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Summary for August 11 through August 15, 2014:
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Monday, August 11, 2014 Maersk to raise U.S. inland tariffs in September
USDA blames Port of Vancouver for lack of inspections at United GrainThe Port of Vancouver, Washington, is facing strong criticism from the federal government over a reported lack of inspections at United Grain Corporation that has all but shut down the West Coast’s largest grain elevator. Labor conflict at United Grain endangers Montana’s $1B wheat cropA severe shipping bottleneck created by a labor dispute at the United Grain terminal in Vancouver, Washington, is threatening Montana’s $1 billion wheat crop as harvest begins. Port of Stockton to switch barge service from weekly to "as needed"Effective Sept. 1, 2014, the Port of Stockton will shift its M-580 Marine Highway cargo barge project from a weekly service to an "as-needed" service. The M-580 has completed its 14-month demo, proving itself a viable, eco-friendly alternative for transporting containers to and from the Central Valley and the Bay Area. Scarab beetle found in banana shipment at Port of WilmingtonA new type of plant-eating scarab beetle was discovered in a shipment of bananas at the Port of Wilmington, in Delaware, the U.S. Department of Agriculture confirmed.
Tuesday, August 12, 2014 NRF: Import volume to surge in August at U.S. ports
Retailers worried about possible shipping delays during West Coast labor contract talks rushed to import holiday season goods earlier than usual, just in case, the report said. The contract between the Pacific Maritime Association and the International Longshore and Warehouse Union expired on July 1, and dockworkers have remained on the job as both parties continue to negotiate a new deal. "The negotiations appear to be going well but each week that goes by makes the situation more critical as the holiday season approaches," said Jonathan Gold, NRF vice president for supply chain and customs policy. "Retailers are making sure they are stocked up so shoppers won't be affected regardless of what happens at the ports." Import volume at U.S. ports covered by the Global Port Tracker report is forecast to total 1.54 million TEUs in August, the highest monthly volume since NRF began tracking import volume in 2000. U.S. ports followed by the report handled 1.48 million TEUs in June up 9.1 percent from June 2013. July is estimated to be up 5.8 percent at 1.53 million TEUs, August up 3.6 percent at 1.54 million TEUs, September up 2.8 percent at 1.48 million TEUs, October up 3.3 percent at 1.48 million TEUs, November up 2 percent at 1.37 million TEUs, and December up 2.1 percent at 1.34 million TEUs. Those numbers would bring 2014 to a total of 17.1 million TEUs, an increase of 5.2 percent year-over-year, the report said. Global Port Tracker covers the U.S. ports of Los Angeles/Long Beach, Oakland, Seattle, Tacoma, New York/New Jersey, Hampton Roads, Charleston, Savannah, Port Everglades, Miami, and Houston. Orient Overseas shifts to profits in first-halfHong Kong-based Orient Overseas International Ltd turned around sharply to realize profits in the first half of 2014. The container transport and logistics giant declared a profit attributable to shareholders of $181.3 million in the first six months of the year, compared with a $15.3 million loss in the same period of 2013. Sales rose 7 percent to $3.2 billion. Revenue at subsidiary Orient Overseas Container Ltd increased 4 percent year-over-year on a 10 percent increase in lifting and a higher load factor. "The first six months of 2014 saw a robust growth in cargo demand in the major European and American markets," OOIL said in a statement Monday morning. OOIL's results were above expectations, according to UOB Kay Hian Research shipping analyst Lawrence Li, who attributed gains in operating income to cost cutting and the firm's ability to charge a premium over its rivals due to well-integrated logistics. For more of the South China Morning News story: scmp.com DHL opens Tokyo hubLogistics and shipping giant DHL broke ground Monday on its $89 million custom-built Tokyo Gateway at Shin-kiba, Tokyo, according to a company statement. Slated for completion in the first quarter of 2016, the firm reports the 15,000-square-meter DHL Express Tokyo Gateway is DHL Express' fourth gateway facility in Tokyo. Located at the same strategic area where the DHL Tokyo Distribution Center (TDC) is currently situated, the statement said the new DHL Express Tokyo Gateway is accessible from the Narita International Airport, Haneda Airport, and Tokyo's business districts. "Japan is on the cusp of an economic revival, with slow but evident growth and imports reaching an all-time high of $800 billion last year," said Jerry Hsu, CEO of DHL Express Asia Pacific. "In tandem with the country's remarkable economic recovery, this investment will provide DHL sufficient capacity to accommodate current and future growth." Built to take over and extend TDC's operations, DHL said the new building will feature a 20,000-square-meter floor area including a gateway operations area of 15,000-sqm, and will offer customs clearance and bonded warehousing services. In addition, the shipping giant said the new gateway would also house a pick-up and delivery service center for customers. Russia: Import market will shift to Turkey and Latin America due to sanctionsRussia will import more goods from Turkey and Latin American countries such as Brazil now that it has banned most European Union and U.S. food imports in retaliation against Western sanctions over Moscow's role in Ukraine. On Thursday, Russian Prime Minister Dmitry Medvedev announced the one-year ban on meat, fish, dairy, fruit and vegetables imports from the U.S., the EU's 28 member states, Norway, Canada, and Australia. "We are having a meeting today with Turkey, which expressed willingness to increase supplies of vegetables and fruit," said Yulia Trofimova, a spokeswoman for Russia's food safety watchdog Federal Veterinary and Phytosanitary Inspection Service. "Latin America — Brazil, Peru — are ready to supply substantial volumes of meat. Brazil and Chile want to supply more milk and dairy products, Ecuador wants to supply shellfish and Peru and Chile — fish," she added. Russia has reportedly become the world's biggest consumer of EU fruit and vegetables, the second largest buyer of U.S. poultry and a major consumer of fish, meat and dairy products. For more of the Moscow Times story: themoscowtimes.com U.S. shipping line sues Alcoa for $300MNanko Shipping is suing Alcoa for $300 million due to losses it incurred after Alcoa allegedly breached a bauxite shipping contract with the government of Guinea, according to court documents. That deal established that the Compagnie des Bauxites de Guinee, the largest bauxite mine in the West African country, gave the government the right to choose a firm to ship half of its production, according to a copy seen by Reuters. In its lawsuit, Nanko alleged that Alcoa, which manages the day-to-day operations of the CBG, had refused the government's request in 2011 to let the U.S. shipping firm take charge of the transportation of Guinea's 50 percent of production. Nanko's demand for damages was based on its estimates that the value of the government's shipping rights was worth $100 million a year since they were established. Alcoa spokeswoman Christa Bowers said the firm had not been served with any legal papers relating to a lawsuit by Nanko, and said that they have never had a contractual relationship with Nanko Shipping. For more of the Reuters Africa story: af.reuters.com Santa Barbara $2500 incentive program slows ships to protect whalesA coalition of government, non-profit and shipping industry groups are participating in a new trial incentive program in the Santa Barbara Channel to slow cargo ships down to reduce air pollution and increase protection of endangered whales, according to a statement from the Santa Barbara County Air Pollution Control District. The agency reports that shipping lines COSCO, Hapag Lloyd, K Line, Maersk Line, Matson, and United Arab Shipping Company will engage in the speed reduction incentive program and have identified the ships that will sail between Point Conception and the Ports of Los Angeles and Long Beach, from July-October 31, 2014, at speeds of 12 knots or less (reduced from typical speeds of 14-18 knots). Participating companies will receive $2,500 per transit through the Santa Barbara Channel, the statement said. The Santa Barbara County Air Pollution Control District, NOAA's Channel Islands National Marine Sanctuary, and the Environmental Defense Center developed the program, which was modeled after successful speed reduction incentive programs at the Ports of Long Beach and Los Angeles.
Wednesday, August 13, 2014 Drewry: Container ship reefer capacity up at expense of specialized reefer fleet
Reefer box capacity is expected to grow from 1.6 million FEUs in 2013 to 1.9 million slots in 2018, according to the review. However, this fleet growth is expected to be in line with vessel utilization levels due to strong cargo growth. Drewry forecasts that reefer container volumes will rise by 20.5 million tons over this five-year period — 16.5 million tons by organic growth and 4 million tons at the expense of the shrinking specialized reefer industry. The overall maritime perishable reefer trade will increase by 17 percent between 2013 and 2018, the report said, accounting for an additional 16.5 million tons of cargo. "As a result of the expected cargo growth, reefer container slot utilization levels will be unchanged in 2015 and only marginally lower thereafter," said Kevin Harding, the report editor. "Meanwhile, the specialized reefer sector is forecast to shrink further as a result of scrapping and a virtually empty order book." Drewry said the specialized sector's decline in market share was bolstered by Seatrade's recent order for two 500-FEU-container ships. The analysts note that although the specialized reefer fleet represented only 7 percent of overall reefer capacity, it carried almost 28 percent of the estimated perishable reefer cargo in 2013. "The specialized reefer operators peaked some years ago, in terms of cargo volumes, and now face continued falling volumes and market shares," remarked Harding. "However, this does not necessarily affect their profitability. In fact, from the limited number of public companies reporting financial returns, profitability is indeed achievable. Specialized reefer companies are now looking to reinvent themselves to protect their undoubted expertise in their field." Drewry estimates that the worldwide maritime perishable reefer trade rose at an annual rate of 3.2 percent in the 10 years to 2013, reaching 98 million tons last year. Sectors driving this growth have been meat and exotic fruit, with the latter rising as much as 9.3 percent each year over the period. Cold Train suspends produce-by-rail service on BNSF delaysBackups caused by increased coal and oil rail shipments have caused Cold Train, a provider of refrigerated cargo transportation, to suspend shipments of double-stacked, containerized produce and other food products from its terminal in Quincy, Washington. The company regularly services 24 states as well as Ontario, but is stopping its service because BNSF switched its delivery guarantees from three days to six days. The company says it has recently lost more than 70 percent of its business, mostly from fresh produce shippers who went looking for "other transportation service options." Earlier in 2014, congestion and track work on BNSF's Northern Corridor forced the railroad to increase transit times for shipments between the Pacific Northwest and Chicago, a move that has driven some customers to Union Pacific. "BNSF not only reduced expedited intermodal service to only one train a day from Washington State, but the service immediately became about two to three days slower from Seattle/Quincy to Chicago," said Cold Train in a statement. "As a result of BNSF's decision to terminate Cold Train's three-day service and replace it with six-day service, it now takes twice as much equipment, refrigeration fuel, etc., to move the same freight." BNSF has been struggling with higher volumes linked to surging shipments of domestic crude and grain, which have created a major chokepoint for the railroad even though it has increased locomotives and train crews. Cold Train blames the rail congestion on the Northern Corridor, as well as intermodal service adjustments that BNSF implemented in April. "We were disappointed to hear they were suspending their operation as we had been working with Cold Train for the past few months to provide them with options that would allow them to continue to operate this service," said BNSF spokesman Gus Melonas. "And we will keep working with them or another operator should they wish to provide service to/from Quincy." "This is a case of rapid growth for several commodities, and we are not favoring one commodity over another," said BNSF's Melonas. "Our customers will see improvements in our railroad and have our commitment that we are making the necessary investments to handle all of our customers' business." For more of the Puget Sound Business Journal story: bizjournals.com China Merchants and Sinotrans form energy-shipping joint ventureTwo state-owned tanker giants, China Merchants Energy Shipping and Sinotrans & CSC, are forming a joint venture in a $1.1 billion deal that could increase the energy shipping capacity of China, already the top importer of crude. CMES is taking a 51 per cent stake in the new venture, injecting its supertankers and cash. Sinotrans & CSC, China's third-largest shipping and logistics conglomerate, will pay cash for its share. CMES, a subsidiary of China Merchants Group, will put its 19 very large crude carriers (existing and on order), worth $565.9 million, into the new venture. The proposed new company will specialize in the operation of VLCCs, each of which is capable of carrying 2 million barrels of crude with a deck area about the size of three standard football fields. The transaction, subject to regulatory approval, should be completed before September 30, the statement said. The ships will be managed by CMES subsidiary Associated Maritime Company in Hong Kong. Sinotrans & CSC, along with energy shipping subsidiary Nanjing Tanker, is ranked as the world's ninth-largest VLCC operator by existing fleet size, according to Clarksons data. CMES is in 22nd place, but could jump into the world's top 10 following the delivery of 10 VLCCs later this year. For more of the South China Morning Post story: scmp.com McKesson to pay $18M settlement in vaccine shipment lawsuitMcKesson Corp. will pay $18 million to resolve allegations over its alleged mishandling of vaccines under a shipping deal with the Centers for Disease Control and Prevention. Friday's settlement resulted from a complaint that Terrell Fox, McKesson Specialty Distribution's former finance director, filed under the False Claims Act in the Middle District of Tennessee. With intervention by the U.S., the case accused San Francisco-based McKesson of shirking the shipping and handling requirements of its vaccine distribution contract with the CDC. "The government alleged that the contract required McKesson to ensure that during shipping, the vaccines were maintained at proper temperatures by, among other things, including electronic temperature monitors set to detect when the air temperature in the box reached two degrees Celsius and below or eight degrees Celsius and above," the Justice Department said in a statement. "The government alleged that, from approximately April 2007 to November 2007, McKesson failed to set the monitors to the appropriate range, and as a result, knowingly submitted false claims to the CDC for shipping and handling services that did not satisfy its contractual obligations." For more of the Courthouse News story: courthousenews.com Container ship rescues sailboat crew in Hurricane JulioOn Monday a container ship crew rescued three people who had been stranded in a sailboat off the Hawaiian islands for about 24 hours, as Hurricane Julio battered their boat with high waves and gusting winds that ripped off one of its hatches. The Matson container carrier Manukai, on its way to deliver goods to Honolulu, was the closest vessel that could help. It reached the sailboat Walkabout around 10 p.m. Sunday. The crewmembers made it on to the container ship at about 8 a.m., according to Coast Guard Chief Warrant Officer Gene Maestas. He said they were in good condition. The three people got into trouble while sailing the 42-foot Walkabout from California to Hawaii, Maestas said, and called the Coast Guard for help Sunday morning after the boat started taking on water. For more of the Press Democrat story: pressdemocrat.com
Thursday, August 14, 2014 United Grain and ILWU make tentative deal, grain inspections resume
The Federal Mediation and Conciliation Service announced the unsettled deal Tuesday, saying it was reached just before midnight Monday in talks between the ILWU and the Pacific Northwest Grain Handlers Association. Details have not been revealed and union members must ratify the agreement before it goes into force. Pat McCormick, spokesman for the Grain Handlers Association, said he expects union pickets — which the ILWU has maintained since February 2013, when United Grain locked out union workers from its facility — will continue until the union ratifies the tentative agreement. In Vancouver, the announcement means normal export operations at United Grain Corp. at the Port of Vancouver may proceed. United Grain, the West Coast's largest grain elevator, has virtually shut down since July 7, when the state Department of Agriculture stopped providing grain inspections in response to threats from demonstrators. The agreement also would apply to Louis Dreyfus Commodities, which operates grain facilities in Portland and Seattle. If finalized, it should ensure that U.S. grain exports will proceed without disruption as harvest approaches. Jennifer Sargent, spokeswoman for the Longshore union, said in an email that each of the union's local units will "review the tentative agreement and vote according to their internal rules, with results to be announced Aug. 25." Terms of the agreement won't be made public, she said, until union members vote on it. The resumption of inspections soothed worries of Pacific Northwest wheat growers, grain elevator owners and foreign buyers. Washington farmers are completing the wheat harvest while Montana's harvest has peaked. Wheat was being sent only to ports in Portland and Longview to be inspected and growers worried a backup would occur. Grain inspections had been halted for more than 30 days and drew national interest because other states, including Montana, also use the Port of Vancouver to export wheat. Montana wheat growers could have lost a portion of their crop. The inspections stopped after Gov. Jay Inslee said Washington State Patrol troopers would no longer escort state grain inspectors, noting that negotiations between United Grain and the union had not been productive. For more of the Columbian story: columbian.com Georgia Ports Authority container volume up 19 percentThe Georgia Ports Authority reports it moved 293,889 TEUs in July, a 19.2 percent increase year-over-year and container volume record high, according to a GPA statement. "Improved confidence among U.S. retailers, newly added port customers and shifting cargo from U.S. West to East Coast are all fueling the growing cargo volumes at Georgia's deepwater ports," said GPA Executive Director Curtis Foltz. "Savannah has the space to more than double its throughput as more shippers choose East Coast ports to serve the fast-growing Southeastern U.S." July volume was up 47,237 TEUs compared to July 2013. Since January, the Port of Savannah reports an average 269,688-TEUS-per-month. Overall, the GPA said its dockworkers handled 2.52 million tons of cargo in July, up 12.8 percent or 287,600 tons compared to the same month a year ago. Out of that, it said container cargo was 2.14 million tons, up 15.7 percent from July 2013. In RoRo traffic, the GPA reported moving 61,860 units of autos and heavy machinery, up 8.5 percent or 4,870 year-over-year. Breakbulk throughput reached 226,493 tons, the authority said, up 7 percent from the 211,638 tons moved last July. DOT rules on shipping crude by train could cause delays and higher costsThe U.S. Department of Transportation's new plans to bolster railcar safety could lead to a shortage of cars, leading to a delay in the transport of domestic oil, according to a report in the Wall Street Journal. The proposed DOT rules calls for the current DOT-111 railcars, which have been involved in a number of recent crashes, to be phased out by 2018. Newer car models would require substantive retrofits that will total $1 billion, according to regulators' estimates. Analysts told the paper that producers that currently make 35,000 new rail cars a year probably won't be able to match the demand for new cars. The Railway Supply Institute, an industry trade organization, said the industry had more than 52,000 backlogged orders at the end of the second quarter of 2014. For more of the Washington Times story: washingtontimes.com China asks India to partner on reviving Silk Road trade routesChina has invited India to join President Xi Jinping's pet project that intends to revive the ancient Silk Road trade route to help boost China's sagging exports and overall trade in the region. "From a historical point of view India is the converging point of Maritime Silk Road (MSR) and the ancient Silk Road on land," said Gao Zhenting, councilor at the Department of International Economic Affairs, who oversees the Silk Roads projects that involve a maze of highways on land and port connectivity by sea. "For more than 2,000 years India has had very good exchanges with China through the passage of the South Silk Road." Regarded as a highly ambitious undertaking, China's plans include the revival of the ancient Silk Road, starting from Xian and possibly to Constantinople through parts of Pakistan, central Asia and Turkey. The second Silk Road is called the Bangladesh, China, India and Myanmar (BCIM) and the third one was the revival of the Maritime Silk Road connecting China's Fujian coast with Asia and the world. India has expressed reservations since it runs through a disputed region. For more of the NDTV story: ndtv.com Former Wilhelmsen employee indicted for embezzling $4.1MA former employee of Wilhelmsen Ships Service Inc., Kathleen Creel, has been charged with defrauding the company and causing a loss of over $4.1 million, according to U.S. Attorney Kenneth Magidson. The indictment, returned under seal April 9, was unsealed Sunday when Creel was arrested by federal officials in New York. She made her initial appearance there and is next set to appear in Houston. The indictment alleges that from at least June 2003 through approximately August 2009, Creel embezzled more than $4.1 million from Wilhelmsen bank accounts. Wilhelmsen employed Creel as the company's customs and tax manager and she had access to sensitive fiscal information, including billing records and bank account information for Wilhelmsen vendors. The indictment alleges that Creel carried out the crime by creating fake invoices from two Wilhelmsen vendors. Creel is charged with 10 counts of wire fraud, based on the wire transfers into her bank account. If convicted, she faces up to 20 years in federal prison on each count as well as a $250,000 maximum fine or twice the pecuniary gain/loss. For more of the Memorial Examiner story: yourhoustonnews.com Submit Your Press |
In September, Maersk Line plans to raise the tariff on U.S. inland imports and exports due to intermodal “operational stress.” In its notification letter to customers, the shipping giant cites chronic trucker shortages and surging cargo volumes that are causing delays at the rail and terminal levels. 
Import volume is surging top U.S. container ports and expected to hit an all-time record in August, according to the monthly Global Port Tracker report released today by the National Retail Federation and Hackett Associates. NRF is also forecasting 3.6 percent sales growth in 2014.
Global reefer capacity on container ships is expected to increase by 22 percent by 2018, which is bad news for a declining specialized reefer fleet, according to the latest Reefer Shipping Market Annual Review and Forecast from Drewry Maritime Research. 
Late Monday, United Grain Corporation and the International Longshore and Warehouse Union made a tentative agreement to resolve a two-year-old labor dispute, and state grain inspections resumed at the Port of Vancouver, Washington, as of 1:10 p.m. Tuesday.