Cargo Business Newswire ArchivesSummary for October 13 through October 17, 2014:
Monday, October 13, 2014
NRF predicts record October holiday imports
Photo credit: Reuters/Jessica Rinaldi
Major U.S. retail container ports will see record October volumes in a final seasonal import surge, according to the National Retail Federation and Hackett Associates, who predict 4.1 percent growth for the holiday season and 3.6 percent growth for 2014 as a whole.
Import volume at key U.S. ports is expected to total 1.53 million TEUs in October, besting the 1.52-million-TEU monthly record set in August, according to this month’s Global Port Tracker report.
Cargo volume has been strong each month since summer began, since retailers imported goods early in case West Coast port labor talks resulted in a strike, a lockout, or other disruption that would result in delays. NRF said the lack of a dockworker contract since July and operational issues have led to record congestion at the ports.
"Increasing congestion at the nation’s ports as well as the ongoing West Coast labor negotiations are ongoing concerns - and retailers are making one last push to make sure they’re stocked up for the holidays," said Jonathan Gold, NRF vice president for supply chain and customs policy. "Retailers are working hard to make sure customers can find what they’re looking for regardless of what happens at the ports."
The rest of the year looks good, with September import forecast up 2.8 percent at 1.48 million TEUs year-over-year, and October up 6.4 percent at 1.53 million TEUs. The reports predicts that November import volume will up 3.7 percent at 1.39 million TEUs, and December up 3.9 percent at 1.37 million TEUs.
Those numbers would bring 2014 to a total of 17.1 million TEUs, an increase of 5.3 percent over 2013.
"The consumer is back," Hackett Associates Founder Ben Hackett said, citing reduced unemployment, improved consumer confidence and other indicators. "That’s all good news for retailers, ports and shipping lines."
Global Port Tracker covers the ports of Los Angeles/Long Beach, Oakland, Seattle, Tacoma, New York/New Jersey, Hampton Roads, Charleston, Savannah, Port Everglades, Miami, and Houston.
Ports respond to Ebola threat with tighter rules
The U.S., Brazil and Argentina have imposed stricter port entry procedures for vessels sailing from West Africa in an effort to stem the potential spread of the deadly Ebola virus.
The U.S. Coast Guard said it would screen individuals coming into the U.S. via ships from Ebola hot spots.
"The Administration continues to take thoughtful and straightforward steps in protecting Americans from Ebola, through stronger screening at our ports of entry," said lawmaker Charles Schumer.
The first person diagnosed with Ebola in the U.S. died on Wednesday morning at a Dallas hospital, according to a hospital spokesman.
Ebola has killed more than 3,400 people in Guinea, Sierra Leone and Liberia, and has become a global concern affecting the container trade, airfreight and tourism industries.
Brazil’s health surveillance agency Anvisa said this week ships that docked in Ebola-affected countries in the last 21 days will receive clearance to dock at Brazilian ports only after a thorough analysis of medical records and logs showing medicine used.
Origin countries include Guinea, Liberia, Sierra Leone, Nigeria and Senegal, according Anvisa.
There are worries about disruption in the West Africa logistics market and the spread of the disease has already rattled commodities and mining markets since the region is a major source of iron ore, crude oil, bauxite and cocoa.
Preventive measures have been imposed at airports in several countries, and ports are now following suit. While most ports have yet to quarantine ships and their crews coming from affected areas, more rigorous screening is being mandated that which could possibly slow shipping activity.
The share price of Tianjin Port Holdings, the Shanghai-listed arm of Tianjin Port (Group), surged Wednesday after the China’s State Council authorized the port's expansion plans to double the number of berths.
Tianjin Port is the largest port in North China and one of the world's largest ports by shipping volume.
The State Council sanctioned plans to enlarge the port’s operational waters to 624 square miles, extending its waterfront length for docks from 30 miles to 57 miles, and increase the number of berths from 75 to 146, according to media reports.
The share price of Tianjin Port Holdings Co soared by the daily limit of 10 percent Wednesday. During the past three days, the share price has risen by nearly 20 percent on the news.
But Zheng said the share price is driven more by expectations of Tianjin Port becoming China's next free trade zone, and less by the expansion plan itself.
"China (Shanghai) Pilot Free Trade Zone has been trialed for about a year and has made some good achievements. Tianjin and Guangzhou stand as next two potential candidates," said Zheng Ping, chief analyst of industry portal chineseport.cn, to the Global Times.
He noted many Chinese ports have seen their share prices rise substantially, fueled by the free trade zone frenzy.
Crowley liner services and Seaboard Marine add to vessel-sharing deal
Crowley Maritime Corporation’s liner services arm and Seaboard Marine have formed a new vessel-sharing agreement to service customers in the Dominican Republic trade lane, while also changing their current VSA to Panama and Costa Rica, according to a company statement.
Crowley said the new arrangement stars mid-November, and will provide customers of both companies with weekly service on a larger ship sailing directly between Port Everglades, Fla., and Rio Haina, Dominican Republic.
The existing VSA between Seaboard and Crowley to Panama and Costa Rica will now only call PortMiami starting in mid-November. Both Seaboard and Crowley vessels will arrive weekly at PortMiami Tuesday evening and sail southbound on Fridays.
"The cooperation between Crowley and Seaboard in both the Dominican Republic and Panama/Costa Rica trade lanes will allow both companies to continue providing exceptional service at competitive rates in the ever-changing Caribbean and Central American markets," said Tony Otero, Crowley vice president of Caribbean services. "It also reduces certain environmental impacts by significantly removing additional emissions."
Under the new Dominican Republic agreement, a vessel will discharge and load in Port Everglades each week on Wednesday then depart for Rio Haina, for arrival on Saturday before departing northbound on Sunday, according to the release.
Seaboard will continue to offer a weekly Sunday sailing from PortMiami to Rio Haina while Crowley will still sail weekly on Sunday from Port Everglades to Rio Haina.
5 jailed for $2.7M cargo theft in Florida
Five people were sent to federal prison for their roles in a South Florida-based cargo theft ring that targeted cold medicine and baby formula.
The group admitted stealing 131,000 cases of Mucinex from a tractor-trailer in Mississippi worth about $2.2 million. They also stole $550,000 worth of Similac baby formula. All of the stolen items were brought to South Florida and offered for sale to brokers and retailers.
U.S. District Judge Joan Lenard imposed sentences last week, and the five defendants received sentences that ranged from five years to a little over two years.
The Canadian Pacific Railway has approached Florida’s CSX about a merger that would form a company worth more than $60 billion, insiders said Sunday.
The sources said that CSX was cool to the idea, so although the two big railroad operators have started to discuss the merger possibility, the outcome is uncertain.
Rail traffic is surging in the U.S. due to the shale gas boom, which is creating bottlenecks and delaying other freight.
Canadian Pacific has a market value of about $32.5 billion and rail lines across Canada and into the U.S. CSX, with as a market value of approximately $30 billion, controls a network of rail lines throughout the Eastern U.S.
Railroad consolidation is difficult. One big obstacle to the potential match would be getting it approved by U.S. Surface Transportation Board regulators.
Canadian Pacific has made a comeback over the last two years by trimming costs and improving efficiency under the leadership of longtime rail industry executive E. Hunter Harrison.
Because Canadian Pacific mainly runs in Canada, there is little overlap with routes run by CSX or other U.S. railroads, so a potential merger might be less of a concern from a regulatory perspective, a person briefed on the discussions said.
Canadian Pacific and CSX both declined to comment.
Port of Long Beach considers rate hike on non-container cargo
On Monday evening Long Beach harbor leaders will consider raising rates by 5 percent on non-containerized cargo, such as cars and petroleum coke.
Non-containerized cargo makes up approximately 25 percent of imports received at the Port of Long Beach, according to port spokesman Art Wong. If the harbor commission approves the Dec. 1 rate increase, an estimated $1.25 million in annual revenue would be generated that would fund port projects such as dredging, roadways and security—infrastructure improvements that specifically affect non-containerized cargo customers.
The harbor commissioners will also receive a budget and status update on the $1.3 million Middle Harbor Redevelopment project, which merges two old shipping terminals into a mega-terminal. Orient Overseas Container Line subsidiary Long Beach Container Terminal will call the new terminal home as early as 2015, when the first section becomes operational. The Middle Harbor project is slotted for completion in 2019.
Hong Kong’s Hutchison Whampoa to invest in Panama port
The Panama Ports Company, an arm of Hong Kong’s Hutchison Whampoa, will invest approximately $110 million through 2015 to expand Balboa Port in Panama, according to PPC's top executive.
"We expect this project will allow us to boost capacity to some 5 million containers," up 11 percent compared with the port's current capacity, said PPC CEO Aitor Ibarreche.
Ibarreche said the expansion, which will add loading and unloading space to the facility and wire its crane zone with electricity, is designed to dovetail with the completion of the widened Panama Canal in 2016.
PPC operates the Balboa Port and the Cristobal Port on the Caribbean coast. Asia’s richest man, Li Ka-shing, controls PCC’s parent company Hutchinson Whampoa.
Potash producers to make $140M investment in Port of Portland
Canpotex, a joint venture of three Saskatchewan potash producers, will invest up to $140 million to enhance its processing and export operations near Terminal 5 at the Port of Portland.
The venture, known as Portland Bulk Terminals, will construct a new building, add a ship loader, and improve its conveyer system at the site, located within an expanded enterprise zone. Qualified businesses that invest in enterprise zones are exempted from many local taxes, including property taxes.
Canpotex said it would increase the tonnage of potash it exports through Portland "incrementally" in coming years, according to a joint statement with the Port of Portland.
More than 2 million tons of Saskatchewan potash, a soil nutrient used in fertilizers, transits the Port of Portland each year on its way to Pacific Rim and Brazil markets, the port said.
About 25 protestors gathered early Saturday at the entrance to Port Tampa Bay to prevent Israeli shipping company Zim from unloading there, although there was reportedly no delay in processing the container ship.
Reportedly, dockworkers from ILA Local 1402 crossed the picket line and the Zim Alabama was processed in a timely manner.
The effort, initiated by Block the Boat, is targeted at Zim Shipping in protest of Israel’s treatment of Palestinians in Gaza.
Port of Long Beach to open new chassis operating unit
On Monday the Long Beach Board of Harbor Commissioners approved a plan to establish a chassis operating unit at the port, which Chief Executive Jon Slangerup says could be a solution to a growing bottleneck problem.
The new chassis plan has been called a game-changer that will allow the port to acquire, manage and maintain the trailers that attach to big trucks and to transport cargo containers. Slangerup will present a detailed action model to the board in 30 days.
"This situation is a surprise to me coming from a logistics background," said Slangerup, former president of FedEx Canada. "Peak is something you plan for. … Peak is a part of the transportation industry."
The port head cited lack of chassis during peak hours at the Long Beach port as "the root cause of peak congestion issues."
"This shortage is preventable and (we) must not allow it to happen again ever. Period," asserted Slangerup.
Truckers have traditionally used chassis owned by a company and would return them after use. But some terminals don’t have an adequate chassis supply, which forces truckers to drive to a storage location to acquire one.
The advent of mega-sized container ships calling at the port recently has exacerbated the congestion issue.
The Department of Justice has recently given the green light to allow three major chassis providers to discuss a chassis pool concept, which the industry has been moving toward. A chassis pool would allow truckers to use chassis interchangeably, and chassis owners would then be compensated through rental fees.
Truck-chassis owners DCLI and TRAC said they plan to increase their fleets by more than 3,000 chassis in the near-term to meet supply and demand.
The harbor commissioners also approved raising rates by 5 percent for non-containerized cargo Monday, to take effect on Dec. 1. The rate hike is expected to yield $1.25 million in annual revenue that would go toward infrastructure projects related to non-containerized cargo customers.
The Port of the Americas in Puerto Rico seeks port operator
Puerto Rico is looking for a major port operator to help develop the Port of the Americas on its Southern Coast in Ponce, according to the Puerto Rico Department of Economic Development and Commerce.
The Port of the Americas site encompasses 300 acres just 5 miles from Mercedita Airport, which is good news for port capacity expansion and industrial growth.
In recent years, Puerto Rico has invested more than $285 million in upgrades to the port, including dredging the entrance channel and berth depths of up to 50 feet, according to the statement.
The government of Puerto Rico is positioning the island as a global business hub in the region, now that the island’s broadband Internet service and power production have been significantly expanded.
"We are excited to work with a private-sector partner on the Port of the Americas, to help bring jobs and economic opportunity to the southern coast of Puerto Rico," said Alberto Bacó-Bagué, secretary of Puerto Rico’s Department of Economic Development and Commerce. "Infrastructure investments create valuable jobs in the immediate term and are pivotal to our sustained success in the years to come."
The Port of the Americas is located along the Mona Passage – a key shipping route between the Atlantic Ocean and the Panama Canal – and is equipped to serve Panamax and Post-Panamax vessels. It features two super Post-Panamax ship-to-shore cranes and 4,400 linear feet of quayside.
"We envision the Port of the Americas becoming a major global shipping hub in the years to come," said Carlos Mejia, director of the Port of Ponce Authority.
G6 Alliance announces Asia-U.S. East Coast winter service
Members of the G6 Alliance announced the winter program for Asia-U.S. East Coast sailings, reflecting seasonal changes in market demand, according to a statement from Orient Overseas Container Line.
The G6 Alliance winter program will combine the NYE and SCE services to provide the following port rotation: Xiamen – Kaohsiung – Hong Kong – Yantian – Shanghai (Yangshan) – Pusan – Panama Canal – Manzanillo – Kingston – Savannah – Charleston – New York – Norfolk – Jacksonville – Kingston – Manzanillo – Panama Canal – Balboa – Pusan – Xiamen.
The first sailing of the combined service will start with Hyundai Glory, the statement said, which is estimated to arrive in Xiamen on October 30).
The last sailings of the temporarily suspended NYE and SCE services are as follows:
• NYE: Week 44 E/B (ETA Kaohsiung on October 26) and Week 48 W/B (ETA Savannah November 24)
• SCE: Week 43 E/B (ETA Xiamen on October 21 2014) and Week 48 W/B (ETA Savannah on November 23)
The G6 Alliance also offers services on the Asia – U.S. West Coast, the North Atlantic and Asia-Europe trade lanes. Its members are APL, Hapag-Lloyd, Hyundai Merchant Marine, Mitsui O.S.K. Lines, Nippon Yusen Kaisha and Orient Overseas Container Line.
Regulators require weekly congestion reports from all Class 1 railroads
Union Pacific and six other Class 1 railroads are now federally required to file detailed weekly reports on shipping delays, as federal regulators cope with complaints that crude oil gets top priority at the expense of all other cargo.
The Surface Transportation Board ruled this week that all seven Class 1 railroads with U.S. operations are required to submit weekly information on average train speeds and the amount of time trains spend waiting in terminals, plus a description of operating conditions in Chicago, which is often cited as a rail choke point.
The other major U.S. railroads join BNSF and Canadian Pacific Railway, which were required to submit such reports earlier this year after delays piled up due to harsh weather and a surge in the demand for Bakken crude oil produced in North Dakota.
"Shippers expressed concerns about the lack of publicly available rail service metrics and requested access to certain performance data," the Surface Transportation Board said in a decision released Wednesday. "There is a need for broader standardized performance data from the railroad industry."
10 hurt when ferry strikes piling at San Francisco Pier 41
The U.S. Coast Guard is investigating what caused a ferry to crash into a piling at Pier 41 in San Francisco Sunday.
Agency officials said the Peralta, operated by Blue and Gold Fleet, hit a piling as it backed out of the terminal at Pier 41 at 5:45 p.m. They said 10 passengers suffered minor injuries and were transported to the hospital for evaluation.
Ports of Seattle and Tacoma commissioners address new alliance
The public had its first chance to comment Tuesday on the new Seaport Alliance between the ports of Seattle and Tacoma, a partnership that will unify the marine cargo operations of the two Washington ports.
The two harbor commissions were on hand for the joint meeting, where they unanimously voted to formally submit the Seaport Alliance agreement to the Federal Maritime Commission. The alliance will merge the ports' management of cargo facilities and the commissions' plan will ask the FMC for final approval March 31 — giving them six months to work out the details, such as how to divvy up profits and costs.
The commissions will hold six public meetings on the Seaport Alliance: Oct. 22 and Nov. 6 in Tacoma and Oct. 28 and Nov. 25 in Seattle.
A contingent from the International Longshore and Warehouse Union Locals 52 and 19 attended the meeting. Union leaders supported the alliance, noting it will help the region compete with Southern California and B.C. seaports after the Panama Canal expansion is complete in 2016. Local 52 President Christ Romischer worried about protecting the status quo of existing cargo terminals.
"We don't believe the Port of Seattle Commission is looking to change existing cargo terminals," Romischer said. "But we are concerned that in the future, if there is not strong language to protect terminals, such as Terminal 46 or Terminal 5, from developers trying to change them into condos or arenas, we may have an issue in the future."
Commissioners voiced the need for the state to fund a transportation package, upgrade railways and complete Highways 167 and 509.
Federal judge reinstates two L.A. port truckers fired by Green Fleet
On Tuesday a federal judge reinstated two truck drivers who hauled cargo to and from the port. The drivers allege they were illegally fired during a labor dispute with their employer, Green Fleet Systems in Carson.
U.S. District Judge Philip S. Gutierrez ordered the company to give Amilcar Cardona and Mateos Mares their jobs back, pending the outcome of a National Labor Relations Board case that alleges Green Fleet is guilty of 50 labor law violations.
In their NLRB case, Cardona and Mares allege that Green Fleet acted in retaliation against them for union activity, for filing claims for lost wages, and for asserting that should be categorized as regular employees, not independent contractors who not covered by federal labor laws.
"This decision lets us return to work and continue to fight for justice and a union contract," said Mares.
Gutierrez said it was likely they the two drivers would prevail at the NLRB hearing and there would be irreparable harm to both men if they were not allowed to return to work.
House measure introduced to extend Export-Import Bank charter
A bipartisan measure was introduced Tuesday in the U.S. House of Representatives to reauthorize the beleaguered Export-Import Bank for a period of five years.
Rep. Maxine Waters of California, ranking Democrat on the House Financial Services Committee, teamed with the Republican vice chairman of the committee, Gary Miller of California, to introduce legislation that would extend the bank's charter for five years while overhauling its business.
After receiving a short-term reauthorization before Congress recessed in September, the Export-Import Bank is only sanctioned through June 2015.
The Chair of the House Financial Services Committee, Jeb Hensarling (R-Texas) wants to eliminate the bank, which conservative Republicans view as corporate welfare.
The Waters-Miller bill would extend its charter and require the bank to hold more reserves against losses that could hit taxpayers, establish a permanent chief risk officer, and improve safeguards against fraud and corruption, among other provisions.
Waters called the reauthorization measure a "balanced compromise," and said that it would ensure that the bank "is able to sustain American jobs, support our small businesses and bolster the U.S. economy for the next half decade."
The Export-Import Bank supports U.S. business exports through financing loans, guarantees and insurance.
China and Russia ink currency deal to double their $100B trade
The central banks of China and Russia inked an agreement on a yuan-ruble interchange that is expected to double trade between the two countries by 2020.
The three-year swap deal is worth $24.5 billion and is one of 38 agreements spanning energy, technology and finance concluded at a meeting in Moscow between Prime Minister Dmitry Medvedev and China's Premier Li Keqiang.
China is Russia's largest trading partner, topping $89 billion last year according to Russian customs data. Medvedev said that should increase to $100 billion in 2015 and ultimately reach $200 billion in 2020.
The yuan-ruble trade on the Moscow Exchange has jumped 10-fold this year to $939 million in September, though still only a fraction of the $374 billion in dollar-for-ruble sales.
Russia, facing strict sanctions from the U.S. and European Union over aggression in the Ukraine, is trying to diversify funding sources and move away from dollar-dominated global settlements.
The Federal Maritime Commission has completed compromise agreements with five non-vessel-operating common carriers (NVOCCs), two unlicensed transport businesses, and one vessel-operating common carrier — recovering a total of $503,000 in civil penalties, according to a statement from FMC Chairman Mario Cordero.
The penalties resulted from investigations conducted by the Commission's Area Representatives in Miami and Los Angeles, and Washington D.C. headquarters staff. The FMC said parties settled and agreed to the penalties, but did not admit to violations of the Shipping Act or the Commission's regulations.
According to the FMC statement, the compromise settlements were as follows: Hayek Services, $20,000; ABC Trucking and Logistics $23,000; FCC Logistics $70,000; Sea Central Shipping $85,000; China Container Line $100,000; Orient Star Transport International $100,000; and Eastern Car Liner $105,000.