Cargo Business Newswire Archives
Summary for August 9- August 12, 2011:
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Tuesday, August 9, 2011

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FedEx Freight to implement 6.75 percent GRI

FedEx Freight, a subsidiary of FedEx Corp., announced it would implement a 6.75 percent general rate increase by Sept. 6, 2011 for shipments within, and between, the U.S. and Canada, in addition to cross-border cargo from Mexico to the U.S.

FedEx Freight said the rate increase applies to shipments covered by the FXF 1000 and FXF 501 series base rates. The FedEx Freight fuel surcharge will remain unchanged, the company said in a statement.

FedEx Freight claims it has one of the lowest fuel surcharges in the LTL industry; “at least 22 percent lower than the next six largest LTL carriers' published fuel surcharge rates based on the average national price of diesel fuel as of July 27, 2011,” the company said.

FedEx previously announced increases to shipping rates for FedEx Express and FedEx Ground that went into effect at the beginning of this year.

OOCL H1 profit falls 86 percent; expects slow economic recovery

Hong Kong’s container-shipping giant Orient Overseas (International) Ltd. reported a precipitous 86 percent drop in its first-half net profit to $176 million compared to the same period a year ago, amid declining freight rates in a softened global economy, and the lack of a one-time gain that helped boost last year’s profit margin.

The shipping line said it does not expect the U.S. economy will experience a double-dip recession or the U.S.' lowered Standard Poor’s debt rating to severely impact the container-shipping market.

Matson discontinues one of two China services

Oakland-based Matson announced it is discontinuing one of its two China services, citing high fuel prices, weakened freight rates and overcapacity in the trans-Pacific shipping trade.

The ocean carrier, most known for its long-standing Hawaii-U.S. - West Coast shipping services, said its China-Long Beach Express (CLX2) service would cease operation towards the end of August.

The CLX2 has served between Hong Kong, Yantian, Shanghai and Long Beach, Calif.

Matson said its original China – Long Beach Express service (CLX1) that was launched in 2006 will continue. That service operates between Xiamen, Ningbo, Shanghai and Long Beach.

Matson said in a statement that the costs for the two services are “considerably different, with the CLX1 service benefiting from round trip economics, generating revenue for both westbound and eastbound voyages,” while the CLX2 has provided direct service from Long Beach to China, that has resulted in costing that is “entirely dependent on the market conditions of the trans-Pacific trade, which is currently challenging for most carriers as a result of chronic high fuel costs and aggressive rate actions in the trade.”

The CLX2’s final eastbound sailing is scheduled to depart from Shanghai on August 21, with westbound service from Long Beach to China continuing through to September 3, the carrier said.

Discontinuing the CLX2 will not affect Matson’s CLX1 service schedule, nor the company’s Hawaii and Guam services.

First steel cut on second Pasha Hawaii vessel

Honolulu-based Pasha Hawaii announced the first steel plate was cut this week on the carrier’s $144 million MV Marjorie C that is being built at the VT Halter Marine shipyard in Pascagoula, Miss.

The Marjorie C is scheduled for delivery in the fall of 2013 when it enters the U.S. West Coast-Hawaii shipping trade, joining Pasha Hawaii’s pure car-truck vessel MV Jean Anne that started operation in 2005, which the company says will enable it to provide weekly service to Hawaii.

The 692-foot Marjorie C will be a combination container and roll-on/roll-off car truck carrier (ConRo) that includes capacity for 2,750 vehicles and 1,500-TEUs.

Pasha said it has an option agreement for the construction of a third vessel with a base price of $137 million.

Bulk vessel chartered by COSCO detained in Louisiana for overdue payment

A bulk vessel chartered by China COSCO Holdings Co. was reportedly detained in Louisiana, making it the second such ship chartered by China’s biggest shipping firm to be arrested in the past month for overdue payments.

Charterer Classic Maritime Inc., a unit of DryShips Inc., attached the Jia Li Hai over $2.7 million reportedly due from COSCO Bulk Carrier Co., according to filings at the U.S. District Court in the Eastern District of Louisiana where a warrant was issued on August 3, as reported by Bloomberg.

Another such COSCO-chartered bulk vessel was reportedly detained last month in Singapore when shipowner Arlen Maritime Co., along with other companies, filed charges seeking $8.58 million, according to court papers, Bloomberg reported.

COSCO Bulk reportedly had both vessels on long-term charters, beginning before the drastic plunge in capesize rates due to slowed demand and high capacity in that sector.

COSCO was reportedly paying $87,000 a day for the vessel detained in Singapore, which is about eight times the current average rate for such vessels.

China COSCO Holdings Co. announced it would likely post a record loss for the first half of the year as rising fuel costs eroded profits.

China COSCO, based in Tianjin municipality, said the loss was caused by the “prolonged high fuel price under the declining international freight market,” according to a statement to the Hong Kong stock exchange today. First-half profit was 3.45 billion yuan ($540 million) last year, it said.

Fuel prices advanced 28 percent this year through yesterday, according to data compiled by Bloomberg. Nippon Yusen K.K. and Mitsui O.S.K. Lines Ltd., Japan’s two largest shipping lines, slashed their annual profit forecasts last month amid falling rates and rising fuel costs.


Thursday, August 11, 2011

Top Story

Canadian Tire in talks with other shipping lines to help fill void at Halifax port

Canadian Tire Corp., a major retailer that ships through the Port of Halifax in Eastern Canada, is reportedly in discussions with other shipping lines serving the port to help fill the void left by the pullout of an alliance of five Asian ocean carriers.

The Green Alliance (formerly termed the CKYH) that consists of COSCO, Hanjin Shipping, “K” Line, MOL and Yang Ming Line, had been calling Halifax since 2009 as the first North American East Coast inbound port stop on a weekly service that transits the Suez Canal from Southeast Asia with nine post-Panamax vessels.

Halifax was the only port dropped from the service, and the loss of the Green Alliance reportedly accounts for 4.5 percent, equating to approximately 20,000 TEUs, of the port’s business at its Halterm cargo-handling facility.

MOL spokesman Timothy Pajak said of the decision to drop Halifax that: “We anticipate significant improvement in on-time performance of the overall service."

Meanwhile, Canadian Tire said in a statement that it is seeking to fill the service void.

"Canadian Tire is aware of the consortium’s decision and is in discussion with other carriers that serve the Port of Halifax," the retailer said.

The Halterm operation, owned by Australia’s Macquarie Infrastructure Partners continues to move ahead with enhancements including two $10 million harbor cranes due for delivery next year.

For the full Chronicle Herald story:

U.S. trade deficit increased in June

The U.S. deficit in international trade for goods and services increased by almost $3 billion in June over May, hitting $53.1 billion over the previous month’s $50.8 billion, according to the latest Census Bureau statistics.

Exports decreased to $170.9 billion from May’s $175 billion, while imports also decreased to $223.9 billion from May’s $225.8 billion.

On the export side, U.S. industrial supplies and materials decreased by $2 billion, capital goods dropped by $1.5 billion, and foods, feeds and beverages were down by $800 million. Consumer goods exports were up $700 million, the Census Bureau reported.

Notable decreases for U.S. imports in June included industrial supplies and materials dropping by $2.2 billion, and automotive vehicles, parts and engines declining $200 million.

The overall goods deficit with China increased from $25 billion in May to $26.7 billion in June, including a $1.7 billion increase in imports to $34.4 billion, primarily consisting of computers, apparel, and household goods.

UK shipping group says “keep the door open” to emissions reduction alternatives

In the wake of this summer’s environmental summit of the International Maritime Organization and the resulting “technical efficiencies” approach the group adopted to help reduce carbon emissions from global commercial shipping, the UK Chamber of Shipping is urging the shipping industry “to keep the door open” to options that includes a more market-based measure.

The Chamber has released manuals on two current options being discussed: a market-based “greenhouse gas contribution” fund where shipping companies contribute a percentage based on bunker-fuel purchases, and a levy-based approach being pushed by the European Union, in particular, termed the Emissions Trading System, where shipping firms buy emissions units that they surrender based on their actual emissions.

“This is a complex international debate for which we need active participation from the shipping industry and governments to find a genuine solution. This must be global – through the IMO – rather than regional,” said Mark Brownrigg, director general of the British Chamber of Shipping in a statement.

“It is crucial that we do not discount either of the main proposed economic mechanisms for encouraging carbon reductions. The debate lies ahead on which option will provide greater certainty of outcome, ease of application, and without damaging the growth of the industry and world trade. That debate must be based on practical considerations rather than conjecture,” Brownrigg said.

To download the two Chamber of Shipping manuals covering the GHG and ETS:

Seaspan to charter new 13,100-vessel to COSCO

Seaspan Corp announced the 13,100-TEU COSCO Development containership was delivered this week by the Hyundai Heavy Industries shipyard and will be chartered to COSCO Container Lines for a 12-year, fixed rate deal.

The latest vessel delivery is the third of eight such like-sized containerships, and the thirteenth of a total of 18 containership Seaspan has chartered to COSCON.

Seaspan said in a statement that its total operating fleet now stands at 64 vessels.

West Africa’s pirate activity on the rise

The sea pirates of Somalia have an emerging rival off the West Coast of Africa, where violent, organized acts of piracy are on the rise, according to the International Maritime Bureau.

There have been 18 separate acts of piracy in the West Africa region in this year’s first half, the IMB has reported.

The IMB reported 12 attack on tankers off of Benin since March, where they had not been any reported in 2010, including five ships that were hijacked, taken to unknown locations, and subsequently ransacked, including some of the vessels’ product oil cargoes.

Another six vessels were boarded in what the IMB described as “violent armed robbery style attacks.”

Off Nigeria, two vessels were reportedly fired upon, including one case where the crew was beaten.


Friday, August 12, 2011

Top Story

Memphis prepares for conference of key trade leaders

By Wayne Risher
Memphis Commercial Appeal

An industry conference Oct. 6 at The Peabody will bring together an A-list of executives who could potentially shape Memphis' future as a big-time port city.

The Memphis World Trade Club and Cargo Business News have lined up speakers including Canadian National Railway's chief and a vice president of the Panama Canal Authority for the Southeast Freight Conference and Memphis Port Night gala.

Claude Mongeau, who succeeded Memphis native Hunter Harrison as president and CEO of the Canadian National, will be the luncheon keynote speaker.

Erxin Yao, president of Orient Overseas Container Line USA, will give the opening keynote.

The conference will run 8 a.m. to 4:30 p.m., followed by Port Night at 6 p.m.

A closing presentation will be made by Rodolfo Sabonge, vice president, market research and analysis, of the Panama Canal Authority.

Port Night, in its 64th year, celebrates the key strategic relationship between Memphis and the Port of New Orleans.

Title sponsors are the CN Railway and the Port of New Orleans, whose president and CEO, Gary LaGrange, will speak during a session on coastal and inland ports.

The Panama Canal Authority and the Port of New Orleans just extended a mutual cooperation agreement in advance of an expansion that will double the canal's capacity. It's scheduled for completion in 2014.

The canal authority is touting an "all water route" providing improved access to Gulf and East Coast ports for container ships [from] the Pacific Ocean.

Port Night this year is being combined with another World Trade Club program, the Southeast Freight Conference, to create a daylong event.

The conference will [also] include a U.S. Southeast Economic and Trade Outlook by David Altig, senior vice president and director of research, Federal Reserve Bank of Atlanta; and Charles Clowdis, managing director, IHS Global Insight.

Other sessions will focus on freight carriers, importers, exporters, air, ocean and trucking. Registration information can be found at

Story courtesy of the Memphis Commercial Appeal:

NOL Group suffers $67 mil loss in H1

Citing “deteriorating conditions in the global economy,” softening trade demand and depressed freight rates, Singapore’s global container shipping and logistics group Neptune Orient Lines reported a net loss of $67 million for the first half of 2011 that the company said could lead to end-of-year losses if conditions don’t improve.

For the year’s first half, NOL reported its revenue was up 9 percent to $4.595 billion, however the second quarter produced a net loss of $57 million, due to higher operating and fuel costs, amid downward pressure on rates, the company said.

For the first half of 2010, NOL had posted $1 million net profit in a year that was a bounce-back for most shipping lines after 2009’s global economic meltdown.

“Conditions are challenging throughout the shipping industry,” said NOL Group CEO Ronald D. Widdows in a statement.

“In this environment we are working aggressively to bring down costs while keeping our assets well utilized,” he said.

NOL’s shipping line unit APL, posted a 7 percent increase in revenue at $4 billion in the first half of 2011. APL’s volume increased 8 percent, with revenue per-FEU declining 3 percent, primarily due to lower freight rates in the Asia-Europe shipping trade, the company said.

APL’s vessel utilization in the first and second quarters of 2011 was 92 percent and 91 percent, respectively.

“Rate pressure, coupled with a 23 percent year-on-year fuel price increase in the first half of 2011, negated the benefit of higher volume,” said APL President Kenneth Glenn.

“Our job now is to accelerate revenue growth while managing down costs in every aspect of our business; from terminal operations to the way we procure all other services,” he said.

NOL’s supply chain management unit, APL Logistics, showed a revenue increase of 18 percent in the first half of 2011 $682 million.

The logistics business increases were attributed primarily to gains in contract logistics, which includes rail and land transport business as well as auto logistics, and international services, APL reported. “Increased volume in most of our business lines is driving revenue higher,” said APL Logistics President Jim McAdam. “We are encouraged by the increasing contribution of emerging markets, particularly in China, to our first-half performance," he said.

Port of Tacoma receives one-millionth Kia

The Port of Tacoma announced it received its one-millionth Kia vehicle - a 2011 Optima Hybrid - at the Blair Terminal on August 11.

"We congratulate Kia Motors on reaching this milestone at our port," said Connie Bacon, commission president, Port of Tacoma, in a statement.

Kia imports at Tacoma have been processed by Auto Warehousing Company since February 1995, the port said.

"This tremendous milestone demonstrates the strength of a long-standing partnership between Kia Motors America and the Port of Tacoma," said Tom Loveless, vice president of sales, Kia Motors America.

"Kia's commitment to the U.S. market is reflected in our growth and long list of critically acclaimed products, including the all-new Optima Hybrid that is now arriving in dealer showrooms," Loveless said.

Kia Motors reportedly surpassed the 350,000-unit sales mark for the first time last year.

The Optima Hybrid is Kia’s first-ever such vehicle that can be operated in zero-emission, full-electric drive mode up to 62 miles per hour.

Port of Tacoma CEO rejects pay raise

The Port of Tacoma’s chief executive, John Wolfe, turned down a salary increase for this year, citing tough economic conditions, despite receiving commendations for by the port’s commission for his performance for his first 18 months on the job.

“Normally, your performance would warrant some level of reward in the form of increased compensation or other benefit,” Port of Tacoma Commission President Connie Bacon wrote in Wolfe’s formal evaluation, as reported by the Tacoma News Tribune.

“The commission, with your strong concurrence, has agreed to make no changes in your current compensation and benefit package, but we look forward to an economic upturn and port growth where we can acknowledge the high level of your work,” Bacon continued.

Wolfe’s current salary is $220,000 per year with a $700-per-month car allowance.

While drawing praise for his short time on the job, the Port of Tacoma is still reeling from the Great Recession after dropping to a 1.5 million-TEU port from over 2 million TEUs handled pre-recession, the News-Tribune reported.

One of the successes being touted under Wolfe, is the port’s 14-month-old log export business that was brought back after an almost three-year absence.

New Zealand-based TPT U.S. Limited loaded its 100 millionth board-foot log on the TPT Longview that is scheduled to depart the Port of Tacoma for China today.

For the full Tacoma News-Tribune story:

Russian cargo plane crash kills 11

A Russian An-12 cargo aircraft crash in that country’s remote Magadan region this week reportedly killed all 11 crew on board after search and rescue could not find any survivors after reaching the site over 24 hours after it went missing.

The crash remnants were reportedly strewn over a 2-km radius.

The plane had been carrying 16 tons of food supplies to a remote village in Chukotka when it reported an oil leak and resulting fire in one of its turbo-prop engines before it went it went off radar.

The Antonov aircraft was the oldest of its kind in use, reportedly built in 1963. The specific cause of the crash in under investigation.



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