Monday, September 15, 2014
DOT announces 2014 TIGER recipients, including key port projects
Several port projects were included in 2014 TIGER (Transportation Investment Generating Economic Recovery) program funding, according to a statement from U.S. Transportation Secretary Anthony Foxx, who announced the 72 transportation projects to be funded by this year’s $600 million grant pool.
EU Commission approves Hapag-Lloyd-CSAV merger with conditions
As predicted in Tuesday’s Reuters story, European Union regulators conditionally sanctioned the merger of Germany’s Hapag-Lloyd and Chile’s CSAV, which will form the fourth largest container shipping line in the world.
Insiders say Maersk and MSC met with FMC on 2M vessel-sharing deal
Maersk Line and Mediterranean Shipping Co. planned to hold talks with U.S. Federal Maritime Commission officials on Friday to discuss concerns that their proposed 2M alliance will be delayed, people involved in the matter said.
BP continues to cleanup oil spill in Port Newark Channel
Crews at BP’s Port Newark facility have been cleaning up a spill of diesel fuel since July, according to BP officials and the state Department of Environmental Protection.
Tuesday, September 16, 2014
Drewry examines Ocean Three alliance
Drewry's latest issue of Container Insight examines how the new "Ocean Three" alliance, the agreement that involves vessel sharing, slot exchange and slot charter deals between CMA CGM, CSCL and UASC.
Ocean Three is subject to regulatory approval but is expected to be sanctioned since current market share is less than 30 percent on all routes
The analysts say this was an expected move after the P3 Alliance of CMA CGM, Maersk and MSC was nixed by Chinese regulators, and Maersk and MSC formed their 10-year "2M" VSA without CMA CGM. The French shipping line had to find new carriers to help fill its big ships.
Ocean Three carriers tout the benefits to customer service and reliability that the new deal would provide. In this regard, the Ocean Three carriers have an edge over the 2M's Maersk and MSC, who have vastly different track records on ship reliability, the report said.
Drewry reports the Ocean Three agreement will cover the key East-West container trades out of Asia to and from North Europe, the Mediterranean and both coasts of North America, starting at the end 2014 or early 2015.
Researchers say little will change in the Asia-North Europe trades for the three lines, other than vessel upgrades so that all four services will have a capacity of 14,000 TEUS on average. On the trans-Pacific routes, the main changes will occur on the Asia-USEC lane, with more focus on the Suez Canal to allow bigger ships.
The Ocean Three will initially operate 15 weekly services, researchers say, using a total of 138 containerships. Discussions are underway to extend the agreement to cover the trans-Atlantic trades, which would mark a new route for CSCL and UASC.
Drewry says most of the East-West routes are completed locked down by the big alliances, and also notes that each container carrier will continue to compete against all other carriers inside and outside of alliances. In Drewry's opinion, it is unlikely the alliances will take on the North-South routes in the near future since the same pressures do not apply in those trades.
The Ocean Three carriers rank second behind the 2M lines in terms of ULCVs, according to Container Insight. Ocean Three's order book for ULCVs is not as big as that of the five members of the CKYHE Alliance, but it's big enough that when all ships are delivered the average size of its big ships will be around 13,200 TEUs, second to 2M's average of 14,800 TEUs.
Drewry concludes that Ocean Three is the final piece in the vessel-sharing puzzle and its success, like all other VSAs, will depend upon not only on unit cost reductions but also on how well the partners can work together.
Vale signs deal with COSCO
Brazilian mining giant Vale has signed an agreement with China Ocean Shipping Co. to ship its iron-ore via massive Valemax vessels in order to lower costs amid slumping prices of the steel-making ingredient.
Vale will transfer four of its 400,000-metric ton vessels to Cosco and charter them for 25 years, according to a company statement. Cosco will also build 10 ships of similar size to ship Vale's iron ore. No financial terms were released.
The Brazilian company started operating Valemax vessels in 2011 in a bid to compete with Australian competitors located closer to China. The deal indicates Vale may have overcome difficulties convincing China that anchoring the giant ships at Chinese ports is safe.
"The deal makes sense to us as the company frees up some cash (in tough iron ore markets) and partners with Chinese players to help minimize any issue with the docking of very large ore carriers in China," said Banco BTG Pactual SA analysts Leonardo Correa and Caio Ribeiro in a note to clients.
For more of the Bloomberg story: bloomberg.com
Prologis buys 23 Class-A distribution centers in Europe
Industrial real estate investment firm Prologis has acquired 23 Class-A distribution centers in three European countries, the Czech Republic, Poland and Slovakia.
There is a rising demand for high-quality logistics facilities in Europe due to an increase in e-commerce application and supply chain consolidation.
Together, the 23 distribution centers, have approximately 2.5 million square feet of logistics space. Of the total number of properties, 17 distribution centers with 1.75 million square feet of space are located in Prague, Czech Republic; four properties with 596,000 square feet of space are in Warsaw, Poland; and two properties with 124,900 square feet of space are in Bratislava, Slovakia.
"We are pleased to acquire such well-located logistics facilities at a discount to replacement costs," said Philip Dunne, Prologis Europe president. "These high-quality assets complement our existing portfolio. The Prague assets, in particular, are in a long-established park that will benefit from an increase in labor availability in the years to come."
By the end of June this year, Prologis said it owns and manages around 154 million square feet of logistics and distribution space in Europe.
For more of the NASDAQ story: nasdaq.com
P&O Maritime buys majority stake in Spain's Repasa
P&O Maritime, a subsidiary of DP World, has acquired a majority stake in Spain's Remolcadores de Puerto y Altura (Repasa), according to a company statement.
Family-owned Repasa provides marine support services to the offshore energy industry.
The deal will create a new joint venture company under the P&O Maritime brand. The financial provisions of the agreement were not disclosed.
The joint venture will expand P&O Maritime's presence to include the Mediterranean and West Africa and enhance its liquefied natural gas portfolio.
"We have identified the LNG marine sector as one of our core businesses that will help us expand in the future," Rado Antalovic, Managing Director of P&O Maritime, said in the statement.
For more of the Reuters story: in.reuters.com
Three environmental groups due DOT over unsafe oil-by-rail car
Three environmental groups — the Sierra Club, ForestEthics and Earthjustice — are suing the Department of Transportation, alleging the agency failed to respond to their petition to ban the use of the DOT 111 rail car model to ship flammable crude oil.
The DOT-111s have been involved in a number of fiery accidents. Last July, a train carrying Bakken crude exploded in Quebec, killing 47 people in the town of Lac-Mégantic.
In July, Earthjustice asked the DOT to issue an emergency order that would prohibit the use of unsafe tanks cars to carry incendiary Bakken crude oil from North Dakota. Now the group is suing, saying transportation officials never responded to that petition.
The DOT has proposed regulations that would ultimately replace the unsafe cars. But it could take years for those rules to phase in, said Patti Goldman, an attorney at Earthjustice.
"The worst tank cars are likely to shift from the Canadian fleet to the U.S. fleet," Goldman said, "unless the secretary of transportation acts [to ban them]."
For more of the KQED Science story: blogs.kqed.org
Wednesday, September 17, 2014
New House bill attempts to revive 100 percent container screening
A new congressional effort is underway to revive screening 100 percent of containers prior to their arrival to U.S. ports.
Although Congress decreed in 2007 that all containers coming to the U.S. must be scanned by inspection and radiation detection equipment prior to being loaded onto U.S.-bound ships in foreign ports by July 1, 2012, the Department of Homeland Security has delayed that deadline.
The Government Accountability Office has identified problems and wasted spending on various cargo screening initiatives launched by Customs and Border Protection. In a report last year, CBP said that lack of foreign buy-in, logistical problems and costs were issues that thwarted the implementation of 100 percent container screening of U.S.-bound cargo containers at foreign ports.
Consequently, the U.S. only scans 3 percent of incoming cargo, according to Rep. Janice Hahn, D- Calif. Last week Hahn, whose district includes the Port of Los Angeles, introduced a bill that would test the implementation of 100 percent scanning technology at two U.S. ports.
"My bill would help demonstrate that scanning technology is effective and then we can move towards its widespread implementation so that 100 percent of shipping containers passing through all U.S. ports can be determined to be safe," Hahn said.
Hahn spokesman Michael Levin Hahn has received briefings by scanning technology companies, including the Multi-Mode Passive Detective System made by Decision Sciences. Hahn's legislation authorizes up to $30 million to carry out the pilot program.
For more of the Roll Call story: blogs.rollcall.com
August cargo volume up at Port of Los Angeles, down at Long Beach
August volumes at the Port of Los Angeles were the highest in four years, while the Port of Long Beach cargo volumes fell substantively, according to the data released Monday.
In August, Port of Los Angeles cargo volume rose 6.7 percent year-over-year, as it handled 757,702 TEUs, which makes it the busiest single month at the port since August 2010, when it moved 763,837 TEUs.
Imports for August at Los Angeles surged 7.8 percent to 383,551 TEUs, and exports increased 6.16 percent to 168,248 TEUs.
"A combination of larger vessels calling at the Port of Los Angeles as well as the beginning of peak shipping season has led to a particularly strong August here in Los Angeles," said Los Angeles port spokesman Phillip Sanfield. "We're cautiously optimistic that this bodes well for the remainder of the peak season ahead."
At the Port of Long Beach, August container volume was fell 9.1 percent from August 2013, at 573,083 TEUs. Imports dropped 8.2 percent to 300,851 TEUs and exports were down a whopping 17.7 percent to 126,856 TEUs.
Long Beach port spokesman Lee Peterson said last month's numbers look low compared to August 2013, which was Long Beach's busiest month since October 2007. He said Long Beach experienced peak season this year from April to June, earlier than the typical peak season, mostly due to retailers shipping Back-to-School and holiday merchandise early to circumvent any possible shutdowns due to ongoing. West Coast port labor talks.
PierPass pilot to improve trucker turn times at L.A.-Long Beach ports
Last week PierPass, a nonprofit created in 2005 to address congestion, air quality and security issues at port terminals, started testing a faster way for trucks to pick up containers at the Port of Los Angeles and Long Beach, according to a company statement.
PierPass says the Free-Flow pilot program, which will be conducted at three terminals, stacks containers by owner, trucking company or logistics provider so that truckers can go directly to a terminal via a special lane to pick up the containers in bulk.
"To keep cargo flowing quickly as ships grow ever larger, we need to change how we move containers," said PierPass President and CEO Bruce Wargo. "Doing the same things incrementally faster won't solve congestion pressures."
West Basin Container Terminal at the Port of Los Angeles and SSA Marine and Total Terminals International at the Port of Long Beach will participate in the pilot, which will continue into the fall, the statement said.
Currently, truckers arrive at a terminal anytime to pick up containers, which are often buried under a stack of other containers. A gantry crane has to move an average of three containers to retrieve a specific container for a truck, which could wait as long as 45 minutes to receive the container. In this situation, the statement said, a crane typically delivers eight to 10 containers an hour.
PierPass says that the Free-Flow method allows crane to retrieve up to 20 containers per hour, and that trucking companies have reported turn times as fast as 11 minutes.
PierPass said it is attempting to improve a business process that has been in effect since the 1960s, and that the Free-Flow process could be a solution to meeting the increased container handling demand of super-sized container ships.
China launches $1.4B port in Sri Lanka
Chinese President Xi Jinping traveled to Sri Lanka this week, launching the construction of the Chinese-backed $1.4 billion Colombo Port City as he promotes his vision to revive a maritime silk road to combat increased competition from Japan and India.
Sri Lanka is a midway point on one of the world's busiest international shipping lanes. China has bested India to become the largest investor in Sri Lanka.
The Port City will be built by a unit of state-controlled China Communications Construction Co. on 576 acres of reclaimed land. The offices, hotels, apartments and shopping centers will draw as much as $20 billion in investment over about 15 years, according to ports authority chairman Priyath Wickrama.
Colombo's port is the only one in South Asia that can accommodate 18-meter deep draft vessels, which means it could potentially serve the Indian subcontinent, the Middle East and some African states, according to Parakrama Dissanayake, former chairman of the Chartered Institute of Logistics and Transport in Sri Lanka.
President Mahinda Rajapaksa welcomed Xi to Sri Lanka. During Tuesday's visit they commissioned the last phase of the $1.3 billion Norochcholai Lakvijaya power plant, which was funded by a Chinese loan, and signed more than 20 bilateral agreements, including plans to pursue talks on a free trade agreement.
For more of the Bloomberg story: bloomberg.com
China's Qingdao Port is center of fraud investigation
China's Qingdao Port is at the center of a fraud investigation in which duplicated warehouse certificates were used to pledge a metal cargo multiple times as collateral for bank loans.
The suspected financing fraud at the port surfaced in June, and involves about 300,000 tons of alumina, 20,000 tons of copper and up to 80,000 tons of aluminum ingots, the port operator said in a statement on Friday.
This is the first time Qingdao Port International has disclosed the amount of metal linked to a case that has caused chaos in China's metal markets, triggering banks to temporarily stop lending.
For more of the Reuters story: reuters.com
Thursday, September 18, 2014
Hawaii to build $266M container terminal
Hawaii is building a new $266 million container terminal to increase capacity at its ports.
The Kapalama Container Terminal will be constructed across a channel from Sand Island in Honolulu. It will span 94 acres and is expected to boost cargo capacity by one-third, according to The Honolulu Star-Advertiser.
The state's final environmental impact report was released and is expected to be approved. The project, which will likely be financed through revenue bonds, harbor tariffs and leases, is expected to be completed by 2016.
Workers have already started tearing down vacant buildings at the former Kapalama Military Reservation site.
Terminal capacity in Hawaii hasn't expanded in 30 years. Approximately 80 percent of Hawaii's goods are imported, and officials say most of those goods come through commercial harbors.
When the facility was first planned a decade ago, officials predicted that Honolulu Harbor would start needing more cargo capacity by 2015 and that a lack of space would impact the economy by 2020.
Then cargo volume dropped by 15 percent during the recession. Although growth over the past few years has been disappointing, according to state Department of Transportation spokeswoman Caroline Sluyter, the island's population and economy is expected to grow, so it makes sense to expand to provide for the future needs of the state.
For more of The Garden Island story: thegardenisland.com
FedEx to raise rates in January 2015
Package delivery giant FedEx Corp announced it will increase shipping rates for its express, ground and freight services effective Jan. 5, 2015.
The rate hike will apply to FedEx freight shipments within the U.S., Canada and Mexico and between the U.S. and Canada and between the U.S. and Mexico, FedEx said.
The company previously raised its shipping rates in the freight business by 3.9 percent on March 31 of this year.
FedEx Corp is expected to report first-quarter results on Wednesday.
Rival United Parcel Service raised its freight rates by 4.4 percent in March.
For more of the Reuters story: reuters.com
VPA commissioners set performance metrics for port leader
The Virginia Port Authority Board of Commissioners has developed a list of incentive metrics that will be used to evaluate Port of Virginia CEO and Executive Director John Reinhart's performance, and could ultimately determine whether he will receive a 50 percent raise in pay.
Even though the VPA is still operating at a loss, many board members and state officials have been impressed with Reinhart's leadership at the port.
Former members of the port authority board set Reinhart's salary at $450,000 before he started the job in February 2014. After his first year, the salary will go up to $618,750 annually. If Reinhart achieves certain performance targets, his contract stipulates that he will be eligible to receive another $56,250 that could bring his salary up to $675,000.
John Milliken, chairman of the VPA board, said a vote on the executive director's salary could occur in January, a month prior to his one-year anniversary.
"Each year will be a little different in terms of the goals we will set for him," Milliken said. "We're not far enough along in the year to have the numbers to apply to each one of those things. Although his year officially ends in February, we may try to do it during our January meeting and do it based on end of December numbers."
Some of the incentive goals have been met, or are in the process of being achieved, including bringing losses below $16.6 million, and managing and addressing the VPA's debt that includes payments to the former APM Terminals Virginia facility, now called Virginia International Gateway.
Reinhart s expected to address a number of operational goals, including optimizing facility use at the Norfolk International Terminal, and the Newport News and Portsmouth terminals. He will also submit options for long-term lease improvements with the Virginia International Gateway.
The port continues to set record container volume. Reinhart said the port handled 214,335 TEUs, in August for an 8.1 percent increase year-over-year increase. Year-to-date, container volume is at a record 1,558,781 TEUs, up 6.9 percent year-over-year.
"These are all-time record results," said Reinhart.
For more of the Daily Press story: dailypress.com
China Shipping Development buys $130M stake in domestic tanker firm
China Shipping Development, China's largest tanker operator by fleet size, is buying a 20 percent stake in a mainland tanker company for $130 million from parent company China Shipping Group to take advantage of the expanding market of transporting petroleum on China's coast and inland waterways.
This buy raises China Shipping Development's shares in Shanghai Beihai Shipping to 40 percent. In June, it bought a 20 percent stake in Beihai from Sinochem International Corp.
The China Shipping Development statement said Beihai, which owns a fleet of eight tankers, was predicted to generate approximately $59 million and $61 million in net profit for 2014 and 2015, respectively.
Other Beihai shareholders include CNOOC Petrochemical Import & Export, with 30 percent, Silverbond Overseas with 20 percent and China Ocean Oilfields Services (Hong Kong), another CNOOC subsidiary, with 10 percent.
For more of the South China Morning Post story: scmp.com
Hurricane causes $20M damage to Port of Long Beach breakwater
A breakwater protecting the Port of Long Beach will need about $20 million in emergency repairs after heavy swells in August from Hurricane Marie cause substantial damage, including dozens of breaches, according to officials.
Eleven of the breaches along the 18,500-foot-long Middle Breakwater, which is one of three that protect the Los Angeles-Long Beach Harbor, are considered "major" and total an estimated 1,550 feet, according to the U.S. Army Corps of Engineers.
For more of the L.A. Times story: latimes.com