Cargo Business Newswire ArchivesSummary for September 29 through October 3, 2014:
Monday, September 29, 2014
Hamburg Süd and United Arab Shipping Company make a deal
Hamburg Süd and United Arab Shipping Company announced they have signed a global agreement to cooperate on several of their respective core trades.
"This cooperation will enable Hamburg Süd and UASC to complement each other’s core services and networks, offering both lines’ customers a more comprehensive global reach and reliable services without incremental investment in new tonnage," said Dr. Ottmar Gast, chairman of the executive board of Hamburg Süd. "Hamburg Süd and UASC customers will benefit from the companies’ deployments featuring highly efficient and environmentally friendly vessels."
Hamburg Süd will enter the Asia-North Europe and Asia-U.S. trades in December 2014 and January 2015, respectively, while UASC will enter the Europe-South America East Coast and Asia-South America East Coast trades effective from mid-2015, the statement said.
"In today’s challenging marketplace our customers deserve more opportunities, better services and improved efficiencies," said Jørn Hinge, president and CEO of UASC. "Through partnerships with leading operators such as Hamburg Süd, and investment in some of the largest and most eco-efficient container vessels ever built, UASC ensures that customer service remains at the very heart of our operations."
Initially, the cooperation will be in the form of slot exchanges, the companies said, and vessel-sharing opportunities will be explored in the future along with greater geographic scope for the agreement. Both carriers said they intend to explore other areas of collaboration going forward.
Ports chief: Georgia can unseat NY/NJ as top East Coast container port
Curtis Foltz, executive director of the Georgia Ports Authority, said Thursday he's convinced the Port of Savannah could someday overtake New York as the busiest seaport for containerized cargo on the East Coast.
The Savannah port moved a record 3.1 million TEUs in the fiscal year that ended June 30. It was only eight years ago that Savannah achieved the 2-million-TEU-cargo milestone.
"It's time to look toward 4 (million)," Foltz said in his annual port update to an audience of 1,300. "It's time to grow and become No. 1 on the East Coast. Something that was unfathomable probably a decade ago, I think, is something that's at least within our sight."
Savannah is the fourth busiest container port in the U.S. and the second busiest on the East Coast. The Georgia port needs to fill quite a gap before it can catch up to the 4.2 million TEUs handled by the Ports of New York/New Jersey over the same fiscal period, a figure that is 35 percent higher than Savannah’s record volumes.
Foltz said the Port of Savannah plans to keep expanding and that the Georgia Ports Authority will invest $1.3 billion in the next 10 years to increase its capacity from being 4.5 million TEUs to 6.5 million by 2024.
Average long-haul truck driver pay might rise as much as 6 percent in 2014, according to Kenny Vieth, president of Americas Commercial Transportation Research Co., which would be an annual increase second only to 2005’s 7 percent.
Long-haul truckers transport approximately 38 percent of the $840 billion U.S. freight market. The driver shortfall now exceeds 214,000, according to FTR Associates data compiled by Bloomberg.
Surging cargo volumes are increasing the urgency to fill those vacancies. Freight tonnage rose in six of 2014’s first eight months, according to a seasonally adjusted index from the American Trucking Associations, and is at the highest since 1973.
Trucking companies have responded by boosting wages. U.S. Xpress Enterprises Inc. announced a 13 percent average wage increase in August, more than four times the industry-wide increase for 2013. The pay raise bested Con-way Inc., Celadon Group Inc. (CGI) and others that have raised pay to keep their trucks on the road.
"You have the early stages of what could be a wage war," said John Larkin, a Stifel Financial Corp. analyst in Baltimore. "It’s hard for others to stand pat and not take pay up."
U.S. Xpress would add 800 trucks to a 7,000-strong fleet if it could find people to drive them, Chief Operating Officer Eric Fuller said.
"We’re seeing anywhere from 5,000 to 8,000 orders a week that we’re turning down that our current customers are actually offering us," Fuller said in a phone interview. "We’re turning those down because we don’t have capacity."
Maersk and other carriers assist UN program to prevent piracy
The Joint Shipping Initiative, which includes Maersk, Shell, BP, Stena, NYK, MOL and "K" line, has contributed $1.5 million in additional funds to a United Nations Development Programme project to fund a Somalia anti-piracy project.
"Piracy is a global problem that takes root in limited economic opportunities, high youth unemployment rates and poor infrastructure," said Jens Munch Lund-Nielsen, Maersk’s head of emerging markets projects in group sustainability. "The problem requires a land-based solution."
UNDP and the initiative are working to prevent the lure of piracy by offering alternative job options to Somali youth and more security for seafarers.
"Somalia has one of the world’s highest rates of youth unemployment. Nearly 67 percent of young people are unemployed," said UNDP Somalia Country Director George Conway. "To reverse this reality, we work with local authorities and community groups to identify sustainable solutions – such as infrastructure projects, livelihoods trainings, or reintegration projects – and tailor our support to match the need."
Initiated by Shell in 2013, the Joint Shipping Initiative’s first donation of $1 million helped expand the market building in Adado – a town in central Somalia – creating hundreds of jobs for retailers and improving infrastructure, including building a road to link the isolated Hafun peninsula with the rest of the country - a project that generated hundreds of temporary jobs.
Training courses in skills such as computing, plumbing, building and clothes-making have been set up to help Somali youth find work, or set up businesses themselves with the help of small grants.
2 FBI employees killed after boat hits barge in Ohio River
Two employees of the FBI in Cincinnati were killed late Thursday when their 19-foot boat crashed into a huge barge traveling down the Ohio River between Cincinnati and Newport, according to a Cincinnati fire official.
It appears the boat crossed in front of the barge just after 11 p.m., said Cincinnati District Fire Chief Lou Arnold. He said the barge captain was at the wheel and saw the entire incident.
"He was looking right out the front watching what was going on. It was a big barge," Arnold said early Friday. "The (pleasure boat) just crossed right in front of them and slammed into the barge. We can only assume they didn't see it."
The U.S. Coast Guard and the Louisville office of the Kentucky Department of Fish and Wildlife Resources will investigate the incident.
Port congestion has hit the news lately, but the reasons for it varies widely in different regions and may be a short-term issue in some areas, according to the latest issue of Container Insight from Drewry Maritime Research.
Drewry also concludes that since the recent port bottlenecks have been reported in Asia, North Africa, North Europe and the U.S., the problem is not solely due to problems in emerging or developed markets.
The analysts say reasons for port slowdowns in various regions include labor strikes, fear of strikes, adverse weather conditions, and port infrastructure upgrades and repairs. Off-schedule ships, particularly the mega-ships that are slow sailing to save costs, is also a factor.
There is evidence of a more chronic problem at ports where three shipping lines have imposed congestion charges over the last five years—Tunisia, Venezuela, Bangladesh and the Philippines.
U.S. ports are also among those from which a congestion surcharge could be levied by carriers, but only in the event a labor slow down or work stoppage.
Looking ahead, Drewry researchers say three world regions are projected to see double digit increases in their average regional terminal use by 2018: Greater China, West Africa and Southern Africa. Of these, they note Greater China is clearly highly significant given the scale of volumes in the region (198 million TEUs in 2013 compared with just 8.4 and 5.4 million TEUs, respectively, in the two African regions).
Other regions forecast to see a marked increase in average utilization levels are the West Mediterranean, North Asia, South East Asia and East Coast South America, with increases in the 7-10 percent bracket, according to the report.
In conclusion, Drewry forecasts that short-term port congestion will always occur in certain places but in the long-term, several global regions will need to be monitored because their proclivity for congestion will likely increase significantly over the next 5 years.
Picketers block worker entry to process Zim vessel at Oakland port
A group protesting Israel’s military action in Gaza demonstrated at the Port of Oakland Saturday to stop the Zim Shanghai from unloading, and prevented dockworkers and clerks from entering the terminals to process the vessel. In the end, the ship went on to Los Angeles with its cargo still on board, according to SF Gate.
About 200 demonstrators picketed outside several of the port’s gates, said Steve Zeltzer, part of the Stop Zim Action Committee, which is organizing the protest. The action follows similar protests last month in California and Florida ports. In a previous incident, protesters prevented the Zim Piraeus from unloading at the Port of Oakland for five days, The Guardian reported.
"I think it was a big victory today for those who are opposed to the policies of Israel in Gaza," he said. The group also returned to the port later Saturday in preparation for the longshore workers’ evening shift.
Some accused the union of colluding with the protesters, but the ILWU said it has no affiliation with the groups and said its leadership and membership have taken no position on the Israel/Gaza conflict.
According to a statement from the International Longshore and Warehouse Union, Saturday evening at 6:00 p.m., the longshoremen and clerks from ILWU locals 10 and 34 sent to work the vessel ZIM Shanghai at SSA’s Oakland California Terminal were met with hostile demonstrators, effectively blocking all access to the terminal.
Union members trying to report to work were threatened physically at some points of entry and their personal vehicles were physically blocked, the statement said. Consequently, all personnel stood outside of the demonstration perimeters for health and safety purposes, and at approximately 8:00 p.m. SSA released all personnel from work, according to the ILWU.
The picketers said they were protesting against Israel’s 50-day military intervention in Gaza this summer, which is said to have caused almost $8 billion in damages and killed more than 2,000 Palestinians, according to The Guardian.
Info-sharing agreement between L.A.-Long Beach ports in the works
The Long Beach harbor department staff are drafting a discussion agreement between the ports of Long Beach and Los Angeles, which would need Federal Maritime Commission approval, to allow information sharing without antitrust violations.
The agreement would include the ability to talk about port congestion, truck turn times, limited gate hours of operation and the PierPass Traffic Mitigation Fee.
"We have some serious challenges within our port complex that are not just in Long Beach, but impact L.A.," said Commissioner Rich Dines. "This is an opportunity for the ports to sit in the same room and talk about the challenges we have."
Port of Seattle manager indicted for stealing over $100K
A Port of Seattle manager has been charged with felony theft for allegedly stealing $117,000 in public money.
Maleaka Jones, former manager of the port’s credential center, is accused of stealing payments made by workers at Sea-Tac International Airport and elsewhere who lost their security badges.
State auditors examined the port’s cash-handling safeguards and found them inadequate. A state auditor’s report blamed the Port of Seattle for failing to create a system of checks that would have prevented thefts by a single rogue manager.
LTL carrier Con-way Freight will increase current pay rates effective January 4, 2015 and reduce the time it takes for drivers to reach top pay scale, according to today’s statement from parent company Con-way Inc.
The enhancements will increase pay for Con-way Freight drivers system-wide while aligning all locations across the network to pay rates competitive for their geographic market, the company said.
The statement said that all locations would be aligned to a common schedule in which drivers will reach top scale three years from date of hire. On January 4, all eligible drivers will be adjusted to the applicable new pay rate aligned with their service time.
"Our LTL company, along with Con-way Truckload, is facing the most pronounced driver shortage we’ve ever seen," said Douglas W. Stotlar, president and CEO of Con-way Inc. "Con-way Freight provides premium service, and the skill and professionalism of our drivers enables us to keep the promises we make to our customers. This action benefits our people, our customers and our shareholders, and is supported by the improved profitability and efficiencies being delivered by Con-way Freight’s 21,000 employees."
The announcement comes on the heels of 110 truck drivers at a Con-way Freight terminal in Laredo, Texas voting to be represented by the Teamsters union, according to USA Today.
"We are committed to being the employer of choice for professional drivers," said Greg Lehmkuhl, president of Con-way Freight. "Our simplified pay structure enables us to more effectively align driver pay with the market-based cost of labor, and provides increased flexibility to react to market conditions over time so we can ensure our drivers’ compensation remains competitive."
Port of Seattle and Corps of Engineers split $3M dredging study cost
The Port of Seattle announced a deal with the U.S. Army Corps of Engineers yesterday to split the costs of a $3 million feasibility study to research potential port deepening alternatives.
The Corps’ preliminary March 2012 report said there is federal interest in deepening Seattle Harbor’s East and West Waterways, the port statement said, and the study will determine if it is economically sound.
Seattle District Commander Col. John Buck and Port of Seattle CEO Tay Yoshitani signed the agreement.
"The Port of Seattle greatly appreciates the Corps of Engineers in starting this study," said Yoshitani. "This is another step in keeping the Pacific Northwest a competitive trade gateway, and keeping thousands of local jobs here."
The port said authorized waterway depths are currently between -34 and -51 feet mean lower low water (MLLW). The study will consider depths of -55 feet MLLW, investigating economics, cost, risk, environmental aspects, cultural resources, fish habitat, endangered species, geotechnical, coastal engineering and cost engineering.
The study should be complete within three years, according to the statement.
MSC alliance to save Maersk $350M annually
The 2M alliance, Maersk Line's shipping proposed vessel-sharing agreement with Mediterranean Shipping Company, will save the Danish shipping giant $350 million a year in reduced costs, according to Maersk presentation to analysts last Wednesday.
2M, which is pending regulatory approval, combine the resources of the two top container shipping companies in the world and involve all major shipping routes.
Analysts had forecasted savings for the A.P. Moller-Maersk subsidiary at $400 million.
The Port of Savannah has doubled its Toyota export business, now that the company is shipping Highlander SUVs to Australia and New Zealand through the port’s Ocean Terminal, according to the Georgia Ports Authority.
"The efficiency and world-class customer service at our roll-on/roll-off facilities in Savannah and Brunswick have made GPA a trusted name in the movement of vehicles and heavy equipment," said Curtis Foltz, GPA executive director. "Combined, our terminals moved more than 700,000 cars, trucks and tractors last fiscal year, and we’re on track to beat that record in FY2015."
Toyota started exporting Venza crossovers through the Port of Brunswick to Eastern Europe a year and a half ago, the statement said.
"The collaboration among the GPA, WWL, Vehicle Services Americas, and Norfolk Southern with Toyota made this move from concept to reality within an incredibly abbreviated time frame," aid Corinne Akahoshi, national manager of marine logistics operations at Toyota Motor Sales, U.S.A., Inc. "We had great confidence that with the GPA as a partner, the project would get done."
The port authority said the Highlander vehicles will arrive in Savannah via Norfolk Southern, and staged at Ocean Terminal prior to export. The GPA recently completed paving an additional five acres at the terminal, bringing the total terminal space for roll-on/roll-off cargo to 40 acres. Craig Kessler, director of breakbulk and bulk operations, said four to 10 acres would be devoted to Toyota staging, depending on shipping schedules.
As reported yesterday, the Hapag-Lloyd MV Colombo Express and the Maersk Tanjong collided at the mouth of the canal collided at the northern end of Egypt's Suez Canal, delaying traffic through the route, shipping sources said Monday.
Three containers were knocked off the Colombo Express into the sea, the sources said, and the collision is expected to delay Suez traffic in both directions.
"The incident has severely interrupted the second southbound convoy and the northbound convoy is therefore expected to be delayed," said a representative from Inchcape Shipping Services.
The Suez Canal facilitates much of the seaborne trade between Europe and Asia, making Egypt about $5 billion in annual revenue.
Both ships remained parked in the canal lakes last night as Suez authorities retrieved the containers out of the water and conducted an investigation.
No casualties were reported, but the Colombo Express sustained a 65-foot dent to its left side, according to agents at Inchcape.
Study: Seattle and Tacoma ports generate $4.3B in economic activity
Cargo operations at the ports of Seattle and Tacoma supported more than 48,000 jobs in 2013 that generated nearly $4.3 billion in economic activity, according to a study commissioned jointly by the two ports.
Marine cargo activity produced more than $378 million in local and state taxes to support education, police, fire services and road improvements, according to a statement from the Port of Seattle.
The analysis, performed by Martin Associates, a Pennsylvania firm that has conducted economic studies for ports throughout the U.S., included direct, indirect and induced jobs.
According to the study, direct jobs include those with trucking companies and railroads moving cargo to and from terminals and warehouses, dockworkers, steamship agents and freight forwarders. Indirect jobs include office supply firms, maintenance and repair firms, and parts and equipment suppliers. Induced jobs are those created by people directly employed by marine cargo operations re-spending their wages in the community on housing, food and other consumer goods.
"This study reaffirms the critical importance of our ports as a trade gateway," said Stephanie Bowman, co-president of the Port of Seattle Commission. "Port activities support tens of thousands of family-wage jobs across the state. These jobs are crucial to maintaining and growing our region's middle class."
Mitsui & Co. announced it is procuring eight LNG carriers to deliver liquefied natural gas from the Cameron LNG Export Project to customers in Japan.
In late September, Mitsui signed time charters for five of the eight ships for a total maximum charter hire amount of approximately $3.6 billion. The company said it is preparing to conclude time charters for the remaining 3 ships.
Mitsui said it will charter the five ships for a maximum of 25 years, starting in 2017 and 2018, as follows: two ships to subsidiaries of MOL, one ship to a subsidiary of NYK, and two ships to ship-owning companies in which Mitsui invests.
Three of the eight ships originate from ship-owning companies in which Mitsui invests, bringing Mitsui's LNG ship fleet — all ships which are jointly owned by partners — to a total of 27, according to the statement.
The announcement arrives on the heels of a decision by the U.S. Department of Energy on September 10 that sanctions shipping LNG to nations like Japan that don't have a free trade agreement with the U.S.
Record soybean forecast highlights Illinois' aging infrastructure
Farmers across Illinois predict a record soybean bumper crop, but the state's aging infrastructure poses a significant export challenge, according to a statement from the Illinois Soybean Association.
"The soybean crop looks better than average," says Paul Rasmussen, Genoa, Ill. soybean farmer and director of the Illinois Soybean Association. "In an average year, 5.7 million tons of soybeans are transported. In central Illinois we're looking at one of the best crops we've ever had."
Rasmussen says in Illinois, about 54 percent of soybeans are destined for export while half are processed domestically and transported by rail. He says the infrastructure of roads, bridges and waterways are all involved in the smooth export of soybeans. A 2011 study, he says, found that every dollar invested in infrastructure repairs provides an average return on investment of $10.24.
ISA said it is working with business, government and industry leaders to find transportation solutions. For example, the trade association is developing a public-private partnership pilot program called P5 to provide the U.S. Army Corps of Engineers with resources to bring locks and dams up to standard. ISA also is identifying roads and bridges in greatest need of repair.
The ISA also says elevators and other merchandisers must coordinate efforts to prepare for the incoming onslaught of soybeans. "While the potential bumper crop presents many opportunities, it also will require skillful logistical management by our Champaign facility team," says Brian Stark, regional sales manager for The Andersons, Inc. "The combination of patience and good communication between elevator personnel and farmers will ensure harvest runs smoothly for everyone."
Aker looks at merging its U.S. shipyard and shipping firm
Aker ASA, a Norwegian holding company focused on offshore fishing, construction and engineering, is looking at merging its American shipyard and shipping firm, which have both benefitted from the U.S. shale energy boom, according to a statement issued by its investment arm Converto.
Converto, the top owner of both Aker Philadelphia Shipyard and American Shipping Company, intends to "evaluate and execute potential strategic initiatives to visualize and maximize shareholder value" for the two firms. "This could include M&A and financial restructuring ... as well as investigating potential joint strategic alternatives for the two companies," the statement said.
Aker Philadelphia Shipyard builds ships that comply with the U.S. Jones Act, which restricts which ships may be used for the domestic transport of goods, such as oil products. American Shipping Company has been the top buyer of the yard's vessels.
Kawasaki Kisen Kaisha was fined $67.7 million after agreeing to plead guilty to price fixing and bid rigging for services at the Port of Baltimore.
"K" Line is the latest carrier charged in an antitrust investigation of companies federal officials say have conspired to boost global shipping prices.
Charged in U.S. District Court in Baltimore on Friday, K-Line provides shipping services for RoRo cargo, including cars, trucks and construction equipment.
"Our efforts exposed a long-running global conspiracy that operated globally, affecting the shipping costs of staggering numbers of cars, into and out of the Port of Baltimore, and other ports in the United States and across the globe," said Bill Baer, head of the Justice Department antitrust division, in a statement.
"We are continuing our efforts to ensure that both the corporations and individuals involved in this cartel are held accountable for their acts and the harm they inflicted on American consumers."
K-Line exported new cars and trucks from the port of Baltimore from at least 1997 to 2012, according to charging documents. The Justice Department charged the company and its co-conspirators with dividing up customers and routes, rigging bids and fixing prices to suppress or eliminate competition.