L.A. -Long Beach terminal operators settle on emissions-cutting agreement
Marine terminals at the ports of Los Angeles and Long Beach reached a settlement that was approved in Los Angeles Superior Court on Monday to cut emissions from their facilities.
Yesterday’s agreement comes on the heels of a suit that had been filed by California Attorney General Kamala D. Harris in June that alleged the terminal operators at the two big U.S. ports had violated Proposition 65 that had been enacted in 1986, in part, to protect the populace from exposure harmful chemicals.
Under the terms of the settlement, the terminal operators agreed to engage in cleanup projects worth $1 million per operation that are to include pilot projects to test solar electric panels that can withstand saltwater and a crane-mounted system used to capture idle vessel exhaust.
In addition, the collective of terminals agreed to pay $757,000 for small trucking firms to buy new, low emission trucks; $324,000 to the Port of Long Beach clean truck and locomotive projects, and another $540,000 in civil penalties.
The terminal operators are also required to launch an outreach program that includes warnings of the emissions at the port through newspaper and online advertising, and signage near their operations.
"This settlement will speed the requirements for port terminals to reduce diesel emissions," said Harris in a statement.
"This is vitally important because expanding port traffic leads nearby residents to be exposed to polluted air, and increased risk of cancer and other diseases," she said.
The seven terminals that reached the agreement with the Attorney General’s office are: APM Terminals Pacific, Ltd.; Eagle Marine Services, Ltd.; International Transportation Service, Inc.; SSA Terminal (Long Beach) LLC; SSA Terminals, LLC, Pacific Maritime Services, L.L.C.; Trapac, Inc.; West Basin Container Terminal LLC; Yusen Terminals, Inc.
Wal-Mart up for Q2; says U.S. customers “are still struggling”
The largest retailer in the world posted a better-than-forecasted second quarter increase, up 5.7 percent, thanks in part to improvements overseas and at its Sam’s Club unit.
However, the Wal-Mart U.S. stores segment, three-fifths of the company’s total business, dropped for the night straight quarter by 0.9 percent.
“Many consumers are still struggling,” said Chief Executive Mike Duke in a conference call. “They’re trading down to stretch their budgets,” he said.
Wal-Mart’s net income for the quarter climbed to $3.8 billion from $3.6 billion for the same period a year ago. Total revenue was up 5.4 percent to $109.37 billion.
Report: U.S. seaport industrial real estate market takes the lead
Vacancy rates for industrial real estate in U.S. seaport markets have dropped to 8.5 percent, outperforming the general industrial property sector’s 9.7 percent vacancy levels, according to a report.
Prepared by industrial real estate firm, Jones Lang LaSalle, the third annual Port, Airport and Global Infrastructure report includes the debut of its Port Index that rates the top 12 U.S. port markets using metrics that include cargo performance and volumes, along with investment plans.
The Port of Los Angeles came out on top in the index with a rating of 95.1, followed by neighboring Long Beach at 92.8.
According to the report, Los Angeles owes its number one status to high container volumes, market share of trans-Pacific cargo traffic, a stable real estate market and the $1billion in planned capital improvements over the next five years.
“Even with a myriad of global economic challenges, seaport industrial real estate has continued to retain its premium value over inland industrial locations,” said John Carver, who leads Jones Lang LaSalle’s ports, airports and global infrastructure team, in a statement.
“Rising leasing volumes and demand for warehouse space at these gateway logistics hubs is driving this continued ‘coast inward’ recovery. In the last year, millions of square feet of space have been taken in and around our busiest ports, bringing vacancy rates down,” he said.
“The largest gains were seen in Baltimore, which jumped 8.7 points to reach 82.5, followed by Charleston at 80.8 rising by 7.8 points and Houston, which scored 89.5 up from 84.8 last year,” said Carver.
“Baltimore has seen an increase in cargo volumes and a decrease in vacancy rates. Houston’s vacancy rates dropped from 11.3 percent last year to 9.1 percent this year. Charleston made headway owing to strong absorption figures and the lack of over-development keeping vacancy rates in check,” he said.
The report contends the outlook for U.S. seaport industrial real estate is positive, citing $316 billion worth of U.S. international imports and exports recorded in May, barely off the all-time high recorded in July 2008, with U.S. exports having risen 16.7 percent to $1,837 billion last year, the second highest level reported.
South Carolina’s shipping volumes up for FY2011
Shipping volume rose through the South Carolina ports for fiscal year 2011, including Charleston’s containerized complex posting an 8.3 percent gain over the previous year at 1.38 million TEUs.
South Carolina’s non-containerized cargo handling increased 32.3 percent at Charleston and Georgetown, totaling 991,705 tons, including vehicles, breakbulk and bulk, the state port authority reported.
“These results show the confidence our customers place in the ports of Charleston and Georgetown, and it means jobs at a time we could really use them,” said Jim Newsome, president and CEO of the SCSPA.
U.S. Navy, Marines conduct joint raid on mock pirate vessel off Southern California
Navy amphibious assault crafts carrying U.S. Marines, flanked by helicopters with snipers, were launched from the USS New Orleans on August 14 near Southern California’s San Clemente Island in a training raid on a vessel that was “hijacked” by mock pirates.
The Marines apprehended a small group of actors portraying terrorists-cum-pirates, seized small-arms weapons and returned the vessel to its owner.
Denmark’s shipping giant, A.P. Moller-Maersk downgraded its container-shipping outlook for the year amid what it says are increased pressures on freight rates, while still managing to post a first-half net profit of $2.8 billion, beating the $2.69 billion average forecasted by analysts.
"We do not see signs that growth is declining, but there is nervousness in the market because some of our competitors have brought in very big ships and bought them when prices were at a peak," Chief Executive Nils Smedegaard Andersen said in an interview with Reuters.
"So obviously a lot depends on whether they are filled up," with some freight rates below break-even for the sector, Andersen said.
Maersk’s average freight rates with bunker fuel surcharges were 3 percent lower in the first half of 2011 compared to the same period last year, and 8 percent lower without the surcharges, the ocean carrier reported.
The average bunker fuel price for Maersk was 26 percent higher in the first half of 2011 than for the same period in 2010, the company said.
"The pressure on freight rates reduced the group's ability to pass on bunker price increases to the customers," Maersk said in a statement.
Those higher fuel rates also helped the conglomerate’s oil unit offset its softened container-shipping business, as Maersk said it expects 2011 to show an average price per barrel of $105, the same as last year.
They did quite well in a difficult market situation," said Jacob Pedersen, analyst for Sydbank, in a Reuters interview.
"The Maersk business model is working ... Higher bunker fuel prices in container shipping are being compensated for by the oil business," Pedersen said.
France’s CMA CGM Group announced it has signed a memorandum of understanding to expand and operate a trans-shipment hub in Kingston, Jamaica on a 35-year lease in anticipation of the widening of the Panama Canal for post-Panamax shipping vessels.
The Gordon Cay Container Terminal is expected to be fully operational by 2015, with a 56-foot draft and 4,300-foot berth after the first phase of construction with potential to expand to 5,600 feet, the shipping line said in a statement.
“This project is a strategic investment for CMA CGM and illustrates the Group’s willingness to be ahead of the game in anticipating changes that will result from widening the Panama Canal. This agreement confirms the CMA CGM Group’s historic commitment to Jamaica and the region,” said Rodolphe Saadé, chief executive officer of CMA CGM.
Report: U.S. exports to China outpace commerce to other countries
Exports to China from the United States outpaced exports to the rest of the world in 2010, continuing a trend that started in 2000, according to a report by the U.S. -China Business Council.
"Exports to China are a vital part of the US economy. China is our third largest export market and is growing faster than many of our other major destinations for American manufactured goods and agriculture products,” said USCBC Vice President Erin Ennis in a statement.
U.S. exports to China increased by almost $76 billion for the years 2000–2010, exceeding export growth in every other market for U.S. goods and farm products, the report said. U.S. -China exports rose 32 percent in 2010, the report said.
Exports from the U.S. to Canada and Mexico rose $69.3 billion and $52 billion, respectively, with exports to Brazil taking fourth place at a $20 billion increase, the report said.
The USCBC’s annual “U.S. Congressional District Exports to China” report identified 333 out of 435 such districts recorded higher growth in exports to China in 2010 than they did to the rest of the world.
“What is most satisfying about this report is that in 2010, 404 congressional districts increased exports to China – that’s 93 percent of districts,” continued Ennis. “Even better, between 2000 and 2010, 408 congressional districts experienced triple-digit growth,” Ennis said.
U.S. Trade Rep touts free trade agreements at Port of L.A. stop
U.S. Trade Representative Ron Kirk made a stop at the busiest container port in the Americas, the Port of Los Angeles, this week to promote free trade agreements with Colombia, Panama and South Korea.
"The combined impact of what we’ve done with panama Columbia and South Korea will add almost $12 billion to our GDP, $10 to $11 billion in new exports, and help us create at least 70,000 jobs," Kirk said.
Container-shipping lines could find this year’s Peak Season for trans-Pacific cargo might fall short with excess capacity on vessels and uncertainty over how successful a projected $400 per-FEU surcharge may fare.
“What is agreed upon by a panel of container lines is one thing, but what will actually happen in the market is another,” said Nils Smedegaard, chief executive officer of the largest container-shipping line in the world, Denmark’s Maersk.
“It’s too early to say whether the surcharges will be successful,” he said as quoted in a Bloomberg report.
Freight rates have reportedly taken a beating, falling 21 percent to $1,589 per container according to a benchmark tradelane on the Shanghai Containerized Freight Index, while fuel prices have soared 29 percent, according to Bloomberg’s data.
Trans-Pacific vessel capacity is reportedly at approximately 90 percent.
“Container ships to the U.S. West Coast are not filling up, which leaves shipping companies with few bargaining chips for imposing surcharges,” said Dong Jinghua, general manager of Shenzhen Continents International Forwarding Co., a shipper of 300 containers per month. “Most lines are taking a wait-and-see attitude because those that act first may risk losing customers,” he told Bloomberg.
Nonetheless, despite a year that thus far has been tougher on the ocean carriers’ pocket books, there is optimism among their ranks that 2011 will pick up for them.
“We are optimistic in the third quarter that we will realize some portion of benefits in the Peak Season surcharge both in the trans-Pacific and Asia-Europe trades,” said APL President Kenneth Glenn.
“Trans-Pacific utilization is improving,” he said.
“Inventory levels in the U.S. are below historical levels for this time of the year,” Glenn said, adding that retailers could be stocking up based on increased demand.
Other carriers have publically shared Glenn’s optimism.
“There’s an expectation of some capacity constraints in the peak season,” said OOCL Chief Financial Officer Ken Cambie.
North Carolina undertakes $1.7 million “Maritime Strategy” study
The U.S. Southeastern state of North Carolina’s department of transportation is undertaking a $1.7 million “Maritime Strategy” study that will reportedly delve into waterborne options for commerce, including whether or not a long proposed “megaport” makes sense.
However, Gene Conti, the state’s D.O.T. Secretary, all options are on the table.
"The purpose of the study is not to focus on one particular solution," Conti said as reported by Businessweek. "It will take a fresh look at our whole maritime industry and how it supports the state's economy," he said.
One of those options reportedly includes taking another look at a 600-acre container-handling complex at Southport that before the project was abandoned last year, had an estimated pricetag of $4.4 billion.
The megaport project faced a lot of community and related backlash, and Conti reiterated other options and needs would be looked at, including improvements to existing ports in Wilmington and Morehead City, and to roads and rail.
"We thought it was important to take a fresh look at everything and do it in a much more open and collaborative way…we're engaging stakeholders, engaging the public and having a good public dialogue about some of these issues so we don't have unpleasant surprises," he said.
Florida to invest over $2 mil in training for port and international trade jobs
A state jobs creation agency in Florida announced it intends to leverage over $2 million in funding to assist in training candidates for jobs in the ports and international trade sectors.
The announcement by Workforce Florida representatives came this week at the Port of Jacksonville’s cruise terminal.
“We are pleased to announce an important, statewide workforce training initiative today…one that illustrates our commitment to fostering partnerships that strengthen our talent supply and forge a globally competitive economy,” said Mary Lou Brunnell, vice chairwoman, Workforce Florida.
The program will reportedly be developed by a partnership between Workforce Florida, the Jacksonville-based engineering firm of Reynolds, Smith and Hills, the American Society of Transportation and Logistics of Jacksonville, University of North Florida, and Broward College.
“When the Florida Ports Council came to see me, I heard something that changed my view. They told me that, in the port industry, there were 550,000 to 570,000 jobs in the state that were directly connected with the import and export industry here, $66 billion worth of salaries,” said state Representative Lake Ray.
Damco expands services for produce and perishables importer
Third party logistics provider Damco announced it has expanded its service offerings with Sun America Imports, Inc., a U.S. -based import wholesaler of fresh produce and perishables from Latin America.
Damco said in a statement that it would now provide Sun America Imports with end-to-end supply chain management handling the importer’s landside services, ocean transportation, and cargo insurance.
Damco said the yearly volume it handles with Sun America is in excess of 10,000 FFE with room for growth in markets that could include Europe.
U.S. charges Somali “negotiator”…again
The U.S. government has charged a Somali man for the second time for negotiating a ransom from the German owners of a cargo vessel in exchange for the crew of 22 that had been held hostage for seven months off the coast of Somalia beginning in May of 2010.
Mohammad Saaili Shibin alledgedly was paid $30,000 of the $50,000 ransom that was paid for the crew of the seized M/V Marida Marguerite.
Shibin has been in custody in the U.S. since April for another, more infamous incident, when he was allegedly involved as the ransom negotiator for the pirates who ended up killing four Americans on their hijacked yacht in February off Somalia.
Shibin now faces 15 counts that include piracy and kidnapping. He could face up to life in prison.
Container-shipping heavyweight APL, a unit of Singapore-based NOL, has reportedly not renewed its lease at the Staten Island-based New York Container Terminal over capacity issues and a planned bridge toll hike.
"It is a difficult sell for NYCT with the tolls," said the terminal's CEO Jim Devine in the Staten Island Advance.
The governors of New York and New Jersey jointly announced a plan in a letter this week calls for a total increase of $4.50 over the next five years on tolls at area bridges and tunnels.
"We did not want to see any toll increase [but] given the crisis facing the Port Authority and its finances, and the potential safety and economic risks to commuters and businesses, an increase cannot be avoided," the governors said in their letter.
The loss of APL for NYCT accounts for 37 percent of the cargo-handling facility's business, according to Devine, who said the shipping line also needed more capacity citing a four-and-a-half-year delay in permitting by the New York state's Department of Environmental Conservation.
"They were concerned that, despite our best efforts, we had not made a lot of progress," Devine said of APL in the Advance's story.
He said the difference in current bridge toll fees between his New York-based location and the New Jersey side is an average of $100 more per truck trip based on number of axles.
The Turkon America shipping line reportedly pulled out of NYCT in 2009 over the toll cost issue, according to Devine.
APL reportedly plans to move to the Maher Terminal in Elizabeth, New Jersey when their lease is up NYCT.
Maersk CEO says current box growth might not be enough for competitors' new big capacity
Maersk beat net profit forecasts for its first half of 2011, but the Danish shipping conglomerate's chief executive says rate pressure from competitors' new big-ship capacity in the market could dampen the firm's expectation of 6 to 8 percent market growth this year.
"The growth story in the container business is still intact – we had a very good first half and the issue is really the freight rates that we see at the moment…we still expect the market to grow 6-8 percent for the year, but we see a lot of nervousness among the competition who've ordered very large vessels that they want to fill up at the moment so rates are under pressure…and we foresee this could be the case for the rest of the year so we are a little bit careful in expecting decent returns in the container market," said Nils Smedegaard Andersen, A.P. Moller-Maersk's chief executive officer in an interview with CNBC this week.
Maersk's next generation of mega-ships are not scheduled for delivery until 2013, continuing through 2015.
"Our forecast has been that we would have a long period of relatively slow growth due to the government debt situation in Europe and the U.S. but still growth, and [our] ships will be delivered in '13 and '14 and '15, and by then, we will definitely have grown more and will need the capacity being the market leader in the European-Asian traffic," Smedegaard Andersen said.
As for a turning point in global trade and supply-demand in the shipping industry, Smedegaard Andersen said Maersk is counting on capacity issues coming home to roost with its competition as much as market growth.
"What we're planning on is not a dramatic turnaround in the economy. I think we will have a period with slow growth. What we're counting on is that a couple of crisis after each other will probably dampen the banks' interest in lending money to our competition with less deep pockets so that we can have a better capacity supply-demand balance in the container-shipping industry, because the problem now is not that the market is not growing, the problem is now that we have too much capacity."
Smedegaard Andersen pointed to container-shipping's years through 2008 leading to the string of big ship orders and subsequent deliveries hitting the seas this year.
"Normally you would expect the world economy to grow somewhat and therefore you would also expect world trade to expand somewhat and that's happening…so we can't really complain about that situation. The problem is during the boom years up to 2008 a lot of capacity was ordered and that capacity is now coming into the market. So that's what we're basically looking at: supply demand balances; more than if the market grows 6 or 8 percent."
Shipping firm in Puerto Rico trade is fined $700,000 for pollution and falsifying records
A U.S.-based shipping firm is the recipient of a $700,000 fine ordered by a federal court in Puerto Rico for pollution and falsifying records, according to a statement released by the U.S. Justice Department.
Epps Shipping Company pled guilty to two felony environmental crimes with regard to its MV Carib Vision vessel that hauls molasses throughout the Caribbean.
The U.S. Coast Guard had inspected the vessel last November and it was reportedly found that pollution prevention equipment was not operational and that oil waste was discharged without being recorded.
The U.S. Justice Department said $100,000 of the total fie would be allocated towards coral reef protection in Puerto Rico's Guanica Bay.
balances; more than if the market grows 6 or 8 percent."
Bulldozer driver killed at Port of Anchorage
A bulldozer driver was killed on Wednesday at the Port of Anchorage while working on the expansion of the port's facilities there.
According to a statement released by his employer, West Construction Company, the driver, Jack Button, a 35-year veteran in the construction business, had been "moving a load of dirt and gravel back in place when the ground collapsed under his bulldozer, sending the bulldozer into the water."
According to the Anchorage Daily News, West Construction was hired in 2010 to deal with the aftermath of damage from a previous contractor that reportedly includes faulty steel sheets used in U-shaped cells as part of a new dock's structure where Button had been working.