Cargo Business Newswire Archives
Summary for September 1 through September 5, 2014:

Tuesday, September 2, 2014

Panama Canal Authority updates Maersk execs on expansion

Last week Denmark’s Maersk Line and Switzerland's Mediterranean Shipping Company submitted their 10-year agreement known as 2M with the U.S. Federal Maritime Commission.

The FMC will start a 45-day review period before reaching a decision, unless the agency needs more information from the applicants, in which case the review period clock will stop and restart once requested materials are submitted.

The South China Morning Post says it obtained a copy of the 2M agreement from a source close to the FMC.

"The geographic scope shall extend to trades between ports in Northern Europe and the Mediterranean, ports on the U.S. Atlantic, Gulf and Pacific coasts and ports in Mexico and the Bahamas and ports in Asia (from) Japan to Malaysia," said the FMC filing, explaining the scope of the 2M deal.

After China's Ministry of Commerce nixed the P3 alliance (Maersk, CMA CGM and MSC) in June, Maersk and MSC proposed the more conventional 2M vessel-sharing deal. 2M does not fall under the category of "concentration of business operators" defined by China's anti-monopoly law, so it doesn’t need approval from Beijing.

So in order to do business in China, the shipping lines only need to file with the Ministry of Transport detailing the partnership plan.

Including Asia-Europe trades, 2M involves a total of 185 vessels with a capacity of 2.1 million TEUs. It has a market share of 35 percent on Asia-Europe, 16 percent on trans-Pacific and 30 percent on trans-Atlantic trades, according to Tan Hua Joo, executive consultant at Alphaliner.

For more of the South China Morning Post story:

CMA CGM reports 8 percent cargo volume surge in Q2

Container shipping giant CMA CGM announced 8 percent year-over-year increase in cargo volume in the second quarter, an 8 percent increase to 2.1 million TEUs.

The company’s board of directors attributed the record high volumes to performance of its Asia-Europe and Africa services, as well as the Asia-Pacific lines of subsidiary ANL.

CMA CGM saw its average revenue per-TEU went down 3.9 percent, as its customers realized reduced costs per-TEU of 4.8 percent. That includes fuel costs per-TEU decreasing by 9.3 percent, the company said, thanks to the combined effect of lower bunker consumption per unit and more moderate bunker prices.

Core EBIT was $204 million versus $172 million in the Q2 2013, representing an 18.4 percent increase.

Consolidated net profit came to $94 million, versus $268 million in the second quarter of 2013. Last year’s figure included $248.0 million in proceeds from the sale of the 49 percent stake in port terminal operations subsidiary Terminal Link.

The group said it would continue to expand its port terminal operations. It said it has made deals with Indian company Adani to start a terminal in Mundra and has begun bilateral negotiations to help develop a terminal in Kingston, Jamaica.

CMA CGM expects its third-quarter operating performance to be sustained.

State of Virginia wants to buy former Hampton Roads APM terminal

Virginia wants to buy the former APM container terminal at Hampton Roads from its new owners, according to Virginia Secretary of Transportation Aubrey Layne Jr.

Layne confirmed Thursday that state officials will meet with Alinda Capital Partners Universities Superannuation Scheme Ltd. in coming weeks to discuss new lease arrangements in an effort to buy the terminal.

Gov. Terry McAuliffe said in an interview that Layne and Virginia Secretary of Commerce and Trade Maurice Jones had contacted Alinda Capital officials about working out a new lease agreement that might end up with state ownership of the container facility.

"This gives us an opportunity to better align their needs and ours," Layne said. "Alinda is a financial buyer as opposed to APM, who is an operator of ports and is in the business. Alinda is supported by pension plans. So, they're looking at a long-term return on their money."

The Virginia Port Authority currently owns Norfolk International Terminals, Newport News Marine Terminal and Portsmouth Marine Terminal, and runs them through its operating arm, Virginia International Terminals (VIT).

APM opened the $450 million, deep-water marine container terminal in 2007, and started leasing it to the Virginia Port Authority in 2010. VIT manages the APM facility.

For more of the Daily Press story:

Amazon to open distribution center in Shanghai FTZ

Amazon will open a distribution within the 11-square-mile Shanghai Free Trade Zone, according to media reports.

The online retail giant will open a logistics warehouse to better serve its small Chinese customer base, offering faster delivery and lower cost shipping, according to the Financial Times

"We're going to have lower shipping charges, faster delivery coming into the free-trade zone, so there are going to be many benefits," said Diego Piacentini, the vice-president of Amazon's international consumer business, on Chinese television, FT reported.

Amazon has not confirmed when it will start operations in the free trade zone.

For more of the story:

Container ship suffers ripped ballast tank while docking at B.C. port

The hull of the Malta-registered container ship Attila was punctured while docking last week in Centerm terminal at Port Metro Vancouver. The dock was also damaged.

The vessel sustained about a puncture about one-meter-long to one of its ballast tanks near the middle of the ship on the right side, according to Mohan Raman, a marine investigator with the Transportation Safety Board of Canada. He said the tank was empty and there were no leaks.

Raman said the captain has been interviewed; the next steps are to contact the B.C. coast pilot on board and to analyze the ship's voice data recorder for information such as speed and direction. Two tugs were also assisting the vessel during the docking, he noted.

Transport Canada is also inspecting damage to the Attila, which has to "remain at berth," according to Port Metro Vancouver spokesman John Parker-Jervis.

For more of the Vancouver Sun story:


Wednesday, September 3, 2014

L.A. to sell $340M in debt to revamp Port of Los Angeles

The Los Angeles Harbor Department is selling about $340 million of debt, following a tentative agreement on health-care costs between West Coast dockworkers and shippers that was seen by the industry as a hopeful sign for further cooperation.

The bond sale this week will help refinance debt and upgrade terminals at the Port of Los Angeles, according to bond documents. Moody's Investors Service ranks port securities at the Aa2 level, the third-highest investment grade.

Negotiations continue on a new contract that will cover almost 20,000 port workers at 29 West Coast ports, after the tentative deal on health care costs raised confidence in continued cargo movement at the port complex.

"Anytime you eliminate any uncertainty that might in some people's mind create some sort of risk, that's good," said Karl Pan, chief financial officer of the harbor department. "I would hope for those that are concerned about the labor negotiations that this helps them reach a positive conclusion."

The bond issue will be backed by revenue from the port, which features 43 miles of waterfront docks and 23 terminal facilities. The port gets most of its revenue from tariffs on cargo and the rental of land and buildings, according to the bond offering.

Proceeds of the sale will help automate container terminals and lessen air pollution from ships docked at the port, Pan said. Part of the deal will also refund 2006 bonds and save about $7 million in debt service, said Soheila Sajadian, the harbor's debt and treasury director.

"'We have to make sure our facilities are strong and efficient so that shipping companies will still want to dock their ships here, and cargo owners believe rightfully that coming through the Port of L.A. is advantageous for them,'' Pan said.

For more of the Bloomberg story:

Port of L.A.-Long Beach truckers say trucking companies reneged on July deal

Truck drivers who haul cargo to and from the Long Beach and Los Angeles ports said Friday that three harbor-area trucking companies continue to violate an agreement brokered by Lost Angeles Mayor Eric Garcetti in July.

Meanwhile, state and federal labor regulators also ruled Friday against two of the companies in separate cases. The Long Beach office of the California Division of Labor Standards Enforcement ordered Total Transportation to give back pay to 14 truck drivers, ruling that they were employees, not contractors. Also, Region 21 of the National Labor Relations Board announced that it is revoking a March settlement agreement with Pacific 9 and is filing a complaint after the company told drivers that the agreement was not applicable to them.

Officials from the trucking companies declined to comment Friday.

At a press conference across the street from Total Transportation Services Inc., truck drivers claimed that Total Transportation, Pacific 9 Transportation and Green Fleet Systems have continued retaliation against the truckers despite a July 12 deal with Garcetti, who asked truckers and employers to agree to a truce after five days of strikes at port terminals.

Under the terms of the July deal, the trucking firms said they would accept all drivers back to work without retaliation and without being forced to sign away all future rights in new truck leases. Drivers agreed to stop picketing and return to work on their regular shifts so that the Los Angeles Board of Harbor Commissioners could look into what drivers say are worker safety issues and unfair labor practices.

"We put down our picket lines because we trusted Mayor Garcetti when he said that he would investigate the violations that have been going on at our companies," said Santiago Aguilar, a Pacific 9 driver. "Since I went back to work, Pac 9 has continued to break the law by firing several of my coworkers. The mayor has to do something to stop this because if this continues we're going back on strike."

Truckers said employers did not honor their promise to the mayor, and instead demanded that drivers had to sign new leases on the condition that they would drop their wage claims against the company.

"These allegations are very serious and I want to be clear — putting our port operations at risk is unacceptable," Garcetti said. "Cool off and focus on an agreement."

For more of the Press-Telegram story:

August manufacturer's index highest since mid-2011 as orders surge

The August PMI Index report from the Institute for Supply Management gained 1.9 percentage points to 59, up from July's reading of 57.1. This is the highest index reading for the index since March 2011, building on largely positive recent reports from the U.S. manufacturing industry.

Manufacturing supply chain executives reported the highest new orders activity for factory goods since April 2004 in August, with the new orders index rising to 66.7, an increase of 3.3 percentage points from the 63.4 percent reading in July.

Seventeen out of 18 manufacturing sectors n the ISM report reported growth in August. The odd category out was textile mills.

"The only downside in the report is that the improvement in imports was more than that for exports, an unfortunate result of stronger growth in the United States economy than for many of our trading partners," said Daniel J. Meckstroth, chief economist for the MAPI Foundation. "U.S. manufacturing production posted solid growth every month since January this year.

"The growth is driven by pent-up demand in consumer durables (particularly motor vehicles and housing-related durables, business equipment, and transportation and energy infrastructure). MAPI forecasts a 3.4 percent increase in manufacturing production this year and 4 percent growth in 2015—both well above the growth rate of the general economy."

For more of the Industry Week story:

Peru plans $2.8B port near Lima

Peru is planning a $2.8 billion port complex that will feature 10 piers and a logistics center on the Bay of Chancay, located 48 miles north of Lima, according to Peruvian officials.

On Saturday, Defense Minister Pedro Cateriano, Culture Minister Diana Alvarez and navy commander Adm. Carlos Tejeda inspected the site of the privately funded prospective port.

"As occurred in other successful cases, this strategic alliance between the state and the private sector seeks the concession of state properties to promote wealth (creation) and generate revenues for the government to consolidate the social inclusion policy," said the Defense Ministry in a statement.

The 10 piers will reportedly cost $1.6 billion and help bolster the country's port infrastructure, the ministry said, adding that the Logistics Activity Zone project will cost approximately $1.2 billion.

The new port is expected to primarily handle minerals.

For more of the Peru this Week story:

Oil tanker reappears off Texas coast with $100M worth of oil

A Kurdish tanker hauling $100 million in legally disputed oil that disappeared off the coast of Texas for several days reappeared Monday, according to the U.S. Coast Guard.

The United Kalavyrvta was anchored at least 60 miles offshore when it vanished from Coast Guard radar screens last week. The Coast Guard said the vessel was anchored Monday in the Galveston Offshore Lightering Area, close to its previous position, and it is still 95 percent full.

Reportedly, this isn't the first time Kurdish oil tankers have switched off their electronic transponders to avoid detection, making their movements impossible to track.

The ship's cargo became disputed when Iraq filed a lawsuit in U.S. courts, urging U.S. officials to grab the ship's oil in Galveston because it belongs to Iraq, not the Kurdish National Government. The Kurds say it's theirs.

A U.S. court denied the lawsuit since it has no jurisdiction over ships more than 60 miles off the coast.

For more of the story:

Protesters of oil-by-rail block BNSF tracks in Everett, Washington

On Tuesday morning, approximately 12 protesters blocked railroad tracks at a Burlington Northern Santa Fe yard in in Everett, Wash., objecting to train shipments of oil and coal and proposed oil export terminals in the Northwest.

Demonstrators included one person sitting on top of a tripod above the tracks, according to organizers from Rising Tide Seattle. Others were locked to the legs of the tripod, they said.

About two-dozen demonstrators on a nearby overpass carried signs that said, "Coal-oil-gas. None shall pass" and "Cut oil trains, not conductors."

"People in the Pacific Northwest are forming a thin green line that will keep oil, coal and gas in the ground," said spokeswoman Abby Brockway in a statement. "Just one of these proposed terminals would process enough carbon to push us past the global warming tipping point — we won't let that happen."

The demonstration blocked an oil train and freight trains at the yard near Interstate 5, according to railroad spokesman Gus Melonas. The main line remained open at the site, located 30 miles north of Seattle.

BNSF has broken a record this year for capital and safety improvements — $5 billion system wide, which includes new track in the Everett area, Melonas added. He said the railroad has focused on crew compliance with speed requirements, advanced detection systems and enhanced inspections for oil transports.

"There has not been one fatality on the BNSF Northern Tier from the Great Lakes, across the Plains, through the Rockies to the Pacific Northwest ports — not one fatality — as a result of a hazardous material release since 1981," said Melonas said.

For more of the King 5 story:


Thursday, September 4, 2014

JLL Seaport Index foresees cargo shift to East Coast ports

Although U.S. West Coast ports remain dominant, rapid growth and demand for space indicates that logistics professionals and shippers are shifting cargo to East Coast ports, according to the sixth annual Seaport Outlook by real estate investment firm JLL.

"Shippers are turning to the Suez Canal to reach U.S. East Coast population centers," said Rich Thompson, managing director of JLL’s Ports Airports and Global Infrastructure (PAGI) group. "This route helps offset the risks associated with potential disruption and costs associated with the Panama Canal and/or delays and potential disruptions at West Coast ports such as LA/Long Beach."

Thompson said 2013 was a banner year for shipping volumes, which were up by 3.3 percent from the previous peak seen in 2007. Of the 13 seaports ranked in JLL’s report, the West Coast seaports volumes were 6.8 percent below 2007 peak levels, he said, while shipping volumes on the East Coast were up 19.1 percent.

JLL’s 2014 Seaports Index ranked U.S. ports based on terminal operating scores (factoring in proximity to population density, transportation networks, and recent infrastructure improvements) and the port area market score (gauging industrial space availability and suitability). 

For the third straight year, the Port of New York/New Jersey topped JLL’s index with a score of 117.8. The Port of Long Beach (112.1) came in second, followed by the Port of Los Angeles (103.4). The second tier group includes the ports of Savannah (82.8), Baltimore (82.4), Tacoma (79.6) and Houston (72.1). JLL’s third tier seaports ranking include Jacksonville (69.6), Virginia (65.7), Charleston (64.7), Oakland (64.5), Miami (60.8) and Seattle (55.8).

Consumer goods are driving the need for an alternative to West Coast ports, according to the report. Since retailers are looking to store more inventory stateside for the upcoming holiday season, warehouses near ports are in great demand.

Industrial real estate within a 15-mile radius of the 13 seaports tracked in the study accounts for 1.3 billion square feet—11.3 percent of the nation’s total. The average vacancy rate within this sector is only 7.7 percent, and several markets have developments under way. JLL said most large requirements for modern space, however, would end up further inland.

"JLL is tracking 267.4 million square feet in active industrial space requirements in the U.S., and nearly 60 percent are based in markets within a three-hour drive-time of the seaports," said Thompson. "To increase supply, nearly half of the nation’s 122.8 million square feet of construction activity is located within three hours of a major seaport, with the bulk found in the Inland Empire (Southern Cal), Central Pennsylvania and Houston."

Although the East Coast industrial real estate market has not yet felt the impact of the cargo shift, Thompson said there would be a "rebalancing" that will begin once New York/New Jersey and other East Coast ports start receiving the super-sized Post-Panamax ships.

China announces plan to upgrade shipping industry

China released a set of guidelines to develop its shipping industry on Wednesday, which triggered a rise in shipping firm shares such as China COSCO and China Shipping.

Beijing will implement tax and other regulatory reforms while requiring shipping firms to upgrade and modernize their fleets, aiming to build an efficient, safe and ecofriendly shipping system by 2020, said the State Council, China's cabinet, in a statement on its website.

"Shipping is a key component in economic development and plays an important role in protecting a country's maritime rights and economy, in promoting exports and industrial development," it said.

The government will also encourage shipping lines to retire vessels early, reducing supply, and develop shipping centers like Shanghai and Dalian to ultimately compete with London in the realm of shipping services.

Barclays analyst Jon Windham said the shipping sector, long plagued by over-capacity when too many ships were ordered before worldwide financial crisis hit, is sensitive to any good news despite the fact that the government's announcement lacked details.

"There's some potential that there's going to be some policy support, likely in the form of some tax policy," Windham said.

The nation is seeking to stabilize its shipping industry supply chains as it becomes more assertive regarding territorial clashes in the South China Sea, upsetting neighbors such as Vietnam and Japan.

For more of the Reuters story:

New harbor commissioner appointed at Port of Long Beach

On Tuesday Long Beach Mayor Robert Garcia nominated former state Deputy Attorney General Tracy Egoscue to the Board of Harbor Commissioners, which governs the Port of Long Beach.

Egoscue will fill the spot left open by attorney and former Commissioner Susan E. Anderson Wise, who stepped down July 14.

The mayor introduced his commission nominee at a City Hall press conference that included the port’s new executive director, Jon Slangerup.

"She’s a strong advocate for the environment, an accomplished environmental attorney, a community leader and a person who understands both business and the industry," Garcia said. "Most important to me is she loves Long Beach, and she’ll do whatever she can to make sure the city continues to grow and prosper, as well as the port."

Egoscue is an environmental attorney with a private practice in Bixby Knolls, She previously won a $5 billion settlement for the Santa Monica Baykeeper, where she served as executive director, making it the largest Clean Water Act settlement in history. The settlement prompted a 10-year pipeline rehabilitation program and reductions in large sewage spills.

She also served as executive officer of the state’s Regional Water Quality Control Board, Los Angeles Region, and currently serves on the Board of the California League of Conservation Voters.

For more of the Press-Telegram story:

Department of Commerce: Houston bests L.A.-Long Beach and NY-NJ in exports

Although California features the busiest port complex in the nation, it is not the top mover or employer in the export sector, according to a new reports from the U.S. Department of Commerce.

Businesses sending cargo out of Texas helped support 1.1 million jobs last year, compared to 802,000 jobs in California, the report said.

In 2013, the value of goods and services exported from the U.S. reached a record $2.3 trillion, supporting about 11.3 million American jobs, according to the government. Exports of goods alone helped sustain 7.1 million jobs.

Nationwide, the metropolitan area that includes Los Angeles, Long Beach and Anaheim was among the top exporters, sending out $76.3 billion in goods. But the Houston metropolitan region in Texas bested that figure, exporting $115 billion in goods last year—$35.3 billion of that in refined petroleum and coal products. New York, along with Newark and New Jersey, exported $106.9 billion in goods.

The report said that the California cities of Riverside and Sacramento were among 15 U.S. metropolitan areas that experienced double digit export growth. Seattle, Washington had the largest overall dollar increase in exports with a $6.4-billion surge, and also posted the most substantial boost in business with China, with a $4.9-billion increase. Los Angeles was fourth, with a $3.3-billion surge.

For more of the L.A. Times story:

Pirates rob petroleum products tanker in Ivory Coast

Armed pirates robbed a petroleum products tanker near Ivory Coast's port of Abidjan last week, indicating the proliferation of Nigeria-based gangs, according to the International Maritime Bureau.

The IMB said the attack occurred at 9.15 p.m. (2115 GMT) on Aug. 27 around 45 nautical miles southeast of Abidjan, one of West Africa's busiest commercial ports.

"Twelve armed pirates with guns boarded a drifting product tanker. They took hostage all crew members, stole ship's cash, crew cash and personal effects and escaped," the IMB report stated.

Pirate attacks in West Africa's Gulf of Guinea, a big source of oil and metals for world markets, have almost doubled from last year, hiking insurance costs for shipping companies.

For more of the Reuters Africa story:


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