Monday, September 23, 2013
China manufacturing scale rises to six month high
A preliminary reading of China's September Purchasing Managers Index rose to a six month high, indicating a manufacturing rally for the world's second largest economic power.
The preliminary September reading released by HSBC and Markit Economics of 51.2 exceeded the 50.9 median estimate of 14 analysts surveyed by Bloomberg. The August PMI was 50.1.
The Shanghai Composite Index increased on the expectation that China's economy is gaining momentum.
"China's growth rebound has continued to gather some momentum, especially in exports," said Wang Tao, chief China economist at UBS AG in Hong Kong. Today's reading adds support to his firm's previous increase of its third-quarter growth prediction to 7.7 percent from 7.5 percent, he added.
The final manufacturing PMI from HSBC and Markit will be released Sept. 30, and China's National Bureau of Statistics releases the government's manufacturing PMI, extrapolated from a larger sample size, on Oct. 1.
Markit's premlinary PMI for the euro area rose to 52.1 from 51.5 in August.
For more of the Bloomberg story: bloomberg.com
Shipping lenders tighten rules
Banks who lend to ship owners are getting tough about who their clients can do business with, according to the Baltic and International Maritime Council, whose membership controls 65 percent of the world fleet.
The maritime council said banks warn that they will cancel loans if ship owners do business with customers they perceive to be at risk of failing to honor contracts.
The new rules will force some shipping companies into shorter-term contracts with a smaller group of clients, said Peter Sand, an analyst at the Denmark-based council.
With the industry's capacity glut the value of merchant ships, typically used as loan collateral, has dropped 80 percent since 2008.
"Five years ago, you always called your shipbroker in the morning," Sand said. "Now you call your ship banker in the morning. If you do not sign up with blue chips, the banks might not approve your loans."
The ClarkSea Index, a gauge of industry-wide earnings, averaged $9,258 a day this year, the lowest since 1990, according to shipbroker giant Clarkson Plc. The price of a five-year-old Capesize, which typically haul iron ore and coal, fell to $30 million at the end of November, from $153.5 million five years ago, according to London shipbroker Simpson, Spence & Young Ltd.
For more of the Bloomberg story: bloomberg.com
ILWU breaks from AFL-CIO
The International Longshore and Warehouse Union ended its affiliation with the AFL-CIO at the end of August.
Less than year ago, the ILWU joined with five other unions to form the Maritime Labor Alliance. The new partnership includes the ILWU, the American Radio Association, the Inlandboatmen's Union, the Marine Engineers' Beneficial Association, the International Organization of Masters, Mates and Pilots, and the International Longshoremen's Association.
In a letter to AFL-CIO President Richard Trumka on Aug. 29, 2013, ILWU President Robert McEllrath cited jurisdictional disputes as part of the reason for discontinuing the affiliation. McEllrath was particularly concerned by the AFL-CIO's decision to stay out of an ILWU conflict with operating engineers at the EGT grain terminal in Longview, Washington.
McEllrath also criticized the AFL-CIO for "overly compromising positions" on national political issues—including legalizing immigrants, letting the Affordable Care Act tax health insurance plans, and allowing immigrant visas that benefit corporations.
Trumka called the break a "tragic situation," saying at a Sept. 8 press conference before the AFL-CIO convention in Los Angeles that he had no idea that ILWU was planning to leave the AFL-CIO.
The ILA said that it would remain with the AFL-CIO, and at the convention, ILA President Harold J. Daggett was elected to the AFL-CIO Executive Council.
The ILWU continues its contract fight with the Pacific Northwest Grain Handlers' Association, which represents six grain terminals in Oregon and Washington. In February, United Grain locked out ILWU dockworkers in Vancouver, and in May, Columbia Grain locked out ILWU workers in Portland. Negotiations, currently stalled, are expected to resume next year.
For more of the NW Labor Press story: nwlaborpress.org
Study: Port of Tacoma ready for mega ships
A new study has shown that the Port of Tacoma's Blair Waterway can safely handle large post-Panamax vessels.
That $40,000 study, paid for by the port and the Puget Sound Pilots organization, set firm guidelines for the passage of Ultra Large Container Ships sailing the Blair. Conditions were determined in simulations at the Pacific Maritime Institute in Seattle. Tests were conducted under several scenarios with different load configurations and weather conditions, using a model of the waterway and a model ship with a capacity of 13,000 TEUs.
The study was commissioned at the request of several container lines calling at the Washington United Terminal on the port's Blair Waterway, said Lou Paulsen, director of strategic operations at the port.
For more of the News Tribune story: thenewstribune.com
USCG detains bulk carrier in Oregon on safety violations
The U.S. Coast Guard detained bulk carrier Stargold Trader in Portland, Oregon, until crewmembers fix the ship's safety violations, according to an agency statement.
Officers from Coast Guard Marine Safety Unit Portland found the discrepancies during a routine inspection of the 618-foot Panamanian-flagged vessel.
A majority of the safety discrepancies were related to fire hazards, which included excessive oil leaks within engine room machinery and disrepair of the vessel's primary firefighting system.
The Stargold Trader will stay in port and restricted sailing until the violations have been corrected.
Tuesday, September 24, 2013
Analysts: Dry-bulk sector poised for profits in 2014
The dry bulk shipping sector hauling commodities from crops to iron ore is reportedly on the verge of returning profits for the first time since 2010 as the biggest capacity glut in history starts to contract.
In 2014, shipping rates will finally exceed break-even levels for each of the four main vessel classes, according to forecasts by 34 analysts surveyed by Bloomberg. Business will expand 10 percent in the three largest dry-bulk categories to a record 2.91 billion metric tons next year, according to ACM Shipping Group, the third-largest listed shipbroker.
Deliveries of new ships are now slowing after earnings that dropped up to 84 percent since 2008 curbed orders.
"We're starting on the path to recovery," said Erik Folkeson, an analyst at Swedbank First Securities, whose recommendations on shipping company shares returned 37 percent in the past two years. "Fleet utilization will tighten, and that's reflected in higher earnings."
The Baltic Dry Index, a measure of freight costs, almost tripled to 1,947 this year, according to the Baltic Exchange.
Capesizes that earned an average of $9,762 a day in 2013 will get $16,000 in 2014, according to the mean of nine analyst forecasts compiled by Bloomberg. The carriers need $15,400 to break even, according to estimates from RS Platou Markets.
Rates for Panamaxes, which averaged $7,770, are forecast to rise to $12,000 in 2014, compared with a break-even level of $11,300.
Supramaxes, which need $10,500 to break even, are predicted to earn $12,000 in 2014.
Rates for Handysizes, Bloomberg analysts forecast, will average $9,800 in 2014. These smallest carriers need $9,300 to be profitable.
For more of the Bloomberg article: businessweek.com
Shenzhen port bests Hong Kong in August container throughput
Shenzhen port outperformed Hong Kong in August, handling a higher number of containers and thus making its way into the top three container ports in the world for the first time.
Shenzhen reported 2.11 million TEUs in August, down 5.64 percent year-on-year, and a throughput of 15.26 million TEUs for the first eight months, up 1.17 percent.
Hong Kong recorded 1.86 million TEUs in August, down 5.9 percent compared with August 2012. In the first eight months of the year, the port handled 14.53 million TEUs, down 6.9 percent year-over-year.
For more of the MENA FN story: menafn.com
Hapag-Lloyd chooses Damco head as CEO successor
German shipping line Hapag-Lloyd has chosen the head of freight forwarder Damco, Rolf Habben-Jansen, to succeed current CEO Michael Behrendt next year, with hopes that he will lead the company as the shipping industry struggles to make a profit amidst overcapacity and low rates.
"Habben-Jansen is a manager who will successfully confront the major challenges in international liner shipping," said Behrendt, who has planned to step down after more than 12 years at the firm.
In the second quarter, Hapag-Lloyd reported a profit of $28 million, compared with a $9.8 million loss during the same period last year, on cutting costs and lower fuel prices.
For more of the Business Week story: businessweek.com
Labor protest closes 400 Bangladesh garment factories
Garment workers in Bangladesh entered their fourth day of protests over low wages today after overnight labor negotiations failed, and factory owners started to reopen facilities that supply global companies including Walmart.
Demonstrations forced about 400 of the nation's 5,000 garment factories to close yesterday. A police official said thousands of protesters, wanting to more than double their monthly pay to $104, stopped traffic today in the capital city of Dhaka.
Shipping Minister Shajahan Khan met last night with factory owners and labor leaders, trying to come to an agreement. "I hope the workers will get back to work," Khan told reporters after the meeting ended early today. He promised to boost security for factories that employ 3.6 million people.
"We strongly support the workers demand for higher wages," H&M spokeswoman Andrea Roos said by e-mail. "Bangladesh is an important sourcing market for H&M and we have on various occasions and also together with other clothing companies, urged the government to raise minimum wages in the textile industry and to revise wages annually."
The labor uprising comes five months after the collapse of the eight-story Rana Plaza factory complex, which killed more than 1,000 people in the worst industrial accident in the country's history.
A group of North American retailers, including Wal-Mart and Target, made a pact in July to set safety standards by October and refuse to buy from factories deemed unsafe.
For more of the Bloomberg article: bloomberg.com
Russia slaps Greenpeace activists with criminal piracy charges
Investigators have launched a maritime piracy case days after Greenpeace activists attempted to board an oil rig in the Barents Sea, according to Russian Investigative Committee's spokesman Vladmiri Markin.
"All participants of the attack on the platform will face criminal charges, regardless of their nationality, Markin said.
The Arctic Sunrise ship was seized by Russian border guards Thursday in international waters, within Russia's exclusive economic zone, a day after two Greenpeace activists climbed the Prirazlomnoye drilling rig in the Pechora Sea, the southeastern part of the Barents Sea.
Greenpeace and other environmental groups oppose drilling in the Arctic because they say that it is impossible to sufficiently clean up potential oil spills in the region.
For more of the RAPSI News story: rapsinews.com
Wednesday, September 25, 2013
Singapore to spend $8B on port
Now that the port of Shanghai has bested Singapore to become the world's busiest harbor, the port of Singapore has plans to double its container capacity, according to Prime Minister Lee Hsien Loong's strategic plan for economic revival.
The country faces stronger competition from rival ports, and greater congestion as its population grows toward 6.9 million by 2030. The harbor plan shows the island isn't running out of space or potential, Lee said in a speech to the nation.
The prime minister's plan includes port building costs that could go over $8 billion and may boost annual growth by 5 percent, according to Vishnu Varathan, an economist at Mizuho Bank Ltd. in Singapore.
Singapore is spending at least $7 million this fiscal year on the project, which involves moving terminals to free 1,000 hectares for development and constructing a larger facility at Tuas in the southwest.
For more of the Business Week story: businessweek.com
Cuba courts investment with new port and zone
Cuba released regulations on Monday for its first special development zone, touting new port facilities in Mariel Bay in a bid to attract investors and benefit from an expanded Panama Canal.
The Mariel container terminal, along with rail and highway support, is a $900 million project largely financed by Brazil and built in conjunction with Brazil's Grupo Odebrecht SA. Singaporean port operator PSA International Pte Ltd. will run the facility.
The special trade zone takes effect on November 1 and includes significant tax and customs breaks for foreign and Cuban companies while maintaining restrictive policies, including for labor.
Cuba hopes the zone, and others it plans for the future, will "increase exports, the effective substitution of imports, (spur) high-technology and local development projects, as well as contribute to the creation of new jobs," according to reform plans issued by the ruling Communist Party in 2011.
The Mariel special development zone covers 180 square miles west of Havana and is centered around a new container terminal being built in Mariel Bay, 28 miles from the Cuban capital.
Port of Olympia loses tenant PacArtic
The Port of Olympia no longer is working with marine terminal tenant PacArctic Logistics, which had agreed to use the port every month to send heavy equipment to Alaska.
PacArctic, once a division of Koniag, made its only shipment from the port in early June. Officials of PacArctic, which is not longer listed as a division of Koniag on the parent company website, could not be reached.
Port Executive Director Ed Galligan told the Olympian he reached out to Koniag's Interim President Tom Panamaroff who said that there was nothing the port could do, or had done, and that they were pleased with the support and service they received from the Port of Olympia.
Port finance director Jeff Smith said PacArctic has paid its lease through September. The PacArctic lease took effect in March and was set to run through the end of the year.
The original goal, based on monthly shipments to Alaska, was expected to generate gross revenue of $700,000, or $340,000 after expenses, Smith said. The port instead was paid more than $100,000 for the one shipment in June, plus about $6,500 a month in base rent, he said.
For more of the Olympian story: theolympian.com
Georgia governor tours Panama Canal expansion
Georgia Gov. Nathan Deal toured Panama Canal expansion Monday, noting the project there underscores the need for the Port of Savannah to deepen its shipping channel.
He said was impressed with the scope of the work being done in Panama to make way for super-sized cargo ships.
The governor said his state is anxious to start dredging the Savannah River shipping channel to accommodate larger ships. The state is currently awaiting Congressional action sometime soon to overcome a bureaucratic hurdle, he said.
For more of the GPB News story: gpb.org
Cargo ship grounds on Corfu beach
A cargo ship filled with iron ore pellets, the Guler, en route from Thessaloniki in Greece to Marghera, Italy, grounded in the early hours of September 23 off Corfu island in the Katavolos area, in the strait between Corfu and mainland.
Sunday beach goers were surprised to be confronted with the large ship, 79 meters long and 11 meters wide, with a deadweight of 2,421 tons.
Divers were sent in to re-float the ship, which was ordered to Corfu port for inspection. There were reports that the hull had been breached.
For more of the story: express.co.uk
Thursday, September 26, 2013
Maersk Line predicts annual container industry growth of 3 to 6 percent
Maersk Line, the container carrier arm of A.P. Moeller-Maersk, predicts annual growth in the container industry would range from 3 to 6 percent.
Jakob Stausholm, Maersk Line's chief financial officer said at an investor meeting Thursday that demand will grow 3 percent to 6 percent a year until 2015.
Maersk Line reported increased profits last month and upped its full-year forecast as its cost cutting offset low freight rates.
"We believe we've reached the bottom of the cycle," said Stausholm.
Maersk said that second-quarter costs dropped 12.7 percent at its container unit. In the first quarter, unit costs went down 7.1 percent. Maersk Line reported a doubling of second-quarter net income to $450 million, even as revenue declined 10 percent.
The company is fighting in the fifth year of industry overcapacity that resulted after a ship orders boom coincided with the global economic crisis, triggering the worst ever drop in global freight demand.
"A deflationary mindset is needed," Maersk Line said in the presentation.
The company said it will defend its 15 percent market share and grow at the same pace as the industry.
For more of the Bloomberg story: businessweek.com
For more of the Financial Times story: ft.com
Work on Russian $1.4B Sabetta port underway
Vladimir Putin led a meeting Wednesday about creating facilities for the production of liquefied natural gas on the Yamal Peninsula, the Yamal LNG project, and developing the $1.4 billion Sabetta seaport.
The Yamal LNG project, a public-private partnership, has attracted $1.8 billion from private investors, the government said.
The Russian government said it has set aside $1.4 billion to finance dredging for the future Sabetta port to create a navigable channel in the Gulf of Ob, a process that is already underway. Private investors will be able to start building port terminals starting in 2014.
Dredging operations at Sabetta will be carried out by Jan De Nul Group. Two cutter suction dredgers, Niccolo Macchiavelli and Leonardo Da Vinci, two holding dredgers, eight open barge hulls, two motorized flatboats, a hose dredger, a special tug vessel, and a crew rotation boat will be used for running operations in the Gulf of Ob.
For more of the Dredging Today article: dredgingtoday.com
Study: Global manufacturing shifting to developed countries
The wage difference between developed and emerging countries is about to shrink significantly, according to new research, which predicts a major shift in where companies base their manufacturing operations.
According to the newly released PricewaterhouseCoopers' Global Wage report, emerging economies are expected to show significant convergence with wage levels in the U.S. and U.K. by 2030, especially China, India, Mexico and the Philippines.
For example, average wages in the U.S. are now 7.5 times greater than in Mexico, but by 2030 are projected to be just 3.8 times more. India's current average monthly wage is about 25 times smaller than in the U.S., but PwC forecasts that by 2030 it will be just 7.5 times smaller.
Higher labor productivity in these emerging economies will drive this boost to wages, the study said.
"The direction of change is clear," said John Hawksworth, PwC's chief economist. "The large wage advantages enjoyed today by many emerging economies will shrink as their productivity levels catch up with those in advanced economies and their real exchange rates rise as a consequence."
For more of the CNBC story: cnbc.com
Dunavant Transportation Group buys Texas logistics company
Memphis-based logistics firm Dunavant Transportation Group has acquired Trucking Consultants Inc., a third-party logistics provider with operations in Houston and Dallas.
"TCI's long-standing culture of service and excellence was a terrific fit for us at this time," says Richard McDuffie, Dunavant's COO. "Shipping and logistics are enormously important to the futures of Houston and Dallas, which are two of North America's strongest regional economies."
A subsidiary of Dunavant Enterprises, Dunavant Transportation Group provides container drayage, crossdocking and transloading, yard services, and chassis leasing.
For more of the Memphis Business Journal story: bizjournals.com
Chinese woman survives after car crushed by container
A Chinese woman miraculously escaped unharmed after a container fell from a truck, crushing her car.
The incident happened in in Zhangjiagang in the Jiangsu Province of China.
For more of the Daily Mail story: dailymail.co.uk