Cargo Business Newswire Archives
Summary for October 8 - October 12, 2012:

Monday, October 8, 2012

Top Story

VIT defends its record Virginia ports at public hearing

Virginia International Terminals on Thursday highlighted its success and defended its record as operator of Virginia Port Authority terminals at a public hearing.

The Port of Virginia, the third largest port on the East Coast, is considering proposals to privatize port terminal operations after receiving an unsolicited bid from APM in May. Including APM, three companies have submitted bids to run port operations for up to the next 50 years.

Port officials are disappointed that Virginia hasn't rebounded from the recession as fast as rivals New York and Savannah.

Officials from shipping lines and hundreds of others attended the meeting, defending VIT, the state terminal operator that was created in 1983.

"VIT's sole duty is to that of the citizens of the commonwealth. Private operators, their sole duty is to that of shareholders. VIT promotes Virginia and Virginia only," said Joseph Ruddy, executive vice president of Virginia International Terminals.

Noting container volume has grown over the last six months, Rudy said, "VIT's historical record of success as a terminal operator is irrefutable with regard to container growth, safety and intermodal market share."

Eric Sisco, President of APM Terminals Americas Region, said 15 percent of the top 150 port terminals in the world are run by a sole operator.

Proposals submitted to the Port Authority Board are viewable online.

For more of the Businessweek story:

South America plans tunnels through the Andes to facilitate intermodal transport

The longest tunnels in the Americas are being planned by engineers to be bored straight through the Andes mountains. The tunnels would ease intermodal transport through South American, and billions of dollars worth of the continent's import and export goods, such as Chinese electronics, Chilean wine, Argentine food and Brazilian cars, would instantly become cheaper and more competitive.

The prospective $3.5 billion private railway, called the Aconcagua Bi-Oceanic Corridor, would take 10 years to build and would link train and trucking hubs on both sides with a 127-mile-long railroad, including twin 32-mile tunnels.

Once completed, it could save millions and lower shipping times across the country by half.

Currently, the sole major Andean pass in the southern half of South America is snowed in each winter, and hundreds of cargo trucks get stranded in frigid temperatures. Its Pacific ports are inaccessible to the Atlantic country of Brazil.

"There is a gigantic network of infrastructure on both sides of the mountain range with a bottleneck we must free up," said engineer Nicolas Posse, who is leading the project for Corporacion America.

For more of the Businessweek story:

Barclays closes shipping unit

Barclays bank will close Pendle Shipping, it said in an e-mailed statement today.

Five tankers transporting fuel will stop their charters with the company, industry newspaper TradeWinds reported. Jon Laycock, a spokesman for Barclays, declined to say how many ships the company controlled.

Following an inter-bank rate-rigging scandal, Barclay's is overhauling its structure. Britain's second-biggest lender paid a record $471 million fine in June for manipulating Libor rate. Daily earnings for product tankers on the benchmark trade route for oil products tankers dropped 65 percent this year to $7,784, according to the Baltic Exchange.

For more of the Bloomberg story:

Tensions aired at ASEAN maritime forum

Friday at an Association of Southeast Asian Nations forum, Japan asserted that the island sea clash that has been affecting Asian countries should be settled according to international law.

China offered $474 million for a "maritime cooperation fund" with ASEAN, the ten-nation association that has many members at odds with China over islands in the South China Sea. Although it is unclear what the money is for, it is possibly a peace offering to ease tense relations.

Senior government officials and private sector maritime experts from China, Japan, South Korea, the United States and other nations, met in Manila for the maritime forum.

In his keynote address, Japanese Deputy Foreign Minister Koji Tsuruoka said claimants in Asia's territorial disputes must reject the idea that "might is right."

"It is indispensable for any party concerned to resolve disputes over territories in a peaceful manner based on international law," said Tsuruoka. He stated countries should base their claims on rules provided by the United Nations Convention on the Law of the Sea. He also asked that members respect the ASEAN as an arbiter of maritime order, a dig at China for that country's preference to have bilateral discussions on disputes in the South China Sea rather than dealing with ASEAN as a whole.

Japan's long-standing conflict with China over some small East China Sea islands got worse last month when Tokyo bought the islands from their private Japanese owners. Japan currently controls the islands, but Beijing claims that they belong to China and that the purchase is in violation of earlier agreements.

Taiwan also claims the islands

Japan has a separate territorial conflict with South Korea. ASEAN members the Philippines and Vietnam, meanwhile, have quarreled with China over islands in the South China Sea.

The expanded forum focused on Law of the Sea convention, improving maritime connectivity, seafarers training and marine environment protection.

For more of the Washington Post story:

Container loaded with animals falls onto Seattle freeway

A container loaded with cattle fell off a tractor-trailer on I-90 in Seattle on Saturday morning, killing half the animals within.

After hitting the road, the container fell to its side and skidded 200 feet.

Troopers responded to the scene, finding that some of the surviving had their hooves stuck in the container's windows. Two tow trucks righted the container with the cattle inside, and the container was loaded into another container and taken to a veterinarian in Sunnyside.

The cattle had just arrived from Hawaii at the Port of Seattle. The State Patrol said the truck driver may have attached the trailer incorrectly.

For more of the Seattle Post Intelligencer story:


Tuesday, October 9, 2012

Top Story

October retail container imports to surge 9.9 percent on peak season shipments

Import cargo volume at major U.S. container ports is forecast to surge 9.9 percent in October as retailers complete the annual shipping cycle for holiday goods, according to the monthly port tracker report released today by the National Retail Federation and Hackett Associates.

"NRF's annual forecast says retailers should see solid growth during the holiday season this year and these cargo numbers back it up," said Jonathan Gold, NRF vice president for supply chain and customs policy. "Increased imports show that retailers have gauged the market and expect increased sales."

The ports followed by Global Port Tracker handled 1.42 million TEUs in August, the latest verifiable month. That was an increase of 6.7 percent from July and 3.3 percent from August 2011.

September was estimated at 1.49 million TEUs, up 8 percent from last year, and October is forecast at 1.45 million TEUs, up 9.9 percent. August, September and October volume combined is predicted to go up 7 percent. NRF forecast last week that holiday sales will increase by 4.1 percent to $586.1 billion this year.

Monthly cargo volume is expected to decrease for the rest of the year but will remain above 2011 levels. November is forecast at 1.32 million TEUs, up 2.4 percent from last year, and December is forecast at 1.28 million TEUs, up 4.6 percent.

January 2013 is expected to stay at 1.28 million TEUs, down one-half of one percent from January 2012, and February is forecast at 1.19 million TEUs, an increase of 9 percent from 2012 data.

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

IMC makes agreement with Consolidated Chassis Management, contributes to chassis pool system for OOCL

IMC Companies recently purchased over 1500 chassis from OOCL, and is the first motor carrier in North America to implement operating agreements with the Consolidated Chassis Management regional chassis pool system.

Effective October 1, 2012, IMC Companies has contributed more than 1500 chassis into CCM's Mid-South Consolidated Chassis Pool for OOCL's dedicated usage.  

"This is a game-changer for the intermodal industry," said IMC Chairman Mark H. George, "developing a solution to transition ownership of chassis from ocean carriers to other entities. I believe this is the most efficient and forward thinking strategy for our industry--facilitating ocean carriers that choose to disengage their ownership, while ensuring that our mutual cargo owner customers continue to have access to a reliable chassis fleet."

IMC, founded in 1982, is an intermodal transportation services company.

Publisher's note: IMC's Mark George will be a featured speaker at the Nov. 7-8 Southeast Freight Conference at the Memphis Hilton, sponsored by Cargo Business News. Mr. George will participate in our Ask the Experts section, and will talk about the evolution of chassis.

Keynote conference speakers include Tsuyoshi Yoshida, president and CEO of MOL America; Donald C. Brown, CFO of FedEx Freight; and William Dunavant III, president and CEO, Dunavant.

The conference will culminate in an evening of dinner and dancing at the annual New Orleans Port Night industry gala Nov. 8.

Hope to see you in Memphis!

Visit the Southeast Freight Conference website for more info, including quick, easy online registration:

Drewry reefer shipping report projects strong growth despite weaker fleet

Drewry Maritime Research forecasts continued growth in perishable reefer cargo for 2012 in its latest report analyzing global reefer shipping. Beyond 2012, population growth levels and GDP levels indicate an average trade increase of over 4 percent a year to 2016.

The report notes the global perishable reefer trade increased by 54.5 million tons between 2001 and 2011 at an annual growth rate of 3.9 percent, with maritime trade at almost 91 million tons in 2011.

Maritime perishable reefer trade grew to total 90.9 million tons in 2011. The greatest growth was in the meat category, which increased from 21.4 million tons in 2001 to 35.9 million tons in 2011. Worldwide trade of bananas grew from 13.2 million tons in 2001 to 15.7 million tons last year.

Despite strong trade growth, the specialized reefer fleet continues its unavoidable decline with a reduction of 234 vessels and 81 million cubic feet in the last ten years alone. During 2010 and 2011 a total of 77 vessels were scrapped. As of mid-2012 another 42 vessels were disposed of and by the end of the year it is expected that scrapping levels will have exceeded record levels set in 1993 and 1999.

No new ships have been ordered for the specialized reefer fleet, as opposed to the glut of container ships. More than 500 containerships are yet to be delivered, while the refrigerated container box fleet growth hit a record 13 percent during 2011 and ended the year at 2,048,000 TEUs. This was one of the highest rates of annual growth ever cited for the reefer box sector.

The containership operators are increasingly expressing their need to increase reefer rates, indicating that sooner or later, time charter rates will once again start to climb.

Maersk to boost capital in other core units as it lessens investment in container line

A.P. Moller-Maersk announced it is changing its focus from its struggling container arm, Maersk Line, to other core businesses to stabilize and increase investment returns.

Maersk Line was profitable in the second quarter but has for years experienced losses due to plunging freight rates and a glut of vessels, which will continue in the foreseeable future, the parent company stated.

The company plans to increase their combined share of investment capital in Maersk Oil, APM Terminals and Maersk Drilling to up to 50 percent from what is currently 34 percent.

Maersk Line's share of the group's invested capital would be reduced to a 25-30 percent range from what is currently 38 percent, A.P. Moller-Maersk said at its capital markets day on Tuesday, its first in the company's 108-year history.

For more of the Reuters story:

Maher Terminals sues the Port Authority of New York and New Jersey for imposing "unlawful fees"

The operator of Maher Terminal, the largest terminal in New York harbor, is suing the Port Authority of New York and New Jersey for charging millions of dollars in unlawful fees.

Maher Terminals, LLC, filed suit in U.S. District Court in Newark, contending that the Port Authority has no right to levy some of the charges and fees that totaled $35 million in 2010, and that are expected to increase to $37 million this year.

Maher alleges that the fees and charges are not levied in a "fair and equitable basis" and "constitute charges for the privilege" of entering, trading or waiting in the port. Rather than being based on real costs for services provided to Maher Terminals or used by the company, the suit alleges the fees are levied to help the port authority recover the cost of projects in the Hudson River, such as dredging to deepen the channels.

The terminal operator is asking the court to stop the authority from imposing fees and charges "in excess of lawful amounts."

Both the Port Authority and Maher Terminals declined to comment.

For more of the story:


Wednesday, October 10, 2012

Top Story

REPORT: Container industry shows no real signs of recovery

The container industry shows no real signs of recovery, according to an industry report, due to ongoing to supply side pressure.

Container lines will remain in "transition mode" until at least 2014 and probably 2015, according to Drewry's "Container Market Review and Forecast 2012/13."

Freight rates and overall profitability will depend on how well the operators manage overcapacity, which should include heavy use of slow steaming and idling of capacity, which have been at a low level over the past year.

Weak demand is expected to continue on the core headhaul trade routes for the next 15 months at least, the report says. The charter market shows no signs of improvement, freight rates are under pressure, and the huge flow of tonnage through the system is starting to cause problems.

The lack of any apparent peak season trade this year is putting serious pressure on container lines. Average Asia-to-Northern Europe spot freight rates have plunged 40 percent since May, says the report.

Drewry predicts the industry will come close to breaking even in 2012, which could be considered good news. However, since freight rates tripled and quadrupled earlier this year, it also highlights the consequences of the damage done in 2011.

Since only a small amount of capacity is planned for temporary removal from the Asia-Europe trade routes, Drewry believes the upcoming November rate of $500 per-FEU will have limited impact unless accompanied by aggressive capacity withdrawal this winter.

"Given the number of factors shaping the industry, carriers seem to want the best of both worlds," said Neil Dekker, Drewry's head of container research. "They firmly believe that deploying ever bigger ships across all the major trade lanes is the way forward, and yet by doing this they cannot forget the likely negative influences on freight rates.

"Now is the time for carriers to deploy service patterns seriously aimed at stabilizing freight rates or else the industry will be caught up in a current of falling rates while using the GRI mechanism to paddle upstream against market fundamentals."

REPORT: Operating costs down 7 percent but shipping overhead will rise

Although some shipping operating costs have gone down this year, ship operators, experiencing the third consecutive year of low revenue, must be vigilant of overhead costs, states an industry report.

Some operating costs have fallen in 2012 by up to 7 percent compared with 2011 and 2013 should see further reductions, according to Drewry's annual "Ship Operating Costs 2012-2013" report. However, cost increases are on the horizon.

"There is some temporary overhead relief for operators but they need to resist the temptation to push profits by cutting corners, as this will likely bite back later," said Paula Puszet, managing editor at Drewry. "Oil prices are unpredictable and steel, still volatile. Zinc, copper and chemicals - all used in repairs and maintenance - are set to rise again. Paints and hull treatments, as well as machinery parts, are likely to go the same way."

Puszet said tighter regulations and new international maritime conventions on safety, manning, and the environment will effect the bottom line after 2013.

New North Vietnam terminal reaches milestone vessel productivity

The new Cai Lan International Container Terminal in North Vietnam, reached vessel productivity in excess of 32 moves per crane hour. The milestone was reached one month after CICT opened on August 31, 2012.

CICT supervisors and managers were trained at MIT Panama, SSA Marine's largest terminal, for up to 9 months before opening the Vietnam terminal, which is a joint venture between SSA Holdings International and Cai Lan Port Investment Company.

CICT is the closest container terminal by road and railway to the Great Mekong region, which includes Southwest China markets. It sits along the left shore of the Hon Gai - Cai Lan channel in Ha Long city, Quang Ninh province.

The terminal, which had its soft opening on August 1, currently has 2 berths available, a 9-hectare container yard, 4 post-Panamax ship-to-shore cranes, 12 rubber tired gantry cranes, 3 reach stackers, 4 side picks, and 28 terminal tractors with a current capacity of 260,000 TEUs.

Full construction will be completed in December 2012, when CICT will have a terminal capacity of 520,000 TEUs. CICT will ultimately expand the container yard and invest in more equipment to reach full capacity of 1.2 million TEUs.

Transportation and logistics M&A on the rise, says Harris Williams

In the first half of 2012, mergers and acquisitions were strong in the transportation and logistics sectors, according to an M&A advisory firm. Industry merger and acquisition activity was up 80 percent from $1.4 billion in the first six months of 2011, despite worry due to the European debt crisis, domestic fiscal issues and the presidential elections.
Companies in transportation and logistics are focused on growing their service offerings, driving operations efficiencies and staying competitive in a global and complex marketplace, reports Harris Williams. These trends are driving consolidation within the industry and attracting new investors.
Harris Williams & Co., a mergers and acquisitions advisory firm and an arm of PNC Financial Services Group, has continued to see strong activity in the sector and recently expanded their transportation and logistics group.

Pirates free Greek ship and crew

Pirates have release a Greek oil tanker that was attacked and taken off the Ivory Cost Saturday. It was the first hijacking in the area, according to the International Maritime Bureau.

The Bahamas-flagged tanker, which had 24 crewmembers on board, was hijacked while anchored off Abidjan, said Noel Choong, head of IMB's Kuala Lumpur-based piracy reporting center.

The pirates freed ship and crew on Tuesday off Nigeria, after stealing some of its cargo of gas oil. No injuries were reported.

For more of the NDTV story:


Thursday, October 11, 2012

Top Story

FedEx to cut budget by $1.7 billion, slash thousands of jobs

Shipping giant FedEx Corp. announced its intention to decrease its budget by $1.7 billion a year by reducing jobs, planes and other underused assets, intending to reach this goal in three years through cost cutting and increased efficiencies.

The restructuring move is due to a consumer shift to lower-cost, slower methods of shipping in a listless world economy.

Founder and CEO Fred Smith said most cost cuts will be implemented in the company's Express and Services units, which have suffered the most from the global economic downturn. He said a voluntary buyout program should reduce the company's "fixed head count by several thousand people." Most of those employees are in the U.S.

The Express division reported revenue of $26.5 billion in fiscal year 2012 and has more than 146,000 employees worldwide. It's been adversely affected by the shift to cheaper, slower delivery methods, and is also hit by the lower cost of shipping lighter, new tech gadgets such as Apple's new iPhone, 17 percent lighter than the original. Express is also reducing flights and getting rid of older planes.

Services is the company's logistics arm, and includes FedEx Office, which used to be Kinko's. Its revenue was $1.7 billion in FY 2012, and at 13,000 employees, is one of the smallest divisions at FedEx.

Enhancing the flow of FedEx staff and operations through improved technology, and reducing overhead in selling, general and administrative expenses are also ways the company plans to reduce overhead, according to Smith.

For more of the Huffington Post story:

China's premier ports have a good September

Container volumes rose sharply at China's top ports in September, compared to the same time last year.

Economists polled by Reuters expect China's annual exports to grow by 5 percent in September, increased from 2.7 percent in August. They forecast imports will bounce back from lower volume in August. Official data will be released Saturday.

Shanghai Port, the world's busiest container port, had a 5.6 percent increase in container volume in September year on year. Shanghai reached 2.91 million TEUs, increased from 2.61 million in August. The year-on-year increase for the month is tempered by a fall of 7.1 percent in August. Cargo volumes rose 10 percent on the year to 44.41 million tons.

At Ningbo Port container volume in September surged 20 percent. Ningbo's container throughput reached 1.59 million TEUs, versus 1.39 million TEUs in August.

"I don't think this necessarily means that the broader economy is turning around. This shows that trade is expanding, but this may be due to factors such as government investment in transportation and other programs to influence demand," said Ma Xiaoping, an economist at HSBC. "Higher consumption during the national holiday is also a factor."

Ningbo Port's container throughput reached 1.59 million TEUs, versus 1.39 million TEUs in August.

For more of the Reuters story:

Hamburg Süd ups rate on U.S.-Australia service

Effective November 5, 2012, Hamburg Süd will implement a general rate increase for all cargo moving from the United States East and Gulf Coasts to Australia and New Zealand.

Tariff rates and service contracts will be increased by $175 per-TEU.

Labor dispute delays Marine Highway dedication at Port of Stockton

A dispute between the longshoremen's union and terminal operator Ports America caused Stockton port officials to postpone this week's dedication of the new $30 million Marine Highway project.

"We have many questions related to labor issues that arose between the longshore union and the stevedoring company involved," said Port Director Richard Aschieris in a Stockton Record report. "They don't appear to be able to get those resolved before Thursday morning. And really, without working labor, there's no way - it's impossible - to start the service."

The port plans to introduce a new cargo service that involves containers being transported on barges between the ports of Oakland and Stockton, and ultimately Sacramento. Current container cargo is conveyed via trucks between Oakland and the Central Valley.

Representatives of Ports America, the stevedoring company, and Marc Cuevas, president of International Longshore and Warehouse Union Local 54 in Stockton, were unavailable for comment.

An ILWU union official, who wishes to remain anonymous, said the conflict involves the number of workers needed for the barge operation. He said Ports America wants to reduce the work force compared to other maritime ship operations in Stockton.

"They wanted to cut the manning in half. It was just getting ridiculous," he said. "We all want to see it work, but you have to be careful, because if the union gives in on this thing and if someone gets killed, then we're responsible."

The union is not trying to pad the payroll, he said. "Unnecessary manning is not good for anybody. You just want to make sure the operation is safe.

"We are starting a new service. We are starting literally from zero," Aschieris said. "It is my hope those remaining discussion points are all agreed upon in the near future. Only after that will we discuss rescheduling the (dedication) event."

The Marine Highway, funded by the U.S. Department of Transportation, was created to improve the area's freight system, boost foreign trade and reduce air pollution and traffic congestion by moving containers by barge instead of truck and generating jobs in the region.

Improvements at the Port of Stockton include the addition of two mobile harbor cranes at the cost of roughly $10 million; the conversion of two former timber barges to carry cargo containers; and the construction of a fenced container yard and a railroad extension to facilitate moving cargo between barge and rail.

The improvements will allow Stockton to handle the goods and packaged products typically packed into cargo containers. Previously, the port could handle only bulk cargo.

For more of the Stockton Record story:


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