Cargo Business Newswire Archives
Summary for October 7 through October 11, 2013:

Tuesday, October 8, 2013

Top Story

NRF forecasts 5.9 percent increase in container imports for peak season 2013

October import volume at major U.S. container ports is predicted to jump 9.1 percent year-over-year, reflecting delivery of retail goods ordered long before the government shutdown, according to the latest Global Tracker report from the National Retail Federation and Hackett Associates.

Approximately 4.42 million cargo containers are expected for August, September and October combined at the ports followed by Global Tracker, which is a 5.9 percent increase. The volume during these three months will account for 25.6 percent of all retail imports for the entire year, the report predicts.

NRF also forecasts that holiday sales will be up to $602 billion this year, a 3.9 percent increase compared to 2012.

"With the holidays nearly here, retailers are making sure their shelves are well-stocked," said Jonathan Gold, NRF vice president for supply chain and customs policy. "Cargo is continuing to move through the ports but the government shutdown has left some agencies short-handed, so NRF will monitor the situation closely as the holidays approach."

Although 6,000 U.S. Customs and Border Protection workers have been furloughed, the agency said impact at the docks should be "minimal" during the shutdown, as inspectors will continue to work and process cargo.

U.S. ports followed by Global Port Tracker handled 1.48 million TEUs in August, the latest month for which hard data is available, a 3.8 percent from August 2012.

September is predicted to be up 4.9 percent year-over-year to 1.47 million TEUs, October is forecast up 9.1 percent to 1.46 million TEUs, November up 3.4 percent at 1.33 million TEUs, and December up 1.8 percent at 1.31 million TEUs.

The container forecast for all of 2013 is 16.3 million TEUs, up 2.7 percent year-over-year. The first six months of 2013 totaled 7.8 million TEUs, up 1.2 percent from the first half of 2012.

Global Port Tracker covers the U.S. ports of Los Angeles/Long Beach, Oakland, Seattle, Tacoma, New York/New Jersey, Hampton Roads, Charleston, Savannah, Port Everglades, Miami, and Houston.

Maersk: Weak demand, low rates keep trade expectations low for peak season

A Maersk Line executive said the shipping industry shouldn't expect a bump from peak season this year due to sluggish global demand and low freight rates.

David Skov, Maersk's chief of South China operations, made the comments in Hong Kong Friday, reflecting the worries of local exporters who have said big retailers Walmart and Nike cut orders for the holiday season.

"We haven't seen a Christmas or Golden Week rush this year, traditionally this season should be very strong for trade, but it's going to be different this year," Skov said.

Maersk Line plans to make another attempt in November to raise the freight rate, which is currently around $765 per-TEU, by $950. The break-even point is around $1,000 to $1,100 per-TEU. The rate slide was caused by weak global economic recovery, and a surge of new ship build deliveries that once again tips the supply/demand balance in the wrong direction.

"The current rate is simply not sustainable, it has to come up," Skov said.

"Most shippers managed capacity well in 2012, but they have been less disciplined this year," Skov said. Shipbroker Golden Destiny said 30 vessels with a total deadweight of 1.5 million tons were ordered last week.

For more of the South China Morning Post story:

Port of Oakland's Lytle tackles trucking problems

Port of Oakland's Chris Lytle, the new executive director of the nation's fifth busiest port, spelled out how he wants to keep the port competitive and truck drivers happy in a speech to shipping industry executives last week.

"The driver and trucker issues are big," Lytle said.

Many of the port's 2,500 truckers, mostly independent contractors who are paid per delivery, have complained about long waits at the docks to pick up cargo. Waiting for long stretches reduces the number of trips they can accomplish in a day, which hurts their bottom line.

To respond to these issues, Lytle has Lytle has formed a truckers working group with a mix of drivers, truck company representatives and terminal operators. The mere fact that all those parties coming together is a good sign, according to some in the Oakland logistics sector.

"To pull together so many stakeholders is ground breaking," said Ron Light, director of West State Alliance, a group of independent trucking companies that serve the port.

Lytle said one possible solution to truckers' complaints of delays could involve terminal operators paying truckers for overly long waits.

"Should that driver be entitled to some compensation? I think so," Lytle said. "There's an element of fairness here. You can't hold a driver up for several hours, four, five, six, whatever the number is, and then turn around and say, 'Have a nice day. Come back tomorrow.' This is an area where I'd like to see the terminal operators get together."

While terminal operators did not endorse compensation, they agreed that the pickup system could work more efficiently.

For more of the San Francisco Business Times story:

U.S. and EU cancel trade talks due to shutdown

The second round of talks between high-level U.S. and European Union officials to cement the world's biggest trade deal were cancelled due to the U.S. government shutdown.

Talks meant to start on Monday were nixed when U.S. Trade Representative Michael Froman said Washington would be unable to send its delegation.

"Next week's negotiations have therefore been cancelled," European Trade Commissioner Karel De Gucht said in a statement Friday, referring to the scheduled talks in Brussels.

Both sides hope to have proposals ready by January to end deep differences over rules and regulations.

For more of the ABS-CBN News story:

Electrical fire burns research ship at Port of San Diego

An electrical fire started on a research ship at the Port of San Diego Sunday afternoon, according to the San Diego Fire Department.

Officials reported a second-alarm fire burning below deck of the research vessel Discovery berthed at the Tenth Avenue Terminal.

More than 24 people aboard the ship were safely evacuated and the fire was put out within a half hour, officials reported.

For more of the NBC San Diego story:


Wednesday, October 9, 2013

Top Story

Drewry: Surging capacity damaging the North-South trades

Drewry Maritime says that container lines are "getting half of it right" in its annual container market report. Amidst weak demand and overcapacity exacerbated by new ship deliveries, cost cutting measures and deployment strategies are helping to somewhat bolster the East-West routes. However, rates on the North-South trades are plummeting on the tonnage glut, according to Drewry's Container Market Annual Review and Forecast 2013/14.

Given that more than 25 ultra large container vessels have been delivered so far in 2013, Drewry said carriers have managed the deployment of tonnage "pretty well" in the main East-West trades. As of October, capacity on the three main East-West routes is up only 2.3 percent year-over-year, although Asia to North Europe spot rates have fallen in 33 of the 39 weeks so far this year.

"Good strategies on one side of the equation are being unraveled quickly simply because the carriers cannot have it both ways," said Neil Dekker, Drewry's head of container research. "Pouring too much capacity into the system means that at some stage it will overflow and we would argue that this has already happened to some extent."

The report forecast global fleet growth at 7.4 percent in 2014, which will continue to challenge the stability of container carriers.

Drewry said the industry would save $5.5 billion on fuel this year, partly on lower fuel costs, but also due to network changes, slow steaming, and the introduction of more fuel-efficient ships and bunkering in Russia.

The report asserted that the global cascade of tonnage is hurting the North-South trades – regions where carriers are pinning their future hopes. Rates in the once-robust Asia to East Coast South America trade have dropped 61 percent to $780 per-TEU this year. Rates in the Asia to Australia trade have fallen 65 percent to $400 per-TEU.

Unless they limit capacity growth at the trade route level to realistic market levels, container carriers run the risk of ruining the trade lanes that they see as the future, the report states. Drewry doesn't expect annual global trade growth to rise above 6 percent between now and 2017, and said that shipping lines must find another way to defend the bottom line other than monthly GRI attempts that fail to stick.

The report named the formation of collaborations line the P3 alliance as one way of stabilizing operational supply, but said much more work is needed.

"Although 2013 will turn out to be an OK year for the industry and the main stakeholders should make a small profit, many carriers will still be in the red," said Dekker. "Liner companies can no longer treat the ULCVs as a secure passport to profitability unless they release the pressure elsewhere."

MOL combines trans-Pacific services

Mitsui OSK Lines is merging two trans-Pacific services — PNW and PS1 — into a single loop called the PNW service, effective October 11.

Port rotation for the new PNW service, which connects U.S. Pacific Northwest cities to China, Taiwan and South Korea, will stay the same except for the addition of a call at the APL terminal in Kaohsiung.

The new rotation: Kaohsiung (Fri/Fri) > Hong Kong (Sat/Sun) > Yantian (Mon/Mon) > Shanghai (Wed/Thu) > Busan (Fri/Sat) > Tacoma (Tue/Fri) > Seattle (Fri/Sat) > Vancouver (Sat/Mon) > Busan (Sun/Mon) > Kwangyang (Tue/Tue) > Kaohsiung (Fri/Fri)

The merging of the two services will reduce vessel capacity from 12,000 TEUs, split between the two services, to 8,000-TEU vessels on the new PNW service.

The last sailing of the PS1 service will be on 10 October.

Alaska shipping merger approved by state court

The acquisition of Northland Marine Services by shipping rival Alaska Marine Lines was approved by a state court this week.

Anchorage Superior Court Judge Andrew Guidi approved the deal after deadline of the 60-day comment period. No objections were filed, according to KTOO.

Lynden Inc., which operates Alaska Marine Lines, and Northland Marine Services are the only two marine companies carrying cargo in southeast Alaska, which prompted fears that the purchase would create a monopoly.

The state of Alaska proposed that Sitka-based Samson Tug and Barge be allowed to lease space and equipment that previously belonged to Northland, meaning that Samson would replace Northland as Lynden's regional competitor.

"Right now, our tentative plan is to start service into Southeast Alaska on Nov. 8," said Samson Vice President Cory Baggen.

For more of the Seattle Post-Intelligencer story:

Chicago faces challenges in renewed search for private port deal

After a tentative deal tanked last week, the struggling Port of Chicago faces an uphill battle to attract the huge investment needed to fix the facility, according to transportation experts.

The port, which has not been upgraded since 1981, could experience increased river traffic after the Panama Canal expansion and more ships on the St. Lawrence Seaway due to improvements at Canadian terminals in Nova Scotia.

Its location in depressed area paired with its neglected condition doesn't bode well for future investors.

The failed pact with The Broe Group "seemed too good to be true," said Joe Schwieterman, a transportation professor at DePaul University. "The area needs extensive infrastructure investment before it's ripe for attracting large-scale new tenants. So the city needs to put serious skin in the game for the magic to happen."

Broe had proposed attracting $100 million in investment to the port during the first decade and nearly $500 million in economic investment over the life of a proposed 62-year lease. It also expected to create 1,000 full-time jobs.

"The fact that they are walking away, or it appears that way, tells me they looked under the hood and something doesn't fit their economic model," said transportation industry veteran Sean Maher, CEO of industrial development firm CenterPoint Properties Trust.

Neither side would say what killed the deal. But Mayor Rahm Emanuel said last week that Broe wanted to change fundamental terms of the deal "as it relates to economic investments and job creation they committed to in the first place. 'No' is going to be the answer."

Michael Forde, chairman of the Illinois International Port District, the city-state agency that owns the port, said Friday, "We have several compelling proposals from a number of bidders and so we're resuming discussions with other bidders to see if we can't get to an agreement that is best for the city in terms of maximum economic development and job creation." He also said it's possible talks could resume with Broe.

For more of the Chicago Tribune story:

Cargo ship runs aground off Cebu

A cargo vessel with a load of 10,517 bags of fertilizer ran aground in rough seas off Oslob, Cebu Monday night on its way from Isabel, Leyte to Dipolog City.

All 19 crewmen of the cargo ship MV Anna Jinky were unharmed.

For more of the Inquirer News story:


Thursday, October 10, 2013

Top Story

Report: Demand for U.S. industrial distribution space surges

The demand for U.S. industrial distribution centers larger than 300,000 square feet is high and increasing, according to Jones Lang LaSalle's first Big Box Velocity Index.

Economic recovery, ongoing e-commerce growth and a deep pool of tenants looking for space have converged, resulting in a highly competitive industrial and warehousing space market, JLL reports. In response to the surging demand, 96.7 million square feet of industrial construction is underway, nearly half speculative, with an average building size of 360,000 square feet.

Demand drivers include the retail (especially e-commerce), logistics and distribution, and manufacturing sectors, according to the index. Retail accounts for more than one third of total demand, with the most concentration in the Northeast.

"With e-commerce sales expected to more than double over the next four years, we anticipate increasing demand for highly specialized facilities," said Craig Meyer, President of Industrial, JLL. "We are seeing a number of major retailers in the market looking for mega-fulfillment centers more than two million square feet near large population centers – especially in the major logistics markets in Pennsylvania or New Jersey, Atlanta, Chicago and of course, the Inland Empire."

JLL notes the two most popular distribution center categories are the 250,000 to 499,999-square-foot spaces, and facilities of more than one million square feet. These two categories represent more than half of overall tenant demand.

Vacancy rates are down after here 14 straight quarters of positive net absorption. Construction activity began to increase during the first half of 2012, the report said.

Five of the top six industries with space needs are looking in the Northeast, with many seeking spaces in excess of one million square feet. In the Midwest tenant requirements are down by 26 percent on a square footage basis due to robust leasing activity in past quarters.

"The Northeast is home to 55 million people, and this is appealing to retail distributors that want access to a lucrative market that a mega population offers: an expansive consumer base and an existing, intricate logistics infrastructure," said Aaron Ahlburn, director of research, JLL Americas Industrial and Retail. "Larger blocks of functional space are also more readily available here than in the neighboring Midwest, meaning tenants in New Jersey have more choice as opposed to facing competition for fewer large space options in Chicago."

"The demand from e-commerce is shaping the market more than ever before, and is influencing the requirements of both users and the institutional investors who make speculative construction possible," said Meyer.

UPS first to offer guaranteed standard service to Mexico

Shipping giant UPS announced the launch of UPS standard service to Mexico, becoming the first logistics provider in the U.S. to offer to its customers guaranteed, door-to-door, small package ground service to Mexico.

The service is available at more than 4,300 UPS Store locations across the U.S. or by scheduling a pickup through UPS.

According to the U.S. Department of Commerce, trade between the U.S. and Mexico has increased 113 percent over the past decade, with more than $1.35 billion in cross-border commerce taking place every day.

"Mexico is an extremely important market for UPS and our customers," said Romaine Seguin, president of UPS Americas Region. "Mexico was the United States' second largest export market in 2012, and is its largest importer of U.S. computer and electronic parts. By leveraging UPS logistics expertise, we can help our customers maximize the potential this market has to offer."

Port of Gulfport to dredge 18-mile ship channel

Port of Gulfport commissioners have decided to fund up to $8 million to dredge its 18-mile ship channel in an effort to boost capacity and profitability. The Mississippi port expects to receive $3 million from the Army Corps of Engineers this year for the project, which will have a total price tag of $8 million to $11 million.

"For every inch, you are looking at somewhere between 200 and 300 tons of additional carriage capacity," said Port Director Jonathan Daniels. "So you are able to bring in more cargo and the vessels are here longer, which ultimately leads to more hours for the shore men, more business, and more important opportunities for those who service the vessels."

The 18-mile channel has not been 36 feet deep since 2009 because of recent storms and the channel-widening project. Daniels said restoring the depth will be good for current tenants and also attract new tenants.

"We have a couple of signed memorandums of understanding that are in place, and part of our negotiations with them is that we need to be at that federally authorized depth," Daniels said. "Dole Fresh Fruit recently came out with a statement saying they will be (using) larger vessels, (with) 60 percent more containers."

Currently there is a study underway to determine if Gulfport can deepen the channel another 11 feet.

Port officials have made it a priority to get the channel as deep as possible to continue to draw more businesses to South Mississippi. Daniels said he hopes dredging can begin sometime next year.

Dutch salvage firm wins $30M contract to move Costa Concordia

A Dutch salvaging company, Royal Boskalis NV, announced it has been awarded a $30 million contract to move the wreck of the Costa Concordia cruise ship next summer to be dismantled at a site yet to be determined.

The Concordia crashed into a reef off Italy's Tuscan island Giglio and sank on Jan. 13, 2012, resulting in the deaths of 32 people.

The cruise ship was righted last month and is sitting on a platform on the ocean bed.

Royal Boskalis said the Concordia will be loaded onto a massive specialized transport ship. The Dockwise Vanguard, a flat-shaped transport ship developed for moving oil platforms, works by submerging its middle section so heavy loads can be placed on top of it.

For more of the Huffington Post story:

Macabre cargo triggers fear at Mombasa port

A cargo of what appears to be frightening Halloween gear from China, including fake skulls and severed hands, caused fear and horror at the port of Mombasa when Kenya Revenue inspectors uncovered the bizarre collection.

The cargo sparked uneasiness in Mombasa, where belief in the occult and clairvoyance is very strong.

Port officials reportedly linked the macabre gear to an unidentified politician.

For more of the Standard Digital News story:

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