Cargo Business Newswire Archives
Summary for September 24 - September 28, 2012:

Monday, September 24, 2012

Top Story

Report: More than 40 percent of shippers will put logistics services out to bid over next year

More than 40 percent of companies that outsource work will conduct a bid or rebid for part of their network to a logistics service provider (LSP) over the next year, state a new report by the Tompkins Supply Chain Consortium.

Companies are typically driven to outsource due to cost, flexibility, and capital issues, as well as improved access to advance capabilities.

“Despite the uncertainty in the economy, shippers are finding their existing networks in need of additional capacity,” says Tim Pyne, VP at Tompkins International and co-author of the report. “They look to LSPs to fill this gap and want to ensure that they join up with a provider that meets their performance expectations.”

The survey-based report compiled responses from 95 shippers of retail, consumer, industrial and wholesale products on trends in outsourced distribution. These companies say the largest categories in which LSPs need to improve are innovation and problem solving.

Of companies that already hire third party service providers, most are content with their LSP’s performance in terms of flexibility, safety, order fulfillment accuracy, and turnaround.

More than half of the surveyed companies already outsource at least part of their distribution operations. About 74 percent have signed a long-term contract of three years or more with an LSP.

Tompkins Supply Chain Consortium is a source for supply chain benchmarking and best practices data with more than 350 participating retail, manufacturing and wholesale/distribution companies, including Domino’s Pizza, Target, GlaxoSmithKline, Hallmark, and the Coca-Cola Company.

China’s shipping lines expect downturn to last through 2014

China’s largest shipping lines estimate the downturn in the market will continue through the next two years. New ships will enter the market, exacerbating overcapacity, as the economy experiences slower growth.

“I fear the future two-to-three years will still remain in a downtrend,” Wei Jiafu, Chairman of China Ocean Shipping Group Co. (COSCO), said yesterday at a conference in Xiamen, China. “Many people don’t have confidence.”

Container, commodity and oil carriers are all dealing with lower rates and too many vessels. Container lines are reducing trips on the Asia-Europe because of lowered demand, and the Baltic Dry Index, a barometer for commodities shipping, has dropped 60 percent over the past 12 months.

“In the coming two years, it’s unlikely that the world shipping sector will bottom out,” said Xu Lirong, general manager of China Shipping Group. Companies should increase cooperation to help ease the slump, he said.

China Shipping Container Lines, a unit of China Shipping Group, declined 7.9 percent this year on the Hong Kong stock exchange. China Shipping Development, the company’s tanker arm, plunged 31 percent.

COSCO’s primary group, China Cosco Holdings, has dropped 18 percent this year.

At the conference, Wei said COSCO might follow the lead of global shipping giant A.P. Moller-Maersk, and diversify in areas outside the shipping arena. He said COSCO is looking for investments that would complement its cargo business, similar to how oil has helped to offset Maersk Line losses.

Shipments along the Asia-Europe route have dropped 13 percent year on year, according to Kuehne and Nagel, the largest organizer of maritime cargo shipments.

Due to better economic growth in the U.S. and a revival of the housing market, the trans-Pacific route is fairing better. Mediterranean Shipping Group recently launched the largest container vessel ever to serve a U.S. route, with a capacity of 13,800 TEUs.

For more of the Bloomberg story:

Port of Tacoma gets 14.5 percent container volume boost in August

The Port of Tacoma’s container volumes rose 14.5 percent in August, year to date. August’s figures were 30 percent higher year on year, with 156,804 TEUs handled.

The surge is attributed to the start of peak season, plus the start of two new Grand Alliance services that began in August. In addition, the fears of an East Coast/Gulf labor strike, which has now been averted at least until the end of the year, caused some companies to reroute shipments to the West Coast.

Import container volumes rose by 18 percent year to date, and export container volumes by almost 11 percent. So far this year, Tacoma has handled 1,024,896 TEUs, a 7.5 percent increase compared to last year.

For more of the Business Examiner story:

Hamburg Süd adds New Orleans to Latin American service

Hamburg Süd is adding New Orleans as a port of call on its second weekly service from the U.S. Gulf to Latin America.

Starting with the departure of the Singapore on Sept. 26 from Houston, the second weekly voyage will connect Houston and New Orleans to Caucedo, Suape, Buenos Aires, Montevideo, Rio Grande, Navegantes, and Rio de Janeiro.

The service is operated through a charter agreement with Hapag-Lloyd.

Fishing vessel crashes into large cargo ship, 13 crew missing

Two Japanese coast guard planes were sent to look for 13 missing crew after a 22-man fishing boat crashed into a larger vessel Sunday morning.

The 119-ton Horiei Maru and the 25,047-ton Nikkei Tiger collided off the east coast of Sendai around 2:30 a.m. Sunday. Nine people were rescued, five Japanese and four Indonesian nationals. Twelve of the missing crewmembers are Japanese and one is Indonesian.

The Shiogama Coast Guard said the Horiei Maru might have sunk.

The crew of the cargo ship remained unharmed.

For more of the Washington Post story:


Tuesday, September 25, 2012

Top Story

TSA member carriers want baseline rates raised for 2013-14 contracts

Container lines on the Asia-U.S. route are determined to make a comeback from 2011 and 2012 losses, and intend to raise the baseline standard for freight rates as negotiations begin for 2013-14 customer contracts.

Participants in the Transpacific Stabilization Agreement (TSA) have issued a new set of guideline rate changes to be applied to all service contracts from Asian origins, effective in mid-October. This includes "early bid" contracts decided in late 2012 and early 2013, and standard contracts that take effect on May 1, 2013.

TSA recommends rate hikes of $800 per-FEU to the U.S. West Coast, $1,000 per-FEU via all-water to the U.S. East and Gulf Coasts, and $1,200 per-FEU for intermodal shipments via all coasts.

TSA members restated the need to recoup full fuel costs, including the bunker charge. The low-sulfur component will address the increased cost of using cleaner fuels within North America coastal zones, and a new intermodal fuel component that converts the current three-tier inland fuel surcharge into a single bunker charge will go into effect January 1, 2013.

TSA executive administrator Brian M. Conrad said that for container lines to reverse dramatic losses, they must address the sharply discounted rates that landed in 12-month contracts due to price wars in key trade lane segments. "The eastbound transpacific is a dynamic, highly competitive market," Conrad said.

"Rates negotiated for one route or commodity too easily go viral, spreading to all routes and commodities. That may often be the nature of markets, but it does not necessarily mean those rates are anywhere near economically sustainable for lines carrying the cargo," he said.

Conrad defended the higher sustainable rate structure because overall rates fell so far in early 2012. "It is critical that, between individual lines' announced September rate initiatives and the TSA guideline adjustments, there will be a reasonably compensatory baseline in place for the coming contract year, beginning with early contracts coming up for renewal," he said.

TSA members project that most of the new vessel capacity launched in the transpacific trade during 2012-13 will be offset rising demand, slow-steaming and other factors.

Inland transport, equipment repositioning, cargo handling, feeder ship and maintenance and repair costs will rise by 8 percent over 2012-13, which will be evident as new labor contracts are signed in coming months.

Container carrier on-time performance drops in August

In August, schedule reliability dropped to 77 percent from July's 83 percent figure on more than 10,000 vessels arrivals. The decline also extended to individual container delivery, where on-time performance worldwide weakened to 64 percent in August from July's 68 percent, according to SeaIntel and INTTRA data.

All top 20 carriers experienced lowered global reliability in August. The top 3 performers in August were Maersk Line, Hamburg Süd and APL, which suffered fairly minor declines in schedule reliability in August.

Even though global reliability declined overall, there were meaningful differences between individual trade lanes. The back haul trade from Europe-to-Asia and the Transpacific routes experienced significant drops, but some trade routes, such as the route from Asia to the Mediterranean, saw better performance in August.

The sharp reduction is seen to be a consequence of poor weather conditions, port issues, and super slow-steaming on main back-haul trade routes.

The SeaIntel Maritime analysis data includes more than 120,000 vessel arrivals, and integrates data from INTTRA, which compiles more than 800,000 container status messages a day.

C.H. Robinson to buy Phoenix International for $635M

C.H. Robinson Worldwide, a third-party provider of freight transport, will buy logistics company Phoenix International for $635 million, to include $571.5 million in cash and the remainder in stock. The $9.3 billion company, which contracts with 53,000 companies, is growing its global freight forwarding business.

"We see significant long-term opportunity in international forwarding as global trade expands, scale and technology continue to become more important, and shippers increasingly look to transportation providers to provide global services," said C.H. Robinson chief executive John Wiehoff in a statement.

Phoenix, which books air and ocean shipments for its customers, posted net revenue of $161 million in the fiscal year ended June 30. The logistics firm has more than 2,000 employees in 74 offices.

C.H. Robinson reported full-year revenue of $10.34 billion for the year ended December 2011.

For more of the Reuters story:

STX Dalian signs $330M deal to build four container ships

STX Dalian Shipbuilding Complex has signed a $330 million contract to supply four 9,200-TEU sized container ships to China International Marine Containers, STX announced Sunday.

Under the contract, the four container carriers will be built at the STX Dalian yard and delivered to CIMC, based in Shenzhen, by 2014. France's shipping giant CMA CGM will charter the containerships from CIMC, according to the STX statement.

The new deal brings the total orders received by STX Dalian to $2.2 billion this year.

Dalian is the Chinese shipyard of South Korea's STX Offshore and Shipbuilding.

Recovery teams reclaim 1000+ containers from Rena wreck

Rena wreck recovery teams, Braemar Howells and Unimar, have reclaimed 1003 containers from the sea. There are still 365 containers surrounding Rena or in the underwater stern section of the ship.

"We take our hats off to all those involved in the ongoing joint recovery effort - from the salvors, Braemar and Unimar staff, to Maritime New Zealand, support services companies, and many others,'' said Braemar operations manager Mike Richards

"The work of identifying containers from numbers on scrap recovered has been a huge behind-the-scenes task and has been carried out by specialists in distressed cargo,'' he said.

Salvage experts Resolve Salvage and Fire have removed more than 140 tons of steel from the bow section over the past seven days. The combined weight of steel removed is approximately 575 tons.

On-shore recovery teams continue work to remove plastic beads from Matakana Island.

For more of the Bay of Plenty Times story:


Wednesday, September 26, 2012

Top Story

Maersk Line to hike reefer rates by 30 percent in 2013

Maersk Line intends to hike rates on refrigerated containers by 30 percent, said Chief Executive Soren Skou at the Cool Logistics shipping conference in Antwerp on Tuesday.

Maersk Line will raise its rates for refrigerated containers, or reefers, by $1,500 per-FEU effective Jan. 1, according to material provided to Reuters.

Skou told conference attendees that for seven years Maersk's reefer rates have not kept up with inflation and over the past 18 months they have trailed increasing bunker fuel costs.

Skou said shipping industry profitability needed to rise and "the overall market outlook is very bleak," according to presentation material. He added that he knew the necessary decision would have a significant impact in the short term on markets and Maersk Line clients.

For more of the Reuters story:

Holiday sales to rise 2.5 percent, trade council predicts

The nation's shopping centers will likely experience a 2.5 increase to $463 billion in sales over the holidays, lower than last year due to economic uncertainty, according to a trade group forecast.

A combination of issues are on consumers' minds, including the presidential race, escalating gas prices and the looming fiscal cliff in January, which could all have an affect on holiday sales, the trade association said.

"Despite the cautiousness displayed in our forecast for the 2012 holiday season due to the uncertainty about the automatic spending cuts, Congress has a real opportunity to resolve the issue quickly and amicably to assuage consumer fears, which, in turn, could propel this season's performance far above ICSC's current expectations," said Michael Niemira, chief economist for the International Council of Shopping Centers.

Chain store sales should rise 3 percent to $112.6 billion during peak holiday season, the ICSC said.

For more of the Reuters story:

Port of Long Beach project to enhance on-dock rail

The Long Beach Board of Harbor Commissioners awarded a $36.8 million construction contract to Ames Construction last week for the Green Port Gateway, a project created to improve on-dock rail capacity at the Port of Long Beach.

The planned enhancements will reduce derailments and improve rail traffic flow to and from waterfront terminals, according to port officials.

"The Green Port Gateway is an important component of the port's overall modernization project [that] allow us to move cargo more efficiently," said Susan Anderson Wise, president of the board of harbor commissioners.

The project includes major track realignment and a new rail support yard. Existing tracks will be demolished and removed, then 29,000 linear feet of new tracks will be laid and 6,000 linear feet of retaining walls built.

Construction is scheduled begin in November and the project should be completed by July 2014.

For more of the Port of Long Beach story:

New German port first in country to accommodate VLCCs

Germany opened its first commercial deep-water port Friday in a move to bolster export shipping capacity.

Located on the North Sea coast near the city of Wilhelmshaven, the $1.3 billion JadeWeserPort is one of Germany's largest infrastructure projects and its only port equipped to accommodate the next generation of very large container carriers.

The nation's Hamburg port, its busiest, is located inland where VLCCs are unable to call.

For more of the Bloomberg story:

APL executive cleared of gun smuggling charges in Dubai

APL executive Steve Dolan, who was stuck in Dubai for months on gun smuggling charges, said he has been acquitted of all charges.

"The media attention, especially after it got to the Dubai media, forced this decision rather quickly," Dolan said in an email to Reuters today.

Dolan, a vice president for APL stationed in Dubai, said he faced up to 50 years in jail after authorities told him they found 30,000 knock-off pistols in a shipping container in fall of 2011. The container, which also carried liquid soap, was ostensibly switching ships in Dubai while on the way to Djibouti from Turkey.

Dolan, who has worked for APL for 28 years, said he and three of his coworkers were charged in February with gun smuggling and transporting weapons without a license. Dolan denied knowing anything about the guns and said he has been stuck in Dubai since February since authorities seized his passport until his case was decided.

Dolan stated he is expecting the return of his passport soon, and would return to the United States in four to six weeks.

For more of the Kansas City Star story:


Thursday, September 27, 2012

Top Story

Pacific Northwest grain operators prepare as ILWU strike looms

In the midst of tense labor negotiations and a contract due to expire in five days, managers of grain terminals in the Pacific Northwest are bracing for a longshoremen strike. Half of the nation's wheat exports flow through Portland and Puget Sound ports.

Four managers in the Portland region and two in the Puget Sound region appear to be preparing for a lockout, beefing up security and lining up non-union replacements, according to the Columbia River Steamship Operators Association.

"I'd anticipate nothing will move with union workers," if negotiators fail to agree, said Jim Townley, the association's executive director.

Neither side will comment on the status of ongoing talks.

Terminal operators want an agreement similar to one made in early 2012 at Export Grain Terminal in Longview, Wash., which lowers costs and ups efficiency at the expense of longshoremen's working conditions. That contract was preceded by weeks of heated protests that resulted in some demonstrators storming the terminal, assaulting a guard, and damaging rail cars.

The grain terminal operators assert they must have the same kind of deal to stay competitive with EGT.

A group of 10 current and retired longshoremen in the International Longshoremen and Warehouse Union are fiercely opposed to the EGT deal that bargained away workers' leverage, and expressed their anger in a June letter to ILWU's president and coast committeeman. Their main points of contention are that EGT gets to bypass the union and hire dockworkers directly, and can fire workers without cause. Further, EGT managers are allowed to bring in "scabs," or non-union workers, during times of disagreements with labor.

"It heads our union in the wrong direction at the wrong time," says the memo, leaked this month, "caving in to employer intimidation and greed just before we begin the Northwest Grain Handlers' contract negotiations."

Talks are occurring at the peak of harvest season, and farmers in the Midwest and Northwest are worried about the outcome of the talks, which involve terminals that handle about a quarter of U.S. grain exports, including wheat, corn and soybeans.

For more of the Oregon Live story:

Fraser Surrey Docks to handle U.S. coal

By Fred McCague, CBN Contributing Editor - Canada

Fraser Surrey Docks will soon begin loading coal to barges. The dock has applied to Port Metro Vancouver for a permit to build coal-handling facilities, and plans to handle up to 2 million tons in 2013 and 4 million in 2014.

The facility will have a maximum capacity of 8 million tons per year. All cargo will be loaded at the terminal's existing Berth 2, which will receive minor modifications in order to accommodate two 8,000-ton barges at a time.

The coal will be from U.S., likely from the Powder River basin in Montana and Wyoming, and will be shipped in bottom-dump cars via BNSF. The BNSF mainline to Vancouver passes directly by the terminal. 

The coal will be transferred directly to barges and towed 80 miles north to Texada Island, where there is an existing facility that already handles coal from a mine near Campbell River that is barged to the terminal.

Fraser Surrey Docks is a large container and multipurpose terminal that is currently handling steel, forest products, logs and agri-bulk cargo in addition to containers.

Former president and co-owner of Jensen Maritime, Sue Williams, retires after 30 years

Jensen Maritime announced the retirement of former president and co-owner Sue Williams today. Williams has spent more than 30 years providing strong leadership and guidance to the naval architecture and marine engineering firm.

Williams was hired at Jensen in 1980 as front desk manager. In 1981, a majority interest in Jensen was bought by a Norwegian firm, which later bought owner Ben Jensen's stake in the company after his death in 1983. Williams remained at Jensen, managing the fiscal affairs of the company, and was given a 5 percent stake in the successful firm.

Eventually Williams and other company employees bought out the Norwegians and Williams became the president and majority owner of Jensen in 1993 through 2005, when Jonathan Parrot succeeded her as president.

In 2008, Crowley Maritime bought Jensen and the two firms share an office on Seattle's Pier 17 today. Williams has remained on staff throughout the changes and in recent years served as Jensen's director of finance and business analyst.

"What many people don't realize is that Sue is truly a self-made woman. She worked very, very hard to build the foundation for the company that Jensen is today," said Johan Sperling, vice president of Jensen. "As one of the few women in this industry, she accomplished an incredible amount. It's important for us to take the time to celebrate her contributions to this company now that she's retiring."

Indonesia ferry and cargo ship collide; 8 dead

An Indonesia passenger ferry went down Wednesday after a collision with a South African-flagged ship thought to be carrying liquefied natural gas about four miles off Bakahuni port in Sumatra. At least eight people died and more than 200 were rescued.

Transportation Ministry spokesman Bambang Ervan reported 208 crew and passengers were evacuated after the accident.

The ferry collided with the ship about 40 minutes into its 90-minute journey Wednesday morning, said Heru Purwanto, an official at Bakauheni port on southern Sumatra. The ferry Bahuga Jaya links Java and southern Sumatra Island.

"The ferry went down so fast after the collision," Purwanto said. It sank 20 minutes after the captain sent a distress signal, enabling 10 merchant ships sailing nearby in the busy Sunda Straits to immediately start rescuing passengers and crew, he said.

He said the manifest showed the ferry was carrying 213 passengers and crew and 78 vehicles. It has an official capacity of 300 passengers and 70 vehicles, although manifests are notoriously unreliable because tickets are sold on board to passengers who don't end up on the official list.

The cause of the accident is unknown.

For more of the Huffington Post story:


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