Monday, October 21, 2013
Hanjin to stop Port of Portland service in January
Hanjin Shipping announced it will stop its weekly service to the Port of Portland in January 2014, ending 20 years of service to Northwest importers and exporters.
The port's biggest trans-Pacific container carrier confirmed Friday it is ending its service due to the high cost of doing business with the port. It will be a major blow to the regional economy, forcing importers and exporters to pay more to transport containers by truck to and from the Port of Seattle.
The departure of Hanjin will also be hard on Portland dockworkers, terminating the $250,000 weekly payroll for those who load and unload Hanjin ships at Terminal 6.
Jeff McEwen, Hanjin's Portland manager, said container handling costs and low longshore labor productivity combined to make Portland too expensive.
"The actual charges have substantially increased, and when productivity doesn't meet our norms," McEwen said, "the cost goes up even more."
Portland has always been an expensive port, since shipping lines must hire pilots to bring their vessels 100 miles up the Columbia River for relatively low container volumes. An ongoing longshore labor dispute and higher terminal charges have also impacted Hanjin, which has lost more than $100 million this year and is struggling to cut costs in an industry plagued with overcapacity and low rates.
Elvis Ganda, chief executive of terminal operator ICTSI Oregon, blamed the International Longshore and Warehouse Union in a statement emailed to The Oregonian. The most recent Hanjin-ICTSI contract expired Dec. 31.
"The ILWU's tactic of intentionally suppressing productivity at Terminal 6 to well below pre-labor dispute levels, resulting in increased costs, made this issue an important factor in Hanjin's decision," Ganda said.
But the ILWU issued a statement saying ICTSI was trying to blame others for its "failed business model." The union said ICTSI tried in contract negotiations to increase rates charged to Hanjin, while insisting that workers speed up and abandon longstanding work practices.
"ICTSI intransigence in its negotiations with Hanjin is the reason for Hanjin's decision to leave Portland," the union statement said.
Port of Portland managers said Friday the decision may not be final, and pledged to do what they could to retain Hanjin or find a replacement.
"They have reached out to us," said Sam Ruda, Port of Portland director of marine and industrial development. "Their senior vice president of sales, marketing and operations wants to come out here within the next two weeks and certainly talk to the port and ICTSI."
For more of The Oregonian story: oregonlive.com
Port of Baltimore reopens Friday after ILA contract extension
The Port of Balitimore opened Friday night, announcing that the work shutdown has officially ended and a 90-day extension of local contracts has been reached.
Approximately 2,000 longshoremen went on strike Wednesday when talks reached an impasse.
Maryland Port Administration spokesman Richard Scher said the Dundalk Marine Terminal and Seagirt Marine Terminal, which receive containers and farm and construction equipment, reopened Friday afternoon. Cargo handled at those two locations is included in the master contract that covers dockworkers from Maine to Texas.
The contracts that involve the handling of autos and forest products were extended after successful negotiations on Friday night between the International Longshoremen's Association Local 333 and the Steamship Trade Association.
Local 333 is the only local union that handles autos, Scher said.
Mazda signed a five-year contract in August that will bring as many as 65,000 vehicles a year to the port from Japan.
Baltimore also handles autos from BMW, Fiat SpA (F) and Daimler AG (DAI)'s Mercedes-Benz. BMW hasn't had to use a contingency plan for the port stoppage, Kenn Sparks, a spokesman for BMW North America, said in an e-mail.
For more of the Bloomberg story: businessweek.com
Hampton Roads record cargo volume triggers chronic logjams
In 2012, Hampton Roads was the fastest-growing container port on the East Coast, with 9.8 percent TEU volume growth compared to 2011. Through the first seven months of 2013, the upward trend has continued with cargo traffic up 7.2 percent year-over-year, but a reputation for rail logjams and high costs may cast a pall over the good news.
In early September, dwell times were hitting five to six days, according to Joe Ruddy, the Virginia Port Authority's chief operations officer. The goal is to get containers out of the terminal in 48 hours.
"I had to pull out, I got so frustrated," said Dwayne Webb, operations manager at Time Dispatch Services, whose 61 trucks ferry containers around the port.
At one point, it could take a trucker four to seven hours to pick up a container at the Norfolk terminal, he said.
It's a surge of rail shipments that has contributed most to the container backup, officials say. The increase has been driven by new business, with three major ocean carriers making Hampton Roads their first East Coast stop over the past few years.
Additionally, the port also has six "last-out" services, which work the opposite way, drawing the most export containers.
Ruddy and other port officials report everything's back to normal and issues will be addressed, basically saying the port has been a victim of its own success.
For more of the Virginian-Pilot story: hamptonroads.com
Amazon sets up distribution hubs inside manufacturer's facilities
Amazon has set up operations inside Proctor & Gamble's manufacturing warehouses, circumventing Amazon's warehouses and facilitating faster, cheaper order shipments, according to the Wall Street Journal.
"The e-commerce giant is quietly setting up shop inside the warehouses of a number of important suppliers as it works to open up the next big frontier for Internet sales: everyday products like toilet paper, diapers and shampoo," wrote the WSJ.
Sellers have come to expect their greatest competition on Amazon to be from Amazon itself, and a few select sellers who have made a deal with the online retail giant. But Amazon is closing more categories to third-party sellers, according to eCommerce Bytes, such as cosmetics and beauty products. Deals with P&G may and other manufacturers may explain the change.
The Wall Street Journal said "by piggybacking on their warehouses and distribution networks, Amazon is able to reduce its own costs of moving and storing goods, better compete on price with Wal-Mart and club stores like Costco Wholesale Corp., and cut the time it takes to get items to doorsteps."
For more of the Ecommerce Bytes story: ecommercebytes.com
Derailed CN train cars still burning
Two railcars were still burning on Sunday, 36 hours after a cargo train carrying crude oil and liquefied petroleum gas derailed in rural Alberta, according to officials.
More than 100 people remained evacuated, but no injuries were reported.
Canadian National Railway reported that 13 of 134 cars on the train derailed about 1 a.m. Saturday in Gainford, 50 miles west of Edmonton.
CN spokesman Louis-Antoine Paquin said the cause of the accident was being investigated and that CN and local emergency crews remained on the scene.
For more of the Wall Street Journal story: online.wsj.com
Tuesday, October 22, 2013
Truckers shut down terminal at Port of Oakland
A group of truckers shut down operations at the SSA Marine terminal at the Port of Oakland Monday to protest work conditions and the high costs of hauling cargo at the port.
Picketers demonstrated outside the terminal's three entrances, forcing closure since crane operators and other terminal staff wouldn't cross the picket line. Approximately 100 truck drivers gathered before sunrise, and the terminal closed by 9 a.m.
The truck drivers, who own and operate their own trucks, say that the amount they get paid per load hasn't gone up in ten years, even though their costs have risen for diesel and truck maintenance.
They want fees to cover the costs of meeting air quality regulations that have become more stringent and to be compensated for chronically long wait times outside congested terminals.
"We're all out here because we don't make money sitting in lines for four hours," said driver Armando Visperas, of San Jose. "It's not working out for us."
Prompted by city officials, an Alameda County judge filed a temporary order last week that bars the protesters from interfering with cargo traffic. Even so, the independent contractors asked for labor activists and the Occupy movement to join them for the protest. Police carrying batons cleared the protesters from one of the entrances yesterday.
"We believe they're raising some valid issues," said port spokesman Isaac Kos-Reed. He said the new port director, Chris Lytle, has met with some of the port's 5,000 registered truck drivers, most of whom own their own trucks, and "is doing everything he can, the port is doing everything it can, to help get them what they want."
"They're trying to use the port as an economic tool. I understand that, but the problem is they hurt the area," said Mike Villeggiante, who heads ILWU Local 10. "People looking on the outside will think it's not a reliable port."
For more of the Mercury News story: mercurynews.com
Tompkins predicts changes for logistics in Shanghai Free Trade Zone
China's new Shanghai Free Trade Zone will have a significant impact on logistics providers, according to an article by Tompkins International, which makes major predictions about coming logistics shifts in China.
Tompkins' recent Asia Supply Chain Excellence Report predicts the establishment of some logistics firms in Shanghai will become more attractive, since now logistics companies registered inside the free trade zone are allowed to have a majority share, although they still need to be joint ventures.
Transfer of cargo by shipping companies is now allowed inside the SHFTZ, and the article projects that this will propel the port into a transfer point for goods bound for other destinations, competing with other ports that have a similar role. Tompkins also asserted that foreign ships will be allowed to ship from the SHFTZ to other domestic ports, although currently only Chinese owned vessels can ship between Chinese ports.
Customs administration in China will become simplified within the SHFTZ, eliminating the current wait of two weeks, according to the report.
Tompkins' foresees that the Shanghai Free Trade Zone will become a go-to global cargo hub, where goods can be delivered and held without paying duty. For example, e-commerce fulfillment will likely be allowed within the zone.
The report notes that although China will continue to take a measured approach to open trade in the zone, the potential for multinational logistics firms is significant.
Cargo volume up again at Port of Long Beach
September container traffic rose 14.7 percent at the Port of Long Beach year-over-year.
The port handled a total of 587,114 TEUs in September. Imports increased 16.2 percent to 307,981 TEUs, while exports surged 17.2 percent to 134,676 TEUs.
For the first nine months of 2013, cargo container volume is up 13.7 percent, including 16.2 percent more imports, 11.5 percent more exports and 10.8 percent more empties.
For the Port of Long Beach and the Port of Los Angeles combined, imports are up 5.7 percent for the third quarter compared to Q3 of 2012
For Long Beach alone, September is the second busiest month of 2013 so far, behind August, due to peak season holiday shipments.
Port of Olympia plans $2.7M warehouse
The Port of Olympia plans to spend $2.7 million to build a second warehouse at its terminal to house currently exposed cargo and accommodate growing volume.
The proposed 50,000-square-foot warehouse would be built between the existing warehouse and the port's administrative building.
Project funding will be provided by a recent port bond issue and port reserves, according to port finance director Jeff Smith.
For more of The Olympian story: theolympian.com
Crowley tug crew rescues men being swept out to sea
The crew of the Crowley tug Siku, operating in West Alaska, recently rescued six men whose 21-foot aluminum skiff had run out of gas in Hooper Bay and was being swept out to sea by a storm, according to a company statement.
The Siku responded to a request by the Coast Guard, located the skiff and towed it back to shore, a five-hour rescue operation in rough seas, the company said.
"We are proud of the professionalism of Captain Isaac and his crew," said Greg Pavellas, director, marine operations. "Crowley has a longstanding relationship with the people of Alaska and we were happy to put our safety and rescue training to work in order to lend a hand to those men who were in dire need."
Thursday, October 24, 2013
Truckers shut down terminal at Port of Oakland
The U.S. Federal Maritime Commission announced Tuesday that FMC Chair Mario Cordero is organizing a global regulatory meeting on the proposed P3 Global Alliance, a collaboration between the world's three largest container carriers, Maersk Line, CMA-CGM, and Mediterranean Shipping.
Cordero asked fellow regulators in the EU and China to convene for a Global Regulatory Summit in Washington D.C. on the proposed relationship between the three major shipping lines, to discuss their respective regulatory roles with regards to the impact of the proposed agreement.
"Together with our European and Chinese counterparts, we as regulatory authorities, have responsibilities related not only to our nations, but to the global shipping structure to ensure that this proposed Alliance does not harm others, including consumers, the maritime community, and world trade," said Cordero.
The three carriers announced they would start cooperating in 2014 on routes covering Asia to Europe as well as trans-Pacific and trans-Atlantic routes to the United States, the statement said.
Maersk Line's chief trading and marketing officer estimated the market control of the alliance would comprise about 42 percent on the Asia to Europe route, 24 percent on the trans-Pacific routes, and 40 to 42 percent on the trans-Atlantic route, according to the FMC.
The P3 network has already named Maersk Line's Lars Mikel Jensen as its chief executive officer, and the new entity has plans to operate from new management offices in London and Singapore with a staff of approximately 200, the statement said.
"One of my concerns relates to media reports that a combined east-west fleet of 346 vessels will be reduced to 255 vessels once the proposed Alliance is consummated," said FMC Commissioner William Doyle. "Maersk Line, Limited is the largest U.S.-flag carrier in the international fleet. To this end, I do not want the Alliance's operations to harm or otherwise negatively impact the U.S.-flag international fleet when decisions are made to cascade or otherwise eliminate ships from service."
Port of Seattle, at half capacity, seeks fed approval to restructure leases
Beleaguered by the continued decline of its container business, the Port of Seattle and its three terminal operators are asking the federal government to approve meetings about lease restructuring.
Seattle's seaport is operating at about 50 percent capacity. The past five years have threatened the viability of the port as competition from other West Coast ports and a soft market have driven down business. Container lines are consolidating their loads onto larger vessels to cope with overcapacity and low rates, so there are fewer ships coming in.
The proposed meetings, requested by the terminal operators, require approval by the U.S. Federal Maritime Commission because of antitrust laws.
The three operators have long-term leases with the port, but if the discussions are sanctioned, almost every aspect of the port's business with shippers and terminal operators would be up for renegotiation, including pricing, hours, infrastructure improvement, and which terminals remain operational.
"The agreement will allow us to discuss operations, facilities, services and other matters in order to improve service, reduce costs, increase efficiency and otherwise optimize conditions at the port," the port said in a statement. "Our goal is to improve the Pacific Northwest container gateway and continue to support thousands of trade-related jobs."
"The bad news is we don't have enough ships coming in. We know that. The Pacific Northwest — Seattle and Tacoma — has been losing market share," said Jordan Royer, vice president for external affairs at the Pacific Merchant Shipping Association.
In June, Moody's Investors Service changed its outlook on Port of Seattle bonds from stable to negative.
For more of the Seattle Times story: seattletimes.com
China's flash PMI indicates at 7-month manufacturing high
China's manufacturing sector in October expanded the most in seven months on robust new orders, according to the preliminary Markit/HSBC survey, a sign of economic stability after September's disappointing PMI and low exports.
The Markit/HSBC Purchasing Managers Index reading was 50.9 in October, above September's final reading of 50.2.
"China's growth recovery is becoming consolidated into the fourth quarter following the bottoming out in the third quarter," said HSBC economist Qu Hongbin.
New orders increased to 51.6, the highest in seven months and well above the 50 reading that indicates expansion.
Many economists reportedly predict slowed growth as worldwide demand remains weak and as Beijing steers the nation towards an economy driven more by consumer demand than investment and credit.
For more of the Reuters article: in.reuters.com
Savannah port deepening approved by House bill
The U.S. House overwhelmingly passed an $8.2 billion bill approving funding for dams, harbor, river navigation and other water projects for the next ten years, including more than $400 million for deepening of the port of Savannah.
"It's another example of the people's house focusing on way to strengthen our economy," House Speaker John Boehner, R-Ohio, said after the vote. "I'm proud that it passed with a strong bipartisan vote."
The water bill's sponsors attracted support from members of both parties by including projects from coast to coast and labeling the measure as a job creator.
"This bill is about strengthening our infrastructure so we can remain competitive. It's about economic growth, it's about trade, it's about jobs," said Rep. Bill Shuster, R-Pa., chairman of the House Transportation and Infrastructure Committee, which wrote the measure.
Business groups led by the U.S. Chamber of Commerce and the National Association of Manufacturers strongly backed the bill.
The Water Resources Reform and Development Act would allow work to proceed on 23 shipping channels, flood management and other water projects that the Corps of Engineers has researched. Actual money for the work would be provided in future legislation.
For more of the Savannah Now story: savannahnow.com
Robbers pose as truckers to swipe cargo
Thieves are posing as truckers to steal containers full of goods, loading the freight onto their own tractor-trailers and driving off. The thefts are hurting the nation's trucking industry, which moves more than 68 percent of all domestic shipments.
Experts say this type of commercial identity theft is growing so rapidly that it will soon become the most common way to steal freight. The con operation has already made off with millions of dollars worth of merchandise, often food and beverages.
Online databases allow the scammers to assume the identities of legitimate freight haulers and to trawl for specific commodities they want to steal.
Examples of the thefts include: 80,000 pounds of walnuts worth $300,000 in California, $200,000 of Muenster cheese in Wisconsin, rib-eye steaks valued at $82,000 in Texas, 25,000 pounds of king crab worth $400,000 in California.
For more of the Tulsa World story: tulsaworld.com
Friday, October 25, 2013
Drewry expects freight rate volatility to continue into 2014
Shipping lines mega ships, which are supposed to reduce operating costs, end up flooding the market with excess container slots. Then the container carriers offer steep discounts, desperate to attract business. In the process, low spot-market rates cause shippers walk away from the contracts that they signed with carriers earlier in the year, perpetuating the industry’s downward spiral.
U.S. trade flat in August, but signs indicate coming improvement
The level of U.S. exports and imports were close to July levels, leaving the monthly deficit essentially unchanged at $38.8 billion, but a new report released by the Census Bureau indicates that trade may soon improve.
Port business operational as Oakland truckers continue protest
Truck drivers continued their protest at the Port of Oakland Tuesday, but unlike Monday, container terminals remained operational as International Longshore and Warehouse Union workers crossed picket lines to return to work.
Pirates kidnap two Americans on oil vessel
Pirates kidnapped two Americans after their ship was attacked off Nigeria's coast, U.S. officials said Thursday.