Monday, September 14, 2009
China retaliates over Obama plan to impose tire tariff
Days after Obama announces plan to impose a 35% tariff on tires imported from China, the Chinese Ministry of Commerce says it will look at 'unfair trade means' allegedly aiding U.S. products.
Reporting from Beijing - China fired back against proposed tariffs on Chinese tires imported to the United States by announcing today that an anti-dumping and anti-subsidies investigation would be launched on American auto parts and chicken products, state media reported.
The move could signal the start of more trade tensions between the massive trade partners at a time when the two economic powers were expected to lead the globe out of the financial crisis.
The U.S. exported $1 billion worth of auto products to China in the first six months of this year, up 9.1% from the same time last year, state media said.
For the full story: www.latimes.com/news
Report: Formosa Plastic to build major deepwater port in Central Vietnam
Taiwan’s petrochemical giant Formosa Plastic Group will build what could be South-east Asia's biggest deepwater port to facilitate its 19-billion-US-dollar steel and petrochemical complex projects in north-central Vietnam, officials said Monday.
Under the 1.2 billion-US-dollar plan, Son Duong deepwater port, located in the north central province of Ha Tinh, would be able to accommodate vessels with capacity between 200,000 and 400,000 dead weight tonnes (DWT).
For the full story: www.monstersandcritics.com/news
Con-way launches regional, short-haul service
Con-way Truckload, a subsidiary of Con-way Inc., announced the launch of Con-way Truckload Regional, designed for short-haul truckload shipments of less than 600 miles, including cartage service for truckload shipments of less than 100 miles. Con-way said it also plans to offer drayage services as part of Con-way Truckload Regional.
Con-way said its new service would be able to tap its network of nearly 300 North American facilities and support a fleet of 2,600-trucks via dispatch through the company's centralized operation in Joplin, Missouri.
"This is the ideal time for us to enter the regional, cartage and drayage business. About 70 percent of the freight in the transportation market travels less than 550 miles, and it's a segment that tends to stay healthy even during challenging economic conditions," said Herb Schmidt, president, Con-way Truckload.
The company said it has been testing an 18-month pilot program in an 11-state region. By the end of 2009, Con-way said it plans to have 325 trucks dedicated to the new regional service, and will add an additional 300 trucks in 2010. By 2011, the company said its goal is to have 1,000 trucks dedicated to nationwide regional service.
TIGER news: Guam port applies for nearly $50 mil in stimulus grants
The Port Authority of Guam today submitted its application for $49.7 Million in ARRA grants to kick start the first phase of the Port Modernization Program.
The Port applied for the funding from the U.S. Transportation Investment Generating Economic Recovery (TIGER) grants under the American Recovery and Reinvestment Act (ARRA). The deadline to apply for this grant is September 15, 2009. This is a “competitive grant” which means that all states and territories can compete for the transportation funding. A total of $1.5 Billion in this grant is available for sea ports, highways, airports, ferry systems, rail ways, high speed transit systems and other modes of transportation.
The Port Authority of Guam will also be applying for $50 Million in USDA loans and will combine the ARRA and USDA monies to launch Phase 1 of the Modernization Program.
-For the full story: www.pacificnewscenter.com
Boeing, Damco team up with logistics MOU
Boeing and Danish logistics company Damco, part of the A.P. Moller - Maersk Group, announced they have signed a Memorandum of Understanding (MOU) to pursue the development of industrial and technological logistics tools based upon Boeing’s Joint Logistics Command and Control Environment (JLC2E).
Damco says the JLC2E “allows defense customers to experiment and evaluate supply chain tactics, processes and technologies to support current and future complex defense missions.”
Damco said it would benefit from Boeing's market position as the largest exporter in the U.S. “through future freight forwarding opportunities.” Boeing reportedly shipped more than $350 million in aerospace goods and services globally in 2008.
Damco is the new, combined brand of the A.P. Moller - Maersk Group's logistics activities, previously known separately as Maersk Logistics.
Tuesday, September 15, 2009
TSA implements “interim final rule” on air cargo screening program
The Transportation Security Administration (TSA) today announced an interim final rule that puts into place the Certified Cargo Screening Program (CCSP).
The CCSP system is what the TSA said it would use to fulfill the air cargo security requirements the 9/11 Commission Act of 2007 that mandated screening of 50 percent of cargo transported on passenger aircraft by February 2009 and 100 percent by August 2010.
"We developed a common-sense solution that will greatly enhance air cargo security by using valuable data from pilot programs and engaging thousands of stakeholders," said TSA Assistant Administrator John Sammon. "This program is a critical step toward meeting the mandate of the 9/11 Act in an efficient and effective manner that facilitates the flow of commerce."
The TSA said the CCSP has operated as a pilot program since February 2009, with the goal of getting aircraft operators to meet the 50 percent screening milestone and allowing the air cargo supply chain to screen cargo offsite and transport it to the airport securely without the need for re-screening. Aircraft operators must verify that the chain of custody is intact upon acceptance of screened cargo from a CCSP participant.
Under the rule, air cargo industry companies can apply to the TSA to become a Certified Cargo
Screening Facility (CCSF). The CCSFs must carry out a TSA-approved security program and adhere to strict chain-of-custody requirements to secure cargo from the time it is screened until it is loaded onto a passenger aircraft, the TSA said.
They also must implement a multi-layered security program that includes appointing security coordinators, strict access controls and vetting of key personnel. The TSA said it would conduct routine inspections to determine whether CCSFs are complying with requirements.
The TSA said the interim final rule would be effective 60 days from the date it is published in the Federal Register.
Report: DP World not for sale
Government conglomerate Dubai World, which is restructuring to cope with the global crisis, is not in talks to sell its flagship DP World DPW.DI to a regional private equity firm, DP World said on Tuesday.
Dubai World said in May it was in talks to sell part of DP World, one of the world's largest port operators, after it was approached by a regional private equity firm seeking to acquire a minority stake.
Media had reported that five months of talks between Dubai World and Dubai-based private equity firm Abraaj Capital had collapsed after they failed to agree terms for the sale of DP World, which runs some 50 marine terminals in over 30 countries.
Analysts said Dubai World, which holds around $59 billion worth of Dubai's total $80 billion debt, was unlikely to sell its lucrative port operator and was more likely to sell part or all of its investment agency Istithmar World.
For the full story: www.reuters.com
Analyst: YRC could possibly survive recession
YRC Worldwide Inc. till is losing customers to competitor Con-way Inc. but YRC’s future is beginning to look more promising, an analyst said Tuesday.
Con-way, based in San Mateo, Calif., has cut prices to drive volumes, prompting more small and midsized shippers to move additional portions of freight away from YRC because of concerns about the company, Longbow Research analyst Lee Klaskow said in a note. But recent channel checks have shown that freight from large customers has stabilized, the note said.
YRC’s on-time performance seems to have improved, but it’s had a tougher time addressing problems because of cost-cutting, the note said.
Klaskow kept a neutral rating on YRC shares and lowered his third-quarter earnings per share estimate to a loss of $1.50, compared with an earlier predicted loss of $1.23 a share.
YRC’s chances of surviving the recession “would increase significantly” if it could extend the maturity date of bonds from its $1.5 billion purchase in 2005 of USF Corp. or swap some of the debt for equity, the note said.
-Kansas City Business Journal
For the full story: www.bizjournals.com
California leads U.S. in transportation stimulus funds at over $2 bil
Governor Arnold Schwarzenegger announced that over $2 billion in Recovery Act funding has been federally obligated to 620 highway transportation infrastructure projects in California, making that state tops in the U.S. in such funds to date.
“We are working around the clock with the federal government to ensure President Obama’s Recovery funding is pumped into California quickly, effectively and responsibly,” said Governor Schwarzenegger. “California is the first state in the nation to obligate $2 billion of this funding, which will improve our state’s transportation infrastructure for generations to come while stimulating our economy, creating jobs and helping drive California down the road to economic recovery.”
Under the Recovery Act, states were given 120 days to obligate half of their federal stimulus transportation funding to projects The State of California said it completed this effort more than two months ahead of federal deadline, and that was also the first state in the nation to obligate $1 billion in stimulus funding to improvements to highways, local streets, public transit and airports.
To view a list of the 620 highway transportation projects that have been federally obligated Recovery Act funding to date in California:
Two German cargo ships traverse North-East Passage
Two German merchant ships have traversed the fabled North-East Passage after global warming and melting ice opened a route from South Korea along Russia's Arctic coast to Siberia.
Now the ships are poised to complete their journey through the cold waters where icebergs abound, heading for Rotterdam in the Netherlands with 3,500 tons of cargo.
The merchant ships MV Beluga Fraternity and MV Beluga Foresight arrived last week in Siberia, their owner Beluga Shipping GmbH said Friday. They traveled from South Korea, in late July to Siberia by way of the North-East Passage, a sea lane that, in years past, was avoided because of its heavy ice floes.
He said the shipping company was planning more voyages through the area in coming months. Traditionally, shippers traveling from Asia to Europe have to go through the Gulf of Aden and through the Suez Canal into the Mediterranean Sea and, pending their destination, into the Atlantic Ocean.
A journey from South Korean to the Netherlands, for example, is about 11,000 nautical miles (12,658 miles). By going northward and using the Northeast Passage, approximately 3,000 nautical miles (3,452 miles) and 10 days can be shaved off. That meanslower fuel costs
For the full story: en.cop15.dk/news
Wednesday, September 16, 2009
Waterfront employer group fires back at ILA
East-and-Gulf Coast shipping management’s proposal to extend the current International Longshoremen's Association, AFL-CIO (ILA) Master Contract to September 2012, did not succeed because some 200 ILA wage scale delegates unanimously rejected the proposal before it could be presented to the 18,500-person union membership, according to the group representing the waterfront employers – the United States Maritime Alliance (USMX).
The USMX responded in a statement on Tuesday, referring to a projected container shipping industry loss of $20 billion in 2009 and U.S. unemployment hovering at or near 10 percent.
“The USMX offer would have resulted in significant salary increases for most workers,” the employer group said.
The ILA’s Wage Scale Committee unanimously rejected the proposal at its meeting in Orlando, Florida, two weeks ago.
The ILA said in a statement on September 3 “USMX insisted on retaining its right to introduce new technology during the period of the extension, which ILA Wage Scale delegates felt was too important to ignore. They also shared concern over giving back a scheduled wage increase, which will now take place on October 1, 2009.”
The USMX proposal would have eliminated the container royalty CAP.
“Eliminating the CAP could make an additional $50 million in supplemental cash benefits available for use by the ILA each year. The proposal also introduced a process to bridge the salary gap between lower and higher paid personnel,” the USMX said in a statement.
"The ability to introduce technology enhances the flow of cargo and facilitates productivity increases that are necessary to enable management to pay for improved wages and benefits," USMX Chairman and CEO James A. Capo said.
"The ILA is completely overlooking the financial gains each and every member will enjoy, in order to veto any implementation of new technology," said Capo.
The USMX said the contract extension would have provided for a starting rate and salary increase to $20 per hour for anyone earning less than that amount. Twelve percent of ILA labor would receive up to a $4 an hour increase as of October 1, 2009, according to the USMX.
Capo said the wage increases originally due on October 1, 2009, would be deferred until October 1, 2010, at which time all levels would receive a raise.
However, the introduction of new technologies to the East and Gulf Coast working waterfronts under ILA jurisdiction is that union’s primary bone of contention amid concerns over job losses.
"USMX and its members will never give up their right to introduce new technology. It goes against all logic. The employees who may or may not be displaced by technology are well-protected under provisions of the Master Contract," Capo said. "It is unfortunate that the ILA rank and file did not get the opportunity to study the facts of the management proposal before the
Wage Scale Committee voted it down. We all ultimately have the same goal-to create a strong maritime industry that can support a well-paid, well-trained\ labor force," Capo said.
The ILA rejection of the new proposed contract terms means the current contract remains in effect for the next 12 months.
L.A.-Long Beach cargo declines tapered in August
A slight pulse in what is being reported as a weak Peak Shipping season appeared to have tapered in August amid the year-to-date stark declines in cargo traffic at the two biggest U.S. ports in Los Angeles and Long Beach.
The Port of Long Beach reported a 13.8 percent drop in container traffic in August at 493,339 TEUs, the smallest year-to-year decline at the port for any month since November 2008.
The Port of Los Angeles reported its highest containerized volume of the year in August at 612,581 TEUs, which was 6 percent better than the previous month.
However, the Port of L.A.’s box business dropped 19.09 percent from the same time period the previous year, which the port attributed to a 2008 Peak Season that thrived just before the economic crisis hit.
The port referenced a long-term forecast it commissioned by the Tioga Group that indicates that the recession and its effect on international container trade are expected to level out in late 2009, with modest growth returning in 2010.
Industrial real estate forecast shows recovery beginning in 2011
Most of the U.S. commercial real estate industry is expected to remain in recession through 2011 with an industry-wide recovery not expected to begin until 2012, according to a quarterly survey commissioned by PricewaterhouseCoopers.
Investors expect the industrial and office sectors to begin to recover in 2011 but not dominate the sector until 2012. Washington D.C., San Francisco, Philadelphia and Long Island are the office markets expected to recover ahead of the overall national market.
In the warehouse sector, West Coast cities are expected to lead the recovery charge, including the cities of Oakland, Portland, Salt Lake City and Orange County, investors said.
For the full story: www.reuters.com
Norfolk Southern and state partners seek $300 mil in TIGER funds
Norfolk Southern and its lead partner Pennsylvania, along with the states of Virginia, Alabama, Mississippi, and Tennessee, are seeking $300 million in Transportation Investment Generating Economic Recovery (TIGER) funds from the federal government for the proposed Crescent Corridor.
The proposed freight corridor would include funds to develop new intermodal facilities in Memphis, Birmingham, and Franklin County, Pa.; and the expansion
of intermodal terminals in Harrisburg and Philadelphia. Track improvements in
the five partner states would include 10 passing tracks, 557 individual speed
improvements, and 393 miles of track improved with upgraded rail.
The intermodal projects would be part of the Crescent Corridor - an existing 2,500-mile rail network from Memphis and New Orleans to New Jersey.
Norfolk Southern says the Corridor would “handle more rail freight traffic, faster and more reliably, creating or benefiting some 47,000 green jobs and producing these estimated annual benefits:
- $326 million in tax revenues to states and communities
- 1.3 million long-haul trucks diverted from interstates
- $146 million in accident avoidance savings
-- 1.9 million tons in CO2 reduction
- $575 million in congestion savings
-- $92 million in highway maintenance savings
- 169 million gallons in fuel savings
In their TIGER application, the five partner states said the Crescent
Corridor is "one of the single largest additions of new freight
transportation capacity in America since the Interstate Highway System.
Building the last long haul intermodal freight distribution supply chain is
one of the best transportation investments of our time."
"On behalf of Norfolk Southern, I thank our partners for their farsighted
support of the Crescent Corridor," said NS CEO Wick Moorman. "The Crescent
Corridor is a tremendous economic advantage for the states and the nation. It
will stimulate jobs, tax revenue, and business growth, while delivering
substantial public benefits for communities and customers. Governors Ed
Rendell, Tim Kaine, Bob Riley, Haley Barbour, and Phil Bredesen are leading
the way in showing how public-private partnerships can create safe,
affordable, green solutions to America's transportation infrastructure
WSJ OpEd: Union Port of Call
The following is an excerpt from a Wall Street Journal opinion piece
President Obama gave a corker of a campaign speech yesterday at the AFL-CIO convention in Pittsburgh, promising to deliver on his promise to ease the rules for union organizing. If you want to know what this means in action, consider the current Teamsters play to control California ports.
The dispute concerns the Clean Truck Program announced in 2007 by the Port of Los Angeles to ban the dirtiest trucks from carrying port cargo. L.A. Mayor Antonio Villaraigosa, a former union organizer, seized on the program as an opportunity to help his Teamster friends. Current law doesn't let the Teamsters organize independent truckers, some 17,000 of whom serve the ports of Los Angeles and Long Beach. So the mayor and his port authority pals wrote into their clean-truck rule a "concession program" banning harbor truck companies from contracting with independent drivers. The port would only allow "employee drivers," all of whom would be eligible for Teamster membership.
The American Trucking Association sued to block the rule, and with good cause. Federal law has long pre-empted state and local regulation of interstate trucking "prices, routes and services," for the reason that international and interstate trade depend on uniform regulation. The courts have recognized this, and even the Ninth Circuit Court of Appeals found that the new port rule had likely violated the Constitution's Commerce Clause, which led to a court injunction earlier this year. Trial on the merits of the rule has been set for next year.
-For the full OpEd: online.wsj.com
Thursday, September 17, 2009
FedEx Q1 profit drops 53 percent; claims conditions have stabilized
FedEx Corp. (FDX) said business activity is picking up and forecast U.S. economic growth for 2010 and the remainder of 2009, even as it posted a 53% drop in quarterly profit and warned near-term earnings will continue to substantially lag prior-year levels.
But the results for the just-ended quarter - which the package-delivery giant preannounced last week - were well ahead of its initial dour forecast in June.
Chief Executive Frederick W. Smith said Thursday that overall economic conditions clearly have stabilized since then, adding that FedEx is seeing a number of "encouraging signs" that the broad downturn has ended. Among other things, he cited recently improving volume trends in its freight and ground divisions.
FedEx posted profit of $181 million, or 58 cents a share, down from $384 million, or $1.23 a share, a year earlier. Revenue slumped 20% to $8.01 billion, and operating margin fell to 3.9% from 6.3%.
Revenue at the company's Express business fell 23%, with earnings off 70%. U.S. domestic package revenue dropped 22%, as revenue per package declined amid lower fuel surcharges, even though package volume was essentially flat. FedEx said the results were partly offset by gains from DHL's exit from the U.S. domestic package market and lower expenses due to cost cutting and fewer flight hours.
For the full story: online.wsj.com
Hanjin splits in two
South Korea’s Hanjin announced it is splitting into two companies, with Hanjin Shipping Holidings set up to manage its subsidiaries, while Hanjin Shipping will have complete control of the shipping business.
The company said in a statement that its “container and bulk shipping businesses continue to show growth, however it felt the need to implement an advanced corporate governance system that will enable the company to cope with the rapidly changing business environment and secure its future-oriented corporate structure for sustainable growth.”
Hanjin said the transformation into a holding company is also expected to allow its subsidiaries to focus on the core business through an independent, and optimized strategy and distribution of its business resources.
The company said shares in Hanjin Shipping Holdings and Hanjin Shipping will be distributed to shareholders according to the ratio of net asset of each company, i.e. 0.1616362 share of Hanjin Shipping Holdings and 0.8383638 share of new Hanjin Shipping for each share of the former Hanjin Shipping.
U.S. signs off on anti-piracy pact
The United States and other shipping nations have agreed on new guidelines to curb rampant piracy off the Horn of Africa, the State Department said on Wednesday.
The State Department said the United States, Britain, Cyprus, Japan, Singapore and South Korea had recently signed the "New York Declaration" on measures to protect against attacks, like increasing lookouts and keeping fire pumps ready to repel would-be pirates.
The nonbinding declaration also covers smaller shipping countries such as Panama and Liberia, and altogether agrees guidelines for nations accounting for more than 50 percent of the world's shipping by gross tonnage.
In 2007, there were 19 pirate attacks on ships. In 2008, the number rose to 122 and in the first nine months of 2009, there have already been 140 attacks including the April attempted hijacking of the U.S. cargo ship the Maersk Alabama.
The attacks continue. This week, Somali pirates freed a Greek ship after they received a $2 million (1 million pound) ransom for the vessel and its 21 Filipino crew.
For the full story: af.reuters.com
Report: Mafia paid to scuttle ships
About 30 ships containing radioactive and other poisonous refuse may have been scuttled off the Italian coast in an illegal Mafia operation to dispose of dangerous substances at sea.
Italy’s political opposition yesterday demanded an investigation after the wreck of a cargo vessel containing 120 barrels of potentially radioactive waste was found in waters off the southern province of Calabria. Environmental campaigners said that many more ships containing toxic and radioactive rubbish were believed to lie near by.
The discovery of the Cunsky, sunk in 1992, came after her location was revealed to anti-Mafia investigators by Francesco Fonti, a former member of the ’Ndrangheta, or Calabrian Mafia, who has become an informant. Mr Fonti claimed that the Cunsky contained radioactive material.
Mr Fonti has told police that he had used explosives to sink her and two other waste ships. The introduction of tighter European Union environmental legislation in the 1980s made illegal waste disposal a lucrative business for organised crime.
-Times of London
For the full story: www.timesonline.co.uk