Cargo Business Newswire Archives
Summary for October 26 through October 30, 2015:

Monday, October 26, 2015

Maersk cuts profit forecast on weakened global economy

A.P. Moller-Maersk cut its 2015 net profit forecast by 15 percent on Friday, attributing the adjustment to a slowdown in the container shipping market that indicates a weaker global economy.

Analysts said Maersk's problems were also due to overcapacity in the shipping industry, which appears to be worse than previously anticipated and is driving down freight rates.

At 1040 GMT Friday, A.P. Moller-Maersk shares were down 6.8 percent at 9,760 Danish crowns, compared with a 1.3 percent rise in Europe's blue-chip share index.

"What we are seeing in general is a slowdown in global GDP growth. We have seen the IMF downgraded its figures and we are feeling it could be on a downward trend," said Chief Executive Nils Andersen on a teleconference.

The International Monetary Fund (IMF) in July trimmed its forecast for global economic growth for this year to 3.3 percent from 3.5 percent previously, and economists are particularly concerned about slowing growth in China.

Maersk said it now expected its 2015 net profit excluding one-offs would be around $3.4 billion, some $600 million lower than previously forecast.

It said market conditions worldwide for Maersk Line had been weaker than anticipated.

Freight rates for transporting 20-foot containers from Asia to northern Europe, carrying anything from flat-screen TVs to sportswear, were $231 this week -- widely considered a loss-making level.

Rates have been falling for six consecutive weeks and are at their lowest levels since June 19.

Maersk Line has managed to bring down unit costs in recent years by deploying bigger and more fuel-efficient vessels. But the mix of overcapacity, low demand and falling rates is depressing profits in the industry that carries up to 90 percent of global trade.

For more of the Reuters story:

NWSA to conduct environmental review of Terminal 5

The Northwest Seaport Alliance (NWSA) says it has taken one more step toward getting Terminal 5 in Seattle ready for big ships.

NWSA has determined that additional environmental review is required by the State Environmental Policy Act (SEPA), and will prepare an Environmental Impact Statement to ensure that the upgrades will meet industry needs, while engaging with stakeholders to identify potential project-related impacts and ways to manage them.

Terminal 5 could only handle ships with a capacity of 6,000 TEUs when container operations were suspended in July 2014 to allow for the investments necessary to handle two 18,000-TEU ships simultaneously.

"Upgrading Terminal 5 to handle larger vessels is critical to creating new maritime and industrial jobs for the region," said Stephanie Bowman, co-president of the Port of Seattle, a partner in the alliance with the Port of Tacoma. "As part of our commitment to the community, we will carefully study the environmental impacts of the terminal improvements."

The planned dock improvements will accommodate heavier cranes and provide deeper drafts to handle the larger ships cascading into the trans-Pacific trade, according to the alliance statement. Design and permitting began last year.

Longtime West Seattle resident and environmental attorney Peter Goldman, who has worked both with and against port projects, thanked and applauded the NWSA’s decision to seek an EIS for Terminal 5.

"An EIS will give the ports and the neighborhoods surrounding it an opportunity to ensure that T5 is designed to be both a competitive deep-water terminal and a good neighbor," Goldman said. "It’s heartening to see the alliance do this right."

Greek dockworkers protest privatization of ports

Greek longshoremen walked out Thursday to protest the planned privatization of the country's two biggest ports, one of the conditions of the country’s multi-billion euro bailout from international lenders.

Setting a date to submit binding bids for Piraeus and Thessaloniki ports is one of the actions that Athens must include in its first bailout review to unlock more funds for its 86 billion euro bailout.

Shipping ministry officials said the labor action did not appear to be disrupting traffic at the ports.

A statement from the dockworkers' labor union vowed to avert privatizations and accused the government of attempting to sell out to "foreign owned monopolies."

"Ports should be developed by utilizing own capital, through credit facilities and tapping European Union funds," it said. Mission chiefs of lenders are in Athens to assess compliance with bailout terms.

CaroTrans announces 11 new LCL services between China and the U.S.

NVOCC CaroTrans has announced 11 new, direct LCL import services between China and the U.S. including: - Ningbo to Los Angeles, Oakland, Seattle, Chicago, New York, Miami, Dallas and Houston - Xiamen to Los Angeles, Chicago and New York.

These services were launched in late August 2015. CaroTrans says it is strengthening its existing China network that consists of its own team in Shanghai and now a new alliance with Portever Shipping, an NVO based in Ningbo.

"Consistent and frequent LCL services provide the supply chain options and flexibility shippers need today. With this new cooperation with PortEver, we’re broadening our China-U.S. scope of import services to address the needs of our logistics service provider customers that are looking for alternative service solutions," said Greg Howard, CEO of CaroTrans.

Family of El Faro seaman files Jones Act lawsuit

The Lawsuit Settlement Funding Company reports that the family of a man aboard a cargo ship that sank during Hurricane Joaquin has recently filed a $100 million wrongful death lawsuit against the owners and captain of the ship.

According to USA Today, the suit "alleges that TOTE Maritime and Davidson were negligent in choosing to sail a 41-year-old cargo ship into dangerous weather." The cargo ship El Faro, which was heading for Puerto Rico, was caught in the seas during Hurricane Joaquin. A few days after they departed, they were out at sea during the hurricane, and reported that they had lost power and were "taking on water."

The lawsuit is regarding one man out of 33 crewmembers, but Legal-Bay expects others to file suit, as is typically the case in shipwreck cases. Items were found during searches, including a survival suit with "unidentifiable remains inside" and "a heavily damaged lifeboat and other debris."

No survivors or other remains were found, and the Coast Guard recently ended the search. The man’s mother released a statement, questioning why her son and his co-workers were sent into the storm, according to the LSFC statement.


Tuesday, October 27, 2015

Seattle to establish heavy haul network to facilitate trade

Mayor Ed Murray praised the Seattle City Council for passing legislation to establish a heavy haul network of city streets in Seattle. The network will allow heavier cargo containers to be transported between the Port of Seattle, industrial businesses and rail yards.

"Seattle is an international gateway and trade supports our strong and diverse economy," said Mayor Murray. "A heavy haul corridor will help freight move more safely and efficiently through our industrial center. I applaud the council for approving a plan that will support thousands of trade-dependent jobs and businesses in Seattle, around the region, and across the country."

The measure provides a framework to repair and build roadways within the network, calls for semi-annual safety inspections of heavy haul trucks, and aligns weight regulations with the state and other municipalities across the country. The proposal will also eliminate citations from the State Patrol to truck drivers for carrying overweight loads.

The Port of Seattle is contributing $250,000 towards start-up and implementation costs for 2016 and 2017. To offset the anticipated impacts of allowing heavier trucks, the port will contribute between $10 million and $20 million over the next 20 years towards roadway repair and reconstruction within the network.

Commercial drivers will be required to purchase a $200 annual permit for transporting loads up to 98,000 pounds. The fees collected from the permits will be used to administer the program, including a Commercial Vehicle Enforcement Officer.

The proposed corridor will allow the port to be more competitive with West Coast rivals, which have similar heavy haul networks.

"The Northwest Seaport Alliance thanks the Seattle City Council for its approval of a heavy haul network that will make us a more competitive international gateway and improve the livelihood of truck drivers," said Port of Seattle Commission Co-President Courtney Gregoire. "Seattle’s heavy haul network, like others in Los Angeles, Long Beach and Tacoma, will allow freight to move more safely and efficiently through our North Harbor."

Baltic Exchange joins forces with Ningbo Exchange on container index

London's Baltic Exchange and China’s state-owned Ningbo Shipping Exchange announced they would collaborate on container indices, the first foray by the Baltic into this segment of the freight market.

In early October, sources told Reuters that the London Metal Exchange, which is owned by Hong Kong Exchanges and Clearing, had informally approached the Baltic in order to acquire it. In a first step, Ningbo's weekly containerized freight index - which tracks rates on various routes - would be published on the Baltic's website, the exchanges said.

A Baltic spokesman said it would work with Ningbo to do "more in the container space."

Baltic chief executive Jeremy Penn said separately the move underlined its "ever-closer ties with the Chinese market."

The Baltic's move is part of efforts by Western firms to get involved in China's "One Belt, One Road" initiative, which intends to create an array of railways, highways, oil and gas pipelines, power grids and other links across Central, West and South Asia.

Until now, the privately-owned Baltic, the hub of global shipping since its founding in 1744, has published data related to the dry bulk and oil tanker markets, including the benchmark BDI main sea freight index.

The Baltic's daily benchmark rates and indices are used to trade and settle freight contracts as well as providing data used in the freight derivatives market.

Ningbo, in the eastern Chinese province of Zhejiang, is one of the world's top ports handling over 20 million TEUs per year. Ningbo Shipping Exchange, established in 2011 and sponsored by the Ningbo municipal government, provides data. It launched its container index in September 2013.

Ningbo's general manager Dong Shanhua said it aimed to boost the presence of its products globally via the Baltic collaboration.

For more of the Reuters story:

Port of Long Beach scores $1.2M EPA grant for eco-friendly tractors

The Port of Long Beach has received a $1.2 million grant from the U.S. Environmental Protection Agency to help Long Beach Container Terminal replace diesel-fueled tractors with electric, zero-emission vehicles.

The Diesel Emission Reduction Act grant will help LBCT to buy eight cargo-handling electric-powered yard tractors for $5.4 million, replacing a matching number of diesel-powered yard tractors and reducing the associated air pollution.

The electric vehicles are key components of the port’s $1.3 billion Middle Harbor project, which aims to be the world’s greenest shipping terminal. The virtually all-electric and zero emissions facility is scheduled to open early next year.

"These vehicles will cut pollution, providing immediate health benefits to surrounding communities," said Rick Cameron, the port’s managing director of planning and environmental affairs. "They’re an important part of building our Port of the Future and we thank the EPA for recognizing our efforts and awarding us this funding to facilitate the project for LBCT."

The project is expected to reduce emissions of smog-forming nitrogen oxides by 40 tons and diesel particulate matter by two tons during the lifecycle of the equipment. Vehicles will be delivered by the spring or summer of 2017.

OOCL adds Savannah call to Atlantic Express 1 service

OOCL announced it would add Savannah as a port call to its Atlantic Express 1 (AX1) service starting November 2015.

This call will enhance their existing port coverage of Savannah through their Pacific Atlantic 1 (PA1) service.

The new port rotation of AX1, starting late next month, will be: Le Havre – Rotterdam – Hamburg – Southampton - New York – Norfolk – Charleston – Savannah – Le Havre.

The first ship adding the Savannah call will be the Kuala Lumpur Express, scheduled to embark from Le Havre on November 27, according to OOCL.

Hurricane Patricia forces bulk carrier against rocks

The strongest ever hurricane to hit the Western Hemisphere was powerful enough to move an enormous bulk carrier like a toy but remarkably failed to claim a single life on Mexico’s Pacific coast.

Despite the welcome absence of fatalities, Mexico did not escape the disaster unscathed as a cargo ship was swept dramatically off course and smashed against rocks. The Llanitos became wedged between rock formations in Punta Graham, in Barra de Navidad, Guadalajara and the 27 crewmembers had to be rescued by a military chopper.

For more of the 9 News story:


Wednesday, October 28, 2015

Drewry: Fewer container carriers doesn’t threaten competition

A new report from the United Nations Conference on Trade and Development (UNCTAD) highlights risks to competition in the container sector, specifically for smaller nations. The Review of Maritime Transport 2015 correctly identifies the growing control of vessel capacity among the leading container lines, suggesting that the search for economies of scale via bigger ships means there are fewer carriers in individual markets.

According to UNCTAD’s research, there is now an average of 15.7 carriers providing services to each country’s ports, down from 22.1 in 2004. UNCTAD identified 32 countries (mostly small island states) with fewer than four carriers calling at their ports, up from 22 back in 2004.

"The average vessel size per country will continue to grow and so we expect there will be fewer companies in individual markets, and this is an increasing challenge for the smallest players," Jan Hoffmann, head of trade facilitation at UNCTAD, told Reuters.

But Drewry researchers disagree with some of the conclusions in the report, for instance saying the rise of the mega-ship does not explain why smaller countries such as Samoa or Iceland are less well served, since these ships were never meant to call at these remote locations that lack sufficient cargo to attract more than a handful of lines.

Furthermore, as the container carriers first went global and then consolidated, many of the smaller North-South carriers disappeared and were acquired, but were not replaced by new entrants. The Hapag-Lloyd/CSAV combination is the latest example. But Drewry says that several carriers are now considering entering the African trades, as volumes increase and as the number of competitors have decreased.

The move towards big ships has certainly reduced the number of vessel operators in the major ocean trades, but Drewry analysts say the industry nonetheless remains extremely competitive, which has contributed to the downwards trend in freight rates.

There are currently 16 vessel operators in the Asia-North Europe trade route where most of the ULVCs are deployed, down from 20 in 2009. However, when you add in all of the subsidiary companies and slot charter parties, the number of carriers is much higher. For example, Drewry counts around 30 different carriers offering space between Shanghai and Hamburg. Admittedly the number of options will be lower between smaller port pairs.

Part of the rationale for ordering big ships was to reduce carrier costs, something they have had more success with than raising freight rates. This coping strategy might have lowered the number of ship operators but Drewry asserts it has not kept smaller lines from entering the fray.

Drewry said the biggest risk to competition within the industry is from the sustained low freight rates that produce very thin profit margins, forcing some carriers out of the global market.

Drewry concludes that the trend towards fewer carriers is not a severe threat to competition. Despite prolonged low margins, they count it as positive that carriers and ship owners continue to (over)-invest in new ships in order to facilitate international trade, giving customers sufficient choice.

Canadian terminal operator breaks ground on B.C. intermodal rail yard

GCT Canada, operator of the flagship container terminal at Port Metro Vancouver, said the company has broken ground on its Deltaport Intermodal Yard Reconfiguration Project.

The project will ensure GCT Deltaport is equipped to handle increased volumes from the trans-Pacific mega vessels calling the facility. The terminal operator said its rail handling capacity would increase by more than 50 percent. Due to the collaborative relationship with railway partners CN and CP, GCT Canada said its U.S. import rail volumes grew by 35 percent per year from 2009-14.

"This expansion provides our customers the confidence to bring their largest ship discharges to GCT Deltaport with the knowledge that the added rail capacity will expedite import container connections through CN and CP's networks," noted Stephen Edwards, president and CEO of GCT. "We are particularly pleased to not only increase our capacity, but that we are doing so with an improved environmental impact on our existing footprint."

Hapag-Lloyd IPO pushed to Nov. 3

German container shipping group Hapag-Lloyd has extended the offer period for its initial public offering by a week to Nov. 3, according to a company statement.

Books were slated to close on Tuesday and trading was to start Friday, but demand for the shares remains weak even after Hapag-Lloyd trimmed the planned volume of the IPO amid wobbly markets.

People familiar with the deal said on Monday that the company guided investors to price the IPO at the bottom of the 23-29 euro (~25-32 USD) price range.

Hapag-Lloyd said that its earnings outlook remained unchanged, after peer Maersk slashed its 2015 profit targets last week.

For more of the Reuters story:

Port of Long Beach partners with State Department on security

The Assistant Secretary of State for the Bureau of International Narcotics and Law Enforcement Affairs (INL), signed a formal Memorandum of Understanding this week with the Port of Long Beach to enhance the department’s maritime and port security assistance in Asia, Latin America, and Africa.

Under this partnership the expertise of the Port of Long Beach will be put to work helping partner nations improve border security in the face of sophisticated criminal threats, according to a release from the INL. Long Beach is one of the top ports in the U.S., with a dedicated Harbor Patrol that operates round-the-clock camera surveillance, mobile underwater sonar, an expert dive team, and explosive detectors in order to maintain vigilant protection of Port facilities and operations.

Port of Long Beach personnel are uniquely suited to provide expert mentoring and training to foreign counterparts who seek to more effectively counter criminal and security threats, the statement said. This partnership also benefits the Port of Long Beach by providing opportunities to establish new foreign contacts, gain valuable overseas experience, and adopt a more international approach to combating transnational crime.

This new relationship with the Port of Long Beach is INL’s third port partnership, building on the bureau’s existing work with Port Miami and the Port of San Diego to provide port and maritime security assistance.

State oil cargo stranded at China ports

About 4 million barrels of crude oil bought by a Chinese state trader for the country's strategic reserves have been stranded in two tankers off an eastern port for nearly two months due to a lack of storage, two trade sources said.

The delays will cost millions of dollars and indicate how China is struggling to import record amounts of crude if storage and port capacity at Qingdao, its largest oil import terminal, are unable to keep pace.

Ocean Lily and Plata Glory, two very large crude carriers (VLCCs) carrying oil for Sinochem Corp, arrived at Huangdao, Qingdao's main oil terminal, in early September, and both were still at anchor this week, waiting to unload, according to Reuters' shipping data, and trade and port sources.

For more of the Reuters story:


Thursday, October 29, 2015

L.A.-Long Beach port truckers strike Pac 9 and XPO Logistics

Truck drivers who haul cargo at the ports of Los Angeles and Long Beach are on strike again this week, joined by warehouse workers on the picket line for the first time.

Workers from California Cartage, a warehouse at the Port of L.A., have joined striking truckers who drive for Pacific 9 Transportation and XPO Logistics, creating the potential for disruption at two key links in the cargo supply chain.

The port truckers have gone on strike several times in recent years, protesting that the companies they drive for are misclassifying them as independent contractors, to avoid paying them a living wage. The workers want to be paid an hourly salary and benefits.

Their drivers’ campaign is backed by the Teamsters Union, which is seeking to organize truck drivers in U.S. ports.

Adding warehouse workers to the port truckers' campaign represents a new step for the Teamsters. The union's International President James Hoffa was in Southern California Tuesday to join picketers and talk to reporters at the Port of Long Beach.

Hoffa said half of the Teamsters 1.4 million members are drivers, and he estimated that the union already represents about 200,000 warehouse workers.

"Warehouse is a tremendous area, more opportunity," he said. "We'll be doing Cal Cartage - that's a beginning. We'll find other targets."

Harley Shaiken, a professor at UC Berkeley who studies labor says the Teamsters strategy is "innovative" and could prove advantageous.

The warehouse workers at California Cartage walked off the job for a few days last month, demanding higher wages. They've also filed a lawsuit against the company, arguing it owes the workers millions of dollars in wages and overtime. The workers argue that because Cal Cartage leases property owned by the City of Los Angeles, they should be paid L.A.'s mandated "living wage" - a few dollars per hour above the state's minimum wage.

For more of the 89.3 KPCC news story:

Ports of NY-NJ approve ship-to-rail facility

The Port Authority of New York and New Jersey's board has approved construction to proceed on a ship-to-rail facility next to the GCT Bayonne terminal.

The project will complete PANYNJ's $600-million ExpressRail initiative to provide all of its major ocean terminals with direct access to rail. The approval completes the final design and build of the new ExpressRail Port Jersey facility in Greenville Yard.

GCT Bayonne will be responsible for the construction, operation and maintenance of the ship-to-rail facility to allow for more efficient, environmentally friendly movement of cargo. PANYNJ will reimburse GCT up to $56 million to cover the costs of construction.

The new project is contingent on continued funding provided by a per-container fee called Cargo Facility Charge, which is assessed on cargo shipped through the Port of NY and NJ to cover the costs of critical road, rail and security infrastructure projects.

"Given the highly competitive nature of the port business, it's critical that we invest in projects that will allow for the efficient, more environmentally sustainable movement of freight and goods throughout the region," said Port Authority chairman John Degnan.

"The project will allow us to maintain our competitive edge and cement our position as the East Coast's premier destination for international cargo."

For more of the Railway Technology story:

COSCO to launch Arctic-to-Europe services

COSCO announced its intension to launch regular services through the Arctic Ocean to Europe, as global warming opens the route and Beijing steps up its northern ambitions.

The state-owned shipping giant has only twice sent a vessel through the Northeast Passage, once in 2013 and again in a voyage completed this month, state media reported.

The European Union is China’s biggest trading partner and sailing via the Arctic rather than the Indian Ocean would cut shipping times by as much as nine days, according to previous reports.

"There is an intention to open a regular line in the future and people are discussing it," a spokeswoman for group subsidiary COSCO Container Lines said, without giving a specific timetable.

Her comments came after the state-run Xinhua news agency reported on Monday that Chinese experts and officials had hailed the route as a "golden waterway" for trade.

For more of the South China Morning Post story:

Daewoo Shipbuilding will likely receive $5B "rescue package"

State-run creditors of South Korea's Daewoo Shipbuilding and Marine Engineering will likely announce a $5 billion rescue package for the struggling company as soon as Thursday, a local media reported this week.

Korea Development Bank and Export-Import Bank of Korea plan to offer about 3.2 trillion won ($2.83 billion) in loans. The package also includes additional 2 trillion won in capital, and KDB, Daewoo's largest shareholder, plans to convert some of the company's debt into equity, the online news service of Chosun Ilbo said.

The two creditors and Daewoo declined to comment on the report.

Daewoo, the world's largest shipbuilder in terms of current orderbook by tonnage as of September, posted a provisional operating loss of 1.2 trillion won in the September quarter, bringing the loss for the year to date at a record 4.3 trillion won.

The high-end offshore plant business has been lossmaking for the world's three biggest shipyards - Daewoo Shipbuilding, Samsung Heavy Industries Co. and Hyundai Heavy Industries Co. Ltd. - all in South Korea. Daewoo recently said it would sell non-core assets and exit from non-essential businesses as part of a restructuring process.

For more of the Reuters story:

Container falls off truck and kills man in S. California

A shipping container fell off a flatbed truck Tuesday evening, crushing and killing a male cyclist near the Long Beach-Carson city boundary.

The accident happened near where Santa Fe Avenue crosses Warnock Way. Early accounts from the Long Beach and Los Angeles County fire departments differed as to which city the incident took place in. Both agencies responded.

"I just heard a big boom and it felt like an earthquake," said Daniel Flores, who lives close to the accident site. "It shook the house a little bit."

Los Angeles County fire dispatch Supervisor Melanie Flores said the container "struck a bridge and got knocked off the trailer."

The victim was on a bicycle, according to Lt. Arthur Escamillas of the sheriff’s Carson Station.

For more of the Press-Telegram story:


Click here to view previous news stories



Submit Your Press
Releases Here!