Cargo Business Newswire Archives
Summary for October 19 - October 23, 2009:
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Monday, October 19, 2009

Top Story

NY-NJ mayors endorse L.A. clean truck program

New York Mayor Mike Bloomberg and Newark Mayor Cory Booker jointly endorsed, on Sunday, the Port of Los Angeles' clean truck program, calling for Congress to, in their words “ensure an obsolete law cannot be used to roll back L.A.'s clean-air progress or deter other ports from following suit.”

The American Trucking Association argued successfully in court over the Federal Aviation Administration Authorization Act, preempting more complete control by the city of Los Angeles and its port over the clean trucks program there amid industry fears of union organization of harbor trucking driving up transport costs.

The mayors of New York and New Jersey weighed in yesterday on behalf of those wanting to reform the Act, including environmental groups and unions.

"For too long we've been offered a false choice between economic growth and environmental sustainability," said Mayor Bloomberg. “Today I am calling on Congress to implement the L.A. Clean Truck Program, an innovative initiative that will create good, green jobs and improve the quality of the air that New Yorkers breathe."

Mayor Booker said: "Newark's residents and port workers disproportionately bear hazards from pollution caused by outdated diesel trucks that transfer cargo shipments. I applaud the Port Authority efforts to enhance air quality such as their program to replace over 600 of the oldest most polluting trucks with newer models, but much more needs to be done to reduce greenhouse gas emissions and improve air quality. I urge Congress to support changes in federal legislation that would enhance the ability of our nation's ports to effectuate policies to improve air quality and protect public health."

It was recently announced that more than 5,000 port trucks servicing the ports of Los Angeles and Long Beach met 2007 federal emissions standards on the occasion of the one-year anniversary of the clean trucks program there.

Navios plans to raise $375 mil to repay debt; purchase two vessels

Shipping company Navios Maritime Holdings Inc. said it would raise about $375 million in a private placement of notes and use part of the proceeds to repay debt.

The Greek company said the notes, due 2017, will be secured by first priority ship mortgages on 15 drybulk vessels.
The company also intends to use the proceeds of the offering to complete the purchase of two new vessels.


For the full story:

Wal-Mart and Amazon gear up for holiday e-shipping war

For Wal-Mart Stores Inc. and Inc., the holiday shopping season is shaping up to be a battle between the Godzilla of retail and the King Kong of e-commerce.

The current price war over hot coming books is just the tip of the iceberg. In recent months, the two companies have increasingly copied each other's playbooks online and are treading more on each other's turf. Chief Executive Raul Vazquez said in an interview that Wal-Mart would continue targeting rivals such as Amazon with other hard discount promotions this holiday season.

-WSJ (subscription required to read entire story)

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Barron’s: COSCO shares might be overpriced

Shares of China Cosco , the country's largest shipping group, may be overpriced, according to a report in business weekly Barron's.

Over the past year, the stock has risen more than 150 percent, compared with a 51 gain for Hong Kong's Hang Seng index. Yet, analyst Damien Horth expects China Cosco to lose money this year, next year and in 2011, the paper said in its October 19 issue.


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Somali pirates hijack Chinese bulker with 25 crew

China's Ministry of Transport said Monday that relevant governmental agencies were making efforts for the rescue of a hijacked Chinese bulk carrier in the Indian Ocean.

The ship named "De XIN HAI" carrying coal was hijacked earlier Monday. Qingdao Ocean Shipping Co., Ltd., to which the cargo vessel belongs, reported the incident to the China Maritime Search and Rescue Center at 3:50 p.m. Beijing time.

The ship was on its route from South Africa to India. There were 25 seamen aboard the ship, according to the center.


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Tuesday, October 20, 2009

Top Story

Port of Long Beach and ATA reach settlement

A settlement was reached Monday between the Port of Long Beach and the American Trucking Association over concession agreements contained in the Clean Trucks Program, officials said.

Despite the deal struck with Long Beach, a legal battle continues to brew between the ATA and the Port of Los Angeles over its version of the year-old ban on dirty diesel trucks.

Under the settlement, the Long Beach Board of Harbor Commissioners agreed to drop its concession program in favor of a registration agreement that focuses on "environmental, safety and security requirements," port officials said.

As a result, trucking companies doing business with the Port of Long Beach are no longer required to submit financial reports, parking plans or records on driver training, vehicle maintenance and insurance.

However, freight haulers will still have to register their trucks and pay a fee to enter port terminals.

-Daily Breeze

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China tries to free 25 crew from Somali pirates

China is making a concerted attempt to rescue members of a bulk carrier seized yesterday by Somali pirates in the Indian Ocean, a government spokesman said.

The pirates have threatened to execute the 25 captive Chinese sailors should China’s navy attempt a rescue, Radio Television Hong Kong reported, citing an associate of the gang it didn’t identify. The navy is preparing a rescue plan, the station reported earlier, citing unnamed military sources.

The captured vessel is the 76,432 deadweight-ton De Xin Hai, Andrew Mwangura, head of the Seafarers’ Assistance Program, said in a mobile-phone text message yesterday.

The ship, which hadn’t registered with naval forces in the area, was hijacked 550 nautical miles (1,020 kilometers) northeast of the Seychelles islands and 700 nautical miles east of Somalia, the European Union said in a statement. A maritime patrol plane has been sent to investigate.


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Report: Freight rates returning to near-breakeven levels

Early signs suggest that the global shipping downturn has hit bottom as freight rates recover to near-breakeven levels, but it could be years before the industry returns to pre-recession levels.

Hong Kong-based container ship operator Orient Overseas (International) Ltd showed just how dire the industry's position remains when it said on Tuesday its shipping revenue for the third quarter sank 42 percent.

China COSCO the country's largest shipping conglomerate, said it raised container freight rates three times from July to September. The rates are now near breakeven levels.

Maersk Line, a unit of A.P. Moller-Maersk expected container shipping freight rates to reach breakeven levels by the first quarter of next year.


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New York Shipping Association tries regain oversight of port labor

The New York Shipping Association is trying to regain control of port labor in a move critics claim would open workers to the same kind of mob exploitation that inspired the film "On the Waterfront."

Joseph Curto, the Shipping Association's president, asked New York lawmakers today to return oversight of the 6,000 longshoremen, checkers, security officers and special craft workers in the Port of New York and New Jersey to the industry.

Curto's testimony at a public hearing in New York City comes as the Waterfront Commission of New York Harbor, which regulates hiring, is being reorganized. An August report by New York's inspector general found evidence of corruption at that bistate agency, which is also entrusted with combating mob influence in the port.

Ronald Goldstock, the Waterfront Commission's New York representative, spoke out against the Shipping Association's proposal. He said his agency needs to continue to regulate hiring to keep out organized crime and promote ethnic diversity in the port work force.

-New Jersey Star-Ledger

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Kuehne & Nagel forecasts freight increase in Q4

Swiss logistics group Kuehne & Nagel hit by lower demand amid the economic downturn, forecast volumes in sea and air freight would rise in the fourth quarter, after it saw signs of recovery in the preceding three months.

Chief Financial Officer Gerard van Kesteren told Reuters final-quarter volumes would be higher compared with the same quarter last year with Christmas trade volumes expected to be significantly higher. The company on Tuesday posted a better-than-expected 10 percent drop in third-quarter net profit.

The WTO expects world trade to shrink 10 percent this year but there have been signs the trade contraction has started to bottom out.


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Wednesday, October 222, 2009

Top Story

Port of Tacoma chief to move on

The Port of Tacoma’s executive director Tim Farrell is vacating his post by year’s end according to an announcement made yesterday by the port commission.

The port commission explained the move was “terms of a transition in leadership.”

“We want to assure our staff, our customers, and our community that the port is dedicated to their continued success,” Commission President Clare Petrich said.

“We continue to focus on maintaining our competitiveness during this challenging economy,” she said.

According to a news story in the Tacoma News Tribune, the aborted NYK container terminal project may have been at the heart of the commission’s leadership change decision.

In 2007, the port announced an $800 million marine terminal project with Japanese shipping giant, NYK. The terms of that deal included a 25-year lease.

Cost estimates reportedly rose to $1.2 billion, the Tribune story said, amid the deepening economic crisis that severely impacted U.S. port traffic.

It was recently announced by NYK that they would instead opt to call at the existing APM Terminal at the port, forgoing the terminal project.

“Bringing NYK Line to Tacoma was a multi-year effort and a significant milestone, both for the port and for me personally,” Farrell maintained. “At age 43, it’s a good time for me to pursue opportunities that have had to sit on the back burner for a while, and to spend more time with my family.”

Farrell joined the Port of Tacoma in 2000 as deputy executive director, serving as executive director since 2004, when he succeeded Andrea Riniker.

Before the Port of Tacoma, Farrell worked for the Port of Seattle and Massachusetts Port Authority.

Deputy Director John Wolfe will serve as interim director.

Maersk to set up global trade center in China

The Maersk Group announced it would locate its global service center in Tianfu Software Park in Chengdu, the capital of southwestern China's Sichuan province

The company said this decision shows its commitment to expand operations in China.

Maersk said it would set up a logistics processing branch as well as a documents processing center in the software park.

The new facility will have total office area of around 15,000 square meters, and will integrate service operations from Maersk's other branches, covering orders and documents processing as well as personnel training, Maersk said.

"After careful and thorough evaluations in China and other countries, we
finally chose Chengdu," said Shi Kesheng, vice president of Maersk Group.

The principal attractions of locating in Chengdu, according to Shi, included: “competitiveness in business, high efficiency in government approvals, a big talent pool as well as huge market potential.”

Maersk will join other global firms operating in Chengdu, including Accenture’s global delivery center, DHL Shared Services Center, Lafarge back-office services center, Amazon order fulfillment center, and domestic players like Alibaba and Tencent.

EU proposes shipping, air industries should cut emissions 20 percent

The European Union proposed that the shipping and airline industries reduce greenhouse-gas emissions by as much as 20 percent over the next decade as part of any new United Nations accord to fight global warming.

Ships would have to cut greenhouse gases by a fifth in 2020 compared with 2005 and airlines would need to trim discharges by 10 percent during the period under the EU proposal to the UN. European environment ministers endorsed the negotiating position at a meeting today in Luxembourg.


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China warns shipping lines to steer clear of Somali pirate area

China has warned domestic shipping lines to keep away from the area where Somali pirates hijacked a China Cosco Holding Co’s bulk carrier in the Indian Ocean two days ago.

China is trying to rescue the 25 crew members of the hijacked ship and has deployed its navy, the Ministry of Transport said on its Web site today.

Somali pirates captured De Xin Hai, a Panamax bulk ship moving more than 70,000 tons of coal from South Africa to India, on Oct. 19. The ship, which hadn’t registered with naval forces in the area, was hijacked 550 nautical miles (1,020 kilometers) northeast of the Seychelles islands and 700 nautical miles east of Somalia, the European Union said in a statement.

The vessel was 1,080 nautical miles southeast of China’s navy force, which was on an escort mission in the area.


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Pirate attacks on rise

The first nine months of this year has seen more pirate attacks than all of last year. And more than half of those attacks were carried out by suspected Somali pirates, an international maritime watchdog group said Wednesday.

"The increased activity in Somalia is the major reason for the spike," said Cyrus Mody, manager of the International Maritime Bureau, which monitors shipping crimes.

From January 1 until September 30, pirates worldwide mounted 306 attacks, compared with 293 in all of 2008, the Bureau said.
Of the incidents this year, Somali pirates accounted for 54 percent: they launched 168 attacks.

Most of them took place off the east coast of Somalia and in the Gulf of Aden, a major shipping route between Yemen and Somalia.


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Thursday, October 22, 2009

Top Story

Major ocean carriers choose, warn, Philadelphia

PHILADELPHIA – A group of major container-shipping lines both supported, and warned, the port community in Philadelphia, PA last night in a rallying cry for that state’s power interests to get more behind containerized growth.

In some comparison-contrast, Claudio Bozzo, the president of Mediterranean Shipping Line told a packed room at a World Trade Association dinner, that rival Baltimore’s freight constituency has rallied stronger behind its port.

“There is more passion there,” he said.

Bozzo also said his company, the second-largest container-shipping line in the world, sees opportunity in Philadelphia, in an interview with Cargo Business News.

“We see a future in Philadelphia, such as with the growth of distribution centers,” he said.

“With 19 start-times [at the port’s terminals], there is a lot of flexibility,” he added.

Bozzo’s shipping line launched a direct European container service this month into the port authority’s Packer Avenue Marine Terminal in a venture with Philadelphia’s Holt Logistics.

Bozzo told CBN he convinced MSC’s home office in Geneva to test the service to see if it can work.

Earlier in the evening, Bozzo told the dinner audience Philadelphia also has challenges to overcome, including being surrounded by competition for the same cargo markets from the ports in Baltimore, Norfolk and New York-New Jersey. Other challenges he outlined included limited routing by the three rail lines servicing the port, and the challenge of a 40-foot shipping channel draft.

Hamburg Sud’s senior vice president, Jurgen Pump, concurred, saying the Delaware River’s draft needs to be 44 feet because currently his ships can’t call Philadelphia fully laden.

“We need to call New York first,” he said.

However, the group stressed the promise of cargo growth in the region, including references to a plan for a 150-plus acre marine terminal facility being developed in South Philadelphia called Southport. The plan has been to have that development’s completion coincide with the opening of the Panama Canal when more trans-Pacific all-water ships are expected to call East Coast ports.

According to Bill Duggan, Maersk Line’s vice president of refrigerated cargo, distribution centers will be set up closer to consumption centers, especially with 70 million baby boomers retiring in the coming years and moving further south on the East Coast.

“The South Atlantic will grow,” he said.

After tough year, Maersk Line sees mid-2010 container growth

PHILADEPHIA – Despite a 22-percent drop in imported containers to the U.S. in 2009 – the “head ball” of the shipping trade – Maersk Line forecasts mid-year recovery in 2010, according to Bill Duggan, the Danish shipping group’s vice president of refrigerated services.

Speaking before a freight industry audience in Philadelphia last night, Duggan said the large retail importers will “start getting into some re-supply of inventories” by that time period.

Duggan also said the shipping industry is now in the early stages of “new behavior” and “a more disciplined view on revenue.”

Revenue was certainly a key issue for the A.P. Moeller Group’s family ownership, and additional 50,000 shareholders this year, Duggan said, referring to the company’s $950 million loss in the first half of 2009.

Service route cuts have been part of the subsequent cost-reduction equation, Duggan said, with the announcement that Maersk’s long-running ‘workhorse” TA3 trans-Atlantic service would cease as of December.

In addition to service adjustments, Duggan said other moves to improve the container-shipping lines’ economic conditions will need to include rate restoration and a more shared cost of bunker fuel.

“Bunker must be a cost of doing business, and no longer the burden of the carrier only,” he said.

Friday, October 23, 2009

Top Story

Maersk Line to stay at Charleston through at least
end of 2014

Maersk Line announced yesterday it would continue serving the Port of Charleston through the end of 2014, reversing an earlier decision to pull out from the South Carolina State Ports Authority after the two parties’ contract expires in 2010.

“Under the new agreement, Maersk Line will maintain a competitive position within the Port of Charleston,” said Dana Magliola, spokesperson for Maersk Line.

“This will allow us to continue to provide a reliable service for our valued customers in South Carolina, a benefit to the economy both in Charleston and throughout South Carolina,” said Magliola.

The shipping line said it would be “working from a smaller, dedicated portion of the Wando Welch Terminal.”

“We have worked closely with the leadership of the South Carolina State Ports Authority since we initially voiced our concern about cost competitiveness for Maersk Line within the Port of Charleston. We are pleased to have reached an agreeable solution for both Maersk Line and the Port of Charleston,” said Gordon Dorsey, senior vice president of operations for Maersk Line in North America.

Dorsey singled out the efforts of Jim Newsome, the SCPSA’s CEO, Paul McClintock, the port’s COO, and South Carolina Senator Larry Grooms, and others in the state senate, “in playing a crucial role in keeping the talks alive and fostering a second round of discussions that resulted in today’s agreement.”

“Maersk Line is the largest line in the world, having 15 percent of the world’s market share,” said Charleston’s Newsome. “I cannot imagine running a major port without having Maersk as a prominent customer. The good news is that we will not have to.”

The Port of Charleston said Maersk has had a presence there for more than 50 years.

UP, BNSF profits drop

Union Pacific Corp. reported a 26% decline in third-quarter profit Thursday, citing a persistent slump in rail demand, particularly from the auto industry, in the face of the global recession.

The Omaha, Neb.-based railroad operator posted earnings of $517 million, or $1.02 a share, down from $703 million, or $1.38 a share, in the year-ago period.

Revenue fell 25% to $3.47 billion from $4.63 billion, bogged down by a 30% decline in its auto-freight business and a 39% drop in industrial-products freight.

Separately, Burlington Northern Santa Fe Corp. reported a third-quarter profit of $488 million, or $1.42 a share, down from $695 million, or $1.99 a share, a year ago.

Excluding a one-time favorable coal rate adjustment, earnings came in at $1.36 a share. Sales fell to $3.6 billion from $4.9 billion.

Analysts were looking for a profit, on average, of $1.29 a share, on sales of $3.64 billion.


For the full story:

Truck tonnage slipped in September

For-hire truck tonnage slipped 0.3 percent in September posting 2.1 increases in July and August, according to statistics released by the American Trucking Associations.

"The trucking industry should not be alarmed by the very small decrease in September," said the ATA’s chief economist, Bob Costello.

"We took two steps forward in July and August and this was a miniscule step backward," he said.

"Between most economic indicators recovering and less of an overhang in inventories, I'm confident that the industry is still on the road to recovery," he said.

Korea state lenders form shipbuilding bailout funds

Korea Development Bank, the state- owned lender, formed a $1.8 billion fund to help pay for vessels at the nation’s shipyards as commercial banks pare ship- financing on tumbling vessel prices.

State-owned Korea Asset Management Corp. has also set up a similar fund as the government assists yards in the world’s biggest shipbuilding nation.

Commercial lenders have curbed shipping loans as vessel prices have slumped to a four-year low on plunging trade, leaving banks at risk of being unable to recoup defaults by seizing ships.

The price of ships has dropped as much as 40 percent from their peaks in the third quarter of last year, according to Yang Jong Seo, a researcher at the state-run Export-Import Bank of Korea.


For the full story:

Congressional steel caucus pushes another infrastructure bill

More than 35 Congressional Steel Caucus members called on their colleagues to approve a bill that would provide federal funds for infrastructure projects around the country.

U.S. Rep. Pete Visclosky, D-Ind. and other House lawmakers said in a letter sent Thursday to House Speaker Nancy Pelosi, D-Calif., the projects will provide jobs and revenue to states and municipalities and boost steel producers and industry suppliers and goods manufacturers.

Visclosky is chairman of the Congressional Steel Caucus, a bipartisan bloc of lawmakers who are from districts with a steel industry presence or are interested in the health of the domestic steel industry.

The letter touted data from the American Society of Civil Engineers, which estimated that $1.6 trillion is needed in a five-year period to bring the nation's infrastructure -- including highways, waterways, rail, aviation and pipelines -- to a "good condition."

-NWI Times

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