Cargo Business Newswire ArchivesSummary for August 24 through August 28, 2015:
Monday, August 24, 2015
Port of Oakland to establish OakPass to reduce congestion
Four container terminals at the Port of Oakland are developing a program to operate their terminal gates on Saturdays to reduce weekday congestion at the port. Called OakPass, the program is slotted to begin in the fourth quarter of 2015, pending review by the Federal Maritime Commission, according to a statement.
The terminals, through the Oakland MTO Agreement, have submitted a filing to the FMC describing the proposed program. They are currently working to ensure that they’ll have enough labor to operate the new gates. OAKMTOA has established nonprofit OakPass LLC to manage the Saturday gate program.
"After spending well over a year evaluating options including night gates, we determined that adding a Saturday gate is the most practical and cost-effective method to increase capacity in a way that meshes with availability of truck drivers and longshore workers and serves the entire supply chain," said John Cushing, president of OakPass LLC.
To help pay for the cost of the new gates, the terminals will begin collecting an Extended Gate Fee of $17 per-TEU, or $34 on a typical FEU. The EGF will only be assessed on loaded containers entering or exiting the terminals during peak hours (Monday through Friday, 7:00 a.m. through 6:00 p.m.).
By the time OakPass begins operating Saturday gates, all beneficial cargo owners moving containers through the Port of Oakland will need to be registered with OakPass.
Amid widespread safety hazards, four new fires erupt at Tianjin
Four new fires have erupted at the site where two huge explosions killed 116 people, Chinese state media reported shortly after officials said safety hazards were found at nearly 70 percent of companies that handle toxic chemicals in Beijing.
The blasts originated in a warehouse storing dangerous chemicals and devastated an industrial park in the northeastern port city of Tianjin late on Aug. 12. More than 700 people were injured and thousands were evacuated because of the risk posed by chemicals stored at the site.
The official Xinhua news agency said Friday rescue crews were rushing to the site after four new fires broke out. It said one of the "combustion points" was in a logistics site for automobiles near last week's blasts.
German shipping line Hapag-Lloyd plans to launch preparations for an initial public offering in September, earlier than initially planned, four sources familiar with the transaction told Reuters.
That means the company's shares may trade on the Frankfurt stock exchange as early as October, the sources said.
The group's strong earnings performance in the second quarter allowed it to move up its listing plans, the sources said. Hapag-Lloyd had originally aimed to list shares at the end of 2015 or in 2015 after its earnings performed well for several consecutive quarters.
In the first quarter, the company swung to a first-quarter profit thanks to the stronger U.S. dollar, lower bunker fuel prices and first effects from its merger with Chilean shipper CSAV.
The company has already chosen Deutsche Bank, Goldman Sachs and Berenberg to lead the transaction, according to Reuters.
APL Logistics announced the opening of its high tech consolidation center in Ho Chi Minh City, Vietnam. It is the company’s largest single-roof container freight station (CFS) in South East Asia.
The CFS is strategically located near major sea and airports and includes over 500,000 square feet of bonded CFS warehouse space, 80,000 square feet of secured parking space, and 170 loading and receiving bays, the statement said. The facility is also compliant with international standards for security and safety.
"Free trade agreements are increasingly being adopted in South East Asia to help drive global trade and make sourcing options even more attractive in this region," said Anthony Tay, Head for APL Logistics Vietnam.
APL Logistics now operates 6 facilities in Vietnam.
Stowaways found on Panamanian cargo ship in JAXPORT
Customs and Border Protection interviewed the three stowaways who jumped from the Panamanian cargo ship Petra yesterday. The three told investigators that there were originally five stowaways when they left Lagos, Nigeria, on Aug. 7, but two of their companions went overboard days before the three were found.
CBP officials are trying to verify that claim.
The Coast Guard conducted a thorough inspection Friday morning of the car carrier Petra.
The three are being treated for sun exposure and dehydration at Baptist Medical Center. Once they have recovered, they will be deported to Nigeria.
Despite adverse economic and climate conditions that are plaguing the container shipping industry, reefer cargo growth seems unstoppable, according to the Reefer Shipping Market Annual Review & Forecast from Drewry Maritime Research.
Perishable reefer traffic grew by 1.8 percent globally in 2014 – hitting almost 190 million tons. Although this is only half the growth seen in 2013, analysts say this represents a growth trend in the market. Except for the citrus trades, all perishable reefer cargoes experienced trade growth in 2014.
The trade growth of seaborne reefer cargo was especially strong last year – up by 4.9 percent year-over-year. Drewry said seafood trades had an exceptional year in 2014 – with cargo growth in excess of 2 million tons.
The growth in reefer cargo is impressive because it has done so despite a global economic downturn, severe weather conditions in many areas, and many port strikes. The publication said it seems the perishable reefer industry is able to withstand all of these issues, since global reefer volume in 2014 topped 100 million tons of cargo for the very first time.
The division of refrigerated cargo between the reefer containership and the specialized reefer ship continued to grow in favor of the container ship. Over three-quarters of the reefer trade was shipped by reefer containership services in 2014. By 2019, researchers say reefer containership services are expected to carry over 23 million tons more cargo than they did in 2014.
In conclusion, Drewry says container carriers will continue to increase their share of the seaborne reefer trade, but specialized carriers should only see a minimal loss of actual cargo volumes due to the overall expected increase in reefer cargoes.
Logistics firms hit hard in Monday’s stock market slide
Logistics and transportation companies fell sharply in Monday’s global stock market drop, according to The Wall Street Journal, with investors worrying that a downturn in China and other large economies would hurt companies that move goods around the world.
Shares of FedEx Corp. were down about 9 percent in morning trading before partially recovering to trade 4.3 percent lower at $149.32 Monday afternoon. Other global carriers, including United Parcel Service and Deutsche Post saw declines, with UPS off 3.5 percent at $95.58 and the DHL parent company ending down 4 percent at $23.58. The Dow Jones Industrial Average was recently off 371 points, or 2.3 percent, at 16088, after having briefly fallen more than 1000 points.
The slide underscores how much logistics companies stand to lose if global economic growth and trade continue to slow. These companies have seen revenues soar 48 percent in the last five years, to $751 billion in 2014, according to Stifel, as companies have increasingly looked abroad to source and sell their products and supply chains have grown more complex.
Port of Charleston volume up almost 14 percent in July
Cargo volumes at the Port of Charleston, the South Carolina Ports Authority said Wednesday.
The port handled 175,223 TEUs in July, up 13.8 percent year-over-year.
Charleston, which benefitted from slowdowns at West Coast ports starting last year, posted its highest cargo volumes in a decade in May, partly due to diverted shipments.
The South Carolina Ports Authority’s operating earnings for the fiscal year that ended in June had more than doubled from the previous year to $30.4 million.
The Charleston port has mounted a vigorous capital campaign to improve its infrastructure so it can serve bigger container ships, officials said.
Last month, the port received approval from the U.S. Army Corps of Engineers to deepen its harbor from 45 to 52 feet, pending Congressional approval, to accommodate mega container vessels.
S.C. inland port at Greer needs crane infrastructure
S.C. State Ports Authority officials have decided the S.C. Inland Port in Greer needs more crane infrastructure to keep pace with 211 percent year-over-year rail volume growth, and is shifting resources there.
The inland port hit record volumes in July with approximately 7,500 rail moves. The Upstate terminal handled around 58,000 total rail moves in fiscal year 2015, which ended June 30.
To help move cargo faster, the ports authority board unanimously voted on Wednesday to relocate two rubber-tired gantry cranes from the Wando Welch Terminal in Mount Pleasant to the S.C. Inland Port in Greer, giving the Upstate port five cranes altogether.
The ports authority board awarded a $530,000 contract to Kalmar to disassemble transport and reassemble the cranes in Greer without soliciting bids for the project. The board previously hired Kalmar, then known as Cargotec, for the relocation of the initial three cranes now operating at the inland port.
Costco retailer accused of selling prawns linked to slave labor
A U.S. lawsuit accusing retailer Costco Wholesale Corp. of knowingly selling frozen prawns linked to a company that uses slave labor was described on Friday as "entirely without merit" by Thai seafood supply company CP Food Products.
A lawsuit filed in the federal court in San Francisco in California sought a court order to stop Costco from selling prawns without a label stating that slave labor was involved in the farm raised prawns.
The claim, citing federal and state rules on labeling and slavery, alleged Costco was aware the prawns bought from its Southeast Asian producers came from a supply chain dependent on ships involved in human trafficking and labor abuses.
While containership operators and ports wrestle with the advent of mega-ships, volatile fuel prices and equally volatile rates on major trade routes, Totem Ocean Trailer Express is pointing the way to a different future for ocean shipping.
How different? It’s potentially revolutionary, both operationally and environmentally, because TOTE is about to begin operating the world’s first LNG-powered containerships. Earlier this year, the Isla Bella—the first of two Marlin Class container vessels—was launched in San Diego. The 3,100-TEU vessel, built by TOTE in the U.S. in partnership with General Dynamics NASSCO, will enter service between Jacksonville, Florida and San Juan, Puerto Rico in the fourth quarter of 2015. The second Marlin Class vessel is scheduled for launch in the third quarter and is expected to enter service in the first quarter of 2016.
TOTE Shipholdings and Saltchuk Resources, TOTE’s parent company, secured a $324.6 million loan guarantee from the U.S. Maritime Administration for the ships. The financing was made available under MARAD’s Title XI Loan Guarantee Program. TOTE and Saltchuk qualified for the loan because the new ships exemplify "advancement in shipbuilding technology" and are being built in a U.S. shipyard. General Dynamics NASSCO has employed more than 600 workers to help construct the vessels.
The LNG-powered ships are among the most environmentally responsible vessels of their kind, TOTE says. By switching to LNG power, TOTE will reduce NOx emissions by 98 percent, SOx by 97 percent, carbon dioxide by 72 percent and particulate matter by 60 percent in the Puerto Rico trade.
In addition, the Marlins will accommodate nearly three times the number of 53-foot containers than ships that currently serve the Puerto Rico trade, TOTE says.
"Building the Marlins has been about change as well as bold and innovative thinking. NASSCO and our other partners have enabled us to build these ships that reflect our commitment to the environment and doing what is right," said Anthony Chiarello, president and CEO of TOTE, at the launch ceremony of the Isla Bella.
TOTE is also the launch customer of MAN’s ME-GI 539-ton engine design. Doosan Engine manufactured the main and auxiliary engines. Pivotal LNG, a wholly owned subsidiary of AGL Resources and WesPac Midstream, will supply the LNG for the ships in Jacksonville, FL.
Regarding LNG power, TOTE is also the first to convert its existing fleet to run on natural gas. Its two Orca Class roll-on/roll-off vessels—the M.V. Midnight Sun and M.V. North Star—which operate in the Alaska trade, will be "converted with minimal time out of service and return as the most environmentally advanced ships in the nation," the company says. Total investment for the conversion is estimated to exceed $80 million.
TOTE says the Orcas will reduce sulfur oxide (SOx) emissions by 100 percent; particulate matter (PM) by 91 percent; nitrogen oxide (NOx) by 90 percent; and carbon dioxide (CO2) by 35 percent.
General Dynamics NASSCO is designing the conversion. Wärtsilä will supply the main engines, generators and integrated LNG storage and fuel gas handling systems. Puget Sound Energy will supply LNG at a $275 million dockside LNG facility on 33 acres at the Port of Tacoma.
With 50 ships using LNG as a fuel in 2014 and a similar number currently on order, LNG-powered engines and related infrastructure are gaining significant traction.
According to a recent report in Port Finance International, the International Association of Ports and Harbors has launched an LNG bunkering website targeted at port authorities that are considering the rollout of LNG as a shipping fuel. An IAPH working group on LNG-fueled vessels has developed guidelines for safe LNG bunkering operations, providing ports with background information to pursue the technology. The website, www.lngbunkering.org, introduces harmonized LNG bunker checklists.
"The site is intended to be a resource and a conversation-starter among ports and stakeholders because we believe that LNG is the ship’s fuel of the future and ports must prepare to offer safe storage and bunkering of LNG for shipping lines," said IAPH president Grant Gilfillan, CEO-director, Port Authority of New South Wales, Australia.
PMSA protests higher rate request from SF bar pilots
The Pacific Merchant Shipping Association and the Western States Petroleum Association have banded together to ask the California Legislature to deny the San Francisco Bar Pilots’ recent request for an 11 percent rate hike. They say the rate hike would be passed onto shipping lines.
The PMSA represents carriers and terminal operators and the WSPA represents companies in the oil industry.
Bar pilots board ships to guide them in and out of ports. The SF Bar Pilots have 60 members who already make an average net income of $450,000 each, according to the letter. The two associations say the bar pilots’ compensation will go up even without a rate hike, since it’s based on the increasing size of ships.
Pacific Merchant Shipping Association President John McLaurin separately sent a sharply worded letter to the California Legislature this week, protesting assertions made by San Francisco bar pilots with regards to their latest pay raise request.
This year the bar pilots has petitioned the California legislature for an 11 percent rate hike that would generate $12.4 million in revenue over four years. The pilots said their expenses have gone up and they haven’t had a rate increase in 10 years.
In their letter, PMSA and WSPA said the pilots’ rates are based on vessel sizes, and shipowners have consistently launched bigger and bigger vessels into service. "It is clear that market forces will continue to result in higher net income for pilots even under the existing rate structure," they said.
In PMSA President John McLaurin’s separate letter to the legislature, he calls the SF Bar Pilots situation "a state-sanctioned monopoly."
"It’s even nicer to have a monopoly in an important, yet obscure profession, like the San Francisco Bay’s 60 bar pilots do," McLaurin wrote in a separate letter to the legislature. "In 2014, the San Francisco Bar Pilots, who guide ships in and out of the Bay, collected their highest revenues ever in their 150+ year history, nearly $40 million, from the ships that called on the Bay Area’s seaports. After expenses, each pilot took home an annual income of $453,766 last year. And that income is for an estimated six months of work per pilot – indeed, at the urging of a pilot, the U.S. Tax Court recently determined that a pilot working in the San Francisco Bay works so few hours that the IRS can consider it a part-time – job."
The bar pilots have said that their expenses are increasing and they haven’t had a rate increase in 10 years.
McLaurin said that in 2011, the pilots projected that their income in 2014 would be $362,147 per pilot if they didn’t receive a rate increase. Stakeholders in the shipping industry disagreed, and argued that their incomes would grow without the need for rate increases, which appears to be true. The pilots made $453,766 in 2014, each bringing in $91,619 more than what they had projected, according to the PMSA president’s statement.
S.C. Ports Authority posts $30M in operating earnings
The S.C. Ports Authority reported operating earnings of $30.4 million and revenues of $196.8 million for FY2015, significant increases compared to FY 2014.
From July through June, SCPA says it more than doubled its previous fiscal year's operating earnings of $14.3 million, while operating revenues increased 20 percent over FY2014 revenues of $164.1 million.
"With 14 percent container volume growth and operating cash flow well above plan, SCPA is well-positioned to continue moving forward with key strategic projects and above-market growth," said SCPA president and CEO Jim Newsome.
The financial report comes on the heels of 14 percent container volume growth for the 2015 fiscal year. SCPA handled 1.9 million TEUs during the period, an increase of 231,473 TEUS over the previous fiscal year.
CEVA Logistics hires new CFO
CEVA Logistics has announced the appointment of Arjan Kaaks to chief financial officer. The company’s current CFO Rubin McDougal is retiring and will remain with the company to facilitate the transition.
Kaaks joins CEVA from Maxeda DIY Group, a Benelux private equity-owned company focused on the do-it-yourself retail market, where he was chief financial officer and a member of the executive board. His prior experience includes COO and CFO of O’Neill Group, a sports lifestyle brand; and CFO of Royal Grolsch, a brewing company based in Holland.
"This is an exciting time to be joining CEVA," Arjan Kaaks stated. "The company has started to execute its renewed strategy and progress is becoming visible. We have a strong foundation to build upon as we continue our focus on driving sustainable topline growth and productivity improvements."
Ship runs aground in Delaware River
The Bermuda Islander, a cargo ship that ran aground late Monday on the Delaware River near Salem, New Jersey was successfully refloated at high tide.
The vessel lost power and propulsion around 9:00 p.m. prior to running aground, according to the U.S. Coast Guard.
The U.S. and Mexico, which have nearly $600 billion in annual trade, just launched the first new rail link between the two countries in more than 100 years.
The West Rail Bypass International Bridge will connect the border cities of Brownsville, TX, with Matamoros, and will facilitate freight between the two countries, the U.S. Commerce Department said.
"The West Rail project, which broke ground in December 2010, was designed to expand regional transportation capacity, improve air quality and alleviate urban congestion by re-routing rail traffic out of the most populated areas in both border cities," according to a Commerce statement.
Mexico is the third-largest bilateral goods trading partner of the U.S., according to the Office of the U.S. Trade Representative.
CEVA launches direct Singapore-New York LCL service
CEVA Logistics has launched a new weekly less-than-container load service from Singapore to New York. This is the first guaranteed weekly service direct to the U.S. from Singapore as part of the company’s initiative to enhance its serving trans-Pacific LCL needs.
The weekly service will take approximately 23 days from port to port, providing customers with better control of their cargo movement, the statement said. CEVA will ensure track and trace visibility of all cargo shipments from origin to destination.
The service is also complemented by consolidation services from Penang to Singapore before moving the load to New York, CEVA said.
"We are excited to roll out a weekly LCL service from Singapore to New York, in response to customer feedback," said CEVA’s Lynnda Loo, head of ocean freight for Singapore and Malaysia. "Singapore, being strategically located in the region, is a key hub for CEVA’s LCL services, with ongoing weekly services directly to Shanghai, Pusan, Chittagong and other destinations."
"Once the container arrives in New York, we utilize a 100 percent all-motor truck network to service the 51 destinations up and down the East Coast and U.S. Midwest. We decrease our transits into the Midwest by an average of five days versus a routing over Los Angeles," said Robert Braun, LCL director for CEVA in North America.
CEVA recently started a guaranteed weekly LCL service from its newly opened Antwerp gateway in Belgium to New York as well.
ATA asks Congress to allow hair testing in driver drug screens
American Trucking Associations President and CEO Bill Graves recently wrote Congress to ask them to pass legislation that would allow fleets to use hair samples as part of a federally required drug-screening program for commercial drivers, according to an ATA statement.
"Every day, thousands of hair tests are performed worldwide within both the private and public sectors," Graves wrote. "Their reason for using hair testing is laudable … hair testing is an effective tool for identifying drug users due to its long detection window and because it is difficult for donors to beat the test."
Graves said Fortune 500 companies like General Motors and Shell Oil, as well as leading trucking companies, already use hair testing, but said the cost of redundant mandatory urine tests prevents more fleets from using this widely accepted drug testing method.
"ATA is aware of thousands of truck drivers who have tested positive for illegal drug use on hair tests and have obtained driving positions with other carriers because they were subsequently able to pass DOT-required urine tests," Graves said. "Several of these drivers have had crashes and, of course, future ones are likely as a result."
A survey of four large carriers revealed that this year 706 drivers failed pre-employment hair tests but passed urine tests, according to ATA.
Canada’s PM promises port funds to Quebec
Canadian Prime Minister Stephen Harper is promising to boost port facilities in Quebec as part of what he terms a maritime prosperity initiative.
Harper said a re-elected Conservative government would provide funding for a new marine terminal at the Alexandra Pier in the port of Montreal.
Harper is also promising a new cruise ship terminal in Quebec City. He said better facilities for cruise liners will attract more tourists, which is critical for the prosperity of Quebec and the country.
In his announcement, Harper also took a swipe at NDP rival Tom Mulcair, saying he’s proposing reckless spending plans without saying how he will pay for them.
The political rhetoric is heating up as the 2015 Canadian federal election, to be held on October 19, 2015, approaches.
Malaysia and Indonesia fight against soaring pirate attacks
Malaysia and Indonesia are deploying rapid reaction teams to fight an increasing number of pirate attacks on cargo ships in the Malacca and Singapore straits, according to a Malaysian admiral.
"We have in general recommended that vessels proceeding to Singapore and passing Malaysian waters take appropriate security measures," said Michael Storgaard, spokesman for Maersk Line. One of the ships attacked last week was the Maersk Lebu.
More than 70 vessels have been attacked this year on the west side of the Malay Peninsula — including at least seven at the end of last week, say security and anti-piracy groups.
"There remains a need for a proactive, permanent security presence in the area during the hours of darkness," said Mark Thomas, Asia Pacific regional manager at maritime security consultancy Dryad Maritime in Singapore.