Cargo Business Newswire ArchivesSummary for October 27 through October 31, 2014:
Monday, October 27, 2014
Retailers see heavy holiday shipment delays at L.A/Long Beach ports
Photo credit: Angela Cesere/Ann Arbor.com
Shipping containers are being delayed for up to three weeks, threatening timely holiday goods delivery to retailers, due to a dearth of transportation equipment and possible labor slowdowns at the the Ports of Los Angeles and Long Beach.
The delays are affecting retailers including JC Penney Co, Macy's, Kohl's, Nordstrom, American Eagle, Ralph Lauren and Carter's, according to three people with inside knowledge of the situation.
Retail giant Wal-Mart recently diverted 300 TEUs to Oakland to avoid the bottlenecks, one source said. Wal-Mart declined to comment.
The chassis shortage is one main reason for the chronic delays, and the National Retail Federation cited protracted labor talks as another issue. The International Longshore and Warehouse Union wouldn’t comment about whether the negotiations had a hand in the delays at the Southern California ports.
Most retailers said there were delays at the ports for shipments from Asia, but also that they did not expect product shortages during the holidays. But any delay in the supply systems can cost retailers more money.
"It's a domino effect," said Nate Herman, vice president of international trade at the American Apparel and Footwear Association. "When there is an interruption, things degenerate quickly."
Many retailers ordered holiday shipments early in case the labor negotiations went south, but big volume is also arriving this month, considered the end of the holiday shipping season.
"There will be a scramble to restock shelves this holiday season," said Mark Hirzel, president of the Los Angeles Customs Brokers and Freight Forwarders Association. "The delays are running into two to three weeks."
FedEx predicts 8.8 percent increase in holiday shipments
FedEx Corp. predicts record shipments of more than 290 million packages between Black Friday and Christmas Eve, an 8.8 percent year-over-year increase, on an expected surge in e-commerce deliveries.
FedEx will move more than 20 million packages on each of the first two Mondays in December, and deliveries will peak at 22.6 million on Dec. 15, according to a statement today from the Memphis-based company.
Approximately 54 percent of the holiday shopping will be conducted online this year, the most since at least 2006, according to a National Retail Federation survey released last week. Up from 40 percent last year, that number includes browsing sessions where shoppers don’t make a purchase, NRF said.
U.S. railroad Union Pacific posted a third-quarter profit that bested analyst predictions on a bumper grain crop and a rebound in consumer demand.
Profits rose 19 percent to $1.37 billion or $1.53 a share, from $1.24 a year earlier, the railway said Thursday. The average forecast among 25 analysts polled by Bloomberg was for earnings of $1.51 a share.
"Assuming the economy and weather cooperate, we are well positioned to finish up the year with record results," chief executive officer Jack Koraleski said in the statement.
UP freight volumes climbed 7 percent while BNSF Railway Co. had a 1 percent drop, according to Association of American Railroads data compiled by Bascome Majors, a Susquehanna Financial Group analyst in New York. BNSF, UP’s main rival in the western U.S., is struggling with a congested network due mainly to the U.S. shale gas boom.
B.C. to issue new rules for container trucking at Port Metro Vancouver
Canada’s Transportation Minister Todd Stone postponed legislation Thursday to create an independent port container-trucking commissioner, who would crack down on undercutting per-container driver pay rates and resolve the type of disputes that led to a trucker work stoppage in the spring at Port Metro Vancouver.
"Job No. 1 for the new commissioner of the container trucking office will be to ensure full and complete compliance with rates negotiated in good faith with truckers back in March," Stone said.
Drivers were supposed to receive an immediate 12-percent hike in per-container rates as part of a settlement of the 28-day strike by more than 2,000 drivers. But Stone said not all companies are paying the new rates, an issue that was threatening to set off another work stoppage.
The move follows Port Metro Vancouver’s announcement that it intends to scrap its old licensing system for trucks allowed to pick up and deliver shipping containers at the port’s four terminals and replace it with a new system aimed at reducing the overall fleet by 25 to 40 percent.
A glut of trucks chasing available business was one of the problems that triggered lengthy waiting times at terminals, which along with the undercutting of per-container rates to independent truckers, touched off the strike in March.
One of the groups that represent port truck drivers was hopeful about the provincial legislation, but a spokesman said it is just a start in terms of reaching a permanent resolution.
"Today I’m not going to make a comment that I think the (new) licensing system will fix everything," said Scott Doherty, assistant to the president of Unifor, who was speaking on behalf of the Unifor Vancouver Container Truckers’ Association.
Crews keep listing barge from sinking at Long Beach
Crews worked Thursday to keep a maintenance barge for the Catalina Express ferry from sinking off Long Beach.
The 110-foot by 30-foot barge, which serves as a fuel feeder for Catalina Express, started taking in water about 11 p.m. Wednesday at the Port of Long Beach, according to Jake Heflin, a spokesman for the Long Beach Fire Department.
A security guard reported the sinking barge—he spotted it listing to one side near the Catalina Express landing.
Long Beach fire crew, alongside Los Angeles firefighters and the U.S Coast Guard, worked overnight to remove water from the sinking barge, which was attached to a 20,000-gallon underwater fuel tank, but the a fire department spokesman said no fuel had been released into the water.
L.A. port head: West Coast port labor negotiations nearing tentative deal
Contract negotiations between shippers and 20,000 dockworkers at West Coast ports are progressing toward a tentative agreement in November, according to the head of the Port of Los Angeles, the busiest port in the nation.
Gene Seroka, executive director of the Port of Los Angeles, said he talks daily to the negotiators from both sides that are in talks to form a new contract for 23 West Coast ports, which together handle about half of all U.S. maritime trade.
"Both sides have a mutual respect, which I think is very important," Seroka said last week at a business luncheon in Los Angeles. He said a tentative deal between the International Longshore and Warehouse Union and the Pacific Maritime Association, representing management, may be reached within weeks.
ILWU spokesman Craig Merrilees declined comment. Wade Gates, a spokesman for PMA, said only that negotiators are ongoing, without a timeline for a settlement.
$10B China-funded Tanzanian port to begin construction in 2015
Construction of a Chinese-funded port and special economic zone in Tanzania worth at least $10 billion will start in July 2015, according to the president's office, which is setting a start date for the first time for the delayed project.
Tanzania said it signed the infrastructure development agreement with port developer China Merchant Holding International and Oman's biggest sovereign wealth fund, the State General Reserve Fund.
The East African country intends to build a massive port at Bagamoyo, 47 miles north of commercial capital Dar es Salaam, where the nation’s main port is plagued by chronic congestion and inefficiencies. Spending on roads and railways are part of Tanzania's efforts to become a transport hub that could challenge the dominance of Mombasa in adjacent Kenya.
A construction agreement for the port and associated zone was signed Sunday and follows a deal signed last year. A framework agreement between Tanzania and the Chinese port operator was signed when Chinese President Xi Jinping's visited the African nation in March 2013.
An official said a start date for building work had taken time to set because of other negotiations about infrastructure to link the port to national transport networks.
"We will do everything possible to ensure that this project takes off because it will bring enormous economic benefits to the entire country," President Kikwete said in the statement.
Harbor commissioners fill Port of Long Beach executive positions
Harbors commissioners have filled several executive positions at the Port of Long Beach, mainly promoting from within the organization.
Noel Hacegaba is now the new managing director of commercial operations/chief commercial officer of the port. Hacegaba, formerly acting deputy executive director, will oversee the new Commercial Operations Bureau and serve as the main liaison to port customers. His bureau includes business development, security services and tenant services and operations divisions.
Assistant Managing Director of Engineering Sean Gamette will take on the role of senior director of program delivery and maintain his role as chief harbor engineer. He will oversee the Engineering Bureau, which includes the program management, construction management and project controls divisions.
Roger Wu has been promoted from manager of commercial trade for ocean carriers to assistant director of business development, a new position.
Senior Port Leasing Officer Eamonn Killeen is the new assistant director of real estate, replacing retiring Gail Wasil.
Matson Navigation Company pled guilty Friday to misdemeanor criminal charges stemming from a 233,000-gallon molasses spill in Honolulu Harbor last year, but a federal judge is reviewing the legality of the sentence.
The 2013 spill killed more than 26,000 fish and other marine life.
U.S. Magistrate Judge Richard Puglisi accepted the plea from Matson Navigation Company Inc. to two misdemeanor charges for illegally releasing the molasses without a permit.
The company and prosecutors wanted to proceed with sentencing, agreeing Matson would pay a $400,000 fine and give $600,000 to environmental organizations.
But Puglisi said he has concerns because the $600,000 community service payment is higher than the maximum statutory fine.
Matson said in a statement earlier this week that as part of a plea agreement, the company would pay $300,000 to the Waikiki Aquarium to support coral programs and invasive algae cleanups, and another $300,000 to Sustainable Coastlines Hawaii.
Prosecutors seek death penalty in Sewol ferry case
South Korean prosecutors are seeking the death penalty for the captain of the capsized Sewol ferry and life in prison for three other crewmembers involved in the fatal disaster earlier this year.
At least 294 people died, including hundreds of high school students on a field trip, when the Sewol sank off South Korea's southwestern coast on April 16. Ten bodies were never found.
Prosecutors charged the captain, Lee Joon-seok and the three crewmembers with murder, alleging they didn't use the ship's safety facilities such as life rafts, life vests and announcements to evacuate passengers.
The death penalty is unusual in South Korea, which has not carried out executions in 17 years.
Bottlenecks at L.A.-Long Beach hits toy companies hard
Photo credit: Times-Picayune
Because of recent congestion at the Port of Los Angeles and Long Beach, it’s taking two to three times longer than usual to get merchandise delivered to the toy wholesaler Aeromax Inc., which does nearly $5 million in annual gross sales selling children’s costumes and toys.
"We’re feeling the pinch here," said Aeromax COO Sean Schipper, noting that the fourth quarter is the company’s busiest time of the year because of the holidays. "Each single day (of delay) costs us money and loss of sales."
The delays also affect the retailers and e-retailers that sell Aeromax products.
"We’re unable to provide accurate arrival data to our customers, and we can’t give them that because of the unknown factors," Schipper said. "And that causes strains on the business-to-business relationship when we can’t provide accurate delivery information."
Nationally, the toy industry is feeling the impact of congestion at the port complex, worrying they won’t get the merchandise in time for holiday shoppers. The delays have been caused by the lack of available chassis, long truck wait times at terminals and continued uncertainty over West Coast port labor talks.
Half of the toy industry’s $22 billion annual sales are generated during the fourth quarter holiday shopping season, specifically in late November and December.
"The toy industry is one of many industries being impacted by congestion at the ports," said Ed Desmond, executive vice president of external affairs at the Toy Industry Association. "Continued delays in delivering product to retail would cause a widespread loss of critical holiday sales and a significant blow to the U.S. economy."
The Port of Savannah is the second ranked container port on the East Coast, second to New York, and ranks No. 4 in the nation after Los Angeles and Long Beach, according to data gathered by Datamyne and compiled by Bloomberg.
"Not only have we been the fastest-growing port in the U.S. for a decade now," said Curtis Foltz, executive director of the Georgia Ports Authority, said at the organization’s annual meeting in September. "But we’re now in a position to grow and become No. 1. Something that was unfathomable a decade ago is something that is at least within our sight."
Savannah has been the fastest-growing major U.S. harbor for most of the last decade with an average annual growth rate of 11 percent, thanks to its transportation network and the economic expansion in the U.S. and southeast region.
"This is the fastest-growing demographic area in the country, and it will be the fastest-growing demographic area in the country for the next half century," Foltz said. "We are the leading port serving the Southeast."
The Port of Savannah’s September imports climbed 21.7 percent compared with a 7 percent increase for New York, although New York still imported almost twice the cargo—256,244 TEUs compared to 125,113 at Savannah. The busiest U.S. port, Los Angeles, grew 9.6 percent last month and imports into Long Beach, the second-busiest, rose 4.3 percent.
New York’s ranking as the third ranked U.S. port probably won’t be threatened anytime soon.
"It has been widely accepted and time-tested that ships will always move large cargo volumes through New York because of its massive consuming population," Stan Payne, the former head of the Canaveral Port Authority in Florida and now a shipping consultant, said in an e-mail. "In the end, if Savannah does overtake New York and New Jersey, and it certainly is within the realm of reasonable possibility, then it will do so because of focus and a political and operating structure that provides it the control to turn that focus into results."
Another port in Brunswick, Georgia, handles mainly Ro-Ro traffic, including auto exports. Brunswick also imports more Jaguars, Mercedes and Porsches than any port in the U.S.
Together, the two ports contributed $32.4 billion to Georgia’s economy in 2011, or 7.8 percent of the total, according to a University of Georgia study.
Hanjin Shipping announced it would start participating in two existing South Africa services, SF1 (South Africa Express 1 Central) and SF2 (South Africa Express 2 South), starting the last week of October.
SF1 and SF2 are currently operated by a group of shipping carriers – including Evergreen Line, COSCO, Pacific International Lines, "K" LINE, and Mitsui O.S.K. Lines – that cover South Africa, South East Asia and the Far East, the statement said.
The service offers 15 ships with capacities between 4,000 and 4,500 TEUs, offering ?transit times of 24 days from Shanghai to Durban and 28 days from Kaohsiung to Cape Town, Hanjin said.
SF1 (Asia – South Africa Central) port rotation:
Shanghai – Ningbo – Keelung – Singapore – Durban – Singapore – Shanghai
SF2 (Asia – South Africa South) port rotation:
Kaohsiung – Xiamen – Hong Kong – Shekou – Singapore – Port Klang – Durban – Cape Town – Port Klang – Singpaore – Kaohsiung
Target offers free shipping for holiday season, others follow
Target is offering free shipping on all items, with no minimum, from now until Dec. 20.
This is unusual for the retail giant, but after last year's huge data breach and an uncertain economy, Target is willing to do whatever it takes to woo shoppers during the holiday season. And Target isn’t the only retailer taking these measures.
"Just trying to stay competitive with Amazon this year was something they felt they needed to do," said Kyle James, founder of rather-be-shopping.com, which keeps shoppers informed of money-saving tips and coupons. He said dozens of stores are doing the same thing.
"A lot of times, it's not going to be your Amazon Prime where it's two-day shipping," said James. "But, if you are shopping early, you'll have plenty of time with three, five, sometimes seven-day shipping. So, I found about 45 stores that offer this."
The list includes Barneys New York, Neiman Marcus, Nordstrom, Reebok, Smashbox Cosmetics, and Shoes.com. All are offering free shipping on any purchase.
The list gets even longer when you add retailers like Best Buy who are offering free shipping on purchases of about $50.
"It's at least another 30 or 50 stores there," said James. "So, there's a lot of stores out there that are having some type of free shipping promotion this holiday."
USCG and container ship respond to adrift sailing craft in Pacific
Coast Guard search and rescue and an Automated Mutual Assistance Vessel Rescue crew responded to a call Sunday evening from a sailing vessel disabled and adrift about 780 miles west of the Oregon California border.
The operator of the 32-foot sailing vessel Hale’s Revenge reported the ship was disabled and adrift after during its voyage from Honolulu to Everett, Washington, sustaining damage to the vessel.
The Coast Guard 13th District command center received a 406 megahertz personal locator beacon alert at about 6:50 p.m., from the vessel.
The crew of the Hyundai Grace, a 965-foot container ship and AMVER vessel, offered to provide assistance and were scheduled to arrive at the vessel’s location at about 5 a.m. The rescue crews faced 12-15 foot seas with 35-mph winds.
AMVER, sponsored by the United States Coast Guard, is a unique, computer-based, and voluntary global ship reporting system used worldwide by search and rescue authorities to arrange for assistance to persons in distress at sea.
Israel breaks ground on China-funded port, triggers dockworker strike
Photo credit: Ilan Assayag/Haaretz
A Chinese construction firm broke ground on a new Mediterranean port in Israel on Tuesday, triggering a dockworker strike up the coast in Haifa where the workers oppose the rival port.
A subsidiary of China Harbour Engineering Co is building the $876 million port in Ashdod, expected to be operational by 2020. The port's operator has not yet been chosen.
As Prime Minister Benjamin Netanyahu and senior ministers gathered at a groundbreaking ceremony in Ashdod, workers in Haifa left their posts for the second time this month, protesting that the new port would hurt their jobs.
Israel's government recently approved creating private ports next to its current state-owned ports.
"You have rights," Netanyahu said of the port workers in a speech. "But eight million Israeli citizens also have rights -- the right to have competitive, modern, efficient port services."
Jaxport’s Asian container volume up 20 percent in 2014
The port of Jacksonville announced that Asian container volume through the port has grown 20 percent year-over-year.
Jaxport offers direct trade with Asian ports through both the Panama and Suez canals and says 12 of the 18 global ocean carriers that service the Asia-U.S. trade call at the Florida port.
In the fiscal year ending in September, 272,524 TEUs were moved through the port, compared to 226,938 last year, according to the statement. The Asian container trade accounted for nearly 30 percent of Jaxport’s container trade in 2014. In the previous fiscal year, it accounted for 24 percent.
The port has posted an average of 28.5 percent annual growth in Asian container volumes during the past five years.
The port authority has been tracking of how much container volume comes from the tenants on its docks, said Jaxport communications director Nancy Rubin, who said this was the resource used to determine the Asian container volume statistics.
U.S. companies invest in $7B LNG export facility in Quebec
U.S. investors in a $7-billion LNG export facility in Quebec hope to secure a spot in the global market as demand for the energy surges in coming years.
Freestone International, a California-based resource development company, has partnered with global equity investor Breyer Capital to develop a liquefied natural gas export facility at the port of Grand-Anse in La Baie, Quebec.
"We have a very compelling project," said Jim Illich, a former executive with U.S. engineering giant Bechtel Corp. who is leading the effort. "There’s a huge need for global energy. Europe wants diversification of their gas supply. And we’re very close to Europe."
The project, Energie Saguenay, depends on construction of a 42-inch, 650 kilometer-long pipeline connecting the plant to TransCanada Corp’s eastern triangle natural gas infrastructure, according to its regulatory filing. The supply will be sourced mainly from natural gas fields in Saskatchewan, Alberta and British Columba and potentially accessed in a number of ways, including third party agreements with gas producers, marketers and aggregators.
Securing the natural gas supply could be problematic. TransCanada’s eastern triangle is the subject of a fight setting the company, which plans to shift its mainline natural gas pipeline from the West to carry oil for the Energy East project, against natural gas utilities that believe that shift will limit supply and raise prices.
Jury finds Virginia International Terminals liable in lawsuit
Last week a jury found that Virginia International Terminals, which runs the port's container terminals, conspired with an employee of a family-owned company to divert business to him and another firm. The owners say that VIT's actions cost them hundreds of thousands of dollars and wiped out their savings.
The case awaits the judge's final order.
Last week, the Norfolk Circuit Court jury awarded Tidewater actual and punitive damages of at least $418,270. The jury ruled against VIT on statutory conspiracy, common law conspiracy, and aiding and abetting a breach of fiduciary duty.
"We never would have suffered these damages had VIT not encouraged and then concealed what our employee did to us," said Woody Ball, who co-owns Tidewater Overhead Door with his wife.
Ball alleged in the suit that VIT asked his company to design and install a prototype for a water-barrier device on one of 25 storage doors at the terminal. Ball's company assigned the project to an employee, who successfully completed the project, winning approval from VIT and CrossGlobe, the tenant at the Newport News facility.
The employee allegedly ended up giving confidential business information about the project to relatives who used it to "undercut and steal this business from Tidewater Overhead Door," the lawsuit alleged.
As of late Tuesday, Circuit Judge Karen J. Burrell, who heard the case, had not entered a final order.
Container ships collide and catch fire at Port Klang (video)
Two container ships collided at Malaysia’s Port Klang Tuesday, triggering a fire on both vessels.
The UASC container ship Al Riffa and the San Felipe, owned by Bernhard Schulte Ship Management, reportedly collided at about 7:30 p.m. at Wharf 20 of Port Klang, and a fire started in the forward sections of both vessels.
The Al Riffa had to be towed away to prevent the fire from spreading to other ships and the fire on San Felipe was contained.