Cargo Business Newswire ArchivesSummary for September 28 through October 2, 2015:
Monday, September 28, 2015
U.S. to host meeting this week in effort to wrap up TPP
The U.S. has called ministers from the 12 nations negotiating a Pacific trade deal for a meeting Sept. 30 to Oct. 1 to finish the pact, a cornerstone of the U.S. administration's engagement with Asia.
The Trans-Pacific Partnership seeks to cut trade barriers and set common standards for 40 percent of the world economy and would be a legacy-defining achievement for U.S. President Barack Obama.
The U.S. Trade Representative said in a statement that ministers would meet in Atlanta. Chief negotiators from countries including Chile, Australia, New Zealand, Malaysia and Brunei will meet from Sept. 26-29.
"Trade ministers and negotiators last met in July and have been making good progress toward resolving the limited number of outstanding issues," USTR said in a statement.
The last ministerial talks, in Hawaii, stumbled over dairy trade, monopoly periods for next-generation, biologic drugs and rules of origin for autos.
Officials close to the negotiations said on Wednesday that two days of talks on the threshold for local content in auto trade between the United States, Canada, Japan and Mexico had made progress, and they aimed to reach a final deal this week.
SC Line starts service from Port Everglades to Cuba
Florida based shipping company SC Line recently started a new era not only for the Cuba-U.S. relationship but also for world trade. On September 20, the Caroline Russ berthed at the Mariel port in the first commercial voyage of the new normal.
SC Line will serve the Cuban seaports of Mariel and Santiago every two weeks on a route with calls in Florida, Cuba, Panama and Colombia. The Caroline Russ can carry shipping containers, vehicles, breakbulk and other varied cargo.
"We're ready to respond to customer volume. We could add bigger ships, more ships or weekly service if needed," said Jose Pardo, chief marketing officer from company offices in Panama.
Port Everglades already has shipping service to Cuba from Crowley Maritime, the Jacksonville-based line authorized since 2001 to ship food, humanitarian supplies and other approved items to the island. Crowley typically serves Cuba's new container port at Mariel weekly.
Shipments to Cuba have been limited under the 5-decades-old U.S. embargo against the island. But trade now is poised to grow, as the Obama administration since Dec. 17 has adopted a new policy of engagement to Cuba that punches more holes in the embargo.
Starting with the arrival of the Cap Palliser voyage 540 on October 15, Hamburg Süd will add fortnightly calls at the port of Corinto, Nicaragua to their Pacific Coast-West Coast of South America service.
Additionally, port calls in Mexico will move from the port of Manzanillo to the port of Lazaro Cardenas commencing with the Cap Patton voyage 541 on October 17.
Wilhelmsen Ships Service to acquire rope company
Wilhelmsen Ships Service has made a deal to acquire TIMM AS, is a leading provider of high performance ropes with five distribution hubs worldwide.
"The Timm acquisition reinforces our position as a global player within marine products," says Bjørge Grimholt, president of Wilhelmsen Ships Service.
Timm has been in business for more than 240 years and has gained a firm foothold in the merchant fleet, especially in the European market. The owners of the company are Christian Krefting (through Krefting AS), Jacob Stolt-Nielsen (through BSN AS) and Managing Director Tore Strand (through Skarbu AS).
"Timm…is a renowned brand with high quality products, which is a good fit with our global supply and service network. We have significant synergy potential going forward," said Grimholt.
Cargo ship runs aground in German canal
The general cargo ship Ofmar ran aground in Germany’s Kiel Canal on its way from Estonia to Morocco. During the evening passage of the canal, in the western direction, it ran into an embankment and became stuck in the mud and rocks.
The Turkey-flagged vessel was reportedly refloated by a harbor tug and went on to Brunsbuettel on its own.
The Ofmar will be inspected before being released to resume its voyage.
Local authorities will investigate the cause of the accident.
Massive Inland Empire logistics development faces legal challenges
Photo credit: Bob Riha Jr./Reuters
A huge prospective logistics development planned for the city of Moreno Valley in Southern California is facing legal challenges that claim the project falls short of environmental standards, according to The Wall Street Journal.
As of Wednesday, eight separate groups had filed lawsuits against Moreno Valley, the future site of the massive 2,600-acre World Logistics Center east of Los Angeles in the Inland Empire.
A large portion of imports that come through the ports of Los Angeles and Long Beach are routed to Inland Empire warehouses in cities like Moreno Valley to be sorted and loaded onto trucks and trains destined for other parts of the country.
The city approved the $3 billion project last month, which would include 40.6 million square feet of warehouse space — a giant development by industry standards.
Southern California has struggled for decades to manage extreme air pollution and related public health problems. Real estate development must satisfy requirements under a strict statewide law known as the California Environmental Quality Act, or CEQA, which requires a detailed, public report on the environmental impacts of any project. That law is behind the challenges filed in Moreno Valley.
The litigants — Riverside County, the region’s air quality regulatory body, several environmental advocacy groups, transportation officials and the Laborers International Union of North America — say the city should not have approved the project because its environmental impact report didn’t adequately take into account the community’s public health concerns.
The lawsuits ask the Riverside Superior Court to invalidate the city’s approval and enjoin the city and the World Logistics Center developers from proceeding with the project.
"We’re asking the city to engage in this land use decision responsibly," said Yana Garcia, a lawyer with public interest law firm Earth Justice. "Our position and our clients’ position is not anti-growth, anti-jobs or anti-industry. What we’re asking for is responsible growth."
Representatives for the city and Highland Fairview, the real estate developer behind the project, didn’t immediately respond to requests for comment Wednesday.
Container shipping rates dropped again this week, with declines on the Shanghai-Europe routes falling by record amounts, according to the latest Shanghai Containerized Freight Index.
The SCFI for Far East-to-North Europe dropped by a staggering 31 percent, losing $143 per-TEU to finish the week at $313 per-TEU. The rate to the Med also finished at $313 per-TEU, one of the first times that the southern gateways have charged a similar rate to Europe's northern ports.
The Far East to Med route decline represented a drop of 30 percent, or $135 per-TEU. The decline represents a potential loss for shipping lines operating ultra large container ships of $2.4 million on a single voyage.
The depth of the rate loss will be of major concern to shipping executives preparing for China's seven-day public holiday known as Golden Week. The week begins October 1, when China’s factories close down, causing a temporary drop in demand.
It appears from the SCFI report that the rate restoration program announced by some carriers for implementation on September 20 was either abandoned altogether or failed to gain traction.
OOCL had planned to increase rates to $500 per-TEU, while Hapag-Lloyd said it would seek a $950 per-TEU general rate increase on all westbound shipments to North Europe and Mediterranean ports to be applied on October 19. The attempts to force rates up to more sustainable levels will soon be accompanied by a series of blank sailings announced by carriers over the past week.
The 2M alliance, run by Maersk and MSC, has cancelled next week's AE6 sailing, the AE1 sailing in week 41 due to depart Shanghai on October 7 and the AE5 and AE2 sailings in week 42, departing Shanghai on the October 12 and 13 respectively.
Similarly, the Ocean 3 Alliance has cancelled the FAL23 and FAL12 in week 41 and the FAL8 the following week. The G6 Alliance has also cancelled its Loop 6 next week, Loop 7 the week after, Loop 4 in week 42 and Loop 5 in week 43.
Porsche Cars North America announced it has selected JAXPORT as its port of entry for new Porsche vehicles bound for dealers in the Southeastern U.S., effective October 2015.
"Porsche conducted an extensive bid process, and found JAXPORT and the selected processing company, AMPORTS, offered the optimum combination of efficiency, quality, and service," said Howard Chang, PCNA vehicle logistics manager. "We thank the processor, the port, and the Florida Department of Transportation for their responsiveness to our needs."
In February, Volkswagen Group of America announced the move of their import facility for cars and SUVs and its Southeast U.S. distribution operations to Jacksonville. Porsche vehicles travel on the same vessels as Audi, Bentley, and Volkswagen vehicles bound for the region.
"We are grateful for Porsche’s confidence in us and we are proud of the work done by our tenants, partners and employees," said JAXPORT CEO Brian Taylor. "All of us at JAXPORT are dedicated to reinforcing our reputation for vehicle-handling each and every day and announcements like this are the reward for our continued commitment to excellence."
CEVA shortens transit times for LCL exports
CEVA Logistics announced changes to its U.S. LCL export system that have cut up to 14 days from the total transit times offered by other operators.
CEVA has nearly doubled its own Container Freight Stations network, according to a company statement, from 26 to 48 locations, replacing a number of outsourced locations. It has also switched collections from shippers, and freight transfers to its own stations at the ports of loading, to its own road vehicle operation, CEVA Ground.
As a result, CEVA says it now has total control over all LCL freight shipments from their origin in any U.S. zip code, to its loading facilities at the ports of New York, Miami and Los Angeles.
Combined with CEVA’s use of road transport instead of rail, CEVA reports it is now cutting 14 days from New York-Shanghai transit times, 8 days from Atlanta-Singapore, 7 days from Los Angeles-Santos and an average 7 days from all its global LCL destinations.
"We have expanded from 26 to 48 receiving and rating warehouses in the USA for LCL exports," said CEVA Global LCL Director Greg Scott. "These 48 warehouses are all CEVA facilities, and all movement from those warehouses to the CEVA port loading locations is via an all-motor, CEVA owned-and-operated truck network."
Port Canaveral head resigns under pressure
Port Canaveral has started a nationwide hunt for a new CEO after its current top executive agreed to resign under pressure.
Port Canaveral CEO John Walsh said Wednesday that he would resign in January after two Port Authority commissioners indicated they were prepared to fire him.
Walsh had been criticized recently for making disparaging remarks about opponents. Earlier this month, he apologized for calling the opponents of a new port rail project "Luddites."
Walsh became CEO in 2013 after working as a deputy executive director for two years.
The ports operator DP World is in talks with Panama ahead of the completion of the country’s expansion of its key trade conduit, the Panama Canal.
Panama officials including Isabel Saint Malo, the vice president and foreign minister, continued discussions in Dubai with DP World and Emirates Airline that had begun with the country’s prior government.
The discussions centered on Panama building up infrastructure to meet an expected increase in trade volumes, due to the widened canal.
"Panama has several port operations but we have the potential to build several more," Saint Malo said. "And the model DP World has is a model that Panama is interested in. So, there are different areas where the two can cooperate in terms of building the facilities, in terms of running the facilities [among other areas]."
DP World manages about 65 marine terminals around the world, including in Latin America, where it has operations in Argentina, the Dominican Republic and Peru.
The expanded Panama Canal, expected to start operations in January of 2016, will help reduce the cost of trade by allowing larger vessels with a capacity of up to 13,500 TEUs to pass through. The current capacity is for 5,000-TEU ships.
"That is enough for LNG transport which, currently, we do not have the capacity for, and will help commerce in general," said Saint Malo. "In terms of trade, cost is critical and larger vessels give the opportunity of diminishing the transportation cost of goods."
The deadline for completing the $5.25 billion expansion has already been delayed several times. The original target date for completion was last month.
International Container Terminal Services, Inc. has reported unaudited fiscal results for the first half of 2015, posting revenue from port operations of $552.1million, an increase of eight percent over the $510.3 million reported for the same period of 2014.
The company posted an EBITDA of $237.4 million, 12 percent higher year-over-year; and net income attributable to equity holders of $100.4 million, down one percent over the $101.7 million earned in the same period last year. ICTSI said 2014 was a higher income year due to several one-time transactions, primarily capital gains.
ICTSI handled consolidated volume of 3,888,130 TEUs in the first six months of 2015, nine percent more year-over-year. The terminal operator said the increase in volume was in part due to the volume ramp-up at terminals in Manzanillo, Mexico and in Puerto Cortez, Honduras; new shipping line contracts/services at Pakistan International Container Terminal in Karachi, Pakistan; and the contribution of the company’s new terminal, ICTSI Iraq, in Basra, Iraq that began commercial operations in November 2014.
The company’s eight key terminal operations in Manila, Brazil, Poland, Madagascar, China, Ecuador, Pakistan and Honduras, which accounted for 77 percent of the group’s consolidated volume in the first half of 2015, grew six percent compared to the same period last year.
For the quarter ending June 30, 2015, total consolidated throughput was five percent higher at 1,905,357 TEUs compared to 1,808,928 TEUs in 2014.
Hapag-Lloyd to raise $500M in stock market flotation
German shipping line Hapag-Lloyd is planning to raise $500 million in a stock market flotation, the company said Monday.
The globe’s fourth largest container liner intends to sell new shares worth $400 million, while two existing shareholders — Kuehne Maritime and CSAV — are placing orders of $50 million each.
"This move will give us better access to the capital markets which will enable us to further invest in our business to become more competitive," said Hapag-Lloyd Chief Executive Rolf Habben Jansen.
The company, which may be valued at more than $5.6 billion in the IPO, is the latest German company to announce plans for an initial public offering in recent days, following automotive supplier Schaeffler, Bayer's plastics business Covestro, building materials maker Xella and online classifieds group Scout24.
The companies are seeking to take advantage of robust equities markets, but Hapag-Lloyd has adjusted its IPO volume in response to recent market wobbles, sources familiar with the deal said.
"Hapag's shareholders opted to float the smallest possible stake to avoid offering more than investors are willing to buy and having to scrap IPO plans," said one source.
IPOs with a volume of less than 5 million euros are generally regarded as providing too little liquidity and are therefore avoided if possible.
Baltic Exchange main sea freight index remains static
The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry bulk commodities, remained unchanged Monday.
The overall index, which factors in average daily earnings of capesize, panamax, supramax and handysize dry bulk transport vessels, remained flat at 943 points.
The capesize index was up 51 points, or 2.52 percent, at 2,075 points. Average daily earnings for capesize vessels, which usually transport 150,000-ton cargos such as iron ore and coal, increased $244 to $14,916.
The panamax index dropped six points, or 0.81 percent, to 738 points. Average daily earnings for panamaxes, which usually carry 60,000- to 70,000-ton cargoes of coal or grain, fell $49 to $5,913.
Among smaller vessels, the handysize index dropped six points to 402 points and the supramax index fell 9 points to 724 points.
Chemical contamination is likely to increase the cost to insurers of last month's blasts in the Chinese port of Tianjin, costs that are already expected to exceed $3 billion, insurance specialists say.
While Chinese insurers are likely to bear the burden, global insurers and reinsurers are also expected to set aside reserves for the quarter ending in September to cover any payouts for the Aug. 12 explosions, which killed more than 160 people.
Zurich Insurance said last week a $275 million loss from Tianjin was partly responsible for the decision to pull the plug on its $8.5 billion bid for rival RSA.
Reinsurance broker Guy Carpenter has said so-called insured losses from the blasts could be as much as $3.3 billion, based on satellite images of how buildings, cargo, containers and property around the port were hit. However, the estimates do not include contamination cleanup costs.
Singapore launches fund to build LNG-fuelled ships
Singapore has launched an $8.4 million fund for companies to build LNG- fuelled ships, as the city-state encourages LNG use while also trying to maintain its position as the top-ranked bunkering hub in the world.
Companies would be able to tap the fund for up to $1.4 million per vessel, according to the port statement.
Qualifying companies must be incorporated in Singapore and the vessels must be flagged under the Singapore Registry or licensed for activity in Port of Singapore for at least five years.
The port also solicited proposals from LNG bunker suppliers in late July in a step towards meeting its own deadline of supplying the super-chilled fuel to ships by 2020.
Port Logistics Group named one of America’s fastest growing companies
Port Logistics Group announced it has been recognized in Inc. magazine’s ranking of the nation’s fastest-growing private companies.
"We are very pleased to be included in this elite group of fast-growing private companies," said Greg Morello, chief marketing officer for Port Logistics Group. "Our expansions into Seattle and Savannah, as well as strong organic growth in our core LA/Long Beach and New Jersey markets, have allowed Port Logistics Group to maintain an above-market average growth rate."
The top companies were featured online and in the September issue of Inc., according to the statement. The average company on the list achieved a three-year growth of 490 percent. The Inc. 5000’s aggregate revenue is $205 billion, generating 647,000 jobs over the past three years.
Port Metro Vancouver warns companies to pay truckers
Container trucking companies at Port Metro Vancouver have been warned by the province that they should pay drivers proper wages and retroactive pay or be prepared to face the consequences.
Provincial Transportation Minister Todd Stone said Tuesday that six audits conducted by the trucking commissioner’s office all concluded companies were not paying their drivers the retroactive rates they had agreed to in March 2014 as part of a settlement with the federal and provincial governments that ended a strike at the port.
"So we’ve served notice to every single company out there — there’s no excuse for not having paid your truckers what the rate regulation requires," Stone said. "That is the law. And if it is determined through one of these audits that a company is in non-compliance, there will be sanctions."
The range of sanctions could include fines or a suspension from operating at the port, said Stone. Thirteen audits are currently underway.
Stone’s ministry would not reveal the names of the trucking companies, how much money is owed to truckers, or how many truckers are involved.
Crowley ship provides assistance to Cuban rafters off Key West
The Crowley-managed Philadelphia Express recently provided assistance to nine Cubans on a makeshift raft adrift near Key West, Fla., according to a company statement.
As the ship was en route from Houston, Texas to Savannah, Ga., crewmembers spotted the raft with people aboard waving in distress. Captain D.A. Sulin, master of the 3,237-TEU container ship, began circling back and notified U.S. Coast Guard Sector Key West of the situation.
Upon order from USCG, the Philadelphia Express passed close to the raft and was asked to stay on scene in order to prevent other large vessel traffic getting to close to the raft and to calm the raft’s occupants until the USCG response vessel could arrive.
The eight-foot long by five-foot wide raft was made up of large blocks of Styrofoam and was floating very low in the water with less than a foot above the waterline.
Once the USCG arrived on scene, Crowley said Philadelphia Express was released from her standby duties and continued her course towards the port of Savannah.