Cargo Business Newswire ArchivesSummary for August 18 through August 22, 2014:
Monday, August 18, 2014
DP World at Port Metro Vancouver stops accepting U.S.-bound rail cargo
The DP World Centerm Terminal at Port Metro Vancouver has announced it will stop accepting U.S.-bound containers intended for rail transfer due to a shortage of railcars.
The terminal is operating over capacity due to a surge of diverted U.S. cargo over the past few months caused by uncertainty over the ongoing U.S. West Coast ILWU labor negotiations. The influx has stressed all terminals at Port Metro Vancouver, according to the statement.
DP World said, of the more than 78,000 feet of rail cargo at the terminal last week, 50,000 feet is U.S. bound cargo.
TSI Terminal Systems, the largest operator of container terminals at Port Metro Vancouver, announced it would continue to accept U.S.-bound rail cargo at the B.C. port.
"During this period of uncertainty on U.S. West Coast labor negotiations, TSI fully intends to provide terminal services connecting our customers’ U.S.-destined cargo to the railroads, with all parties acting in line with allocations," the terminal operator said in its statement.
DP World reports it will continue to handle U.S. bound cargo moving by truck to regional markets or nearby container yards.
In early July, Canadian National Railway began issuing equipment allocations to ocean carrier customers through Metro Vancouver and the Port of Prince Rupert.
UPS and FedX receive licenses to extend reach in China
UPS and FedEx Corp have received licenses to independently open up their express package services in Beijing and other Chinese cities without a joint venture partner, after years of waiting.
A 2009 postal law restricted foreign firms to from delivering packages domestically—they could only deliver those from abroad.
The licenses give the package delivery giants access to a huge market, second only to the U.S. Due to online commerce, the Chinese market is growing 60 percent yearly and could be $46 billion by 2015, according to consultancy Deloitte.
"We now have 33 licenses," said Laura Lane, UPS president of global public affairs, to Reuters. "The government just approved (the licenses) in May," Lane said, talking about UPS's latest 14 licenses for cities that include Beijing, Wuhan and Hefei.
"We're really looking at developing those capabilities in those 33 cities, expanding our investment," Lane said. "But we haven't developed a concrete plan yet in terms of where we want to go beyond those 33 cities."
FedEx received 21 licenses in May, returning its total to 58, the same number it held before the 2009 law, a spokesman told Reuters.
UPS and FedEx had to reapply for licenses to offer domestic B2C services once the law changed. In 2012, the two companies were given their first five and eight licenses respectively.
Neither company has disclosed the size of their businesses in China, but both refer to the country as their fastest growing market.
China’s first "fully-automated" terminal opens at Xiamen
The Xiamen Yuanhai container terminal, reportedly the first fully automated container terminal in China, was put into operation on a trial basis by the government.
With a total investment of $107 million, the Xiamen Yuanhai terminal is sits at the No. 3 berth at Haicang Port, located in Xiamen city in the Fujian province.
The container terminal was co-founded by the Xiamen government, the China Ocean Shipping Group Company, and the China Communications Construction Company Limited.
The terminal's workflow is controlled by an intelligent system, giving it a greater degree of efficiency. It is expected to have an annual throughput of 780,000 - 910,000 TEUs, an increase of 20 - 40 percent more than rival ports.
South African bank loses $80M in Qingdao port loan scandal
Standard Bank of South Africa was hit with an $80 million loss from its exposure to suspected metal financing fraud in China, eliminating first-half earnings growth at Africa's largest loan provider.
Standard Bank, one of several international lenders caught by the scandal at the Qingdao port, said Thursday it was unclear if further write-downs would be needed given a dearth of information from China on the issue.
Chinese authorities started an investigation in May about whether metals trading firm Decheng Mining and related companies used false warehouse receipts at Qingdao port to receive multiple loans secured against a single cargo of metal.
The bank took an $80 million "valuation adjustment" against finance agreements called "repos" related to physical aluminum stored in warehouses in China.
On Friday, Japan’s Foreign Ministry said it froze the assets of a North Korean ship operator seized for smuggling weapons, as Tokyo negotiates with Pyongyang to return Japanese citizens kidnapped by North Korean agents decades ago.
The sanction against Ocean Maritime Management, which operated the ship that was detained near the Panama Canal a year ago because it was hauling Soviet-era arms, echoes similar measures taken by the U.S. and U.N. blacklisting of the North Korean company in July.
In May, North Korea said it would reinvestigate the fate of Japanese citizens abducted by the state in the 1970s and 1980s. In return, last month Japan eased sanctions on North Korea, lifting travel restraints and allowing North Korean ships to call at Japanese ports for humanitarian purposes.
Drewry: Container ship capacity grows with fewer ships afloat
Container ship capacity is continuing to grow with fewer vessels on the seas, according to this week's issue of Container Insight from Drewry Maritime Research.
The first half of 2014 saw the number of container carriers afloat declining for the first time in two decades, analysts report.
The nominal TEU growth capacity of the global fleet continues to increase by about 6 percent per year, Drewry says, derived solely from the boost in average ship size, not from having more ships.
During the 12 months ending March 2014, 192 ships with average capacities of 2,600 TEUs were scrapped, which amounts to the demolition of about 55 ships per quarter, according to Drewry's Container Forecaster.
The researchers note the number of ships leaving the market so far closely aligns with the number being introduced to the market. Approximately 230 new ships of various sizes will be delivered in 2014, they say, and the number of new deliveries will drop to about 180 in 2015.
As ships are getting bigger, the absolute number and the relative market share of smaller ships are falling. Of 2014's 230 new vessels, most will be larger than 5,000 TEUs, and the majority of the demolitions involve smaller ships of 5,000 TEUs or less.
These trends have significant implications for the industry, Drewry says. For ports, it means that volume will be concentrated on fewer port calls or less frequent joint services. For shipyards, the demand appears to be shifting toward bigger and bigger ships. The researchers say smaller vessels will likely be harder to find on the charter market.
Drewry concludes that diminishing fleet of smaller vessels will create investment opportunities for certain types and sizes of smaller vessels of less than 5,000 TEUs.
TSA members advise September rate increase on Asia-to-U.S. trades
Container shipping line members of the Transpacific Stabilization Agreement are recommending a general rate increase of at least $600 per-FEU on all Asia-to-U.S. trades, effective September 1.
TSA lines cited strong cargo demand and high vessel utilization levels to justify the proposed GRI, noting that forward bookings suggest the trend will continue through September. With equipment, inland transport and other cargo handling costs increasing, shipping lines say they regard higher baseline rates going into 2015 as key to maintaining service levels long-term.
"Lines have made modest revenue gains to date this year, but they continue to struggle in terms of returning to profitability," said TSA executive administrator Brian Conrad. "In most route segments they are operating at or near full capacity with little room for error in managing assets, so this increase is needed as a cushion to cover costs and assure service choice and reliability."
As it turns 100, Panama Canal considers another expansion project
As the Panama Canal hits the centennial mark, the $5.3 billion widening project that was delayed by 16 months due to conflicts between the canal authority and contractors is nearing completion. But it might not be big enough.
Canal administrator Jorge Quijano said officials are looking at whether they should dig a fourth set of locks to accommodate a growing fleet of ever larger ships. For example, the 400-meter-long "Triple E" vessels that haul more than 18,000 TEUs, four times more than current ships passing through the canal.
"We are always analyzing the market and as soon as we can economically justify it we will begin," said Manuel Benitez, deputy administrator of the Panama Canal Authority, saying the current expansion is enough for now. "If that changes and the demand exists we are ready to begin."
On Friday, Panama celebrated the anniversary of the French and U.S.-built canal, which cut thousands of miles off global trade routes and made almost $10 billion in tax revenue for Panama since the U.S. relinquished control at the end of 1999.
A new expansion could help maintain an economic expansion that has averaged 9 percent per year since 2007.
"We have renovated the canal, added technology, and we have deepened and widened it for our clients," Quijano said in an interview on Panama's Channel 2. He said a decision about another potential expansion "could come within the next five years."
July cargo volume up at Port of Long Beach, Los Angeles flat
The Port of Long Beach marked its busiest July since 2010, while cargo volume at the Port of Los Angeles remained flat, according to information released by the ports.
At the Port of Long Beach, July's container volume rose 3.7 percent year-over-year to 583,000 TEUs. Imports went up by about one percent to almost 298,000 TEUs. Exports dropped 6 percent to approximately 124,000 TEUs.
Overall cargo volumes year-to-date at Long Beach rose 2.7 percent year-over-year.
The Port of Los Angeles handled more than 717,000 TEUs during July, similar to volumes reported during the same month last year. Imports fell 2 percent year-over-year to more than 363,000 TEUs. Container exports increased 4 percent to approximately 163,000 TEUs.
Year to date cargo volumes at Port of Los Angeles is up 8 percent year-over-year.
35 people found in container at Port of Tilbury, one fatality
British police reported that 35 people were found trapped inside a shipping container at the Port of Tilbury on Saturday, including one man who was pronounced dead at the scene.
The group of Afghan Sikhs, including men, women and children, were taken to a hospital for treatment.
Essex Police Superintendent Trevor Roe said that dockworkers found the group after hearing "screaming and banging" coming from inside the container.
Police said the group were victims of human trafficking.
Shipping giant Maersk Line nearly doubled profits in the second quarter on tighter cost controls and lower fuel prices.
The Danish shipping line made a second-quarter net profit of $439 million, significantly besting an average analyst forecast of $99 million.
Parent company A.P. Moller-Maersk raised its annual profit forecast Friday, and its shares increased 6 percent to their highest level in 18 months. Maersk Line generates nearly half of the group’s revenue and its success has served to shore up the current weakness in the company's oil business.
The parent group’s second-quarter net profit fell 11 percent to $856 million, against a forecast for a 30 percent drop to $667 million in a Reuters poll of analysts.
"The biggest swing factor in Maersk's result is always Maersk Line, and the unit's result today nearly knocks you off your chair," said Sydbank analyst Jacob Pedersen.
While cautious about calling it an end to the slump that has held down the industry since the 2008 financial crisis, Chief Executive Nils Smedegaard Andersen predicted a measure of stability.
"It is currently our expectation that we can maintain freight rates at the level we have reached now for the rest of the year," said Smedegaard.
A.P. Moller-Maersk raised its forecast for group net profit, excluding impairment losses and divestment gains, to approximately $3.5 billion, up from the previous forecast of $2.9 billion. Its net profit forecast remains unchanged at $3.3 billion.
Protesters at Port of Oakland stall working of Zim ship
By Richard Knee
A longshore work stoppage stemming from anti-Israeli government rallies outside a Port of Oakland cargo terminal reportedly idled the Zim Integrated Shipping Services containership Piraeus, which sat unloaded for at least two days starting Sunday evening.
Zim, Israel’s largest shipping line, is partly owned by the Israeli government, which is being widely criticized for its treatment of Palestinians in Gaza. The International Longshore and Warehouse Union, which represents West Coast dockworkers, said it had “taken no position on the issue associated with the demonstration” that took place outside the SSA Marine-run Oakland International Container Terminal used by Zim and 14 other carriers.
The protest group is planning further protests this week to try to disrupt Zim container ship processing—at the Port of Tacoma on August 21 and at the Port of Seattle on August 22—according to the Block the Boat website.
Port authority spokesman Robert Bernardo said on Monday that all other port operations, including truck and train services, were proceeding normally. The port is served by the Burlington Northern Santa Fe and Union Pacific railroads. Independent drivers provide much of the trucking to and from the port.
Bernardo said Monday night that he believed container offloading and loading work on two other vessels berthed at OICT was taking place but he could not be sure. Conversely, on Tuesday when ILWU spokesman Roy San Filippo confirmed the Piraeus was not being worked, he said of the other two ships “I am not certain but I believe they are not being worked.”
No one at the OICT office or at SSA Marine headquarters in Seattle could be reached for comment on Tuesday.
ILWU and SSA Marine representatives had voiced hope late Monday afternoon that dockworkers would report for the shift that was to start at 8 p.m. They did, but container handling didn’t take place.
Bernardo said that while Oakland police were keeping the terminal gate free of obstruction as 40 persons demonstrated there Monday night, not enough dockworkers were on hand to service the Piraeus.
The ILWU said in a late-night statement that dockworkers feared for their safety because of the presence of 100 armed Oakland Police and Alameda County Sheriff’s officers, who outnumbered demonstrators. The workers said they would not come in unless the officers dispersed and were released from duty at 9 p.m. by SSA Marine and the Pacific Maritime Association, according to the ILWU.
The Piraeus docked Sunday afternoon after a day’s delay prompted by a demonstration on Saturday. Longshore workers were unavailable to service the Piraeus, though two other ships at the terminal had been processed before the Zim ship arrived, said Edward DeNike, president of SSA Marine’s SSA Containers unit, on Monday afternoon.
DeNike said the ILWU had given its assurance that the Piraeus would be worked Monday night, though he said it might not happen if there was another massive demonstration outside the terminal.
ILWU spokesman Craig Merrilees gave a similar accounting: “We’re understanding that a request was put in for labor and the request is being fulfilled. … (The protest) seemed to be focused on one ship at one terminal in a big port.”
How the episode affected Zim and its customers could not be ascertained by Tuesday. A representative at the carrier’s Long Beach, Calif., office said a statement was forthcoming but Cargo Business News did not receive one in time for inclusion in this story.
Other carriers calling at the OICT facility are APL, China Shipping, CMA CGM, China Ocean Shipping Co., Hanjin Shipping Co., Hapag-Lloyd, Hyundai Merchant Marine, Maersk Line, Mitsui O.S.K. Lines, Nippon Yusen Kaisha, Orient Overseas Container Line, United Arab Shipping Co. and Wan Hai Line.
Oakland is the nation’s fifth-busiest container port, handling upward of 2.3 million TEUs annually. It is a major gateway for exports from the agriculturally rich San Joaquin and Salinas valleys.
USPS posts $2B loss in Q3, shipping gains
The U.S. Postal Service posted its third quarter results with a net loss of $2 billion, compared to a net loss of $740 million for the same period in 2013, but continues to realize gains in its shipping and packing businesses
Shipping and package revenue was up 6.6 percent, USPS said, noting other revenue boosters including a mail price increase in January and successful sales and marketing initiatives.
Total operating revenue of $16.5 billion increased by $327 million, or 2 percent, year-over-year, according to the statement.
"We're seeing momentum in our package business and continued use of direct mail as an advertising medium," said Patrick Donahoe, postmaster general. "We've been effective in developing and marketing our products, and we're improving how we leverage data and technology - all providing a higher return on mail for many customers and causing them to take a fresh look at the Postal Service."
USPS noted that total operating expenses for the third quarter of 2014 were $18.4 billion, an increase of $1.5 billion from the same period last year, driven mainly by a workers' compensation fair value adjustment.
"Due to continued losses and low levels of liquidity, we’ve been extremely conservative with our capital, spending only what is deemed essential to maintain existing infrastructure," said Joseph Corbett, CFO and executive vice president. "To continue to provide world-class service and remain competitive, we must invest up to $10 billion to replace our aging vehicle fleet, purchase additional package sorting equipment, and make necessary upgrades to our infrastructure."
Maersk changes protocol in W. African ports due to Ebola virus
Due to the spreading Ebola virus in West Africa, shipping giant Maersk Line has changed operations in Nigeria, Liberia, Sierra Leone and Guinea.
Maersk has suspended shore leave and crew changes in these four countries, even though it said that normal calls would still continue.
"We have been following the situation for some time and sent out our first advisory to vessels calling at West African ports on 26 March," said a Maersk spokesperson. "We have subsequently sent out several updates – to crews and land-based personnel – outlining additional health measures as per the WHO recommendations. We have also suspended shore leave as well as crew change in Liberia, Sierra Leone and Guinea as well as in Nigeria."
Maritime insurers have advised their clients to ensure that crewmembers take every precaution while calling at West African ports.
On Monday, a severe storm caused a container ship to break its moorings and crash into the rail bridge at the Port of Fremantle.
The bridge is closed as structural engineers inspect it for damage.
The vessel that crashed into the rail bridge was unloading a cargo of cars when its stern rope snapped, causing it to swing out into the port. A second cargo ship also broke its moorings and hit the Parmelia 1, a refueling vessel docked near the bridge.
The closure has disrupted train services between North Fremantle and Fremantle stations, and has triggered a call to fix the crumbling infrastructure of Fremantle Port bridges.
The structural integrity of the bridge was questioned in 2011, after it was hit by a refueling barge.
Singapore’s Neptune Orient Lines reportedly wants to sell its APL Logistics, its global freight management and logistics division, for more than $750 million, according to information from inside sources.
NOL plans to launch the process this fall, and has hired banks to help find a buyer for APL Logistics, the sources said, asking not to be named.
A representative for NOL had no immediate comment.
According 2013 financials the logistics business had earnings before interest, taxes depreciation and amortization of $74.5 million.
NOL hopes to sell it at 10 to 12 times that amount in a potential sale, or between $750 million and $900 million, the anonymous sources said. However, they added, buyers are more likely to value the business at closer to $600 million.
NOL posted a net loss of $76 million on $8.8 billion of total revenue in 2013.
ILA claims no liability for Baltimore port losses caused by 2013 strike
Dockworkers who went on strike at the Port of Baltimore in 2013 say they are not liable for related losses sustained by their employers, in part because the coast-wide labor contract banning such strikes does not apply to them.
The claim was made in a federal court filing on behalf of International Longshoremen's Association Local 333. Port employers sued the union last month for $3.86 million in damages — the amount arbitrator M. David Vaughn determined the employers lost during the union's three-day October strike last year.
Dockworkers walked off the job after failing to come to terms on a local labor contract covering automobiles, paper and other breakbulk cargo with the Steamship Trade Association of Baltimore, which represents local employers.
Vaughn’s estimates were based on his finding that the strike violated a no-strike provision in the master contract covering container cargo with the United States Maritime Alliance (USMX), which represents employers in container shipping. ILA and USMX agreed to the master contract in the spring of 2013, and Local 333 members have been working since then under that contract.
In Monday’s filing, ILA attorney Jennifer Stair argued that the terms of the master contract submitted to Local 333 membership included a provision that it "would not go into effect" until local agreements were reached — and that no such agreement has been reached. She also argued that the lawsuit has no merit because it was filed before the expiration of Vaughn's 180-day jurisdiction in the case.
In response to the union's filing, U.S. District Judge Ellen L. Hollander recommended a Sept. 15 conference call to discuss a schedule for the case.
SC Ports Authority earnings and container growth up for FY2014
South Carolina ports reported 2014 fiscal year-end operating earnings of $14.3 million, 20.7 percent more than the organization's financial plan projected, according to a statement from the South Carolina Ports Authority.
In July the SCPA announced 8 percent container growth for the fiscal year, noting it handled 1.7 million TEUs. The authority posted 9 percent increases for the previous fiscal year.
FY2014 was also marked by 17 percent growth in the SCPA's refrigerated cargo sector, the statement said.
"With the Port's aggressive capital plan for the next several years, a solid financial performance is essential," said SCPA Board Chairman Bill Stern. "The strong 2014 fiscal year revenues reported today reflect that the SCPA remains focused on the growth necessary for these important projects."
From July through June, the SCPA posted operating revenues of $164.1 million, a jump of nearly 17 percent year-over-year. FY2014 expenses totaled $149.9 million.
Evergreen returns to Port of Boston on Asia-U.S. East Coast service
Evergreen Line’s Ital Lunare celebrated its maiden call to the Port of Boston at a presentation on Monday, marking the first time the shipping line has called directly at Boston in nearly 30 years, according to a port statement.
The Ital Lunare has been added to the weekly AWE2 service between North Asia and the U.S. East Coast, operated by the recently expanded CKYHE alliance.
The service calls Qingdao, Shanghai, and Ningbo, China before crossing the Pacific Ocean, transiting the Panama Canal, and then calling the U.S. ports of New York, Boston, and Norfolk, VA.
During the 12-month period between July 2013 and June 2014, the port said its Conley Terminal saw 13 percent growth on the Asia service (AWE2) and 6 percent growth overall. The number of containers handled per ship call on the service also increased 15 percent during the same period.
"As we move forward with the dredging of Boston Harbor, we expect to continue to see new lines and new, bigger ships calling Boston" said Massport Port Director Deborah Hadden.
Two UP freight trains crash head on in Arkansas, 2 dead
Two Union Pacific freight trains carrying toxic chemicals crashed head on in Arkansas early Sunday, killing two crewmembers and injuring two others.
The collision happened around 2:30 a.m. near U.S. 67 between Hoxie and Minturn, according to a Jonesboro Police and Fire statement.
After the crash, a fire broke out. Crews were told the car on fire contained an alcoholic beverage, which, along with diesel fuel from the train, was feeding the flames, said Kendell Snyder, spokesman for Arkansas Department of Emergency Management.
The toxic chemicals the trains were carrying were reportedly not involved in the fire.
For more of the International Business Times story: www.ibtimes.com
The DP World Centerm Terminal at Port Metro Vancouver has announced it will stop accepting U.S.-bound containers intended for rail transfer due to a shortage of railcars. 
Container ship capacity is continuing to grow with fewer vessels on the seas, according to this week's issue of Container Insight from Drewry Maritime Research.
Shipping giant Maersk Line nearly doubled profits in the second quarter on tighter cost controls and lower fuel prices.
Singapore’s Neptune Orient Lines reportedly wants to sell its APL Logistics, its global freight management and logistics division, for more than $750 million, according to information from inside sources.