Cargo Business Newswire Archives
Summary for August 9 - August 13, 2010:
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Monday, August 9, 2010

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AAR praises freight rail infrastructure bill

The Association of American Railroads (AAR) praised the introduction of the Freight Rail Infrastructure Capacity Expansion Act of 2010 (S.3749) by Senators Kent Conrad (D-N.D.) and John Ensign (R-Nev.).

“America has great expectations for our nation’s railroads – to provide not only the vital connection for U.S. business to the global marketplace, but also the underlying network for expanded intercity passenger and high-speed rail,” said AAR President and CEO Edward R. Hamberger. “This bill offers incentives for our highly capital-intensive business, and will ensure freight rail can continue to meet these expectations,” he said.

The AAR pointed to two of the bill’s tax incentives that would provide for private investment to expand U.S. freight rail infrastructure capacity: A 25 percent tax credit for capacity expansion expenditures on new freight infrastructure, and the ability to expense all qualifying rail infrastructure capital expenditures.

The AAR cited a recent report from the American Association of State Highway and Transportation Officials that says demand for freight would double in the next 40 years.

The AAR contends U.S. freight railroads operate almost exclusively over infrastructure that they build and maintain with their own private funds. From 1980 to 2009, America's freight railroads invested more than $460 billion to maintain and improve their rail network infrastructure and equipment, the AAR said in a statement.

The incentives in the bill are available to other rail network users such as shippers, trucking companies and ports. Qualifying expenditures can include track, grading, tunnels, signals, train control devices, locomotives, bridges, yards, terminals and intermodal transfer and transload facilities.

The bill is a companion to H.R. 1806, introduced last year by U.S. Rep. Kendrick Meek (D-Fla.), and currently has more than 100 cosponsors in the House.

China, Hong Kong bulk carriers revenues up, profit down

Sinotrans Shipping Ltd., the dry-bulk arm of China’s third largest shipping group, said first-half profit fell 8.7 percent, mainly on reduced interest income.

Net income fell to $58.5 million, or 1.46 cents a share, from $64 million, or 1.6 cents, a year earlier, the company said in a Hong Kong stock exchange statement today. Sales rose 12 percent to $133.7 million, mainly on increased dry-bulk revenue.

Pacific Basin Shipping Ltd., Hong Kong’s biggest dry-bulk line, also boosted revenue in the period as China’s rising imports of iron ore, a key steelmaking ingredient, boosted freight rates. The Baltic Dry Index, a measure of commodity- shipping costs, traded at an average 3,163 in the first half of this year, 49 percent higher than a year earlier.

First-half dry-bulk shipping sales rose 14 percent to $125.2 million, oil-tanker sales increased 70 percent to $8.61 million and container-shipping sales fell 9.3 percent to $9.76 million, Sinotrans Shipping said.

Sinotrans Group in April said it may buy overseas dry-bulk vessel owners on the rebound in demand.
Pacific Basin boosted first-half sales by 45 percent to $616.5 million.


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Cathay projects return to pre-recession capacity

Cathay Pacific Airways Ltd., Hong Kong’s biggest carrier, said it will return capacity to levels reached before the global recession as an economic recovery revives travel demand.

The carrier plans to add more flights to France, Australia, New Zealand, Canada and Japan, it said in an e-mailed statement today. Capacity, or the number of seats available multiplied by the distance flown, will rise about 4 percent, it said.

The airline will add more service to Sydney, Perth, Brisbane, Cairns, Auckland, Toronto and Osaka from November, it said. Flights to Paris will climb to 11 a week by December.


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FedEx freight forwarding unit adds more offices in Europe

Memphis-based freight forwarder FedEx Trade Networks, a subsidiary of FedEx Corp. announced that it has opened additional offices in Rotterdam, Netherlands, and Hamburg and Frankfurt, Germany, lifting its total of new such global offices to 28 since the inception of an expansion plan launched in 2008.

“Rotterdam and Hamburg are two of Europe’s largest seaports and Frankfurt serves as an important air cargo gateway to Central Europe,” said Fred Schardt, president and CEO of FedEx Trade Networks. “With our new offices in these key markets, we continue to provide our growing customer base with the service and operational support they need and the expertise they require.”

Philippine freighter sinks in rough seas; 12 missing, one dead

One sailor was found dead and 12 others were missing more than a day after a cargo ship sank in rough seas off the Philippine coast, authorities said Monday.

Three people, including the ship's captain, were rescued and one body recovered, but bad weather delayed further search operations for the 12 missing crew members, a navy spokesman said.

Two planes had to abort their search mission due to strong winds, but a team of navy commandos and other rescuers were ready for immediate dispatch as soon as sea conditions improved, Arevalo said.

The MV SF Freighter, with 16 Filipino crewmen, radioed a distress call on Saturday after its engine faltered while it was being battered by heavy waves off the central island of Dos Hermanas, the coast guard said in a statement.

The vessel was laden with steel and was en route to the port city of Cebu when it radioed its last position.


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Tuesday, August 10, 2010

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Forecast: Mixed signals between shipping and U.S. economy

The trans-Pacific shipping market is making more money thanks in part to rate increases by ocean carriers and a second quarter lift from China trade, but the U.S. economy is projected for a potential second half slowdown in 2010, possibly impacting container shipping services, according to the business information aggregator

“The strong growth trend in trans-Pacific trade seen in H110 has, for the most part, been underpinned by restocking by U.S. exporters who, during the nadir of the global economic downturn, allowed inventories to run threadbare,” the report said.

“An improvement in U.S. economic output in Q409 and this year prompted firms to replenish stocks, with growth driven in large part by the knock-on effects of the government's fiscal stimulus program,” the report went on to say.

However, the report cited the second quarter of 2010 as positive with throughput data from ports such as Los Angeles, Charleston, Seattle and Savannah revealing a sharp rise in Chinese exports in May, including 48.5 percent year-on-year growth in exports to $131.76 billion.

Container-shipping lines have so far successfully capitalized on the increase in trade demand through a series of rate increases in the trans-Pacific, with rumors of more to come, the report said.

Growth at the Port of L.A. is forecasted at 6.7 percent growth in total tonnage and 4.6 percent containerized growth in 2010 at 7.06 million TEUs, after a contraction of 18.4 percent last year, according to the report.

The Port Authority of New York-New Jersey suffered a 20.8 percent drop in total tonnage throughput in 2009, and should show meager growth for 2010 at 0.8 percent in total tonnage, and 1.9 percent for container business at 4.65 million TEUs, the report said.

The report said that “in recent weeks there have been indications that the stimulatory effects of government spending are beginning to fizzle out, with the Telegraph reporting in May 2010 that U.S. money supply contracted by an annualized rate of 9.6 percent in the three months to April 2010.”

The report pointed to concerns over aggregate demand slowing down with the news of a 1.2 percent month-on-month fall in U.S. retail sales in May, the steepest monthly contraction since October 2009. Sales by department stores were among the worst affected, registering a 1.8 percent contraction in volume terms, the report said.

“The latest data has yet to filter through into actual trade volumes or port throughput, news of slowing sales will be of concern to importers, and in particular shippers of Chinese-produced manufactured goods,” the report said.

“Wary of a further decline in consumer demand, we believe shippers will be under pressure to reduce orders over the next few weeks, which threatens to have a marked effect on shipping volumes and port throughput,” the report said.

The strongest growth in value terms projected in the report should be in fuels, ores and metals and iron and steel. Export growth should be marginally greater than the rise in imports in value terms - up by 7.9 percent to $1.59 trillion.

Canada could let $500 mil infrastructure stimulus fund go unspent

Canadian cities are calling on Ottawa to extend its deadline for some stimulus projects in response to a report showing up to half a billion dollars of infrastructure funds could go unspent, or dropped on municipalities' laps.

Kevin Page, the parliamentary budget officer, says many projects in the government's heavily hyped $4-billion Infrastructure Stimulus Fund were slow getting off the mark and many are dragging on longer than expected.

But Prime Minister Stephen Harper said it was premature to speculate about whether the clock will run out on some projects, saying all federal work is on time and he believes a vast majority of municipal projects will also be completed.

Harper did not rule out extending the deadline, but speaking in French he pointed out the purpose of the stimulus program was to stimulate the economy during the recession, which ended last fall.

-Winnipeg Free Press

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DuPont honors Kenco with Responsible Shipper Award

Kenco Logistic Services LLC (KLS), announced it received DuPont’s 2009 Responsible Shipper Award for achieving zero recordable distribution incidents and regulatory citations for the period 1995 - 2009 at its Live Oak/Orange, Texas location.

According to DuPont, the award is for “the outstanding efforts of site personnel to ensure that all materials shipped from the site complied with all applicable transportation regulations, DuPont safe transportation policies, standards and guidelines, and the Responsible Care(R) Distribution Code of Management Practices.”

Kenco said in a statement it specializes in facilities and services for the pharmaceutical, apparel, automotive, food, textile, and appliance industries.

ACL raises rates in trans-Atlantic trade

Atlantic Container Line announced a general rate increase in the trans-Atlantic trade effective October 1, 2010.

The shipping line said in a statement that rates for sailings in both directions between North America and North Europe are going up $150 per-TEU, and $300 per-FEU, respectively.

Hundreds of containers obstruct Mumbai port’s harbor

India ordered salvagers to remove hundreds of containers obstructing Mumbai’s ports by Aug. 14 as the government accelerates attempts to reopen the nation’s busiest cargo-box harbor.

Jawaharlal Nehru Port and the smaller Mumbai Port remained closed today after halting operations yesterday. The closure of the two ports, which handle about 40 percent of India’s exports, has disrupted deliveries of oil to a local refinery and hindered shipments of grains and other exports. As many as 32 ships have been stranded in the ports or were waiting docking, according to the government.

Mediterranean Shipping Co.’s MSC Chitra shed the containers after colliding with another vessel on Aug. 7, the shipping ministry said in a statement yesterday. The vessel is now listing after being deliberately beached.

The ship had 1,219 containers on board, of which 31 held hazardous chemicals and pesticides, Satish Agnihotri, India’s director general for shipping, said in Mumbai yesterday. Srivastava, the shipping ministry official, said that these containers were well-packed and were not expected to cause environmental problems.


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Wednesday, August 11, 2010

Top Story

Long Beach approves $1 bil bridge replacement plan

The Port of Long Beach announced its board of harbor commissioners unanimously approved a plan – including an environmental impact report - to replace the aging Gerald Desmond Bridge with a close to $1 billion replacement that the port said would “accommodate future traffic needs and dramatically improve safety for vessels and vehicles alike.”

In partnership with Caltrans, the port said in a statement it would oversee the project “to design and build a higher, wider bridge parallel to and just north of the existing Gerald Desmond Bridge.”

The older bridge would be taken down once the new one is built, the port said.

Construction of the bridge is projected to take five to six years and generate, on average, 4,000 jobs per year, the port said.

“This is a high priority project both on a national and a local scale,” said Harbor Commission President Nick Sramek.

The port claims the current Gerald Desmond Bridge carries approximately 15 percent of U.S. cargo, along with commuters, accounting for 75 percent of the bridge’s traffic. The harbor bridge connects Long Beach and San Pedro.

The new bridge will have three traffic lanes plus emergency lanes in both directions, and will be higher to allow for larger cargo ships to pass underneath, the port said.

The port commission also announced it has added $2.4 million to its mitigation grant programs, which now total $17.4 million.

NYK postpones its chassis discontinuance in Oakland

NYK Line North America announced it is “temporarily postponing” a previous decision to discontinue its chassis business at the Port of Oakland, Calif.

The pullout of the Japanese liner’s chassis provision in Oakland was originally to have commenced on September 1. The shipping group said in a statement that a new date would be “determined in the future.”

“This postponement is due to the lack of adequate data links to insure a clean product that will be acceptable to the market place. A robust data link is vitally important to the efficient administration of this program, which is expected to be both environmentally sound and a true benefit to the customer,” the company said.

The liner said it would charge a fee for “merchant haulage moves only and all carrier haulage chassis usage cost would be for the account of NYK.”

“The data link is critical in making the distinction of who would be absorbing the cost for the use of the chassis,” NYK said.

Metro Ports appoints new president

Wilmington, Calif.-based Metro Ports announced the appointment of James Dillman as its new president.

As president of Metro Ports, which is held by Nautilus International Holding Corp., Dillman will be in charge of Metropolitan Stevedore Co., Southeast Maritime Services LLC and Southeast Crescent Shipping Co., and will report directly to James Callahan, chairman and CEO of Nautilus, the company said in a statement.

Dillman most recently served as vice president of Ceres Gulf, Inc., in Houston, Texas. Other positions over the course of his 25 years n the shipping industry have included operations manager for the Port of Houston, vice president North American operations for Swire Shipping, manager Barbours Cut Terminal operations for Shippers Stevedore Co., general manager of breakbulk operations for Marine Terminals Corp., general manager operations with BHP Shipping, and general manager for Ceres Great Lakes operations.

“Jim Dillman’s appointment as Metro Ports president further strengthens the Metro Ports management team as we continue to grow and expand our nationwide operations,” said Callahan.

Report: Rickmers nets 565 mil loan for ship financing

Rickmers Group, a German provider of maritime services, got a $565 million term loan which matures in 2015, according to data compiled by Bloomberg.

Proceeds will be used for ship financing and lead arrangers include DnB Nor ASA and HSH Nordbank AG, the data show.

Rickmers, based in Hamburg, has a fleet of 102 vessels and more than 3,650 employees, of which about 85 percent are at sea, according to its website.


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MSC claims no fault in Mumbai ship collision

The MSC Chitra was “properly proceeding” in the navigation channel off Mumbai before a collision with another ship that caused it to shed hundreds of containers into the sea, said operator Mediterranean Shipping Co.

The Khalijia 3 “unexpectedly” extended a turn and crashed into the Chitra, Geneva-based MSC, the world’s second-largest container line, said yesterday in a statement on its website.

“It would appear that under the rules of navigation, the Khalijia 3 was significantly in error,” MSC said, citing a preliminary review of a black-box recording. A formal inquiry will be undertaken by the Mumbai authorities, it said.


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Friday, August 13, 2010

Top Story

Report: Trucking spot freight market up 122 percent in July

The spot trucking freight market continued its strong resurgence in July, posting a 122 percent increase over the same period a year ago, according to Portland, Ore.-based TransCore’s North American Freight Index.

July’s North American load volume was 14 percent lower than June’s.

“In other month over month comparisons, spot freight loads for dry vans and reefer vans each dipped 8 percent in July compared to June, while flatbed load availability declined 17 percent,” the report said.



Gap to offer international shipping to 55 countries

Gap inc. has for the first time offered international shipping to 55 countries, allowing people in Australia, Mexico, Brazil to order from its brands and allowing the company to test the market for its brands overseas.

The company said in a news release Thursday this marks the first time people outside of the U.S. can buy items online from Gap, Banana Republic, Old Navy, Athleta and Piperlime.

Gap is planning to fulfill orders outside the U.S. and it's launching dedicated shopping sites later this month for Canada and Britain.

The company partnered with international e-commerce expert FiftyOne on the effort. Customers can get their order totals in their own currency, along with international duty, tax, and delivery costs, with a guaranteed exchange rate.

FiftyOne will ship the items to customers.

Gap has previously announced it will start letting people in China buy its products through a partnership with e-commerce company Shagnhai Yi Shang Network Information Co. Ltd.

-Yahoo News

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Seattle port commissioner concerned over competition from B.C., Georgia, Texas

Ports in Washington need to be wary of losing business to both the north and south, the top commissioner at the Port of Seattle told the Port Angeles Regional Chamber of Commerce on Monday.

Bill Bryant, president of the Port of Seattle, said he is concerned about ports in British Columbia as well as those in Texas and Georgia taking a large portion of business that now comes through the Strait of Juan de Fuca and Puget Sound.

Improved railways and highways from Georgia and Texas as well as from British Columbia east could leave Washington shut out, he said.

He said the money in the U.S. -- and Washington state in particular -- is distributed politically rather than strategically.

In 2014, the Panama Canal will be widened, which will allow for easier marine transport of goods to the East Coast from Asia, Bryant said.

"Legislators will continue to want to earmark where the money is spent, and constituencies will rise up to oppose new construction projects and the 100 agencies involved will claw and scrape to protect their turf, but if we are setting up new funding mechanisms we have to elect people who have the courage and political will to get it done."

-Peninsula Daily News

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Florida port seeks funds for container business, link-up with Texas port

U.S. Transportation Secretary Ray LaHood Wednesday announced his selection of marine highway corridors and an initial eight projects and six initiatives along the corridors that will be eligible for federal assistance.

One of the projects is the Cross Gulf Container Expansion between Port Manatee and the Port of Brownsville, Texas, which will be eligible to compete for $7 million in federal grant funds.

A partnership between Port Manatee and Port of Brownsville is aiming to increase container traffic between the ports by making infrastructure improvements, said Steve Tyndal, senior director, trade development and special projects at the port.

With another $400 million available in Tiger II transportation funding, Tyndal said Port Manatee plans to apply for $32 million to complete phase 1 of Berth 12’s 32-acre container yard and extending Berth 12 from 1,000 feet to 1,584 feet. This will accommodate the larger 965-foot container ships the port is trying to attract, he said.

SeaBridge Freight will provide container-on-barge service between Port Manatee and the Port of Brownsville.

-Bradenton Herald (Florida)

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Sen. Stevens plane crash: Air transport especially dangerous in Alaska

As the tragic crash which killed former Sen. Ted Stevens and four others on a fishing trip this week shows, Alaska is one of the most dangerous places to fly an airplane.

That is particularly true in regards to general aviation – the small Pipers, Cessnas, and DeHavillands on which so many of the state’s isolated communities depend.

Over the five years of 2004 to 2008, the latest for which complete data is available, the general aviation accident rate for Alaska was 13.59 mishaps per every 100,000 flying hours, according to the Air Safety Foundation. That is more than two times worse than the comparable figure for the US as whole: 5.85 accidents per 100,000 flying hours.

What’s behind this risky record? Bad weather, big mountains, rough airstrips, and the state’s sheer size all contribute to the dangers faced by Alaska’s small plane passengers.

Here are some of the recurring causes of crashes:

Strong, changeable wind gusts channeled through mountain passes and over lakes are common in the state.

Frozen precipitation is a major problem for Alaska pilots, of course. This is true when it is on the ground as well as blowing through the air.

Sudden weather
Snow, ice, rain, wind – lots of locales in the US experience bad weather. But in Alaska, it can hit you in an instant, due to the meteorological effect of its high mountains, deep gorges, and permanent glaciers.

-Christian Science Monitor

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