairman and president of Cat Logistics, in a statement.

Caterpillar said it would retain a 35 percent equity stake in the logistics business that will be renamed by Platinum at a later date.

"We look forward to building on that tradition while establishing a new identity and propelling the company to new levels of success," said Platinum Equity Partner Jacob Kotzubei.

The sale won't impact Caterpillar's manufacturing logistics and transportation operations or CAT brand parts distribution, the company said.

"These services will continue as core businesses within CAT Logistics," the company said.

The divested third party logistics business will continue to provide services for non-CAT branded parts including FG Wilson, Perkins, Solar, as well as for Caterpillar Japan, according to the announcement.

DP World throughput up 7.5 percent for H1

Global terminal operator DP World reported its total container-handling volume was up 7.5 percent to 28.2 million TEUs for the first half of 2012 over the same period last year.

The United Arab Emirates company said in a statement that its container business in the Asia Pacific and Indian Subcontinent "was the main driver of this growth," with a 12.1 percent increase to 13.3 million TEUs.

DP World's Americas and Australia region volumes grew 6.1 percent to 3.3 million TEUs "as solid growth in the Americas mitigated a more challenging environment in Australia," the company said.

DP World deconsolidated five terminals in Australia in March of last year.

The terminal operator's box-handling business in Europe, Middle East and Africa were up a collective 3.2 percent to 11.6 million TEUs.

"Weaker trade across Europe masked the stronger performance across the rest of the region including in Jebel Ali, UAE which handled 6.6 million TEUs in the first six months of the year, 7.3 percent ahead of the same period last year," the company said.

Old Dominion posts strong Q2, H1

Old Dominion Freight Line, Inc. announced what it said were record financial results for both its second quarter and first half of 2012.

The trucking firm said in a statement that its revenue increased 12.8 percent to $541.5 million compared with $480.3 million for the second quarter of 2011.

Old Dominion's net income increased 21.5 percent to $47.8 million for the second quarter from $39.4 million for the same period last year, while the company said its operating ratio improved to 84.7 percent for the second quarter from 86.5 percent for the second quarter of 2011.

For the first six months of 2012, Old Dominion posted a revenue increase of 15 percent to $1.04 billion, up from $902.9 million for the first six months of 2011.

Net income for the six-month period was $78.9 million, up 29.5 percent from $61.0 million for the same period last year, with operating ratio over the same period improving to 86.8 percent from 88.6 percent.

"Old Dominion's second-quarter performance was truly exceptional as we set quarterly records for our revenue, margins and earnings per diluted share," said David S. Congdon, president and chief executive officer of Old Dominion.

Congdon said revenue growth for the second quarter of 2012 reflected a 9 percent increase in tonnage compared with the second quarter of 2011 that resulted from an 8.6 percent increase in shipments and a 0.4 percent increase in weight per shipment.

The trucking company's CEO said revenue per hundredweight rose 3.4 percent for the latest quarter, or 4.1 percent excluding fuel surcharges, "despite the generally negative impact on revenue per hundredweight resulting from the increase in our weight per shipment and a 1.4 percent decline in our length of haul."

Congdon said Old Dominion's most recent quarterly operating ratio was "the best we have ever produced in our 78-year history, and we believe it is one of the best ever produced by a public less-than-truckload carrier with national coverage."

Old Dominion reported capital expenditures for the second quarter of $120.6 million, which included the opening of a new service center in Benson, Minn., bringing total capital expenditures for the first half of 2012 to $210.0 million.

Baltimore port handles record tonnage for H1

The Maryland Port Authority announced its public marine terminals at the Port of Baltimore handled a record 4.83 million tons of general cargo during the first six months of 2012, breaking the previous record of 4.69 million tons set during the first half of 2008.

The port said it new record is also up 10 percent over the first six months of 2011.

The port said in a statement that the strongest performing commodities passing through its marine terminal facilities during this year's first half were roll on/roll off, such as farm and construction equipment, increasing 36 percent, automobile traffic increasing 27 percent, and container business climbing seven percent.


Friday, August 3, 2012

No Newswire today.

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