Cargo Business Newswire Archives
Summary for October 29 - November 2, 2012:

Monday, October 29, 2012

Top Story

NY and NJ ports close, others on East Coast batten down for Sandy

Hurricane Sandy is making its way up the East Coast. From North Carolina to Rhode Island, forecasters said Sandy may trigger a "super storm" that could cause massive flooding, power outages and possible snowstorms, according to CNN.

"It could be bad," said U.S. Coast Guard Rear Adm. Steven Rattior, "or it could be devastation."

Officials on the Eastern Seaboard have urged coastal residents to evacuate.

Effective at 7:00 a.m. Monday morning, the Port of New York and New Jersey has been closed to all vessel traffic due to Hurricane Sandy, according to the Wall Street Journal. Condition ZULU was declared for all commercial waterways, which means sustained 54 mph gale force winds from a hurricane are predicted within 12 hours. Mariners are ordered to stay off the water.

"Coast Guard Sector New York's number one priority is the safety of life at sea for mariners and our first responders," said Capt. Gregory Hitchen, deputy commander Coast Guard Sector New York. "We're working closely with our port partners to keep a close watch on the waterways and beaches."

The Captain of the Port of Baltimore set port condition Yankee for all commercial waterways in the upper Chesapeake Bay Saturday evening, according to the Coast Guard. Yankee means that gale force winds are possible within 24 hours.

The Port of Baltimore is closed to all inbound traffic. Vessels bound for this port shall seek an alternative destination. All cargo and bunker handling operations shall cease upon the setting of port condition Zulu.

In Connecticut, there is a statewide truck ban on Monday, and all state highways will be closed after 1:00 p.m.

"This is the most catastrophic event that we have faced and been able to plan for in any of our lifetimes," Connecticut Gov. Dan Malloy said.

Visit the Federal Emergency Management Agency's site to stay informed and for tips to prepare and plan. Visit the National Weather Service webpage at

Farmers worry as PNW grain talks continue

A federal mediator is arbitrating talks today between the West Coast longshore union and Pacific Northwest grain terminals that handle 25 percent of the U.S. grain exports.

Farmers in wheat country fear that their crops may have trouble getting to market because of the possibility of a lockout, since longshoremen and terminal owners still seem far from an agreement.

Growers worry that even if non-union labor is hired to load ships going to Asia during a lockout, grain elevators could still back up if there are not enough workers or if negotiations drag on too long.

Wheat, corn and soybeans that are transported to the six terminals involved in the labor talks come from as far away as the Dakotas.

Oregon farmers belong to co-ops, which hold their grain in county elevators, hauling it to terminals on the Columbia River. The terminal's non-union workers load barges that carry grain to Columbia River ports including four of the terminals -- three in Portland and one in Vancouver – that are currently in talks with longshoremen.

The companies that own the terminals, under the grain-buying system, bid for the wheat from farmers and negotiate with longshoremen to load ships.

"It's the grower that ends up suffering," in the event of a lockout, said Brad Wiley, operations manager of coop Mid Columbia. "And, we push business away and have a hard time getting it back."

Representatives of the International Longshore and Warehouse Union have said in past negotiations that the corporations that own export terminals garner billions in sales and millions in profits globally, and are holding up the U.S. economy by failing to reach an agreement with labor.

Both the ILWU and the Pacific Northwest Grain Association have agreed to keep the content of the talks confidential.

For more of the Oregonian story:

Savannah dredging gets federal approval

The U.S. Army Corps of Engineers announced Saturday it has approved the dredging of the Savannah River from a 42-foot depth to a 47-foot depth, in order to accommodate huge post-Panamax vessels.

Assistant Army Secretary Jo-Ellen Darcy signed a Record of Decision for the deepening project, which is the final approval needed before construction can start on the $642 million project, which Georgia has pursued for 16 years.

Government officials said the dredging project should be completed by 2016.

For more of the Channel 11 (Savannah) story:

FedEx will develop $100M air cargo hub in Shanghai

Shipping giant FedEx signed a contract with Shanghai's airport operator to build an air cargo hub in that city that will be built by 2017, said a company statement.

"Demand for FedEx shipping services, both to and from China, is expected to increase," said Michael Ducker, chief operating officer of FedEx Express. "By expanding our infrastructure in Shanghai, we will be equipped to handle increased volumes in Asia."

The center will handle cargo between China's eastern coast and the U.S. and Europe, the company said.

The new FedEx air cargo hub at Shanghai's Pudong airport will triple the capacity of its current facility by handling up to 36,000 items an hour, the company said.

For more of the AFP story:

Russian cargo ship filled with 700 tons of gold ore disappears

A ship with a 9-member crew and 700 tons of gold ore vanished after making a distress call off Russia's Pacific coast. It was on its way from the town of Neran to Feklistov Island in the Sea of Okhotsk, reported The Associated Press.

Hired by mining firm Polymetal, the ship was carrying the gold ore to a processing location. A small amount of gold can be extracted from gold ore, but Polymetal would not estimate the value of the cargo.

For more of the NBC World News story:


Tuesday, October 30, 2012

Top Story

Sandy suspends cargo, freight, transportation on Northeast corridor

Hurricane Sandy prompted the closure of ship, rail, air, public transportation and many highways on the U.S. Northeast Coast.

The New York subway system was deluged with water as Manhattan was hit with a record storm surge of 14 feet, raising worries that Wall Street could be down for days.

"Hitting at high tide, the strongest surge and the strongest winds all hit at the worst possible time," said Jeffrey Tongue, a meteorologist for the weather service in Brookhaven, New York.

Cargo container operations in New York and New Jersey, one of the top port complexes in the country, shut down very early Monday, and will stay closed indefinitely, according to the port authority, which means millions of dollars worth of imports arriving for the holiday season will stay put for now.

Arthur Hatfield, managing director of equity research at Raymond James, said the cargo problem won't be a catastrophe, and that cargo back-ups are eventually delivered. "Nothing disappears," he said.

"The only time we've ever seen a storm that had a lasting or immediate impact on logistics and or freight volumes was Katrina," Hatfield said, adding that Sandy is a Category 1 hurricane. "You've got to remember Katrina was a Category 5 and the storm surge was something they'd never seen." Katrina was downgraded to a Category 3 by the time it hit land.

Delivery companies were also impacted by the storm. UPS started to reroute packages and planes over the weekend. On Monday it postponed delivery in Delaware, Maryland and Washington, D.C., but sent out delivery trucks in Manhattan, Connecticut, Westchester County, Nassau County and Suffolk County.

Most UPS drivers continued working in New England, except along the coast. In New Jersey, they sent out about half their drivers. The company said it was planning for serious snow in some areas.

"We're going to be doing operations as long as we possibly can, as far as pickup and delivery goes," said Chris Stanley, spokesman for FedEx Corp, the second-largest package delivery company in the U.S. "If we are able to safely move, we will."

Railroads were also affected by the storm. CSX Corp shut down between Richmond, Va., and Albany, N.Y., early Monday. Norfolk Southern advised customers to expect delays of 72 hours or more, noting rail traffic from Virginia through New England could be plagued by flooding and high winds.

Truck rental company Ryder closed distribution centers on the east coast that serve auto, electronics and other industries. YRC Worldwide also shut down its facilities on the Northeast corridor.

For more of the Reuters story:

UPS holiday shipping volume up 10 percent

UPS, the largest package delivery company in the world, announced it will deliver 527 million packages during the peak season between Thanksgiving and Christmas, a 10 percent surge compared to the same time last year.

The company projected that Dec. 20 will be its busiest delivery day in 2012, forecasting that 28 million packages will be handled that day, twice that of a typical delivery day.

UPS will hire up to 55,000 seasonal workers in 2012, the same number as in 2011.

FedEx, the number two global package delivery service, predicted 280 million packages handled between the holidays, and that on Dec. 19, its busiest day, FedEx will move 19 million packages.

For more of the Huffington Post story:

Survey: Shipping costs to rise in 2012 and 2013

Vessel operating costs are projected to rise by 3 percent in 2012 and 2013, due to an expected boost in the price of marine lubricants used to prevent corrosion on machinery, according to a recent survey conducted by accountancy and advisory company Moore Stephens.

"Ship operating costs increased by an average of 2.1 percent across all the main ship types in 2011, and it is unsurprising that our latest survey anticipates that costs will rise by a greater margin in both 2012 and 2013," Moore Stephens shipping partner Richard Greiner said.

"Although they will be difficult for owners, operators and managers to absorb in a struggling economic environment and a depressed freight market, these increases still represent a continuation of less volatile cost movements than those we saw just a few years ago."

"With crude oil prices hardening, lube costs will go up," one survey participant said in the survey. "Fuel and lube suppliers are very aware that there is an oversupply of tonnage on the market, and take advantage of that in their dealings with owners," said another.

The shipping sector has been hit hard by high bunker fuel prices and overcapacity, and the dry bulk sector has been among those most impacted.
"We expect 2012 (dry bulk) fleet growth to be around 14 percent, which is still well above demand growth; however, we look for 2013 fleet growth to be only around 5 percent to 6 percent," said Natasha Boyden with Global Hunter Securities. "However, we believe that it will still take some time for demand to catch up with the excess capacity delivered in the past few years, so we don't expect any meaningful recovery until toward the end of 2013, or 2014 at the earliest."

Recently, average earnings for a larger capesize dry bulk hauler have reached nearly $17,000 a day, although still less than the highest rate of over $230,000 a day in 2008.

Average earnings for a crude oil supertanker have dropped to a negative rate of less than $2,000 a day, which is below operating costs of $10,000 to $11,000 a day and the highest rate of more than $180,000 a day in 2008.

For more of the Reuters story:

Coast Guard rescues 15 from HMS Bounty

The Coast Guard rescued 14 people from the sea early Monday morning after the historic ship HMS Bounty took on water off the coast of North Carolina during Hurricane Sandy.

The Bounty is a 180-foot replica of an 18th century ship in the 1962 movie, "Mutiny on the Bounty. The crew was abandoning ship onto two lifeboats during the night, and three people were swept into the water. One was hauled back into the lifeboat, but two disappeared.

After it was abandoned, the ship sank.

Many hours later, a 15th survivor, a woman said to be "unresponsive," was recovered and taken to the hospital. Claudene Christian was taken to Albemarle Hospital in Elizabeth City, where she was later declared dead.

The search is still on for a missing man, Captain Robin Walbridge, 63. The Coast Guard used ships and airplanes to search the Atlantic on Tuesday for the captain, and was optimistic Walbridge could still be alive in his red survival suit.

"There's a lot of factors that go into survivability. Right now we're going to continue to search. Right now we're hopeful," Coast Guard Capt. Joe Kelly said.

For more of the Forbes story:


Wednesday, October 31, 2012

Top Story

TSA container lines propose 2013-14 contract rates

Container carriers hope to increase rates on the Asia-U.S. trade route in the early days of their 2013-14 contract negotiations.

Shipping lines have experienced flat or declining sales growth due to overcapacity and fuel costs, and as contracts expire, further revenue improvements are critical to the industry, according to Transpacific Stabilization Agreement member carriers.

In order to create a fair baseline rate for contracts through mid-2014, member container lines in the TSA recommend a dry cargo general rate increase of $400 per-FEU to the U.S. West Coast, and $600 per-FEU for all other destinations, effective December 1, 2012.

"Even though contracts run 12 months or more, rates ebb and flow throughout the year depending on contract timing and structure, as well as cargo seasonality" said TSA executive administrator Brian M. Conrad. "This is especially true in the fourth quarter, as peak season traffic begins to ease, and more so this year, as U.S. holiday retail shipments were moved forward amid labor uncertainty. Lines want to be sure that revenue gains made earlier in the year are not prematurely eroded in upcoming contracts."

TSA carriers also approved a rate guideline to take effect January 1, 2013 on refrigerated cargo from all Asian origins to all U.S. destinations, of $1,500 per-FEU.

"This increase follows years of gradual rate deterioration," said Conrad. "The message to the trade is that rates are unsustainable and will not support the purchase, lease, operation and maintenance of very sophisticated and costly equipment."

TSA is a research and discussion forum of major container shipping lines serving the Asia-to-U.S. route. TSA members include APL, China Shipping Container Lines, CMA-CGM, COSCO Container Lines, Evergreen Line, Hanjin Shipping Co., Hapag-Lloyd, Hyundai Merchant Marine, Kawasaki Kisen Kaisha (K Line), Maersk Line, Mediterranean Shipping Co., Nippon Yusen Kaisha (N.Y.K. Line), Orient Overseas Container Line, Yangming Marine Transport Corp., and Zim Integrated Shipping Services.

Report: Maritime-related pollution decreases for Puget Sound region

Port-related air pollution has decreased by up to 40 percent in the Puget Sound region since 2005, according to a report released Tuesday.

The progress is largely attributed to the investment of private and public sectors in green technology, cleaner fuels and efficiency, including using low-sulfur fuel and shore power, replacing or retrofitting old engines and improving procedures. The Northwest Ports Clean Air Strategy, an initiative of the ports of Tacoma, Seattle and Metro Vancouver, B.C., has helped to further reduce emissions.

"The results of the 2011 Emissions Inventory are significant, with substantial pollution reductions across the board for the Port of Seattle," said Gael Tarleton, port commission President. "The Seattle Port Commission has been committed to finding answers that will inform our decisions for years to come."

The 2011 Puget Sound Maritime Air Emissions Inventory updated the port's 2005 baseline inventory.
The inventory assessed greenhouse gases, diesel particulate matter and other pollutants such as sulfur dioxides and volatile organic compounds. It focused on emissions related to ships, harbor vessels, cargo-handling equipment, rail, heavy-duty trucks and other vehicles associated with port activities.

Since 2005 all pollution measurements were reduced. Nitrogen oxides in 2011 were down by 14 percent, volatile organic compounds by 40 percent, sulfur oxides by 14 percent, particulate matters by 16 percent, diesel particulate matter by percent and carbon dioxide by 5 percent.
In 2011, diesel particulate matter emissions declined 16 percent in ocean vessels, increased 7 percent in harbor vessels, dropped 24 percent in locomotives, dropped 40 percent in cargo-handling equipment, decreased 52 percent in heavy-duty vehicles, and dropped 52 percent in fleet vehicles.

China Shipping profits rise, COSCO works to reverse losses

China Shipping Container Lines rose 9 percent in Hong Kong trading, the highest it has been since early June. China Cosco shares rose 4.9 percent.

CSCL reported a net income of $159 million at the end of the third quarter, compared with a loss of $152 million the same time last year.

"We remain positive on CSCL's future earning thanks to the industry's self-discipline," wrote Lawrence Li, an analyst at UOB Kay Hian Holdings, in a report. "Cost pressure eased on lower bunker fuel prices."

Li said CSCL has increased freight rates. The Asia-Europe rate was raised by 85 percent year on year, and the Transpacific rate rose 58 percent since 2011.

China Cosco Holdings Co. had a third-quarter loss of $245 million compared with $332 million in third quarter 2011. COSCO reported it might have a net loss this year, due to "imbalances between supply and demand, low dry bulk freight rates."

For more of the Bloomberg story:

East Coast transportation starts the recovery process after Sandy

On Tuesday, East Coast transportation officials assessed damage caused by the huge Sandy storm, announcing it would take some time to restore transportation fully. Roads are flooded, power lines are down and millions still have no power in their homes.

John F. Kennedy International Airport and Newark Liberty International Airport are open today with limited service and no estimate on when service will be back to normal. 19,000 flights have been canceled since Sunday, according to About 220 people remain stranded at New York area airports.

The Port Authority of New York and New Jersey said LaGuardia Airport remain closed indefinitely.

Some East Coast airports opened Tuesday, including Boston and Philadelphia. Washington D.C.'s Dulles and Reagan International never closed, and now planes and staff are coming back. Metropolitan Washington Airports Authority spokeswoman Kimberly Gibbs said limited service started Tuesday afternoon.

Amtrak is starting to offer limited services today, as crews make repairs.

CSX railway is closed from Richmond, Virginia, to Albany, New York. CSX has also stopped traffic initiating on other lines that travel between Boston and Philadelphia. CSX announced assessments were underway, and that repair teams were "removing trees, reinstalling crossing gates and ensuring generators were running to guard against power outages," according to Reuters.

Norfolk Southern told Reuters it was waiting for flooding to subside, clearing snow in western Virginia and West Virginia, and had a power line across tracks in Cleveland.

For more of the Reuters story:

First contracted cargo flight a success for NASA

NASA's first contract cargo delivery via an unmanned SpaceX cargo capsule went smoothly, and the spacecraft made it safely back from the International Space Station Sunday.

SpaceX CRS-1 delivered 882 pounds of supplies to the space lab, including 260 pounds of crew supplies, 390 pounds of scientific research, 225 pounds of hardware and several other supplies.

This was the first mission of 12 planned cargo resupply trips to the space station by SpaceX under NASA's $1.6 billion Commercial Resupply Services contract. SpaceX and Orbital Sciences are the two companies under contract to build and test new cargo spacecraft for NASA.

The SpaceX Dragon spacecraft was released from the station's robotic arm Sunday at 6:26 a.m. Pacific Daylight Time. The spaceship splashed down in the Pacific Ocean at around 12:22 p.m., about 250 miles off southern California.

"This historic mission signifies the restoration of America's ability to deliver and return critical space station cargo," said SpaceX CEO and Chief Technical Officer Elon Musk.

For more of the Wire Update story:


Thursday, November 1, 2012

Top Story

Cargo starts to move in the Northeast

Cargo shipping from the Northeast, delayed this week by Sandy, is just starting to resume after disrupting supply chains and adding to the cost of the storm.

The Port of New York and New Jersey has stayed empty since it was closed on Monday morning. Officials are still trying to assess when the port, the second largest in the U.S., is likely to reopen. The U.S. Coast Guard told Reuters that they expect some shipping restrictions to be lifted today at New York Harbor.

Insurers "are going to be inundated with thousands and thousands of cargo claims" from damaged vessels, terminals and distribution facilities, according to Cameron Roberts of law firm Roberts and Kehagiaras, which specializes in trade and transportation.

Airlines, which often carry cargo along with passengers, were able to mitigate the disruption of the storm by scheduling shipments around it, and refusing to ship anything perishable until after it was over. Airlines, along with railroads, resumed business on a limited basis on Wednesday across the Northeast U.S., with the exception of flooded areas in New York and areas of heavy snow in West Virginia and Pennsylvania.

FedEx planes were returning to normal flight delivery schedules on Wednesday.

UPS worked with clients move merchandise on Friday instead of Monday, and to use express instead of ground. The company relocated its planes in Louisville from their customary location in Newark before the storm, and routed its European flights there.

For more of the USA Today story:

NOL reports profit in third quarter for first time since 2010

Neptune Orient Lines has risen to profitability for the first time in 18 months, due to "increased cost efficiencies, stable rates and volume growth," including recent organizational restructuring and lower fuel use.

The Singapore container line saw a net profit of $50 million, compared with a net loss of $91 million year on year, according to the Straits Times.

"Going forward, maintaining focus on the fundamentals of our business - service quality, operational efficiency and cost discipline - will be key to improving performance," said NOL chief executive Ng Yat Chung.

NOL's revenue was up 4 percent in the third quarter at $2.3 billion.

The container carrier is selling its headquarters for $311 million to real estate company Fragrance Group. NOL plans to lease the property until June 30, 2014, and said it was selling the facility "to release capital for strategic investment."

Although the bottom line is looking up, an NOL statement said, due to the weak macro-economic outlook, the company "expects to post a full-year loss."

DP World third quarter down slightly, says EBITDA will match expectations

Global port operator DP World posted a slight downturn in the third quarter, but predicts its EBITDA will be in "in line with expectations" for 2012, according to a company statement it gave to NASDAQ Dubai today.

DP World's container volumes in the third quarter decreased 1 percent to 14.2 million TEUs for its container terminals. The decline was due to due to the divestment of three joint-venture terminals and "a decline in volumes in Europe, the Middle East and Africa," the statement said.

"The third quarter of the year has seen a slowdown in container volume growth with some of our regions reporting a small decline in volumes reflecting the challenging macroeconomic environment," Chief Executive Officer Mohammed Sharaf said in the statement. "Whilst there remains uncertainty within the macro economy, we continue to believe we will achieve EBITDA in line with expectations."

No details were given about the company's forecast for earnings before interest, taxes depreciation, and amortization.

In the first nine months of 2012, DP World said gross container volumes increased 4.5 percent because of growth in the Americas, Asia Pacific, the Middle East and the United Arab Emirates.

DP World shares this year have gained 20.8 percent overall, and rose by 0.3 percent to $11.65 at 10:53 a.m. in Dubai today.

For more of the Bloomberg Businessweek story:

Hazmat cargo gets a once over at ports of Los Angeles and Long Beach

Cargo containers and trucks that contain hazardous materials were subjected to a thorough inspection on Wednesday at the Ports of Los Angeles and Long Beach.

The multi-agency effort to ensure that hazmat shipments are handled correctly involved the U.S. Coast Guard, U.S. Customs and Border Protection, the Transportation Security Administration, the California Highway Patrol and police departments.

"We're making sure that anything that comes through the port that's hazmat is properly shipped, with proper markings and labels, and that it's blocked and braced," said Coast Guard Petty Officer 3rd Class David Rice, a marine science technician.

Last year, in a similar effort, 7000 containers were inspected.

When containers were reviewed with hazardous materials placards on the outside, containers were first aired out, and then a small electronic device was used to check for dangerous gases.

For more of the Mercury News story:

Vietnamese cargo ship goes down off Sri Lanka, four missing

Four crewmembers are missing from the Saigon Queen, a Vietnamese cargo vessel that sank off Sri Lanka on Wednesday, according to the Vietnam Maritime Search and Rescue Coordination Centre.

The ship, which had 22 crewmembers on board, was loaded with timber and on the way from Myanmar to India when it went down in a storm in Sri Lankan waters. 19 crewmembers were rescued.

Captain Nguyen Minh Luan, 51, is one of the missing.

For more of the Bangkok Post story:

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