China's HNA will spend billions to acquire EU, US companies
China investment firm HNA Group has $6.3 billion in credit from state backed banks to invest in European and U.S. companies. The group, which invests in shipping, aviation and hotels, intends to increase its overseas holdings from 10 percent to 40 percent within 5 years. European and U.S. companies are more transparent and easier to get out of, according to HNA, and poor stock market performance has reduced the prices of some.
This year the company has invested in container leasing company GE SeaCo for $1.05 billion, partnering with Bravia Capital.
The huge tunnel boring machine, or TBM, is on site at Watson Island and about to dig the $1 billion Port of Miami tunnel. The monstrous mechanical device, which looks like a train or rocket, will dig through limestone, remove excavated soil by conveyor and install tunnel walls.
The tunnel will go from the center of the island in Biscayne Bay, in the middle of the MacArthur Causeway, to Dodge Island. It will consist of twin tubes, with two lanes each, one leading to Dodge Island, and a return tunnel, each 4,200 feet long.
The first truck should be able to use the tunnel in May 2014. It will provide a direct truck connection from the Port of Miami to highways via Watson Island to I-395
and will make lessen the congestion on downtown streets.
Union Pacific, the largest railroad in the U.S., saw its third quarter earning rise 16 percent after raising its prices to counter higher fuel costs and slow shipment rates.
Revenue rose 16 percent to $5.1 billion. UP earned $904 million or $1.85 per share in Q3, compared to $778 million or $1.56 per share one year ago. Shipping volume grew 1 percent during this period. The amount of cars and parts shipped grew by 10 percent and energy sector shipping rose 7 percent, while intermodal and agricultural shipments dropped.
According to an industry report by Martin Associates, the Great Lakes and the St. Lawrence River shipping industry saves $3.6 billion a year compared to over land shipping. The area moves 160 metric tons of cargo a year, making billions for the U.S. and Canada and supporting over 200,000 jobs. Ships haul a majority of bulk cargo, including iron ore coal, stone, salt, sugar, train, steel, wind turbine parts and heavy machinery.
The connection to transoceanic vessels connects the region to overseas ports, allowing farmers and manufacturers to sell their products internationally. Based on 32 ports in 2010, the report found that Great Lakes shipping generates $33.5 billion in revenue and $4.6 billion in taxes to the area.
Many environmentalists say the reports is one-sided, objecting to Great Lakes shipping due to invasive species the ships bring in through discharged ballast water. Species such as zebra and quagga mussels are thought to have caused billions of dollars of damages through destabilization of the aquatic food chain and a surge of algae growth.
The SpaceX Dragon capsule is arriving at Cape Canaveral Monday. This commercial aircraft will likely carry cargo to the International Space Station if its second test flight, scheduled for January 2012, is successful. SpaceX is up for a billion dollar International Space Station cargo contract.
House Republicans are sponsoring a 6-year transportation construction bill as a major jobs bill, hoping that it passes through Congress by election year 2012. The bill is designed to boost employment in the transportation and road building sectors, offering up federal funds to state and local government for large infrastructure plans.
The bill would spend $285 billion over 6 years, fostering investment in roads, bridges and transit via federal loans. A major obstacle to bill passage fell away when an agreement was made to continue highway funding at its current level despite lower gas tax funding. GOP leaders have not yet addressed how they will pay for the $100 billion shortfall between gas tax and other revenues and the funding they propose.
Last month, Republicans blocked President Obama's proposed $447 billion jobs plan, including new infrastructure and education spending, which was partially paid for by higher taxes on the wealthiest Americans.
DP World, which had 10 percent increase in container volume in the third quarter, says they expect to achieve full-year gross profits in line with expectations.
The fourth largest port operator handled 14.4 million twenty-foot equivalent units in Q3, compared to 13.1 TEUs the year before. Gross volume for the first three quarters is 40.6 million TEUs, an increase of 11 percent.
DP World's port operations grew in the United Arab Emirates, Africa and America, and they also made money from selling their Australian division. In the first half of the year, the company's net income quadrupled to $705.3 million from $176.6 million a year earlier.
DP World's London Gateway deep-sea port, on the Thames 25 miles east of London, will begin operations in Q4 of 2013.
China plans to invest $7.1 billion to expand Dandong port to open up a transport hub in North Korea. Located on the North Korean border, Dandong will handle 100 million tons of cargo after the expansion, compared to the 60 million tons it presently handles.
After being sanctioned internationally in 2006 for nuclear weapons testing, North Korean leader Kim Jong-il has reached out to China and Russia to make up for the lack of U.S. economic help.
China is positioning itself to benefit should North Korea open up its trade. Bilateral trade between the countries made $3.2 billion in the first seven months of 2011, an increase of 87% from last year.
A New Mexico resident tried to smuggle 76 pounds of bologna from Mexico to the U.S. in a spare tire. U.S. Customs and Border Protection officers at the Paso Del Norte crossing port at El Paso seized 8 rolls of Mexican bologna after scanning the Ford truck's spare tire with a density meter.
The driver was issued a $1,000 fine and released.
Mexican bologna is prohibited in the U.S. because it's made of pork and may introduce foreign animal disease to the U.S. pork industry.
Atlanta shipped $9.5 billion in cargo through the ports of Savannah and Brunswick last year, an 18 percent increase from the year before. Georgia Governor Nathan Deal and Atlanta Major Kasim Reed are using this statistic as proof that the Savannah River deepening process must go forward in 2012 for Savannah to retain its status as the country’s fourth largest and fastest growing container port.
Reed discussed federal funding for the $600 million deepening process with the Obama administration last week. In order to accommodate the massive cargo ships that will come through the newly expanded Panama Canal in 2015, Savannah and several other competing East Coast ports must deepen their harbors now. Otherwise they will miss out on the big money, jobs and lower shipping costs that will come with the large ships calling at their ports.
Georgia wants to deepen the river from 42 feet to 48 feet, allowing the big ships that carry 10,000 containers to dock at the port.
The process has been bogged down with fiscal and regulatory concerns. South Carolina’s environmental agency has denied a permit by the Corps of Engineers to deepen the Savannah River. In addition, S.C. officials are worried that the Savannah port will leave the Port of Charleston behind.
Matson Navigation Co. expects absorb some container shipping business to Guam next month when Horizon Lines ends its service there. Matson said it has the excess cargo capacity to handle the volume left by Horizon.
Currently, Matson ships call at Guam weekly.
Horizon will cease its West Coast-China route, which will end its service to Guam, Micronesia and the Northern Mariana Islands.
Last year, the Port of New York/New Jersey was ranked as the third busiest U.S. port based on total imports and exports. As the largest port on the East Coast, it received 32.2 million metric tons of cargo worth over $175 billion, and generally handled more than 5 million TEUs in 2010. It is the hub of the Northeast U.S., and critical in terms of national commerce and security.
PONY/NJ is top in the nation in terms of the transportation infrastructure it provides to support its maritime port facilities, but some outstanding issues remain. Officials from both states are concerned about the limited depth of the channels at the port, currently able to handle ships with a 45-foot draft. As ships get ever larger and a wider Panama Canal opens, the Port Authority wants to accommodate the “New Panamax” ship size by dredging up to 50 feet.
Another problem involves the limited air draft of the 1931 Bayonne Bridge. The 151-foot draft is much too small for large ships calling at the port, and several ships have struck the bridge in the past few years. Sometimes the ships have to wait for low tide in order to get the few feet they need to clear the bridge. There are plans for a new bridge to be built with a draft of 215 feet. PONY/NJ has earmarked $1 billion for this $3 billion dollar project.
The UN Security Council declared that all U.N. member states should make piracy a crime. They asked all members to issue reports by the end of the year on measures they have implemented to criminalize piracy and in particular to prosecute those who have raided ships off the coast of Somalia.
This year Somali pirates have ramped up their attacks in spite of patrolling nearby. In the nine months of 2011, pirates have taken 625 hostages, killed eight and hurt 41 people. Somali pirates were responsible for 199 of the attacks.
Because of Somalia’s unstable government, punishing the pirates is difficult, but the Security Council is looking at ways to establish courts and prisons in the area with international participation.
AAPA Chairman appeals to Congress for port funding
Jerry Bridges, chairman of the board of the American Association of Port Authorities and executive director of the Virginia Port Authority, testified before Congress on Wednesday to appeal for more federal funding for ports. Christopher Koch, president and CEO of the World Shipping Council, also testified.
“While ports are planning for the future, the federal government has not kept pace with the industry or our international competitors,” Bridges said to the U.S. House Transportation and Infrastructure Committee’s Water Resources and Environment Subcommittee.
The subcommittee and testimony focused on the need for full utilization of the Harbor Maintenance Tax (HMT) to maintain federal navigation channels and the need for a long-term surface transportation authorization bill to address landside infrastructure needs.
Bridges voiced AAPA’s support for a reauthorization bill, including the need for support of freight transportation, improved seaport connections and inserting a maritime title in the bill.
Koch talked about the importance of seaports to the economy and modern trade realities, including the impact of the new Panama Canal locks, citing the Panamax-size vessels they will accommodate and the ensuing changes for U.S. trade flow. He defended port deepening, noting that dredging should not be regarded as "ear mark" spending, and that ports should have adequate investments to serve the country's needs.
The heads of three other U.S. port authorities also testified on behalf of their ports: Omar Benjamin, Port of Oakland; William Friedman, Cleveland-Cuyahoga County Port Authority; and Paul Anderson, Jacksonville Port Authority. Others who appeared as witnesses included Jo Ellen Darcy, assistant secretary of the Army for Civil Works and Peter Peyton, president of the International Longshore and Warehouse Union Marine Clerks Association.
Bridges and AAPA president and CEO Kurt Nagle wrote an op-ed on the importance of federal funding for ports, published in the Capitol Hill newspaper and The Hill newspaper's CongressBlog. Read it here.
In the third quarter, the U.S. gross domestic product rose at a 2.5 percent annual rate, faster than it has in a year, according to an announcement today by the Commerce Department. Household purchases increased at 2.4 percent, a rate higher than projected.
Stocks climbed on the announcement, which coincided with news that European nations have decided to expand a bailout fund to $1.4 dollars in response to their debt crisis.
U.S. durable goods orders rose in September, indicating that the manufacturing sector may help bolster our economy. Demand for goods expected to last three years excluding transportation gear rose 1.7 percent, according to the Commerce Department, the highest in six months.
A federal tax break to encourage business investment and a 14 percent drop in the dollar's value since June 2010 are helping to boost U.S. exports.
Japan wants to be a member of the ASEAN maritime security forum, according to an official from the Association of Southeast Asian Nations. Japan depends on some of the same fishing and trade routes as member states, and would be flexible regarding how the expanded forum would conduct itself. The body deals with unimpeded maritime commerce, including problematic issues such as piracy at sea, human trafficking and other transnational crimes.
Some members are thought to have reservations about Japan's membership, thinking the current membership should be consolidated before expanding. Currently, ASEAN includes the Philippines, Indonesia, Malaysia, Singapore, Thailand, Brunei, Cambodia, Vietnam, Laos and Myanmar. Only the Philippines have supported the idea, and Singapore has indicated it would not block the initiative.
The Transportation Security Administration screener in New Jersey who wrote a note and put it in a female passenger's bag after screening her luggage is no longer working as a screener, according to the TSA.
The note, which said "Get your freak on girl," was written in response to finding a sex toy in the luggage of a Manhattan lawyer, who blogged about it. She wrote it was a violation of privacy, but also that she "died laughing" in her hotel room when she saw it.
After media inquiries, the screener was identified and removed from the screening position. The agency did not say whether the individual was still working for the TSA.
The NJ legislature approved the sale of $1.3 billion in Transportation Trust Fund Authority bonds in November to keep their state highway and rail construction program going.
In 2010, Democratic lawmakers delayed a similar $1.4 transportation bond request, asking for a detailed plan as to how the trust fund would be reimbursed. This resulted in Republican Governor Christie suspending road construction for a day, until Democrats relented and approved the funding.
Christie came up with an $8 billion, five-year transportation funding plan in January that would provide $1.6 billion annually for road and rail work with no tax hike, and involves $4.4 billion in borrowing over that five years. Dems say his plan depends on economic growth, since the low interest on the outstanding debt is scheduled to go up next year.
The NJ Transportation Trust Fund Authority is $12.5 million in debt. Almost all of its annual revenue, about $895 million, goes to pay this debt.
Governor wants Alaska’s natural gas shipped to Asia
Alaska Governor Sean Parnell, addressing a meeting of the oil and gas industry, said Alaskan producers should ship natural oil to Pacific Rim markets rather than to the U.S. He said the producers and TransCanada Corp should focus on building an export terminal rather than a pipeline into the U.S.
Parnell said he had discussed such a terminal with Exxon, BP and ConocoPhillips. Natural gas companies are looking to reposition themselves toward Japan and other Asian countries because of low U.S. gas prices and demand.
TransCanada and Exxon have a proposal to build a $41 billion pipeline connecting Prudhoe Bay on the state’s North Slope to Alberta, Canada, in turn connecting to TransCanada’s existing pipeline into the U.S.
In one of the first U.S. gas export agreements; Cheniere Energy (LNG) signed an $8 billion deal Wednesday with UK’s BG Group to sell liquefied natural gas from a facility in Louisiana. Cheniere received federal approval to expand the Louisiana terminal for this purpose.
China’s largest shipping line, China Cosco Holdings, projects a loss this year due to diminishing rates for carrying commodities and containers. They said yesterday they have seen a particular loss in the global dry-bulk shipping market, although it didn’t provide numbers. The company reported a $330 million Q3 loss.
China Cosco’s average container rates on transpacific routes decreased by 26 percent from last year, and fell 41% on Asia-Europe routes.
Half the oil has been pumped from the Liberian container ship Rena, grounded off the coast of Tauranga on the east coast of New Zealand’s North Island.
Operated by Mediterranean Shipping Company, the Rena has been stuck for over three weeks. It is wedged on the reef with large cracks down both sides. Its instability on the reef raises the risk of the ship breaking up.
About 350 tons of toxic fuel spilled into the sea, causing the nation’s first environmental crisis in decades.
New Zealand salvage teams have pumped over 800 tons of oil from the ship. They now face the difficult step of pumping oil from a submerged tank. When it hit the reef, the Rena had 1,700 tons of fuel oil on board.
The captain and second officer, both from the Philippines, have been charged with the dangerous operation of the ship. They may be fined up to $7,900 or go to prison for one year if found guilty.
A cannon was pulled from the Atlantic Wednesday from the wreckage of Queen Anne’s Revenge, the ship of the pirate Blackbeard. It was the 13th found on the ship.
The cannon is 8 feet long and weighs 2 tons, and is being examined by the Queen Anne’s Revenge conservation lab.
The pirate ship began as La Concorde, a French slave ship. Blackbeard captured it to make it the flagship of his fleet in 1717, and the ship sank off the coast of North Carolina in 1718.
