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Summary for September 26 - September 30, 2011:
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Wednesday, September 28, 2011

Top Story

Maersk contends its next big ships won’t glut the market

The biggest container-shipping line is less than two years from delivery of what will be the largest containerships in the world, and it contends the mega-vessels won’t be the industry-wide standard amid concerns by some analysts that they could contribute to over-capacity in an already contracted global market.

“Generally, it will be only very few companies who will go for these ships," said Soren Andersen, director of Maersk Line’s vessel management team at an Informa Maritime shipping conference as reported by Reuters.

"I don't see a new industry standard emerging,” Andersen said in reference to Maersk’s order of 20 “Triple-E” 18,000-TEU ships that are scheduled for delivery between summer of 2013 and the middle of 2015.

Andersen said Maersk is one of the few shipping firms that have the financial wherewithal and market share to pull off building box ships of such scale.

"We have the market share size that justifies these ships ... We have the financial strength to do this," he said.

Maersk Line currently has 15.7 percent of global container-shipping market share, according to Paris-based consultancy Alphaliner.

The Triple-E ships will be the largest in the world and are scheduled for deployment in the Asia-Europe ship trade.

Andersen said the big ship order does not translate to “an aggressive market expansion.”

“We believe we are below the average of our competitors in [fleet] growth over the next three years and below the market growth.”

The new 1,312-foot-long ships cost $190 million each and are designed for lower emissions and fuel consumption amid an era of “slow steaming” by the major container-shipping lines.

"These ships are designed for slow speeds…we are not adding horsepower," Andersen said.

For the full Reuters story:

U.S. truck driver turnover rate hits 79 percent for Q2

The turnover rate for over-the-road truck drivers hit 79 percent for the second quarter this year, up from 75 percent in the previous quarter, according to the American Trucking Associations' Trucking Activity Report.

The latest statistics marked the third quarter in a row of increased driver turnover, rising to the highest point since the second quarter of 2008, the ATA report said.

"Even though the increase was small, we still believe the market for quality drivers is getting extremely tight and fleets are aggressively recruiting to fill their openings," said ATA Chief Economist Bob Costello in a statement.

"The slowdown of the economic recovery has affected the turnover rate, but if the economy continues to improve we'll see further tightening in the driver market and a renewed risk of a severe driver shortage," Costello said.

Turnover at small truckload companies and less-than-truckload fleets showed a reverse trend, dropping to 47 percent from 50 percent for small TL firms and to 6 percent from 8 percent for LTLs, according to the ATA’s statistics.

UP named rail carrier of the year by Owens Corning

The Union Pacific Railroad was named “Enterprise Carrier of the Year” by Owens Corning for the second consecutive year.

According to a news release, the award “recognizes carriers' extraordinary commitment to service, safety and operational excellence for Owens Corning.”

"Union Pacific was chosen to participate based upon its strategic importance to our transportation program and its level of commitment to our mutual success," said Wayne Johnson, manager of carrier relations at Owens Corning.

World Shipping Council elects new board members; retains Widdows as chairman

The World Shipping Council announced that at its meeting in Seoul last week, the election of new members to its board of directors, and the retention for another year of Board Chairman Ron Widdows, the outgoing president and CEO of Neptune Orient Lines.

Wan Min, managing director of COSCO Container Lines and Dr. Ottmar Gast, chairman of the executive board of Hamburg Süd, were elected to two-year terms on the WSC’s board.

Philip Chow of Orient Overseas Container Line (OOCL), Morten Englestoft of Maersk Line and Ulrich Kranich of Hapag-Lloyd AG, were re-elected to the board, the WSC said in a statement.

Other current WSC board members include: Thomas Crowley, Jr., Crowley Maritime Corporation; Rafi Danieli, Zim Integrated Shipping Services; Y.M. Kim, Hanjin Shipping; and Kenji Mizushima, NYK Line.

Thursday, September 29, 2011

Top Story

Westbound trans-Pacific lines to take “commodity-specific” approach to rates

A Peak Season surcharge for eastbound trans-Pacific containerized freight rates have reportedly been a struggle for shipping lines to realize, and now ocean carriers involved in the westbound trade are calling for a “commodity-specific” rate adjustment approach.

The executive administrator of the Westbound Transpacific Stabilization Agreement, Brian M. Conrad, said in a statement “that some westbound trans-Pacific rates have approached levels that are below carrier costs, and rate increases are necessary to make carriage of some cargo financially feasible.”

Conrad said the previous round of scheduled increases in July for the U.S. -Asia container-shipping market has experienced “limited success, and levels have eroded further since then.”

For example, a shortage of equipment in the refrigerated shipping market due to the movement of containers to other “more lucrative trades, coupled with higher purchase and lease prices,” has applied more rate pressure, Conrad said.

As a result, the WTSA members say they’re engaged in “an extensive review of rates” and plan to make adjustments on a commodity by commodity basis that looks at: “prevailing rate levels, competitive considerations and overall market conditions.”

The WTSA said many of its proposed rate adjustments would take effect November 1, 2011 and will be posted on the group’s website:

The WTSA said in statement that its rate reviews are being conducted by liner subcommittees “with significant expertise and market participation in the specific commodity areas.”

The initial cargo segments under review, according to the WTSA, include: wastepaper, metal and plastic scrap, protein cargo (refrigerated beef, pork and poultry), hay, hides, agri-products, chemicals, clay, forest products, dry miscellaneous “freight all kinds” (FAK) cargo, and refrigerated “not otherwise specified” (NOS) cargo such as dairy products, baked goods or other prepared foods that are not covered under any commodity-specific review.

The carrier group said a separate rate program for cotton is being developed for a different season. “We’re hoping that market fundamentals will be more supportive of rate improvement in the coming months as we move into the winter period when westbound volumes typically start to improve,” Conrad said.

The WTSA members are: APL, Ltd., Hyundai Merchant Marine Co., Ltd., COSCO Container Lines, Ltd., Kawasaki Kisen Kaisha, Ltd. (K Line), Evergreen Line, Nippon Yusen Kaisha (N.Y.K. Line), Hanjin Shipping Co., Ltd., Orient Overseas Container Line, Ltd., Hapag Lloyd AG, Yang Ming Marine Transport Corp.

Ace Hardware to build $14 mil East Coast import facility in Virginia

Ace Hardware Corp. announced it will invest $14 million to establish what it terms its “East Coast import re-distribution center” in Suffolk, Virginia.

The 336,000-square-foot “build-to-suit” location will be at the CenterPoint Intermodal Center, the hardware company said.

“We’re confident that the Ace Hardware Import Re-Distribution Center in Suffolk will allow us to more efficiently ship goods to our East Coast retailers—and ensure that they will be able to continue providing superior service to their customers,” said Tim Duvall, supply chain director for Ace in a statement.

“Fifty-four small business owners across Virginia own stores that belong to the Ace Hardware cooperative, and these independent owners employ hundreds of Virginians,” said Jim Cheng, Virginia’s Secretary of Commerce and Trade. “The cooperative also employs 275 people at its regional distribution center in Prince George County. We welcome the expansion of such a valued Virginia employer into the City of Suffolk,” the Secretary said.

Ace Hardware company says it currently has more than 4,500 independently owned stores across the U.S.

Sources: PANYNJ director to resign

The executive director of the Port Authority of New York and New Jersey, Christopher Ward, will reportedly resign his post effective the end of October, according to sources cited in a New York Times report.

Under Ward’s watch the World Trade Center site development was reportedly re-jumpstarted along with a major toll increase on all Hudson River crossings.

Ward has been the port authority’s chief since 2008 and was appointed by then-Governor David Patterson.

Current Governor Andrew Cuomo must now make two new significant appointments, as the chairman of the Metropolitan Transportation Authority, Jay Walder, is also leaving that post next month, the Times reported.

For the full NY Times story:

JIMCO Group opens trans-load bulk facility at Port of Charleston

The Port of Charleston announced JIMCO Group has opened a trans-load bulk facility there to facilitate the industrial services company’s agricultural and related exports.

The port said JIMCO’s new facility is located adjacent to the North Charleston Terminal at the South Carolina Public Railways’ Remount Road facility where its freight will be trans-loaded from rail and truck for containerized ocean shipment to international markets, including Asia.

“Our new Charleston facility gives farmers, agricultural interests and other bulk cargo shippers a new, cost-effective way to get their product to overseas buyers through a productive, deep-water port,” said Jimmie Collins, president and founder of JIMCO.

Longshoreman survives 40-foot fall into cargo hold at Port of Savannah

A longshoreman survived a fall of more than 40 feet into the hold of a cargo vessel at the Port of Savannah, Georgia on Wednesday night, according to the Savannah Morning News.

The 34-year-old victim was working at the port’s Ocean Terminal, and was reportedly found conscious by 10 Savannah Fire Dept. rescuers who rode a container crane over to the ship and used a basket to lift the fallen longshoreman to safety when he was subsequently treated his for injuries.

For the Savannah Morning News story source:



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